Full Comment - BEST OF 2025： How a few rich dairy farmers are sabotaging Canada’s big, beautiful trading future

00:00:00.000 getting down to the bottom of the trade dispute with the united states it's something we tried

00:00:07.920 to do quite often in 2025 here at full comment hello i'm brian lily your host and this is a

00:00:13.880 best of episode from the 2025 season i want to take a moment to thank you the audience all the

00:00:19.260 listeners for making it a great 2025 season and we're hoping for an even better 2026 i'm sure

00:00:26.300 that this issue of the trade dispute with the united states is going to continue to come back

00:00:31.420 it was one of the main things we talked about all year we had a discussion with carlo dade and ian

00:00:36.340 lee about what the america first movement wanted economically that episode was wildly popular so

00:00:42.260 too was an episode with martha hall finley she's a former liberal mp currently director of the

00:00:47.960 university of calgary school of public policy she's also a long-time critic of supply management and

00:00:53.860 feels that it was a giant mistake for canada's parliament to unanimously pass a bill that would

00:00:59.440 say supply management can never be part of trade negotiations she believes that just a handful of

00:01:05.180 dairy farmers are ruining it for everyone here is that conversation

00:01:09.720 donald trump was able to kill off canada's digital services tax without much of an effort or pushback from

00:01:18.180 mark carney's liberal government in ottawa will supply management be next and what about canada's

00:01:23.740 trade future hello and welcome to the full comment podcast my name is brian lilly your host this week

00:01:29.280 we want to take a deep dive into trade canada's prosperity as well as our future in some ways is

00:01:35.060 at stake the americans are moving away from their negotiated trade deal with us we've trying to get

00:01:41.300 tariffs off of that and there are trade irritants like the digital services tax which will soon be gone

00:01:47.760 and of course supply management martha hall finley is a former liberal mp from toronto she's been in 0.95

00:01:54.980 western canada for many years first is president and ceo of the canada west foundation now is president

00:02:00.460 and chair of the school of public policy at the university of calgary and trust me when i tell you

00:02:05.320 she's got some strong opinions on supply management and why she believes it needs to go for the good of

00:02:10.860 canada never mind what it means for our trade negotiations we caught up with each other at her office

00:02:16.740 in downtown calgary on the margins of the stampede here's our conversation so martha how do you view

00:02:23.340 things right now is canada in a trade war are we at a hinge moment as prime minister carney likes to

00:02:30.560 say that's one of his favorite phrases uh are are we just dealing with a transformational president

00:02:36.420 for good or for bad who is out to adjust the global trading system i think it might be a bit of all

00:02:43.960 three um there's no question that we have a moment in time right now for canada it it's interesting i

00:02:51.560 mean i i struggle with saying thanks to donald trump in the same sentence but there's no question what's

00:02:55.900 happened south of the border has really forced an awful lot of canadians and and and therefore

00:03:03.280 canadian politicians but forced an awful lot of canadians

00:03:05.940 to have a much better maybe more realistic look at our own economic situation so we have two big

00:03:15.860 problems one is yeah we are significantly dependent on the united states and we have not diversified

00:03:22.240 enough to expand those opportunities and just take away from the united states as a market because

00:03:27.440 geography will will dictate that that will always be a huge market for us um but we have have really not

00:03:34.520 taken advantage of the opportunities in the indo-pacific for example or or in other parts of the world

00:03:39.620 partly because the america because the united states has been so easy for us um but you know donald trump

00:03:46.600 has clearly made made an awful lot of people realize maybe that reliance on the united states

00:03:51.400 needs to be um looked at carefully and and force us to look at other opportunities elsewhere in addition

00:03:58.660 not just not to to move away too much from the states but the other thing is a realization that

00:04:06.880 our own economic house needs some real work our productivity numbers are terrible our uh competitiveness

00:04:14.440 compared to you know most of the countries that we compare ourselves to is is down investment has

00:04:20.260 challenged has been challenged for a long time i would say not just the last 10 years i would say

00:04:25.080 we've we've we've struggled the last 25 years um for a variety of reasons so this isn't just a

00:04:31.520 partisan it's not a partisan comment i think we just have had some real challenges in canada for 25 years

00:04:36.360 um is this a hinge moment as as a prime minister likes to call it there's no doubt in my mind this is

00:04:43.020 a moment for canada right whether whether it's how do we do better in terms of our relationship with

00:04:48.700 the united states how do we avoid tariffs how do we enhance that kind of economic engagement

00:04:54.020 whether that's with trump or a successor to trump or you know what happens after the midterms whether

00:05:00.060 he becomes less powerful the fundamental is we still need to work very closely with the united states

00:05:06.000 and we we've benefited from that open trade we should work to continue to do that but we also have

00:05:13.280 an awful lot of work in canada to get our house in order and this is a moment in time for us we've had

00:05:18.480 clearly challenges in building infrastructure we are a trade dependent nation we are therefore

00:05:24.960 dependent on trade infrastructure and we have not invested whether it be ports whether it be

00:05:31.260 additional rail whether it be yes even more highways whether it's pipelines absolutely we have

00:05:37.940 not done a very good job in the last quarter century of building the infrastructure that a trade

00:05:43.440 dependent country um depends on and so is this a moment in time for canada because we've been forced

00:05:49.820 to recognize our economic challenges absolutely are we in a position to take advantage and finally

00:05:56.460 work at getting things right um i sure hope so but we're in early days so far the the words are

00:06:04.400 sounding good the language is good um but as we've seen too many times words don't always get followed

00:06:13.520 uh with action and so here's you know really hoping that we'll see action finally um to really get this

