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Making Dairy, Poultry, and Eggs More Affordable
Issue
Supply management is a government-imposed cartel that keeps the prices of dairy, poultry, and eggs artificially high through the control of production, the banning of imports, price fixing, and the prevention of competition in the market.
The system forces producers to buy quotas which grant permission to produce a set amount. For example, it costs between $20,000 and $40,000 to get the right to milk one cow. It keeps out imports by imposing exorbitant tariffs that range from 150% for eggs to 300% for butter. Because our market is closed to most imports, our farmers are not allowed to export their products.
Although they account for only about 10% of all Canadian farms, farmers under supply management constitute one of the most influential lobbies in Ottawa. In order to satisfy one small but powerful lobby, we restrict the development of other businesses and prevent the creation of thousands of jobs in these other sectors.
When Canada negotiates free trade agreements with other countries, protecting the system always ends up as the focus of talks. Canada could have obtained a better deal during negotiations with the U.S. and Mexico to renew NAFTA in 2018 if we had put supply management on the table, as demanded by President Trump back then. Since his return to the White House in January 2025, Canada’s trade relations with the U.S. have deteriorated, and supply management remains one of the most contentious issues. Negotiations for a free trade agreement with the United Kingdom also broke down in 2024 in part over the issue of opening our market to English cheeses.
Facts
According to the OECD, Canadian consumers had to pay $3.6 billion more every year between 2011 and 2015 for all products under supply management. A 2015 study done by University of Manitoba economists showed that the system imposes a financial burden of $339 annually on the poorest 20% of Canadian households, which is the equivalent of a 2.3% tax on their incomes.
The claim that supply management is essential to keep dairy farms alive is false. Since the early 1970s when supply management was introduced, the number of dairy farms in Canada has dropped from about 145,000 to about 10,000 today. More than 90% have disappeared. The exorbitant price of quotas makes it impossible for young farmers to start a farm under supply management.
The “market” value of quotas was estimated at $35 billion in 2016. But that’s not what it would cost the government to buy them back if it decided to abolish the system. The accounting value of quotas after depreciation would form the basis for compensation. Farmers who bought them recently would be reimbursed close to the market value, while those who bought them at lower prices years ago would get less, and those who got them for free would get nothing. The Conference Board of Canada estimated such a buy-out would cost between $3.6 billion and $4.7 billion in total.
Our Plan
The supply management system is inefficient and fundamentally unfair to consumers, farmers, and other sectors of our economy.
A People's Party government will:
✓ Eliminate Protectionism in the Agricultural Sector
Create a free, open, and fair system in the dairy, poultry, and eggs sectors that will save Canadians billions of dollars annually thanks to the lower prices they will pay for these products, while improving our trade relations with the U.S. and other partners.
✓ Gradually Phase Out Supply Management
Phase out the supply management system over a number of years to allow farmers to adapt, and compensate them for the lost value of their quotas. Allow Canada’s dairy, egg and poultry farmers to innovate, thrive and sell their products internationally.
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The Fraser Valley Regional Association (FVRA) of the People's Party of Canada supports
Chilliwack-Hope and candidate Jeff Galbraith
Mission-Matsqui-Abbotsford and candidate Kevin Sinclair
Abbotsford-South Langley and candidate Aeriol Alderking
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