MILKING THE CONSUMER

The forgotten constituency

In 1975. New York City was in the grip of a severe financial crisis and in response, Gerald Ford, then U.S. president, gave a soon-to-be-famous speech in late October in which he denied New York’s request for a federal government bailout. The next day, the Daily News characterized Ford’s position on its front page: “Ford to City: Drop Dead.”

That headline comes to mind every time Canada’s politicians approach consumer issues — by stiffing consumers in favour of producer cartels.

From Conservative leader Stephen Harper to New Democratic Party leader Thomas Mulcair and the Liberals’ Justin Trudeau and on to a constellation of premiers and mayors, Canadian politicians relentlessly favour producers over tens of millions of consumers.

The newest evidence of this political protection racket arrived when welcome news — the Trans-Pacific Partnership trade deal between Canada and 11 other countries — was followed by debauched details: How the chicken, cheese, turkey, milk and butter cartels imposed on consumers by government-granted fiat (the Orwellian-named “supply management programs”) will remain.

Thus Prime Minister Stephen Harper shored up the ramparts behind Cuban-style regulated egg prices: “This government remains absolutely committed to making sure we preserve our system of supply management,” said Harper the day before the Trans-Pacific deal was announced.

Then there are the other party leaders on Canada’s own version of North Korean economic farm policy: “An NDP government will not accept any deal that puts our dairy and poultry farms at risk,” wrote Mulcair. “The federal government must keep its word and defend Canadian interests (including) defending supply management” announced Justin Trudeau.

Elizabeth May opined that the Harper Conservatives “just double-crossed the supply-managed sectors of Canada’s agricultural sector.”

May’s thoughts were amusing, given that the Dairy Farmers of Canada’s president Wally Smith already announced he was happy with the continued protection: “We have come a long way from the threat of eliminating supply management,” said Smith, who yet complained that foreigners were granted access to 3.25 per cent of Canada’s milk and cheese “market.”

Let’s remember why cracking the dairy and poultry cartels matters.

Because, according to former Liberal member of Parliament Martha Hall Findlay, it costs a Canadian family $200 per year. That’s not much for some politicians or the cartel crowd, but $1,000 every five years is significant to the poor.

Maddeningly, the very point of free trade agreements is to smash the power of domestic cartels, this to allow markets to better serve consumers, especially the poorest ones. The point of open trade is to protect them and not businesses who dislike competition.

Of secondary importance are the producers. Even there though, Canada’s current poultry and dairy cartels could greatly prosper in a freer trade world because it would allow them to sell more milk, cheese and chicken into Asian markets. Spot the market opportunity: Asia has a few billion more people than does Canada’s currently trapped domestic market.

But the Tories failed to use this international opportunity as a teaching moment, to lift up protectionist eyes to greater possibilities, and to concurrently protect consumers from cartels.

International Trade Minister Ed Fast, in defending the protectionist carve-out for cheese, milk, eggs and your Thanksgiving turkey, uttered up this quote: “We have been successful in protecting the three key pillars of supply management, being production controls, price controls and import controls.”

Thus did central economic planning and language make it into a trade minister’s talking points: Fast mentions “controls” three times in his last six words.

It would be rhetorical excess to accuse politicians such as Fast, Harper, Mulcair, Trudeau and May of intending to send a Ford-like “drop dead” message to consumers. But their protectionist statements send this clear dispatch: Consumers, including the poorest ones, will rank lower than the vested interests of politically-protected cartels.