Compensating dairy processors harmed by trade agreements
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 destabilize the market and curb further growth. It is estimated that the combined impact of CETA, CPTPP and CUSMA will amount to a loss of $300 million annually for the sector. By the government’s own admissions, these losses will not be balanced by new export market opportunities.
A comprehensive trade compensation program is needed
Addressing the impacts of trade agreements will allow dairy processors to more confidently invest and innovate in Canada. Government compensation for the impacts of these trade agreements on Canada’s dairy processors will help to stabilize market disruption and help processors adapt to the new market realities created by an influx of imported products.
Government has committed to fair and full compensation for processors. To date, this has included $100 million in government funding for the impacts of CETA, as well as a larger program for all supply managed processors–dairy, poultry and egg–as part of the 2021 federal budget. The $292.5 million Processor Investment Fund will roll out over seven years to support private investment in processing plants. In the last election, the current government committed to fulfilling its commitments by providing compensation for CUSMA within the first year of its next mandate.
These are important steps toward securing a strong future for Canada’s dairy processors, as well as its farmers. The Dairy Processors Association of Canada will continue working to ensure the government keeps its compensation commitments.