Supply management, established in the 1970s for the dairy, poultry and egg sectors, is a key component of Canada’s agricultural policy. This system was introduced in response to major price instability in the agriculture sector in previous decades caused by fluctuations in supply and demand, as well as in prices on world markets.
The regulatory framework of supply management relies on three pillars: production planning, which is adjusted to domestic demand to avoid surpluses; price administration, which ensures a stable and fair price for farmers; and import controls, which impose high tariffs on foreign products that exceed tariff rate quotas.
Supply-managed agricultural production – concentrated mostly in Ontario and Quebec – accounts for a relatively modest share of the total number of Canadian farms yet it contributes significantly to farm cash receipts.
As part of its international commitments, Canada has gradually granted tariff concessions, granting some foreign products greater access to the Canadian market, particularly cheeses from the United States and Europe. However, supply management remains a major point of contention in international trade negotiations. Countries such as the United States and New Zealand have called for greater access to the Canadian market. Although dispute settlement mechanisms exist, such as the one provided for by the World Trade Organization, these issues continue to fuel disagreements among parties.
Read the full text of the HillStudy: Canada’s Supply Management System
Revised by Corentin Bialais, Khamla Heminthavong, Sarah Houle and Offah Obale, Library of Parliament
Categories: Agriculture, environment, fisheries and natural resources, Business, industry and trade, Executive summary