Quotulatiousness

June 14, 2018

The economic idiocy of Canada’s supply management system

Filed under: Cancon, Economics, Politics — Tags: , , , , — Nicholas @ 10:03

Andrew Coyne, who finally seems to have weaned himself off the PR voting jag, explains the Canadian government’s idiotic yet deeply entrenched supply management bureaucracy:

How did supply management, of all things, come to be at the centre of everything?

The policy, under which farmers in a number of sectors — milk, cheese, eggs, poultry — are organized into government-approved price-fixing rings, enforced by a complex system of quotas and protected by prohibitive tariffs on imports of the same goods, has been in place since the early 1970s. It affects fewer than 15,000 farmers nationwide, who between them account for less than one per cent of Canada’s GDP.

Yet it has somehow become the central issue not only of our domestic politics, but of international trade talks. It was the pretext for Donald Trump’s decision to impose tariffs on imports of aluminum and steel, and is his most-cited grievance with Canadian trade policy. As such, it has become the rallying cry of preening political patriots, each of the parties seeking to outdo the others in defence of a policy whose avowed purpose, let us remember, is to make basic food items more expensive for Canadians.

It has also become a source of deep division within the Conservative Party. It was already, of course, thanks to last year’s leadership race, in which Maxime Bernier made its elimination the central plank in his campaign, as Andrew Scheer made its retention the key to his. Indeed, Scheer’s narrow victory was directly attributable to the votes of thousands of Quebec dairy farmers, who took out party memberships for the sole purpose of ensuring Bernier’s defeat. It is even possible the Scheer campaign encouraged them in this endeavour.

[…]

There is no serious case for supply management — a policy that is is as unjust, inasmuch as it imposes the heaviest burden on the poorest families, as it is inefficient; that locks out new farmers and deters existing farmers from seeking new markets; and that makes us look utter hypocrites in free-trade talks, not only with the U.S., but the rest of the world — and no serious person whose livelihood does not depend upon it would make it.

And yet every member of every party is obliged to swear a public oath of undying fealty to it. That all do, but for one, is a sign of the institutional rot in our politics. For they do so not in spite of its awfulness but because of it — because the willingness to say two plus two equals five has become the ultimate test of loyalty.

On other issues, that might be because of genuine agreement. But a willingness to sign onto a truly hideous policy like supply management — that’s certain proof an MP is a “team player.”

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