Supply management has become a hot topic in Canada ever since conservative leadership hopefuls started making it a point of argument during the leadership race, with Maxime Bernier proposing to abolish it completely.
It’s a pretty broad topic, but the basics are that production is met with consumption and imports and exports are taken into account in order to ensure that shortages and surpluses aren’t a problem.
Producers pay thousands of dollars for permits and quotas in order to be able to operate and those permits are limited.
So because permits are limited, that also means that supply is limited and some say that leads to higher prices.
That’s one side of the story, but others say that Canada’s pricing is competitive.
There are also duties imposed on foreign dairy products. It’s like a protectionist measure to keep foreign products out of the Canadian market.
There are also tariff rate quotas to factor in and when products being imported are over the limit, higher access commitment fees have to be paid.
Overall, anything the government has its hands in is bad news simply because it usually involves protectionist policy, which usually favours one entity over another and in the case of supply management, the consumer seems to be left out.
It means less choice for consumers because trade is limited and it means higher costs for consumers due to having to pay for common floor prices set by boards and farmers.