A Balancing Act Between Free Trade and Supply Management Politics

(Embassy – Laura Payton)

Canada’s policies keep some farmers profitable, but could threaten export opportunities for other agricultural sectors

As negotiators prepare to begin talks with the European Union on the biggest economic agreement Canada has undertaken in decades, the government has already taken a big bargaining chip off the table. The message seems clear: supply management is not up for debate.

Only a handful of Canadian agriculture sectors – dairy, eggs and egg-hatching, chicken and turkey – are supply managed. Supply management assigns quotas to producers, managing production and keeping farmers profitable. However, it also keeps prices high for consumers and, most importantly from a bargaining perspective, represents a major barrier to foreign imports.

For a government that champions free trade and lowering barriers, the position seems dissonant. But because the farms that benefit from supply management are concentrated in Ontario and Quebec, where the majority of House of Commons seats are also concentrated, politicians of all stripes are loathe to mess with it. In fact, in 2005, members of Parliament went as far as to adopt an all-party motion instructing Canadian negotiators at the World Trade Organization not to budge on supply management. Read more here.