00:06:22.220 country back onto the road of of the prosperity that we really ought to be able to see you mentioned in

00:06:27.920 that answer about um diversifying trade i looked at some stats from a while back and in the 1890s when

00:06:36.420 canada was very much a part of a very big and burgeoning british empire we sent about 60 61 percent

00:06:43.780 of our exports to either the uk or countries of the empire and we were also reliant on them for defense

00:06:51.020 now we're reliant on the united states for defense and we send more than 75 percent of our exports to the

00:06:56.100 united states so did we just trade one empire for the other that we're reliant upon oh goodness i

00:07:01.740 had not have thought of that uh that's an interesting question uh well one i'm not sure it's a question of

00:07:09.940 reliance i think it's more a question of opportunity and of course over that period of time the united

00:07:17.040 states has became way more way bigger way more powerful economically but also if i remember

00:07:25.940 correctly there were significant um there were barriers perhaps to to trade i'd have to go back

00:07:33.020 and look but there were certainly um uh fewer trade barriers like fewer tariff barriers between canada and

00:07:41.480 the uk and the empire the other empire countries at that time yeah um so that might have also been a part

00:07:48.420 of that but look we're we're not that big we're obviously geographically very big which does create

00:07:56.160 certain challenges for us but we're not very big and and we're sizable economically but compared to the

00:08:01.800 united states um we have no choice but to recognize that we are not their equal we will not be their

00:08:11.740 equal economically we will not be their equal militarily and so i think over the last you know

00:08:18.560 century and a half two centuries and certainly the last few decades it's been more opportunity than

00:08:24.000 anything else i there's no question now given some of trump's um sloganeering and and language

00:08:33.140 that the comfort we've had with that relationship has been put on edge but i don't i i don't see

00:08:43.960 the united states as being necessarily similar vis-a-vis canada to what was our relationship

00:08:52.120 as a member of the commonwealth so many years ago but in terms of that size that you mentioned how do we

00:08:59.140 compensate for that you know we're important trading partners but when you look at the numbers

00:09:05.240 about 20 percent of our gdp relies on trade with the united states theirs is less than two percent i

00:09:11.080 think it's 1.6 1.7 and we see that with the uh the backtracking on the digital services tax which by the

00:09:19.200 way i think was the right thing to do i think prime minister carney played it horribly by saying

00:09:24.020 oh no we're moving forward with it and then you know less than two hours before midnight when it's

00:09:30.080 about to kick in says we'll get rid of it but getting rid of it was the good idea but on other

00:09:36.000 issues we're just going to face the fact that they have a lot an awful lot of power i'm not going to

00:09:40.720 use trump saying that they have all the cards but they've got an awful lot of power over us and leverage

00:09:46.360 they absolutely do but and and and just i can't resist but on the digital services tax

00:09:55.240 we should as canada we should have waited and kept with the much larger group of countries that

00:10:05.480 were trying to work on this collaboratively our decision a couple years back to go it alone

00:10:12.480 um which a couple of other countries have as well but for canada to do that set us up for a problem

00:10:18.700 um it has been an irritant with the americans not just donald trump right from the time we said we're

00:10:24.940 going we're not going to we're not going to wait for this other group of countries the oecd

00:10:29.080 countries exactly so um you know i my preference would have been not to have gone down that path in

00:10:36.660 the first place and then having to rescind it because and of course it's not rescinded right it's just

00:10:41.460 we're not charging it there's i mean they've promised that they'll bring in legislation to

00:10:46.420 rescind it but you're right it is still on the books but you know in terms of strategy um if they

00:10:53.200 had announced the um the week before it was supposed to come into effect look we're going to put a pause

00:11:00.320 on this it still could have been a bargaining chip and what i kept hearing from liberal mps and insiders

00:11:05.420 was well we're using it as a bargaining chip to try and get something bigger that's why we haven't

00:11:09.720 gotten rid of it but you know we'll get rid of it but not yet because we need it for bargaining

00:11:13.500 and then they they gave it up with getting absolutely nothing but a resumption of talks in

00:11:18.620 return i i don't we i'm not hearing that it was for nothing um and i don't know yeah and i there's an

00:11:26.540 awful lot going on behind the scenes that that neither one of us is privy to i don't my my understanding

00:11:33.560 is that there is a lot more going on behind the scenes that there may have there may have been

00:11:40.280 some bargaining who knows there might have been some of this discussion uh at can and ask us but

00:11:45.640 you know digital services tax you know my views on supply management like oh we'll get into that

00:11:51.140 that's on the list can we please because my gosh um but i i i just i think there's a real

00:12:00.340 with all of this there is a moment now for canada to actually do the right things for canada

00:12:09.620 not just for donald trump we shouldn't be just playing around and and it's not playing we shouldn't

00:12:16.260 be reacting and you know and trying to figure out what what how we can best donald trump we're not

00:12:23.580 we're not going to economically we there's the best way to deal with the fact that we have an elephant

00:12:28.920 to the south of us is first understand that we have a relationship with an elephant and that comes

00:12:34.840 with some opportunities and it comes with some challenges without question being pragmatic is

00:12:39.680 probably the best strategy canada could embark on when you talk about that trade imbalance though

00:12:45.580 there are a couple of nuances a big amount of that trade that we have with the united states are

00:12:51.400 our exports to the to the united states is of course oil right and they need that oil the gulf coast

00:12:57.360 refinery complex needs canadian oil they need it's it's all set up for canadian heavy so that's

00:13:04.720 there's there's definitely some power some influence there we it may you know maybe not long long term

