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Cheesemakers brush Swiss cave-aged Gruyere cheese in a cave in Kaltbach, near Lucerne October 22, 2008. (Michael Buholzer/Michael Buholzer/REUTERS)
Cheesemakers brush Swiss cave-aged Gruyere cheese in a cave in Kaltbach, near Lucerne October 22, 2008. (Michael Buholzer/Michael Buholzer/REUTERS)

Campbell Clark

It's time to question Canada's cheese prices Add to ...

Free the cheese! It’s one protest that should unite Canada’s big business and the 99 per cent. More varieties of cheese, and cheaper cheese, is a public good. Milk and chicken, too.

From the supermarket to trade talks, cheese is an issue. A hunk of it costs Canadians far more than Americans pay, and one reason is the quota system for dairy and poultry that’s also a sticking point in trade talks. It’s not just preventing trade-offs in talks with Europe, but the refusal to even talk about change that is keeping Canada out of talks toward a Pacific trade bloc.

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Japan is in the midst of an existential debate about joining those talks for the Trans-Pacific Partnership, largely because it means reconsidering heavy protections for rice. But talk is quiet here, and the Conservative government doesn’t want to debate dairy and poultry. They like trade agreements, but don’t mention the cheese.

The cost of cheese is one reason to ask questions. It may not rival the Occupy protests, but there is grumbling in grocery store aisles. On a Facebook page devoted to the price of cheese in Canada, one contributor protested: “Free the Cheese.”

Prices often seem high, but try shopping in the United States instead. Montreal-based cheese outfit Saputo Inc. speculated yesterday that Canadians are doing just that, crossing the border for dairy.

An Ottawa supermarket was selling two litres of milk yesterday for $2.99, while a roughly equivalent half-gallon at a Buffalo supermarket was $1.83 (all prices Cdn.)

Chicken breast was $8.23 a pound in Ottawa, $3.35 a pound in Buffalo. Parmesan in Buffalo ran from $6.10 a pound for domestic stuff to $15.29 for imports, while in Ottawa it ranged from $13.79 a pound for domestic to $22.42 per pound for imports. It’s not a scientific study, but it’s a sign.

In Canada, eggs, chicken and dairy aren’t sold like most goods. Farmers get a quota to produce so much. Competition is kept out. There’s a small quota for imports, but once it’s met, they face tariffs of more than 200 per cent. A $10 French cheese is hit with a $24.50 duty. Canadian dairy exports are restricted because they’re subsidized.

Dairy farmers say it works. U.S. prices are lower in part because their farmers get government payouts worth 31 cents per litre of milk, said dairy farmer Ron Versteeg, who is on the board of the Dairy Farmers of Ontario. Other countries have subsidies, too.

But Canadian milk prices are far above world prices, including places without subsidies. Mr. Versteeg argues allowing farmers to produce more milk would just pad profits for big dairy processors, not cut prices in the store.

“That’s a lie,” said Michael Hart, a Carleton University trade professor. “But in the world of agricultural economics, that’s a very common lie.” If it worked, we would forbid car imports and hand out quotas here, and forget choice or trade, he said. Dairy prices are high because competition is restricted, he added; if it wasn’t, transportation costs would allow most farmers to compete selling fluid milk, and cheese could be exported.

Dismantling supply management has been a political no-no because of votes in rural ridings in Ontario and Quebec. But dairy farmers have dwindled from more than 30,000 in 1999 to fewer than 13,000. Phasing out supply management would take years, and money, so it’s time to talk.

It’s already a trade issue. Ottawa hasn’t yet offered the EU a bigger cheese quota for more access to their beef and pork markets. At an Asia-Pacific summit this weekend, nine leaders including U.S. President Barack Obama will push the Trans-Pacific Partnership as a trade bloc, but Stephen Harper’s not among them because the ambition for the bloc is to eliminate all tariffs and subsidies, and Canada won’t discuss phasing out supply management.

Trade Minister Ed Fast, who stresses Asian trade, is in India to prod talks, but said yesterday Canada hasn’t decided if the TPP is in its interests. He wouldn’t say why. Don’t mention the cheese.

Campbell Clark writes on foreign affairs from Ottawa

Follow on Twitter: @camrclark

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