The Candice Malcolm Show - 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

00:00:06.520 in. We have an excellent episode for you today. I hope everyone had a wonderful weekend.

00:00:11.860 So over the weekend, Prime Minister Mark Carney was in Calgary, and he was there to

00:00:17.160 meet with energy industry leaders. I've heard this from several people, including Brett

00:00:21.700 Wilson, who was on the show with us last week. And he said that Mark Carney plays a good

00:00:26.880 game, talks a good game about developing energy, developing oil and gas. While he's

00:00:31.160 in Calgary, he's positive about pipelines. And then as soon as he leaves, he sort of strikes

00:00:35.100 a different tone. So we're going to keep an eye on that. Of course, Mark Carney today is

00:00:39.040 in Saskatoon, and he's at the First Minister's meeting. So he's having a meeting with all

00:00:43.400 of the premiers. We're going to keep an eye on that, and we're going to dive into it a

00:00:47.440 little later in the week. But I did want to point out one interesting thing. So we did

00:00:52.800 learn, like I said, Carney was in Calgary yesterday talking about how he wants to make Canada

00:00:56.780 an energy superpower, not really specifically saying oil and gas or pipelines, but energy

00:01:01.480 broadly. And then he also quietly appointed a new chief of staff on Sunday. And now I know

00:01:08.100 personnel issues aren't the most interesting things to talk about, but this individual,

00:01:12.620 Marc-André Blanchard, will serve as chief of staff. And this is only interesting because

00:01:17.580 of his own background and what it signals, right? There are two flanks in the Liberal Party.

00:01:21.500 There is a sort of pro-business, business as usual side that Mark Carney tries to represent,

00:01:26.680 like a departure from Justin Trudeau and the sort of radical anti-oil agenda that he had.

00:01:33.980 And then that other side, which is sort of the Gerald Butts flank of the Liberal Party. Well,

00:01:38.540 Marc-André Blanchard very much comes from that Gerald Butts flank of the party. And don't just

00:01:43.500 trust me. I mean, when Gerald Butts stepped down in 2019, Marc-André profusely thanked him for his

00:01:50.940 service and his deep commitment. And he said that he was, you know, an idol and his leadership in

00:01:56.020 fighting against climate change and inequalities was inspiring to others. His background is that

00:02:01.500 he was the executive vice president and global head of sustainability at the CDPQ Global, which is a

00:02:07.160 Quebec-based institutional investment firm. And he was very much on board with the net zero. He's a net

00:02:12.260 zero investor. And he previously said that it's essential to not increase oil and gas and coal

00:02:18.520 production and focus on renewable and transitional energy. So that is where we're coming from with

00:02:25.140 this chief of staff. And what that is signaling to Canadians is not exactly the same kind of thing

00:02:31.480 that Carney was saying yesterday in Calgary. Okay, I want to introduce our guests. I'm very pleased to

00:02:37.000 have this guest. We had him on the election show, which was great to talk to him. I'm talking about

00:02:40.960 Dr. Sylvian Charlebeau. He's not online as the food professor. He runs an excellent, excellent

00:02:46.260 ex-account. He leads the Agri-Food Analytics Lab at Dalhousie University. And he's host of the

00:02:52.580 Food Professor podcast. So Sylvian, thank you so much for joining the show.

00:02:56.200 Hello, Candice.

00:02:57.580 Hi, great to have you. So I want to talk a little bit about the food inflation that's happening in

00:03:03.440 Canada. Specifically, we learned today or yesterday that Mark Carney is endorsing the dairy cartel

00:03:11.300 protectionist bill that's put forth by the blog. This is Rebel News reporting that Mark Carney

00:03:15.340 backed a Quebec war dairy bill amid the ongoing trade disputes with Donald Trump's supply management

00:03:21.640 will never, never be on the negotiating table, Mark Carney told the House of Commons supply

00:03:26.600 management will be protected according to Blacklock's reporter. So I'm wondering what you make of this

