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People shop for milk at a grocery store in Toronto on Dec. 8, 2021.Christopher Katsarov/The Globe and Mail

Canada wants the world to believe that it’s committed to free trade. But when it comes to dairy imports, other countries are calling our bluff.

New Zealand is the latest trading partner to complain about fettered access to Canada’s dairy market, alleging that Ottawa is violating provisions of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

The Pacific island country’s grievance follows that of the U.S., which is pursuing its second such trade challenge of our dairy restrictions under the auspices of the United States-Mexico-Canada Agreement.

These dairy disputes are damaging Canada’s credibility as a free-trading nation, and the timing couldn’t be worse. Ottawa is busy negotiating bilateral trade agreements with other countries including Britain and India, but its protectionist dairy policies are under scrutiny like never before.

New Zealand reluctantly gets into trade dispute over Canadian dairy

Limited market access for foreign products is already proving to be a sore point with British officials, who have made it clear they’re eager to sell us more of their cheese. The truth is, most Canadians are more than willing to buy it if we can get a bargain – especially since domestic dairy prices are about to rise again.

That’s right, folks, the Canadian Dairy Commission has approved a second milk-price increase for this year to further coddle domestic producers.

Starting on Sept. 1, the CDC will raise the “farm gate” price that producers receive for their milk by roughly two cents per litre. That, of course, comes on top of a previous six-cents-a-litre hike that took effect this past February and set a new record in the process.

The CDC’s prices serve as reference points for provincial marketing boards. Those authorities then set milk prices in each province.

Still, the CDC estimates its impending price hike means the cost of milk that is used to make a range of dairy products for stores and restaurants will jump by an average of 2.5 per cent in September.

But the sticker shock for consumers is likely to be much worse. That’s because retail prices also reflect other costs, such as those for transportation and packaging.

“In making its decision, the CDC considered possible impacts of a price increase on consumers and demand,” its release states.

Ultimately, though, the CDC decided that it was more important to give dairy farmers, many of whom are wealthy rural residents of Quebec and Ontario, yet another revenue boost.

Talk about willful blindness. The consumer price of dairy products climbed by 7.9 per cent on a year-over-year basis in May. So obviously, ordinary Canadians should just suck it up to spare affluent business owners from the ravages of inflation.

After all, that’s the Canadian way.

No one should be surprised. Although the CDC is a Crown corporation, its governing board is currently comprised of two dairy farmers. So when their industry friends requested yet another increase for this year, the CDC was more than happy to oblige.

“Like all Canadians, dairy farmers are concerned with the sharp rise in inflation of late,” the Dairy Farmers of Canada said in a release.

“However, as we have noted previously, dairy farmers are not the cause of the unprecedented global economic turmoil plaguing all sectors of the economy, but have to adjust to the conditions like everyone else.”

Unfortunately, the industry is adjusting by reaching deeper in the pockets of every day Canadians who have no offset for inflation – with the CDC’s blessing, of course.

That brings us back to the increasing number of international challenges to our dairy policies. Brace yourselves: Trade tensions will get a whole lot worse if Bill C-282 gains traction in Parliament.

The private member’s bill, which is being sponsored by Bloc Québécois MP Luc Thériault, seeks to block federal negotiators from granting foreigners further access our protected dairy, egg and poultry markets in future trade deals.

Of course, the dairy lobby, which wields outsized power in Ottawa, can barely contain its glee.

Our federal legislators need to get their heads out of the sand. Ottawa’s defence of its protectionist dairy policies is no longer tenable.

Dairy-market protectionism is exposing Ottawa’s hypocrisy on free trade and depriving more than 38 million Canadians of the price benefits of true market competition.

Long before this wave of inflation, the Organization for Economic Co-operation and Development estimated supply management costs Canadian consumers billions every year. And a 2016 study by the Montreal Economic Institute found that supply management pushes up to 190,000 Canadians into poverty.

This isn’t our grandparents’ dairy industry – this is big business. It’s time for Ottawa to side with everyday Canadians over a small group of wealthy profiteers.

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