Latest news with #C-202
National Observer
03-07-2025
- Business
- National Observer
New supply management law can't save the system from Trump, experts say
A new law meant to protect supply management might not be enough to shield the system in trade talks with a Trump administration bent on eliminating it, trade experts say. "It's certainly more difficult to strike a deal with the United States now with the passage of this bill that basically forces Canada to negotiate with one hand tied behind its back," said William Pellerin, a trade lawyer and partner at the firm McMillan LLP. "Now that we've removed the digital service tax, dairy and supply management is probably the number 1 trade irritant that we have with the United States. That remains very much unresolved." When Trump briefly paused trade talks with Canada on June 27 over the digital services tax — shortly before Ottawa capitulated by dropping the tax — he zeroed in on Canada's system of supply management. In a social media post, Trump called Canada a "very difficult country to TRADE with, including the fact that they have charged our Farmers as much as 400% Tariffs, for years, on Dairy Products." Canada can charge about 250 per cent tariffs on US dairy imports over a set quota established by the Canada-US-Mexico Agreement. The International Dairy Foods Association, which represents the US dairy industry, said in March the US has never come close to reaching those quotas, though the association also said that's because of other barriers Canada has erected. When Bill C-202 passed through Parliament last month, Bloc Québécois MPs hailed it as a clear win protecting Quebec farmers from American trade demands. The Bloc's bill, which received royal assent on June 26, prevents the foreign affairs minister from making commitments in trade negotiations to either increase the tariff rate quota or reduce tariffs for imports over a set threshold. On its face, that rule would prevent Canadian trade negotiators from offering to drop the import barriers that shield dairy and egg producers in Canada from price shocks. But while the law appears to rule out using supply management as a bargaining chip in trade talks with the US, it doesn't completely constrain the government. Pellerin said that if Prime Minister Mark Carney is seeking a way around C-202, he might start by looking into conducting the trade talks personally, instead of leaving them to Foreign Affairs Minister Anita Anand. Carney dismissed the need for the new law during the recent election but vowed to keep supply management off the table in negotiations with the US. Pellerin said the government could also address the trade irritant by expanding the number of players who can access dairy quotas beyond "processors." "(C-202) doesn't expressly talk about changing or modifying who would be able to access the quota," he said. Expanding access to quota, he said, would likely "lead to companies like grocery stores being able to import US cheeses, and that would probably please the United States to a significant degree." Carleton University associate professor Philippe Lagassé, an expert on Parliament and the Crown, said the new law doesn't extend past something called the "royal prerogative" — the ability of the executive branch of government to carry out certain actions in, for example, the conduct of foreign affairs. That suggests the government isn't constrained by the law, he said. "I have doubts that the royal prerogative has been displaced by the law. There is no specific language binding the Crown and it would appear to run contrary to the wider intent of the (law that it modifies)," he said by email. "That said, if the government believes that the law is binding, then it effectively is. As defenders of the bill insisted, it gives the government leverage in negotiation by giving the impression that Parliament has bound it on this issue." He said a trade treaty requires enabling legislation, so a new bill could remove the supply management constraints. "The bill adds an extra step and some constraints, but doesn't prevent supply management from eventually being removed or weakened," he said. Trade lawyer Mark Warner, principal at MAAW Law, said Canada could simply dispense with the law through Parliament if it decides it needs to make concessions to, for example, preserve the auto industry. "The argument for me that the government of Canada sits down with another country, particularly the United States, and says we can't negotiate that because Parliament has passed a bill — I have to tell you, I've never met an American trade official or lawyer who would take that seriously," Warner said. "My sense of this is it would just go through Parliament, unless you think other opposition parties would bring down the government over it." While supply management has long been a target for US trade negotiators, the idea of killing it has been a non-starter in Canadian politics for at least as long. Warner said any attempt to do away with it would be swiftly met with litigation, Charter challenges and provinces stepping up to fill a federal void. "The real cost of that sort of thing is political, so if you try to take it away, people are screaming and they're blocking the highways and they are calling you names and the Bloc is blocking anything through Parliament — you pay a cost that way," he said. But a compromise on supply management might not be that far-fetched. "The system itself won't be dismantled. I don't think that's anywhere near happening in the coming years and even decades," said Pellerin. "But I think that there are changes that could be made, particularly through the trade agreements, including by way of kind of further quotas. Further reduction in the tariffs for outside quota amounts and also in terms of who can actually bring in product." The United States trade representative raised specific concerns about supply management in the spring, citing quota rules established under the CUSMA trade pact that are not being applied as the US expected and ongoing frustration with the pricing of certain types of milk products. Former Canadian diplomat Louise Blais said that if Canada were to 'respect the spirit' of CUSMA as the Americans understand it, the problem might actually solve itself. 'We jump to the conclusion that it's dismantlement or nothing else, but in fact there's a middle ground," she said.
Winnipeg Free Press
03-07-2025
- Business
- Winnipeg Free Press
New supply management law won't save the system from Trump, experts say
OTTAWA – A new law meant to protect supply management might not be enough to shield the system in trade talks with a Trump administration bent on eliminating it, trade experts say. 'It's certainly more difficult to strike a deal with the United States now with the passage of this bill that basically forces Canada to negotiate with one hand tied behind its back,' said William Pellerin, a trade lawyer and partner at the firm McMillan LLP. 'Now that we've removed the digital service tax, dairy and supply management is probably the number 1 trade irritant that we have with the United States. That remains very much unresolved.' When Trump briefly paused trade talks with Canada on June 27 over the digital services tax — shortly before Ottawa capitulated by dropping the tax — he zeroed in on Canada's system of supply management. In a social media post, Trump called Canada a 'very difficult country to TRADE with, including the fact that they have charged our Farmers as much as 400% Tariffs, for years, on Dairy Products.' Canada can charge about 250 per cent tariffs on U.S. dairy imports over a set quota established by the Canada-U.S.-Mexico Agreement. The International Dairy Foods Association, which represents the U.S. dairy industry, said in March the U.S. has never come close to reaching those quotas, though the association also said that's because of other barriers Canada has erected. When Bill C-202 passed through Parliament last month, Bloc Québécois MPs hailed it as a clear win protecting Quebec farmers from American trade demands. The Bloc's bill, which received royal assent on June 26, prevents the foreign affairs minister from making commitments in trade negotiations to either increase the tariff rate quota or reduce tariffs for imports over a set threshold. On its face, that rule would prevent Canadian trade negotiators from offering to drop the import barriers that shield dairy and egg producers in Canada from price shocks. But while the law appears to rule out using supply management as a bargaining chip in trade talks with the U.S., it doesn't completely constrain the government. Pellerin said that if Prime Minister Mark Carney is seeking a way around C-202, he might start by looking into conducting the trade talks personally, instead of leaving them to Foreign Affairs Minister Anita Anand. Carney dismissed the need for the new law during the recent election but vowed to keep supply management off the table in negotiations with the U.S. Pellerin said the government could also address the trade irritant by expanding the number of players who can access dairy quotas beyond 'processors.' '(C-202) doesn't expressly talk about changing or modifying who would be able to access the quota,' he said. Expanding access to quota, he said, would likely 'lead to companies like grocery stores being able to import U.S. cheeses, and that would probably please the United States to a significant degree.' Carleton University associate professor Philippe Lagassé, an expert on Parliament and the Crown, said the new law doesn't extend past something called the 'royal prerogative' — the ability of the executive branch of government to carry out certain actions in, for example, the conduct of foreign affairs. That suggests the government isn't constrained by the law, he said. 'I have doubts that the royal prerogative has been displaced by the law. There is no specific language binding the Crown and it would appear to run contrary to the wider intent of the (law that it modifies),' he said by email. 'That said, if the government believes that the law is binding, then it effectively is. As defenders of the bill insisted, it gives the government leverage in negotiation by giving the impression that Parliament has bound it on this issue.' He said a trade treaty requires enabling legislation, so a new bill could remove the supply management constraints. 'The bill adds an extra step and some constraints, but doesn't prevent supply management from eventually being removed or weakened,' he said. Trade lawyer Mark Warner, principal at MAAW Law, said Canada could simply dispense with the law through Parliament if it decides it needs to make concessions to, for example, preserve the auto industry. 'The argument for me that the government of Canada sits down with another country, particularly the United States, and says we can't negotiate that because Parliament has passed a bill — I have to tell you, I've never met an American trade official or lawyer who would take that seriously,' Warner said. 