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

By: The Hon. Peter Harder

Share this post:

Hon. Peter Harder: Honourable senators, perhaps I’m out of fashion. I believe in moderation, not polarization; in pluralism, not populism; in climate action, not climate denial. I believe in experts, not slogans; in the rule of law, both domestic and international. I believe in politics of country and free trade, not politics of region and protectionism. So I come to this debate knowing how unfashionable it is to oppose Bill C-282.

As a reminder, this bill seeks to amend the Department of Foreign Affairs, Trade and Development Act. It would bar the Minister of Trade from concluding negotiations that open access to our supply-managed sector. It makes supply management non-negotiable.

As critic of this bill, I’d like to make a few key points. The first is that this bill isn’t about supply management. In the debate, we’ve heard emotional support for supply-managed farmers. We’ve heard about the benefits of supply management and why it should be protected.

If this were a substantive debate about supply management, we would have heard justification of why, in the year to July 2023, the cost of chicken rose 23.7%, far outpacing general food price increases that rose 7.8%, or we would have heard about the price of eggs, which have risen more than 22% in two years, or milk, which the Canadian Dairy Commission raised three times in the 12 months to February of last year, by a total of 13%.

There have been studies showing how supply management consistently keeps the costs of supply-managed goods above the rate of inflation, which affects the poorest of us the most.

This is why Senator Woo called supply management “regressive.” Yet, we have heard barely a word in speaking up for the consumers of these products — just emotion.

No one should dispute that Canada is a trading nation. We rely on trade. This is a vast country with a relatively low population. It’s also indisputable that Canada’s stature as a trading nation began after the advent of supply management in the early 1970s. Times change, and policies change in response. What has been described as a Soviet-style cartel system, supply management — it can be argued — appears to be antiquated when associated with our trading nation status.

The argument of “protecting the family farm” has also been raised, but what we haven’t heard is how the number of dairy producers has continued to dwindle after supply management was implemented.

In a 2017 report from the Canada West Foundation, they state:

In the 1970s, when supply management was brought in, there were approximately 145,000 dairy producers; according to Statistics Canada, there are now only about 9,000 — a staggering drop of more than 93%.

If it were a substantive debate about supply management, we would have heard not just the benefits but the hesitations and the outright criticisms as well. I would welcome and happily participate in such a debate. But this isn’t the time nor the bill for that, because Bill C-282 is not about supply management.

This brings me to my second point. Is supply management at such a risk that it requires legislative protection? The answer again is a resounding “no.” Here’s what Statistics Canada has to say on the issue: If we look at the cash receipts for dairy producers from 2010 to 2021, these were $5.5 billion in 2010, and these were $7.39 billion in 2021. This is an increase in revenue of 40%. The 2021 figure was after the so-called problematic trade agreements had been negotiated, namely the Canada-European Union Comprehensive Economic and Trade Agreement, or CETA; the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP; and the Canada-United States-Mexico Agreement, or CUSMA.

If we look at actual milk production from 2014 to 2021, there were 78 million hectolitres produced in 2014, and 95 million hectolitres produced in 2021. We’ve heard that supply management is at risk, but, according to these numbers, it’s flourishing.

Moreover, a decision from an expert panel convened under the auspices of CUSMA issued findings back in November that were very much in Canada’s favour. Canada celebrated what it is calling an absolute victory in its latest trade dispute with the United States over dairy imports.

This is the second dispute process, with the first having been a toss-up for both Canada and the United States.

In this second dispute, the United States triggered it to consider four issues: first, Canada’s exclusion of retailers from tariff rate quota eligibility; second, Canada’s use of different metrics to calculate the market share for its different categories of applicants, like processors, further processors or distributors; third, Canada’s requirement that importers demonstrate monthly activity in their markets for each of the 12 months of a specified period; and, fourth, Canada’s lack of a mechanism for returning and reallocating unused import permit volume in a timely and transparent manner so that importers fully use what’s available.

The second panel’s report found that Canada’s practices were consistent with the language in the trade deal, ensuring no further changes would have to be made on Canada’s part.

Colleagues, this is a process of transparent protection of the supply management sector. After this decision, I expect the language in the trade deal will be of utmost concern during the 2026 mandatory review of the CUSMA.

