Juno News - Carney FLIPS on supply management, Food Professor explains why food inflation is going UP in Canada

00:00:00.000 Hi, I'm Candice Malcolm, and this is The Candice Malcolm Show. Thank you so much for tuning in.

00:00:06.720 We have an excellent episode for you today. I hope everyone had a wonderful weekend. So over

00:00:12.200 the weekend, Prime Minister Mark Carney was in Calgary, and he was there to meet with energy

00:00:18.220 industry leaders. I've heard this from several people, including Brett Wilson, who was on the

00:00:22.740 show with us last week. And he said that Mark Carney plays a good game, talks a good game

00:00:27.860 about developing energy, developing oil and gas. While he's in Calgary, he's positive about

00:00:32.660 pipelines. And then as soon as he leaves, he sort of strikes a different tone. So we're going to keep

00:00:36.580 an eye on that. Of course, Mark Carney today is in Saskatoon, and he's at the first minister's

00:00:41.740 meeting. So he's having a meeting with all of the premiers. We're going to keep an eye on that,

00:00:45.780 and we're going to dive into it a little later in the week. But I did want to point out one

00:00:50.920 interesting thing. So we did learn, like I said, Carney was in Calgary yesterday talking about how

00:00:55.520 he wants to make Canada an energy superpower, not really specifically saying oil and gas or

00:01:00.220 pipelines, but energy broadly. And then he also quietly appointed a new chief of staff on Sunday.

00:01:07.340 And now I know personnel issues aren't the most interesting things to talk about, but this

00:01:11.800 individual, Marc-André Blanchard, will serve as chief of staff. And this is only interesting

00:01:16.940 because of his own background and what it signals, right? There are two flanks in the Liberal Party.

00:01:21.300 There is a sort of pro-business, business-as-usual side that Marc Carney tries to represent, like a

00:01:27.180 departure from Justin Trudeau and the sort of radical anti-oil agenda that he had. And then

00:01:34.380 that other side, which is sort of the Gerald Butts flank of the Liberal Party. Well, Marc-André

00:01:39.080 Blanchard very much comes from that Gerald Butts flank of the party. And don't just trust me. I mean,

00:01:44.300 when Gerald Butts stepped down in 2019, Marc-André profusely thanked him for his service and his

00:01:51.540 deep commitment. And he said that he was, you know, an idol and his leadership in fighting against

00:01:56.380 climate change and inequalities was inspiring to others. His background is that he was the executive

00:02:02.180 vice president and global head of sustainability at the CDPQ Global, which is a Quebec-based

00:02:07.680 institutional investment firm. And he was very much on board with the net zero. He's a net zero

00:02:12.480 investor. And he previously said that it's essential to not increase oil and gas and coal production

00:02:18.960 and focus on renewable and transitional energy. So that is where we're coming from with this chief

00:02:25.960 of staff. And what that is signaling to Canadians is not exactly the same kind of thing that Carney

00:02:32.620 was saying yesterday in Calgary. Okay. I want to introduce our guests. I'm very pleased to have this

00:02:37.240 guest we had on the election show, which was great to talk to him. I'm talking about Dr. Sylvain

00:02:42.020 Charlebeau. He's not online as the food professor. He runs an excellent, excellent X account. He leads

00:02:47.200 the Agri-Food Analysis Analytics Lab, sorry, at Dalhousie University. And he's host of the Food

00:02:52.680 Professor podcast. So Sylvain, thank you so much for joining the show.

00:02:55.840 Sylvain Charlebeau. Hello, Candice.

00:02:56.720 Hi. Great to have you. So I want to talk a little bit about the food inflation that's happening in Canada.

00:03:03.560 Specifically, we learned today or yesterday that Mark Carney is endorsing the dairy cartel protectionist

00:03:11.940 bill that's put forth by the Bloc. This is Rebel News reporting that Mark Carney backed a Bloc-Quebec

00:03:16.740 war dairy bill amid the ongoing trade disputes with Donald Trump. Supply management will never,

00:03:22.340 never be on the negotiating table, Mark Carney told the House of Commons. Supply management will be

00:03:27.740 protected according to Black Locks from Porter. So I'm wondering what you make of this bill and Mark

00:03:33.960 Carney agreeing to back it. Well, I'm not surprised. So you're talking about Bill C-282 coming from

00:03:43.000 Parliament number 44. It has survived. And politically, I would say that no one in Parliament

00:03:50.700 has any choice. The dairy lobby in particular is incredibly powerful. And they know how to destroy

00:03:58.620 political careers. Just talk to Maxime Bernier about that. I mean, they are incredibly influential.

00:04:05.440 And the dairy lobby is advocating for a system that very few people understand. Even I would say

00:04:11.700 that many politicians don't understand. But what they do understand is that if they actually go

00:04:16.620 against it, they will pay the price. As a scientist myself, my job is to make sure that people understand

00:04:25.100 what the system is all about, and how costly it can be for an economy. So yes, we are stuck with Bill

00:04:33.760 C-282. And I testified before Senate in December against Bill C-282. I think Senate listened. We were going to

00:04:45.340 be successful. But now, of course, we all know what happened next. We went into an election, a leadership

00:04:51.900 race, an election, and here we are. Well, it's interesting because during the election campaign,

00:04:57.380 Mark Carney, he affirmed that he had unwavering support for the dairy supply management system in

00:05:04.600 the face of President Trump. So I'm going to play this clip, but I'm going to play another clip that

00:05:09.140 showed something slightly different. So first, here's a clip of Carney saying that he had unwavering

00:05:13.380 support of supply management. We will never have discussions with respect to supply management.

00:05:19.600 It's off the table. So that's sort of the typical Canadian politician response. But then a few days

00:05:24.940 later, speaking on a panel with Radio Canada journalists, this is French language. Mark Carney

00:05:30.540 said that there isn't a need to pass a law to protect supply management, saying it's not necessary

00:05:35.020 to make new laws for negotiating positions, adding, I know how to negotiate. So this was sort of an

00:05:40.240 interesting, I felt like maybe opening the door to possibly just saying that it's time to evolve the

00:05:46.020 system. So let's play this clip. It's French, but I believe it's dubbed in English, and then I'll get

00:05:50.660 you to respond to it.

00:05:51.800 You refused today to committing to legislation to protect supply management for people in agriculture.

00:05:57.640 Why? In my opinion, it's not necessary to make laws for negotiation positions. It's not about legislation to have a

00:06:09.640 negotiation with you, say, as a European and with regards to critical minerals. It isn't necessary. I know about negotiation.

00:06:17.420 So to me, that's the interesting point here, because he's saying that when you're negotiating with a foreign country, you don't want to be bound by legislation that could hurt your negotiating position.

00:06:28.880 And so again, that was sort of applying that maybe he would have some room to negotiate. And he was pretty adamant there, saying that it's not necessary. And then yet, here we are seeing him go ahead and back the very bill that he said wasn't necessary. So what do you make of that?

00:06:42.340 Yeah, so the second version, the French debate, what he was saying is accurate. I don't think you need to do this. And honestly, I think it would position, it would put Canada in a very weak position moving forward with any country, to be honest, because typically, when you start negotiating with another country, you will put on the table sensitive sectors.

00:07:11.420 And so there would be an automatic for Canada. Do you need a bill? Do you need a law to protect that sector? I don't think so, to be honest, because eventually, we're probably going to have to make some compromises along the way, as we did with the United States, Mexico, Canadian deal that was ratified in 2020. And of course, we all know what happened next. We all had to pay a $1.2 billion bill,

00:07:40.420 given back to dairy farmers as compensation, if you will, even though, Candace, I'm not sure if you were aware, but dairy farmers don't lose a cent with these deals at all. I mean, when you actually look at how much money they're losing, they're not losing at all, they recalibrate quotas, which indicates how politicians poorly understand the system. It's all about theater, it's about artifacts. So I think what

00:08:10.420 Prime Minister Carney's understanding now is that he needs to go ahead with this bill, only to show that he cares very much about supply management. But it doesn't mean that there aren't going to be compromises made along the way.

