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Canada’s supply management system, which regulates dairy, egg, and poultry production to maintain high prices, is facing renewed scrutiny following a Fraser Institute report and U.S. President Trump’s recent trade criticisms.
The report argues that dismantling this system, as Australia did, could benefit Canadian consumers and farmers alike, while a Lethbridge-area egg farmer’s arrest underscores its restrictive nature.
In April, Henk Van Essen, a 61-year-old farmer near Lethbridge, Alberta, was jailed for civil contempt after selling eggs outside the Egg Farmers of Alberta’s quota system, which limits unregulated producers to 300 hens. Van Essen’s farm faced a court-ordered cull of up to 1,000 hens, highlighting the system’s barriers to small farmers, who must pay for hen quotas.
The Fraser Institute points to Australia’s dairy deregulation in the early 2000s as a model, where milk prices dropped 12 cents per litre post-reform, remaining stable with below-inflation increases. Australian farmers, supported by government transition programs, saw a 56% revenue increase and boosted exports by $3 billion, with exports now comprising over 30% of dairy production, compared to Canada’s less than 1%.
In contrast, Canada’s system imposes an 18% subsidy burden on taxpayers, far higher than Australia’s 6% or New Zealand’s 1%, both of which also eliminated supply management. The report notes that Canada’s quotas, valued at $37.5 billion in 2019, inflate consumer prices and restrict market entry, costing each citizen roughly $1,000.
Trump’s trade attacks, while often inaccurate, spotlight Canada’s protectionist policies, which face pressure from trading partners for reform. The Fraser Institute urges federal-provincial cooperation to phase out supply management, with Ottawa controlling import tariffs and provinces overseeing marketing boards that set minimum prices.
While politically challenging due to entrenched dairy lobbies, reform could mirror Australia’s success, strengthening farmers’ competitiveness and easing consumer costs.
Van Essen’s case, coupled with global examples, underscores the urgency for change, potentially turning Trump’s trade pressure into a catalyst for a fairer, more open agricultural market.