Canada-Europe trade anxiety has me thinking wine, ’88 vintage

Why the Canadian cheese industry will survive

It’s the duty of a journalist to report sometimes on shattered dreams and social disruption. Just this morning, I had occasion to look back at a newspaper story in this grim vein, one I wrote in the spring of 1988. It reported on honest farmers about to lose their livelihoods—“wrenching restructuring,” I called it.

I painted a picture of thousands of acres of grape vines in Ontario’s Niagara region and B.C.’s Okanagan Valley about to be ploughed under, hundreds of growers wondering what they would do next, all because the new Canada-U.S. trade deal, along with international trade agreements, would bring a flood of foreign wine. “I’m finished,” I quoted one tiller of the soil saying.

This past summer, more than a quarter-century after I wrote that somber story, I was lucky enough to find myself, on a sunny July afternoon, quaffing a nice Cave Spring riesling on a patio in the heart of Niagara wine country. A few weeks later, on another bright day in August, I sipped a Nichol Vineyard cab franc while gazing out over Lake Okanagan from the winery’s terrace.

From those vantage points (life is good) the devastation predicted by representatives of both regions’ wine industries back in ‘88 was not immediately evident. It’s true a lot of vines were sacrificed: The crappy ones had to be replaced with top hybrids to provide fruit for the wine boom that was prompted in no small part by the pressure to compete that came with free trade.

So you’ll excuse me if I’m not rushing to the defence of the Canadian cheese industry on this week’s news that something tolerably close to a deal has been reached in the drawn-out Canada-European Union trade negotiations. There’s just not much oomph left in the arguments for protectionism (with the exception, I would argue, of the very particular case of Canadian cultural industries).

This is not to say, of course, that companies won’t have to work hard to adjust to fewer restrictions on European products coming into Canada, or take some big risks to try to grasp the opportunities presented by fewer barriers to our goods and services cracking the European market. Looked at more closely, the story of Canadian wine has lessons to teach about the unpredictable ways things will surely work out.

Here’s something worth considering. It’s actually incorrect to say that all those pessimistic assumptions made by the Canadian wine industry back in the heat of 1988 trade debate turned out to be wrong. In fact, in some limited respects, those who feared Canadian wine makers would be outgunned were right.

The anti-free-trade camp told us that Canadian wines would loose market share. It has come to pass. Canadian wineries saw their share of the domestic market drop, between 1987 and 2012, from 49 per cent to 30 per cent by volume. In other words, foreign wine’s share shot up to 70 per cent from 51 per cent. And yet, over the same period, the number of wineries in B.C. exploded to 206 from just 13, and in Ontario to 142 from the 18 that were turning out mostly plonk at the time the Canada-U.S. trade accord was finalized.

How can Canada’s wine sector have expanded so much while loosing market share? A major reason is that it commands a smaller percentage of a much larger pie. Canadian wine sales last year totaled 135 million litres, up from 96 million litres as recently as 2000; imported wine sold here climbed to 308 million litres in 2012, up from 163 million litres in 2000. (Thanks to the Canadian Vintners Association for all these stats.)

As well, Canadian wine has migrated to the higher-priced section of the liquor store. Evidence of quality: exports climbed to respectable 26 million litres last year, up from a mere 3.4-million-litre trickle in 1988. Harder to precisely quantify are the clever ways wineries have turned themselves into high-end tourist attractions, a major development hardly conceivable back in 1988, when Canadian wine was not exactly a prestige draw.

Obviously the wine experience won’t be replicated in every sector touched by the Canada-EU agreement. But it’s worth keeping in mind when we hear Prime Minister Stephen Harper and European Commission President Jose Manuel Barroso telling us from Brussels that the deal is win-win. That sounds like the sort of politician’s bromide best greeted with skepticism. How can Europe’s companies and Canada’s simultaneously do better? But look at how freer trade both brought more foreign wine to Canadian consumers and spurred the domestic industry to profitable innovation and diversification.

It could work that way for cheese, for seafood, or for any of a bunch of other industries we are less immediately familiar with as shoppers. Federal officials talk, to pick just one specialized example, about the potential in Europe for Canadian medical devices. I doubt they really know—that sounds like a pretty sophisticated business. Or they tout the upside for Canadian service firms bidding freely on European government contracts, down to the local level. Could be good. Or frustrating. Check back in a decade or so.

Perhaps we’ll speculate about it all over a bite at my place this weekend. I’ll crack one of the bottles I brought back from Jordan Village, Ont., or Naramata, B.C. Have to pick up some cheese on the way home, though— maybe, if a I can find it, a block of the Eastern Ontario “Lankaaster” recently judged, in a prestigious contest in England, the world’s best.




Browse

Canada-Europe trade anxiety has me thinking wine, ’88 vintage

  1. oh no, they’re loosing market share? better tighten up!

    • Depends, do they continue price gouging and ignoring waste, or do they do like New Zealand and get competitive and effective?

  2. I have similar hopes for cheese myself. If only the increased imports of fine European cheese can spur our guys to do better. ( the general run of Canadian super market cheeses ( outside of niche cheeses such as BC goat cheese) are somewhere between mediocre and frankly awful. But it is hard to overlook that the EU agri subsidy policy amounts to anything short of dumping.

    • There are two cheese markets in Canada. There is commodity cheeses, mostly artificially aged cheddar and mozzarella, and then fine cheeses. I think every country has their own version of ‘commodity cheese’. The better stuff is all we ever see exported.

