The Montreal Economic Institute says doing so could create jobs
By Diego Flammini
Assistant Editor, North American Content
Farms.com
Canada should use its dairy supply management system as a bargaining chip with the United States, particularly as it relates to softwood lumber trade, a new report from a Montreal-based organization suggests.
The Montreal Economic Institute’s (MEI) report, Trading Supply Management For Softwood Lumber, suggests taking such a bargaining approach could be beneficial for both countries.
“Trade barriers have never made more than small minority of people richer, at the expense of the vast majority,” Alexandre Moreau, public policy analyst for MEI, wrote in the report. “Eliminating those (barriers) that persist in the agricultural sectors under supply management and in the softwood lumber sector, and making sure not to erect new ones, would be good both for consumers and for producers.”
The U.S. Department of Commerce is considering implementing a 25 per cent tariff on softwood lumber.
Between 2006 and 2015, Canadian softwood lumber tariffs cost producers CAD$2.0 billion. During the same period, American consumers paid CAD$6.4 billion in tariffs. MEI suggests those tariffs could raise house prices in the U.S. by $1,300.
Allowing American dairy into Canadian markets could have lasting impacts, MEI suggests.
“American farmers’ access to Canadian sectors under supply management would open up for them a market with revenues for production and processing that total over CAD$36 billion …” the report states. “The liberalisation of the dairy industry would thus lead to an increase in Canadian production of from 75 per cent to 150 per cent over a period of 10 years.”
Easing regulations on supply management could create “over 8,500 (Canadian) jobs in the dairy production and processing sectors,” Moreau wrote.
But Dairy Farmers of Canada said it’s optimistic the Canadian government will continue to embrace supply management.
“We are confident our government will support and defend supply management. As a matter of fact, the Government of Canada, through the Minister of Agriculture, recently stated their unequivocal support of the supply management system, and for Canadian dairy farmers,” Dairy Farmers of Canada told Farms.com in an email.
Farms.com has reached out to Farm Credit Canada and various dairy producers for insights and opinions on MEI’s report.