Question Period Note: COMPENSATION FOR DAIRY, POULTRY AND EGG SECTORS

How will the Government of Canada compensate the supply managed sectors for losses from recent trade agreements?

1. Our message is clear – the Government of Canada strongly supports supply management.

2. In Budget 2019, we announced up to $3.9 billion to support eligible dairy, poultry and egg producers.

3. In August, we announced a total of $2 billion in compensation for dairy producers, including $345 million this fiscal year. Many farmers will receive payments this month.

The Comprehensive Economic and Trade Agreement (CETA) came into force on September 21, 2017, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) came into force on December 30, 2018 and, the Canada-United States-Mexico Agreement (CUSMA) was signed on November 30, 2018. The trade agreements offer significant opportunities for the Canadian agriculture and agri-food sector, while creating some challenges due to new market access for supply managed dairy, poultry, and egg products.

Working groups
Following the signing of the CUSMA, Government has created working groups with representatives from supply-managed industries.
The Dairy Mitigation Working Group and the Poultry and Egg Working Group have concluded, and their recommendations have been shared with the Minister of Agriculture and Agri-Food.

The Dairy Strategic Working Group has met twice. Work remains ongoing.
Budget Commitment:

In Budget 2019, the Government of Canada made a commitment to support farmers in the supply managed sectors following ratifications of new trade agreements. Budget 2019 proposed up to $3.9 billion in support for supply-managed farmers. Support will be offered to sustain the incomes of eligible dairy, poultry, and egg farmers, by making available up to $2.4 billion. Of this amount, $250 million has already been provided to support dairy farmers as a result of the CETA.

Assistance will also be offered to protect the value of investments made by farmers in supply-managed sectors, through a Quota Value Guarantee Program that will protect against reduction in quota value when quota is sold. $1.5 billion has been set aside for this demand-driven program.

Current Status:

On August 16, 2019, further details of the Budget 2019 commitments were announced, covering $1.75 billion over eight years for Canada’s dairy farmers, in addition to the previously announced $250 million Dairy Farm Investment Program for a total of $2 billion in federal support to dairy producers.
Of this amount, $345 million will be paid in the first year, in the form of direct payments and will benefit all dairy producers in proportion to their quota held. The program is administered by the Canadian Dairy Commission (CDC) and AAFC. Payments will help dairy producers adapt to the CPTPP and CETA market conditions by replacing foregone income, increase producer confidence in the future of the supply management system, and provide producers with the opportunity to make investments in their operations. Details of the remaining funds will be determined in consultation with stakeholders.
A registered producer will receive a payment in proportion to the quota they hold. To determine individual payments, the program budget of $345 million will be divided according to the provincial shares of the national production quota as of August 31, 2019. Producers will be given the option to receive their payment before the end of calendar year 2019 or before March 31, 2020.

As of November 29, the CDC had received 1,700 producer registration forms.

The Government will continue to work in partnership with supply management stakeholders to address the impacts on the poultry and egg sector, and dairy, poultry and egg processing, as well as potential future impacts of the CUSMA.

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