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

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00:01:12.640 donald trump was able to kill off canada's digital services tax without much of an effort or pushback

00:01:23.360 from mark carney's liberal government in ottawa will supply management be next and what about canada's

00:01:29.200 trade future hello and welcome to the full comment podcast my name is brian lilly your host this week we

00:01:34.880 want to take a deep dive into trade canada's prosperity as well as our future in some ways is at stake the

00:01:41.920 americans are moving away from their negotiated trade deal with us we've trying to get tariffs off

00:01:47.440 of that and there are trade irritants like the digital services tax which will soon be gone and

00:01:53.760 of course supply management martha hall finley is a former liberal mp from toronto she's been in

00:02:00.400 western canada for many years first as president and ceo of the canada west foundation now as president

00:02:06.000 and chair of the school of public policy at the university of calgary and trust me when i tell you

00:02:11.040 she's got some strong opinions on supply management and why she believes it needs to go for the good

00:02:16.160 of canada never mind what it means for our trade negotiations we caught up with each other at her

00:02:21.760 office in downtown calgary on the margins of the stampede here's our conversation so martha how do you

00:02:28.560 view things right now is canada in a trade war are we at a hinge moment as prime minister carney likes to

00:02:36.000 say that's one of his favorite phrases uh are are we just dealing with a transformational president for

00:02:42.160 good or for bad who is out to adjust the global trading system i think it might be a bit of all

00:02:49.440 three um there's no question that we have a moment in time right now for canada it it's interesting i mean

00:02:57.120 i struggle with saying thanks to donald trump in the same sentence but there's no question what's happened

00:03:01.600 south of the border has really forced an awful lot of canadians and and and therefore canadian

00:03:09.360 politicians but forced an awful lot of canadians

00:03:13.840 to have a much better maybe more realistic look at our own economic situation so we have two big

00:03:21.360 problems one is yeah we are significantly dependent on the united states and we have not diversified enough

00:03:28.160 to expand those opportunities and just to take away from the united states as a market because

00:03:32.880 geography will will dictate that that will always be a huge market for us um but we have have really not

00:03:39.920 taken advantage of the opportunities in the indo-pacific for example or or in other parts of the world

00:03:45.600 partly because the america because the united states is so has been so easy for us um but you know donald trump

00:03:52.080 has clearly made made an awful lot of people realize maybe that reliance on the united states

00:03:57.680 needs to be um looked at carefully and and force us to look at other opportunities elsewhere in addition

00:04:04.160 not just not to to to move away too much from the states but the other thing is a realization that

00:04:12.800 our own economic house needs some real work our productivity numbers are terrible our uh competitiveness

00:04:19.920 compared to you know most of the countries that we compare ourselves to is is down investment has

00:04:25.680 challenged has been challenged for a long time i would say not just the last 10 years i would say

00:04:30.880 we've we've we've struggled the last 25 years um for a variety of reasons so this isn't just a partisan

00:04:37.520 it's not a partisan comment i think we just have had some real challenges in canada for 25 years

00:04:42.480 um is this a hinge moment as as a prime minister likes to call it there's no doubt in my mind this is a

00:04:48.560 moment for canada right whether whether it's how do we do better in terms of our relationship with

00:04:54.080 the united states how do we avoid tariffs how do we enhance that kind of economic engagement

00:05:00.240 whether that's with trump or a successor to trump or you know what happens after the midterms whether

00:05:05.520 he becomes less powerful the fundamental is we still need to work very closely with the united states and

00:05:11.600 we we've benefited from that open trade we should work to continue to do that but we also have an

00:05:18.880 awful lot of work in canada to get our house in order and this is a moment in time for us we've had

00:05:24.720 clearly challenges in building infrastructure we are a trade dependent nation we are therefore dependent

00:05:31.200 on trade infrastructure and we have not invested whether it be ports whether it be additional rail whether it be

00:05:38.560 yes even more highways whether it's um pipelines absolutely we have not done a very good job in the

00:05:45.120 last quarter century of building the infrastructure that a trade dependent country um depends on and so

00:05:52.000 is this a moment in time for canada because we've been forced to recognize our economic challenges

00:05:57.840 absolutely are we in a position to take advantage and finally work at getting things right um i sure hope so

00:06:05.920 but we're in early days so far the the words are sounding good the language is good um but as we've seen

00:06:14.800 too many times words don't always get followed uh with action and so here's you know really hoping that

00:06:24.320 we'll see action finally um to really get this country back onto the road of of the prosperity that we

00:06:30.400 really uh ought to be able to see you mentioned in that answer about um diversifying trade i looked

00:06:37.920 at some stats from a while back and in the 1890s when canada was very much a part of a very big

00:06:44.720 and burgeoning british empire we sent about 60 61 of our exports to either the uk or countries of the

00:06:53.040 empire and we were also reliant on them for defense now we're reliant on the united states for defense and

00:06:58.800 we send more than 75 of our exports to the united states so did we just trade one empire for the

00:07:04.720 other that we're reliant upon oh goodness i had not have thought of that uh that's an interesting

00:07:10.320 question uh well one i'm not sure it's a question of reliance i think it's more a question of

00:07:18.880 opportunity and of course over that period of time the united states has became way more way bigger way

00:07:27.120 more powerful economically but also if i remember correctly there were significant um there were

00:07:35.680 barriers perhaps to to trade i'd have to go back and look but there were certainly um uh fewer trade

