The Canadian Dairy Commission is increasing the prices it
offers for surplus butter and skim milk powder on Feb. 1, enabling marketing
boards to charge one per cent more for milk used by processors.
Provinces separately price fluid milk for sales in
supermarkets and other retail outlets.
The Canadian Restaurant and Foodservices Association says
the price hike will cost them $26 million a year and complained that the
marketing boards continue to price milk and dairy products out of reach.
The support price for butter will
increase to $7.4046 from $7.3379 per kilogram; the support price for skim milk
powder will increase to $6.4754/kg, from $6.417.
The marketing boards are able to
charge relatively high prices for milk because there are high tariffs holding
out competing products from other countries.
Companies are always looking for
ways around the high Canadian prices and the Pizza Pizza chain out of Toronto
found one – importing packages called pizza kits that contained separate inside
packaging for cheese and other ingredients.
Canada Border Services Agency,
which administers tariffs, ruled these packages could enter Canada without
paying any tariff. Dairy farmers’ marketing boards challenged that ruling and
persuaded the federal government to change a regulation so the cheese in those
pizza kits now faces a 254 per cent tariff.
The U.S. government has filed an
objection, complaining that it was not properly notified about the impending
change.
In a letter to Ottawa, Islam
Siddiqui, the lead negotiator on agriculture issues for the U.S. government,
asked Canada to delay implementing the regulation until Americans can be
properly consulted and the tariff ruling can be justified.
Siddiqui is stepping down soon.
Lawyer James McIlroy, who has
handled many challenges to the supply management establishment, says this
change in tariff regulations threatens to harm Canada’s overall reputation for
fair trade negotiating and administration.