00:08:23.420 Okay, so you're saying that maybe this is just posturing, because from my perspective, I mean, he just won an election. It's not like we're heading into another election anytime soon. So I don't really understand why he has to do this.

00:08:35.420 To me, the one sort of silver lining of being in a trade war with our closest friends and allies is that maybe it would be a time for introspection and reflection upon our own policies, so that we can go ahead and get rid of the protectionist policies that really severely benefit a small, small group of people and harm the rest of Canadians.

00:08:54.640 And we're talking about this in light of crippling food inflation, as it is like the cost of dairy is more expensive in Canada, because of this system system was designed, I think in the 1950s, maybe you can correct me if I'm wrong. 1972. Yeah, okay. 1970s. It seems like it's quite out of date. And maybe we should adapt and have a sort of more modern laissez faire free market system. And yet that seems to be completely off the table. I want to read a tweet that you posted because I love this.

00:09:21.640 You said, for Canada to truly have a thriving agri-food economy, provincial dairy boards that manage quotas must be eliminated, but don't hold your breath. If anything, the 45th parliament is likely to repeat the same mistakes as the last one, doubling down on protecting dairy.

00:09:35.780 It's interesting because I remember when Stephen Harper was the prime minister and the conservative government got rid of the wheat board, and that was a huge victory. And I thought, you know, next will be the dairy board. And yet that was, preferably, you know, no pun intended, but the sacred cow of Canadian politics.

00:09:49.120 And it seems like it still is. So what do you make of all that?

00:09:52.800 The monopsony that impacted barley and wheat, I was actually in Saskatchewan at the time, and it was really a different system.

00:10:01.180 And it was easier to dismantle because to be honest, a lot of farmers were discontent, were unhappy with the system.

00:10:07.400 They were able to trade better than the Canadian wheat board based out of Winnipeg.

00:10:12.060 And that's why it was easier for Chuck Strahl at the time, he was the Minister of Agriculture, to get rid of it, really, through a plebiscite.

00:10:19.800 The supply management system is much more complicated. There's a lot of fiscal baggage here.

00:10:25.680 You have a quota system, first of all.

00:10:28.400 Secondly, you have provinces managing quotas.

00:10:32.660 And that, of course, would include Quebec and Quebec, with only 20% of the population, produces almost 40% of all the milk we have in Canada.

00:10:43.180 So you can tell that Quebec has a lot to lose, which makes it a very political, well, hot potato.

00:10:50.460 I was asked by many politicians over the years, if I were to have superpowers and eliminate or at least make supply management better, what would you do?

00:11:03.240 If there's one thing I would do right now would be to harmonize the allocation of quotas nationally, not provincially, but nationally.

00:11:13.560 And that's where you're going to start seeing more efficiencies.

00:11:17.180 And to your point about costs, you would probably reduce the cost to produce milk and butterfat in Canada because the money will go where efficiencies are built, in Alberta, in Saskatchewan, in BC.

00:11:30.600 So the money would actually flow west.

00:11:33.740 And Quebec and Ontario, both provinces absolutely know this.

00:11:37.480 That's why they're adamant in protecting the status quo.

00:11:39.640 Well, I'm guessing that's part of the reason why those changes aren't being seriously discussed, because if the benefit is in Ontario and Quebec, that's, you know, the system is going to be protected to keep it that way.

00:11:51.620 I want to tie this into food inflation and what many Canadians are experiencing when they go to the grocery store, which is just that the prices continue to go up.

00:12:01.720 So this was a report that came out over the weekend.

00:12:03.560 Food inflation continues to rise.

00:12:05.100 Here's what it means for your fridge.

00:12:06.960 According to Loblaw's company, May Food Inflation Report, grocery prices rose 3.8% per year over year from last April, surpassing the General Consumer Price Index.

00:12:17.660 This marks the third consecutive month where food inflation has outstripped overall inflation, noted by Statistics Canada.

00:12:24.500 You had an article over in Troy Media about a week and a half ago saying blaming the U.S. won't cut it.

00:12:30.260 Canada's food inflation crisis is largely the result of Ottawa's poor policy choices.