00:07:43.120 barriers like fewer tariff barriers between canada and the uk and the empire the other empire countries at

00:07:50.800 that time yeah um so that might have also been a part of that but look we're we're not that big

00:07:58.720 we're obviously geographically very big which does create certain challenges for us but we're not very

00:08:03.760 big and and we're sizable economically but compared to the united states um we have no choice but to

00:08:11.600 recognize that we are not their equal we will not be their equal economically we will not be their equal

00:08:19.520 we will militarily and so i think over the last you know century and a half two centuries and

00:08:25.920 certainly the last few decades it's been more opportunity than anything else i there's no question now

00:08:32.720 given some of trump's um sloganeering and and language that the comfort we've had with that relationship

00:08:43.520 has been put on edge but i don't i i don't see the united states as being necessarily similar vis-a-vis

00:08:53.680 canada to what was our relationship as a member of the commonwealth so many years ago but in terms of

00:09:02.400 that size that you mentioned how do we compensate for that you know we're important trading partners but

00:09:09.360 when you look at the numbers about 20 of our gdp relies on trade with the united states theirs is

00:09:15.520 less than two percent i think it's 1.6 1.7 and we see that with the uh the backtracking on the digital

00:09:23.360 services tax which by the way i think was the right thing to do i think prime minister carney played it

00:09:28.480 horribly by saying oh no we're moving forward with it and then you know less than two hours before

00:09:34.720 midnight when it's about to kick in says we'll get rid of it but getting rid of it was the good idea

00:09:40.800 but on other issues we're just going to face the fact that they have a lot an awful lot of power i'm

00:09:45.760 not going to use trump saying that they have all the cards but they've got an awful lot of power

00:09:50.720 over us and leverage they absolutely do but

00:09:54.320 and and and and just i can't resist but on the digital services tax we should as canada we should

00:10:05.120 have waited and kept with the much larger group of countries that were trying to work on this

00:10:12.880 collaboratively our decision a couple years back to go it alone um which a couple of other countries

00:10:20.240 have as well but for canada to do that set us up for a problem um it has been an irritant with the

00:10:26.160 americans not just donald trump right from the time we said we're going we're not going to we're not

00:10:31.840 going to wait for this other group of countries the oecd countries exactly so um you know i

00:10:39.360 my preference would have been not to have gone down that path in the first place and then having to

00:10:43.440 rescind it because and of course it's not rescinded right it's just we're not charging it there's

00:10:48.720 there's i mean they've promised that they'll bring in legislation to rescind it you're right

00:10:52.720 it is still on the books but you know in terms of strategy um if they had announced the um the

00:11:01.440 week before it was supposed to come into effect look we're going to put a pause on this it still

00:11:06.480 could have been a bargaining chip and what i kept hearing from liberal mps and insiders was well

00:11:11.360 we're using it as a bargaining chip to try and get something bigger that's why we haven't gotten rid

00:11:15.520 of it but you know we'll get rid of it but not yet because we need it for bargaining and then they

00:11:20.320 they gave it up with getting absolutely nothing but a resumption of talks in return well i i don't we

00:11:26.720 i'm not hearing that it was for nothing um and i don't know yeah and i there's an awful lot going

00:11:32.720 on behind the scenes that that neither one of us is privy to i don't my my understanding is that

00:11:39.920 there is a lot more going on behind the scenes that there may have there may have been some

00:11:46.320 bargaining who knows there might have been some of this discussion uh at canon ask us but you know

00:11:51.840 digital services tax you know my views on supply management like oh we'll get into that that's on

00:11:57.760 the list can we please because my gosh um but i i just i i think there's a real

00:12:05.680 real with all of this there is a moment now for canada to actually do the right things for canada

00:12:15.840 not just for donald trump we shouldn't be just playing around and and it's not playing we shouldn't

00:12:21.680 be reacting and you know and trying to figure out what what how we can best donald trump we're not

00:12:29.120 we're not going to economically we there's the best way to deal with the fact that we have an elephant

00:12:34.400 to the south of us is first understand that we have a relationship with an elephant and that comes

00:12:40.320 with some opportunities and it comes with some challenges without question being pragmatic is

00:12:45.120 probably the best strategy canada could embark on when you talk about that trade imbalance though

00:12:51.040 there are a couple of nuances a big amount of that trade that we have with the united states or our

00:12:57.040 exports to the to the united states is of course oil right and they need that oil the gulf coast

00:13:02.800 refinery complex needs canadian oil they need it's there it's all set up for canadian heavy

00:13:09.040 so that's there's there's definitely some power some influence there we it may you know maybe not

00:13:16.000 long long term but right now that is a bit of a bargaining uh i wouldn't say it's a bargaining chip

00:13:22.160 because we're not going to cut it off but it's a recognition that it's that there are certain

00:13:27.120 strengths and weaknesses that are a little more nuanced than just the top level trade numbers

00:13:31.360 the other thing though but but just to finish the other thing is that that trade balance that canada

00:13:37.120 has with some of the some of the states like 30 different states of the united states actually do

00:13:45.920 trade heavily with canada and so i've been saying this right from the beginning our best allies in

00:13:53.360 dealing with donald trump's tariff nonsense are in fact americans they're the americans in a

00:13:59.840 number of those states number of the manufacturers that are now being hurt by some of the tariff

