John Ivison: Kiss goodbye to supply management
As Martha Hall Findlay reeled off the reasons why Canada’s supply management system should be dismantled, you could almost hear time’s winged chariot changing gears in the background. The former Liberal MP’s research paper, which landed in the week the Harper government joined the Trans-Pacific Partnership talks, has the potential to change everything.
Written for Jack Mintz’s School of Public Policy at the University of Calgary, it is the latest to lay out the irrefutable case for consigning the supply management of dairy, poultry and eggs to history.
Crucially though, it is the first to address the question of political will — or more accurately, political won’t. Her analysis suggests that there are only 13 ridings in Canada with more than 300 dairy farms — eight in Quebec and five in Ontario.
Eight of them are Conservative, most with 10,000 vote pluralities. Her conclusion is that even if Conservatives had made clear their intent to end supply management, and all those seats had been lost in 2011, the Tories would still have won a majority government.
She suggested even that scenario was unlikely, since it discounts the prospect of people actually voting in support of dismantling supply management.
Her analysis of Statistics Canada’s agricultural census division suggests that in every single riding in question, there are far more non-dairy farmers, who would benefit from ending supply management through gains in exports.
There are a mere 12,746 dairy farms in Canada (down from 145,000 in 1970 and 30,000 in 1996). This compares to 210,000 beef, pork and grain farms dependent on international trade.
The reason so many MPs are of the opinion that nothing can be done is that they are constantly bombarded with messages from the vocal dairy lobby, richly funded by the proceeds of the higher milk prices all Canadian consumers pay. No-one wants to be accused of killing the family farm, even though the numbers suggest there has already been a winnowing of small farmers.
Ms. Hall Findlay urged export-oriented farmers to mobilize themselves in support of reform. But the real silent majority is the millions of consumers who pay more than they should for dairy and poultry.
The study suggested a family that buys an average of three bags of milk a week (four litres) is paying up to $300 more than in the United States — and that doesn’t include higher prices for cheese, butter and eggs.
“The worst part is that it’s not just taxpayers, it’s regressive. Lower income families are paying a higher percentage of their income for basic nutrition.
“From a political perspective, that alone should be worth far more than the whole variety of family tax credits that have been offered in recent years to encourage voters,” she said.
The paper did not delve into the ticklish issue of how to compensate dairy farmers for their the loss of value of their production quota — currently, each cow is valued at $28,000. But Ms. Hall Findlay did point to the experience of Australia, which funded transition payments by putting a levy on retail milk sales for eight years. She noted that, while the levy kept dairy prices higher than international free market prices, they were lower than they had been under supply management.
The timing is impeccable. Canada has just been invited into the Trans-Pacific Partnership and top of the list of demands from existing members like the U.S., New Zealand and Australia is the opening of Canada’s supply managed sectors.
The Conservatives hope they can pacify other TPP members by opening up some more tariff free quota, as they are doing with the European Union in their free trade negotiations. But, as the Hall Findlay paper notes, Europe is the only major trading bloc with a higher producer subsidy equivalent than Canada (as a percentage of gross farm receipts, the EU’s PSE is 27%, Canada’s is 18%, the U.S. is 10%, China is 9%, Australia is 6% and NZ is 1%). The quota solution just won’t wash with the TPP members, so the Harper government is going to have go further. Why not make a virtue of a necessity by courting the people who would gain from the introduction of free trade in dairy and poultry?
That is certainly Ms. Hall Findlay’s intention. She lost her Toronto seat at the last election but has expressed an interest in running for the Liberal leadership again (she ran in 2006). She said if she won, she would make the dismantling of supply management Liberal policy.
But that day will be a long time coming, as long as the Liberal Party is dominated by the Wayne Easters of the world. The Liberal trade critic didn’t miss a beat after the TPP announcement landed this week, demanding the government continue to protect dairy and poultry farmers.
Ms. Hall Findlay has made what Yes Minister’s Sir Humphrey Appleby would call a “brave decision” — namely, one that risks losing votes. Regardless, it will raise her candidacy in the estimation of those Liberals looking for some fresh thinking and political integrity.
It’s long been known that supply management is a racket — an indefensible, anti-competitive cartel. Politicians of all parties have known it, condemned it in private and then voted unanimously in support, as they did in November 2005.
But the tide just turned. The combination of entry to the TPP and evidence that change can come at minimal political cost suggests that supply management’s days are numbered.
Mr. Mintz, the renowned tax and fiscal specialist, said he sees the current situation as a “milestone” in Canadian history, similar to the signing of the Canada-U.S. free trade agreement.
“We are at a very important juncture. Do we want to be a major trading country in emerging markets, or, are we like a turtle pulling its head and feet back into its shell?” he asked. This government has already indicated it has ambitions to bolster Canada’s trade in Asia through new alliances.
Supply management is the price of admission.