00:03:33.280 bill and Mark Carney agreeing to back it. Well, I'm not surprised. So you're talking about

00:03:39.760 Bill C-282 coming from Parliament No. 44. It has survived. And politically, I would say that no one in

00:03:50.500 Parliament has any choice. The dairy lobby in particular is incredibly powerful. And they know

00:03:57.620 how to destroy political careers. Just talk to Maxime Bernier about that. I mean, they are incredibly

00:04:03.820 influential. And the dairy lobby is advocating for a system that very few people understand. Even I would

00:04:11.480 say that many politicians don't understand. But what they do understand is that if they actually go against

00:04:17.160 it, they will pay the price. As a scientist myself, my job is to make sure that people understand what the

00:04:25.880 system is all about and how costly it can be for an economy. So, yes, we are stuck with Bill C-282.

00:04:35.120 And I testified before Senate in December against Bill C-282. I think Senate listened. We were going to be

00:04:45.540 successful. But now, of course, we all know what happened next. We went into an election, a leadership race,

00:04:52.260 an election, and here we are. Well, it's interesting because during the election campaign, Mark Carney,

00:04:58.420 he affirmed that he had unwavering support for the dairy supply management system in the face of

00:05:05.520 President Trump. So I'm going to play this clip, but I'm going to play another clip that showed

00:05:09.420 something slightly different. So first, here's a clip of Carney saying that he had unwavering support

00:05:13.760 of supply management. We will never have discussions with respect to supply management. It's off the

00:05:20.120 table. So that's sort of the typical Canadian politician response. But then a few days later,

00:05:25.640 speaking on a panel with Radio Canada journalists, this is the French language. Mark Carney said that

00:05:30.920 there isn't a need to pass a law to protect supply management, saying it's not necessary to make new

00:05:35.620 laws for negotiating positions, adding, I know how to negotiate. So this was sort of an interesting,

00:05:41.160 I felt like maybe opening the door to possibly just saying that it's time to evolve the system. So

00:05:46.440 let's play this clip. It's French, but I believe it's dubbed in English, and then I'll get you to

00:05:51.140 respond to it.

00:05:51.960 You refused today to committing to legislation to protect supply management for people in agriculture.

00:05:57.960 Why? In my opinion, it's not necessarily to make laws for negotiation positions. It's not about

00:06:07.840 legislation to have a negotiation with you, say, as a European and with regards to critical minerals.

00:06:14.460 It isn't necessary. I know about negotiation.

00:06:18.140 So to me, that's the interesting point here, because he's saying that when you're negotiating

00:06:23.920 with a foreign country, you don't want to be bound by legislation that could hurt your negotiating

00:06:28.320 position. And so that, again, that was sort of applying that maybe he would have some room to

00:06:33.020 negotiate. And he was pretty adamant there saying that it's not necessary. And then yet here we are

00:06:37.980 seeing him go ahead and back the very bill that he said wasn't necessary. So what do you make of that?

00:06:42.400 Yeah. So the second version, the French debate, what he was saying is accurate. I don't think you need

00:06:52.340 to do this. And honestly, I think it would position, it would put Canada in a very weak position moving

00:06:59.760 forward with any country, to be honest. Because typically, when you start negotiating with another

00:07:08.080 country, you will put on the table sensitive sectors. And so there would be an automatic for Canada. Do you need

00:07:15.740 a bill? Do you need a law to protect that sector? I don't think so, to be honest, because eventually, we're

00:07:23.740 probably going to have to make some compromises along the way, as we did with the United States-Mexico-Canadian

00:07:30.340 deal that was ratified in 2020. And of course, we all know what happened next. We all had to pay

00:07:36.280 a $1.2 billion bill given back to dairy farmers as compensation, if you will, even though, Candace,

00:07:46.640 I'm not sure if you were aware, but dairy farmers don't lose a cent with these deals at all. I mean,

00:07:53.040 when you actually look at how much money they're losing, they're not losing at all. They recalibrate

00:07:58.780 quotas, which indicates how politicians poorly understand the system. It's all about theater. 0.59

00:08:07.800 It's about artifacts. So I think what Prime Minister Carney is understanding now is that he needs to

00:08:13.880 go ahead with this bill only to show that he cares very much about supply management. But it doesn't

00:08:19.860 mean that there aren't going to be compromises made along the way. Okay. So you're saying that maybe

00:08:25.720 this is just posturing because- Oh, absolutely. I mean, he just won an election. It's not like

00:08:30.440 we're heading into another election anytime soon. So I don't really understand why he has to do this.