00:14:04.720 impositions if you know you're dependent on canadian steel and aluminum your your prices just went up and

00:14:10.640 so you're going to be not happy about that that the the biggest allies we have the biggest strength we

00:14:17.440 have right now is frankly with a whole lot of americans especially in those states and especially

00:14:23.760 in those manufacturing sectors who are hurting more from donald trump's tariffs than we are yeah

00:14:28.960 and i think that um ontario premier doug ford has been very good on that working those connections

00:14:35.120 going to the meetings with governors and pointing that out you know it's going to require the americans

00:14:41.280 actually making that point in washington to the audience of one but it helps that the conversation is

00:14:46.960 there but you mentioned about oil and we're not going to cut it off so this is where i'm going to

00:14:51.760 tap into your roots as an easterner now in calgary so i get the pre the position of alberta premier

00:15:01.040 danielle smith this is a non-starter i get it politically economically so many reasons but out east you listen

00:15:08.960 to an awful lot of the commentary oh why won't they just cut it off they're not on team canada they

00:15:14.080 don't care about the country um the premier's a traitor uh you know all of these things that you

00:15:20.000 hear from folks that never leave rosedale or west mount and uh don't really have a sense of why that

00:15:28.160 would be an unthinkable idea out here so help help those folks understand well a couple of things um

00:15:36.560 um i i the the premier was forced into a bit of that corner because um one of our federal ministers

00:15:45.600 made the comment that we should cut off oil exports that or you know put a tariff on our own tariff on

00:15:54.720 whatever a couple of points that are really important for everybody in this country to remember

00:16:00.320 is that oil and gas exports are a massive part of the entire canadian economy so everything that we

00:16:09.600 benefit from in terms of prosperity is significantly dependent on our oil and gas exports so this is a

00:16:17.360 canadian enterprise this is not just alberta um totally you know in a in a number of ways the the

00:16:26.400 the oil industry here depends on all sorts of um manufacturing inputs service inputs from across

00:16:33.280 the country so this industry is a canadian industry and the taxes and the benefits and the economic

00:16:39.440 prosperity all actually go to all of canada and all of canadians that's something we do not talk about

00:16:46.160 enough and has to be repeated the other thing is that same minister didn't come out and say

00:16:53.280 and maybe we should put a hold on potash exports that same minister didn't come out and say we should

00:17:02.720 put a hold on auto pick your manufacturing sector in toronto in ontario such as auto or you know auto parts

00:17:12.880 um so i recognize that sometimes things get said that are you know emotional but i will say that

00:17:21.680 um the premier of alberta really got pushed into a spot because of a federal minister

00:17:31.600 picking on only oil exports from alberta and and it came especially under the previous government

00:17:38.400 after a decade of saying we don't want your resources we don't want your pipelines etc etc and

00:17:44.000 then it became we want to use it as a bargaining chip um please let us cut off your uh your life blood

00:17:50.080 the the the the the the the nerve of absolutely that brian um 10 years of really having a thumb on

00:17:59.760 the opportunities here the prosperity here uh the potential prosperity again not just for here but for

00:18:06.080 the whole country but um and then and then turning around and saying but we're gonna you know we're gonna

00:18:14.080 use you to get to to to serve as a bargaining chip um it was it was deeply offensive to people here and

00:18:20.800 i you know you you started this by saying you know i'm an easterner well i've been here for 12 years

00:18:26.400 uh now but i do i i think of myself as a canadian by far and away more than i think of myself as having

00:18:33.200 been from ontario or being an alberton i fit i think of myself as a canadian and i have always been a

00:18:40.240 free trader i have always been and for somebody as old as i am will always say it's actually a long

00:18:45.680 time um uh but but but as long as i can remember i've been a free trader for as long as i can

00:18:52.160 remember i've been a big supporter of canada um embracing the fact that we are blessed with resources

00:18:59.760 of all kinds there are people around the world who literally would kill to have the opportunities

00:19:06.880 and the resources that we are blessed with in this country and we shoot ourselves in the foot over

00:19:12.320 and over um for whatever reasons i mean certainly on the on the climate piece the the irresponsibility

00:19:20.560 of of the this the most recent government and the prior government didn't we didn't build a whole

00:19:26.160 lot under that government either so this is you know i want to make that clear but this last government

00:19:31.760 the absolute irresponsibility of a federal government suggesting and implementing policies that somehow

00:19:41.120 suggested that canada could solve the global climate challenge on its own was um well irresponsible i i it

00:19:51.760 just very frustrating there were proposals put forward to help reduce global emissions by using

00:19:57.280 canadian oil and gas letting lng exports replace coal and that was laughed at uh by by the trudeau

00:20:05.440 administration oh no no we can't do that we just have to lower canada's emissions not worry about

00:20:10.240 what's happening in india and china and south korea and places that wanted our product the focus the in

00:20:16.560 there's so much ideology there and and and let me be clear about one thing um i hate it when people say

00:20:23.680 that i always try to be clear it's like let me let me be honest here well i kind of try to be all the

00:20:28.480 time um an awful lot of those people have been well-meaning an awful lot of those people are not bad

00:20:37.680 people but they saw climate as the existential challenge for the for the world and felt that canada

00:20:45.520 um had the most important thing for canada was to meet our climate goals our paris commitments

00:20:53.680 canada has never done that has never met its goals we have an unfortunate history of of having

00:21:01.200 um aspirations but never actually being able to come through and um knowing that what was happening