We have all heard the promise from the Prime Minister that no further access would be granted to the supply management sector. Obviously, this wasn’t a throwaway line, as the U.K. stepped away from trade negotiations with Canada in large measure over their lack of access to our supply-managed markets, especially as they relate to cheese. The U.K. is Canada’s third-largest trading partner. I fear that this is a premonition of things to come, yet it is another example of the steps that are being taken to protect supply management.

Finally, compensation in the billions is being given to supply-managed sectors because of the market loss created by the CETA, CPTPP and CUSMA. Tom Rosser, Assistant Deputy Minister for the Market and Industry Services Branch at the Department of Agriculture and Agri-Food Canada, stated the following at the House Standing Committee on International Trade hearings on Bill C-282:

The Government of Canada is also fully and fairly compensating producers and processors with supply-managed commodities who have lost market share under the three agreements. As announced this past November —

— that is November of 2022 —

— dairy, poultry and egg producers and processors are expected to share more than $1.7 billion in direct payments and investment programs in response to the impacts related to CUSMA. This is in addition to the over $3 billion in direct payments in investment programs for CETA and CPTPP. These programs will help drive innovation and growth in the supply-managed sectors.

The Government of Canada is investing north of $4.7 billion into supply-managed sectors — because of negotiated access to these free trade agreements — simply so the system doesn’t suffer. It is yet another layer of protection, and this time the protection is coming at the expense of the taxpayer. I won’t call this a bailout per se, but you can see why my mind is wandering here.

Now the consumer is paying twice for supply management — once on the inflated price of goods at the source, and once in taxpayer dollars to ensure supply management’s livelihood after negotiated agreements. I’d call this a double whammy.

So if this bill isn’t about supply management, and supply management isn’t at risk, what is this bill really about? Colleagues, this bill is all about politics — especially Quebec politics — and it is fuelled by one of the best lobbies in the country. It appears to be another case of an unrealistic public and an overpromising political class.

In recent years, supply management has enjoyed religious-like devotion. This is particularly true in the dairy sector where, you could say, it has become a sacred cow. We’ve seen unanimous resolutions in the National Assembly of Quebec and in the Parliament of Canada in support of this sector. Access to supply management in the three recent free trade agreements is seen as a threat to the system and its three pillars, so something more must be done to protect against this threat. Simple support for supply management through resolutions is no longer the acceptable political bar. You see, resolutions are easy to accept circumstantially, because they are non-binding. There was no real consequence to voting for such a motion at the time because it was a show of support for farmers, mostly from my province of Ontario and in Quebec, where most of the votes for re-election are found or sought after.

The minister and trade negotiators can certainly take a resolution vote into consideration, but they are ultimately able to move forward — to ensure the best result for all Canadians — without it. It’s a low-stakes vote unlike, say, a vote on a piece of legislation.

Then the Bloc Québécois introduced this bill in the other place as a shrewd political gesture of one-upmanship. All of a sudden, the stakes became much higher, and the previously inconsequential votes to resolutions meant something more. Do they remain consistent with their previous voting record, or vote against a system they claim to protect? The result is the bill we have before us, where there is a prohibition against the inclusion of supply-managed sectors in any future trade negotiations.

The sad reality is that the Bloc Québécois threat has been politically successful in seducing Conservative, NDP and Liberal support. Again, a minority Parliament does have its price.

But I suppose congratulations are also in order for the strong dairy lobby because they played no small part in this. It’s the same dairy lobby that is financed and operated on the backs of Canadians through supply-managed goods themselves — interesting. All of this is happening during a period of economic uncertainty, where Canadians are required to extend a dollar to purchase the bare essentials; where pocketbook issues and the economy are under the microscope; and where words such as “greedflation” are used to demonize grocery CEOs and others.

I understand why a majority of MPs voted for Bill C-282 — the 2025 election is looming — but it remains somewhat baffling that there is such a dogmatic determination to back supply management under the circumstances that we face. But this can be boiled down to sermon over substance.

Ryan Cardwell, a professor of agricultural economics at the University of Manitoba, also doesn’t put much stock in what elected officials have to say on supply management. He stated for The Canadian Press in March, “On one hand, they talk about food affordability, and (on) the other hand —”

The Hon. the Speaker: Honourable senators, it is now six o’clock and pursuant to rule 3-3(1), I am obliged to leave the chair until eight o’clock, when we will resume, unless it is your wish, honourable senators, to not see the clock.

Is it agreed to not see the clock?

Hon. Senators: Agreed.

Senator Harder: Let me resume:

On one hand, they talk about food affordability, and (on) the other hand, they have a government-sanctioned cartel in staple foods.