'My sense of this is it would just go through Parliament, unless you think other opposition parties would bring down the government over it.' While supply management has long been a target for U.S. trade negotiators, the idea of killing it has been a non-starter in Canadian politics for at least as long. Warner said any attempt to do away with it would be swiftly met with litigation, Charter challenges and provinces stepping up to fill a federal void. 'The real cost of that sort of thing is political, so if you try to take it away, people are screaming and they're blocking the highways and they are calling you names and the Bloc is blocking anything through Parliament — you pay a cost that way,' he said. But a compromise on supply management might not be that far-fetched. Monday Mornings The latest local business news and a lookahead to the coming week. 'The system itself won't be dismantled. I don't think that's anywhere near happening in the coming years and even decades,' said Pellerin. 'But I think that there are changes that could be made, particularly through the trade agreements, including by way of kind of further quotas. Further reduction in the tariffs for outside quota amounts and also in terms of who can actually bring in product.' The United States trade representative raised specific concerns about supply management in the spring, citing quota rules established under the CUSMA trade pact that are not being applied as the U.S. expected and ongoing frustration with the pricing of certain types of milk products. Former Canadian diplomat Louise Blais said that if Canada were to 'respect the spirit' of CUSMA as the Americans understand it, the problem might actually solve itself. 'We jump to the conclusion that it's dismantlement or nothing else, but in fact there's a middle ground,' she said. This report by The Canadian Press was first published July 3, 2025.
Hamilton Spectator
03-07-2025
- Business
- Hamilton Spectator
New supply management law won't save the system from Trump, experts say
OTTAWA - A new law meant to protect supply management might not be enough to shield the system in trade talks with a Trump administration bent on eliminating it, trade experts say. 'It's certainly more difficult to strike a deal with the United States now with the passage of this bill that basically forces Canada to negotiate with one hand tied behind its back,' said William Pellerin, a trade lawyer and partner at the firm McMillan LLP. 'Now that we've removed the digital service tax, dairy and supply management is probably the number 1 trade irritant that we have with the United States. That remains very much unresolved.' When Trump briefly paused trade talks with Canada on June 27 over the digital services tax — shortly before Ottawa capitulated by dropping the tax — he zeroed in on Canada's system of supply management. In a social media post, Trump called Canada a 'very difficult country to TRADE with, including the fact that they have charged our Farmers as much as 400% Tariffs, for years, on Dairy Products.' Canada can charge about 250 per cent tariffs on U.S. dairy imports over a set quota established by the Canada-U.S.-Mexico Agreement. The International Dairy Foods Association, which represents the U.S. dairy industry, said in March the U.S. has never come close to reaching those quotas, though the association also said that's because of other barriers Canada has erected. When Bill C-202 passed through Parliament last month, Bloc Québécois MPs hailed it as a clear win protecting Quebec farmers from American trade demands. The Bloc's bill, which received royal assent on June 26, prevents the foreign affairs minister from making commitments in trade negotiations to either increase the tariff rate quota or reduce tariffs for imports over a set threshold. On its face, that rule would prevent Canadian trade negotiators from offering to drop the import barriers that shield dairy and egg producers in Canada from price shocks. But while the law appears to rule out using supply management as a bargaining chip in trade talks with the U.S., it doesn't completely constrain the government. Pellerin said that if Prime Minister Mark Carney is seeking a way around C-202, he might start by looking into conducting the trade talks personally, instead of leaving them to Foreign Affairs Minister Anita Anand. Carney dismissed the need for the new law during the recent election but vowed to keep supply management off the table in negotiations with the U.S. Pellerin said the government could also address the trade irritant by expanding the number of players who can access dairy quotas beyond 'processors.' '(C-202) doesn't expressly talk about changing or modifying who would be able to access the quota,' he said. Expanding access to quota, he said, would likely 'lead to companies like grocery stores being able to import U.S. cheeses, and that would probably please the United States to a significant degree.' Carleton University associate professor Philippe Lagassé, an expert on Parliament and the Crown, said the new law doesn't extend past something called the 'royal prerogative' — the ability of the executive branch of government to carry out certain actions in, for example, the conduct of foreign affairs. That suggests the government isn't constrained by the law, he said. 