Cheese at Scheffler’s Deli in St. Lawrence Market in Toronto on Dec. 19, 2023.Carlos Osorio/The Globe and Mail
European cheeses are grabbing a bigger share of Canada’s charcuterie boards, with sales from European Union countries soaring under the (slightly liberalized) trade agreement that took effect in 2017.
Since then, cheese imports from France, Italy and the Netherlands have doubled, with 19.2 million kilograms of cheese imported in 2022. There is greater selection and more reliable supply, good news for both specialty vendors and their customers.
Even better, competition has put pressure on margins, with one cheese importer bemoaning the slender profits on Parmesan. But what is cause for complaint from vendors is a win for consumers. Competition is doing what it should, exerting downward pressure on prices.
The lesson that the Canadian government has taken from this demonstrable policy success is: Let’s never do that again.
Britain, no longer a part of the EU, is not a party to the Canada-European Union Comprehensive Economic and Trade Agreement, or CETA. Negotiations are ongoing for a permanent free (so to speak) trade treaty between Canada and Britain.
And Ottawa has made it crystal clear in its formal bargaining objectives that it will not entertain any further weakening of this country’s anti-consumer supply management framework. “The government will also fully defend Canada’s supply management system for dairy, poultry and eggs, including by not conceding any additional market access for supply-managed goods.”
That stance is not just wrong-headed, it is completely and precisely wrong. Canada’s bargaining position is focusing on the well-being of a small number of agricultural producers – who already enjoy massive subsidies by way of government-mandated supply restrictions – rather than the 40 million or so consumers in this country.
The politics are understandable, if lamentable. Dairy producers have a lobby group, the Dairy Farmers of Canada, and even an officially mandated body, the Canadian Dairy Commission. Of course, there is no Canadian Cheese Eaters Commission.
The pain of any increase in import quotas is focused, but the benefits (while much bigger) are diffuse. Add to that the power of the status quo, which makes it difficult to discern the fundamental unfairness of Canada’s supply management system for agricultural products. Poor families with kids pay hundreds of dollars a year, by way of artificially high prices, to affluent farmers and large corporations.
In any other context, levying a tax on poor children to pad the profits of businesses would result in richly justified political annihilation. But in Canada, when you call it supply management, it’s a formula for reaping rural votes.
Canada shouldn’t need prodding from other countries to dismantle supply management. The costs to consumers are overwhelmingly clear. Prices are too high. Selection is too limited.
And the protestations of supply management as a bulwark to defend quality is laughable, for anyone who has had the good fortune to try foreign-produced butter.
Given the lack of appetite among politicians to directly take on the dairy lobby, however, trade negotiations could be the one viable tool to whittle down the supply management system. Trade talks with Britain would be a modest step in that direction, if Canada allowed its arm to be twisted into conceding additional import quotas for cheese.
Winding down Canada’s outdated and unfair supply management system is likely to be costly, with the federal government paying out billions of dollars to compensate for lost quotas. Ottawa committed to pay dairy farmers up to $3.5-billion for the relatively modest changes made in 2018 under the revised free trade agreement between Canada, the United States and Mexico.
Full scale restructuring would be even more costly. Ultimately, though, it would be fairer. Better to fund that onetime cost through tax revenues than indefinitely through what amounts to a consumption tax.
Protectionism in its many forms has hindered the Canadian economy for generations, handing unearned profits to complacent businesses at the expense of consumers. The tentative steps toward freer trade in cheese has given Canadian consumers, at last, a taste of the benefits that vigorous competition could serve up.