Moved second reading of Bill C-282, An Act to amend the Department of Foreign Affairs, Trade and Development Act (supply management).

She said: Honourable senators, I rise to speak to you today from the traditional unceded territory of the Anishinaabe Algonquin nation.

Honourable senators, it is a privilege for me to address you as the sponsor of Bill C-282, which seeks to amend the Department of Foreign Affairs, Trade and Development Act regarding supply management.

This bill has to do with a policy established in our country half a century ago, a policy that applies to all of our regions and that has served Canadians well. I am talking about supply management.

I salute the work of Luc Thériault, the member of Parliament for the riding of Montcalm and sponsor of Bill C-282.

I consulted several people and reflected carefully before agreeing to sponsor this bill in the Senate. I eventually agreed for three reasons.

First of all, it addresses the needs of Canadians in terms of the reliability and sustainability of our food supply and its implications, particularly in terms of health. It also addresses the needs of our farmers as the producers of this food supply. I will come back to that a little later.

Second, we need to take into account the effects of the changes that are forever transforming the vast sector of the farming economy. I’m thinking in particular of climate change, which is dramatically affecting global agricultural production. We must also take into account the notion — if not the obligation — to ensure food security. This obligation recently became political, and a prime example is India’s decision to ban rice exports in order to meet the needs of its own population, which stands at 1.4 billion. I would remind the chamber that India is the world’s leading rice exporter. Admittedly, these policies contradict the notion of an open market. They are based on different considerations and on other values that are embodied in the concept and reality of food security.

I would like to remind senators that we all need to condemn the disgraceful use of agricultural commodities as weapons of war in Russia’s current war on Ukraine. This disgraceful tactic is jeopardizing the already fragile food security of many African countries.

Third, my decision to sponsor this bill was also influenced by the considerable support that it received in the other place last June, with 262 yeas versus 51 nays. That means that almost 80% of members voted in favour of the bill, including the four party leaders. This solid support has already been expressed several times in the past. There have been many unanimous motions calling for the supply management system to be protected when trade agreements are being negotiated.

It is also important to mention that Bill C-282 represents the second attempt to draft legislation on this subject. In 2021, Bill C-216 died on the Order Paper after reaching second reading stage and being sent to committee. The motion was adopted with 250 yeas and 80 nays. I also want to take this opportunity to commend the work of Louis Plamondon, the member for Bécancour—Nicolet—Saurel, who sponsored that bill.

In preparing this intervention, I recalled a time, an episode in my life as a business owner, that I will share with you in this chamber. There was a time when I worked closely with shea butter producers from Burkina Faso. These valuable female partners provided me with the raw materials needed to manufacture a range of body care products in Canada.

We collaborated in a very transparent manner with women who had formed a producer cooperative. Our company paid them a fair and equitable price for the fruits of their labour. Thanks to the fair trade system that we implemented, they could easily meet their needs and those of their families. They sent their children to school. What’s more, they contributed to the local economy and supported the development of their communities. This collaboration also enabled them to acquire new skills and meet very strict quality standards. That is how we helped these women become the very first producers in the world to obtain organic certification for shea butter. That meant value added for their products, and the sale price per kilo more than doubled.

Essentially, Bill C-282 seeks to preserve a certain system, supply management, that provides Canada with a number of benefits comparable to those received, on a smaller scale, by these producers in Burkina Faso.

I acknowledge and respect the arguments of those in this chamber whose convictions on the issue of supply management differ from my own. However, I believe that food security for Canadians is a fundamental and unavoidable objective. I would even go so far as to say that it is one of our country’s values and obligations. In that sense, it is non-negotiable. Consequently, it must be afforded solid and lasting protection.

To that end, we must look very carefully at the food needs of Canadians and protect what needs protecting, considering today’s climate, economic and commercial ecosystems.

The issue of supply management goes far beyond economic and financial considerations alone. I agree that they are important, but they cannot replace the requirements of food safety and availability for Canadians, the sanitary quality of the food and the impact its production has on all of the land in our country in the rural regions. This production and protection contributes to land occupancy, to the viability and prosperity of the communities that occupy that land, and to the maintenance of private and public services within them.

What’s more, supply management gives our country tools to ensure stability, predictability and good levels of investment in research and development in agriculture and agri-food, which are major economic sectors. In an era when severe climate change is unfortunately disrupting agricultural production around the world, supply management guarantees Canadians a secure supply of essential food items, the quality of which is verified and verifiable.