So, it’s talk. I don’t give it much credence.

I have certainly heard whispers from MPs, even some who have voted to pass the bill, asking the Senate to dispose of it quietly. I have an inkling others may have heard the same thing. Politics wins — Canada loses.

For all of these reasons, I believe that Bill C-282 is both reckless and dangerous and, if passed, will do significant harm to Canada’s interests. For Canada, foreign and trade policies are existential, and they need to be understood as such.

This recklessness is best expressed in a letter from luminaries — some of whom Senator Plett quoted, and I exclude myself from that list, although I signed it — including former ministers, deputy ministers, trade negotiators, entitled “Canadian Senators Should Not Approve Bill C-282.” I would like to read that letter in full:

As individuals who have devoted many years of public service and policy advocacy directed to negotiating beneficial international trade agreements and to assisting Canadian firms to develop international markets, we are profoundly concerned about how counterproductive Bill C-282 (Act to Amend the Department of Foreign Affairs Trade and Development Act) stands to be to Canada’s interests. We urge Senators not to approve the Bill.

We do not comprehend how the Bill will benefit Canada, nor the dairy sector which it is apparently designed to favour. The Bill includes serious and troubling provisions which we believe will be extremely damaging to Canada’s vital international trade and business interests, including those of the dairy sector. Correcting the deficiencies of the proposed Bill cannot be achieved through further amendment or redrafting. Rather, Senators should not approve the Bill, either as presented or in any other formulation seeking to deliver similar intents.

If passed into law, Bill C-282 would seriously handicap Canadian Governments and their trade negotiators to accommodate the give-and-take of future trade negotiations to open up new markets and secure valued access for Canadian products, services and investments. It should be added that, once negotiated, international trade agreements already require legislation to fully implement them, thereby providing the House and Senate with a critical role in the implementation of each agreement.

Additionally, rather than supporting Canadian dairy farmers, as seems the Bill’s and its proponents’ intent, any legislation that exempts the sector from all future trade negotiations and agreements could, counterproductively and detrimentally, end up making the dairy sector and supply management an explicit priority negotiating target for Canada’s trading partners — and therefore be an unwelcome target and stumbling block in critically important future negotiations, including notably, for example, when the renegotiated Canada-US-Mexico Free Trade Agreement (CUSMA) comes up for mandatory unanimous agreement to renew by all three parties before July 1, 2026, not to mention current negotiations with the United Kingdom among others.

Previous trade negotiations have respected the importance of Canada’s dairy sector and Canada’s supply management system, while also being able to gain access for a broad range of Canadian products, including agriculture and food products.

We count on Canadian Senators to understand how damaging Bill C-282 could be to the national interest and specifically as well to the dairy sector and therefore not to approve it.

That’s the end of the letter. It was signed by the following: Stewart Beck; Ian Burney; Donald Campbell; Thomas d’Aquino; Leonard Edwards; Martha Hall Findlay; Jonathan Fried; Robert Hage; myself; George Haynal; Lawrence Herman; Deanna Horton; Peter MacKay, former minister; John Manley, former deputy prime minister; John Tennant; John Treleaven; John Weekes; David Wright; and Robert Wright. Many of you will recognize some of these names, if not all.

If Bill C-282 makes it as far as committee, we will have an abundance of witnesses and experts to be called upon who are actually subject-matter experts, which is how we need to face this bill should it get to committee.

This letter is only bolstered by the many reports that have been written on the effects supply management would have on trade. One such report comes from the C.D. Howe Institute, where they state the supply management system hurts the interests of Canada as a trading nation by undercutting “. . . Canada’s potential role as a positive force in multilateral trade liberalization talks.”

It isn’t just bilateral trade at issue but multilateral agreements as well. The institute goes on to say:

. . . the need to maintain quantitative limits and prohibitive tariffs has neutralized Canada’s traditionally pro-liberalization stance in international trade negotiations, hampering our pursuit of other national interests. Even within Canada, the federal government’s devotion to these programs has inhibited it from supporting provincial initiatives to remove barriers.

Canada’s fierce protection of supply management at the federal level will hamper not only international trade agreements but also our internal domestic trade.

