Canada. We have a real problem : r/CostcoCanada - "There’s no fraud. Their egg, chicken, and dairy monopolies are openly supported by the government and as we know that makes it “legal”. They even pretend it’s good for consumers."
"It is good for consumers. It’s good for farmers too: lest we slide into capitalistic farming (like America) that destroys small farms, the land and gives little regard for what it is they provide as long as it’s cheap for them and fast. I’ll take subsidized farming over hyper capitalism any day."
Canada. We have a real problem : r/CostcoCanada - "You are mistaken friend. The lobbyists sell you that it is good for us. It is not. It has been proven time and time again that these protections are terrible, companies won’t innovate and get lazy, we get high prices for mediocre products. Australia went through this and found the courage to get rid of the protections. They are now happy they did. Check out their story it is very interesting and eye opening."
"I don’t need innovation in milk or eggs. I need it in manufacturing, healthcare and infrastructure. These agricultural companies do innovate, they still have competition, stop licking capitalist boots."
"You may not but society does. It’s not about capitalism, it is about competition and the lack of it creates what we have now. We pay more for less. Innovation is important."
When you can just blame "greedy grocers", you can let agricultural cartels make bank and pretend that it's good for consumers and continue pretending that everything that sucks in your life is due to "capitalism"
William Watson: Margaret Thatcher would diss our supply-side politics - "Thanksgiving Monday is Thatcher’s 100th birthday (she died in 2013). If there were any justice, the British would declare it a day of thanksgiving, too, for Thatcher rescued their economy — for a time at least — from the slow death of democratic socialist planning. She was probably the most powerful and important female figure of her time, though since her views were so pro-market and anti what wasn’t yet called identity politics, you won’t hear that from our public broadcaster. You probably will hear a lot about “supply side economics” — a phrase that in fact occurs only three times in Charles Moore’s three-volume authorized biography of Thatcher, a single-volume centenary version of which is being released to coincide with Monday’s anniversary. It was not a term she used often. In her mind it had to do with what she regarded as fiscally irresponsible tax-slashing. She did eventually lower taxes but she cut deficits first. The supply side was at the heart of her philosophy, however, as it is for anyone who takes economics seriously. These days, as we’ll probably hear a lot over the next week, “supply side economics” is regarded as a fusty ideological relic of 1980s culture. But it’s not that. It’s a simple statement of timeless fact: people respond to incentives. If you over-tax and over-regulate suppliers, they will cease supplying. Treat businesses as cash cows and vehicles for social engineering and business people will go elsewhere or do other things. A new century hasn’t brought a new version of human nature. In this country we pursue, not supply side economics, but supply side politics. From defence, tech and artificial intelligence to steel and aluminum, supplier groups line up for favours from governments. Sometimes what they get is more government’s idea — as with the Trudeau government’s expensive obsession with electric vehicles and the batteries that go into them (see Michael Nitefor’s article on Ottawa’s “field of EV dreams”). Other times the producers are clearly in charge, as with the dairy industry’s longtime management of Central Canadian politicians of both parties. But whoever is calling the shots, competition and consumer interests suffer. Dairy’s influence is really quite extraordinary, given its size. The latest Statistics Canada data on agricultural employment say the industry employed 31,326 people in 2023. That’s certainly a respectable number. It would almost fill Calgary’s McMahon Stadium or Regina’s Mosaic, though not Toronto’s SkyDome. But it’s only one in nine agricultural workers. And it’s less than two-thirds the number of grain and oilseed farmers. If dairy farmers were being treated the way canola growers are — left to the mercies of Chinese retaliatory tariffs so Ottawa can tariff the life out of EV imports — can you imagine the hell there would be to pay? The number of dairy and milk workers is almost exactly the same as the number working in “fruit and tree nut farming” (31,061). It’s less than in “vegetable and melon farming” (34,887) and less than half the number in “greenhouse, nursery and floriculture” (63,690). As we try to get the best possible trade deal for the country, all these other types of farming are on the table. But not dairy farmers. What is it about cows that gives dairy farmers such power politically? Cows are sacred to Hindus, yes, but we’re not in India, Toto. True, in addition to those who work in dairy on the farm, 28,412 more work in “dairy product manufacturing,” according to Statistics Canada data on employment by industry, averaged from 2022-24. But that’s just one in 630 — 630! — of all the Canadians (17.9 million of us) who worked in the more than 400 industries tracked by Statistics Canada. Dairy was just behind people working in “heritage institutions” (29,124) and just ahead of “social advocacy organizations” (27,649), another disproportionately pampered group. But almost 300 different industries employed more people than manufacturing milk and dairy did. Publishing was 80,997, dentists’ offices 120,535, insurance carriers 162,765."
