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Liberals downplay concerns about record-breaking milk prices

Click to play video: 'Dairy Commission suggests rise in Canada’s already high milk prices' Dairy Commission suggests rise in Canada’s already high milk prices
WATCH: Canada's surging dairy costs are expected to soar even higher in 2022. The Canadian Dairy Commission is proposing record hikes that will give the country's dairy farmers a bigger payoff. As Eric Sorensen reports, critics say the Crown corporation is giving more weight to producers than consumers when setting prices – Nov 24, 2021

Liberal cabinet ministers deflected concerns about the surging price of milk by saying they’re focused on other issues, such as housing and childcare.

“Indeed, that’s why we’re working on affordability,” Prime Minister Justin Trudeau said Wednesday when asked about rising dairy costs.

Read more: Dairy farmers pushed record-breaking price hike for milk even higher

An investigation published by Global News on Tuesday showed a recent record-breaking increase to the price of milk paid to farmers would have been about 20 per cent less if the normal method for setting prices was used. The investigation also found growing discontent among restaurant and retail groups over how prices are set.

Mary Ng, minister of international trade, echoed Trudeau’s remarks when asked to comment on concerns about the rising price of milk.

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“Affordability really matters,” Ng said. “And this is why we are very focused on affordable childcare as well as why we’re very, very focused on affordable housing. But we’ve also been clear: this government is going to protect the supply management sector.”

Click to play video: 'Canadian milk, butter, yogurt prices expected to soar in the new year' Canadian milk, butter, yogurt prices expected to soar in the new year
Canadian milk, butter, yogurt prices expected to soar in the new year – Nov 2, 2021

Supply management is a government-controlled system that imposes quotas for how much milk farmers can produce and guarantees a minimum price for all the milk they sell. The system imposes massive tariffs — some as high as 300 per cent — on imported dairy products, including milk, cheese and yogurt.

In October, the Canadian Dairy Commission, which is a Crown corporation, announced it’s increasing the price paid to farmers for milk by a record-breaking 8.4 per cent next year. This is nearly double the previous record.

Read more: Milk, cheese and butter prices could soar in Canada next year

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The commission said the increase is due to rising production costs, especially for animal feed.

“Producers deserve to be paid a fair price. And I would invite you to look at the increase to the cost of food in recent years, and you will see that they have never abused the system,” said Agriculture Minister Marie-Claude Bibeau.

“The work that the commission has done is fair, but having said that, I understand that the increase to (the cost of) food, and inflation in general, is very high. This is why we are investing in a significant manner in supporting families with our childcare program.”

Milk is a ‘public good’

Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University, says the absence of concern from politicians about rising milk prices is nothing new.

“I’ve seen politicians talk about supply management without knowing exactly what it was,” he said Thursday.

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Read more: Food prices rose nearly 4% in September. These products saw the biggest jump

Charlebois isn’t opposed to increasing the price of milk. He says costs are going up for everyone and it’s reasonable that farmers would recover their costs.

But he has major concerns with how the commission is structured, including the fact that two of its three board members own dairy farms and the third has an extensive background in dairy processing.

“I think dairy farmers should be involved with the (commission), but right now it’s only the dairy farmers involved with the (commission),” he said.

Click to play video: 'Rising milk prices will hurt diets of low-income families' Rising milk prices will hurt diets of low-income families
Rising milk prices will hurt diets of low-income families – Nov 24, 2021

The commission says it consults various industry “stakeholder” groups whenever it changes the price of milk. This includes dairy farmers and processors, restaurants, retailers and consumers.

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But restaurateurs and retailers say they’ve become increasingly frustrated by this process and by the lack of transparency around how final decisions are made.

“There is much room for improvement,” said Michelle Wasylyshen, national spokesperson for the Retail Council of Canada.

Wasylyshen said the federal government ought to “revisit” the commission’s price hike this year and consider changes to how the commission operates, similar to what Charlebois proposes

“Who can argue against the need for representation, transparency?” she said.

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