'I have doubts that the royal prerogative has been displaced by the law. There is no specific language binding the Crown and it would appear to run contrary to the wider intent of the (law that it modifies),' he said by email. 'That said, if the government believes that the law is binding, then it effectively is. As defenders of the bill insisted, it gives the government leverage in negotiation by giving the impression that Parliament has bound it on this issue.' He said a trade treaty requires enabling legislation, so a new bill could remove the supply management constraints. 'The bill adds an extra step and some constraints, but doesn't prevent supply management from eventually being removed or weakened,' he said. Trade lawyer Mark Warner, principal at MAAW Law, said Canada could simply dispense with the law through Parliament if it decides it needs to make concessions to, for example, preserve the auto industry. 'The argument for me that the government of Canada sits down with another country, particularly the United States, and says we can't negotiate that because Parliament has passed a bill — I have to tell you, I've never met an American trade official or lawyer who would take that seriously,' Warner said. 'My sense of this is it would just go through Parliament, unless you think other opposition parties would bring down the government over it.' While supply management has long been a target for U.S. trade negotiators, the idea of killing it has been a non-starter in Canadian politics for at least as long. Warner said any attempt to do away with it would be swiftly met with litigation, Charter challenges and provinces stepping up to fill a federal void. 'The real cost of that sort of thing is political, so if you try to take it away, people are screaming and they're blocking the highways and they are calling you names and the Bloc is blocking anything through Parliament — you pay a cost that way,' he said. But a compromise on supply management might not be that far-fetched. 'The system itself won't be dismantled. I don't think that's anywhere near happening in the coming years and even decades,' said Pellerin. 'But I think that there are changes that could be made, particularly through the trade agreements, including by way of kind of further quotas. Further reduction in the tariffs for outside quota amounts and also in terms of who can actually bring in product.' The United States trade representative raised specific concerns about supply management in the spring, citing quota rules established under the CUSMA trade pact that are not being applied as the U.S. expected and ongoing frustration with the pricing of certain types of milk products. Former Canadian diplomat Louise Blais said that if Canada were to 'respect the spirit' of CUSMA as the Americans understand it, the problem might actually solve itself. 'We jump to the conclusion that it's dismantlement or nothing else, but in fact there's a middle ground,' she said. This report by The Canadian Press was first published July 3, 2025.
Edmonton Journal
20-06-2025
- Business
- Edmonton Journal
Major projects bill expected to pass before MPs leave for the summer
Article content It also tabled C-4, the Making Life More Affordable for Canadians Act, which includes some of the government's campaign promises on affordability like a middle-class tax cut and removal of the GST on new homes for first-time homebuyers. However, the bill has been criticized as it also seeks to exempt federal political parties from modern privacy laws. Unlike the major projects bill, C-2 and C-4 were not fast-tracked, meaning that they will continue to make their way through the legislative process during the fall sitting. Interestingly, the first legislation to pass all stages in this new Parliament was not a government bill. Last week, MPs unanimously approved C-202, a Bloc bill to protect the supply management system which regulates the price and production of dairy, poultry and eggs, from future trade deals. That same bill was stalled in the Senate in the last legislature and ended up dying on the order paper when the election was called. This time, the Senate approved C-202 on division, and it is now awaiting royal assent.