00:08:36.240 To me, the one sort of silver lining of being in a trade war with our closest friends and allies

00:08:41.240 is that maybe it would be a time for introspection and reflection upon our own policies so that we can

00:08:46.820 go ahead and get rid of the protectionist policies that really severely benefit a small, small group of

00:08:52.760 people and harm the rest of Canadians. And we're talking about this in light of crippling food

00:08:57.460 inflation as it is. The cost of dairy is more expensive in Canada because of this system. The

00:09:03.980 system was designed, I think, in the 1950s. Maybe you can correct me if I'm wrong.

00:09:07.960 1972. Yeah.

00:09:09.040 Okay. 1970s. It seems like it's quite out of date and maybe we should adapt and have a sort of more

00:09:14.740 modern laissez-faire free market system. And yet that seems to be completely off the table. I want to read

00:09:19.460 a tweet that you posted because I love this. You said, for Canada to truly have a thriving agri-food

00:09:24.960 economy, provincial dairy boards that manage quotas must be eliminated, but don't hold your breath. If

00:09:30.120 anything, the 45th parliament is likely to repeat the same mistakes as the last one, doubling down on

00:09:34.620 protecting dairy. It's interesting because I remember when Stephen Harper was the prime minister and the

00:09:38.640 conservative government got rid of the wheat board and that was a huge victory. And I thought, you know,

00:09:42.420 next will be the dairy board. And yet that was, preferably, you know, no pun intended, but the sacred cow

00:09:48.020 of Canadian politics. And it seems like it still is. So what do you make of all that?

00:09:52.860 The monopsony that impacted barley and wheat, I was actually in Saskatchewan at the time and it was really a

00:10:00.600 different system and it was easier to dismantle because, to be honest, a lot of farmers were discontent,

00:10:05.820 were unhappy with the system. They were able to trade better than the Canadian wheat board based out of

00:10:11.560 Winnipeg. And that's why it was easier for Chuck Strahl at the time. He was the minister of agriculture

00:10:16.480 to get rid of it, really, through a plebiscite. The supply management system is much more complicated.

00:10:23.080 There's a lot of fiscal baggage here. You have a quota system, first of all. Secondly, you have

00:10:30.420 provinces managing quotas. And that, of course, would include Quebec. And Quebec, with only 20% of the

00:10:37.660 population, produces almost 40% of all the milk we have in Canada. So you can tell that Quebec has a

00:10:45.020 lot to lose, which makes it a very political, well, hot potato. I was asked by many politicians over the

00:10:53.300 years, if I were to have superpowers and eliminate or at least make supply management better, what would

00:11:02.500 you do? If there's one thing I would do right now would be to harmonize the allocation of quotas

00:11:10.140 nationally, not provincially, but nationally. And that's where you're going to start seeing more

00:11:16.380 efficiencies. And to your point about costs, you would probably reduce the cost to produce milk and

00:11:21.220 butterfat in Canada because the money will go where efficiencies are built in Alberta, in Saskatchewan,

00:11:29.380 in BC. So the money would actually flow west. And Quebec and Ontario, both provinces absolutely

00:11:36.700 know this. That's why they're adamant in protecting the status quo.

