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Domestic Trade Pact Could Threaten Supply Management

“We don’t have enough information to provide the level of comfort.”

– WALLY SMITH, DFC

Canada’s supply management groups are lobbying hard against wording in an interprovincial trade agreement which they fear could threaten their industries.

Dairy Farmers of Canada wants governments to plug possible loopholes in the agreement that might leave supply management open to domestic trade challenges.

Ottawa and the provinces are telling producers not to worry because the agreement does not affect supply management.

But producer groups say government reassurance isn’t good enough because the wording in the actual text is ambiguous.

“We don’t have enough information to provide the level of comfort,” said Wally Smith, DFC vice-president, during the Dairy Farmers of Manitoba annual meeting Dec. 3-4 in Winnipeg.

At issue is Chapter 9 of the recently revised federal-provincial Agreement on Internal Trade (AIT), which supposedly exempts supply management.

Section 902.2 of the chapter, revised by a trade ministers’ meeting in October, reads: “Nothing in this chapter shall be construed to prevent a party from adopting or maintaining measures pertaining to supply management systems regulated by federal and provincial governments and provincially regulated marketing boards.”

But the sentence ends by adding: “that are not technical measures.”

It’s that apparent exemption that has dairy, egg and poultry producers worried.

Technical measures in supply management includes such things as quota allocation, pricing and transportation. Regulating these core functions allows marketing boards to operate their systems, said David Wiens, DFM chairman.

“If that’s challengeable, that’s where our concern is.”

For if the AIT does not cover technical measures, someone could argue their existence violates the agreement, which could ultimately unravel the entire supply management system, said Wiens.

The agreement is only in principle so far. Some provinces, including Smith’s home province of British Columbia, have yet to sign it. Provincial and federal cabinets also have to formally ratify it.

Smith said federal lawyers insist the wording does not impinge upon marketing boards’ operations. But DFC’s lawyers are not so sure.

DFC is telling members to meet with provincial governments and get their legal interpretation of the wording.

It’s probably too late to have the agreement changed. But governments should either clarify the wording or add an interpretive text to it, said Smith.

The concern goes beyond supply management. Provincially regulated marketing boards for other commodities, such as potatoes and vegetables, feel they could also be impacted.

Smith said DFC feels the deal was signed in secret without consultation with agricultural groups, who now feel unsure if their industries are fully protected.

The federal Conservative government has repeatedly said it supports supply management. But DFC and other groups still want a bulletproof AIT instead of just vague assurances, said Smith.

“If government supports supply management, then I don’t think that they should continue to keep the information under wraps. We have not seen the legal opinion from government that would give us any comfort. They just continue to have closed doors as to what the impact of this can actually be.”

The Canadian Federation of Agriculture is also directing its members to demand that provinces not accept a text that could affect the ability to run effective marketing boards. [email protected]

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