End to supply management a good thing

An end to supply management is good for Canada

It would be odd if ultrafiltered milk should one day prove to have been supply management’s undoing. The “non-fat milk solid” isn’t even considered milk for purposes of trade law, but an “ingredient” for use in processed foods like pizza cheese.

And whereas the point of supply management is to keep prices higher than would otherwise be the case, the express aim of Canadian policy with respect to ultra-filtered milk is to drive prices lower.

Not being milk, after all, it was not subject to the usual astronomic tariffs with which the domestic milk cartel is protected from having its complex system of provincial supply quotas undercut by lowerpriced foreign imports. That raised the ghastly prospect of Canadian milk producers, to whatever microscopic degree, having to compete for a living, and we can’t have that. Indeed, since 1971 it has been against the law.

So a deal was worked out last year between the dairy industry and domestic processors, with the usual government connivance, first in Ontario, then across the country: part of what was inevitably called a “national ingredient strategy.”

If imports of ultra-filtered milk could not be made artificially expensive by tariff, then domestic production could be made artificially cheap, by subsidy. Not only would this help domestic milk producers repel the foreign invaders, but any surplus non-fat milk solids could be exported at the same ultralow prices, without inviting charges of “dumping” (selling a good for less abroad than at home, considered a no-no in trade law).