00:11:40.500 Well, I'm guessing that's part of the reason why those changes aren't being seriously discussed,

00:11:44.960 because if the benefit is in Ontario and Quebec, the system is going to be protected to keep it that

00:11:51.520 way. I want to tie this into food inflation and what many Canadians are experiencing when they go to

00:11:57.880 the grocery store, which is just that the prices continue to go up. So this was a report that came

00:12:02.920 out over the weekend. Food inflation continues to rise. Here's what it means for your fridge.

00:12:07.080 According to Loblaw's company, May food inflation report, grocery prices rose 3.8 percent per year

00:12:13.720 over year from last April, surpassing the general consumer price index. This marks the third consecutive

00:12:18.740 month where food inflation has outstripped overall inflation noted by Statistics Canada. You had an

00:12:25.140 article over in Troy Media about a week and a half ago saying, blaming the U.S. won't cut it.

00:12:30.400 Canada's food inflation crisis is largely the result of Ottawa's poor policy choices. So can you help us

00:12:36.480 understand why prices are continuing to rise?

00:12:40.720 So 3.8 percent is the highest food inflation rate amongst G7 countries, with the exception of Japan.

00:12:47.320 Okay. So it's got to be policy driven. Absolutely. And right now, food inflation is 2.1 percent above

00:12:55.160 inflation, which means that if you and I want to go to the grocery store, when we see high prices,

00:12:59.960 we'll notice. That's really what it means. And so what's going on right now, counter tariffs have not

00:13:07.400 helped. So in March, from March the 3rd to through March, April and beginning of May, we actually,

00:13:15.460 a lot of importers had to deal with counter tariffs. But the one thing that you may not know, Candace,

00:13:21.960 is that during the election, Mark Carney decided to pause counter tariffs affecting the food industry

00:13:29.220 effective May 7th, a few weeks ago, until October. So Loblaw came out a few weeks ago saying,

00:13:38.880 well, we're going to have 6,000 products affected by counter tariffs. It's terrible. Well,

00:13:43.920 not quite, because as of May 7th, which is the day after Mark Carney met with President Trump,

00:13:50.580 by the way, no coincidence, tariffs were paused. And so counter tariffs aren't going to be a problem

00:13:58.120 for May, June. So we are expecting the food inflation rate to actually drop. But the troubling part of all

00:14:05.520 this is that no one has actually talked about it. And the first person I would point to is Prime

00:14:11.440 Mr. Carney, he should have said during the elbows up campaign that perhaps

00:14:16.560 implementing counter tariffs actually will penalize Canadians first. He knows that. And so he did it 1.00

00:14:25.300 very quietly in a very subtle way and let Sean Pine do the dirty work.

00:14:30.440 Well, it's interesting because one of the things you note in your piece is that food inflation is going

00:14:36.220 down in the United States. So they're the ones that are implementing tariffs on just about absolutely

00:14:40.260 everybody. And yet their inflation is going down. It was 2 percent, 2.1 percent. And Canada's is almost

00:14:46.640 double that. And there's a really simple reason for that. The American economy can absorb

00:14:52.300 geopolitical shocks like tariffs. Absolutely. That's what it says. In Canada, we have a less

00:14:59.260 competitive food industry. So when you implement counter tariffs, it will hurt Canadians. When President

00:15:06.020 Trump said to Walmart, well, with tariffs, you can eat it up. He's absolutely right. Walmart can eat

00:15:13.140 up the tariffs because it's such an efficient company. We don't have a company like Walmart in

00:15:18.400 Canada. Well, possibly because we don't have the same kind of competition. So they are a little bit

00:15:24.820 complacent. And when it comes to that, you had another interesting concept in this article I hadn't

00:15:29.320 really heard or really understood. Although you see it when you go to the grocery store and that was,

00:15:33.640 you call it maple washing, where companies overstate or exaggerate a product's connection

00:15:38.300 to Canada. I noticed when I go to the grocery store, it's almost obnoxious, Sylvain, because

00:15:42.380 a Canadian product, you know, they put like a huge maple leaf on it. They really want you to know that

00:15:46.640 this product is Canadian. And they kind of like try to hide the non-Canadian products, even though the

00:15:52.260 Canadian ones often are more expensive. So could you help us understand what you mean by maple washing?

