A new bill shielding dairy, poultry and eggs from trade negotiations sends the wrong message to global partners and punishes Canadian consumers
Last week, the House of Commons unanimously approved Bill C-202, a law that would prohibit Canada from making any trade concessions involving its supply-managed sectors, including dairy, poultry and eggs.
The bill now moves to the Senate for final approval. With unanimous support, the House is reinforcing a decades-old protectionist system just as Canada faces mounting pressure to modernize its economy and re-establish credibility as a global trading partner.
Introduced initially as Bill C-282 by the Bloc Québécois in the last Parliament, Bill C-202 grants blanket immunity to supply-managed sectors, most notably dairy, regardless of the negotiating partner or economic context. With its approval in the House, Parliament has already sent a clear signal: this system is off-limits, no matter the cost.
Canada’s approach to supply management and trade keeps circling back to the same policy mistakes—protecting an outdated system whose relevance is increasingly hard to justify.
Supply management, a system that controls domestic production through quotas, guarantees prices for farmers and restricts imports with high tariffs, especially in dairy, poultry and eggs, was introduced decades ago to stabilize farm incomes and ensure domestic supply. But today, it’s more about shielding entrenched interests than serving consumers or the broader economy.
During the federal election campaign, Prime Minister Mark Carney stated in a Radio-Canada interview that no legislation was necessary to protect the dairy industry. It appears he has since changed his mind, or someone changed it for him.
While the prime minister’s shift signals executive backing, not everyone is convinced. The Senate may still push back, as some senators have raised concerns about the bill’s long-term economic consequences. But the political momentum is unmistakable: protectionism is once again being presented as national interest.
In Ottawa, few MPs from any party challenge one of the most powerful lobby groups in the country: the Dairy Farmers of Canada. Their influence is formidable, both federally and provincially. Despite this outsized influence, it’s worth asking: what exactly are we protecting?
Canada has the highest industrial milk prices in the G7. A litre of milk in Canada can cost up to twice as much as it does in the U.S.—an added burden for families already struggling with inflation and rising grocery bills.
These elevated prices don’t drive innovation or reinvestment. Many producers are content to maintain the status quo, insulated from competition. The result? Consumers pay more while the industry resists efficiency and change.
Defenders of supply management often point to food safety. It’s true that bovine growth hormones are banned here. That’s commendable.
But other practices deserve more scrutiny. A 2022 study published in Trends in Food Science and Technology found that palm oil derivatives are permitted in feed for Canadian dairy cows. This may help explain the firmer, less spreadable butter observed at room temperature—a phenomenon dubbed “Buttergate,” which was initially dismissed by dairy farmers despite growing evidence.
More recently, a peer-reviewed study co-authored by researchers at McGill and Dalhousie universities estimated that Canada discards between 600 million and one billion litres of milk annually. The dairy lobby rejected the findings but has yet to present alternative data.
The reality is simple: cows don’t stop producing milk when demand dips, so waste is inevitable.
Rather than engage critics or offer transparency, the dairy sector leans on silence and self-congratulation. Reform is taboo. This unwillingness to confront hard truths at home has international consequences.
Looking ahead, Canada will need to renegotiate trade deals with the United States, Mexico and other partners.
Trade negotiations with countries like the U.S., our largest trading partner, require flexibility and credibility. Shielding entire sectors from negotiation signals that we are unwilling to deal in good faith.
Two choices await: we either pay billions in compensation to dairy farmers every time we offer concessions, a practice that borders on economic racketeering, or we forfeit our standing as a credible trade partner.
What message does this send to the world at a time when Canada urgently needs to diversify its economy?
By clinging to a politically convenient system, our elected officials are rewarding complacency and institutionalizing inefficiency, all under the guise of defending national interests.
The more things change, the more they stay the same.
Dr. Sylvain Charlebois is a Canadian professor and researcher in food distribution and policy. He is senior director of the Agri-Food Analytics Lab at Dalhousie University and co-host of The Food Professor Podcast. He is frequently cited in the media for his insights on food prices, agricultural trends, and the global food supply chain.
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