At Juno News, Sylvain Charlebois shares a sign of internal dissent inside the supply management system that prioritizes protecting producers at the cost of significantly higher prices and reduced choice for Canadian consumers — not to mention getting Trump’s attention (and anger) for shutting out American competitors:
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.
