Senator Forest: Thank you.

All things considered, it’s hard to argue that there’s a level playing field for Davie workers, given that Davie itself is paying for its modernization with no help from Ottawa and that a lot of money went to Irving Shipbuilding.

Senator Forest: Thank you for the question.

I am very honoured to get a question from the sponsor of the bill. It is true that we have seen many countries do the same thing the United States is doing with sugar, for example. It has a supply management policy. It even implemented a subsidy for turning surplus stock into ethanol. Every country has the right to protect certain tariff lines, and many countries use that practice.

Hon. Éric Forest: Welcome to the Senate, minister. In April 2023, the injustice done to workers in the Quebec City area was redressed when the government announced that Davie would be added to the National Shipbuilding Strategy.

Of the $840 million announced to modernize the Davie shipyard, $519.2 million came from the Government of Quebec and $320 million came directly from Davie itself. Ottawa did not contribute a single penny. A spokesperson for Public Services and Procurement Canada was quoted in Le Journal de Montréal as saying:

 . . . all of the Government of Canada’s strategic partners in the National Shipbuilding Strategy (NSS) must self-finance the infrastructure investments required to establish the capacity to build the ships included in their work package.

However, on August 9, the government announced that it would be giving Irving Shipbuilding Inc. $463 million to expand and modify its shipyard.

Hon. Éric Forest: Minister, when it comes to the major challenge of renovating and converting federal government buildings, are the municipalities partners that you’re counting on to develop a strategy? The municipalities have an enormous responsibility when it comes to increasing the supply of affordable housing.

Hon. Éric Forest: Hon. colleagues, I wanted to rise to speak to Bill C-282 because I have concerns about the supply management system that governs milk, poultry and egg production in Canada.

[English]

It’s important to note that the bill, which was passed with the support of MPs from all political parties represented in the House of Commons, even received the backing of the Prime Minister, the leader of the official opposition and the ministers of International Trade and Agriculture. In itself, this is no mean feat.

[Translation]

The sheer scale of the support from the House of Commons and cabinet should be enough to convince us to send this bill to committee to be looked at closely.

Bill C-282 is fairly simple, after all. It amends the Department of Foreign Affairs, Trade and Development Act to add the protection of the supply management system to the minister’s responsibilities.

Bill C-282 adds supply management to the list of directions the minister must take into account in the conduct of foreign affairs, particularly regarding international trade, in order to increase the Government of Canada’s bargaining power at international negotiating tables.

As you know, supply management was weakened by three recent trade treaties. Despite promises to the contrary by successive governments, workers in supply-managed sectors were impacted by additional import quotas.

Some commentators claimed that this bill ties the hands of negotiators. I would argue that it provides a framework for their future mandates and ensures that parliamentarians and Canadians have a right to know what’s going on before their hands are tied.

Bill C-282 will make it so that negotiators can’t finalize agreements that involve supply management without Parliament’s approval.

Some legal experts, like our own ever-vigilant colleague, Senator Dupuis, have suggested that Bill C-282 may infringe on the Royal Prerogative, the idea being that the Crown must give explicit consent when giving up one of its prerogatives.

I don’t claim to be an expert on the Constitution or parliamentary law. That’s why I invite you to consult the research report that constitutional expert Patrick Taillon contributed to. It’s entitled Le consentement royal aux projets de loi touchant la prérogative royale sur les affaires étrangères, or Royal Consent for bills affecting the Royal Prerogative in matters of foreign affairs. He writes that the bill is compliant because it doesn’t prevent the minister or the executive from exercising their prerogative in matters of international trade. Rather, the bill creates parameters for this.

If the government wants to give something up, all it has to do is check with Parliament before committing itself. Trade agreements need parliamentary approval anyway.

There are several mechanisms in place to ensure that bills respect the prerogative of the Crown. However, at this stage, if the Prime Minister of Canada has given his consent and the government itself has not contested this fact, it would be inappropriate for the Senate to delay or block a bill that has been passed by the House of Commons, when it was supported by the head of the government, the leader of the official opposition and Parliament. Otherwise, this bill would not have made it to the Senate.

The next legitimate question is this: Why protect supply-managed products rather than other products like beef and forest products, for example?

It’s important to first recognize that supply-managed products are special because they’re essential to our food security and therefore must be protected from uncontrolled competition.

The supply management program was created in 1972 as a result of overproduction and market anarchy. The Canadian government gradually introduced this system to protect producers and consumers from excessive fluctuations in production and prices.

Note that Canadian processors support supply management because it has a positive effect on price and supply stability.

Furthermore, I also want to point out that giving one product differential treatment is not exactly out of the ordinary in international trade. We are already doing that for culture because we recognize that cultural products are not like other products.