We are already seeing some omens coming to fruition that this letter and these reports prophesize. I have spoken about how the U.K. has stepped away from the negotiating table. When it comes to the CUSMA review in 2026, certain senior U.S. trade officials have already put supply management in their sights. After the CUSMA panel decision I spoke of earlier was announced, which found in Canada’s favour, Katherine Tai, the U.S. Trade Representative, issued a statement, and I would like to read it in part:

We will continue to work to address this issue with Canada, and we will not hesitate to use all available tools to enforce our trade agreements and ensure that U.S. workers, farmers, manufacturers, and exporters receive the full benefits of the USMCA.

The U.S. response did not stop there. The U.S. Secretary of Agriculture, Tom Vilsack, added the following:

We will continue to voice deep concerns about Canada’s system. We remain focused on securing the market access we believe Canada committed to under the USMCA and we will continue exploring all avenues available to achieve that goal.

Senators, these are representatives of the democratic Biden administration. Should the election later this year result in a different configuration, we should be very concerned about the CUSMA’s current standing. Supply management is enemy number one to our neighbours down south, and the panel ruling in Canada’s favour has only reconfirmed this stance. We duped them — as indicated by Senator Woo in his speech — and I expect they are not the type to bear a grudge easily.

Just don’t take it from me.

Our resident U.S. expert, who has dealt with the previous tumultuous U.S. administration, has commented on this issue. In a piece by John Ivison in the National Post, Senator Boehm said:

The Americans have consistently tried over the years to eliminate the trade impacts of Canada’s supply-management programs. They have not succeeded, but putting up legislation that they would see counter to their interests would have them raise the bargaining stakes. In fact, one could see a future in which, no matter who is in the White House after 2024, a U.S. president would only extend the CUSMA if supply management was terminated, given America First proclivities on both sides of the political aisle.

Thus says Senator Boehm.

Senators may not be surprised, but I am in full agreement with my colleague. This is the level of consideration that needs to be given to Bill C-282. This bill is like handing the United States a hand grenade, and passing it would be akin to pulling the pin.

I cannot say enough about Canada as a trading nation. A piece was authored by Juan Navarro and published on Open Canada, an online magazine published by the Canadian International Council. In it, he stresses:

. . . one in six jobs across Canada is supported by international trade. Consequently, shutting the door to negotiations in a specific sector, even one considered strategic or of national interest, is not the most conducive approach to facilitate greater participation of Canadian companies in export activities. . . .

He continues:

. . . Bill C-282 appears inconsistent with Canada’s role in guiding the international trade agenda alongside like-minded economies. Indeed, approving this bill can be perceived as a protectionist measure and a shift in Canada’s trade policy values, which up until now have been characterized by principles of openness, fairness, and sustainability.

I can’t see Bill C-282’s approach as anything but dichotomous to Canada’s trade values. Where Canada needs to rely more on trade liberalization, we are intensely protectionist of one sector of our economy as it stands. To further this protectionist approach using a departmental act is simply beyond the pale.

Moreover, the brief to the House International Trade Committee from the Canadian Cattle Association indicates that legislating this protection could have a precedent-setting effect. The cattlemen’s brief states that Bill C-282:

. . . sets a dangerous precedent that certain industries and sectors would have their trade interests protected through legislation. Further, this bill could see a domino effect around the globe with further protectionist actions from our trading partners. This risk is not worth the economic risk to Canada’s economic sectors that rely on trade and the broad interest of Canadians. Market access losses will be counterproductive to Canada’s wider economic interests.

The cattlemen go on to say, and this is important:

While many other countries have trade-sensitive sectors, we understand that no other country has chosen to legislate the work of their trade negotiators. Bill C-282 is unprecedented in terms of global trade principles.

Colleagues, this isn’t some mere scare tactic. This was verified by Aaron Fowler, Associate Assistant Deputy Minister at the Department of Foreign Affairs, Trade and Development. For context, Mr. Fowler was at the table for the Canada-United States-Mexico Agreement, or CUSMA, negotiations and told the committee:

Countries deploy a variety of tools and policies to protect and advance the interests of their agricultural sectors. In some cases this includes subsidization, and in some cases it’s tariff protection for the domestic market. When we negotiate with these countries we try to secure concessions from them that respond to interests that are brought to our attention by Canadian agri-food stakeholders and other stakeholders.

Canada currently deploys these types of tools and policies to protect and advance its interests, in this case with supply management. Mr. Fowler concludes this thought by saying:

It has been suggested that other countries have legislation in place that is similar to the bill that is before the committee. I must say that to the best of my knowledge, I am not aware of any Canadian trading partner that has a legislated prohibition on the negotiation in a specific area.

