The federal government continues to force Canadian families to squander more than $275 per family per year to protect the lucrative Canadian dairy and poultry industries. What gives?
Some time in 2015, Prime Minister Stephen Harper will introduce a budget that will lower Canadians’ income taxes. Tax reduction is a cynical, long-standing pre-election trick that works.
Voters love tax breaks. But they obviously come at a cost — reduction in government services, often in areas where they are badly needed, such as protection of the environment and assistance for the poor.
But if Harper simply followed his own mantra — that open competition is great for the development of efficient industries and great for consumers alike — he could hand the average Canadian family $275 without cutting important government services.
How badly are Canadian consumers being gouged? Based on data from Statistics Canada and the United States Department of Labor, here’s a comparison for June (in Canadian dollars) to what U.S. consumers pay on average under the American free market system:
• Chicken: Canada $3.22 a pound, U.S. $1.64 a pound.
• Dozen eggs: Canada $3.27, U.S. $2.14.
• Litre of milk: Canada $2.47, U.S. $1.05
• Processed cheese: Canada $5.10 a pound, U.S. $4.83 a pound.
• Butter: Canada $4.51 a pound; U.S. $2.74 a pound.
We Canadians pay 96 per cent more for chickens, 50 per cent more for eggs, 142 per cent more for milk, 27 per cent more for cheese, and 65 per cent more for butter.
Why? To assure our poor farmers adequate compensation and marketplace stability? That might have been the original intention. But as former Toronto Liberal MP Martha Hall Findlay pointed out in a seminal research paper in June 2012, there are virtually no more small dairy farms — the number has dropped over four decades from 70,000 (a lot of little guys) to 12,000 (not many and not so little anymore).
This system isn’t supporting thousands of small Canadian farmers. It’s supporting a small group of agricultural industrialists who are inhaling money at Canadian consumers’ expense. One might think, because all voters are consumers, that a vast majority of MPs would be standing up for them and demanding that the government phase out this antiquated system, and phase it out quickly.
But on June 18, MPs unanimously passed a motion 262 to 0 saying that the government should “respect its promise to dairy and cheese producers in Quebec and Canada” by resisting pressure from the Comprehensive Economic and Trade Agreement between Canada and the European Union to dismantle Canada’s system of supply management for the marketing of eggs, butter and poultry.
That system guarantees Canadian producers lucrative returns by limiting production and by imposing tariffs on imports from other countries to the point that those who would export these commodities to Canada have all but given up trying.
So if the system has become warped, why did 262 MPs vote against moving toward hasty reform? The cynical answer to that is because all parties are looking at crucial rural seats in the next election, particularly in Quebec. That’s the answer MPs give me, even as they agree in private that the system stinks. But this is nonsensical politics — 12,000 farms couldn’t possibly swing vote counts in even the most traditional dairy ridings. MPs could win more votes appealing to consumers.
Nearly every other country that used to impose supply management for these commodities has given them up. Australia did. New Zealand did. Their dairy industries are thriving.
The Conservative government is trying to avoid being ousted from the 12-country Trans-Pacific Partnership Talks, which will produce one of the most important free-trade agreements of our time. Why are other countries involved in the negotiations pointing at Canada as too protectionist to be part of any agreement?
Because we are dragging our heels, trying to preserve parts of this corrupted system that makes no sense for Canada and no sense for the world.
Colin Kenny is a member of the Senate.
