Canada’s iconic milk bag could soon face more competition from the American carton.
Driving the news: The federal government is considering changes to its dairy quota system that would allow more U.S. products to come into the country tariff-free, per the Globe and Mail.
- Prime Minister Carney has previously said dairy supply management is off the table in trade talks, but that commitment may not be so ironclad in the face of upcoming CUSMA negotiations.
Catch-up: Parliament passed a law in June that prevents the feds from allowing more tariff-free imports of foreign dairy, poultry, or eggs as part of trade talks. Still, that bill doesn’t stop Ottawa from adjusting its rules around the import licences that determine which products get sold in Canada.
- Currently, U.S. dairy producers can’t ship products straight to Canadian grocers. Instead, U.S. producers have to go through Canadian distributors and processors who get to decide what products can come in.
- U.S. producers argue that the system unfairly allows those Canadian distributors — who are often competitors — to keep out popular products that might cut into their market share.
Why it matters: The dairy industry is seen as one of Canada's biggest bargaining chips in renegotiating CUSMA. Ottawa could be willing to open it up to American competition if that’s what it takes to secure a better overall deal.—LA