00:13:11.340 but right now that is a bit of a bargaining uh i wouldn't say it's a bargaining chip because we're not

00:13:17.100 going to cut it off but it's a recognition that it's that there are certain strengths and weaknesses

00:13:22.740 that are a little more nuanced than just the top level trade numbers the other thing though but

00:13:27.260 but just to finish the other thing is that that trade balance that canada has with some of the

00:13:33.520 some of the states like 30 different states of the united states actually do trade heavily with canada

00:13:41.880 and so i've been saying this right from the beginning our best allies in dealing with donald trump's

00:13:49.560 tariff nonsense are in fact americans they're the americans in a number of those states number of

00:13:55.840 the manufacturers that are now being hurt by some of the tariff impositions if you know you're dependent

00:14:00.880 on canadian steel and aluminum your your prices just went up and so you're going to be not happy about

00:14:07.620 that that the the biggest allies we have the biggest strength we have right now is frankly with a

00:14:14.500 whole lot of americans especially in those states and especially in those manufacturing sectors who

00:14:20.480 are hurting more from donald trump's tariffs than we are yeah and i think that um ontario premier doug

00:14:25.960 ford has been very good on that working those connections going to the meetings with governors

00:14:31.320 and pointing that out you know it's going to require the americans actually making that point

00:14:36.880 in washington to the audience of one but it helps that the conversation is there but you mentioned about

00:14:42.680 oil and we're not going to cut it off so this is where i'm going to tap into your roots as an

00:14:48.560 easterner now in calgary so i get the pre the position of alberta premier danielle smith this is

00:14:56.920 a non-starter i get it politically economically so many reasons but out east you listen to an awful

00:15:04.000 lot of the commentary oh why won't they just cut it off they're not on team canada they don't care

00:15:09.100 about the country um the premier's a traitor uh you know all of these things that you hear from folks

00:15:15.260 that never leave rosedale or westmount and uh don't really have a sense of why that would be

00:15:23.240 an unthinkable idea out here so help help those folks understand well a couple of things um i i the

00:15:33.000 the premier was forced into a bit of that corner because um one of our federal ministers made the

00:15:40.780 comment that we should cut off oil exports that or you know put a tariff on our own tariff on whatever

00:15:49.620 a couple of points that are really important for everybody in this country to remember

00:15:54.780 is that oil and gas exports are a massive part of the entire canadian economy so everything that we

00:16:04.100 benefit from in terms of prosperity is significantly dependent on our oil and gas exports so this is a

00:16:11.920 canadian enterprise this is not just alberta um totally you know in a number of ways the the oil

00:16:21.480 oil industry here depends on all sorts of um manufacturing inputs service inputs from across

00:16:27.860 the country so this industry is a canadian industry and the taxes and the benefits and the economic

00:16:33.960 prosperity all actually go to all of canada and all of canadians that's something we do not talk about

00:16:40.680 enough and has to be repeated the other thing is that same minister didn't come out and say

00:16:48.040 and maybe we should put a hold on potash exports that same minister didn't come out and say we should

00:16:57.240 put a hold on auto pick your manufacturing sector into in ontario such as auto or you know auto parts

00:17:06.840 um so i recognize that sometimes things get said that are you know emotional but i will say that um

00:17:17.080 the premier of alberta really got pushed into a spot because of a federal minister picking on only

00:17:27.720 oil exports from alberta and and it came especially under the previous government after a decade of

00:17:33.960 saying we don't want your resources we don't want your pipelines etc etc and then it became we want to use

00:17:39.960 it as a bargaining chip um please let us cut off your uh your lifeblood the the the the the the nerve of

00:17:47.800 absolutely that brian um 10 years of really having a thumb on the opportunities here the prosperity here uh

00:17:57.480 the potential prosperity again not just for here but for the whole country but um and then and then turning

00:18:05.320 around and saying but we're gonna you know we're gonna use you to get to to to serve as a bargaining

00:18:11.080 chip um it was it was deeply offensive to people here and i you know you you started this by saying

00:18:17.800 you know i'm an easterner well i've been here for 12 years uh now but i do i i think of myself as a

00:18:24.200 canadian by far and away more than i think of myself as having been from ontario or being an alberton

00:18:29.960 i fit i think of myself as a canadian and i have always been a free trader i have always been and for somebody

00:18:37.560 as old as i am i'll always say it's actually a long time um uh but but but as long as i can remember

00:18:44.440 i've been a free trader for as long as i can remember i've been a big supporter of canada um embracing the fact

00:18:51.560 that we are blessed with resources of all kinds there are people around the world who literally would kill

00:18:59.480 to have the opportunities and the resources that we are blessed with in this country and we shoot

00:19:05.320 ourselves in the foot over and over um for whatever reasons i mean certainly on the on the climate piece

00:19:12.280 the the irresponsibility of of the this the most recent government and the prior government didn't

00:19:19.880 we didn't build a whole lot under that government either so this is you know i want to make that clear

00:19:24.920 but this last government the absolute irresponsibility of a federal government suggesting and implementing

00:19:33.640 policies that somehow suggested that canada could solve the global climate challenge on its own was

00:19:43.880 um well irresponsible i i it just very frustrating there were proposals put forward to help reduce global

00:19:50.520 emissions by using canadian oil and gas letting lng exports replace coal and that was laughed at uh by

00:19:59.000 by the trudeau administration oh no no we can't do that we just have to lower canada's emissions not

00:20:04.200 worry about what's happening in india and china and south korea and places that wanted our product the

00:20:09.800 focus the in there's so much ideology there and and and let me be clear about one thing um i hate it when

