Two powerful Canadian conservative voices last week called on the Conservative government to dismantle the supply management system.
In a report for the Fraser Institute, former Reform party leader Preston Manning and former Ontario premier Mike Harris said the system of regulated dairy, egg and poultry production behind protectionist walls makes the economy less competitive, hampers Canada’s trade negotiating position and prevents deeper economic integration with the United States.
They threw the Canadian Wheat Board monopoly into the mix of bad policy that should be ended.
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“The wheat board, agricultural supply management, ownership restrictions in financial services, transportation, energy, telecommunications, business subsidies and tariffs all may once have responded to the perceptions of compelling public purpose,” they wrote. “Today, they serve as little more than a drain on Canada’s economic wealth.”
The core idea advanced by the two conservative heavyweights in their report is that Canada should negotiate with the U.S. a customs union that would give the two countries common tariff levels against offshore goods, a fully integrated energy market, regulatory harmonization and a single government procurement policy.
Part of that would be ending support for loser sectors that require protection or subsidies. However, government would have an obligation to provide some short-term compensation for the loss of quota value.
Therese Beaulieu from Dairy Farmers of Canada said the analysis wrongly implies that supply management increases consumer prices. Beyond that, it is a repetition of old arguments that should not sway the government.
“We looked at the report and there is really nothing new here,” she said.
The federal government, populated with key figures from both Manning’s Reform years and Harris’s government, quickly distanced itself from the dramatic recommendation on supply management.
Agriculture minister Chuck Strahl said the government has no intention of weakening its support for supply management.