Supply management is not broadly known or understood, yet it has been at the heart of our agricultural production system for over 50 years. It seeks to regulate the price of three essential products: eggs, including hatching eggs, dairy products and poultry.

These three supply-managed sectors account for nearly 350,000 jobs, contribute up to $30 billion to Canada’s GDP and generate $7 billion in tax revenue. More specifically, supply management accounts for 125,000 jobs in Ontario, 115,000 in Quebec, 90,000 in the Western provinces and 20,000 in the Atlantic provinces. That makes it a truly Canada-wide system, as I mentioned earlier.

Supply management is built on three pillars. The first is efficient management of supply.

In the case of dairy products, for example, research on consumer demand is conducted regularly and is used to allocate production quotas, which the Canadian Dairy Commission distributes amongst the provinces. Provincial authorities then sell them to their respective producers.

The second pillar is price control. A floor price and a ceiling price are set, and prices can move freely within this range.

The third pillar is import control. By setting appropriate tariffs, the system regulates the quantity of the products concerned crossing our borders. This three-pronged approach to supply management is both simple and effective. This system has many benefits for Canadians.

The first of these benefits concerns agricultural producers themselves. With this policy, producers receive guaranteed, fair and equitable compensation for their work. Reliable compensation protects their businesses and enables them to invest in applied research. Furthermore, it makes it possible for them to invest in very expensive modern equipment, which relies heavily on digital technology and is likely to rely on artificial intelligence in the future.

Finally, it encourages investment in governance in this area according to private sector or cooperative sector standards.

Without these capabilities, our agricultural sector would be in real trouble because of the EU’s agricultural policy and its three generously funded programs: the European agricultural fund for rural development, the European agricultural guarantee fund and a program to compensate farmers for green agricultural practices. According to a recent study by Le Devoir, nearly 3,000 French farms have already received payments through the program, which was launched just two years ago.

According to France’s national strategic plan for the upcoming common agricultural policy 2023-27, 90% of medium and large businesses get subsidies that make up 21% of their revenue, and at least half of them would be in the red without that support.

Left to its own devices, our agricultural sector would also be threatened by the agricultural policy of our great neighbour to the south, which, according to the OECD, has “continued strong support for farm incomes.”

In both of these economic powerhouses, agriculture is protected, highly subsidized and fully protected from risk. Does it make sense for Canada to compete with those two giants on food production?

I would add that our supply management policy undoubtedly costs us less than our neighbour’s agricultural policies or those of the 27 EU countries, let alone China and India.

Another major advantage of our supply management policy is that it enables our producers to establish a strong presence in Canada and, as noted earlier, to ensure the sustainability and prosperity of our regions. Our regions greatly benefit from this source of employment, which contributes to regional vitality and economic activity. Conversely, when farm operations shut down, it has a major impact on the regions, particularly those that are far from our urban centres.

If supply management were to be done away with, it is estimated that 80,000 jobs would be directly at risk. The health of our farms goes hand in hand with regional development. The two are inextricably linked.

The COVID-19 health crisis made it clear that the offshoring of agricultural production is a major problem. It exposed dependencies that we were completely unaware of. It highlighted the urgent need to build resilient local supply chains around essential common goods, such as health, education, transportation, communications and food security.

Supply management protects us by making our most essential food items subject to our own rules and controls, particularly food safety controls.

In poultry farming, for example, the industry has implemented a food safety program called “Raised by a Canadian Farmer.” This program is now mandatory in all the provinces, and 100% of chicken farmers are certified. Supply management ensures not only that our products are of good quality, but also that they meet our animal husbandry and welfare standards.

Furthermore, by bringing our producers closer to consumers, supply management helps us meet our ecological objectives. In fact, shortening our supply chains is an inexpensive and effective way of reducing our greenhouse gas emissions.

According to a recent report from the United Nations Food and Agriculture Organization, the supply chain is becoming one of the largest contributors to greenhouse gas emissions from the agri-food system in many countries. Of the 16.5 billion tonnes of GHG emissions due to global agri-food systems in 2019, 5.8 billion tonnes came from supply chain processes. Clearly, supply management contributes significantly to our efforts to combat global warming.

