Watching the federal Conservative leadership candidates battle it out over supply management is interesting, not just for the obvious ramifications, but because Conservatives are usually driven by free-market economics.
Supply management is the antithesis of the free market. It exists in Canada to protect dairy, poultry and egg markets. Former Prime Minister Brian Mulroney — who negotiated the North American Free Trade Agreement — says supply management should be abolished, while the Liberals, as argued by Agriculture Minister Lawrence MacAulay, maintain their support for the system.
That clash of ideals between conservative and liberal thinking is to be expected in such matters, but not so much within the Conservative party itself.
Yet we have the two front-runners in the campaign, Kevin O’Leary, a millionaire entrepreneur, defending supply management, while Quebec businessperson and politician Maxime Bernier vows to abolish it.
The issue is especially important now, because the U.S. is expected to put strong pressure on Canada for more access to dairy markets during the pending negotiations over NAFTA, as demanded by U.S. President Donald Trump’s administration.
But O’Leary, who leads the 14-member field in the polls, isn’t vowing to keep supply management as a matter of expediency, just because it’s too expensive to abolish — $30 billion, he says — but because he argues it’s good policy.
“The agriculture industry is critical to ensuring a strong Canadian economy, and supply management plays a vital role,” O’Leary said in a March 18 release.
Bernier vows to put a levy on dairy products until there is enough money — $18 billion to $28 billion, he says — to compensate farmers for ending supply management, arguing market forces will benefit consumers with lower prices. There is considerable evidence that the Australian model, which Bernier favours, hasn’t paid off in lower prices or benefits to farmers, and the United States operates under farm subsidies and cheap labour. Abolishing supply management in Canada would be a gamble.
Regardless, agriculture is once again in the spotlight in politics, in a manner that must leave many conservatives scratching their heads.