On May 27, DFC President Pierre Lampron and Vice-President David Wiens appeared before the House of Commons Standing Committee on Agriculture and Agri-Food as part of their Study of the Canadian Response to the COVID-19 Pandemic. This was the first opportunity for representatives from DFC to appear on the record before MPs since the crisis began.

In their presentation, Wiens and Lampron highlighted the key challenges dairy farmers have had to face in recent weeks, from fluctuations in consumption to workforce challenges at the retail, distribution and processing levels. They also touched on the significance of the Canada-United States-Mexico Agreement (CUSMA) coming into force on July 1. The presentation highlighted the extraordinary efforts and leadership of dairy farmers who have worked with partners throughout the supply chain to lessen the impacts of COVID-19 on the sector.

DFC highlighted how, thanks to supply management, the dairy sector was able to move quickly to mitigate the impacts of the COVID-19 crisis through reductions in production, storage programming through the Canadian Dairy Commission and other efforts to address market disruptions and shortages. This was contrasted with the situation in the U.S. and the E.U. where, in the absence of supply management, farmers were not well positioned to act quickly or collectively to respond to the crisis.

The presenters also noted how dairy farmers worked to support Canadians in need through food bank donations while reassuring the public about the safety and supply of Canadian milk.

They welcomed the recent increase to the CDC’s borrowing capacity from $300 million to $500 million, as the existing level of borrowing would not have provided the level of flexibility needed to respond should there be additional market shocks. They also noted the government’s moves to facilitate the entry of new temporary foreign workers into Canada during the pandemic while safeguarding public health, given that some of them work on dairy farms.

Although we have welcomed these announcements which will benefit the broader agricultural sector, some industries have been more severely affected than others and will require additional government support, such as processors in particular.

Despite the losses incurred by dairy farmers, DFC was not seeking financial support from government to address the impacts of COVID-19. Rather, DFC called on MPs to formalize the government’s previous commitments to compensate dairy farmers for the domestic dairy production that was given up in CETA, CPTPP and, most recently, with the early adoption of CUSMA. These agreements have eroded the supply management system – by 2026, 18% of our Canadian dairy production will have been transferred to imports coming from abroad. Unlike COVID-19, which created a market disruption, trade concessions mean Canadian product on the shelf being replaced by dairy from other countries.

The government has committed to a compensation package for CETA and CPTPP, with a balance of $1.75 billion to be delivered over eight years. Only $345 million has been made available under year one for the Dairy Direct Payment Program, which ended on March 31. DFC continues to request that the remaining seven years of full and fair compensation for CETA and CPTPP be delivered in the form of direct payments, but the government has yet to make a commitment in this regard.

“A big part of our market was ceded to foreign production, and that’s why we need this compensation and, like the first round of compensation, we are seeking it in direct payments,” Lampron said.

‘Every time there’s more access given, it weakens us’

“The losses that we will incur have been well documented, and they will be felt even sooner than we had anticipated,” Lampron said. “We were really hoping that CUSMA would take effect in August because that would align with the start of the dairy year, but these limits will be imposed on our exports, and our industry will have to adjust.”

“Part of what we’re really trying to emphasize here is that with supply management, we can handle things like downturns, although this was extreme – we have never experienced something like this, so that tested us to our limits,” Wiens said when asked about the impact of CUSMA on dairy farmers.

“But what supply management cannot do is to have the foundation continuously being undermined and whenever we allow further access to the Canadian dairy market, that is in fact what is happening. So every time there’s more access given, it weakens us, and then it makes it more difficult for us to withstand the kind of challenges that we’ve seen with the pandemic; that concerns us, that in the future it does make us a little bit weaker.”

MPs on the committee acknowledged dairy farmers’ outstanding efforts to support Canadians through donations and other measures.

Founded in 1934, Dairy Farmers of Canada (DFC) is the national organization which defends the interests of Canadian dairy farmers and strives to create favourable conditions for the Canadian dairy industry. Working in accordance with supply management principles, DFC promotes safe, high quality, sustainable and nutritious Canadian dairy products made from 100% Canadian milk through various marketing, nutrition, policy and lobbying initiatives. Driven by a strong sense of community and pride, DFC and Canadian dairy farmers actively support a number of local and national activities. Visit Dairy Farmers of Canada for more information.