Canada has given its trading partners unprecedented access to its domestic dairy market through the Canada-EU Comprehensive Economic and Trade Agreement (CETA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the Canada-United States-Mexico Agreement (CUSMA).
Alone, each of these agreements pose significant threats to Canada’s domestic dairy market. Combined, the three agreements have the potential to destabilize the market and curb further growth. It is estimated that the combined impact of CETA, CPTPP and CUSMA will be a loss of $300 million annually for the sector. To put this loss into perspective, it is equivalent to 15 to 20 medium-sized cheese makers going out of business in Canada each year.
Canadians value products made close to home. A strong domestic dairy processing industry supports over 24,500 Canadians and their families, and the work of more than 10,000 dairy farms. Strengthening the industry has been a goal of the dairy processors who have invested over $7.5 billion in their operations over the past decade. The access that the Canadian government has provided under CETA, CPTPP and CUSMA threatens all of this.
The government announced $292.5 million to support Canada’s dairy processors impacted by CETA and CPTPP in the latest Federal Budget. Funding for a Processor Investment Fund will roll out over seven years to support private investment in processing plants. DPAC views this as a very good first step toward fulfilling the government’s commitment to full and fair compensation for processors.
However, the 2021 Budget announcement did not include CUSMA compensation. DPAC will continue working to ensure the government keeps its compensation commitments and takes all necessary steps to support Canada’s dairy processors. This includes providing processors with most of the import licenses, known as tariff-rate quota or TRQ, related to CETA, CPTPP and CUSMA.
This is an opportunity to help the industry innovate and adapt to new market realities created by trade agreements, and ensure that the Canadian-made products that consumers want will continue to be made here at home.
DPAC Reports and Submissions
Speaking Notes: DPAC Presentation to the Standing Senate Committee on Agriculture and Forestry (February 26 2019)
Oversight in the USMCA – A letter to Prime Minister Justin Trudeau (November 2018)
Speaking Notes: DPAC Presentation to the Standing Senate Committee on Agriculture and Forestry (October 2018)
NAFTA and Dairy Concessions – A letter to Prime Minister Justin Trudeau (June 2018)
Recommendations on policy measures to promote innovation in the dairy processing sector – Submission to the Standing Committee on Industry, Science and Technology (October 2016).
Dairy processing industry by the numbers:
- $670 million expected in lost return on investments resulting from CETA
- $730 million expected in lost return on investments resulting from CPTPP
- Hundreds of millions more are expected in lost return on investments resulting from CUSMA
- $7.5 billion in investments made since 2008
- $16 billion contributed annually to the Canadian GDP
- 10,000 Canadian dairy farms supported by dairy processors
- 24,500 Canadians employed by dairy processors
- Aggregate annual payroll of $1.2 billion