Canada’s Supply Management System Hurts Canadian Farmers Banned From Participating in the Supply Management Cartel – Ottawa’s defeat in dairy dispute with the U.S. could kill the cartel – January 8, 2022,
Let’s imagine for a moment that supply management in Canada didn’t exist? Which for many Canadians a of 2022 is hard to imagine, because you have to remember how large this cartel is. The Five national supply management organizations, the SM-5 Organizations include the Egg Farmers of Canada (EFC), Turkey Farmers of Canada (TFC), Chicken Farmers of Canada (CFC), the Canadian Hatching Egg Producers (CHEP) and the Ottawa-based Canadian Dairy Commission (CDC).
So yeah, I’m not exactly well versed in The Canadian Dairy Commission(CDC) which is an Ottawa-based Government of Canada Crown Corporation that plays the role of administrator, facilitator, and stakeholder in the public policy related to the Canadian dairy industry. What I do know is this a huge inefficiently run organization that strips options from the Canadian consumer.
If Canada’s supply management system was efficient, they’d welcome the competition from American producers, a reminder that the CDC has been in existence since 1966meaning it’s had over 50+ years to make itself competitive and more efficient. Why this post focus is about Farmers who can not participate in the Supply management cartel is because had those farmers been allowed to compete, chances are at the very least Canada’s supply management system would have been far more competitive and prepared for American competition.
What has Canada’s supply management system shaking in their boots is the same reason why it’s cheaper for Chinese and U.S vendors to use Canada Posts Parcel services than it is for Canadian vendors to use it. If a Canadian seller uses Canada Post, Canada Post considers the “economies of scale” model to a Canadian small business owner as a burden, that Canada Post must make up for by charging its Canadian customer a PREMIUM price.
The Canadian vendor is too small and insignificant and therefore Canada Post a FEDERAL CROWN CORPORATION charges the same Canadian voters that give it a monopoly a premium fee for daring to be a startup or small business? While granting Communist China and the United States special privileges. Now, as Canadian sellers know, dropshipping from the United States will equate to tariffs at the border whereas dropshipping from China is less likely to come with a tariff for a Canadian customer.
Why I bring Canada Post into this, is because there’s no incentive for Federal Crown Corporations to benefit Canadian small businesses. The same is true with the Canada Mortgage and Housing Corporation(CMHC) which is another Federal Crown Corporation that helps to provide mortgage insurance for Canadians who otherwise wouldn’t qualify for a mortgage with a PRIVATE bank. The CMHC has proven the most helpful for foreign investors, who see Canada’s housing market as shielded from collapse.
If the Canadian housing market crashes, the CMHC will lose a lot of money, so it’s pretty clear for most of us to see that the CMHC and the Bank of Canada(BoC) collude with each other to make sure the housing market in Canada benefits the best interests of CMHC. So although it appears on the surface that the Canadian Dairy Cartel was put in place to stop Americans from owning the Canadian market, the end result was Canada going to war with itself.
Now, of course, you can understand the paranoia of the cartel, to allow Canadians to compete, because what could have happened and I will acknowledge this is that maybe American companies start buying up Canadian land and start producing on Canadian soil? What’s wrong with that you argue? The answer is, that’s why we call it a cartel because supply management isn’t about the best interest of Canadians, these Canadian dairy cartels are actually special interest groups, that won the battle in Canadian courts.
The Federation of Quebec Maple Syrup Producers was formed around the same time in 1966 and they’ve been destructive not so much to the Americans wanting to sell Maple Syrup into Quebec, but they’ve been devastating to Quebec producers who can’t join the cartel. The end result is that members of the Federation of Quebec Maple Syrup Producers aren’t really competitive, they’re merely profitable via government decree, which prevents competitors from competing for their market share.
Government monopolies prevent innovation and a lack of innovation, equates to entities that benefit from Supply management, changing their spending and investing patterns. In most businesses, they have to prepare for all sorts of unsuspecting events, so most businesses will often look to innovation to help them become more efficient, this is one of the reasons why American farmers have so many dairy innovations that don’t even exist in Canada
Do American Farmers receive bailouts from the U.S government? Of course, they do, but those bailouts aren’t PERPETUAL, With the United States Postal Service as an example, it’s not a Crown Corporation, it gets bailed out by the U.S government because private COURIER businesses are far more efficient because Canada is a crown corporation, competing with Canada Post is ILLEGAL! So no private courier dare do it, Amazon, doesn’t even compete with Canada Post, you have to be a member of Amazon to benefit from its services.
