Dairy sector impatient on trade compensation

Canadian dairy farmers say they’ve waited long enough for the compensation Ottawa promised them for market share losses from trade deals.

Dairy Farmers of Canada president Pierre Lampron and vice-president David Wiens said last week that they have heard the promises but not seen much money.

Dairy farmers received a first payment of $345 million in 2019, before the federal election, but haven’t heard about the remainder of the promised $1.75 billion over eight years. There are about 12,000 dairy farms in Canada.

“Without the compensation that has been promised to us, dairy farmers may have to postpone or forego investments, which will have serious consequences for rural communities across the country,” Wiens said.

Compensation has been an issue for years as both the previous Conservative administration and the current Trudeau Liberal government agreed Canada’s supply managed sectors should receive something for giving up domestic market share to imports from other countries.

Initially, the compensation announced in 2019 was for the Comprehensive Economic and Trade Agreement with the European Union and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Then, the revamped free trade deal with the United States and Mexico came along.

Wiens said the new North American agreement was “only a project” when the compensation package was announced and there has been no talk about how farmers will cope with further market losses.

DFC estimates by 2024 about 18 percent of domestic production will have been transferred to foreign dairy farmers at annual losses of about $450 million.

In a letter to Prime Minister Justin Trudeau, the organization asked him to intervene and ensure a timely announcement on how much and when producers can expect payments for CETA and CPTPP.

“We also ask that an announcement be made as to the level and timing of compensation to producers, in the form of direct payments, for CUSMA,” the letter said.

Trudeau told reporters that his government is working with dairy farmers and others on compensation for the United States-Mexico-Canada Agreement.

“We will continue to make this a priority,” he said.

Wiens recognized that the COVID-19 pandemic has thrown a wrench into plans, but said the promise was made long before it hit. He said DFC was “careful not to be pushing too hard. We knew the government had their hands full.”

But he also noted the government was able to ratify USMCA during the pandemic.

Dairy farmers didn’t ask for, but received, pandemic support, including a $50-million program to buy surplus products that would not be consumed and a $200-million extension of the Canadian Dairy Commission’s borrowing ability.

Wiens and Lampron said the dairy sector is key to Canada’s economic recovery from the pandemic. It supports 221,000 full-time-equivalent jobs and contributes $20 billion each year to the country’s GDP.

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