“[Canada] has a large dairy producing constituency that it wants to protect, so they put a cap on imports that can be accessed at a competitive rate. That's what we call a ‘TRQ’ (tariff rate quota),” says Becky Rasdall Vargas, senior vice president of trade and workforce policy at the International Dairy Foods Association. Under the TRQ, Canada accepts a certain amount of dairy products duty-free, without tariffs.
"Rather, Rasdall Vargas blames the dispute on “a systemic set of failures” by Canadian administrators that intentionally prevent American dairy exports from reaching the import cap. These protectionist measures are intended to support Canadian dairy farmers. One rule, for example, requires that Canadian dairy processors be the primary recipients of American dairy products.
“If you’re a U.S. exporter, you're going to want to sell to your customers, not to a competitor,” she says. “Another one is that retailers aren't eligible to obtain an import license quota in Canada. There are layers upon layers of rules that ultimately prevent U.S. exporters from being able to fill those quotas.”
[1] https://www.farmprogress.com/farm-policy/the-real-story-behi...
That's why the USA has never reached the tarriff limit. The big producers there would just dump 20 million litres at once if they could. They aren't interested in 1 or two.
And if they were able to do that, the Canadian producers would go under. So its kinda simple, the Dairy Supply system is there to protect the Canadian Dairy industry. If it was removed, we would be flooded with cheap, low-quality US milk.
The entire Canadian dairy industry produces less milk than Wisconsin alone. Why does the US need the Canadian market? A: They don't, they just want it anyways.
The US and Canada use different, incompatible means for accomplishing this, so you can arbitrarily paint either as “cheating” the other by saying “well (Canada/The US) does X to the tune of (a dollar amount) and the other does zero of that, they’re cheating!”, i.e. by lying by omission.
Because of the way the US subsidizes theirs, Canada could be vulnerable to dumping. So there are protections in place. This is not remotely a big deal so long as both sides are competent and operating on something resembling good faith…
Yet the same rules apply to European cheese: limited quantities that can only be imported through an established dairy cartel member. Anti-Americanism is a convenient marketing tool, along with the nostalgic myth of the independent family farm. The reality is oligarchs like https://en.wikipedia.org/wiki/Saputo_Inc.
I don't know about timber, but the US maple syrup industry is healthy, just unable to keep up with demand. I think that's a consequence of geography and the time investment required to get mature trees, not Canada undercutting.
A common point of political contention up here are various pipeline issues, precisely because it potentially permit access to more markets, improving the sale price. (However it would also raise the price of gas in Canada for the same reason, with all the implications that comes with that).
The USD and CAD are not 1:1, as the CAD is 'lower value', so of course stuff made in Canada will generally be less expensive. (The trade off is that imports are more expensive for Canadians.)
Flooded? Cheap? Yes. Low quality? Doubtful. If quality were the sticking point, you'd expect this would be amicably resolved with equal standards for both domestic and imported milk.
Again, if that were the sticking point that can be fixed with rules around imports. The fact that these negotiations always end with quotas and/or tariffs strongly suggests the reason is political (ie. lobbying).
Same how all countries, including the US, heavily subsidize and protect their agricultural sector.
I'd call this strategic, not political (although ofc it involves lobbying, again, like in every other country including the US)
It's still protectionism, even if it's for a "good cause". During the mercantilist era protectionism was considered the obvious thing to do. After all, why would you want to make yourself poorer and enrich your enemies in the process? That doesn't mean it wasn't protectionism.
>I'd call this strategic, not political (although ofc it involves lobbying, again, like in every other country including the US)
For every policy that benefit some interest group there's almost always a fig leaf "strategic" justification for it. Jones act? It's to protect domestic ship building. Banning discounted medicines from abroad? They aren't been certified safe by the FDA. Tariffs on sugar? Food security and American Jobs™, of course!
I also have doubts that our current model is the best way of achieving the goals we had in mind when the programs were created in the 1970s. I know the error bars are quite sizeable, and it's not quite apples to apples, but recent studies that suggest our supply chain management in dairy, eggs, and poultry, costs approximately $244pp per year in higher costs. That's over $10billion per annum Canada wide, equivalent to 2% of the federal budget! I have been discussing this with someone in another thread for days, and the more I look into it, the more I feel like we really need to take another look at the implementation of this program. Dollar amount breaks my brain.
When they did it for tobacco back in 2009 it was only around $300 million on the table which isn't nearly as mind boggling and thus much more easily forgotten. Not to mention that very few Canadians realized that tobacco was ever supply managed to begin with so it easily few under the radar. Anything that affects dairy will be headline news.
And I know nothing about the market, but I can't imagine it's overly liquid, the fact that all farmers would receive cash for their quota, would definitely be attractive to most. It's already heavily financialized and borrowed against.
