From the Frontier Centre for Public Policy

By Brian Giesbrecht

Senior Fellow Brian Giesbrecht says it’s time to stop coddling millionaire dairy barons. Supply management drives up grocery bills, blocks trade and makes Canada a global joke. Australia fixed it—we can too.

Canadians are paying the price for political cowardice

Canada’s outdated supply management system forces the average Canadian family to spend $500 a year to protect a small group of wealthy dairy producers, most of them millionaires. This protectionist regime enriches a few at the expense of many, drives up food prices and undermines Canada’s credibility in trade negotiations. It no longer fits the times, and it has to go.

Let’s be clear: this isn’t about attacking dairy farmers. Most are hardworking, conscientious people who’ve built their lives around a system they didn’t create. They rise early, work long hours, rarely take holidays and deserve fair compensation if the system is dismantled. But good intentions don’t justify bad policy.

Under supply management, the government tightly controls how much dairy, poultry and eggs Canadian farmers can produce and imposes steep tariffs—sometimes more than 400 per cent—on imported products to limit competition. The result is artificially high prices, limited consumer choice and retaliatory tariffs from other countries.

This system, once designed to protect small family farms, is now dominated by fewer than 10,000 large operations, many worth millions. It no longer serves its original purpose, yet it remains in place because of political cowardice. Pierre Poilievre and Mark Carney both know the system is flawed but won’t challenge it. Why? Because it’s popular in Quebec, a province with significant electoral influence. No party wants to risk alienating those voters.

Australia and New Zealand once faced similar challenges. They phased out their systems, fairly compensated farmers through levies and built globally competitive dairy sectors. We can too. Trump’s return to power may force our hand, but it also gives us an opportunity to act on what we should have done long ago.

Even without outside pressure, the inefficiency is clear. Every year, billions of litres of milk are dumped when quotas are exceeded. At the same time, Canadian companies like Saputo are forced to relocate abroad to reach global markets. Our artisan cheese producers are trapped in a small domestic economy while foreign markets block our exports in retaliation for our own protectionism.

The hypocrisy is glaring. We call for free trade but defend a system that imposes up to 400 per cent tariffs on imports. Our global partners are right to scoff.

Trump did. In a social media post, he wrote: “Canada is a very difficult country to TRADE with, including the fact that they have charged our Farmers as much as 400 per cent Tariffs, for years, on Dairy Products.” And in his July 10 letter announcing 35 per cent tariffs on Canadian goods, he added: “Canada charges extraordinary Tariffs to our Dairy Farmers—up to 400 per cent—and that is even assuming our Dairy Farmers even have access to sell their products to the people of Canada.”

This isn’t just an American objection. High-quality dairy from France and Germany can’t be sold in Canada because of our import barriers. Their governments respond by blocking our dairy exports. Canada loses jobs, investment and credibility.

Some defenders claim foreign dairy is unsafe. But countries like France and Germany have food safety standards as strict as ours. And Canada already has legal mechanisms to block substandard imports. We don’t need tariffs for that.

Former Liberal MP Martha Hall Findlay said it plainly: supply management is a dead end. So did Maxime Bernier, who made it a central issue during his bid for the Conservative leadership. The dairy lobby made sure he didn’t win. And we’re still stuck.

Now, all parties have voted to exclude supply management from current trade talks. We are entering negotiations that demand fair treatment while protecting one of the most unfair systems in the developed world. It’s a national embarrassment.

But this can change. A phased buyout funded by a modest, temporary levy—not taxpayer dollars—could end supply management and open our dairy sector to global opportunity. Australia and New Zealand proved it works. Their citizens don’t pay $10 for butter or yogurt. Neither should we.

It’s time to stop protecting the past. Dismantle the system. Free our producers. Lower grocery bills. Restore our credibility.

Maxime Bernier saw it in 2017. Trump is saying it again in 2025.

This time, we’d better listen.

Brian Giesbrecht is a retired judge and senior fellow at the Frontier Centre for Public Policy.

From the Fraser Institute

By Jake Fuss and Alex Whalen

Here’s a statement few Canadians will disagree with—air travel in Canada is expensive and frustrating. But there’s hope. According to a recent report from the Competition Bureau, a law enforcement agency that reports to the federal government, the key solution is to increase competition among airlines.

And government policies are the primary reason for the lack of airline competition. Specifically, excessive regulatory barriers and restrictions on foreign airlines limit choice and increase ticket prices.

Currently, the federal government prohibits foreign airlines from operating domestic routes within Canada’s borders. For example, a German airline such as Lufthansa is permitted to fly from Frankfurt to Toronto, but is barred from flying passengers from Toronto to another Canadian city. The result? There’s little competitive pressure for Canadian airlines to lower their prices for domestic air travel.

The European Union offers a stark contrast. After the EU removed restrictions for member-state airlines to operate in all EU countries, low-cost carriers such as Ryanair entered the market, flight frequencies increased and airfares dropped 34 per cent.

In fact, the Competition Bureau examined the EU model and said Canada should relax restrictions on foreign airlines to improve service quality and bring down ticket prices. Our recent study similarly suggests the federal government negotiate deals with other countries to allow foreign airlines to operate within Canada in exchange for allowing Canadian airlines to operate in those countries—a win-win for Canadian consumers and Canadian airlines.

But the federal government should not stop there. High taxes and fees comprise a large portion (25 to 35 per cent) of airfare costs, driving up ticket prices. In Canada, fees for airport improvement, security, landing and other charges are all largely uncompetitive with peer countries. And Canadian fuel taxes and sales taxes drive prices up further.

Why are fees so high? While several government policies play a part, Canada’s outdated airport ownership structure remains a key factor. The federal government owns the land upon which our large airports are built and charges the not-for-profit airport authorities rent (as high as 12 per cent of airport revenue). In 2023, the government received $487 million in rent charges from airports. In response, the airports levy fees on passengers to recoup these costs.

Improving the policy environment to reduce taxes and fees to levels more competitive with peer countries should be one lever Ottawa pulls to address sky-high airfares. Moreover, Canada should also—based on the successful airport ownership structures in Europe, Australia and New Zealand—sell its remaining interests in airport leases and allow for-profit organizations to own and operate airports in Canada.

Finally, Ottawa should ease the regulatory burden on the airline industry while maintaining strong safety standards. The United States undertook a successful deregulation effort in the 1970s and 1980s, which helped create more competition and choice, lower airfares and safety improvements.

Canadians face high airfares and have few choices to fly within in Canada, mainly due to bad government policy. It’s past time for Ottawa to make bold reforms to open up competition and reduce travel costs for Canadians.