Myths & Realities

Myth 1:

Supply management hurts consumers.

Reality:

Retail prices for Canadian dairy products are comparable to prices in other countries. Canadians are also spending less on dairy products — the percentage of their income spent on dairy has fallen from 1.2 % in 1990 to 0.97% in 2016.

In fact, Canadian consumers have a good deal on food. On average, households spend about 10 per cent of their income on food and alcohol, one of the lowest in the world. By February 9, 2018, Canadians had earned enough money to pay for food for the year, making Canada and the UK and the U.S. the top three countries where food is most affordable.

The latest global price comparison (52 weeks ending October 2017) shows our consumers get a good deal in Canadian stores as they pay (on a weighted average basis considering purchasing habits) about $1.50 a litre of fresh milk, which compares well with the 1.83 in New Zealand, 1.57 in Australia, and 1.77 in France, 1.12 in the United States, and 1.23 in Germany, while China’s prices are more expensive at $2.58 a litre. Moreover, as all Canadian milk is free of the artificial growth hormone rBST (which is not the case in the United States) it is helpful to compare apples to apples: the average price for rBST-free milk in the US over the same period was $1.64.


Myth 2:

Milk is an expensive beverage.

Reality:

Compared to other beverages, milk is the most cost-effective product with any nutritional value, containing up to 16 essential nutrients, offered to consumers. (AC Nielsen 2017 data).


Myth 3:

If Canada eliminated supply management, the price of dairy products would drop.

Reality:

When the United Kingdom and Australia deregulated their dairy industries, farm prices went down but retail prices went up. For example, in Australia prices for milk in capital cities rose 27 cents per litre in the three years after deregulation compared to 9 cents per litre in the three years before deregulation, according to Australian Bureau of Statistics figures.

Moreover, in New Zealand, the most competitive milk-producing country in the world, retail prices for milk are higher than Canada’s.


Myth 4:

Canadian consumers want supply management gone.

Reality:

Canadian consumers are savvy and recognize quality products are not always the least expensive. In an Abacus poll released April 25, 2017, Canadians reiterated their support and satisfaction with the range and quality of Canadian dairy products. Another poll by Canadian Business in 2013 found 81% of Canadians want to retain supply management and 58% would pay higher prices for dairy and poultry products if they needed to in order to maintain these industries in Canada.


Myth 5:

Canada blocks imports of dairy products.

Reality:

Unlike many other countries, Canada does not close the door to dairy and cheese imports. In fact, an estimated 8 to 10% of dairy products on Canadian shelves are already imported tariff-free. That’s Canada delivering on signed WTO commitments, something other countries have not done.

The EU has asked and received additional access to the Canadian market under the CETA deal. Another 18,500 tonnes of cheese will come in from Europe when the deal is fully implemented. This means that 9% of the cheese consumed in Canada will come from EU, up from the current generous access of 5%. The European Union (EU) currently imports only a modest number of Canadian dairy products, despite the fact that the EU is a market about 15 times the size of Canada.


Myth 6:

Supply management stops Canada from signing free trade agreements.

Reality:

All countries have sensitive sectors they wish to protect. Since 1994, Canada has negotiated 13 trade agreements with 53 countries while maintaining supply management including the recent Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which includes Canada and 10 other countries. Supply management has been one of many issues on the negotiating table of CETA or CTPP, but it has not stopped any of these agreements from being successfully completed.

Canada continues to pursue its trade agenda, including the ongoing NAFTA talks.


Myth 7:

Eliminating supply management would create free trade.

Reality:

Eliminating Canadian supply management would not discourage foreign governments from subsidizing their domestic agricultural sectors. In fact, farm subsidies are a pillar of both the US and European political systems.

Our farmers are paid based on what it costs to produce milk in the market and the system of supply management ensures the supply of local quality milk and dairy products is able to meet Canadian consumer demand.


The voice of Canadian Dairy Farmers

We support supply management because it works!

Learn more about proAction


Loading...