Ottawa may soon pass ‘supply management’ law to effectively maintain inflated dairy prices

Many Canadians today face an unsettling reality. While Canada has long been known as a land of plenty, rising living costs and food insecurity are becoming increasingly common concerns. And a piece of federal legislation—which may soon become law—threatens to make the situation even worse.

According to Statistics Canada, rising prices are now “greatly affecting” nearly half of Canadians who are subsequently struggling to cover basic living costs. Even more alarming, 53 per cent are worried about feeding their families. For policymakers, few national priorities are more pressing than the ability of Canadians to feed themselves.

Between 2020 and 2023, food prices surged by 24 per cent, outpacing the overall inflation rate of 15 per cent. Over the past year, more than one million people visited Ontario food banks—a 25 per cent increase from the previous year.

Amid this crisis, a recent academic report highlighted an unforgivable waste. Since 2012, Canada’s dairy system has discarded 6.8 billion litres of milk—worth about $15 billion. This is not just mismanagement, it’s a policy failure. And inexcusably, the federal government knows how to address rising prices on key food staples but instead turns a blind eye.

Canada’s dairy sector operates under a “supply management” system that controls production through quotas and restricts imports via tariffs. Marketing boards work within this system to manage distribution and set the prices farmers receive. Together, these mechanisms effectively limit competition from both domestic and foreign producers.

This rigid regulated system suppresses competition and efficiency—both are essential for lower prices. Hardest hit are low-income Canadians as they spend a greater share of their income on essentials such as groceries. One estimate ranks Canada as having the sixth-highest milk prices worldwide.

The price gap between the United States and Canada for one litre of milk is around C$1.57. A simple calculation shows that if we could reduce the price gap by half, to $0.79, Canadians would save nearly $1.9 billion annually. And eliminating the price gap would save a family of four $360 a year. There would be further savings if the government also liberalized markets for other dairy products such as cheese, butter and yogurt. These lower costs would make a real difference for millions of Canadians.

Which brings us back to the legislation pending on Parliament Hill. Instead of addressing the high food costs, Ottawa is moving in the opposite direction. Bill C-282, sponsored by the Bloc Quebecois, has passed the House of Commons and is now before the Senate. If enacted, it would stop Canadian trade negotiators from letting other countries sell more supply-managed products in Canada as part of any future trade deal, effectively increasing protection for Canadian industries and creating another legal barrier to reform. While the governing Liberals hold ultimate responsibility for this bill, all parties to some degree support it.

Supply management is already causing trade friction. The U.S. and New Zealand have filed disputes (under the Canada-United States-Mexico Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership) accusing Canada of failing to meet its commitments on dairy products. If Canada is found in violation, it could face tariffs or other trade restrictions in unrelated sectors. Dairy was also a sticking point in negotiations with the United Kingdom, leading the British to suspend talks on a free trade deal. The costs of defending supply management could ripple farther than agriculture, hurting other Canadian businesses and driving up consumer costs.

Dairy farmers, of course, have invested heavily in the system, and change could be financially painful. Industry groups including the Dairy Farmers of Canada carry significant political influence, especially in Ontario and Quebec, making it politically costly for any party to propose reforms. The concerns of farmers are valid and must be addressed—but they should not stand in the way of opening up these heavily regulated agricultural sectors. With reasonable financial assistance, a gradual transition could ease the burden. After all, New Zealand, with just 5 million people, managed to deregulate its dairy sector and now exports 95 per cent of its milk to 130 countries. There’s no reason Canada could not do something similar.

Bill C-282 is a flawed piece of legislation. Supply management already hurts the most vulnerable Canadians and is the root cause of two trade disputes that threaten harm to other Canadian industries. If passed, this law will further tie the government’s hands in negotiating future free trade agreements. So, who benefits from it? Certainly not Canadians struggling with food insecurity. The government’s refusal to modernize an outdated inefficient system forces Canadians to pay more for basic food staples. If we continue down this path, the economic damage could spread to other sectors, leaving Canadians to bear an ever-increasing financial burden.

Author:

Jerome Gessaroli

Related Topics:#FraserInstitute #JeromeGessaroli DairyPrices SupplyManagement

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Agriculture

In the USA, Food Trumps Green Energy, Wind And Solar

Published on September 8, 2025

Todayville

From the Daily Caller News Foundation

By Bonner Cohen

“We will not approve wind or farmer destroying Solar,” said President Trump in an Aug. 20 post on Truth Social. “The days of stupidity are over in the USA!!!”

Trump’s remarks came six weeks after enactment of his One Big Beautiful Bill terminated tax credits for wind and solar projects by the end of 2027.

The Trump administration has also issued a stop-work order for the Revolution Wind project, an industrial-scale offshore wind project 12 miles off the Rhode Island coast that was 80 percent completed. This was followed by an Aug. 29 announcement by the Department of Transportation that it was cutting around $679 million in federal funding for 12 offshore wind farms in 11 states, calling the projects “wasteful.”

Sending an unmistakable message to investors to avoid risking their capital on no-longer-fashionable green energy, the Department of Agriculture (USDA) is pulling the plug on a slew of funding programs for wind and solar power.

“Our prime farmland should not be wasted and replaced with green new deal subsidized solar panels,” said Agriculture Secretary Brooke Rollins on a visit to Tennessee in late August. “We are no longer allowing businesses to use your taxpayer dollars to fund solar projects on prime American farmland, and we will no longer allow solar panels manufactured by foreign adversaries to be used in our USDA-funded projects.”

The White House is putting the squeeze on an industry that can ill-afford to lose the privileges it has enjoyed for so many years. Acknowledging the hesitancy of investors to fund green-energy projects with the looming phaseout of federal subsidies, James Holmes, CEO of Solx, a solar module manufacturer, told The Washington Post, “We’re seeing some paralysis in decision-making in the developer world right now.” He added, “There’s been a pretty significant hit to our industry, but we’ll get through it.”