By preserving Canada’s farms, supply management is helping to preserve a valuable agricultural ecosystem that is undergoing profound change. Over the past 20 years, our country has lost the equivalent of seven farms a day.

This shift primarily affects farms that are not supply managed, and the result is that farmland ownership is being concentrated in the hands of major conglomerates. This threatens the family farm model in Canada. Between 2001 and 2021, the number of farms in Canada dropped by 23%, but active farms have grown in size from an average of 274 hectares in 2001 to 327 in 2021. Our neighbours to the south are experiencing the same phenomenon, only more dramatically. Canada still has 22 egg farms, but the United States has only a handful. A single one of them would be able to meet Quebec’s entire demand.

This concentration phenomenon is undermining supply management.

Having such diverse farms in our country is a major asset. In addition to ensuring the occupation and development of our territory, as I said earlier, it protects Canada’s supply from all kinds of adverse events. The latest of these was avian flu, which had a significant impact in the United States, driving price hikes. In contrast, the diversity of our farms protected Canadian consumers.

Clearly, supply management is good for consumers.

By keeping prices fair for the entire value chain, the system gives Canadians a guarantee that their supply is protected from shortages. The system also shelters them from significant and untimely price fluctuations. In an unregulated market, prices are volatile by nature, not least because of extreme weather phenomena that are occurring more and more frequently because of climate change.

Thanks to supply management, producers do not have to rely on government support programs or subsidies to survive. In that context, supply management can be seen as a sort of insurance policy for consumers. Not only does it contribute to protecting the work of farmers and producers by giving them stable incomes, but it also ensures consumers get a stable supply. It is a win-win partnership.

Like the majority of the senators in this chamber, I am unquestionably very much in favour of a market economy. However, I believe that we must take into account the context and the specific characteristics of certain essential fields that need to be protected and kept safe from adverse disruptions. Despite the clear and tangible benefits supply management offers our country, it is constantly under threat.

To the question of why we should include supply management in legislation, I would answer that recent free trade agreements have successively damaged this mechanism. They have progressively weakened it. Whether we’re talking about the Comprehensive and Progressive Trans-Pacific Partnership, CPTPP, the Comprehensive Economic and Trade Agreement, CETA, or the Canada-United States-Mexico Agreement, CUSMA, they have all chipped away at the supply management system.

For example, CETA allowed the import quota for European cheeses to be increased to 16,000 tonnes per year. As a result, small Canadian producers have seen their position greatly weakened. In particular, this has led to a drop in their cheese production and, in turn, a decline in milk producer sales. Furthermore, CUSMA provided additional access to the Canadian market equivalent to nearly 4%.

It is true that the producers who were affected were eligible for government compensation to make up for these breaches in the supply management system. However, this compensation proved to be not only insufficient, but also very expensive for Canadian taxpayers. For example, $250 million of public money has been spent to offset the losses incurred under CETA by the dairy sector alone. Since the supply management system works so well without taxpayers’ money, why dismantle it and then subsidize the producers who are affected? It just doesn’t make sense.

Honourable senators, Bill C-282 is about protecting the supply management system. It is very simple. The bill amends section 10 of the Department of Foreign Affairs, Trade and Development Act to safeguard the system by making it a ministerial responsibility. It adds supply management to the list of directives that the minister must adhere to in conducting Canada’s external affairs, specifically during free trade agreement negotiations. The minister responsible for international trade won’t be able to do anything that would hurt supply management. It can no longer be used as a bargaining chip. Taking supply management off the table in international negotiations will preserve it forever.

Some of our partners around the world were unable to defend their equivalent of our supply management system, and they are paying a heavy price for it today. For example, Australia abandoned this system in the 2000s, profoundly altering the landscape of the country’s dairy industry. Its farms were forced to undergo a transition. Farmers fought hard to compete with international prices for milk but were unsuccessful. The price that Australian farmers were getting per litre of milk was below the world average. In 20 years, from 2000 to 2020, the number of dairy farmers dropped from 22,000 to less than 6,000, which is a massive decrease. Since then, exports continue to fall, while imports continue to rise.

A growing share of the Australian dairy processing industry is ending up in the hands of foreign businesses. In the European Union, the end of the common framework signalled the start of industrial management of milk production. France has discovered that it is very difficult to promote and encourage small-scale markets and local producers. Between 2000 and 2010, 35% of the dairy farms in the Picardie region in northern France disappeared.