Trans-Pacific Partnership and low political costs mean supply management's days are numbered | Full Comment | National Post
As Martha Hall Findlay reeled off the reasons why Canada’s supply management system should be dismantled, you could almost hear time’s winged chariot changing gears in the background. The former Liberal MP’s research paper, which landed in the week the Harper government joined the Trans-Pacific Partnership talks, has the potential to change everything.
Written for Jack Mintz’s School of Public Policy at the University of Calgary, it is the latest to lay out the irrefutable case for consigning the supply management of dairy, poultry and eggs to history.
Crucially though, it is the first to address the question of political will — or more accurately, political won’t. Her analysis suggests that there are only 13 ridings in Canada with more than 300 dairy farms — eight in Quebec and five in Ontario.
Eight of them are Conservative, most with 10,000 vote pluralities. Her conclusion is that even if Conservatives had made clear their intent to end supply management, and all those seats had been lost in 2011, the Tories would still have won a majority government.
She suggested even that scenario was unlikely, since it discounts the prospect of people actually voting in support of dismantling supply management.
Her analysis of Statistics Canada’s agricultural census division suggests that in every single riding in question, there are far more non-dairy farmers, who would benefit from ending supply management through gains in exports.
There are a mere 12,746 dairy farms in Canada (down from 145,000 in 1970 and 30,000 in 1996). This compares to 210,000 beef, pork and grain farms dependent on international trade.
The reason so many MPs are of the opinion that nothing can be done is that they are constantly bombarded with messages from the vocal dairy lobby, richly funded by the proceeds of the higher milk prices all Canadian consumers pay. No-one wants to be accused of killing the family farm, even though the numbers suggest there has already been a winnowing of small farmers.
Ms. Hall Findlay urged export-oriented farmers to mobilize themselves in support of reform. But the real silent majority is the millions of consumers who pay more than they should for dairy and poultry.
The study suggested a family that buys an average of three bags of milk a week (four litres) is paying up to $300 more than in the United States — and that doesn’t include higher prices for cheese, butter and eggs.
“The worst part is that it’s not just taxpayers, it’s regressive. Lower income families are paying a higher percentage of their income for basic nutrition.
“From a political perspective, that alone should be worth far more than the whole variety of family tax credits that have been offered in recent years to encourage voters,” she said.
The paper did not delve into the ticklish issue of how to compensate dairy farmers for their the loss of value of their production quota — currently, each cow is valued at $28,000. But Ms. Hall Findlay did point to the experience of Australia, which funded transition payments by putting a levy on retail milk sales for eight years. She noted that, while the levy kept dairy prices higher than international free market prices, they were lower than they had been under supply management.
The timing is impeccable. Canada has just been invited into the Trans-Pacific Partnership and top of the list of demands from existing members like the U.S., New Zealand and Australia is the opening of Canada’s supply managed sectors.
The Conservatives hope they can pacify other TPP members by opening up some more tariff free quota, as they are doing with the European Union in their free trade negotiations. But, as the Hall Findlay paper notes, Europe is the only major trading bloc with a higher producer subsidy equivalent than Canada (as a percentage of gross farm receipts, the EU’s PSE is 27%, Canada’s is 18%, the U.S. is 10%, China is 9%, Australia is 6% and NZ is 1%). The quota solution just won’t wash with the TPP members, so the Harper government is going to have go further. Why not make a virtue of a necessity by courting the people who would gain from the introduction of free trade in dairy and poultry?
That is certainly Ms. Hall Findlay’s intention. She lost her Toronto seat at the last election but has expressed an interest in running for the Liberal leadership again (she ran in 2006). She said if she won, she would make the dismantling of supply management Liberal policy.
But that day will be a long time coming, as long as the Liberal Party is dominated by the Wayne Easters of the world. The Liberal trade critic didn’t miss a beat after the TPP announcement landed this week, demanding the government continue to protect dairy and poultry farmers.
Ms. Hall Findlay has made what Yes Minister’s Sir Humphrey Appleby would call a “brave decision” — namely, one that risks losing votes. Regardless, it will raise her candidacy in the estimation of those Liberals looking for some fresh thinking and political integrity.
It’s long been known that supply management is a racket — an indefensible, anti-competitive cartel. Politicians of all parties have known it, condemned it in private and then voted unanimously in support, as they did in November 2005.
But the tide just turned. The combination of entry to the TPP and evidence that change can come at minimal political cost suggests that supply management’s days are numbered.
Mr. Mintz, the renowned tax and fiscal specialist, said he sees the current situation as a “milestone” in Canadian history, similar to the signing of the Canada-U.S. free trade agreement.
“We are at a very important juncture. Do we want to be a major trading country in emerging markets, or, are we like a turtle pulling its head and feet back into its shell?” he asked. This government has already indicated it has ambitions to bolster Canada’s trade in Asia through new alliances.
Supply management is the price of admission.
Trans-Pacific Partnership and low political costs mean supply management's days are numbered | Full Comment | National Post