Yahoo
20-06-2025
- Business
- Yahoo
Opinion: We needed to get rid of the dairy cartel, not sanctify it in law
By Lawrence L. Herman It never ends. On June 5, Yves-François Blanchet, the Bloc leader in Parliament, tabled Bill C-202, a private member's bill that's yet another regrettable effort to enshrine Canada's Soviet-style supply management system in the statute books. It legislates against any increased imports of dairy products, eggs and poultry — sectors the system protects from foreign competition — under Canada's current or future trade agreements. The Senate fast-tracked the bill, passing it on June 17 after it sailed through the House with virtually unanimous support. It's an unprecedented piece of protectionist legislation that favours this one group of farmers. C-202 is virtually identical to Bill C-282, which a Bloc member tabled in 2021 during the past Parliament. It was passed by the Commons in June 2023 and was still being examined in the Senate last November when Donald Trump was elected. It had been stalled there for almost two years and — mercifully — died on the order paper when this spring's election was called. As well as preventing imports, supply management is a quintessential barrier to internal trade, designed to protect local producers against out-of-province competition, whether in dairy, eggs or poultry. Under the influence of the well-financed dairy lobby, the Trudeau government and all the other parties supported Bill C-282 as it made its way through the House. This time round, however, it's hard to see how the Liberals could have voted in favour of a blatantly protectionist bill completely at odds with the Carney government's core policy of dismantling interprovincial trade barriers — and doing so before July 1, no less. While Blanchet and his Bloc colleagues have remained focused on currying favour with Quebec dairy farmers, there has been a sea change in the geopolitical context, most notably a dramatic deterioration in the Canada-U.S. relationship, with Trump targeting dairy import restrictions among the many trade assaults he's been directing at Canada. For Parliament to raise this protectionist fence higher is downright foolish — as was emphasized by experts over and over again during the debate on C-282 — and would seriously jeopardize our relations with the U.S. at this very sensitive juncture. That alone should have consigned C-202 to the Parliamentary dustbin. But some other factors that are not always fully aired should outrage Canadians when the facts are better understood. Consider the dairy sector as an illustration. First, to make supply management work, over the past 50 years governments at both federal and provincial levels have layered complexities onto the system, creating a mind-numbing process run by vast bureaucracies from coast to coast. This newspaper explained it all in a report compiled by staff about a year ago. At the top of the structure is the Canadian Dairy Commission (CDC) and its Canadian Milk Supply Management Committee (CMSMC). Each year, the CMSMC sets the allowable production volume for Canada as whole and the Commission then divides this up among the provinces, who parcel out the quota to their own producers, distributors, processors and consumers. The CDC then sets the farm-gate price for milk under what's called the National Pricing Formula. While consumers may think of milk as milk, under supply management milk is divided into five different classes and many sub-classes, based on what the milk is used for, whether as a consumer good or for further processing. The CDC applies the National Pricing Formula to set the annual farm-gate price in each class, with the price being different for each milk component — butter fat, proteins and solids. Provincial marketing boards then take all of this and, after even more consultations with industry players, determine who in their province is allowed to produce what, as well as where and to whom it can be sold, in what volume and at what price in that particular province. This goes on, year after year, involving scads of officials. Other industries, meanwhile, manage to decide prices and quantities without regulators' help. The point here isn't to go through all of these bureaucratic intricacies — details can be found in the FP report already referred to and on the CDC website — but to illustrate that in diary alone, the system is inordinately complex, difficult to penetrate, and run by large bureaucracies across the country. All this for the benefit of a few more than 9,000 dairy farms, compared, say, with Canada's 71,000 beef farms and 7,400 pig farms, which operate on the open market and receive no such guarantees. These numbers alone illustrate the inequities of this complex, over-staffed and costly system that exists to protect a small but highly favoured fraction of Canada's agricultural producers. When it comes to who runs the system, there's another set of issues that should outrage Canadians. It's run by insiders, persons with direct connections to the dairy industry, the same industry the system is supposed to regulate. For example, the CDC board is made up of persons with dairy industry connections, the chair being a dairy farmer himself. The Supply Management Committee is also weighted with industry players. At the provincial level, there's the same problem. All members of the Ontario Milk Marketing Board, for example, are dairy farmers, a pattern replicated in the other provinces. It's hard to see where the public interest comes in. Jack Mintz: Don't expect big economic gains from lower interprovincial barriers Bjorn Lomborg: Freer trade isn't dead yet, which is a good thing for all of us All of this should have led to a derailment of Bill C-202 and for the Carney government to start to phase out supply management as an outdated, discriminatory, protectionist system, contrary to the public interest. Though C-202 has passed, the government could hold up the proclamation needed to bring it into force pending further developments in our trading relations. In the meantime, Canadians should be concerned both about supply management itself and about the outsized influence its lobbyists have in Ottawa. Lawrence L. Herman, international counsel at Herman & Associates, is a senior fellow at the C.D. Howe Institute. Sign in to access your portfolio