00:21:09.040 in china and india and in other places all around the world that somehow canada could on its own

00:21:20.000 by meeting our paris commitments have any kind of realistic impact on the global climate change

00:21:26.800 challenge was completely nonsensical and that's why i say i think you know the the politicians

00:21:33.360 suggesting that we could do that and at the expense of canadian economy canadian prosperity was was

00:21:39.920 irresponsible um it's it's well intentioned but we uh unfortunately have uh for 10 years been shooting

00:21:48.320 ourselves in the foot so that a few people could pat themselves on the back and what we're seeing now

00:21:54.160 is a much greater recognition ironically from one of the most vocal and influential people

00:22:01.760 in the climate change challenge uh world you're talking mark carney mark carney um you know i give

00:22:08.800 him full marks for for recognizing he's now he's now prime minister canada and as john manley likes to

00:22:15.040 say and i think he's absolutely right natural resources this is our family business and mark

00:22:19.760 carney's now he's kind of the head of the family and so his first responsibility is to this country

00:22:26.720 and he's recognizing canada's not going to solve climate change we can play our part we're still you

00:22:32.960 know i was part of the pathways alliance the the the oil sands pathway pathways alliance to reduce

00:22:38.000 emissions um the industry has been reducing emissions um per barrel dramatically over the last

00:22:44.560 number of years anyway um those those are really good goals but i i give i give mark carney full

00:22:50.720 credit so far because the words are right as i said earlier we need to see the actions but um i give him

00:22:56.960 full credit for being able to say um my circumstances are this the world's circumstances have changed and we

00:23:05.920 now to get need to get on with this and i so far i'm i'm impressed i think these are these are the

00:23:13.200 right things to do for the prime minister of canada well and you're even hearing that he's saying the

00:23:18.240 right things um from people like saskatchewan premier scott moe and from alberta premier danielle smith and

00:23:25.120 i even ran into premier smith at a an event here at stampede and she said you know we'll see if the

00:23:31.200 results turn out but so far he's saying the right things and that gives her hope we'll take a quick

00:23:36.480 pause here but when we come back let's get into supply management because i know you have some

00:23:41.920 thoughts and and so do uh the listeners back in moments this is tristan hopper the host of canada

00:23:48.240 did what where we unpack the biggest weirdest and wildest political moments in canadian history you

00:23:54.000 thought you knew and tell you what really happened stick around at the end of the episode to hear a

00:23:59.440 sample of one of our favorite episodes if you don't want to stick around make sure you subscribe to

00:24:04.880 canada did what everywhere you get podcasts so just before we entered into these new negotiations

00:24:11.760 with the americans to try and get an extra a different trade deal uh a new you smacka a new

00:24:17.360 kuzma whatever you want to call it we decided to pass a bill put forward by the leader of the separatist

00:24:22.880 party uh y francois blanchet to say that canadian uh diplomats and trade negotiators were forbidden by

00:24:30.640 law from talking about supply management at all not dismantling it but talking about it martha you

00:24:37.520 know you've got a track record on supply management but my discussions with the your uh the americans

00:24:43.200 including uh ambassador pete hoekstra is they don't want to get rid of supply management but they do want

00:24:50.000 greater access for their uh producers whether it's a bigger quota or something and they just feel like

00:24:57.280 like we try and use supply management to block them at every turn um do can we negotiate away some

00:25:05.760 quota or should this system just be dismantled wow a lot of parts to that um i'll take a couple of

00:25:16.480 bits just one at a time so first we already have a deal with the united states it is the usmca kuzma

00:25:25.440 uh nafta the new nafta we have a treaty a trade deal with the united states it is the law of both of

00:25:34.400 all three countries because remember it includes mexico so it is very dangerous to talk about

00:25:40.160 negotiating a new deal or whatever because in some way like language matters in some ways that kind of

00:25:48.000 con that kind of language only feeds into donald's donald trump's view that he can just throw it away

00:25:54.160 because he can't um i mean he clearly has been throwing it away since he brought in the tariffs

00:26:01.760 on liberation day so so that said we have the realities of a president who seems to be getting

00:26:07.920 away with executive actions without the consequences and without without the enforcement of the legal

00:26:15.280 constraints that he really should be facing so there's a whole bigger question there but that is

00:26:20.720 the pragmatic that the practical challenge that we're facing now but i think it's worth repeating

00:26:25.920 that we do have a deal now now if we can just talk about that deal for a moment though like the americans

00:26:32.320 have been complaining about how we handle dairy since basically the day after the deal was signed and the

00:26:39.360 biden administration took us to trade panels twice and you know you've forgotten more about supply

00:26:45.680 management then i'll know but my understanding i was talking with sylvan charlebois about this a

00:26:50.080 little while ago and he said well the problem is the americans negotiated quota access for their

00:26:55.200 producers but the holders of that quota are canadian cheese producers like saputo or armstrong and they

00:27:02.480 just say we're not buying any of your milk and so that creates the irritant of wait a minute we thought

00:27:09.440 we had a deal and you're just still blocking us which seems like a a bad move when you look at the

00:27:16.960 totality of our trade deal so so oh there's so many parts to this so let me i don't i don't disagree

00:27:28.160 with any of that but the issue is much much larger than um some frustration that maybe the deal wasn't

00:27:37.760 clear clear clear enough or that the canadian side has has been not adhering to it completely well i

