For at least the next two months, the political, economic and statistical controversies swirling around the tariff-free imports of a cheap cream substitute used in ice cream making will have to take a holiday.
For dairy farmers, the issue is nothing less than the integrity of supply management and the government’s support of the system.
For dairy processors, the issue is finding lower-priced ingredients to keep products like ice cream competitive.
Late last week, the three members of the Canadian International Trade Tribunal ended two weeks of public hearings and retired to consider options on how to handle the tempest that built around import of a 49-51 percent blend of butteroil and sugar.
Read Also
Farmers urged to be grain-safe this fall
Working around grain bins comes with risk, from farmers falling to drowning in grain: Experts have five tips to help avoid grain-related accidents this harvest.
They are to report to the government by the end of June.
Cost and saving
Until then, the rhetoric will subside as both sides in the dispute – dairy farmers who argue the imports cost them tens of millions of dollars in lost income and ice cream makers who say it is a legal way for them to keep their costs down – await the CITT report.
Then, it will be political season again as both sides try to convince the government to see it their way.
As he ended the hearings, CITT chair Arthur Trudeau said the commissioners would consider a number of options: Allowing imports to continue, making imports subject to tariffs, compensating dairy farmers for losses, imposing an excise tax on imports or holding a full CITT hearing on the issue.
He said the tribunal also will consider the processor argument that dairy farmers should create a low-priced special class of milk that could provide the cream they need for ice cream making, but at prices competitive with imported butteroil.
“The tribunal does not consider this list as exhaustive,” said Trudeau. “And we may choose in the end to combine some of these options.”
The hearings at times became a theatre for reminiscing about political history and might-have-beens. At other times, it was a forum for duelling studies and disputes about numbers.
Evidence suggested 8,000 tonnes of the blend were imported last year, although consultant Margaret Treloar speculated it could have been more.
There was evidence the cream consumption displaced by the butteroil imports cost dairy farmers less than $20 million in sales, but dairy farmers said the actual cost was much higher when quota cuts and quota price loss are considered.
The tribunal heard damage estimates approaching $1 billion.
And Treloar predicted imports could rise significantly, putting actual dairy losses into the hundreds of millions of dollars. Lawyers for importers and ice cream makers scoffed at those predictions.
Promised protection
There was dispute over the history of the issue.
Dairy Farmers of Canada said they felt they had been promised by the government in 1993 that they would receive tariff protection from such dairy-displacing imports in the future.
Senior Agriculture Canada official Mike Gifford said no such promises were made.
Gifford warned the tribunal any decision by Canada to impose a tariff on the butteroil-sugar blend, which has been tariff-free, would lead to negotiations through the World Trade Organization and the likelihood of demands that Canada pay compensation to affected countries or face trade retaliation.
Any attempt by Canada to act unilaterally would be a “mockery” of its free trade obligations. And adding a new tariff on product coming from the United States would violate the North American Free Trade Agreement, he said.
It is this welter of argument and conflicting evidence that CITT members must weigh as they do the government bidding of offering alternative ways to handle the butteroil import issue.
Defenders of the imports say it is not a political issue. It is an issue of obeying the rules of trade deals Canada has signed.
