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Canada’s outdated supply management system forces the average Canadian family to spend $500 a year to protect a small group of wealthy dairy producers, most of them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.

Quick facts

• Since 2023, there are 16 applicants to the Agri-Processing Investment Tax Credit for projects worth about $1.6 billion total in new investment in Alberta’s agri-processing sector.

• To date, 13 projects have received conditional approval under the program.
  • Each applicant must submit progress reports, then apply for a tax credit certificate when the project is complete.
• Beretta Farms has expanded the Lacombe facility by 10,000 square feet to include new warehousing, cooler space and an office building.
  • This project has the potential to increase production capacity by 50 per cent, thereby facilitating entry into more European markets.

Related information

• Agri-Processing Investment Tax Credit