Canada's morally wrong supply management system
This is a chapter from an unpublished book by Conservative MP Maxime Bernier that was made available online by both Bernier and his publisher regarding Canada’s supply management system.
Government imposed supply management controls the domestic production, prices, and imports of all poultry and dairy products ensuring there is no free market in these goods in Canada resulting in Canadian consumers paying unnecessarily higher prices for these products to give wealthy Canadian farmers a guaranteed income.
The first one is the control of production, so that the amount of milk, eggs and poultry on the market is restricted to what Canadians are expected to consume. A national marketing agency determines that amount and sets production quotas for each province. Provincial boards are responsible for selling quotas among farmers, who are strictly forbidden to produce any more than they’re told to.
The second pillar is the fixing, by bureaucratic agencies, of the prices that processors have to pay farmers for each category of product.
The third pillar is import control. Like any closed and rigid system controlled by government—or by semi-autonomous bureaucratic agencies that get their power from government—this one also has to prevent outside influence. The Soviet Union forbade its citizens from traveling abroad, or reading or listening to news from other countries. Preventing information from free countries from infecting the minds of Soviet citizens was a necessary “pillar” of the power of the Communist Party. In the case of supply management, beyond the very small amounts that are allowed into Canada tariff free, foreign products are hit by import tariffs that range from about 150% for turkey and eggs, to about 250% for chicken, yogurt and cheese, and 300% for butter. Obviously, no one would buy any imported good that costs three or four times more than the local one.
It should be clear that this is a transfer of wealth from the poorest to some of the richest in our society. Farming families working under supply management are indeed far richer than most Canadian families. Average after-tax income of all households in Canada is $69,100. By comparison, the average dairy farming household income is $147,800, and the number is $180,400 for poultry-farming households.
Moreover, many of these families are paper millionaires, thanks to the value of their quotas. The average net worth of a dairy farmer is $3.8 million while that of poultry and egg farmers is $5.9 million.
Supply management is a morally wrong communist based system created by the Liberal government of socialist Pierre Trudeau decades ago, and is today fully supported and defended by the Conservative Party.
It’s no surprise that the government that adopted supply management was the Liberal government of Pierre Trudeau. Trudeau was a typical left-wing intellectual. Born to a wealthy family, he didn’t have to work to earn his living and had spent part of his adult life as a bohemian writer and traveller. He was an admirer of communist China and Cuba, and a big fan of Fidel Castro. Before running as a Liberal in the late 1960s, he had been a supporter of the CCF/NDP. He had zero understanding of economics.
From the very beginning to the very end, one policy issue was at the centre of my campaign for the leadership of the Conservative Party of Canada: supply management in agriculture. This is the system established by Pierre Trudeau’s government in the early 1970s that keeps the prices of dairy, poultry, and eggs artificially high. As I said repeatedly during the campaign, it’s a cartel. It’s the total opposite of a free market, and a conservative party should not be supporting it.
© Trevor Dailey