It's not just dairy farmers, but those in Quebec, so
YOU SAID IT: Supply management must stay - "I got a call at 5:10 a.m. the other morning from the dairy farmer next door, who said something wasn’t working. I am saying this to show you the average day a dairy farmer puts in is unlike any other. They work seven days a week all year long and never get a single day off, regardless of sickness or even death in the family. But, hey, let’s get rid of supply management, which ensures a good income for the farmer and his family, all to save a few bucks at the grocery store. I guess the food inspection agency that also increases the price of food should go as well. Then we can allow our family farms to be lost and replaced with products mostly from the U.S.A. But the single biggest reason I would not dismantle the dairy industry is I am sick and tired of Donald Trump winning every battle he decides to pick with us, and, yes, at this point I would cut my nose off to spite my face."
"Have these people who complain taken the time to figure out the effect it will have? A large number of jobs lost as dairies and trucking companies close down. Hundreds of farmers who can’t pay their property taxes. And, like all things, once Donald Trump gets a hold of it, there will be new tariffs. You can’t replace what you give up. But they are willing to support the Americans. Don’t like it, move."
When you're ignorant about how much dairy farmers earn from gouging consumers and openly proclaim that you want to cut off your nose to spite your face just to spite the US
Weird. We used to be told that criticising one's country was the most patriotic thing one could do. But if it threatens the left wing agenda, you need to shut up or move
Clearly, to stop US dairy products from being sold in Canada, dairy products from the rest of the world need to be banned
Canada can eliminate supply management by following Australia's lead - "Canada’s policy of supply management means that Canadians pay much higher prices for staple foods such as milk, cheese, eggs and poultry. These higher prices are enforced in two ways. First, the amount of domestic production is limited by government regulation. And second, imports face stiff penalties (tariffs), making them markedly more expensive than domestically-produced substitutes. The tariffs range from 168 per cent for eggs to almost 300 per cent for butter. Crucially, the higher prices on agricultural staples disproportionately hurt lower-income families across Canada, who spend a much higher share of their household income on food than families with higher incomes. However, the increasing trade tension caused by Canada’s supply management presents an opportunity for Canada to phase-out a policy it should have eliminated years—if not decades—ago. And Australia provides a real world, working example. In 2000, Australia dismantled agricultural subsidies that had protected the dairy industry since the 1920s. For most of the 20th century, successive governments stabilized the supply and price of milk, butter and cheese through protectionist policies and subsidies, which, like in Canada, meant higher prices for consumers and less-efficient farms. A series of policy reforms starting in the 1980s addressed some of these issues and in 2000 the industry was deregulated. State Marketing Authorities, which had been responsible for setting prices and managing supply, were abolished along with the premium paid for drinking milk. Alongside these reforms, the Australian federal government introduced a package of measures worth more than AUD$2 billion by a temporary levy on the reduced price of milk, to assist farmers with the transition. Put simply, the opening of the dairy market was not abrupt but rather introduced systematically over an eight-year period to allow time for farmers to transition. The results of these reforms have been unambiguously positive. Consumers have benefited from lower prices for milk with prices falling by 12 cents per litre in the first six months following deregulation. While there has been consolidation in the industry, surviving farmers have benefited from a 56 per cent increase in wholesale prices for their milk. National milk supply has been maintained, and larger farms are driving much greater productivity. Exports of milk have increased as Australian dairy farmers have become more efficient and now represent the third most important agricultural export after beef and wheat, with earnings of roughly AUD$3 billion annually. The key to this success was the transition period for the industry. Farmers were given only a nine-month advance notice of the reforms—but again, received a transition period of almost nine years. Farmers had three choices: exit, expand or transition. In all three cases, farmers were given financial and policy support to adjust to the new policy environment. The Australian reforms reduced consumer prices, which disproportionately benefits lower-income households, while also making the industry much more efficient and internationally competitive. Additionally, the transition period and the funding provided to many farmers, particularly those who chose to transition out of the industry, meant the reforms were implemented with minimum disruption."
The Daily — Total income of farm families, 2019 - "The average total income of farm families operating a single farm in Canada was $163,098 in 2019"
Is it time to "tax the rich" dairy farmers?
Some ignorant person was defending supply management as "to allow small herd farmers to stay in business" and "enable them to make a decent living", but the average Canadian dairy farm has over 1,000 cows: clearly they're all "small herd farmers". And of course he blamed the high cost of dairy products on "greedy grocery retailers", even though the big 3's average net income margin was only 3.5% (also, weird how American retailers are less "greedy" than Canadian ones, since butter there is cheaper). Then the Facebook post disappeared - I guess the supply management cartel does not like inconvenient facts
Why Are We Paying Dairy Farmers Who Are Producing More? - "Every once in a while, someone inside a tightly protected system decides to say the quiet part out loud. That is what Joel Fox, a dairy farmer from the Trenton, Ontario area, did recently in the Ontario Farmer newspaper. In a candid open letter, Fox questioned why established dairy farmers like himself continue to receive increasingly large government payouts — even though the sector is not shrinking, but expanding. His piece, titled “We continue to privatize gains, socialize losses,” did not come from an economist or a critic of supply management. It came from someone who benefits from it. And yet his message was unmistakable: the numbers no longer add up. Fox’s letter marks something we have not seen in years — a rare moment of internal dissent from a system that usually speaks with one voice. It is the first meaningful crack since the viral milk-dumping video by Ontario dairy farmer Jerry Huigen, who filmed himself being forced to dump thousands of litres of perfectly good milk because of quota rules. Huigen’s video exposed contradictions inside supply management, but the system quickly closed ranks. Until now. Fox has reopened a conversation that has been dormant for far too long. In his letter, Fox admitted he would cash his latest $14,000 Dairy Direct Payment Program (DDPP) cheque, despite believing the program wastes taxpayer money. The DDPP was created to offset supposed losses from trade agreements like CETA, CPTPP, and CUSMA. These deals were expected to reduce Canada’s dairy market. But those “losses” are theoretical — based on models and assumptions about future erosion in market share. Meanwhile, domestic dairy demand has strengthened. Which raises the obvious question: why are we compensating dairy farmers for producing less when they are, in fact, producing more? This month, dairy farmers received another 1% quota increase, on top of several increases totalling 4% to 5% in recent years. Quota — the right to produce milk — only increases when more supply is needed. If trade deals had truly devastated the sector, quota would be falling, not rising. Instead, Canada’s population has grown by nearly six million since 2015, processors have expanded, and consumption remains stable. The market is expanding. Understanding what quota is makes the contradiction clearer. Quota is a government-created financial asset worth $24,000 to $27,000 per kilogram of butterfat. A mid-sized dairy farm may hold $2.5 million in quota. Over the past few years, cumulative quota increases of 5% or more have automatically added $120,000 to $135,000 to the value of a typical farm’s quota — entirely free. Larger farms see even greater windfalls. Across the entire dairy system, these increases represent hundreds of millions of dollars in newly created quota value, likely exceeding $500 million in added wealth — generated not through innovation or productivity, but by regulatory decision. That wealth is not just theoretical. Farm Credit Canada (FCC), a federal Crown corporation, accepts quota as collateral. When quota increases, so does a farmer’s borrowing power. Taxpayers indirectly backstop the loans tied to this government-manufactured asset. The upside flows privately; the risk sits with the public. Yet despite rising production, rising quota values, rising equity, and rising borrowing capacity, Ottawa continues issuing billions in compensation. Between 2019 and 2028, nearly $3 billion will flow to dairy farmers through the DDPP. Payments are based on quota holdings, meaning the largest farms receive the largest cheques. New farmers, young farmers, and those without quota receive nothing. Established farms collect compensation while their asset values grow... What makes Fox’s letter important is that it comes from someone who gains from the system. When insiders publicly admit the compensation makes no economic sense, policymakers can no longer hide behind familiar scripts. Fox ends his letter with blunt honesty: “These privatized gains and socialized losses may not be good for Canadian taxpayers… but they sure are good for me.” Canada is not being asked to abandon its dairy sector. It is being asked to face reality."
Left wingers are only against socialised losses and privatised profits when they hurt the left wing agenda
Scrap Supply Management, Save Canadians Money, and Fix the Trade War - "Is this a free market economy, or Soviet Russia? In this sector, it’s much closer to the latter. An Alberta egg farmer has been arrested, and Greek Orthodox nuns in Quebec have been threatened with ludicrous fines for the horrendous crime of trying to sell food... The end result of not having a competitive market is that it costs Canadians more for milk, dairy products, chicken, and turkey. Research by SecondStreet.org found that supply management results in Canadian consumers paying 29 percent more than their American counterparts for milk. Isn’t life expensive enough as it is?... Keeping the cartel is justified by all major federal political parties for one reason: It satisfies the farmers unjustly enriched by the quota system. The average net worth of a Canadian dairy farm is just over $6 million; it’s not so hard to do well when competition is banned and the government sets prices... Australia used to have a similar regime, but it saw the writing on the wall and gradually phased out supply management. To placate the irritated dairy farmers, that country implemented a temporary 11-cents-per-litre tax on milk, the proceeds of which went to the farmers to “adjust to deregulation by consolidating, changing practices, or exiting the industry.” Even with this tax, the price of milk dropped immediately, and the tax was eventually removed as well. It should be clear as day that Australia got it right, and the stakes were considerably lower for them at the time. They didn’t have the largest economy in the world on their border, levelling gigantic tariffs at them. Yet they still made a choice that annoyed a few for the good of the entire nation. That’s the kind of leadership Carney could show. Dropping the dairy cartel might ruffle some feathers (or get a chorus of annoyed “moos”), but it’s the right thing to do."
Canadians agree on internal trade, less consensus on dairy - "An Angus Reid poll of 4,009 people, published in March, found that 29 per cent of Canadians want to eliminate supply management for dairy, eggs and poultry and 23 per cent want to maintain the system. In between those options, about 26 per cent would reduce or remove it temporarily to help Canadians cope with inflation and the threat of American tariffs... most Canadians want to see interprovincial sales of alcohol and national standards for trucking regulations. For a pollster such as Roe, it’s interesting that Canadians dislike internal barriers to trade and want them eliminated, but there is less urgency to get rid of supply management, a system that restricts trade and increases the price of milk, cheese and other products... In spite of the urgency to remove inter-provincial barriers to trade, dairy, eggs and poultry aren’t part of that conversation."
Matthew Lau: ArriveCAN explained by the rule of all-thumbs - "The rule of thumb in economics is that government spends twice as much as private entities in a competitive environment would need to spend to accomplish the same thing. This rule, Milton Friedman said in various interviews and lectures, has been documented in studies on bus service, fire protection, garbage collection, clerks handling paperwork and other areas. In his 1973 book The Machinery of Freedom, Milton’s economist-son David coined Friedman’s law: “It costs any government twice as much as it should to do anything.”... As with many rules, however, there are extreme outliers. The Liberal government in Ottawa has managed to produce a spectacular one by reportedly spending $54 million on ArriveCAN, its border screening app that forced international travellers arriving in Canada to declare their COVID-19 vaccination and quarantine information. Some estimates of how much it should have cost come in at around $250,000... with ArriveCAN, the overspending is only the start of it. Paying $54 million for something worth $250,000 is one thing; that the value to the Canadian public of ArriveCAN is actually $250,000, or in fact anything north of zero, is far from clear. On the contrary, it unnecessarily hassled Canadians travelling in and out of the country, discouraged tourism, caused significant delays and sometimes chaos at border crossings, gave some travellers erroneous instructions to quarantine and otherwise caused widespread consternation. The $54 million was clearly misspent; unfortunately, even this price tag does not fully account for the cost of the app. The distortionary effect of the taxes that finance government spending means that every dollar collected by the federal government costs the private sector more than a dollar. The cost of raising an additional dollar in tax revenues is known as the marginal cost of public funds. A study done this year by Alberta economists Bev Dahlby and Ergete Ferede put it at $2.02 to raise $1 via the federal corporate tax and $2.86 to raise $1 via the federal personal income tax. The dollar cost to Canadians of developing the app is therefore something like two to three times the stated amount of $54 million. There are two main public policy lessons the public can learn from the ArriveCAN debacle. The first has to do with cost-benefit analyses of government programs. The cost of government spending is far higher than what shows up under “expenses” in the financial statements. Adding the cost of raising public funds, the real cost to taxpayers is more like double or triple the stated expense. Moreover, if the spending is to support regulatory initiatives, as in the case of ArriveCAN, then its main cost is actually the regulatory effect and not the money spent... While the costs of government programs tend to be greatly understated, the benefits are invariably greatly exaggerated by those implementing the programs. Liberal MP Anthony Housefather declared that the app “saved the lives of tens of thousands of Canadians,” a preposterous statement from which he backed down by later saying that he meant the full suite of pandemic policies (of which ArriveCAN was one) by the federal and provincial governments saved tens of thousands of lives. In fact, there is no evidence that ArriveCAN saved any lives at all, and plenty of evidence that it imposed widespread costs."
Left wingers would rather spend more, because profit is evil and they want a big government
Watchdog recommends up to 100% foreign airline ownership amid low competition - "Canada should allow 100 per cent foreign ownership of domestic-only airlines, the Competition Bureau says in a new report highlighting the country's "highly concentrated" aviation industry. In a market study released Thursday, the watchdog suggested creating a new class of airline that operates only in Canada but could have owners from outside its borders, opening the gate to global expertise — and cash. The current foreign ownership cap sits 49 per cent. In addition, no more than 25 per cent of a carrier can be owned by any one foreign entity, a proportion the Competition Bureau proposed raising to nearly half... “Competition in Canada’s airline sector has struggled to take off,” it said, noting consumers’ dissatisfaction with fares, flight options and service quality. Air Canada and WestJet together account for between half and three-quarters of all domestic passengers at major airports, according to the study. Though competition improved between 2019 and 2023 with the arrival of Flair Airlines and the expansion of Porter Airlines, market concentration remains “extremely high” and competition from new entrants fragile, the bureau said, with the field dominated by a few large airlines. “Many Canadians report that international flights are often cheaper than flights within Canada,” it noted. The report recommended a basket of reforms that include shifting the financial burden of airport maintenance away from passengers, thus lowering ticket prices and allowing more consumers to book flights on budget carriers, as well as expanding market access for new entrants by allowing secondary airports to compete with major hubs. Currently, flight exclusivity clauses often mean only one airport in a local area can host international flights... The report also called for an end to the transport minister's power to override mergers and acquisitions deemed anticompetitive under a federal review process. It also urged industry-wide publication of data on delays and cancellations to help consumers make informed choices, on par with the United States and United Kingdom. It further stressed the unique challenges faced by remote communities and recommended a working group to ramp up service to the North, where air transportation is an “essential lifeline, even for residents who never fly” but whose food and medicine arrive by plane. “New entrants face major barriers because existing carriers control critical assets at the major northern airports,” the report said. It asked the government to "tailor regulations to the northern context" and weed out unnecessary costs. Over the past 20 months, four low-cost carriers have disappeared from the skies, as Lynx Air and Canada Jetlines shut down and WestJet folded subsidiary Swoop and the recently acquired Sunwing Airlines into its main-line service."
Too bad hating the US is probably more popular than lower prices
Opinion: We’re heading to a 1990s-style fiscal reckoning - "According to the IMF , our various governments’ combined gross debt is 113.9 per cent of GDP. In 1990, at the beginning of a decade that came to be dominated by a debt crisis, it had been just 73.7 per cent. The deficits projected in the 2025 federal budget will take our gross debt even higher. The trend is unsustainable, which means it will end. Its end will come when the government’s taxation and borrowing capacity is exhausted and revenues don’t cover the cost of running the government and paying interest on the debt. As we approach this point, our credit rating will fall and the interest rate we pay will rise, worsening the problem. In the end, there will be no bids at our bond auctions. We will have no choice but to declare bankruptcy. Argentina shows what happens next. Bond-holders, politicians and financial experts meet to work out a deal. Bond-holders accept reduced payments at a level the government can afford to pay, which causes the bonds’ value to fall. Bond-holders accept this “hair cut” because it gives them at least some return on what turned out to be a bad investment. They will also lend us the money to pay our debt interest and thus re-start our normal participation in the global bond market. In exchange, however, they will force economic reforms on us designed to prevent future such bankruptcies. Foreigners aren’t the only ones who suffer financial losses, of course. Our banks and investment companies hold government bonds as backing for their customers’ deposits. Their losses ultimately are borne by their customers. The same is true for companies that sell life and property insurance, which by law must be backed by government bonds believed to be safe. A second class of costs comes from the reforms imposed by agencies like the IMF, rather than chosen by parliamentarians in touch with Canadians’ needs and preferences. Many of us will also consider it a cost that our country has lost its reputation as a reliable member of the world’s financial community. It wasn’t so long ago that the federal government came close to bankruptcy. Persistent deficit spending during the 1980s caused the all-government debt-to-GDP ratio to rise from 44.6 per cent in 1980 to 94.2 per cent in 1993. In 1994 our credit rating was lowered and at one auction federal government bonds attracted no bids until 30 minutes before the end. The Wall Street Journal called Canada “an honorary member of the Third World.” Bankruptcy was avoided because in 1993 voters concerned about deficits and debts had elected 51 members of Preston Manning’s Reform Party, which ran on a platform of fiscal austerity and became the unofficial opposition in Parliament... The 1995 budget introduced important spending cuts. In a speech on the floor of the House I praised the budget and awarded it a professorial A-, noting that it would have received an A+ if it had been adopted earlier. I also praised the Liberals’ willingness to accept the political risks that always accompany spending cuts. The austerity policies begun in the 1995 federal budget helped reduce the debt-to-GDP ratio from 94.2 per cent in 1993 to 67.2 in 2007. Canada was lucky to avoid bankruptcy in the 1990s. But in the new millennium chronic deficit spending returned and it has taken the debt-to-GDP ratio to levels well above those reached in the 1990s. Inexplicably, the public seems unconcerned and no equivalent of the Reform Party has been created, much less gained electoral success. Politicians have persuaded the public that deficits have been needed to deal with global recessions, pandemics, financial bubbles and threats to national security. Emergency deficits were probably unavoidable in our caring society but they should not have continued after the crises had passed. There has also been misinformation. Former finance minister Chrystia Freeland argued that our government’s net debt, rather than the much higher gross debt, is the proper indicator of the risk of bankruptcy — a claim many economists dispute. For his part, Prime Minister Mark Carney argues that deficits to finance investment do not add to bankruptcy-causing debt. These arguments are gaslighting. The holders of our bonds care only about the government’s ability to pay the interest on its debt, not whether the debt is net or gross or caused by investment or other types of spending. Politicians also argue we are fiscally OK because our debt-to-GDP ratio is one of the lowest among western democracies. But a bankrupt nation’s relative standing matters little to the holders of its bonds. And why is it wise to copy other countries shooting themselves in the foot?"
Left wingers keep bitching about austerity in 1995. Presumably they'd rather a bond default and financial collapse. But then, they think money is fake anyway
Matthew Lau: Brutal productivity numbers require more Carney course corrections - "As analyses from the Fraser Institute , University of Calgary , C.D. Howe Institute , TD Economics and others have argued, fixing Canada’s uncompetitive tax regime would help lift productivity. Although regulatory expansion has also driven Canada’s relative economic decline, the federal budget did nothing to reduce the red tape burden. Instead, the Carney government empowered cabinet to decide which large natural resource and infrastructure projects are in the “national interest” — meaning that instead of predictable, transparent rules, businesses must answer to the whims of politicians. The government has also left in place many of its Trudeau-era environmental regulations, which have helped push pipeline investors away for years. It is encouraging that a new “memorandum of understanding” between Ottawa and Alberta may pave the way for a new oil pipeline . A memorandum of undertaking would have been better. Although the government paused its phased-in ban on conventionally-powered vehicle sales in the face of heavy tariff-related headwinds to Canada’s automobile sector, it still insists that all new light-duty vehicle sales by 2035 must be electric. Liberal MPs on the House of Commons Industry Committee recently voted against a Conservative motion calling for repeal of the EV mandate. Meanwhile, Canadian consumers are voting with their wallets. In September, only 10.2 per cent of new motor vehicle sales were “zero-emission,” an ominous 18.2 per cent decline from last year. If the Carney government continues down its current path, it will only make productivity and consumer welfare worse. It should change course to reverse Canada’s economic underperformance and help give living standards a much-needed boost."
