Danielle Smith says pulling Alberta out of supply management is worth considering

OTTAWA — Canada’s dairy and poultry supply management regime could face a major challenge from within with Alberta Premier Danielle Smith saying she could consider the province exiting the quota system. Smith said at a town hall in Red Deer, Alta., that she found the idea of the province opting out of supply management intriguing. “(C)reating our own Alberta version of supply management, maybe as a pathway to a market system and maybe just because it would stick our finger in the eye of Quebec … might be (something) we want to do a little consultation on,” said Smith. Smith noted that Alberta’s share of the Canada-wide quotas for dairy and egg production allotted under supply management falls below its share of the population. Her comments came after one of the attendees, Lee Eddy, a resident of Red Deer County, said earlier in the evening that pulling out of the system would be one way for Alberta to grab the attention of Laurentian power brokers. The town hall was being held as part of Smith’s Alberta Next panel, struck to consider tactics for enhancing Alberta’s sovereignty. “If we really want to make the eastern politicians … change their underwear, we should remove our supply management from the Canadian system,” said Eddy. Quebec producers hold roughly 37 per cent of Canada’s total milk quota, with Ontario producers holding 32 per cent , according to Agriculture and Agri-Foods Canada. Producers in the two provinces have exerted considerable clout over politicians, given their concentration in certain ridings. Alberta producers hold just short of nine per cent, despite the province representing more than 11 per cent of the national population. Eddy suggested that Alberta move first to a transitional provincial quota system and eventually to a market-based system. Supply management has emerged as a major trade irritant with the U.S., further complicating already delicate cross-border trade negotiations. U.S. President Donald Trump singled out Canada’s restricted dairy market in a recent letter to Prime Minister Mark Carney, threatening to slap 35 per cent tariffs on all Canadian products on August 1. During the recent federal election, Carney promised to keep supply management “off the table” in new trade negotiations with the U.S.  Federal Conservative Leader Pierre Poilievre has also said he supports supply management . Sylvain Charlebois, director of the Agri-Foods Analytics Lab at Dalhousie University, says that Alberta’s relative lack of skin in the dairy-quota game gives it a freer hand to take on supply management. “I could potentially see Alberta become the quote-unquote ‘sh-t disturber’ that could actually get everyone, and politicians in particular, to think differently about supply management, instead of just (being) blindly supportive without knowing why,” said Charlebois. He noted that dairy farmers in Alberta benefit relatively little from the existing scheme, paying up to twice as much as farmers in Quebec and Ontario for the same share of quota. Charlebois said it was “absolutely possible” for Alberta to leave the federal system and set up its own dairy commission. But he said that provincial administration would come with its own challenges, such as selling Alberta dairy products elsewhere in Canada. “Would they consider other provinces to be foreign markets? It’s hard to say,” said Charlebois. Charlebois added that other provinces could also object to Alberta “dumping” less expensive, non-supply-managed products across provincial lines. Alberta’s milk marketing board couldn’t be reached for comment. Lawrence Herman, a lawyer and international trade expert based in Toronto, says that just because Alberta can unilaterally exit supply management doesn’t mean it should. “There isn’t anything that legally requires a province to participate,” said Herman. “However, the province couldn’t change the import limits and (tariff-rate quota) system, so it’s difficult to see how it would work.” “The better option is for the feds and the provinces to work together in phasing out the entire national (supply management) system,” he added. Supply management in Alberta sparked a minor controversy in April, when an egg farmer in the province was jailed in a quota dispute with the egg marketing board. Smith said in February that she’d asked her agricultural minister to “start (a) conversation” about potential Canada-U.S. trade concessions relating to supply management. The Red Deer town hall was the first of ten scheduled in-person events hosted by the Smith-chaired Alberta Next panel. Supply management is not one of the six formal topics put up for discussion by the panel. National Post rmohamed@postmedia.com

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