Sometimes political parties and the governments and oppositions they form forget that they exist to improve and enhance the lives of the Canadians who vote for them. So it made me very happy to see the federal Conservatives pressuring the Liberal government to let us know what a carbon tax would cost the average Canadian household.
It’s nice to know that the opposition cares about government policy details and how much will be taken out of our wallets.
Or do they?
Conservative concern over the cost of the carbon tax has been overshadowed by the party’s strident support of policies that punch Canadians in the pocketbook almost every time we eat or try to feed our families. They reveal this through their support of supply management practices for poultry, eggs and dairy; so much so that the they removed Maxime Bernier from the shadow cabinet for daring to oppose this bad policy.
Supply management increases prices
The supply management practices implemented through marketing boards reduce the supply and significantly increase the prices for dairy products, chicken and eggs. Quotas limit the quantity produced in Canada and tariffs keep out imports. These are exactly the kind of practices we’re so opposed to when they’re threatened to be used against us.
Unless one is a practising vegan, it’s rare to find a meal that isn’t more expensive than it should be because of the inclusion of these products: eggs, yogurt or milk on cereal for breakfast, cheese on the burger or pizza for lunch, chicken for supper – you get the picture.
And this has been going on since the 1970s.
Why do we allow these harmful rules in what is otherwise largely a free-market economy? It hurts everyone who eats.
Who benefits? The producers of dairy, eggs and chicken. Unlike most other businesses, they get a guaranteed market. They can keep prices high. They don’t have to worry about competition. Nice for the almost 15,000 farmers who are so protected.
But Statistics Canada has just told us that Canada now has a population of more than 37 million. That means that more than 200,000 Canadians face inflated food bills for each subsidized farmer. No one has examined the cost to each Canadian household. But a quick estimate could be calculated by determining what we spend on poultry, eggs and dairy and how much less it would cost us if we paid American prices.
Apart from this basic blow to the consumer, supply management has other costs. Canada is a trading nation. Our economy is now under very serious threat should we lose access to our biggest trading partner, the United States, through changes to or even the loss of the North American Free Trade Agreement (NAFTA).
Our protectionist marketing boards and supply management policies are a major impediment to a successful trade agreement. Why should the U.S. not put barriers up against our products when we so effectively keep out some of theirs?
Canada’s best strategy for growing trade as a major component of our long-term economic well-being is to diversify our markets. We need to find customers around the world and not just in the U.S. We have a trade agreement with Europe but it was not easy to put in place because of marketing boards. Our negotiations for trade across the Pacific with its growing markets are hampered by the protectionist policies of our marketing boards.
Another price of monopoly suppliers is a lack of quality and variety. Unlike many parts of the world, the quality of our products meets basic health and safety standards. However, it doesn’t have to go beyond that. Take butter for example. To most Canadians, butter is butter and, apart from being too expensive, our butter is fine. However, many foodies, chefs and bakers find that Canadian butter is not up to making the flakey croissants and other specialty products enjoyed in countries with freer food markets and more choice.
Australia, NZ didn’t fear abandoning marketing boards
I’m not against the dairy and poultry farmers. I have great respect for them and I’m sure that they’re at least as good at what they do as their counterparts in the U.S. and elsewhere. When we finally get free trade in this industry, these producers will react like good business people and develop productivity, products and markets that will allow them to prosper.
That is what happened in Australia and New Zealand when agriculture protectionism was removed. That is what happened to Canada’s wine industry when it first felt competition with the Canada-U.S. free-trade agreement in the 1980s. We went from having Canadian wine that was either bad or unaffordable to having both reasonable prices and wines that won international prizes. Surely our poultry, egg and dairy producers will do at least as well as our vintners.
Protected industries form associations and speak to politicians with a single loud voice. It’s time for all Canadians to remind politicians that we’re aware of what we’re paying to subsidize a small number of farmers and we think of it every time we pick up groceries, order a pizza and vote.
Troy Media columnist Roslyn Kunin is a consulting economist and speaker.
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