00:20:17.640 people say that i always try to be clear it's like let me let me be honest here well i gotta try to be all the time um

00:20:25.960 an awful lot of those people have been well-meaning an awful lot of those people are not bad people but they saw

00:20:33.800 climate as the existential challenge for the for the world and felt that canada

00:20:39.160 um had the most important thing for canada was to meet our climate goals our paris commitments

00:20:49.720 canada has never done that has never met its goals we have an unfortunate history of of having

00:20:55.640 um aspirations but never actually being able to come through and um knowing that what was happening in

00:21:03.640 china and india and in other places all around the world that somehow canada could on its own by

00:21:14.760 meeting our paris commitments have any kind of realistic impact on the global climate change

00:21:21.240 challenge was completely nonsensical and that's why i say i think you know the the politicians suggesting

00:21:28.440 that we could do that and at the expense of the canadian economy canadian prosperity was was

00:21:34.360 irresponsible um it's it's well-intentioned but we uh unfortunately have uh for 10 years been shooting

00:21:42.760 ourselves in the foot so that a few people could pat themselves on the back and what we're seeing now

00:21:48.600 is a much greater recognition ironically from one of the most vocal and influential people in the climate

00:21:57.160 change challenge uh world you're talking mark carney um you know i give him full marks for for

00:22:04.760 recognizing he's now he's now prime minister canada and as john manley likes to say and i think he's

00:22:10.280 absolutely right natural resources this is our family business and mark carney's now he's kind of the head

00:22:16.200 of the family and so his first responsibility is to this country and he's recognizing canada's not going

00:22:23.880 to solve climate change we can play our part we're still you know i was part of the pathways alliance

00:22:29.560 the the oil sands pathway pathways alliance to reduce emissions um the industry has been reducing

00:22:35.560 emissions um per barrel dramatically over the last number of years anyway um those those are really good

00:22:42.520 goals but i i give i give mark carney full credit so far because the words are right as i said earlier we

00:22:48.360 need to see the actions but um i give him full credit for being able to say um my circumstances

00:22:55.960 are this the world's circumstances have changed and we now to get need to get on with this and i

00:23:03.800 so far i'm i'm impressed i think these are these are the right things to do for the prime minister of

00:23:09.640 canada well and you're even hearing that he's saying the right things um from people like Saskatchewan

00:23:16.040 premier scott mo and from alberta premier danielle smith and i even ran into premier smith at uh

00:23:21.880 an event here at stampede and she said you know we'll see if the results turn out but so far he's

00:23:28.120 saying the right things and that gives her hope we'll take a quick pause here but when we come back

00:23:32.360 let's get into supply management because i know you have some thoughts and and so do uh the listeners

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00:25:09.560 this is tristan hopper the host of canada did what where we unpack the biggest weirdest and wildest

00:25:15.320 political moments in canadian history you thought you knew and tell you what really happened stick

00:25:21.000 around at the end of the episode to hear a sample of one of our favorite episodes if you don't want

00:25:25.960 to stick around make sure you subscribe to canada did what everywhere you get podcasts so just before

00:25:32.120 we entered into these new negotiations with the americans to try and get an extra a different trade

00:25:38.040 deal uh a new you smacker a new kuzma whatever you want to call it we decided to pass a bill put forward

00:25:44.360 by the leader of the separatist party uh y francois blanchet to say that canadian uh diplomats and trade

00:25:51.720 negotiators were forbidden by law from talking about supply management at all not dismantling

00:25:58.360 it but talking about it martha you know you've got a track record on supply management but my

00:26:04.440 discussions with your uh the americans including uh ambassador pete hoekstra is they don't want to get

00:26:10.600 rid of supply management but they do want greater access for their uh producers whether it's a bigger

00:26:17.800 quota or something and they just feel like we try and use supply management to block them at every turn

00:26:25.480 um do can we negotiate away some quota or should this system just be dismantled wow a lot of parts to

00:26:36.280 that um i'll take a couple of bits just one at a time so first we already have a deal with the united

00:26:45.480 states it is the usmca kuzma nafta the new nafta we have a treaty a trade deal with the united states

00:26:55.880 it is the law of both of all three countries because remember it includes mexico so it is very dangerous

00:27:02.360 to talk about negotiating a new deal or whatever because in some way like language matters in some

00:27:10.280 ways that kind of con that kind of language only feeds into donald's donald trump's view that he

00:27:15.960 can just throw it away because he can't um i mean he clearly has been throwing it away since he brought

00:27:23.800 in the tariffs on liberation day so so that said we have the realities of a president who seems to be

00:27:30.840 getting away with executive actions without the consequences and without without the enforcement of the

00:27:38.120 legal constraints that he really should be facing so there's a whole bigger question there but that is

00:27:43.960 the pragmatic that the practical challenge that we're facing now but i think it's worth repeating

00:27:49.240 that we do have a deal now now if we can just talk about that deal for a moment though like the americans

00:27:55.560 have been complaining about how we handle dairy since basically the day after the deal was signed

00:28:02.280 and the biden administration took us to trade panels twice and you know you've forgotten more

00:28:08.360 about supply management than i'll know but my understanding i was talking with sylvain charlebois

00:28:12.920 about this a little while ago and he said well the problem is the americans negotiated quota

00:28:17.640 access for their producers but the holders of that quota are canadian cheese producers like saputo or

00:28:24.680 armstrong and they just say we're not buying any of your milk and so that creates the irritant of

00:28:31.320 wait a minute we thought we had a deal and you're just still blocking us which seems like a a bad move