00:27:43.680 don't disagree with any of that but the issue is much larger and and it's not just the americans the

00:27:49.120 entire world is frustrated with canada's supply management um regime because it uh basically enforces

00:27:56.880 ridiculously high tariffs on any dairy uh poultry and egg uh imports into canada and so that's frustrating

00:28:04.640 i mean you know we're not a tiny market we're resizable and um producers around the world get

00:28:10.800 frustrated when we go to negotiate trade deals like our trade deal with europe or the trans-pacific

00:28:15.840 partnership trade deal the the people are pretty frustrated with canada because we we say sure we'd

00:28:21.440 love to have free trade but oh by the way you can't sell us any in effect you can't sell us cheese

00:28:27.360 milk yogurt you know yogurt ice cream so so it's a much larger issue parsing out a couple of the

00:28:35.680 things you said one is this new bill that is about to achieve uh to get royal assent that was brought in

00:28:43.120 in this new government as you said by the uh the the bloc quebecois and passed unanimously though and

00:28:49.760 passed unanimously in the house the last government just before the last government um ended there was

00:28:59.600 a similar bill that had been put forward by the uh the bloc quebecois that richie and she almost i

00:29:05.360 don't think it was completely unass but almost unanimous consent in the house bill 282 it then went to the

00:29:11.440 senate and the senate and i want to do a shout out to a couple of senators peter harder and peter beam

00:29:17.120 who did yeoman's work in getting the senate to do what the senate is supposed to do sober second

00:29:24.560 thought the senate hearings the senate committee worked on this it had tons of investigation into

00:29:32.080 the issue importantly it was not actually to be a referendum on supply management it was the concept

00:29:41.840 of carving any sector any part of our economy out of any future trade negotiations is something no

00:29:51.360 country in the world has ever done let me just say trade negotiation means negotiation and this as soon

00:29:59.040 as you say oh but we'll negotiate everything except for that piece it destroys the concept and so many of

00:30:06.560 us who appeared before the senate on this said this is not if you did this on the auto sector if you

00:30:12.000 did this on steel and aluminum we would say we would say the same thing you must not carve out a sector

00:30:18.880 from trade negotiations because then you've tied you've really tied you know one hand behind your back so

00:30:26.000 this is a nuance it's really important to understand this new bill came in virtually the same

00:30:32.080 and i have to say the senators that i've spoken to um have did not do it again because their view was

00:30:40.880 at a certain point the senate does have to respect what they see as the will of the people if the house

00:30:46.160 of commons completely abrogated any responsibility for appropriate committee hearings on this bill

00:30:52.800 is the house of commons's fault and we as canadians have to be critical of that but i can understand you

00:30:57.840 know the senate works so hard to deal with 282 that it just it the the will was not there to do it on

00:31:05.760 this bill so this bill is going to pass you've got every party and every mp that's voting saying they're

00:31:11.360 backing this why the stranglehold you know i was talking to some um farmers in saskatchewan the other

00:31:19.120 day and they they just blame quebec and it's quebec farmers and there's a bit of truth to that

00:31:24.400 so back in parts of ontario and and and their pockets i mean look there's a very strong dairy

00:31:30.000 lobby in in alberta too there are a small number of very wealthy um dairy farmers here now the the

00:31:36.400 entire entire country um when supply management was brought in there were about 145 000 dairy farmers

00:31:44.880 across the country and there were real issues in terms of price volatility um etc the supply

00:31:50.960 that's less than 10 000 and now it's probably about 8 000 they are all multi-millionaires even the

00:31:57.120 small small you know 70 head farms in quebec um they're all multi-millionaires the challenge here

00:32:07.600 and and they are so because of the extraordinarily high prices that we charge uh that that we end up

00:32:13.120 paying as consumers in canada it's the the best way for me to describe it for listeners it's the three

00:32:19.280 legs of a stool and this come brings it back to the trade discussions supply management is a cartel

00:32:25.840 it's a legislated cartel so you know we we say any other cartels are illegal because they're bad but this

00:32:31.920 one is sanctioned um historically you know might have been a reason for it does not stand the test of

00:32:39.600 analysis anymore you can't really say that we're doing this to keep the small family dairy farm going when

00:32:45.680 we've gone from over a hundred thousand to on you know i think charlebois says nine you say eight

00:32:52.160 i think it's eight now it's it's definitely under ten now um and and that's exactly one of the

00:32:57.440 arguments well it protects the family farm absolute nonsense in fact um uh the rate of consolidation

00:33:05.680 in the last number of decades in dairy and poultry and eggs has been higher than virtually other every

00:33:12.560 agricultural sector in canada so one could actually say it has hurt right the the maintenance of of

00:33:20.240 the family farm but if i can just the the three legs of the stool because people say to me i don't

00:33:26.320 say i don't understand supply management the three legs of the stool are you have price setting by the

00:33:32.720 dairy commissions the federal provincial um and that they're made up of dairy farmers no conflict of

00:33:38.560 interest there um so you have them set prices they set their prices based on if you've ever worked in

00:33:44.480 construction or had to you know get construction work it's like it's cost plus right um so there's no

00:33:52.080 there's no there's not a lot of incentive for for uh figuring out how to be more efficient on the on the

00:33:57.920 costs um so you have price fixing the the prices are fixed by the producers themselves so as i said

00:34:04.320 um clear conflict of interest the other the second leg of the stool is that any industry if you say

