October 4, 2018
This week, we heard a lot about the fact that Canada got the best deal it could with the current US administration, and that the dairy sector could have been hit a lot harder. It’s a narrow view of the situation.
The USMCA is just one of a number of trade deals to which Canada has recently agreed. Take the 3.6% market access that the government agreed to with the USMCA, add to it the 4% with CETA, and another 3.25% with CPTPP and you end up with more than 10% access conceded in just two years at a cost of over $2 billion to dairy processors over the course of implementation.
Our position is an impossible one: Because of government decisions, dairy processors stand to lose nearly a third of the $7.5 billion that has been invested in innovation and market growth over the past decade. During this same time, these investments spurred 16% growth in real GDP contributions–a stark contrast to the 4% decline in the broader manufacturing sector.
For a government that talks so much about wanting to grow the economy and creating good middle-class jobs, Canada is certainly not creating the conditions that encourage investment in its second-largest agri-food sector.
There is an opportunity for it to make a course correction to ensure that both dairy processors and farmers are able to recoup some of the losses they will face because of government decisions.
The Canadian government owes it to its dairy farmers, dairy processors, and the hard-working Canadians they employ, to do everything within its power to turn this situation around and create the conditions which will allow the dairy sector to continue to grow.
This week, a dairy farmer very aptly likened the situation to owning a store and one in 10 customers being turned away at the door and sent to the competition. I’ll take this insight a step further and say, ‘What the government chooses to do next is the difference between standing at the dairy sector’s door and welcoming the remaining customers in or sending them off to the competition.’