Direct income support payments would be a smarter way to help import-sensitive dairy, poultry and egg sectors than maintenance of the protectionist and distorting supply management system, the chief economist for the Conference Board of Canada told MPs last week.
Glen Hodgson, vice-president and chief economist for the private sector think-tank, said trade liberalization is the way to make the food and agriculture sectors more competitive and prosperous.
But government policy to maintain high protective tariffs for supply managed sectors undermines Canada’s credibility in arguing for freer trade, he said during a Feb. 1 appearance before the House of Commons international trade committee.
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The system, designed decades ago to stabilize those sectors through higher incomes, distorts trade and prices, said Hodgson.
“There has to be a smarter way to do that (support farm incomes),” he said. “Writing a cheque would be far more effective.”
Hodgson and Conference Board policy vice-president Gilles Rhéaume told MPs that Canada should be taking more of a leadership role at World Trade Organization negotiations because a trade deal would be good for the Canadian economy.
His arguments were challenged by British Columbia New Democrat Peter Julian, who described it as a formula for making Canadian agriculture policy more American.
He said destroying of supply management would leave Canadian farmers more vulnerable because the government cannot be counted on to directly support farm incomes.
Rural Bloc Québecois MP Guy André complained that the Conference Board proposal would make farmers “losers” in globalization.
Rhéaume argued that Canada cannot avoid globalization and free trade and must adjust.
Meanwhile, trade minister David Emerson is being summoned to the House of Commons agriculture committee to answer questions about controversial statements he made to The Western Producer in December.
In an interview, he said Canada should have a more aggressive policy at WTO talks and not allow its “defensive” interests dictate a trade negotiating strategy.
Defence of supply management’s over-quota tariffs is part of the issue, he said.
“There is no doubt that we have defended very strongly our sensitivities in the supply managed sectors and at some point, you have to look at what that’s costing you in terms of gains and in my opinion, Canada must have offensive gains over time,” Emerson said. “We cannot for long sustained periods of time be defensive traders or we will wither and die the death of a thousand cuts. And we won’t win. We can protect but we won’t win.”
Critics condemned it as a sign the Conservative government was planning to abandon supply management.
The government issued a statement insisting Conservative support for supply management remained strong.
On Feb. 1, the Commons agriculture committee approved a motion to call Emerson before it to explain.
All opposition MPs and two Conservatives on the committee voted to summon the minister.
“Minister Emerson has clarified his comments,” said Ontario Conservative Michael Chong, who argued the committee has more important things to do than asking for clarification of something that has been clarified.