00:34:12.320 it's all cost plus and you've got your fixed prices you're going to get a lot of people wanting to get

00:34:17.440 into that industry it's like handing out mcdonald's franchises for free um that's you're going to get

00:34:23.520 an awful lot of people wanting to set up mcdonald's well that ultimately doesn't work it's not tenable so

00:34:28.400 there's a quota system so to keep the limit the number of producers limited you establish a quota

00:34:37.040 basically how much milk can that farmer produce right well the third leg of the stool

00:34:44.320 is and the quota ends up being really valuable it's a little bit like a mcdonald's franchise fee

00:34:50.240 right if you want to run a mcdonald's you have to pay an awful lot of money for the privilege up front

00:34:54.560 you have to pay an awful lot of money for the privilege of having quota up front so you know

00:35:00.080 in some parts of the country quota is worth 45 000 a cow and that doesn't include the value of the cow

00:35:06.560 in some places it's fixed at 25 000 worth per cow but you get the drift right there's there's a lot

00:35:13.360 of money involved here the third leg of the stool is that if you will have artificially higher prices

00:35:22.480 in canada because of the first two legs of the stool which you do you can't let cheaper you know

00:35:30.400 world market products come into the country because it will completely undermine the system right if you

00:35:37.760 allowed american yogurt at a third of the price of what we pay for your yogurt here in canada

00:35:46.160 well guess what's going to happen everybody's going to buy american yogurt right well can you speak to

00:35:51.280 uh this claim that i hear on a regular basis and and that is that again even if we just allow a

00:35:58.240 little bit more american product in um supply management protects us from those evil americans

00:36:04.640 with their chemical filled products and their bovine growth hormones yeah i this is just drives me

00:36:10.240 crazy this but this is what i get and and what's what's amazing is it's not true it goes across partisan

00:36:16.320 lines this is not one party or another it goes across and people think that supply management

00:36:22.160 is there to protect us from inferior product talk to any baker about butter in canada versus butter from

00:36:29.200 other countries and you will get a rant about how our product is not superior on that front but it's an

00:36:35.200 awful lot more expensive yes um uh ironically australia and new zealand both had supply management in their

00:36:43.680 dairy sectors many years ago the new zealand's less of a good example australia was very similar to ours

00:36:50.560 and um you know you talked earlier about being right next door to a an economic powerhouse australia

00:36:58.160 is really close to china and it was recognizing that its economy needed to become a lot more

00:37:04.720 competitive in the early 2000s they implemented policies to and to actually ensure australian

00:37:11.680 uh well the whole economy it wasn't just dairy but the whole economy become much more competitive

00:37:17.840 as part of that they actually got rid of supply management the australian dairy industry is now one of

00:37:23.280 the most um lucrative powerful industries in canada in the world new zealand does really well too you'll

00:37:30.240 hear you know canadian farmers saying well the climate's different and honestly it drives me crazy because

00:37:37.360 some of this is all just um uh i i wanted i don't want to say nonsense because that's a little harsh

00:37:45.920 and i don't want to be flippant these are not truths the how can we get rid of it though and so here's the

00:37:53.200 thing um what the opportunity and and so just to complete the picture of the three stools sorry brian but

00:38:01.360 what that means to prevent low cost product from coming in we have tariffs on um milk dairy products

00:38:12.480 poultry eggs for anyone any other producing country in the world including the united states of up to

00:38:20.480 almost 300 that is to make sure that we don't get that cheaper product coming in because you add the

00:38:27.120 tariff on and then it becomes comparable in term in price so you know for we basically we basically

00:38:34.640 have built a wall around canada the response from the rest of the world is well you can't sell us your

00:38:41.360 dairy because you know you that's how the w the world trade organization rules work he's you can't you

00:38:48.640 can't suck and blow you can't keep yours protected and then come in and sell in on ours the other

00:38:54.000 challenge is because we've made ours so expensive there isn't a market in internationally because

00:38:59.360 it just it that we can't compete which is such a shame because we have you know we have in nova

00:39:04.080 scotia let me just pick on nova scotia there is a really fantastic cheese um artisanal cheese

00:39:10.800 manufacturing sector in nova scotia for example but that stuff is so expensive it wins global awards some

00:39:17.520 of those cheeses and quebec too ontario other parts of the country but they but they're limited to the

00:39:23.680 canadian market which is a real shame so there's a lancaster cheddar from lancaster in ontario that won

00:39:29.120 world's top cheddar a few years ago yes and the rest of the world doesn't know it because they

00:39:33.520 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

00:39:39.920 the opportunity um a couple of big dairy companies in canada one is a co-operative owned by the irony

00:39:48.640 here just kills me owned by quebec dairy farmers agripoor now produces more american milk than it

00:39:56.160 than than produces canadian milk because they bought into american dairy because they knew that if they

00:40:03.360 wanted to expand into other markets which most successful businesses see as opportunities they had

00:40:10.640 to actually go outside of canada and set up shop in in agripoor's case in the united states what really

00:40:19.200 is frustrating about that is that that the quebec dairy farmers that own it they keep their wealth

00:40:24.080 in terms of the canadian market with inflated prices um but for the agripoor the company to process

00:40:32.000 to go into the united states and process more american milk than canadian milk those are american jobs

00:40:37.840 not canadian jobs so we've in effect exported jobs into other markets saputo is a quebec company

