Brian Mulroney has been out of politics for more than two decades, but when he speaks, people generally take notice.
Such was the case when the former Conservative Prime Minister, pronounced that the time has come to end the protectionist regime that controls how dairy, eggs and chicken are priced and produced in Canada.
Unshackling these sectors would open up “enormous export potential,” particularly in fast-growing Asia, Mr. Mulroney pointed out in a keynote address to the GrowCanada agricultural conference in Ottawa last week.
“We should give some thought to the consideration of a careful, innovative and generous phase out of our supply managed programs for dairy and poultry,” he said in a speech that drew a standing ovation.
What’s remarkable here is that Mr. Mulroney is saying publicly what no sitting politician of significance anywhere in Canada dares – that maintaining supply management has become an economic anchor. The system costs consumers, stifles innovation and competition, and deprives the industry a share of the exploding global market for food protein.
Mr. Mulroney, still colourful and controversial at 75, is the most prominent political figure to challenge this sacred cow of Canadian public policy. Until now, that mantle was held by former MP and failed Liberal leadership candidate Martha Hall Findlay, who has written and spoken extensively about supply management since losing her seat in 2011.
Speaking out is political heresy. Many Conservative MPs grumble privately about supply management. But on the record, they and members of every other federal party stand as a monolithic block in defence of the status quo.
Last June, MPs from all parties voted unanimously to urge the government to “respect its promise” to shield the dairy industry from any fallout from the European free-trade deal. The vote had echoes of a similar 2005 motion, when 100 per cent of MPs similarly stood up in the Commons to express unwavering support for supply management in global trade talks.
In its most recent Throne speech in October, 2013, the Conservative government vowed to continue “supporting supply management.”
As Prime Minister, Mr. Mulroney similarly defended the system he now argues should go.
His about-face hints at an eventual shift in political orthodoxy – perhaps not immediately, but after next year’s federal election.
It is no secret that the U.S. and other partners in the Trans Pacific Partnership trade talks are pushing Canada hard to loosen its protectionist dairy and poultry policies. Doing so would bolster Canada’s case for concessions from the U.S. on government purchasing (Buy America), non-tariff barriers (country labelling for meat) and on agricultural export subsidies.
The tariff wall that protects supply management comes at a price – a cost paid in lost exports, and higher consumer prices. Every concession in trade talks has the potential to bring vastly larger gains in other areas of the economy.
Beyond its value as a trade bargaining chip, phasing out the regime would ultimately be good for the affected farm sectors as well, according to Mr. Mulroney. He pointed to Canada’s wine industry and New Zealand’s dairy industry as classic examples of once-protected industries that are now free-trade success stories.
Phasing out supply management would be disruptive for some, and initially costly to tax payers. The Conference Board of Canada estimated earlier this year that buying back production quota from the country’s dairy farmers alone would cost $3.6-billion to $4.7-billion.
But the biggest risks are political, as Mr. Mulroney, a Quebecker, knows well. The province is home to roughly half of the country’s roughly 12,000 dairy farms and political support for the industry is deeply entrenched.
Politicians in Ottawa, and the two main producing provinces – Quebec and Ontario – long ago made the calculation that there was little to be gained by even musing about a post-supply management world. Former Conservative Trade Minister David Emerson did that once in 2007 and was quickly silenced.
Mr. Mulroney likened the challenge to his own fight for Canada-U.S. free trade in the 1980s. Reform, he said, calls for bold leaders willing to endure short-term political risk for the sake of longer-term rewards – a not-so-subtle jab at Prime Minister Stephen Harper.
The risk of inaction is that Canada is left watching a global food revolution from the sidelines.Report Typo/Error