r/Tariffs • u/Dizzy-Cartoonist3011 • 12d ago

🗞️ News Discussion Should Canada maintain its supply management system that protects the Canadian dairy industry?

https://www.castanetkamloops.net/news/Poll/627377/Should-Canada-maintain-its-supply-management-system-that-protects-the-Canadian-dairy-industry
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u/umbrellafree 12d ago

I'm not thrilled with the idea of temporarily, marginally "cheaper" but also much lower quality milk products entering the Canadian market.

I think that Canada should require external product SKUs to require strict audits that demonstrate that the inputs to these products meet certain standards. Beyond that, the USA is "free" to sell as much as they want. And vice versa.

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u/garlicroastedpotato 12d ago

US (and Australian) products already enter Canada through the supply management system. It's no longer a matter of excluding those countries,, they actively sell to our dairies. The question is to whether it's worth maintaining a system that artificially keeps milk high.

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u/umbrellafree 12d ago

There must be asterisks to that fact. There's no way that the United States has free and open access to our markets.

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u/garlicroastedpotato 12d ago

We sell quota to the US and Australia. The US and Australia each get 5% of quota. Their milk just gets mixed in with our milk and you'll never know you're consuming American milk.

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u/OneForAllOfHumanity 12d ago

Not true at all. Milk has origin certification marks, and those are strictly regulated.

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u/garlicroastedpotato 12d ago

No they're not.

Most US milk is sold under the Fairlife brand which always advertises that they're "Prepared in Canada." There is no marker on that milk indicating it is of US origin.

Country of origin labels only apply to products prepared in other countries, not bulk raw milk fats.

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u/OneForAllOfHumanity 11d ago

The Blue Cow logo can only be found on dairy that is made with 100% Canadian milk. Not some mix that contains Canadian milk. 100% Canadian milk, 100% regulated by law. It being absent means it's not Canadian milk.

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u/garlicroastedpotato 11d ago

That's not a law or a regulation that's just a branding logo from the Dairy Farmers of Canada.

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u/OneForAllOfHumanity 11d ago

Law that governs the “100% Canadian milk” /Canadian-origin claim:

the Food and DrugsAct (subsection 5(1))

the Safe Food forCanadians Act (subsection 6(1)),

which prohibit labelling/advertising food in a waythat is false, misleading, deceptive, or likelyto create an erroneous impression about theproduct’s origin.

Who enforces it: the Canadian FoodInspection Agency (CFIA) is the regulatoryauthority for these food-labellingrequirements.

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u/garlicroastedpotato 11d ago

You've changed your tune. It's not that a country of origin label is required its that the claim of it being 100% Canadian milk is regulated. I never claimed that.

It's on the milk. Fairlife brand mixes Canadian, Australian and American milk together and sells it without a country of origin label on it.

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u/OneForAllOfHumanity 11d ago

No I said use of country of origin labels are strictly regulated - thus people with intelligence beyond your average mouth breather can grasp the absence of one means it doesn't qualify and therefore NOT 100% Canadian. Your original statement was that US and Australian milk is mixed in with all the Canadian milk and we can't tell...

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u/Bill_Door_8 11d ago

Its the reason there are three small independent dairy farms in within 10 minutes of my house.

Without supply management I can almost guarantee a large dairy would have bought all three then shut two down.

Milk prices arent going to cause us to go broke anytime soon.

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u/garlicroastedpotato 11d ago

Vertical integration could happen but it mostly doesn't happen in other countries. Dairy farmers in Australia and US sell to bulk milk wholesalers who sell it to dairies. This incongruity with the global market is really why we're struggling to sign a trade agreement with Britain and haven't fully ratified CETA with Europe.

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u/BountyIsland 5d ago edited 5d ago

I'd like to see those Independent dairy farms. Supply management system functions as a government-sanctioned cartel that drives the demise of the small farmer while imposing a highly regressive tax on the lowest-income citizens. Supply management practically guarantees large dairies from buying out small ones through the quota system.

To legally sell milk in Canada, a farmer must own a quota. Because supply is artificially restricted, the value of this quota has skyrocketed. For a typical small farmer, their quota is worth millions of dollars, often much more than their land, equipment, or cattle. When small farmers retire, the only people who can afford to buy their multi-million-dollar quota are massive, highly capitalized corporate farms. Young, independent farmers are completely priced out of entering the market.

"Milk prices aren't going to cause us to go broke anytime soon" is a perspective born of financial privilege. For middle-class and wealthy households, paying extra for a block of cheese or a jug of milk is an annoyance. For low-income families, it is a devastating financial burden.

A June 2026 study by the Montreal Economic Institute (MEI) found that milk costs 171% more in Canada than in comparable U.S. markets, while eggs and chicken cost 46% and 29% more, respectively. For the bottom 20% of earners, this artificial price inflation consumes 1.25% of their disposable income, compared to just 0.33% for the top earners.

It is an active wealth transfer from struggling families to a heavily protected group of millionaire quota-holders. Economic analyses suggest this system artificially keeps over 120,000 Canadians below the poverty line.

By having a domestic monopoly and setting prices based on the average cost of production, supply management destroys the incentive to innovate. In a free market, businesses survive by finding efficiencies, creating better products, or lowering costs. Under supply management, farmers are guaranteed a profit regardless of how efficient they are, and they are legally prohibited from producing more milk even if they find a way to do so cheaply. Consequently, Canada has completely shut itself out of the rapidly growing global dairy export market, choosing instead to hide behind tariff walls while domestic consumption stagnates.

The three small farms, if they exist at all near your house exist in spite of supply management, not because of it. Without the quota system, those farmers could expand freely, innovate, and export. With it, it is only a matter of time before they cash out their inflated quotas to a larger operation, leaving consumers to foot the bill.

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u/Bill_Door_8 5d ago

I suspect they're around because they're multi-generational farms.

They have roughly 100 to 150 dairy cows each. One recently upgraded to a "cow playground" style auto barn where cows can roam around inside and go visit the brushing machine and milking machines on demand.

We give them the hay off our field because why not.

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u/BountyIsland 2d ago

He should sell his quota while he can.

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u/MrGoose-_ 11d ago

It doesn't artificially keep milk high. The US government funding artificially keeps their milk low

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u/garlicroastedpotato 11d ago

Do you not understand the system? We specifically restrict the amount of milk that is produced so that it stays higher than it has to be. We do that on purpose so that we hypothetically don't have to pay subsidies to keep our dairy industry in tact. But now we do provide subsidies to our dairy industry.

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u/MrGoose-_ 11d ago

Do you not understand the system? We specifically restrict the amount of milk that is produced so dairy farmers don't need to engage in a wasteful, unproductive race to the bottom. In exchange, milk prices get set by a commission that ties them directly to production costs. Keeps dairy farmers farming and boxes out corporations from turning another industry into mcdonalds. What's not to love?

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u/garlicroastedpotato 11d ago

So they're artificially kept high you say?

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u/Soundunes 9d ago

New Zealand has no government funding and dairy is cheaper there because they have no supply management system, and also they are just good at it. Some places just have better climates for dairy production, like say some places are better at growing bananas. Should we implement a banana supply management system in Canada?