00:28:39.160 when you look at the totality of our trade deal so so oh there's so many parts to this so let me i

00:28:50.280 don't i don't disagree with any of that but the issue is much much larger than um some frustration that

00:28:59.320 maybe the deal wasn't clear clear enough or that the canadian side has has been not adhering to it

00:29:06.040 completely well i don't disagree with any of that but the issue is much larger and and it's not just

00:29:11.560 the americans the entire world is frustrated with canada's supply management um regime because it uh

00:29:18.920 basically enforces ridiculously high tariffs on any dairy uh poultry and egg uh imports into canada and so

00:29:27.080 that's frustrating i mean you know we're not a tiny market we're resizable and um producers around the

00:29:32.760 world get frustrated when we go to negotiate trade deals like our trade deal with europe or the trans

00:29:38.680 pacific partnership trade deal the the people are are pretty frustrated with canada because we

00:29:43.880 we say sure we'd love to have free trade but oh by the way you can't sell us any in effect you can't

00:29:49.480 sell us cheese milk yogurt you know yogurt ice cream so so it's a much larger issue parsing out

00:29:58.200 a couple of the things you said one is this new bill that is about to achieve uh to get royal assent

00:30:05.480 that was brought in in this new government as you said by the uh the the bloc quebecois and passed

00:30:11.640 unanimously though and passed unanimously in the house the last government just before the last government

00:30:19.480 um ended there was a similar bill that had been put forward by the uh the bloc quebecois that

00:30:27.160 richie and she almost i don't think it was completely unass but almost unanimous consent in the house bill

00:30:32.360 282 it then went to the senate and the senate and i want to do a shout out to a couple of senators peter

00:30:39.160 harter and peter beam who did yeoman's work in getting the senate to do what the senate is supposed to

00:30:46.520 do sober second thought the senate hearings the senate committee worked on this

00:30:52.120 had tons of investigation into the issue importantly it was not actually to be a referendum on supply

00:31:02.440 management it was the concept of carving any sector any part of our economy out of any future trade

00:31:12.280 negotiations is something no country in the world has ever done let me just say trade negotiation means

00:31:20.040 negotiation and this as soon as you say oh but we'll negotiate everything except for that piece

00:31:27.480 destroys the concept and so many of us who appeared before the senate on this said this is not if you did

00:31:33.640 this on the auto sector if you did this on steel and aluminum we would say we would say the same thing

00:31:39.160 you must not carve out a sector from trade negotiations because then you've tied you've

00:31:45.320 really tied you know one hand behind your back so this is a nuance it's really important to understand

00:31:52.360 this new bill came in virtually the same and i have to say the senators that i've spoken to um have

00:32:00.680 did not do it again because their view was at a certain point the senate does have to respect what

00:32:07.080 they see as the will of the people if the house of commons completely abrogated any responsibility

00:32:13.240 for appropriate committee hearings on this bill is the house of commons's fault and we as canadians

00:32:18.360 have to be critical of that but i can understand you know the senate works so hard to deal with 282

00:32:25.160 that it just it the the will was not there to do it on this bill so this bill is going to pass you've

00:32:30.920 got every party and every mp that's voting saying they're backing this why the stranglehold you know

00:32:37.720 i was talking to some um farmers in saskatchewan the other day and they they just blame quebec and

00:32:45.240 it's quebec farmers and there's a bit of truth to that i think parts of ontario and and and their

00:32:50.040 pockets i mean look there's a very strong dairy lobby in in alberta too there are a small number of very

00:32:56.040 wealthy um dairy farmers here now the the entire entire country um when supply management was brought

00:33:04.360 in there were about 145 000 dairy farmers across the country and there were real issues in terms of

00:33:10.760 price volatility um etc the supply less than 10 000 and now it's probably about 8 000 they are all

00:33:18.840 multi-millionaires even the small small you know 70 head farms in quebec um they're all multi-millionaires

00:33:29.720 the challenge here and and they are so because of the extraordinarily high prices that we charge uh

00:33:35.480 that that we end up paying as consumers in canada it's the the best way for me to describe it for

00:33:41.160 listeners it's the three legs of a stool and this come brings it back to the trade discussions supply

00:33:47.160 management is a cartel it's a legislated cartel so you know we we say any other cartels are illegal

00:33:54.200 because they're bad but this one is sanctioned um historically you know might have been a reason

00:33:59.240 for it does not stand the test of analysis anymore you can't really say that we're doing this to keep

00:34:06.680 the small family dairy farm going when we've gone from over a hundred thousand to on you know

00:34:12.520 i think charlebois says nine you say eight it's under ten now it's it's definitely under ten now um

00:34:18.600 and and that's exactly one of the arguments well it protects the family farm absolute nonsense in fact

00:34:25.960 um uh the rate of consolidation in the last number of decades in dairy and poultry and eggs has been

00:34:33.880 higher than virtually other every other agricultural sector in canada so one could actually say it has

00:34:40.680 hurt right the the maintenance of of the family farm but if i can just the the three legs of the

00:34:47.320 stool because people say to me i don't i don't understand supply management the three legs of the

00:34:52.280 stool are you have price setting by the dairy commissions the federal provincial um and that

00:34:59.480 they're made up of dairy farmers no conflict of interest there um so you have them set prices

00:35:05.480 they set their prices based on if you've ever worked in construction or had to you know get

00:35:09.320 construction work it's like it's cost plus right um so there's no there's no there's not a lot of

00:35:16.760 incentive for for uh figuring out how to be more efficient on the on the costs um so you have price

00:35:23.480 fixing the the prices are fixed by the producers themselves so as i said um clear conflict of interest

