Commons considers Bloc bill to end dairy concessions in trade deals

·6 min read

When Canadian trade negotiators begin talks with the United Kingdom next year on a permanent bilateral trade deal, their hands could be tied when it comes to offering any future dairy, egg or poultry concessions — if Parliament passes a new private member's bill that saw its first hour of debate on Tuesday.

Bloc Québécois MP Louis Plamondon's legislation, Bill C-216, would amend the Department of Foreign Affairs, Trade and Development Act to state that the minister "must not make any commitment ... by future trade treaty or agreement" that would increase the tariff rate quota (TRQ) applicable to dairy products, poultry or eggs, or reduce the tariff applicable to those goods when they are imported in excess of that quota.

Canada protects its agriculture supply management system for these commodities by carefully controlling access to its domestic market. Only small quantities of imports are allowed under strict international quotas — TRQs — with high tariffs keeping any extra imports above and beyond these quotas from being cost-competitive.

But the three major trade deals implemented by the Liberal government over the last four years — the Comprehensive Economic and Trade Agreement (CETA) with the European Union, the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) with 10 other Pacific Rim markets and, most recently, the revised North American Free Trade Agreement (the new NAFTA) — all offered new access to Canada's domestic market, among other concessions required to land these deals.

"Something very important for milk and egg and poultry production is given away as a token and nothing comes back for those producers, so we say in the law that this should not happen anymore," Bloc Leader Yves-François Blanchet told CBC News last week.

"[The Liberal government says,] 'Oh, we will will compensate you. And you know what? They don't."

No word on NAFTA compensation

A few weeks before the 2019 general election, Agriculture and Agri-Food Minister Marie-Claude Bibeau announced compensation for dairy farmers to cover their anticipated losses from CETA and CPTPP, which were already both in effect at the time. That financial assistance rolled out last winter.

Help has also been pledged to compensate for the even larger concessions in the new NAFTA but nothing further has been announced. American farmers got access to a greater share of Canada's starting July 1 — and the new NAFTA also dictates how dairy ingredients can be priced and slapped strict export limits on sensitive global commodities like skim milk powder and baby formula.

Sean Kilpatrick/Canadian Press
Sean Kilpatrick/Canadian Press

Blanchet slammed Finance Minister Chrystia Freeland for taking so long to present her fall economic update and said her spending plan must include the NAFTA compensation farmers anxiously anticipate.

"This money is owed, is expected [and] is terribly late," he said.

Freeland announced Monday that she'll present her update on Nov. 30.

Bill could block British demands

If Plamondon's legislation garners enough support to pass in this Parliament before the next election, the first trade negotiation it could affect is talks between Canada and the United Kingdom to reach a permanent, comprehensive deal to liberalize their bilateral trade post-Brexit.

On Saturday, prime ministers and trade ministers from both sides announced they'd reached agreement on a transitional deal to offer continuity for businesses by continuing most of the terms of the CETA past Jan.1, when it was otherwise set to expire because the U.K. is no longer an EU member.

The government won't release details of exactly what's in that transitional agreement until the legal text is ready, which usually takes another two to four weeks. But Doug Forsyth, Canada's lead negotiator in the talks, confirmed previously that the British were seeking additional tariff-free access to Canada's cheese market.

"I want to be very clear that there is no new market access for cheese here in this transition agreement," International Trade Minister Mary Ng told CBC News at Saturday's announcement.

But yesterday at the Commons trade committee, Ng's parliamentary secretary, Rachel Bendayan, said that language in the transitional deal commits both sides to returning to the table to reach what Prime Minister Justin Trudeau has called a "bespoke" bilateral deal by 2024.

That means the British could make another play to get more U.K. cheeses into Canada.

"By 2024, Canada will have transferred 18 per cent of its domestic dairy production to dairy farmers in other countries ... that will displace our domestic products on the grocery shelves," said Pierre Lampron, the president of the Dairy Farmers of Canada, in a statement sent to CBC News last weekend. "Another concession as part of a trade agreement with the U.K. would have been dramatic for the industry.

"Officials had told us there would be no further concessions, and they followed through, but we must remain vigilant as this is a provisional agreement."

Future vote result unclear

Based on remarks made during Tuesday's first hour of debate, it appears Conservative MPs may not support this bill, although a party spokesperson has yet to comment on it or confirm how the Official Opposition will vote.

"If this bill passes, we can be sure that potential trade partners will target supply management right off the bat and counter with their own protectionist measures," Conservative MP Luc Berthold said in French during the debate. "This is like drawing the other side's attention to a specific negotiation issue that could well force Canada to agree to new concessions..."

"We do not believe that Bill C-216 is a good bill to protect supply management and Canadian producers," Berthold said.

In an email to CBC News, party spokesperson Melanie Richer said New Democrats agree with the Bloc that compensation has been slow to roll out, adding that "the Liberals added insult to injury by bringing CUSMA into effect several weeks earlier than promised, robbing Canadian dairy farmers of a full year to prepare for the change in their local markets."

"New Democrats have consistently decried the damage done to Canada's dairy sector in successive trade deals and we have said we would not do the same," Richer said. "This bill would add legal force to that position."

Youmy Han, a spokesperson for Trade Minister Ng, said the government is still studying the bill and would not say how Liberal MPs might vote.

"We have been clear: our government will not grant any further market access in our supply-managed sectors in any future trade negotiation," Han said.

MPs will vote on the bill at second reading after its second hour of debate, expected later this winter.