Honourable senators, supply management is like a shield. It protects Canadians from shortages and sudden price swings. It fights global warming by shortening supply chains. It ensures a decent income for our dairy, egg and poultry producers. It protects our regions from social and economic desertification and safeguards tens of thousands of jobs. Finally, it guarantees healthy, high-quality food on our plates.

Colleagues, we are at a crossroads, and the following questions should guide your decision. How do we want to treat our farmers? Do we want competitiveness at all costs or a resilient, sustainable and local ecosystem? How do we want to feed Canadians? How do we want our livestock to be raised? What role do we want our food sovereignty to play? These crucial questions are at the heart of our supply management policy.

When I began working with the women from Burkina Faso I mentioned earlier, I immediately saw the virtuous circle that had been created. If developing countries have benefited from this approach to trade, so too can developed countries like Canada. I’m convinced that Canada can take advantage of reasonable, regulated free trade, which will preserve its reputation as a responsible trading nation, while fully maintaining its supply management policy.

In closing, I just want to mention that, before this bill was introduced in the House of Commons, it underwent an external legal review, which confirmed that it did not infringe on the privileges of the Crown. As a result, I would ask you to vote in favour of sending Bill C-282 to committee as quickly as possible so that we can provide sober second thought, a process that I hope will be quick and have a positive outcome.

Thank you for your attention.

I want to begin by commending my colleague for her speech. She did her homework and it is very impressive. She has some really good arguments. My instinct as a senator from Quebec and the son of a dairy farmer who comes from a rural area is to support the bill. However, if I put on my economist hat, I must admit that this bill makes me somewhat uneasy. I will no doubt ask you to convince me of some of your arguments in committee. The first thing that makes me uneasy about this bill is that it ties the Government of Quebec’s hands in the negotiation process.

You’re saying that Canadian taxpayers don’t subsidize this program, but the truth is that they pay more for their litre of milk and their dozen eggs than their neighbours south of the border do, and they have not been protected from inflation. The price of a dozen eggs went up by 16% in 2022, and the price of a litre of milk went up by 13%. The supply management system protects dairy farmers, but what do you have to say to Canadian consumers who are indirectly subsidizing our producers but were not protected from price hikes last year?

Thank you for your question, dear colleague. I’ll start by commenting on your statement about hands are tied and subsidies being given indirectly.

Nobody is being subsidized, and prices are very transparent. Producers set them in advance and disclose them well in advance. These prices have zero impact on inflation, and they are fair, set in advance and agreed to by all producers.

As I said in my speech, this system is not unique to Canada. Similar systems exist in all countries, and the WTO encourages states to protect certain essential sectors.

Therefore, my answer to your question is that we do not pay indirectly. We do not provide subsidies that cost taxpayers dearly. As in other countries, dairy producers disclose their prices well in advance. I hope I have answered your question.

Thank you.

Thank you, senator, for your question. With respect to how other sectors might react, I think the government needs to respond on a case-by-case basis. We can’t just use one sector to help others. The priority must be to help and meet the needs of consumers, the needs of Canadians. If a sector requires government support, it’s up to that sector to demand it from the government. No sector should always have to pay to support other sectors.

Thank you for your presentation, Senator Gerba. You quickly mentioned at the end of your speech that a legal opinion had concluded that your bill did not infringe on the prerogative of the Crown. Can you tell us more about the nature of that document? Is it a public document or a study that was tabled at the House of Commons committee? Is it a document senators have access to?

Thank you for your question, honourable senator. Yes, it is a public document. It’s an independent study that was done during the first incarnation of this bill, and it’s publicly available.

Thank you, senator, for a very informative speech; it was wonderful. My question is to help gather a bit of clarification.

You mentioned that we’re losing seven farms on average in Canada every day. There is no doubt that supply management is essential to the sustainability of those sectors that you talked about. What about the other farms — even some of the ones under supply management — that are at risk because of other factors? How will the committee take that into consideration? Do you anticipate that will be raised at committee?

Thank you for your question, senator. I’ll start by clarifying that I’m not a supply management expert. What I’m focusing on is Canadians’ needs and their food security and food sovereignty. Therefore, if other sectors need protection, I believe the government is entitled to put them forward. I think we need to be guided by the knowledge that this bill is for Canadians because it involves their food security.