00:15:57.300 Yeah. If you've been following my work over the last few years, you'll know that I always give the

00:16:02.240 benefit of the doubt to business. But sometimes businesses tend to make stupid decisions. 1.00

00:16:10.580 The bread price fixing scandal is certainly one. The maple washing is another one. I actually do 1.00

00:16:16.720 receive pictures from readers almost daily. And one time I got a reader sending me a picture of

00:16:23.480 Canadian naval oranges, Candice. Canadian naval oranges. Yeah. Unprocessed. So you can tell that

00:16:33.180 something was going on. So the person actually went to management and said, listen, you have a problem

00:16:37.740 here. You can't have Canadian oranges. They rectified the situation. He came, he went back the next day,

00:16:45.440 the next day, same store, same shelf, only to discover that those naval oranges were in fact from

00:16:51.480 Egypt. And they were 12.5% less expensive. Now that is maple washing.

00:16:59.760 Interesting. Interesting. Well, I, there was a funny political cartoon during the campaign and it was

00:17:04.060 all these Canadians, it was, it was a picture of a whole bunch of Canadians lining up to go into

00:17:08.620 Walmart. And yeah. And they were all saying, elbows up, buy Canadian, you know, and like shopping.

00:17:13.860 Right next door, there's the bankrupt Bay, the Bay Hudson Bay. Yeah. Yeah. Yeah. That's, that's

00:17:19.840 typically, and of course, Nelson IQ last week. So for the last few months, we've seen several

00:17:25.300 surveys telling us, oh, Canadians are buying Canadian. They're buying Canadian elbows up.

00:17:29.940 They're boycotting America at the grocery store. But last week we heard from Nelson IQ. And again,

00:17:35.620 this is something that hasn't been reported overly by, by, by legacy media. Sales for Canadian food

00:17:43.300 products are up in the last few months by 4.4%, not 10%, not 20%, 4.4% with inflation. When you look at

00:17:55.540 American food products, they're down of course, but by 4.1%. So we're talking about a shift of about 4%,

00:18:02.860 which is actually important, but we're not talking about a huge boycott, a huge shift towards

00:18:09.820 Canadian products here because people have budgets. People, uh, only have so much money to spend on

00:18:15.580 food. Right. And at the end of the day, if the, you know, imported American, uh, blueberries or half

00:18:22.220 a price or even just to get blueberries at this time of year, uh, people are at the end of the day,

00:18:26.780 they're going to do that. Uh, if, if, if you were advising Mark Kearney, or if you could advise

00:18:31.340 one, one thing to do to help lower the costs of food and groceries in Canada, what, uh, what would

00:18:36.860 that be? Well, the one thing that we haven't discussed yet is the Grocer Code of Conduct. It's

00:18:41.580 actually, uh, going in, uh, it's going to be implemented as of January 1st. I would, I would make

00:18:47.420 sure that this code works for all to, uh, the liberals actually didn't make a promise investing

00:18:54.300 more in food processing. I'd make sure it happens. So they've committed to a $200 million fund,

00:19:00.620 which is not a whole lot. Uh, I certainly would like to see more, but it is the only,

00:19:06.140 only platform during the election that actually did promise to give some attention to processing.

00:19:11.900 And if we want to build a stronger agri-food sector, if we want to gain some ability to

00:19:18.220 support our farmers and innovate more, we need a stronger food processing sector.

00:19:24.380 Interesting. Interesting points. Well, Dr. Charlebois, I really appreciate your time,

00:19:28.460 uh, and insights. Thank you so much. That's Dr. Sylvan Charlebois of, uh, Dalhousie University.

00:19:33.340 Thank you. My pleasure. All right, folks, this is all the time we have for today. We'll be back

00:19:37.980 again tomorrow with all the news. I'm Candace Malcolm. This is Candace Malcolm Show. Thank you and God

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The Candice Malcolm Show - June 02, 2025

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

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