00:12:35.480 So can you help us understand why prices are continuing to rise?

00:12:40.380 So 3.8% is the highest food inflation rate amongst G7 countries, with the exception of Japan.

00:12:47.260 So it's got to be policy driven.

00:12:50.460 Absolutely.

00:12:51.560 And right now, food inflation is 2.1% above inflation, which means that if you and I want to go to the grocery store, when we see high prices, we'll notice.

00:13:01.200 That's really what it means.

00:13:02.880 And so what's going on right now, counter tariffs have not helped.

00:13:07.600 So in March, from March the 3rd to through March, April and beginning of May, we actually, a lot of importers had to deal with counter tariffs.

00:13:18.340 But the one thing that you may not know, Candice, is that during the election, Mark Carney decided to pause counter tariffs affecting the food industry, effective May 7th, a few weeks ago, until October.

00:13:35.540 So Loblaw came out a few weeks ago, saying, well, we're going to have 6,000 products affected by counter tariffs.

00:13:42.560 It's terrible.

00:13:43.680 Well, not quite, because as of May 7th, which is the day after Mark Carney met with President Trump, by the way, no coincidence, tariffs were paused.

00:13:55.640 And so counter tariffs aren't going to be a problem for May, June.

00:13:59.140 So we are expecting the food inflation rate to actually drop.

00:14:02.540 But the troubling part of all this is that no one has actually talked about it.

00:14:08.960 And the first person I would point to is Prime Minister Carney.

00:14:12.000 He should have said during the elbows up campaign that perhaps implementing counter tariffs actually will penalize Canadians first.

00:14:23.140 He knows that.

00:14:24.260 And so he did it very quietly in a very subtle way and let Sean Payne do the dirty work.

00:14:30.680 Well, it's interesting because one of the things you note in your piece is that food inflation is going down in the United States.

00:14:37.380 So they're the ones that are implementing tariffs on just about absolutely everybody.

00:14:40.740 And yet their inflation is going down.

00:14:43.280 It was 2%, 2.1%.

00:14:45.380 And Canada's is almost double that.

00:14:47.380 And there's a really simple reason for that.

00:14:50.420 The American economy can absorb geopolitical shocks like tariffs.

00:14:55.940 Absolutely.

00:14:56.420 That's what it says.

00:14:57.720 In Canada, we have a less competitive food industry.

00:15:00.560 So when you implement counter tariffs, it will hurt Canadians.

00:15:04.720 When President Trump said to Walmart, well, with tariffs, you can eat it up.

00:15:10.260 He's absolutely right.

00:15:11.880 Walmart can eat up the tariffs because it's such an efficient company.

00:15:16.440 We don't have a company like Walmart in Canada.

00:15:19.140 Well, possibly because we don't have the same kind of competition.

00:15:21.900 So they are a little bit complacent.

00:15:25.720 And when it comes to that, you had another interesting concept in this article I hadn't really heard or really understood, although you see it when you go to the grocery store.

00:15:33.220 And that was you call it maple washing, where companies overstate or exaggerate a product's connection to Canada.

00:15:38.920 I noticed when I go to the grocery store, it's almost obnoxious, Sylvain, because a Canadian product, you know, they put like a huge maple leaf on it.

00:15:45.420 They really want you to know that this product is Canadian.

00:15:48.260 And they kind of like try to hide the non-Canadian products, even though the Canadian ones often are more expensive.

00:15:54.160 So can you help us understand what you mean by maple washing?

00:15:57.240 Yeah.

00:15:57.520 If you've been following my work over the last few years, you'll know that I always give the benefit of the doubt to business. 1.00

00:16:04.460 But sometimes businesses tend to make stupid decisions. 0.99

00:16:10.440 The bread price fixing scandal is certainly one. 1.00

00:16:14.240 The maple washing is another one.

00:16:15.880 I actually do receive pictures from readers almost daily.

00:16:19.760 And one time I got a reader sending me a picture of Canadian naval oranges, Candace.

00:16:28.620 Canadian naval oranges.

00:16:30.520 Yeah.

