New NAFTA deal worries Quebec dairy farmers, politicians

A new trade deal between Canada, the United States and Mexico has finally been reached and will allow U.S. farmers to sell more in Canadian markets, a decision Quebec dairy farmers and politicians say they find troubling. 

The decision is part of the new North American Free Trade Agreement (NAFTA), which has been renamed the United States-Mexico-Canada Agreement (USMCA).

Granting greater access to Canadian markets came as a trade-off for maintaining Chapter 19 of the agreement, NAFTA's dispute resolution process.

"It's definitely going to hurt the Canadian dairy industry," said Marcel Groleau, president of Quebec's union of agricultural producers.

The exact percentage of the market extended to U.S. dairy producers, some of which are grappling with severe oversupply, was not immediately clear — but they will be granted between three and four per cent access to the Canadian market, which is heavily protected by a system of supply management.

That's about the same level of access Prime Minister Justin Trudeau gave up when he signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade deal with 10 Asia-Pacific countries earlier this year.

About 37 per cent of Canada's dairy cows are in Quebec, and 50 per cent of the dairy products in Canada come from Quebec. In its last three international trade deals — CETA with Europe, the CPTPP and now USMCA — the dairy market has been made increasingly accessible for international trade.

"It equals about 30 days per year of production that we're losing," Groleau said. "There will be enormous impacts for the Canadian dairy industry."

'Sacrificing' supply management

Some Quebec dairy farmers are more concerned with Canada's agreement to end Class 7 pricing, a system that cut the pricing of some Canadian-produced milk ingredients used to make cheese and yogurt last year. The coordinated price cut made the American products uncompetitive.

The amount of Canadian products of this kind that can be exported to the United States has also been limited, Groleau says.

"Every time we sacrifice supply management, we affect Quebec more than the other Canadian provinces," he said.

Supply management is a system that allows specific commodity sectors — dairy, poultry and eggs — to limit the supply of their products to what Canadians are expected to consume in order to ensure predictable, stable prices.

Peter Strebel, a dairy farmer in Saint-Blaise-sur-Richelieu and a member of the board of directors of Quebec's farmers' union (UPA), says the USMCA decision is concerning because it could have adverse effects within Canada.

"Now, the U.S. is telling us what we can do and can't do within our own borders," Strebel said. "It's not just dairy policy, it's the whole Canadian sovereignty that's at stake."

"It's real bad news for the Canadian dairy industry."

Little hope for fair compensation

Though compensation for the agriculture industry is part of the deal, some dairy farmers aren't hopeful they'll get their fair share.

"If we look at the compensation we received in the deal with Europe (CETA), it was totally insufficient," Groleau said. "Not all the producers were compensated, either."

Not all of the deal's details have been released.

Strebel said the package for CETA didn't even cover a year's loss.

"It was kind of a lottery, first come first serve," he said. "We'd rather have our money straight from market than government subsidies."

Politicians react

Quebec is in the midst of an election campaign, and the renegotiation of the agreement became an issue on the campaign trail.

Premier Philippe Couillard addressed the media Monday afternoon after taking part in a conference call with Trudeau and the other premiers.

Couillard said he expressed his profound disappointment in the agricultural aspects of the deal to the prime minister.

"The federal government opened a wide door to the United States, permitting an intrusion without precedent to the internal commercial politics of our country," he said.

Couillard said if he is elected tonight, he will look at all the options. On Twitter, he said he would continue to "stand firm beside our dairy producers."

Parti Québécois Leader Jean-Francois Lisée called the deal "the worst possible news for Quebec," in a post on Facebook. He said the federal government is trading Quebec's dairy industry for Ontario's automobile industry.

Québec Solidaire co-spokesperson Manon Massé also denounced the deal, saying Canada had put its interests above Quebec's needs.

"Once Quebec is independent, its agricultural producers and population will truly be defended," Massé said. 

Coalition Avenir Québec Leader François Legault, who said he spoke with Groleau earlier today, said the compromises that were made will hurt agricultural producers.

"Later, I'll speak with Philippe Couillard, and I want to look at all the options to defend our agricultural producers," he said.

Former Quebec premier Jean Charest said the outcome is exactly what he expected.

"There's a diminished impact of supply management because we're opening the markets more and more," Charest said on CBC Montreal Daybreak. 

He said Trudeau would have to deal with the decision as he goes into next year's election campaign.

"Most of our producers here in the [Eastern] Townships are in the dairy industry," he said. "They have a lot of political clout during the election campaign."

Trudeau might have to defend this as the best deal he could get for them and the rest of the country, Charest added.

With files from Radio-Canada and Gravel le matin