That may not be easy. According to SolarInsure, a firm that tracks the commercial performance of the domestic solar industry, over 100 solar companies declared bankruptcy or shut down in 2024—a year before the second Trump administration started turning the screws on the industry.

As wind and solar companies confront an increasingly unfavorable commercial and political climate, green energy is also taking a hit from its global financial support network.

The United Nations-backed Net Zero Banking Alliance (NZBA) “has suspended activities, following the departure of numerous financial institutions from its ranks amid political pressure from the Trump administration,” The Wall Street Journal reported. Established in 2021, the NZBA’s 120 banks in 40 countries were a formidable element in global decarbonization schemes, which included support for wind and solar power. Among the U.S. banks that headed for the exits in the aftermath of Trump’s election were JP Morgan, Citi, and Morgan Stanley. They have been joined more recently by European heavyweights HSBC, Barclays, and UBS.

Wind and solar power require a lot of upfront capital, and investors may be having second thoughts about placing their bets on what looks like a losing horse.

“Wind and solar energy are dilute, intermittent, fragile, surface-intensive, transmission-extensive, and government-dependent,” notes Robert Bradley, founder and CEO of the Institute for Energy Research.

Given these inherent disadvantages of wind and solar power, it’s no surprise that the Department of Agriculture is throttling the flow of taxpayer money to solar projects. The USDA’s mission is to “provide leadership on food, agriculture, food, natural resources, rural development, nutrition, and related issues….” It is not to help prop up an industry whose best days are behind it.

Effective immediately, wind and solar projects will no longer be eligible for USDA Rural Development Business and Industry (B&I) Guaranteed Loan Program. A second USDA energy-related guaranteed loan program, known by the acronym REAP, will henceforth require that wind and solar installations on farms and ranches be “right-sized for their facilities.”

If project applications include ground-mounted solar photovoltaic systems larger than 50 kilowatts or such systems that “cannot document historical energy usage,” they will not be eligible for REAP.

Ending Misallocation Of Resources

“For too long, Washington bureaucrats and foreign adversaries have tried to dictate how we use our land and our resources,” said Republican Rep. Harriot Hagermann of Wyoming. “Taxpayers should never be forced to bankroll green new deal scams that destroy our farmland and undermine our food security.”

Hagermann’s citing of “foreign adversaries” is a clear reference to China, which is by far the world’s leading manufacturer of solar panels, according to the International Energy Agency.

According to a USDA study from 2024, 424,000 acres of rural land were home to wind turbines and solar arrays in 2020. While this – outdated – figure represents less than 0.05 percent of the nearly 900 million acres of farmland in the U.S., the prospect of ever-increasing amounts of farmland being taken out of full-time food production to support part-time energy was enough to persuade USDA that a change of course was in order.

Bonner Russell Cohen, Ph. D., is a senior policy analyst with the Committee for a Constructive Tomorrow (CFACT).

Agriculture

USDA reverses course under Trump, scraps Biden-era “socially disadvantaged” farm rules

Published on August 28, 2025

Todayville

MxM News

Quick Hit:

The Trump administration’s USDA is pulling back from defending Biden-era farm aid programs that gave preferential treatment based on race and gender. The move aligns with President Trump’s directive to dismantle remaining diversity, equity, and inclusion initiatives across federal agencies.

Key Details:

The Wisconsin Institute for Law and Liberty (WILL) sued on behalf of dairy farmer Adam Faust, challenging USDA aid programs that favor minorities and women.
Programs under scrutiny include loan guarantees, dairy coverage, and conservation incentives, all of which disadvantaged white male farmers.
USDA issued a final rule eliminating “socially disadvantaged” designations, stating programs must uphold meritocracy, fairness, and equal opportunity.

Diving Deeper:

The U.S. Department of Agriculture under the Trump administration is abandoning its defense of farm aid programs created during the Biden years that granted benefits based on race and gender. In a recent court filing, the USDA declined to defend several programs that civil rights watchdogs argue discriminated against white male farmers.

The litigation was brought forward by the Wisconsin Institute for Law and Liberty (WILL) on behalf of Adam Faust, a Wisconsin dairy farmer. Faust contends that the Biden-era rules violated equal protection principles by privileging minorities and women over others in loan guarantees, dairy margin coverage, and conservation cost-share programs.

Under the loan guarantee program, minority and female farmers could secure up to 95% federal backing on loans, while white male farmers were limited to 90%. This disparity directly affected borrowing power and interest rates. Similarly, the Dairy Margin Coverage Program charged white male farmers a $100 annual fee, while exempting “socially disadvantaged” farmers. In conservation projects, minority and female participants received up to 90% reimbursement for costs, while others received only 75%.

On July 10, the USDA issued a final rule to strike the “socially disadvantaged” designation from its regulations, calling it inconsistent with constitutional principles and with President Trump’s policy objectives. “Moving forward,” the USDA rule stated, “USDA will no longer apply race- or sex-based criteria in its decision-making processes, ensuring that its programs are administered in a manner that upholds the principles of meritocracy, fairness, and equal opportunity for all participants.”

The department noted that while the loan guarantee program will be amended immediately, officials are still reviewing how to apply the new policy to the dairy and conservation programs. The USDA also signaled that its decision “could obviate the need for further litigation,” though WILL has indicated its legal fight will continue.

“This lawsuit served as a much-needed reminder to the USDA that President Trump has ordered the end to all federal DEI programs,” said Dan Lennington, deputy legal counsel at WILL. “There’s more work to be done, but today’s victory gives us a clear path to do even more in the name of equality.”