00:35:30.520 the other the second leg of the stool is that any industry if you say it's all cost plus and you've got

00:35:37.240 your fixed prices you're gonna get a lot of people wanting to get into that industry it's like

00:35:41.880 handing out mcdonald's franchises for free um that's you're gonna get an awful lot of people wanting to

00:35:47.960 set up mcdonald's well that ultimately doesn't work it's not tenable so there's a quota system so to keep

00:35:54.360 the limit the number of producers limited you establish a quota basically how much milk can that farmer produce

00:36:03.240 right well the third leg of the stool is and the quota ends up being really valuable it's a little

00:36:11.400 bit like a mcdonald's franchise fee right if you want to run a mcdonald's you have to pay an awful

00:36:16.040 lot of money for the privilege up front you have to pay an awful lot of money for the privilege of

00:36:20.840 having quota up front so you know in some parts of the country quota is worth 45 000 a cow and that

00:36:27.400 doesn't include the value of the cow in some places it's fixed at 25 000 worth per cow but you get the

00:36:35.400 drift right there's there's a lot of money involved here the third leg of the stool is that if you will

00:36:42.120 have artificially higher prices in canada because of the first two legs of the stool which you do

00:36:49.560 you can't let cheaper you know world market products come into the country because it will

00:36:58.600 completely undermine the system right if you allowed american yogurt at a third of the price of what we

00:37:06.360 pay for your yogurt here in canada well guess what's going to happen everybody's going to buy american

00:37:12.360 yogurt right well can you speak to uh this claim that i hear on a regular basis and and that is

00:37:19.160 that again even if we just allow a little bit more american product in um supply management

00:37:25.880 protects us from those evil americans with their chemical filled products and their bovine growth 0.95

00:37:30.520 hormones yeah this is just drives me crazy this but this is what i get and and what's what's amazing

00:37:37.000 is that it's not true it goes across partisan lines this is not one party or another it goes across

00:37:43.000 and people think that supply management is there to protect us from inferior product talk to any baker

00:37:50.360 about butter in canada versus butter from other countries and you will get a rant about how our product

00:37:56.200 is not superior on that front but it's an awful lot more expensive yes um uh ironically australia

00:38:03.640 and new zealand both had supply management in their dairy sectors many years ago the new zealand's

00:38:09.800 less of a good example australia was very similar to ours and um you know you talked earlier about

00:38:16.120 being right next door to a an economic powerhouse australia is really close to china and it was

00:38:24.360 recognizing that its economy needed to become a lot more competitive in the early 2000s they implemented

00:38:30.920 policies to and to actually ensure australian uh well the whole economy it wasn't just dairy but the

00:38:38.360 whole economy become much more competitive as part of that they actually got rid of supply management

00:38:44.040 the australian dairy industry is now one of the most um lucrative powerful industries in canada

00:38:50.600 in the world new zealand does really well too you'll hear you know canadian farmers saying well the

00:38:56.040 climate's different and honestly it drives me crazy because some of this is all just um uh i i wanted

00:39:06.280 i don't want to say nonsense because that's a little harsh and i don't want to be flippant these are not

00:39:12.120 truths the how can we get rid of it though and so here's the thing um what the opportunity and and

00:39:19.400 so just to complete the picture of the three stools sorry brian but what that means to prevent low

00:39:26.840 cost product from coming in we have tariffs on um milk dairy products poultry eggs for anyone any other

00:39:38.600 producing country in the world including the united states of up to almost 300 percent that is to make

00:39:46.280 sure that we don't get that cheaper product coming in because you add the tariff on and then it becomes

00:39:52.440 comparable in term in price so you know for we basically we basically have built a wall around

00:39:59.160 canada the response from the rest of the world is well you can't sell us your dairy because you know you 0.98

00:40:07.240 that's how the w the world trade organization rules work you can't you can't suck and blow you can't 0.97

00:40:13.560 keep yours protected and then come in and sell in on ours the other challenge is because we've made

00:40:18.520 ours so expensive there isn't a market in internationally because it just that we can't

00:40:23.880 compete which is such a shame because we have you know we have in nova scotia let me just pick on

00:40:28.680 nova scotia there is a really fantastic cheese um artisanal cheese manufacturing sector in nova

00:40:36.040 scotia for example but that stuff is so expensive it wins global awards some of those cheeses and

00:40:41.880 quebec too ontario other parts of the country but they but they're limited to the canadian market

00:40:47.640 which is a real shame so there's a lancaster cheddar from lancaster in ontario that won

00:40:52.360 world's top cheddar a few years ago yes and the rest of the world doesn't know it because they

00:40:56.760 they can't and you can barely get it in canada well there you go so so let me go back to if i can to

00:41:03.160 the opportunity um a couple of big dairy companies in canada one is a cooperative owned by the irony

00:41:11.880 here just kills me owned by quebec dairy farmers agripoor now produces more american milk than it

00:41:19.400 than than produces canadian milk because they bought into american dairy because they knew that if they

00:41:26.520 wanted to expand into other markets which most successful businesses see as opportunities they

00:41:33.640 had to actually go outside of canada and set up shop in in agripoor's case in the united states what

00:41:42.040 really is frustrating about that is that that the quebec dairy farmers that own it they keep their wealth

00:41:47.320 in terms of the canadian market with inflated prices um but for the agripoor the company to process

00:41:55.240 to go into the united states and process more american milk than canadian milk those are american

00:42:00.600 jobs not canadian jobs so we've in effect exported jobs into other markets saputo is a quebec company

