Government of Canada fulfills its commitment to compensate supply-managed sectors

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Source: Agriculture and Agri-Food Canada

On a dairy farm in the Eastern Townships, Agriculture and Agri-Food Minister Marie-Claude Bibeau re-affirmed the Government’s commitment to provide compensation for supply-managed sectors for the impacts of the Canada-United States-Mexico Agreement (CUSMA). Dairy, poultry and egg producers and processors are expected to share more than $1.7 billion in direct payments and investment programs.

This federal investment will help dairy, poultry and egg producers and processors make key investments and improve their operations to be even more competitive and sustainable.

While dairy producers already know how much they will receive next year under the fourth compensation payment for the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) the Government intends to offer them extra funding of up to $1.2 billion over six years under the Dairy Direct Payment Program to account for the impacts of CUSMA.

From 2024 to 2029, the owner of a farm with 80 milking cows may receive compensation through a direct payment of about $106,000 in six yearly instalments on a declining scale. These funds will give producers the flexibility to invest according to their individual needs.

Starting in 2023, the Government intends to invest up to $300 million in a new program to support innovation and investment into large-scale projects to add value to solids-non-fat, a by-product of milk processing. The Government will consult closely with industry stakeholders in the development of program parameters.

For the Canadian poultry and egg producers, the Government intends to provide up to an additional $112 million under the Poultry and Egg On-Farm Investment Program. Producers will receive payments based on their quota holdings, to support improvements to their farm businesses. This funding will bring the total compensation for this sector to $803 million.

Finally, the federal Government intends to invest up to $105 million in the Supply Management Processing Investment Fund to support investments in dairy, poultry and egg processing plants, to grow their productivity or efficiency through new equipment and automation technologies. This brings the total investment for processors up to $497.5 million.

These programs will help drive innovation and growth in the supply-managed sectors. With this announcement, the Government of Canada delivers on its commitment to fully and fairly compensate producers and processors who have lost market share under CETA, CPTPP and CUSMA. The total compensation will reach up to $4.8 billion.

Quotes

“Promise made, promise kept. We made a commitment to fully and fairly compensate the market losses suffered by dairy, poultry and egg producers and processors, and that is what we have done. I would like to reiterate our government’s commitment not to concede any further market shares under supply management during future trade negotiations.”
     – The Honourable Marie-Claude Bibeau, Minister of Agriculture and Agri-Food

“The government made a promise to compensate producers for the losses caused by the CUSMA agreement. Today, they can say they fulfilled their promise. We can now look towards the future.”
     – Pierre Lampron, Chair, Dairy Farmers of Canada

Canada’s 2,800 chicken farmers are proud stewards of our land, providing high-quality, sustainable, nutritious food for Canadians. Today’s further investment in our sector will help farmers enhance the long-term efficiency and sustainability of their farms and continue to feed Canadians.”
     – Tim Klompmaker, Chair, Chicken Farmers of Canada

“Our farmers are proud to offer Canadians high-quality eggs of local production and support rural jobs and our economy. The measures outlined in today’s announcement provides a tool to navigate the impact of CUSMA on our sector, and benefits all Canadians as egg farmers continue to embrace green tech, make enhancements to their farm operations, and grow their sector. Canada’s more than 1,200 egg farmers are committed to upholding our strong, domestic food system—today and into the future.”
     – Roger Pelissero, Chair, Egg Farmers of Canada

“Hatching egg producers across the country have experienced losses due to recent trade agreements but we are pleased to see that the Fall Economic Statement has addressed an ongoing commitment to Canadian poultry and egg farmers on programming to offset the impact of the CUSMA agreement. This funding will help our producers reinvest to make our sector stronger and more resilient which benefits all Canadians.”
     – Brian Bilkes, Chair, Canadian Hatching Egg Producers

“We appreciate today’s announcement which will greatly assist the Canadian turkey industry by offsetting market losses under the CUSMA agreement and builds on the Government’s previous work for our sector due to CPTPP. Combined, these investments will allow turkey farmers to strengthen on-farm sustainability, improve and modernize their operations, and help them continue to provide turkey to Canadians that is safe, and produced in an efficient and responsible way. We thank the Government for following through on its commitment.”
     – Darren Ference, Chair, Turkey Farmers of Canada

“Dairy processors across Canada welcome the compensation measures announced today as it reaffirms the Government’s commitment to supporting the dairy sector in addressing the impacts of international trade agreements. The funding announced for dairy processors, including a new innovation program and additional funding for the existing ‘Supply Management Processing Fund’, will increase productivity and efficiency through investments in new automated equipment and technology to meet consumer demand in an ever-changing marketplace.”
     – Michael Barrett, Chair, Dairy Processors Association of Canada

“With this injection of new funds in the Supply Management Processing Investment Fund, poultry and egg processors will have access to additional funding to leverage private investments in new equipment and technology. This will help poultry and egg processors improve their productivity and efficiency as a response to the additional market access granted in recent trade agreements.”
     – Ian McFall, Chair, Canadian Poultry and Egg Processors Council

Quick Facts
  • Through the 2022 Fall Economic Statement, the Government announced up to $1.7 billion in compensation to supply-managed sectors for the impacts of CUSMA. This brings the total amount committed to compensate and support supply-managed sectors up to $4.8 billion.

  • The Government intends to deliver compensation by sector:
    • Up to $1.2 billion to Canadian dairy producers under the Dairy Direct Payment Program.
    • Up to $112 million to the Canadian poultry and egg producers under the Poultry and Egg On-Farm Investment Program. 
      Up to $105 million to support investments in dairy, poultry and egg processing plants under the Supply Management Processing Investment Fund.

  • The Government intends to invest up to $300 million to the Canadian dairy sector through a new innovation program.

  • Based on 2021 production, the compensation for a dairy producer with an average herd of 80 head will be $26,507 (25%) for 2024, $22,089 (21%) for 2025, $22,089 (21%) for 2026, $13,253 (13%) for 2027, $13,253 (13%) for 2028 and $8,835 (8%) for 2029.

  • To date, the Government of Canada has committed over $3 billion to compensate and support supply-managed sectors impacted by the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which includes:

    • $2 billion for dairy farmers:
      • $250M through the Dairy Farm Investment Program
      • $1.75B through the Dairy Direct Payment Program
    • $691 million for poultry and egg producers:
      • $647M through the Poultry and Egg On-Farm Investment Program
      • $44M through the Market Development Program for Turkey and Chicken
    • $392.5 million for processors of supply-managed commodities:
      • $100M through the Dairy Processing Investment Program
      • $292.5M through the Supply Management Processing Investment Fund.

  • Supply managed sectors create over 100,000 direct jobs in Canada in production and processing activities.

  • In 2022, there were 9,952 dairy farms in Canada and 4,773 chicken, turkey, egg and broiler hatching egg producers.

  • The dairy Industry generated $7.39 billion in total net farm cash receipts in 2021.

  • The four supply-managed poultry and egg sectors (chicken, turkey, eggs, and broiler hatching eggs) generated over $5.5 billion in farm cash receipts in 2021.