EXPLAINER: Bloc Wants Supply Management Bill Passed; Questions Arise Over Impact on Trade Talks
In exchange for backing the Liberals in non-confidence votes, the Bloc Québécois wants the federal government to pass legislation taking Canada's supply management system off the table in trade negotiations. Those opposed raise concerns that past experience shows the bill could remove a major bargaining chip for Ottawa, while those in favour say it's important for the protected industries.
For the Liberal government to prevent a successful non-confidence vote, it needs the support of the Bloc Québécois, which has given an Oct. 29 deadline for passing two private member's bills sponsored by two Bloc MPs.
Bill C-319 , currently in third reading in the House of Commons, would amend the Old Age Security (OAS) Act to give Canadians aged 65 to 74 the same 10 percent increase in OAS benefits previously granted to people aged 75 and over. It comes at the cost of over $3 billion per year, according to estimates by the Parliamentary Budget Officer.The second bill the Bloc demands the Liberals help pass, Bill C-282 , pertains to supply management and is in consideration in committee in the Senate. The bill would ensure that in international trade agreements, the foreign affairs minister cannot commit to increasing the tariff rate quota (allowing a set amount in at a low or zero rate of duty) on imported dairy, poultry, or eggs, or reduce tariffs on those products if they are imported in excess of the quota.Canada has a supply management system that coordinates production and demand relating to dairy, chicken, and turkey products and eggs while controlling imports as a way of setting stable prices for farmers and consumers. The system was created in 1972 in response to a situation of decreasing prices for the products. It imposes tariffs that can run as high as 300 percent in the case of butter.When Bloc MP Luc Thériault introduced Bill C-282 in June 2022, he said it would protect Canada's supply management system from "further dilution in future international trade negotiations." He said trade agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Canada-United States-Mexico Agreement (CUSMA) had negatively impacted Canada's agricultural sector, and that food producers and processors were still "assessing the scale of the damage" caused by the agreements.Bill C-282 was passed in the House of Commons with the support of 262 MPs out of 313 votes at third reading in June 2023. However, it has slowed down in the Senate, where it was examined by the Foreign Affairs and International Trade Committee on Sept. 25 and 26 this year. On Sept. 25, several senators raised concerns about the bill's impact on future trade negotiations, particularly given an upcoming CUSMA review in 2026. Independent Senator Marty Deacon said the legislation sounded "alarm bells" and questioned whether "this bill is good politics, but not good policy."Conservative Senator Micheal MacDonald asked whether Bill C-282 could limit the Canadian government's flexibility in trade negotiations and harm its international reputation.
Global Affairs Canada's Doug Forsyth said it would be "reasonable to expect" that the bill "could well limit our opportunity to maximize the overall commercial benefit" of new trade agreements.
"By starting to narrow the scope of the negotiation, your trading partner does that as well," said Forsyth, director general of the Market Access and Trade Controls Bureau.
"It really starts to narrow the scope of the negotiation. ... Would it provide positive commercial benefits for Canada across the board? I think the answer is no, and I think this is one of the risks that we face."
In the House of Commons, all Bloc, NDP, and Green MPs voted to pass the bill, as did all but two Liberal MPs. Out of the Conservative MPs voting, 56 voted in favour of the bill, while 49 opposed. The bill needs to be passed by the Senate before it can become law.Supply Management and Trade Agreements
Canadian agricultural groups are split on Bill C-282. The Dairy Farmers of Canada, Egg Farmers of Canada, Chicken Farmers of Canada, and Turkey Farmers of Canada have all unsurprisingly come out in support, saying the bill will "strengthen and protect Canada's essential system of supply management" while supporting thousands of Canadian jobs.Quebec's largest farm organization, the Union des producteurs agricoles, also welcomed the House of Commons approval of Bill C-282. President Martin Caron said it was a "historic day for all supply-managed producers" and that "a majority of MPs of all parties have recognized the importance to never make concessions during the next trade negotiations."However, the Canadian Agri-Food Trade Alliance (CAFTA) said the legislation will put Canada at a disadvantage during all future trade negotiations. "CAFTA found no other country in the world has legislation that prohibits its government from including specific commodities in negotiations," said CAFTA's president, Dan Darling.Sylvain Charlebois, senior director of the agri-food analytics lab at Dalhousie University, said Canada has already lost out on some trade agreements due to its supply management system. And Bill C-282 would further "impede the growth opportunities of various agricultural sectors striving to compete globally," he said in a commentary for the Frontier Centre for Public Policy.
Canada has previously faced difficulties in trade discussions due to its supply management system. In January 2024, the United Kingdom exited trade negotiations with Canada over the amount of tariff-free access UK cheese producers were to have to the Canadian market.In 2022, New Zealand accused Canada of limiting preferred-tariff-rate quotas for dairy products to protect its own dairy processors, violating obligations under the CPTPP. New Zealand said its dairy sector had lost $96 million in revenue from the Canadian market over three years due to Ottawa blocking access to New Zealand's dairy industry.In 2023, the dispute settlement panel sided with New Zealand, finding that its exporters couldn't use Canada's quotas and that Canada gave priority access to its own dairy processors.
In 2020, the United States accused Canada of unfairly limiting U.S. dairy producers' ability to sell to Canadian markets through its tariff rate quotas. In January 2022, a CUSMA panel sided with the Americans in the dispute.The ruling came even as U.S. officials had argued during 2018 CUSMA negotiations that the deal would give U.S. producers increased access to Canada's dairy market while limiting the American impact of Canada's supply management system for dairy and poultry products.At the time, the Canadian government ultimately gave the United States an expanded 3.6 percent market access to Canada's dairy market and eliminated competitive dairy classes. The government said farmers would receive compensation from the federal government because of the change.