00:42:09.960 quebec dairy company it's one of the largest dairy companies in the world has massive operations in

00:42:15.000 in australia and elsewhere for the same reason so you know good on them that's fantastic but we make good

00:42:22.440 milk here we could be making a lot more milk here for those export markets but we can't because of

00:42:28.760 the rules because of this very inward looking we need to protect our our cozy little arrangement here

00:42:36.440 at all costs the key is we could do this australia got rid of supply management as i said that industry

00:42:44.120 is now one of the world's best we do it if we were going to do it how would it happen because one of

00:42:48.840 the another argument i hear is well the banks have so much money tied up in loans for the quota right

00:42:55.720 that it would be too expensive or if you just you know didn't compensate for the loans for the quota

00:43:02.120 that uh you would effectively take a real hit for the banks no so so here's this is what australia did

00:43:09.800 i mean the first premise is you can't jeopardize the farmers and the producers who based on having quota

00:43:19.400 borrowed borrowed borrowed money to build barns borrowed money you know you we you can't do that

00:43:24.600 that's unfair so how do you compensate the existing quota holders in a way that uh allows them to not

00:43:35.640 you know be be uh jeopardized financially but in a way that also doesn't cost a canadian taxpayer

00:43:43.160 billions of dollars now you hear the number floating around if you just multiply that the quota number by

00:43:48.120 number of cows you know 30 billion dollars it's not that much we've i've i've done a lot of work on

00:43:54.200 this we had an mpp student from the school of public policy do some fantastic work he graduated i guess

00:44:00.840 two years ago now um some fantastic work uh with much uh more updated numbers the number would

00:44:08.600 probably be about eight billion in that range now that's not chump change that's a lot of money 1.00

00:44:15.880 especially at a time when canada's making a whole lot of financial commitments on military and various

00:44:20.600 other things but what australia did and this was the genius of the australian approach and remember this

00:44:27.000 was not australia just focusing on dairy this was australia recognizing it needed to be a lot more

00:44:32.200 competitive it had big economies around it growing like china oh does that not sound familiar that maybe

00:44:38.360 this is a moment in time for canada to actually in all of its sectors become more competitive but on

00:44:43.880 dairy what the australians did is they used the system itself to build the fund that actually paid

00:44:51.720 out the quota for the farmers and so over the course of it was either 20 or 25 years they said

00:45:01.080 they determined what the number was that would have to make the farmers whole

00:45:05.960 they then said okay x say 10 10 billion it wasn't 10 billion but for the sake of of argument if they

00:45:12.200 said 10 billion dollars was what they were going to need to make the farmers whole basically paying

00:45:18.200 out their quota and making sure that they could get stick you know get more on their feet to be able

00:45:22.280 to compete internationally um if and you that's hard because on a podcast you can't see my hands but i'm i'm

00:45:29.560 if you say the the uh supply managed price was 10 bucks the uh world market price was five dollars

00:45:40.440 they increased the cost of a liter per milk a liter of milk by 11 cents from the world from the five

00:45:50.120 dollars so five dollars plus 11 cents those numbers are not real but the 11 cents is but

00:45:55.880 i'm trying to do the graphics here um for that 11 cents per liter produced for 20 years was the source of

00:46:05.880 the of the of the of the money to build the fund to buy the farmers out so yes did it cost

00:46:12.200 consume so it wasn't a cross taxpayer base it was consumers but the consumers if they didn't do the

00:46:18.280 consumers were still going to be paying 10 bucks if the consumers were paying five plus that was still

00:46:23.800 better than paying 10 bucks and over 20 years that actually managed to ensure that the uh farmers in

00:46:31.560 australia were made whole economically did everyone stay in the industry did everyone

00:46:37.000 manage to to sort of rally to this and compete no some of the dairy farmers in australia sold out to

00:46:42.520 others there was some consolidation that's not a bad thing like i said the australian industry is now

00:46:48.680 a powerhouse globally which has benefited the australian dairy sector like it's been it's an opportunity for

00:46:56.680 canada so for me it's not we need to get rid of supply management because supply management is bad

00:47:02.440 and you know it's it's made a small very small number of people ultra wealthy at the cost of

00:47:07.320 consumers which is true but it's also a shame because we are depriving our own dairy farmers

00:47:15.640 and the dairy sector and the producers from using more canadian production building canadian jobs to be

00:47:22.520 able to participate in the global marketplace but i but i will say fundamentally the lobby the dairy

00:47:29.640 lobby so if you're if you're spending 100 200 million dollars a year and you know just by if you

00:47:35.880 add how much a billboard costs and a tv ad costs and how much the milk insignia on the toronto make

00:47:41.400 on the leaves jersey yeah it's too bad probably you know would have been more more costly if it had

00:47:46.280 been the others but anyway um those are all that's really expensive i mean when i was first first

00:47:51.480 doing my work on this the the the understanding it was well over a hundred million dollars a year

00:47:56.840 of marketing well that's you and i are paying for that right because of our inflated dairy 0.99

00:48:02.440 poultry and egg prices but the people who benefit from that the lobbyists the marketing people the ad

00:48:10.600 campaign people they all have a vested interest in having the dairy farmers themselves believe that supply

00:48:20.280 management is is sacred and they also have a vested interest in making sure because the you know the

00:48:28.440 dairy farmers will spout these lines even if they're not true but they've been told them

00:48:33.240 there are some dairy farmers by the way who behind the scenes are actively working to get

00:48:37.320 rid of supply management for these very reasons because they understand what what they're missing but

00:48:41.880 they have to be extremely quiet about this because uh it's a it's a it's it's a tough um there are