00:40:46.720 quebec dairy company it's one of the largest dairy companies in the world has massive operations in in

00:40:52.000 australia and elsewhere for the same reason so you know good on them that's fantastic but we make good

00:40:59.200 milk here we could be making a lot more milk here for those export markets but we can't because of the

00:41:05.680 rules because of this very inward looking we need to protect our our cozy little arrangement here at

00:41:13.360 all costs the key is we could do this australia got rid of supply management as i said that industry

00:41:20.880 is now one of the world how would we do it if we were going to do it how would it happen because one

00:41:25.520 of the another argument i hear is well the banks have so much money tied up in loans for the quota right

00:41:32.480 that it would be too expensive or if you just you know didn't compensate for the loans for the

00:41:38.000 quota that uh you would effectively take a real hit for the banks no so so here's this is what australia

00:41:45.920 did i mean the first premise is you can't jeopardize the farmers and the producers who based on having

00:41:54.800 quota borrowed borrowed money to build barns borrowed money you know you we you can't do that that's unfair

00:42:02.960 so how do you compensate the existing quota holders in a way that uh allows them to not

00:42:12.480 you know be be uh jeopardized financially but in a way that also doesn't cost a canadian taxpayer

00:42:19.920 billions of dollars now you hear the number floating around if you just multiply the the quota number by

00:42:24.880 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 this

00:42:31.200 we had an mpp student from the school of public policy do some fantastic work he graduated i guess

00:42:37.600 two years ago now um some fantastic work uh with much uh more updated numbers the number would

00:42:45.360 probably be about eight billion in that range now that's not chump change that's a lot of money

00:42:52.640 especially at a time when canada's making a whole lot of financial commitments on military and various

00:42:57.360 other things but what australia did and this was the genius of the australian approach and remember this

00:43:03.760 was not australia just focusing on dairy this was australia recognizing it needed to be a lot more

00:43:08.960 competitive it had big economies around it growing like china oh does that not sound familiar that

00:43:14.800 maybe this is a moment in time for canada to actually in all of its sectors become more competitive

00:43:20.320 but on dairy what the australians did is they used the system itself to build the fund that actually paid

00:43:28.480 out the quota for the farmers and so over the course of it was either 20 or 25 years they said

00:43:35.120 um they determined what the number was that would have to make the farmers whole

00:43:42.480 um they then said okay x say 10 10 billion it wasn't 10 billion but for the sake of of argument if they

00:43:48.960 said 10 billion dollars was what they were going to need to make the farmers whole basically paying

00:43:54.960 out their quota and making sure that they could get stick you know get more on their feet to be able to

00:43:59.200 compete internationally um if and you it's hard because on a podcast you can't see my hands but i'm i'm

00:44:06.480 if you say the the uh supply managed price was 10 bucks the uh world market price was five dollars

00:44:18.240 they increased the cost of a liter per milk a liter of milk by 11 cents from the world from the five

00:44:26.880 dollars so five dollars plus 11 cents those numbers are not real but the 11 cents is but

00:44:32.720 i'm trying to do the graphics here um for that 11 cents per liter produced for 20 years was the source

00:44:42.480 of the of the of the money to build the fund to buy the farmers out so yes did it cost consume so it

00:44:49.520 wasn't a cross taxpayer base it was consumers but the consumers if they didn't do the consumers were

00:44:55.680 still going to be paying 10 bucks if the consumers were paying five plus that was still better than

00:45:00.960 paying 10 bucks and over 20 years that actually managed to ensure that the uh farmers in australia

00:45:08.880 were made whole economically did everyone stay in the industry did everyone manage to to sort of rally to

00:45:15.520 this and compete no some of the dairy farmers in australia sold out to others there was some

00:45:20.080 consolidation that's not a bad thing like i said the australian industry is now a powerhouse globally

00:45:27.360 which has benefited the australian dairy sector like it's been it's an opportunity for canada

00:45:34.320 so for me it's not we need to get rid of supply management because supply management is bad and

00:45:39.360 you know it's it's made a small very small number of people ultra wealthy at the cost of consumers which is

00:45:45.360 true but it's also a shame because we are depriving our own dairy farmers and the dairy sector and the

00:45:53.760 producers from using more canadian production building canadian jobs to be able to participate

00:46:00.320 in the global marketplace but i but i will say fundamentally the lobby the dairy lobby so if you're

00:46:07.920 if you're spending 100 200 million dollars a year and you know just by if you add how much a billboard

00:46:14.080 costs and a tv ad costs and how much the milk insignia on the toronto maple leaf jersey it's too bad

00:46:20.160 probably you know would have been more more costly if it had been the oilers but anyway um those are

00:46:25.920 all that's really expensive i mean when i was first doing my work on this the the the understanding was

00:46:30.960 well over 100 million dollars a year of marketing well that's you and i are paying for that right because

00:46:37.600 of our inflated dairy poultry and egg prices but the people who benefit from that the lobbyists the

00:46:45.760 marketing people the ad campaign people they all have a vested interest in having the dairy farmers

00:46:53.600 themselves believe that supply management is is at sacred and they also have a vested interest in making

00:47:03.280 sure because the you know the dairy farmers will spout these lines even if they're not true but

00:47:08.320 they've been told them there are some dairy farmers by the way who behind the scenes are actively working

00:47:13.760 to get rid of supply management for these very reasons because they understand what what they're missing

00:47:18.480 but 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

00:47:25.200 people who are very very strongly intent on keeping this system because they benefit so much from it

00:47:33.280 but then they also that's the by far the most active lobby on parliament hill so even though behind the

00:47:40.320 scenes many of those politicians who voted for that bill agree that supply management needs to go

00:47:47.600 they vote for it because they say they don't have the votes and the vet the industry the lobby has a vested

00:47:58.000 interest in making sure that those politicians continue to believe that there are simply too much too many votes in

00:48:06.160 support of supply management so we need the canadian public to understand the realities of this much much more

00:48:14.320 if i can right now every other sector in this country automotive whether you know the big three auto parts

00:48:25.600 canola uh um beef uh beef aluminum steel all of the aluminum and steel industry in canada is now under

00:48:36.160 tariffs and they are suffering part of the reason is that we have um this extraordinary need somehow to

00:48:47.040 protect supply management but the cost what do we give up what does every other sector give up if we were

00:48:55.520 able to say that the americans i think you're absolutely right they're not saying get rid of supply

00:49:01.680 management they just want greater some greater access to the to the country's market um but we need to

00:49:08.880 get rid of supply management for canada's sake not for donald trump but right now because we are holding

00:49:15.520 on to it so dearly every other in the negotiation on every other economic sector is harmed well i'm sure

00:49:24.480 you've heard from the same people i have who have been part of the past negotiations in the last trump

00:49:30.640 administration and are being consulted now from various industries they they will tell you straight

00:49:36.480 up maybe not on the record but they will tell you straight up that the dairy lobby could scupper the

00:49:43.760 entire deal uh and and hurt every other industry well that this recent bill um is is hugely problematic

00:49:51.680 even as i said before even if it weren't dairy um excluding any economic sector from trade negotiations

00:49:58.640 is a problem but are keeping supply management as a as a system absolutely i mean you i'm look i'm i'm in

00:50:06.400 western canada the beef farmers the canola people the everybody the the corn people in ontario corn farmers who

00:50:13.920 have expanded into the united states simply because they can't afford the the acreage in ontario because of the

00:50:21.600 the the um artificial wealth of the of the dairy industry i mean i'll say something that's not popular

00:50:29.440 though isn't canada overall a protectionist country while we scream about the americans and tariffs and

00:50:36.000 and different things beyond supply management we protect our banks we protect our telcos our media

00:50:43.040 companies and it's a long list of um thou shalt not trade in this well it foreign ownership

00:50:51.120 restrictions are a bit different i mean there's there's nothing to prevent verizon from coming in and and

00:50:56.080 setting up shop in canada we don't we don't prevent there are lots of banks that come into canada and operate

00:51:01.360 what we do restrict is ownership in those in those companies and that's a much different conversation um

00:51:09.040 it nothing compares to this extraordinary artificial the sanction cartel that continues with supply

00:51:17.760 management my hope brian is that that what's happening with donald trump and the americans and

00:51:24.320 and let's face it there are a lot of people behind trump who also i mean supply management was a

00:51:29.280 frustration for obama was a frustration for biden it was a frustration for you know it's been a frustration

00:51:34.880 for for decades um the the challenge here is we need the other economic sectors in this country

00:51:43.120 to be very firm with our politicians to say enough is enough we know that there's actually real

00:51:50.160 benefits to getting rid of supply management for canada for canadian consumers and ironically for the

00:51:56.400 canadian dairy poultry and egg sectors in terms of potential global opportunities but we're ignoring

00:52:03.360 those and hurting all of our sectors in all of these trade negotiations so you know where are they

00:52:11.120 we need them to step up we need the canola farmers we need the beef farmers we need aluminum steel we

00:52:16.560 need the auto auto auto parts sector people to be making these these noises with our canadian politicians

00:52:24.560 because if they don't speak up the canadian politicians will continue to be under this

00:52:30.640 frustrating belief that somehow those dairy votes are more of important than every other economic

00:52:37.200 sector in this country martha all finley thanks so much oh my pleasure full comment is a post media

00:52:43.920 podcast my name is brian lilly your host this episode was produced by andre prue theme music by bryce

00:52:49.760 hall kevin libban is the executive producer remember to hit subscribe like leave a comment or review wherever

00:52:55.680 you're getting your podcast whether it's on amazon apple spotify what have you help us out leave us

00:53:00.960 that review and spread the word thanks for listening until next time i'm brian lilly

00:53:09.440 here's that clip from canada did what i promised you

00:53:16.240 so um although although abortion was sort of accessible it really wasn't but then 1988 rolls

00:53:25.360 around and what's the law on abortion then suddenly there wasn't one literally no restrictions existed

00:53:33.440 in 1988 abortion went from heavily restricted to completely unrestricted almost overnight there was

00:53:41.360 no referendum on this there wasn't even an act of parliament this whole thing is due to a somewhat

00:53:46.960 surprised decision out of the supreme court of canada and it came about in large part because of one man

00:53:53.120 a canadian doctor who had been relentless about running illegal abortion clinics since the 1960s

00:53:58.720 and was determined to overturn the laws prohibiting the practice along the way he endured multiple

00:54:04.640 arrests constant raids a jail term a firebombing of his clinic an attack by a fanatic wielding garden

00:54:10.000 shears the approbation of virtually his entire profession and frequent death threats

00:54:15.440 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 - July 07, 2025

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

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