And then, you could even do something like NZ did where all the dairy farmers got together and created a coop for processing, NZ is now the largest exporter of dairy in the world! If some of the quota levy went to getting this off the ground, you'd help the farmers retain a bigger piece of the pie with vertical integration of the supply chain. And, hopefully also compete globally and become net exporters, increasing the size of the pie.
I dunno, I have no idea what the fucking solution is, but after spending a bunch of time in the weeds of this shit over the past couple days, I am like, we have created a monster, this can't be the most effective way to achieve the underlying goals of the program.
That isn't going to go over well with the big three (Saputo, Agropur, Lactalis) who own ~75% of the processing quota. I suspect if you dig even deeper you will find it is they who hold the political capital that props up the dairy supply management system. If it were only farmers involved it would have been gone ages ago.
As we're seeing with this trade war as a whole, tightening economic integration with an asymmetric partner puts your sovereignty at risk as well. If we have no industries of our own, and are utterly dependent on a single unreliable superpower, then we lose the freedom to decide on our own future as the rug could be pulled out from under us at any time. The only way to mitigate that risk is to diversify trade and ensure self-sufficiency in our own industries.
For reference, there are about 190k farms in Canada, 8% of those farms are dairy, poultry, and eggs whose viability is ensured with supply chain management. The other 92% of farms, are managed with direct government assistance (AgriStability, AgriInsurance, AgriInvest, and AgriRecovery). The latter costs the government $1.5-$2 billion most years. While the recent report on supply chain managed farms suggests the cost born by Canadians to be around $10 billion. Even if that number is off by an order of magnitude, we're looking at $1 billion for 8% of farms, and $1.5-$2 billion for the other 92% of farms.
All I'm saying is it seems like the solution to help ensure viability in dairy, egg, and poultry farming is wildly inefficient and merits a look from first principles. Is there a solution to achieve the same outcome at a lower cost? The world has changed drastically since the policies were implemented in the 1970s.
I admit I am far from an expert, but I have spent an inordinate amount of time reading about this shit out of curiosity in the past couple days. Broke my brain when I saw the numbers around the costs born by canadians in the checkout aisle due to supply chain management.
And my rabbit hole over the last couple days has led me to spend a bunch of time looking into Fonterra, which is the farmers processing Coop that happened in NZ when they got rid of their quota system. It's turned NZ into the largest milk product exporter on earth, and their whole strategy is processing milk into more shelf stable products. Cheese and Butter is about 20% the remainder is skim milk powder, whole milk powder, whey protein, and caseins.
Anyhow, all of this is to say, that there are solutions that ensure no milk goes to waste by processing it into more shelf stable ingredients, all of which have massive demand on the global markets. Whether we do much of this in Canada, I am not sure, but, feels like a missed opportunity if not, and likely partially caused by a lack of necessity to innovate due to the artificial moat.
Eggs, haven't looked into but presumably similar to milk in that it can be processed into shelf stable powders.
But, on the poultry front, beef, pork, etc, are all in the 92% of farms group, managed by subsidies, so, while chickens have a shorter lifespan, I don't see why we can manage cow and pork farms with subsidies, but not chicken.
It should also be noted that this is misleading. The dairy products are permitted to be produced with rBGH and you will almost certainly find some on the shelves as not all dairy products in Canada come from Canadian cows. What isn't permitted is giving it to cows in Canada as it is concern for reasons of animal welfare.
I know you already know that, but the audience needing your message doesn't and they are prone from messaging like that to think there is some reason to be afraid of the milk even though it perfectly satisfies Health Canada concerns. It wouldn't be allowed across the border if it were deemed dangerous. It is worth reminding that Canada happily allows all and every drop of American milk across the border as long as someone is willing to pay the tariff.
It does affect the wellbeing of the cow, though, which is why it is against the law to give it to them.
We have cows too, and farmers.
It’s one thing for the government to create protectionist policies, it’s another to have folks like me or perhaps you who practice it in person with our daily economic choices.
There’s also other brands of cream cheese.
However i try to avoid ultra-transformed products like cheez-whiz and philadelphia. Those are not even allowed to be called "cheese" here, they must have some qualifier in front or after the word.
I'm a Canadian who is pretty unhappy with our protectionist dairy lobby, and thinks there probably is a bunch of unfair trade barriers erected on our side by the dairy lobby.
I'm probably more open to this line of argument than the majority of Canadians. However, when I see an American who has literally anything to do with their federal government start making these arguments, I more or less have to assume it's either a lie, or at best a truth that's going to be twisted, blown out of proportion, and used to undermine the sovereignty of my country.
The furthest I would go right now would be to support a relaxation of our dairy protections in dialogue with the EU, and then whatever scheme we arrive at can then be applied to trade with the USA at a later date (including requiring dairy imported from the USA to meet EU-level food safety standards).
The USA simply cannot be trusted to be anything like good-faith negotiators.
(I would emphasize that I don't think this is bad in some cosmic sense, and Canadians have every right to keep the shelves stocked with Canadian butter only if they would like.)