Thanks to the leadership of Canada and France, the cultural industry has been exempted from international treaties, particularly through the WTO. Let’s not forget that the WTO allows member countries to protect a certain number of tariff lines. Every country can do that, and most do. It is a right.

It is necessary and worthwhile to note that the Americans have a supply management system for the sugar industry. In addition to controlling imports, production and pricing, they even set up a program for turning sugar into ethanol to use up surplus production and support their producers.

The example of American sugar clearly shows that products intended for export and those intended for the domestic market can coexist and be part of the same negotiating mandate.

Some agricultural sectors want to play the game of total market liberalization and try to compete with our neighbours by focusing on low-cost products. That is fine, but dairy, egg and poultry producers should also be able to protect their own marketing method. One industry should not take precedence over another.

Every time we talk about protecting supply management, we hear people in certain circles say that we should get rid of it and let competition play out.

This debate was recently revived at Canada’s Competition Summit in Ottawa, when some participants linked food inflation with supply management.

First of all, it is important to realize that food prices in supply‑managed sectors have evolved in the same manner as all other food products.

The consumer price index for dairy products, for example, rose more slowly than food products as a whole in Quebec over the past five years, increasing by 14.7% over five years, compared to 16.7% for food products as a whole.

Second, it is often argued that ending supply management would be good for consumers. The somewhat simplistic reasoning behind this argument is that opening up the Canadian market would benefit consumers because milk from the U.S., which is not subject to supply management and costs less to produce, would retail for a lower price.

It is important to note that even if consumers see higher prices for supply-managed products, the difference is not necessarily due to supply management.

A study by economist Daniel-Mercier Gouin comparing the retail price of milk in Toronto, Quebec City and Washington showed that the price of milk and cheese was similar in Quebec City and Washington, where there is no supply management, and a lot lower in Toronto, where there is a supply management system.

This seems to show that supply management has no significant impact on retail pricing. The profit margins all the way down the processing and distribution chain have a much bigger impact.

I urge you to resist the temptation to imagine that eliminating supply management would benefit consumers. You have to realize that, around the world, agriculture is supported either by consumers or by taxpayers.

Just look at the American model that is so dear to those who want to dismantle supply management. The Farm Bill adopted by Congress in 2018 allocated $867 billion over 10 years. The 2023 version is set to reach an astronomical $1.4 trillion over the next 10 years, including more than $221 billion to support commodities such as corn, wheat, soybeans and sugar, but also the dairy industry.

A study by business consultants at Grey, Clark, Shih and Associates estimated that the U.S. government provided US$22 billion in subsidies to the U.S. dairy sector in 2015 alone.

When people complain that the price of milk is unduly subsidized by Canadian consumers, I say: What about the support that American taxpayers provide when it comes to the price of American milk?

Since the complete elimination of direct production subsidies in the 1990s, Canadian dairy farmers have been proud to derive most of their income from the market. It’s a regulated market, to be sure, but one where producers’ prices are set transparently and with due consideration for farmers’ production costs, unlike certain subsidies that sometimes “reward” less efficient businesses.

Supply management deserves to be protected if only for its economic impact for this country.

Supply management accounts for $30.1 billion in GDP and 339,000 jobs across Canada. However, supply management in a country like Canada is also a matter of regional development and land use.

This is why supply management is particularly relevant to me. It’s an issue that’s close to my heart, since I’ve been working in regional development for over 45 years.

As you know, Canada and Quebec are vast lands with a relatively low population density. Land use is the cornerstone of regional economic development, and supply management helps in that regard because it allows dairy farmers to operate in most regions, whether in Saint-Hyacinthe, in Gaspé or in Abitibi.

Food processors pay a single price to farmers, which means that dairy, chicken, turkey and table egg farms don’t have to be close to processing plants and large consumer markets to be profitable.

That is how the supply management system contributes to regional development. Supply-managed producers employ local workers. They purchase local goods and services. They send their children to school, go to the post office, use the ATM and stop by the corner store, often helping to sustain these services in smaller communities.

Simply put, they are important actors in the regional socio-economic ecosystem.

[English]

To allow for the erosion of supply management is to weaken our regions.

In conclusion, I invite us to set aside our preconceived ideas. The debate is not about the relevance of supply management.

[Translation]

That is a red herring, because as long as our trading partners subsidize their agriculture, we’ll have to support our farmers one way or another to maintain our food sovereignty.

The real issue Bill C-282 raises is this: How should we respond to what producers and processors are asking of us? They have witnessed the erosion of supply management over the past 10 years, and they feel their government abandoned them and sacrificed them during the negotiations on the last three major agreements.

This is about economic nationalism in response to competition from some of our trading partners.

The point is this: The main goal of Bill C-282 is to clarify future negotiating mandates for our representatives and to ensure that Parliament has its say right from the start of trade agreement negotiations, which have a major impact on our regions.

Thank you. Meegwetch.