Second reading of Bill C-282, An Act to amend the Department of Foreign Affairs, Trade and Development Act (supply management)

By: The Hon. Diane Bellemare

Share this post:

Hon. Diane Bellemare: Colleagues, I would like to begin by acknowledging that I am delivering my remarks on the unceded territory of the Algonquin Anishinaabe people.

I rise today to speak in support of Bill C‑282, An Act to amend the Department of Foreign Affairs, Trade and Development Act (supply management) at second reading.

I don’t want to reiterate the arguments put forward by the bill’s sponsor, Senator Gerba, or by Senator Forest, because they ably explained why we have supply management and what it’s supposed to achieve.

I also know that the topic of dairy, egg and poultry supply management can be polarizing for many Canadians. Why should we pay more for imported cheese and eggs, milk and poultry? That’s certainly a legitimate question.

Many economists, including my husband, are against supply management, particularly if they like certain types of French cheese that we can’t get here.

I’m an economist too, but I don’t feel that economic theory is grounds for me to reject Canada’s system out of hand.

I don’t think I’m adequately informed to make definitive statements about supply management and the fact that its costs clearly outweigh the associated benefits. I think it’s a complex and highly regulated system, and I don’t think we should attack it unless we really know what we’re talking about.

In my speech, I will try to convince you that we need to vote in favour of Bill C‑282 quickly.

Why? Because this bill is not a vote on supply management, but on a matter of principle. The principle is this: Do we want to remove from the free trade negotiations institutional aspects that set us apart as a country, as in the case of Canadian cultural industries and our social programs?

I’m now getting to the substantive part of my speech.

Bill C‑282 is just a few lines long. It amends the Department of Foreign Affairs, Trade and Development Act so that the Minister of Foreign Affairs cannot make certain commitments on behalf of the government to increase the import of dairy products, eggs or poultry or reduce the tariffs.

In short, the bill prohibits the minister from negotiating, on behalf of the government, free trade agreements on the back of supply management.

Why is such an effort being made in support of supply management? It is simple: This system, based on controlling production, prices and imports, is complex and worth a lot of money, more than $36 billion — in fact, nearly $37 billion. I’ll come back to that.

If Canadians want to change this system, they can. I suggest they do so with transparent choices and decisions that are made in the context of a public debate.

At first glance, this supply management system works quite well and has proven effective in ensuring the stability of local supply for essential goods, which was its objective.

Tackling this issue indirectly through free trade negotiations lacks legitimacy because the stakes are high. The public policy choices made in the 1970s can really only be called into question in the context of other, fully informed public policy choices. As others before me have said, the supply management system was put in place in the 1970s in response to issues of overproduction that were driving down the prices of certain essential goods and threatening the viability of Canadian farms.

Before I go on, I’d like to share a little personal anecdote. Senator Cotter often prefaces an argument with a little personal anecdote that always manages to capture my attention. I’m drawing my inspiration from him.

My father was a taxi owner and driver for a long time, until I was 10. He was a professional driver and proud of it. He worked long hours and enjoyed being self-employed. That’s why he owned his own cab.

Then, as now, the taxi industry was heavily regulated and adhered to supply management principles. A person could not then, and cannot now, just hang out their shingle as a taxi driver. That was before Uber. Supply was strictly regulated by the availability of a limited number of taxi vehicle permits. My father bought a taxi permit that allowed him to operate a taxi in the city of Montreal. A taxi driver like my dad needed a driver’s licence, a vehicle and a taxi permit. The price of a taxi permit varied depending on the economy, but there was always a limited number of permits.

In the late 1950s and early 1960s, economic activity in Canada had slowed considerably, and my father, who was the breadwinner of the family, was having trouble covering the costs of his taxi and earning enough money to feed his family of four children. The cost of taxi permits was starting to drop. It was normal. There was less activity and things were more difficult. My father got the idea to sell his Montreal taxi permit before the price dropped too much and to buy a less expensive permit from a small neighbouring town so that he could continue to work long hours driving a cab and keep himself out of debt. I have very strong memories of those conversations because my mother was very concerned about that decision.

In the end, it took a long time for the taxi industry to recover from the recession in the early 1960s, and my father had to sell the second taxi permit and stop driving a taxi. Despite his long hours of work, he was unable to cover the costs of his business.

This period had a profound effect on me and helped me to better understand the workings of the taxi industry and the basis for supply management a little better. In this case, it was about controlling the service offering by issuing a limited number of taxi permits.

When I was doing my master’s at the University of Western Ontario, it helped me pass an exam, when most of my peers didn’t understand the question. Obviously, supply management is a complex issue.

You’re probably wondering what this has to do with Bill C‑282. The connection is simple. Farmers in the dairy, egg and poultry sectors also need to buy a permit to produce. These are basically production quotas. These production quotas are limited in number. When the government issued them in 1970 to limit production, they were distributed free of charge. Over time, as farms have changed hands, quotas have become more valuable. Today, quotas are traded monthly based on the price of supply and demand.

As such, farmers can’t simply decide to produce milk, eggs or poultry. They must first buy production quotas, much like taxis need a licence. For a medium-sized farm in Quebec, production quotas can be worth around $1.5 million. If I remember correctly, that’s for a farm with 64 cows. This $1.5-million investment for a production quota doesn’t take into account the value of the animals, the farm or the land.

That is why production quotas are considered financial assets. To indirectly undermine the supply management system through free trade agreements that open the market to imports is to gamble with the farming assets and financial arrangements of Canadian farms. It is an important aspect because the farmers go into debt to buy quotas.

Honourable colleagues, as Senator Gerba and Senator Forest explained so well, supply management of dairy products, eggs and poultry rests on three pillars: production quotas, price control and import control. It is clear that market liberalization through free trade agreements will have an impact on the price of products and on the value of the production quotas.

Supply management of the dairy, egg and poultry sectors is a complex system, especially because of the underlying regulation. This sector is very important to Canada.

According to a 2018 Library of Parliament study using 2017 data, the sector represents some 350,000 jobs, $29.6 billion in production and almost $7 billion in government revenue. There’s more, though. In 2017, the value of production quotas was almost $37 million. That is the total value of supply management, and that amount is spread out across all the provinces in all our senatorial divisions.

For example, in Ontario, quota value is $14 billion. In Quebec, it’s about $10 billion.

In the West — British Columbia, Alberta, Saskatchewan and Manitoba — it’s $11 billion in financial assets. In the Maritimes, it’s $2 billion. That’s nothing to sneeze at.

When we open the Canadian market to foreign producers that are heavily subsidized by their own governments, that disrupts our system. We don’t know how serious the unexpected consequences of that can be.

That’s why I support this bill, which prevents the Minister of Foreign Affairs from making concessions during free trade negotiations. The supply management system is too complex to be part of the back-and-forth of free trade negotiations. In my opinion, it is far too valuable.

For all these reasons, I will be voting in favour of the bill, and I invite you to do the same, regardless of your position on supply management.

As you know, the vote at second reading of a bill is on the principle of the bill. The question is, do we agree with the principle of this bill? Now, this legislation stems from the general principle that we don’t want to transform our institutions, whether cultural, social or economic. In this case, it is within the context of free trade agreements.

By the way, I’d like to remind everyone that this bill passed third reading in the other place and was supported by all four party leaders.

It doesn’t seem legitimate to me to vote against this bill at second reading.

Thank you. Meegwetch.

Share this post: