And now the CUSMA

After many years of fighting to receive compensation, we welcomed the announcement of the payment schedule for the amounts promised to compensate for the loss of market share under both the Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The payments will be made directly to producers and will take place over three years rather than seven. For 2020-2021, $468 million (M) will be paid out to Canadian milk producers, including $172 M to Quebec producers.

Many of us have already completed the registration process for the Program, which is administered by the Canadian Dairy Commission. Those who have not yet done so must not wait any longer since the deadline for receiving a payment this year is March 31. All the details, codes and steps you must follow to receive your payments are explained in a letter that Agriculture and Agri-Food Canada sent out in January.

The cheques will help to cover a portion of the losses resulting from concessions under CETA and the CPTPP, but do not put an end to our fight for full and fair compensation, since an official announcement has not yet been made concerning the losses related to CUSMA. The compensation payments provide some relief for our dairy businesses, but all dairymen would have preferred to produce the 8.4% of the Canadian market share that was conceded under the last three agreements.

Keep in mind that the agreement with the United States and Mexico provides for additional access to the Canadian market of 100,000 tonnes of dairy products, or the equivalent of 3.9% of the Canadian market. These impacts are in addition to the changes made to our dairy policy to respect the provisions of the agreement, as well as the caps on skim milk powder and protein concentrate exports, which generate significant additional costs.

CUSMA is in force and the negative effects are already being felt as American milk takes the place reserved for it in our market. The losses resulting from the market shares ceded to the benefit of the economies of our neighbour are concrete and negatively impact our farms and the Canadian economy.

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Concessions coupled with compensation promises are not a suitable model to follow in trade negotiations. The government has committed to make no further concessions involving dairy products in future trade agreements; this must be the rationale in the future.

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The Trudeau government promised on many occasions to compensate the dairy sector fully and fairly for the cumulated effects of these trade agreements, including CUSMA. This commitment was repeated in the Speech from the Throne, as well as in black and white in Minister Bibeau’s January 2021 mandate letter. The letter mentions that she must implement on a priority basis the steps to ensure that supply-managed sectors receive full and fair compensation for recent trade agreements. We understand that this is a commitment that needs to be fulfilled before the end of the current mandate.

We are aware that the management of the COVID-19 pandemic involves major, unprecedented challenges for the Canadian Government. All Canadian milk producers lend their support in this historic fight against COVID-19. More than ever in this period of uncertainty, our governments and the population at large are aware of the importance of food self-sufficiency. This naturally means the production of our own food locally by local people. It’s a question of domestic food security.

COVID-19 has had, and will continue to have, significant financial impacts for a longtime on various economic sectors, including the dairy industry. In our case, these financial consequences are in addition to the losses resulting from these trade agreements that will remain in place in perpetuity. Besides exerting pressure on our families, the concessions create a climate of uncertainty that limits our ability to reinvest on our farms and in our regions. Thousands of jobs related to our sector and millions of dollars of economic spin-offs are at risk.

The minority Liberal government is preparing to table its 2021-2022 budget, probably in March. Persistent rumours are circulating that an election may be called at that time. Last November, Minister Bibeau said she wanted to rapidly consult with our sector to conclude this portion of their commitment. The government must quickly send a clear sign of support to the dairy industry. We need stability and predictability, requirements for any successful business, to continue to ensure food security for our fellow citizens.

SignatureDanielGobeil

 

 

 

Daniel Gobeil, Chairman

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