Bloc Québécois Leader Yves-François Blanchet is making two demands of Prime Minister Justin Trudeau in exchange for his party’s support in the House: that the Liberal government enhance Old Age Security, and that it further protect supply management. Both are terrible ideas.
Many have explained why this is not the time to increase funding for OAS. I would only add that Statistics Canada reported last week that the fertility rate in this country has fallen to 1.26 births per woman, far below the replacement rate of 2.1 – and among the lower rates in the developed world. (United States: 1.62; Germany: 1.36; Japan: 1.2; Korea: 0.72.)
Because we have had half a century of declining fertility, fewer people each year will enter the labour force than the year before, even as the vast cohort of baby boomers swells the ranks of the retired.
Asking those who are younger to divert more of their income to sustaining those who are older risks stoking intergenerational tension. No wonder polls show younger voters shifting toward the Conservatives.
Further enhancing the OAS would be bad policy and, for the Liberals, bad politics. The party appears to agree: Steven MacKinnon, Seniors Minister, harshly criticized the Bloc’s approach to supporting seniors during a speech in the House Tuesday.
But whatever happens to the OAS, another demand of Mr. Blanchet’s could be even worse. It involves passing a Bloc bill that would force the federal government to keep supply management – which provides quotas for dairy, poultry and egg farmers, while imposing prohibitive tariffs on imports – off the bargaining table during trade negotiations.
As a United States senator in 2020, Kamala Harris was one of 10 who voted against the U.S., Mexico and Canada trade agreement that the Trudeau government negotiated with former president Donald Trump’s administration. The USMCA, which replaced the original North American free trade agreement, NAFTA, is set for review in 2026.
“It was Trump’s trade deal that made it far too easy for a major auto company … to break their word to workers by outsourcing American jobs,“ said Ms. Harris, now the Democratic presidential candidate, in a statement last week.
“Many who voted for this deal conditioned their support on a review process, which as President I will use.”
It doesn’t get any clearer than that: If Ms. Harris becomes president, Canada and Mexico can expect the U.S. to demand new USMCA concessions during the treaty’s review. As the U.S. is the destination for 78 per cent of this country’s exports, any new restrictions on those exports would badly damage the Canadian economy.
The Americans have long complained about Canada’s supply management system. In the next round of USMCA negotiations, expect the U.S. to once again demand greater access to the Canadian market for its farmers.
It would be good for Canadian consumers and, ultimately, for Canadian farmers if we were to wind down supply management. But it might also be a necessary condition to renew USMCA and, hopefully, to eliminate the sunset clause that prompts these periodic renegotiations.
The federal government simply can’t permit legislation that would keep supply management off the table during the talks. We may need that carrot to avoid an American trade stick.
Of course, there may be no Harris administration. Mr. Trump, the Republican presidential nominee, is essentially tied with her in the polls in the key swing states. He may well be president again.
In theory, a second Trump administration would smooth the way for renewal of USMCA, since the first administration negotiated the deal. But he is now talking about blanket tariffs on all imports – even from Mexico and Canada.
After hearing that John Deere planned to shift some manufacturing jobs from the U.S. to Mexico, Mr. Trump threatened the farm equipment maker that, “if you do that, we’ll put a 200-per-cent tariff on everything that you want to sell into the United States” – a move that would obviously violate USMCA.
It’s hard to predict whether a Democratic or Republican president would be a tougher negotiating partner during USMCA renewal talks. What matters is that Canada dedicate itself to a successful renewal, which means keeping supply management on the table and ignoring threats from the Bloc – even if that hastens a federal election.