FIRST READING: How Canada's dairy cartel keeps fumbling our foreign trade negotiations
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As Canada is actively trying to expand its trade with the non-U.S. world, Parliament has just entrenched the one thing that has scuppered more trade negotiations than anything else.
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This week, the first bill passed by the 45th Parliament ended up being a Bloc Québécois-championed proposal to shield the Canadian supply management system from any foreign trade negotiations.
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Bill C-202, which passed the Senate on Wednesday, bars the Department of Foreign Affairs from negotiating any trade deal that liberalizes foreign access to Canada's heavily tariffed dairy and egg sector.
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Although the bill has been framed as a boon to the country's 9,000 dairy farms, everyone from trade analysts to other Canadian farmers have warned that it comes at the cost of kneecapping Canada's ability to grow its global trade links.
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The Grain Growers of Canada trashed the bill, saying it scares away trade partners at the precise moment that Canada needs to find more of them. 'For grain farmers who rely on access to international markets, the result will be less ambitious trade agreements, fewer export opportunities, and slower economic growth at home,' said Kyle Larkin, the group's executive director, in a Wednesday statement.
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The Canadian Agri-Food Trade Alliance (CAFTA) similarly framed C-202 as throwing a wrench into Canada's 'accelerated trade diversification agenda.'
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'At a time when Canada must be demonstrating leadership and consistency in defending predictable, rules-based trade, this bill sends the wrong message,' CAFTA said, in a press release.
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Supply management has directly led to the collapse of at least one major Canadian trade deal, and has held up negotiations on several others.
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In January 2024, the U.K. walked away from negotiations for a bilateral trade deal with Canada over Ottawa's refusal to compromise on supply management and accept increased imports of British cheese.
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During 2015 negotiations for the since-cancelled Trans-Pacific Partnership, Canada's refusal to allow free trade access to its dairy sector wound up becoming one of the deal's most conspicuous snags.
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As U.S. negotiator Darci Vetter said at the time, Canada was trying to close a 'market access' deal that 'doesn't include market access.'
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A 2016 trade agreement struck with the European Union was secured only after Canada agreed to liberalized European access to the Canadian dairy market — but at the cost of billions in compensation paid to dairy farmers.
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