According to food policy experts and economists, chicken prices could rise in Canada by between 20 per cent and 25 per cent over the next few months. This should serve as a huge red flag for policy makers in Ottawa, given that food bank visits are soaring, which is driving an increase in food insecurity.
Since 2019, food bank usage in Ontario, for example, has doubled, with more than two million Canadians using one in March of this year. And to add insult to injury, one of the starkest findings in the latest report on food bank usage shows that more employed Canadians are usingthem. Approximately 20 per cent of those who used a food bank reported that they were employed.
What makes the potential spike in chicken prices infuriating, beyond the human cost of families struggling to make ends meet, is the fact that supply management is supposed to make a scenario such as this impossible.
Supply management is an agricultural policy framework for dairy, poultry and eggs that dates back to the early 1970s. It operates through three main mechanisms: production quotas, import controls, and a cost-of-production formula. The system dictates how much each farmer can produce through quotas. The concept behind controlling supply in this way is for supply to meet demand without leading to surpluses or shortages, ensuring stable prices.
We know that supply management has failed to keep prices stable, and it is the major roadblock to help correct rapid food inflation, so why not get rid of it?
It is, of course, one of U.S. President Donald Trump’s major trade grievances with Canada, but it is also a serious trade irritant with Britain, the EU, New Zealand and potential trade partners in Asia. If we are serious about seeking new trade agreements abroad in response to Mr. Trump, we cannot let supply management act as a roadblock in perpetuity.
While all Canadians now know what tariffs are because of the backward economic views of Mr. Trump, most Canadians don’t know that, because of supply management, Canada has huge tariffs on imported chicken, milk, cheese, turkey and eggs.
Under the current system of supply management, a limited number of products from foreign markets can be imported at a lower tariff or zero tariff rate using a system of tariff rate quotas (TRQ).
The thresholds vary by product to product and by the trade deal governing the relationship between the exporting country and Canada, such as the United States-Mexico-Canada Agreement (USMCA), the Comprehensive Economic and Trade Agreement (CETA) with the EU, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Regardless of the trade deal in question, the TRQ limits are small and ensure that the Canadian market for these products is almost entirely Canadian. The tariffs for dairy can be as high as 241 per cent. Chicken tariffs on imports above the TRQ can reach 289 per cent, and on turkey imports, they are around 165 per cent. For egg and egg product imports above the TRQ limit, tariffs range between 150 per cent and 164 per cent.
If Mr. Trump’s musings about 10 per cent, 25 per cent and even 50-per-cent tariffs are irritating, well then, our tariffs because of supply management should be rage inducing.
Supply management, with chicken as an example, has failed to accurately meet supply with demand, and Canadians are looking down the barrel of rapid food inflation on a core staple in just a matter of months.
And what makes all of this worse is that, because of the tariffs built into supply management, we cannot economically import chicken to help increase supply and put downward pressure on prices.
And it’s not like there is a lack of chicken globally either. Poland, The Netherlands, the U.S., Germany and Belgium exported more than $7-billion in fresh chicken around the world in 2024. Those exporters would happily sell to Canadian consumers if their products weren’t made up to 289-per-cent more expensive through tariffs.
By getting rid of supply management, we could open up Canadian grocery stores to products from abroad, giving consumers more choice and lower prices, while making it easier to sign trade deals abroad as we reconsider our relationship with the U.S.
The time is now to seriously reconsider this backward policy, for the betterment of all Canadians.
Originally published here