Canadian milk will continue to be the main ingredient in Canadian cheese and cheese makers will have to pay more for ingredients, the Federal Court of Canada has ruled.
Justice Luc Martineau threw out a cheese industry challenge of 10-month-old federal regulations that limit the ability of cheese makers to use cheaper, usually imported, milk protein products rather than protein from Canadian liquid milk.
The cheese compositional standards regulations enacted in December 2008 and applying to domestic cheese destined for interprovincial or international trade, as well as imports, set minimum levels for the amount of milk protein that must come from Canadian liquid milk.
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Cheese makers Saputo Inc., Kraft Canada Inc. and Parmalat Canada Inc. took the federal government to court, arguing that agriculture minister Gerry Ritz exceeded federal authority and likely violated trade agreements when he enacted the regulations.
Their main argument was that the rules are a thinly veiled economic policy to help the dairy farmer bottom line.
The judge was not impressed by the argument.
“As a key factual claim in this instance, the applicants invite the court to conclude that the essential or dominant purpose of the new regulations was to transfer an economic benefit to dairy producers at the expense of dairy processors,” wrote Martineau.
But he found the arguments from a Saputo lobbyist and former industry executive about government motives “unpersuasive.”
Martineau said he accepted the government’s argument that the motivation for the regulations was to ensure that “cheese available to consumers has a consistent composition and characteristics.”
However, he noted that whatever its motivation, the new government policy will help dairy farmers and will raise costs for cheese makers.
