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Trump Pressure Aids Canadian Consumers

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15Jun

by Graham Lane,

Published in the Winnipeg Sun, June 15, 2018

This week federal Conservative Party Leader Andrew Scheer booted MP Maxime Bernier from his shadow Cabinet.  Bernier’s sin?   Placing his longstanding and wise thoughts on abolishing supply management on his personal website. Recall that Scheer sold his soul to the dairy lobby during last year’s conservative leadership race by pledging to protect supply management.

This is the regressive system of government sanctioned cartels that artificially restrict production of dairy, poultry and eggs at huge cost to Canadian families. More broadly, the policy continues to damage our economy because it severely limits Canada’s scope to open up other export markets in other trade agreements. Ironically, supply management is the opposite of the free-market, pro-consumer thinking that the Conservative Party has traditionally stood for.

Donald Trump’s surprise win of the US presidency occurred because he unexpectedly took several states – including several coal mining states who voted against Obama’s anti-coal climate change policies that were progressively closing down entire communities, and Wisconsin – America’s largest dairy producing state.

Thus, it’s no surprise that dairy is of great political interest to Trump, who is now aggressively going after Canada’s restrictive dairy cartel policies. It now threatens NAFTA, with the American president specifically targeting the outrageous 270% tariffs the cartel system levies on U.S. milk exports to Canada, all to keep things cozy and soft for Canada’s roughly 13,500 dairy farmers.

Bizarrely and irresponsibly, both Trudeau and Scheer appear willing, so far, to sacrifice auto manufacturing and other more important sectors of our economy to remain holy with the anti-people church of supply management.

Why?

Ignoring the ridiculously high prices paid by consumers for dairy and poultry, Pierre Trudeau introduced dairy supply management in 1971. For almost 50 years consumers have been forced to pay high prices for less selection. Before the market was rigged, there was little price difference for dairy products between Canada and the USA.  Since then, the changes gave the Canadian dairy industry the ability to restrict supply and enjoy a monopoly. Prices for dairy and poultry in Canada are dramatically higher in Canada compared to what US consumers pay. Research from the C D Howe Institute showed consumers pay up to 77% higher prices for dairy than Americans,

Here’s more supply management nonsense. Restricted entry into the Canadian industry continues to severely punish younger generations of farmers. They are faced with an exorbitant high cost to enter an industry that fairly could be called the milk cartel. Simply gaining permission to produce milk requires buying or renting ‘quota’ – in Ontario $25,000 a cow, in B.C., $42,500. Effectively, a license per cow.

The dairy industry has been very effective at renting and buying politicians – Andrew Scheer is but the latest industry lapdog. But, its time to move on.

Forgiving Trump a win by ending supply management means NAFTA could survive and steel and aluminum tariffs lifted. In this case, Trump, despite being a bully and a master of false news, is correct, as is the principled friend of the consumer, Maxime Bernier

Trump needs a win. End supply management and let the bully walk away with a smile. Our consumers will stop getting ripped off on dairy and poultry products.

It’s time to get rid of supply management.

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