Beyond the negotiating realities this bill aggravates, we need to look internally, to our agriculture community itself. At a time when the community should be working in tandem to provide food security to Canada and elsewhere, we should not be giving reasons to divide the agriculture community itself. Unfortunately, that is exactly what this bill has done.

This is apparent when looking at the testimony given at the House committee: The industries that are supply managed love the bill and those that are not are opposing the bill. This shouldn’t be perpetuated.

There are two outcomes of barring any negotiations over supply-managed access. First, as was already discussed, it could have the effect of crashing negotiations completely, which is bad for all sectors.

Second, it encourages our trade partners to go after the other sectors more ferociously, such as other agricultural and agri-food products like canola, beef, pork and pulses, or beyond these to steel, aluminum or auto parts. With one item off the table, all other items become more heavily favoured in the negotiations.

How is this fair to them or to Canadians who want the best deal? It is hard for me to comprehend.

I now turn to the idea that since the House of Commons has spoken, we should follow suit. We have heard from proponents of Bill C-282 that it was not just the House but also party leaders who voted in favour of this bill, and that we must give some importance to this consideration. Senators, a leader of a party is still an elected MP who is as prone to, and often more prone to, considering the political weight of their decisions.

Politically speaking, it is clear why the party leaders voted in favour of this bill. It is the same for any MP. That still doesn’t make it good policy or require the Senate to adhere to this decision of the House. I, for one, don’t have a party leader and won’t be influenced by this argument.

Further, this is a private member’s bill. This is not government policy. This is not a government bill. There aren’t any Salisbury convention implications. I know that there are senators who are not sold on the Salisbury convention in any case, but for those who are, including myself, rest assured that it does not apply in the context of private members’ bills.

Senator Simons, during her debate on Bill C-282 — and indeed on Bill C-234, as she was quoting herself — said:

. . . private members’ bills require more thought and study, because they don’t always receive such scrutiny in the other place where partisan politics can play more of a factor than they sometimes do here. Just because a private member’s bill wins enough votes to pass in the other place doesn’t mean we should rubberstamp it here.

I align myself with every word of that statement. Indeed, this is the process that was carried out regarding Bill C-282. Not only does the House allow for quicker consideration and quicker passage of private members’ bills through their Standing Orders, but the committee consideration was, in my opinion, farcical. For a bill about trade sent to the International Trade Committee, there was an obvious lack of trade representatives or experts speaking to the trade implications of the bill.

Senator Simons also pointed out that “. . . it is not the job of the Senate to accept and pass private members’ bills without study and possible revision. . . .”

I would even be so bold as to go further and say that a private member’s bill as fatally flawed and beyond repair as Bill C-282 should not be accepted or passed — no study needed. A vote to send legislation to committee is a vote on a bill in principle. I’m in principle against this bill and believe it doesn’t deserve more consideration in our chamber.

Bill C-282 is a solution in search of a problem. It is not about supply management. It is political, plain and simple. Supply management is not at risk. Therefore, it is not in need of further protection. What is at risk is our negotiators’ ability to reach agreements on free trade beneficial to Canada and Canadians as a whole. We’re risking deals that create opportunity, choice and prosperity.

Sylvain Charlebois, Senior Director of the Agri-food Analytics Lab and professor in food distribution and policy at Dalhousie University, recently encapsulated much of my opinion on this matter in the following excerpt from the Toronto Sun. He says:

In essence, Bill C-282 represents a misguided initiative driven by farmer boards capitalizing on the ignorance of urban residents and politicians regarding rural realities. Embracing further protectionism will not only harm consumers yearning for more competition at the grocery store, but also impede the growth opportunities of various agricultural sectors striving to compete globally, and stifle the expansion prospects of non-agricultural sectors seeking increased market access.

Professor Charlebois is an expert on these issues. His knowledge was shared with the Senate Prosperity Action Group, which some of us may remember.

On that point, colleagues, I urge you to vote against Bill C-282 at second reading, so it cannot see the light at committee. The approach of putting politics before pragmatism that was taken in the elected chamber requires us to impart our duty as the appointed body of further reflection. It is in the national interest to do so now.

Throughout this debate, I was reminded of a familiar quote by H. L. Mencken, the great American journalist. It reads, “There is always a well-known solution to every human problem — neat, plausible, and wrong.”

Truer words have never been spoken. Thank you.

Some Hon. Senators: Hear, hear.

Share this post: