Canadian Dairy Industry

There are many different view and opinions on how the the government should regulate different parts of the economy, especially the poultry and dairy industry. The Canadian governments current system establishes a production quota and price control in the dairy industry by tying the amount produced to the Canadian consumer demand. Foreign competition is also limited through high tariffs. This production quota results in an equitable outcome for Canadians because it creates a predictable income for farmers, consistent prices for consumers, protects Canadian jobs and eliminates the need for Government subsidies. Canadian poultry and dairy farmers are the big winners of Canada’s production quota system. The system guarantees them a predictable paycheck every year because the production quotas are tied to consumer demand, which is also predictable. Foreign imports of dairy, cheese, poultry and eggs face a high tariff. This form of protectionism limits competition and helps to keep farmer’s incomes high and consistent. The current pricing system also
These jobs contributed $19 billion to Canada’s GDP and contributed $3.6 billion in taxes. Without the tariffs imposed on imports, domestic production would surely collapse with the huge influx of much cheaper foreign dairy and poultry products. This would result in a wave of unemployment for farm workers and dairy and meat processers. Also, the government would lose a significant amount of tax revenue. Higher unemployment leads to lower consumer spending and a greater amount of people using social programs like employment insurance. It is in the interest of the Canadian people to keep government regulations on the dairy and poultry markets because without it job losses and lost tax revenue would lead to an outcome that is far from