Dairy farmers to be compensated by time trade deal comes into force, Freeland says

Foreign Affairs Minister Chrystia Freeland says Canadian dairy farmers will be compensated for losses under a new trade deal negotiated by Canada, the U.S. and Mexico by the time the agreement takes effect.

"By the time it enters into force, our dairy farmers can be very, very confident that they will have fair compensation," Freeland told CBC Radio's Metro Morning on Tuesday. 

Freeland said compensation for farmers is "justified" because the deal, known as the United States-Mexico-Canada Agreement (USMCA), gives the U.S. access to Canada's dairy market.

"I want to start by saying to dairy farmers that compensation is justified. And compensation will be full and fair. We are doing the calculations now. It's going to be fair and the key thing is we have some time."

The deal, which replaces NAFTA, still has to be signed by leaders of all three countries and must be ratified by their respective governments. It grants U.S. milk producers access to 3.6 per cent of the Canadian domestic market.

"That was one of the central elements which was necessary for the deal to come together," she said.

Farmers are disappointed in how the deal will affect their industry, according to Graham Lloyd, CEO of Dairy Farmers of Ontario, an industry group that represents more than 3,500 dairy farms. 

"They're obviously concerned about the continuing erosion of our marketplace and the true loss of revenue and income," he said.

Ontario Premier Doug Ford called for compensation on Monday, saying farmers need the support of the federal government because access to their market was a concession in negotiations. 

"If our farmers are being abandoned because of one-sided concessions from the federal government, they must take immediate action to support the families and livelihoods that are now at risk," Ford said in a tweet.

The new deal also imposes unprecedented export controls and ends a dairy ingredient pricing system that was helping dairy processors compete without using cheap American imports. 

Freeland said she "agonized over a lot" in negotiations, including the dairy concession, but the deal is good news for Canada.

"With this deal, we have secured our continued access to the largest market in the world and to the market that accounts for around 70 per cent of our exports," she said. "That is a big deal."

'Deal I was happy to get'

Freeland said she agreed with Prime Minister Justin Trudeau that "no deal is better than a bad deal," but was relieved that the agreement keeps Chapter 19, a dispute-settlement mechanism of the original NAFTA, and the cultural exemption, which she said helps Canada maintain its identity.

Chapter 19 allows companies to request arbitration if they feel their products have been unfairly hit with anti-dumping or countervailing duties. 

"It's the deal that I was happy to get," she said. "It secures what we have."

The deal has elements that are better than NAFTA, she said.

For example, Freeland said the deal gets rid of the ISDS, the investor state dispute settlement mechanism between Canada and the U.S., which she said allows foreign companies to sue the Canadian government.

She said she considers that provision of the original NAFTA to be a "serious breach of our sovereignty." The provision cost Canada millions of dollars, she said.

"I felt throughout this negotiation truly a sacred trust," she said.

Farmers are meeting with the Ontario premier on Tuesday to talk about the impact of the deal on dairy, egg and turkey operations.