We want their cheese on our pizza. They want to sell us their cheese. Why won’t Ottawa let this happy relationship be?
Canadian pizza producers have long tried to import economical American mozzarella, but were always blocked by Canada’s protectionist supply-management rules. Then they found a loophole: pizza topping kits containing both cheese and sliced pepperoni.
Last year, J Cheese Inc., of Oakville, Ont., went to the Canada Border Services Agency and obtained a ruling saying that these kits are prepared foodstuffs, not cheese, and thus were not subject to tariffs on cheese. The Canadian International Trade Tribunal declined to hear the case ruling that the Canadian dairy producers, who brought the appeal, had no standing.
Then the federal government stepped in and announced a retreat, seemingly under pressure from the government of Quebec – and the supply-management-protected dairy industry. On Nov. 22, André Bellavance, a Bloc Québécois MP, said in the House of Commons that the government had “betrayed” Quebec’s dairy farmers. Later the same day, Tim Uppal, the minister of state for multiculturalism (is it cheese or pepperoni that is multicultural?), tabled a motion to amend the Custom Tariffs Act, in effect revoking the food-preparation ruling. On Nov. 29, the motion took effect. The press secretary of Jim Flaherty, the Minister of Finance, says this was a “technical clarification,” closing a gap in which goods are packaged “solely to circumvent Canada’s tariff system.”
Meanwhile, the Canada-European Union free-trade agreement would double the quota of European cheese that can come into Canada. But last week, Quebec Premier Pauline Marois, who favours the agreement, said that she will nevertheless not table the agreement in the National Assembly, unless Prime Minister Stephen Harper offers compensation to – who else? – the province’s cheese producers.
These circumstances suggest that imported pizza kits – pizza kits! – have become caught in a tug-of-war between Ottawa and Quebec City. The federal government wants the agreement with Europe to go through. So does Quebec. Which means Ottawa’s got leverage on the issue of food-preparation packets. When the pizza-kit delivery man rings, Canada should let him in.
Editor’s note: An earlier version of this editorial said the Canadian International Trade Tribunal upheld a decision by the Canada Border Services Agency saying that pizza topping kits containing both American mozzarella (normally taxed with a tariff) and pepperoni were considered prepared foodstuffs and not cheese and were not subject to the normal tariffs on cheese. In fact, the CITT declined to hear the case ruling that the Canadian dairy producers, who brought the appeal, had no standing.