00:16:31.020 Unprocessed.

00:16:32.220 So you can tell that something was going on.

00:16:34.280 So the person actually went to management and said, listen, you have a problem here.

00:16:38.160 You can't have Canadian oranges.

00:16:40.500 They rectified the situation.

00:16:42.340 He came, he went back the next day, the next day, same store, same shelf, only to discover that those naval oranges were in fact from Egypt and they were 12.5% less expensive.

00:16:56.440 Now that is maple washing.

00:16:59.600 Interesting.

00:17:00.300 Interesting.

00:17:00.680 Well, there was a funny political cartoon during the campaign and it was all these Canadians. 0.72

00:17:04.980 It was a, it was a picture of a whole bunch of Canadians lining up to go into Walmart.

00:17:08.960 Walmart.

00:17:09.600 And yeah.

00:17:10.120 And they were all saying, elbows up, buy Canadian, you know, and like shopping.

00:17:13.940 And right next door, there's the bankrupt Bay, the Bay Hudson Bay.

00:17:17.840 Yeah.

00:17:18.300 Yeah.

00:17:18.640 Yeah.

00:17:19.240 That's typically.

00:17:20.380 And of course, Nelson IQ last week.

00:17:22.680 So for the last few months, we've seen several surveys telling us, oh, Canadians are buying Canadian.

00:17:28.040 They're buying Canadian.

00:17:29.020 Elbows up.

00:17:29.960 They're boycotting America at the grocery store. 0.72

00:17:32.100 But last week we heard from Nelson IQ.

00:17:35.120 And again, this is something that hasn't been reported overly by, by, by legacy media.

00:17:41.580 Sales for Canadian food products are up in the last few months by 4.4%.

00:17:47.280 Not 10%, not 20%, 4.4% with inflation.

00:17:54.380 When you look at American food products, they're down, of course, but by 4.1%.

00:18:00.540 So we're talking about a shift of about 4%, which is actually important, but we're not

00:18:05.580 talking about a huge boycott, a huge shift towards Canadian products here because people

00:18:11.540 have budgets.

00:18:12.320 People only have so much money to spend on food.

00:18:16.480 Right.

00:18:16.780 And at the end of the day, if the, you know, imported American blueberries are half a price,

00:18:22.520 or even just to get blueberries at this time of year, people are at the end of the day

00:18:26.780 going to do that.

00:18:28.440 If you were advising Mark Kearney, or if you could advise him on one thing to do to help

00:18:32.780 lower the cost of food and groceries in Canada, what would that be?

00:18:37.840 Well, the one thing that we haven't discussed yet is the Grocer Code of Conduct.

00:18:41.300 It's actually going in.

00:18:43.860 It's going to be implemented as of January 1st.

00:18:46.320 I would, I would make sure that this code works for all.

00:18:50.760 Two, the Liberals actually did make a promise investing more in food processing.

00:18:55.980 I'd make sure it happens.

00:18:57.280 So they've committed to a $200 million fund, which is not a whole lot.

00:19:02.880 I certainly would like to see more, but it is the only, only platform during the election

00:19:07.880 that actually did promise to give some attention to processing.

00:19:11.940 And if we want to build a stronger agri-food sector, if we want to gain some ability to

00:19:18.180 support our farmers and innovate more, we need a stronger food processing sector.

00:19:24.420 Interesting.

00:19:25.060 Interesting points.

00:19:25.680 Well, Dr. Charlebois, I really appreciate your time and insights.

00:19:29.260 Thank you so much.

00:19:29.920 That's Dr.

00:19:30.640 Sylvan Charlebois of Dalhousie University.

00:19:33.360 Thank you.

00:19:34.260 My pleasure.

00:19:35.740 All right, folks, this is all the time we have for today.

00:19:37.660 We'll be back again tomorrow with all the news.

00:19:39.020 I'm Candice Malcolm.

00:19:39.700 This is the Candice Malcolm Show.

00:19:40.700 Thank you, and God bless.

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Juno News - June 02, 2025

Carney FLIPS on supply management, Food Professor explains why food inflation is going UP in Canada

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