Statement on Supply Management by Conservative Party Leadership Candidate Maxime Bernier


TUESDAY, MAY 31ST, 2016 


Good morning,

Since I announced my candidacy for the leadership of the Conservative Party, there is one question that I have been asked by almost every journalist, as well as by many Conservative members: “How do you reconcile your free-market principles with your support for supply management?”

There is of course no way to reconcile it. Supply management is a system based on keeping the prices of dairy, poultry and eggs artificially high through the control of production, the banning of imports and price fixing by bureaucrats. It is a government cartel. It is the opposite of free markets.

However, article 117 of the Conservative Party Policy Declaration affirms the party’s official support for supply management. As an MP and minister in a government that supported supply management, I was not in a position to question the party’s democratic decision, or cabinet solidarity. And so I went along with it, even though I had grave misgivings about it for all these years.

Today, I am running for the leadership of my party. I have said repeatedly that for conservative principles to win, we must defend them openly, with passion and conviction. I cannot defend supply management with passion and conviction. And I think we Conservatives are not credible when we talk about principles and then defend policies that squarely contradicts these principles.

Why should we change this system? Because it is inefficient and fundamentally unfair to Canadian consumers and to our farmers.

I understand that there are advantages to the supply management system. One is that in a world where agriculture is being subsidized everywhere, Canadian supply management production does not require any subsidies on the part of government.

However, it does require much larger subsidies placed on the backs of Canadian consumers 2.6 billion of dollars each year, by fixing prices above the world price and preventing competition from foreign imports. In order to protect 10% of farmers, we are forcing all Canadian families, especially those with children and low-income families, to pay hundreds of dollars more every year for dairy, eggs and poultry products. This system is fundamentally unfair to Canadian families.

Another advantage is that it provides stability for farmers, in terms of prices and quantity of production. But the flip side of this is that it doesn’t adapt to changes in demand and it discourages innovation and productivity. The current crisis in the dairy sector with diafiltered milk is just the latest illustration of what happens when a system is too inflexible.

Supply management is also unfair to the other 90% of farmers who cannot develop their export markets as much as they otherwise could. Canada has always focused, when negotiating trade agreements, on protecting those sectors covered by supply management instead of trying to open new markets for the other sectors.

In order to satisfy one small, but powerful lobby, we restrict the development of thousands of other farming businesses across the country, and prevent the creation of thousands of jobs in these other sectors.

Supply management is unfair to all those businesses in the food processing sector and food preparation sector like restaurants that are forced to pay more for basic products and are therefore less competitive.

Of course, we cannot simply abolish the system and abandon those farmers who have played by the rules imposed by successive governments and have invested in those production quotas. They must be properly compensated.

The best solution would be to follow the successful example of reform in Australia. There would be a multi-year phase-out of import barriers and elimination of the domestic quotas and price control system. A temporary levy on these products would be raised to compensate farmers for the value of their quota. After that transition period, we would have a free, open and fair system to all, with lower prices, innovation, and more growth in the whole agricultural sector.

For all these reasons, I think it is time to have a debate. I am respectfully asking the members of our party to reconsider their position on this issue. During the coming year, I will try to convince Conservative Party members, as well as my fellow leadership candidates, that we should adopt a new position. We should use the occasion of the leadership race to have a real debate on this issue instead of maintaining this taboo.

There are very powerful lobbies in the supply management sector. My own riding is among those with the largest number of farms under supply management in Canada. But political leadership is about tackling difficult issues, not avoiding them.

Two years ago, our former Prime Minister Brian Mulroney said it is time to consider ending the supply management system. He compared the challenge to his own fight for Canada-U.S. free trade in the 1980s. Reform, he said, calls for bold leaders willing to endure short-term political risk for the sake of longer-term rewards.

I am willing to take that risk, because I believe that this is the right thing to do for all Canadians and for the Canadian economy. Thank you.


Press release (Word .DOC)

Statement (Word .DOC)

Backgrounder (Word .DOC)