As autumn sets in, dairy farmers are still waiting for a government announcement on compensation to offset market shares Canada gave up in order to conclude three trade deals: the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the Canada-United States-Mexico Agreement (CUSMA).
The market concessions made in these three agreements represent $450 million in lost milk sales for a total of 8.4% of production. Moreover, the other concessions made in CUSMA, namely the elimination of the ingredients class and capping of skim milk powder exports will certainly result in major additional costs.
The consequences of these agreements are already being felt and, to add insult to injury, CUSMA took effect prematurely on July 1, 2020 instead of August 1 as agreed. This will cause additional losses for dairy farmers and processors by moving the 35,000-tonne cap for skim milk powder and protein concentrate exports ahead by one year.
The battle for compensation measures has been ongoing for seven years. The first commitment was made under the Harper government. Since then, the Trudeau government has made many commitments to compensate the dairy sector fully and fairly for the cumulative effects of CETA, CPTPP and CUSMA. This commitment was repeated in the motion adopted unanimously by the House of Commons in October 2018. The motion demands that “the House call on the government to implement a program that provides financial compensation to egg, poultry and dairy farmers for all the losses they sustain due to breaches to the supply management system in CETA, CPTPP and [CUSMA], and that it do so before asking parliamentarians to vote on [CUSMA].”
Tabling of the budget, which was scheduled for last March, was postponed due to the COVID-19 pandemic. All sectors of the Québec economy and the global economy have been affected by this unprecedented health crisis. Dairy farmers are no exception. We also had to adapt to deal with exceptional market fluctuations. Our farms have been hard hit by various factors, including strict production management, tight biosecurity measures, delays or cancellations by service providers, or heavy revenue losses.
We understand that the COVID-19 pandemic required all the government’s attention in the first few months and that it still does. However, the trade agreements are in force and losses are occurring as predicted. At this stage, an announcement specifying the conditions of the compensation pledged would not hinder efforts against the pandemic.
We understand that the COVID-19 pandemic required all the government’s attention in the first few months and that it still does. However, the trade agreements are in force and losses are occurring as predicted. At this stage, an announcement specifying the conditions of the compensation pledged would not hinder efforts against the pandemic. More than ever, the government and consumers are aware of the importance of protecting local production to maintain their food security. In fact, Premier François Legault wants to make local consumption a priority, particularly for the agri-food sector. But COVID-19 has had and will continue to have major financial impacts for our sector, added to the losses resulting from the trade agreements. Without a clear commitment by the government on the long-term support it plans to offer the dairy industry, all these combined negative impacts will have repercussions for our farms and the economy of our regions.
With a contribution of $6.2 billion to Québec’s GDP and its 83,000 jobs, the dairy sector makes a major contribution to employment and the socioeconomic fabric of Québec’s regions and communities. Moreover, farmers invest every year to modernize their buildings, equipment, and machinery. In 2019 alone, these investments amounted to over $500 million. This means that nearly $3 billion will be returned to our economy in 5 years. The government must move quickly from talk to action. Our dairy farmers are not going anywhere; the compensation given to them will be spent and reinvested here.
We expect the government to make concrete announcements quickly. Deputy Prime Minister Chrystia Freeland is well aware of the issues related to the trade agreements. As Minister of International Trade, she sat at the CUSMA negotiating table. She was at Prime Minister Justin Trudeau’s side to announce, when the agreement was signed, that dairy farmers would be fully and fairly compensated for all loss of market shares.
In August, Ms. Freeland was appointed Minister of Finance, following the resignation of Bill Morneau. She now holds the purse strings; it is her responsibility to quickly pay out the compensation she herself promised at the Prime Minister’s side. We have waited long enough. It is now time for action!
Daniel Gobeil, Chair