00:48:48.520 people who are very very strongly intent on keeping this system because they benefit so much from it

00:48:55.640 um but then they also that's the by far the most active lobby on parliament hill um so even though

00:49:03.080 behind the scenes many of those politicians who voted for that bill agree that supply management needs to go

00:49:10.920 they vote for it because they say they don't have the votes and the vet the industry the lobby

00:49:20.200 has a vested interest in making sure that those politicians continue to believe that there are simply too

00:49:28.200 much too many votes in support of supply management so we need the canadian public to understand the

00:49:34.040 realities of this much much more if i can right now every other sector in this country automotive

00:49:45.080 whether you know the big three auto parts canola uh um beef beef aluminum steel all of the aluminum and

00:49:56.120 steel industry in canada is now under tariffs and they are suffering part of the reason is that we have

00:50:07.080 this extraordinary need somehow to protect supply management but the cost what do we give up what

00:50:15.160 does every other sector give up if we were able to say that the americans yeah i think you're absolutely

00:50:23.160 right they're not saying get rid of supply management they just want greater some greater

00:50:27.480 access to the to the country's market um but we need to get rid of supply management for canada's sake

00:50:34.760 not for donald trump but right now because we are holding on to it so dearly every other

00:50:42.440 the negotiation on every other economic sector is harmed well i'm sure you've heard from the same people

00:50:49.160 i have who have been part of the past negotiations in the last trump administration and are being

00:50:55.480 consulted now from various industries they they will tell you straight up maybe not on the record

00:51:01.560 but they will tell you straight up that the dairy lobby could scupper the entire deal uh and and hurt

00:51:09.560 every other industry well this recent bill um is is hugely problematic even as i said before even if it

00:51:16.840 weren't dairy um excluding any economic sector from trade negotiations is a problem but are keeping

00:51:24.120 supply management as a as a system absolutely i mean you i'm look i'm i'm in western canada the beef

00:51:30.760 farmers the canola people the everybody the the corn people in ontario corn farmers who have expanded

00:51:37.960 into the united states simply because they can't afford the the acreage in ontario because of the

00:51:44.920 the inflated costs of that acreage because of the the um artificial wealth of the of the dairy

00:51:50.280 industry i mean i'll say something that's not popular though isn't canada overall a protectionist

00:51:55.400 country while we scream about the americans and tariffs and and different things beyond supply

00:52:01.720 management we protect our banks we protect our telcos our media companies and it's a long list of

00:52:08.920 um thou shalt not trade in this well foreign ownership restrictions are a bit different i mean

00:52:16.120 there's there's nothing to prevent verizon from coming in and and setting up shop in canada we

00:52:20.600 don't we don't prevent there are lots of banks that come into canada and operate what we do restrict

00:52:26.280 is ownership in those in those companies and that's a much different conversation um it nothing compares to

00:52:35.080 this extraordinary artificial the sanction cartel that continues with supply management my hope brian

00:52:42.920 is that that what's happening with donald trump and the americans and and let's face it there are a lot

00:52:48.840 of people behind trump who also i mean supply management was a frustration for obama was a frustration

00:52:55.000 for biden it was a frustration for you know it's been a frustration for for decades um the the challenge

00:53:01.880 here is we need the other economic sectors in this country to be very firm with our politicians to

00:53:08.760 say enough is enough we know that there's actually real benefits to getting rid of supply management

00:53:15.720 for canada for canadian consumers and ironically for the canadian dairy poultry and egg sectors in

00:53:22.200 terms of potential global opportunities but we're ignoring those and hurting all of our sectors in

00:53:30.600 all of these trade negotiations so you know where are they we need them to step up we need the canola

00:53:37.160 farmers we need the bee farmers we need aluminum steel we need the auto auto parts sector people to

00:53:44.200 be making these these noises with our canadian politicians because if they don't speak up the

00:53:50.520 canadian politicians will continue to be under this frustrating belief that somehow those dairy votes are more

00:53:58.280 important than every other economic sector in this country martha all finley thanks so much oh my

00:54:04.440 pleasure full comment is a post media podcast my name is brian lilly your host this episode was produced

00:54:10.920 by andre prue theme music by bryce hall kevin libban is the executive producer remember to hit subscribe

00:54:17.000 like leave a comment or review wherever you're getting your podcast whether it's on amazon apple spotify

00:54:22.040 what have you help us out leave us that review and spread the word thanks for listening until next time i'm brian lilly

00:54:32.680 here's that clip from canada did what i promised you

00:54:39.480 so um although although abortion was sort of accessible it really wasn't but then 1988 rolls around

00:54:49.400 and what's the law on abortion then suddenly there wasn't one literally no restrictions existed in

00:54:56.840 1988 abortion went from heavily restricted to completely unrestricted almost overnight there was no

00:55:04.760 referendum on this there wasn't even an act of parliament this whole thing is due to a somewhat

00:55:10.200 surprised decision out of the supreme court of canada and it came about in large part because of one

00:55:15.800 man a canadian doctor who had been relentless about running illegal abortion clinics since the 1960s

00:55:21.960 and was determined to overturn the laws prohibiting the practice along the way he endured multiple

00:55:27.880 arrests constant raids a jail term a firebombing of his clinic an attack by a fanatic wielding garden

00:55:33.240 shears the approbation of virtually his entire profession and frequent death threats

00:55:38.680 if you want to hear the rest of the story make sure you subscribe to canada did what everywhere you get

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Full Comment - December 22, 2025

BEST OF 2025： How a few rich dairy farmers are sabotaging Canada’s big, beautiful trading future

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