Commodity groups split over supply management trade limit

Commodity groups are split along predictable lines over a proposed law that would exclude supply managed commodities from future trade negotiations. 

Bill C-216 was introduced as a private member’s bill by Bloc Quebecois MP Louis Plamondon as a means of protecting supply management. If passed, federal negotiators would not be able to involve tariffs or import quotas for supply managed sectors. 

Why it matters: Supply managed industries lost market share in recent trade agreements and a proposed bill would prevent that from occurring in future deals.

Submissions to a parliamentary committee show supply managed industries side with Plamondon but others, including the Canadian Agri-Food Trade Alliance (CAFTA), say doing so would impede future negotiations and impact the country’s global reputation. 

In its submission to the parliamentary committee studying the proposed law, the Chicken Farmers of Canada welcomed the change.

“The more access that is granted means an erosion of the system and a weakened system means that the sector is no longer able to guarantee fresh, local, safe chicken, raised with care for Canadians,” the submission read. 

“Supply management is a uniquely Canadian system that allows Canada’s dairy, poultry and egg farmers to produce what the Canadian market demands,” the brief said, adding supply management is known to be safe because of mandatory audits and animal care programs. 

Canadian Hatching Egg Producers noted losses from recent trade deals, arguing the integrity of tariff rate quotas (TRQs) “must be respected and the level of access must not exceed the current levels.

“Under supply management, the import control pillar is critical in our ability to properly plan production to ensure that supply continues to meet demand. Any additional market access concessions will jeopardize the ability to keep our broiler hatching egg and chick industry strong for the benefit of all Canadians.”

A submission from Egg Farmers of Canada said excluding supply-managed sectors from trade agreements is not a barrier preventing other sectors from trading abroad, and pointed to a recent transitional trade agreement with a post-Brexit United Kingdom as an example. 

CAFTA wrote in its submission that the bill should not be supported, in part because doing so “would damage relationships with key trading partners and jeopardize the foundation of our economic engine as a trading nation.”

Contending the law contradicts trade rules, CAFTA also argued it is counterproductive. 

“It would severely constrain the government’s ability to negotiate the best deals for Canada and in turn for Canadian agri-food exporters and workers. Put simply, this would be detrimental to our ability to generate growth and support about a million jobs across Canada,” the submission read, adding the law would “set a dangerous precedent inviting other sectors and trading partners to impose legislated restrictions from trade negotiations.”

CAFTA said such legislation “would reduce opportunities to be invited to a seat at the table of various bilateral and multilateral negotiations and put Canada on a collision course with the United States and many other trading partners, especially when it is time to review, extend or modernize existing trade agreements.”

A handful of commodity groups echoed those concerns. 

The Canola Council of Canada urged MPs not to support the bill, saying it would “dramatically and permanently undermine Canada’s strategic trade interests” in the short and long term. 

Noting more than 90 per cent of Canadian canola is exported, the council said that Bill C-216 would “tie the hands of Canada’s trade negotiators upfront in bilateral and multi-national discussions and creates a dangerous precedent” while inviting other nations to “impose legislated limits on their scope of negotiations or future free trade partners to seek exclusions before negotiations begin.”

The Alberta Wheat Commission expressed “deep concern regarding the devastating impacts that Bill C-216 will have on our sector and the Canadian economy, if passed.

“Legislating the exclusion of products or sectors from trade negotiations not only damages Canada’s relationships with key trading partners, it also sets a dangerous precedent — one which threatens Canada’s position in the international marketplace.”

The Grain Growers of Canada filed a nearly identical brief.

Cereals Canada CEO Dean Dias wrote that passing Bill C-216 would “send a dangerous message” about Canada’s commitment to existing and future trade deals and harm the export-oriented sector he represents.

He echoed concerns about the law tying the hands of negotiators, adding it would also “give our trading partners legitimate doubts about Canada’s sincerity in entering into negotiations and limit Canada’s ability to get things done on the international stage.” 

Liberals voted for the bill at second reading and International Trade Minister Mary Ng has voiced her support, but critics complain the government is dragging its feet on allowing the bill to pass.

The International Trade committee will continue to study it in June.