Quebec Premier Jean Charest says there's no way the Canadian government will give up the country's complex supply-management system in upcoming trade talks.
The protectionist system governing poultry, dairy and eggs creates higher prices for Canadian consumers and has drawn ire abroad, but it profits domestic farmers.
There is now speculation the Canadian government might come under pressure to dismantle the system in negotiations for a trans-Pacific trade zone.
Not so fast, Mr. Charest said Tuesday.
He says supply management has not been on the table during ongoing Canada-European Union trade talks, nor should it be during the upcoming Trans Pacific Partnership negotiations.
He says the place to have a broad conversation about agriculture programs is at the global level, at the World Trade Organization. He said the same applies to other countries' agriculture subsidies.
“The supply-management system is non-negotiable,” he told reporters, speaking about the trans-Pacific trade talks.
“We're in the middle of Canada-Europe negotiations and we've never thought in the Canada-Europe negotiations that Quebec, or Canada, would settle with Europe on an issue like this one.
“Because it is a global issue. It's at the World Trade Organization that this will be settled.”
The Premier's reaction offers only a hint of the potential political pushback and economic headaches involved in dismantling a multibillion-dollar system that affects every grocery store in the country, not to mention farming communities and well-connected industry groups.
Other countries have frequently been critical of Canada's agriculture barriers.
But Trade Minister Ed Fast says he's confident that Canada can negotiate a trade deal while also protecting supply management. The federal government announced Canada's participation in the trade talks last weekend after an Asia-Pacific summit in Honolulu.
“This past weekend at APEC we expressed formally our willingness to join the Trans Pacific Partnership. As we do in every trade negotiation, Canada will seek to defend and promote our specific interests in every sector of our economy, including supply management,” Mr. Fast told reporters in Ottawa.
But he deflected questions about whether Canada would walk away from the talks if supply management was at stake.
“I'm not going to speculate what the outcome of the negotiations will be. We're going to the table in good faith, bringing a high level of ambition to the table. And we would certainly expect the other partners to do the same,” he said.
“We've made it very clear that we will continue to defend Canada's system of supply management.”
The system, established four decades ago, is linked to higher prices in Canadian grocery stores.
Canadians pay two to three times more than world market prices for products like milk, butter, cheese and eggs, according to the Organization for Economic Co-operation and Development.
Last week, in the days leading up to the APEC summit in Honolulu, Mr. Fast and senior government officials signalled that they were lukewarm on joining the TPP.
Previously, the United States had stood in Canada's way, blocking Ottawa's access to the coveted negotiations because of Canada's insistence at protecting supply management.
But on Friday, senior U.S. officials publicly indicated that they would be open to Japan, Mexico and Canada joining the talks.
That indication led the federal government to send an official application to join the TPP on the weekend.
Mr. Fast said on Tuesday that Canada did not flip-flop on the TPP. Rather, officials were able to examine the most recent negotiating framework, and see that it was a good fit for Canada.
“The framework was released on Saturday. We reviewed that framework very carefully, as we always do when we go into free trade negotiations. And we determined that it is in Canada's best interest to now enter the Trans Pacific Partnership process,” Mr. Fast said.
“There was no change of mind.”
Echoing Prime Minister Stephen Harper’s comments on the weekend, Mr. Fast said Canada could work easily within the new framework and even exceed its demands.
However, the application to the TPP does not necessarily mean Canada is in. Ottawa will have to convince all nine of the existing members of the TPP – not just the United States – that Canada is worth including. And it's not clear whether supply management will survive those negotiations.