There are dire consequences to government monopolies if an economy heads to depression because people who enjoy the benefits of a government monopoly have no idea how to compete in a free market economy. This is why the Dairy Cartel is fearful of Americans entering the Canadian dairy market. Zellers and a bunch of other Canadian retailers had no answer to Walmart, which now dominates the Canadian marketplace.
Why was Walmart so effective at beating Canadian retailers? Because competition in the American marketplace is fierce, it’s hard to have a monopoly in America, which is why up until the idiot Democrats looked to remake America into Europe, prices for things in America were extremely cheap compared to Canada.
Now in Canada, because we have all of these idiot socialists in charge, instead of the Canadian dollar being stronger than the U.S dollar, which would benefit Canadian producers and consumers, the powers that be suppress the Canadian dollar, so all of these Canadian government-sanctioned monopolies can be PROFITABLE.
When you have a smaller country, you want a STRONGER currency, the reason Canada has a weaker currency is that we have idiot laws like the minimum wage, too many federal, provincial and municipal welfare programs for me to mention in this post, Federal and Provincial Crown Corporations everywhere, universal health care, which again limits choice, CMHC which creates all sorts of malinvestment in the Canadian mortgage, leasing and rental markets, which also have provincial rent controls.
There’s so much government involvement in the Canadian marketplace that it becomes beneficial to Canada to debase the Loonie. Yes, depending on what region of the United States a person is living in, their cost of living might be higher than Canada’s because Canada has a federal government transfer payments system, which allows buffoonery like Dairy Cartels to be profitable when they probably wouldn’t be if consumers had the right of choice.
We don’t even know if The Federation of Quebec Maple Syrup Producers is profitable? Transfer payments take money from profitable provinces and give that money to the enjoyment of the public sectors of Canada’s unprofitable provinces. Meaning that being a Conservative politician in Canada is an oxymoron because if Alberta as a province is profitable, Quebec’s inefficient public sector will benefit via transfer payments.
In America at the very least the Republic Party fights back against transfer payments, in Canada, Transfer payments are the law, which again benefits supply management, because not only are they protected from competition, if let’s say a bunch of Canadians in have-not provinces find themselves on government welfare, transfer payments equate to Canadians on welfare being forced to buy diary products produced by the Canadian dairy cartel at INFLATED prices.
This obviously accelerates poverty and helps these monopolists, which again leads to a demand for more welfare spending. My position is quite consistent in that I say let’s end the welfare state, people keep bashing the rich, well, Canadians who contribute NOTHING to the Canadian economy have a better standard of living than most upper-middle-class people in third-world countries?
The real people dragging down Canadian society are these welfare leeches, whether it’s supply management, corporate or personal welfare, these socialist monopolies have created a Canada that has become heavily dependent on our world’s reserve currency status. A lot of these bad economic ideas only work because Canadians are forced to support them.
Anyway, what does this victory mean for Canada’s dairy cartel? I don’t know, my mind wonders towards Walmart, it will take a few years before U.S manufacturers figure out the Canadian market and what is likely to happen in my opinion is that to save costs, some U.S companies will want to be in Canada, and this is where things get ugly because the Dairy Cartel is actually at war with Canadian non-cartel-member producers.
Now, if the Canadian dairy cartel is losing market share to America and Canada’s independent dairy producers aren’t allowed to compete with the Canadian dairy cartel, the whole Canada Post scenario I pointed out earlier in this post will happen to the Canadian dairy cartel. It’s cheaper and more beneficial to ship things from China to Canada Posts Parcel service than it is to ship things within Canada using Canada Post. Yes I know there are ways around it, but this isn’t available to all Canadian businesses.
Canada Post has been very destructive to Canadian small businesses and consumers, and I suspect moving forward the CDC will be the most destructive force to Canadian dairy. Be aware, however, the way I write this post, won’t be the way the believers in supply management will frame their argument. They’ll most likely frame their arguments from a place of entitlement. Our higher cartel prices were justified because of “INSERT REASON HERE”
Interesting times ahead!