Question Period Note: Supply management - Dairy sector

• Canada's supply management sector, our farm families and their communities can continue to count on the full support of the Government of Canada.

COMPENSATION
• We are committed to providing support to producers and processors of supply managed products.
• Following our commitment in Budget 2019, we announced a total of $2 billion in compensation for dairy producers, with the first $345 million flowing in this year.

• Following the ratification of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP), Budget 2019 provides up to $3.9 billion to support supply-managed farmers:
o On August 16, 2019, 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.
o 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 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 Canada United States-Mexico Agreement (CUSMA).
• On November 30, 2018, Canada, United States and Mexico signed the CUSMA. Canada, the United States and Mexico will now move forward with their respective domestic procedures toward the ratification and implementation of the new trade agreement.
• The CUSMA includes a number of outcomes for Canada’s agriculture and agri-food sector, including among other things, (1) incremental market access for refined sugar and market access, (2) better rules of origin for margarine, (3) ambitious obligations affecting agricultural biotechnology, and (4) a modernized Committee on Agricultural Trade.
• As part of the balance of concessions, Canada agreed, among other things, to (1) provide incremental market access to the U.S. for dairy, poultry, and egg products, (2) eliminate current milk classes 6 and 7, (3) establish an export charge on skim milk powder, milk protein concentrate, and infant formula if exports exceed certain thresholds; and (4) allow U.S. grown wheat of varieties registered in Canada to receive an official Canadian grain grade.
• In statements released shortly after the signing of CUSMA, the Dairy Farmers of Canada (DFC) and the Dairy Processors Association of Canada (DPAC) released statements criticizing the deal, claiming that the transparency provisions of the deal relating to the supply managed sectors undermine Canadian sovereignty and the ability to manage Canada’s dairy sector without U.S. intervention.

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