    • Also, if the EU wants to pay us to eat their food, let them.

      • It isn’t that simple is it. If their subsidized cheeses push aside ours, where’s the gain for us ? Unless of course we find new export markets. Nevertheless well be ceeding our domestic market share for their subsidized product ( granted their product is superior) how does that advance free trade?

        • Perhaps that doesn’t advance free trade per se, but if the Europeans are willing to spend their tax dollars helping to ensure that I get higher quality cheese in Toronto, at a lower price, I’m not sure that I care to stand in their way.

          I just can’t get too up in arms about the dastardly Europeans conspiring to send me excellent cheese at a reasonable price while I type up a comment using an iPad made in China. Not without feeling REALLY hypocritical.

          Am I perhaps underestimating the importance of a domestic cheese industry? If so, have we considered perhaps developing a strategic cheese reserve?

          • “…conspiring to send me excellent cheese at a reasonable price”

            The bastards. They’re without conscience. As for the strategic cheese reserve, don’t think our enemies don’t have one.

          • But you might object when you see the size of the compensation cheque Harper’s is going to have to cut for the provinces eventually.
            Agree, it could be worse. We could be getting Chinese cheeses and Bulgarian ipads.

        • The gain for us is that we get cheaper, better cheese from those who specialize in making such and that the labour being used making inferior cheese here will move to some other area.. ideally one that we have more expertise in than they do.

          Internal subsidies shouldn’t make one whit of difference when it comes to free trade deals between democracies. If a society decides it wants to spend its resources on creating a cheese-selling industry, even if it might not be profitable otherwise, that’s solely the business of that society.

          What if a society was really culturally invested in a particular trade.. haberdashery, say. Kids grew up being taught in the particulars of haberdashery from a very young age. They hold competitions for creativity, speed, and quality haberdashery and the winners are held in very high esteem and widely sought out to be spokes-persons for various products. Now.. if this society started to trade with us.. should we charge extra duties on their hats for their focus on this trade? Isn’t their tradition, training, and culture all some form of internal subsidy, with significant resources being devoted to enshrining their haberdashery industry?

          Why then do we decide that some other society, which has, for whatever reason, decided it values its cheese industry enough to devote some portion of its public resources to the development of such industry isn’t “playing fair” in free trade?

          So long as they choose not to penalize our cheese producers, it’s entirely fair, because we can make a similar decision to support ours as they do. If we don’t.. that’s *our* choice.

          • There’s a limit to that sort of thinking. Generally if the product is good i would agree, although reluctantly. In this case the EU clearly makes a better product.[ although that begs the question why artificially subsidize it in the first place]
            In the final analysis i think your argument falls apart when those subs produce iniquitous consequences. The EU policies have produced everything fro butter mountains to wine lakes. In the past they even been forced to destroy produce or give it away to keep prices up. Another awful consequence was the inducement to farmers to start bringing marginal lands on stream. Much environmental damage and centuries old hedgerows in the UK were sacrificed on this altar.
            Natural advantage is fine. We grow big trees. It pays us economically and culturally to support sustainable forest industries. The fact that we have done a poor job of doing that is another sad tale.

          • Marginal lands are now being ploughed under in Canada again too. For the longest time, that wasn’t happening. Back in the 70s and 80s, when I was a kid, it was common for farmers to clear land (i.e. remove all the trees) and put it into crops. Then in the 1990s, this stopped. Land prices were depressed. Now agricultural land prices have skyrocketed, and once again farmers in my home region in Manitoba are denuding the landscape of as many trees as they can. It’s a bloody shame, but I don’t know how to stop it.

          • In the case of the eu it was as a direct result of subsidy. Farmers ploughed under hill top land they pretty well knew to be senseless and wasteful.
            Some of this has hopefully sincd been corrected. I certainly hope the damage in MN wasn’t down to senseless politically driven govt policy rather then the more understandable market driven opportunity.

          • Agreed in full. Which is why I find most anti-dumping actions to be such utter balderdash.

          • Delighted to see “haberdashery” as the example. Could you work the milliners in next?

          • LOL.. shush you. I’m sure nobody else noticed my mix-up until you pointed it out.

            Or at least.. I sure didn’t. Thanks!
            I learned something today. That makes it a good day.

        • This logic – that exports are good, imports are bad – is simply wrong. Imports are the point of trading with other countries. Incidentally, while some industries win/lose from free trade, the net impact on jobs approximates zero.

          Think about it, if Europeans earn Canadian dollars by selling cheese where are they going to spend that money? They have to spend it in Canada (or exchange it for some other currency, such that some other foreigners have dollars that can only be spent in Canada).

          So that money earned by selling cheese comes back as investment, or as foreign purchases of Canadian goods.

          The only scenario where foreign subsidies hurt us is if they subsidize in order to ensure their firms gain a monopoly in cheese, enabling them to raise prices later. That scenario doesn’t strike me as particularly likely (we have free trade with other cheesemaking countries, and it wouldn’t be that hard to restart a cheese industry if monopoly prices made doing so profitable again for Canadians).

          • Your missing some of my point. Agreed that free trade is a good all around. But because of pernicious EU agri policy those subsidies are in effect in Europe also. The only way our better cheeses can hope to compete in their market is to do so with higher subsidies from our end. This is most certainly not a harmless good. Those subsidies represent a lost opportunity somewhere else in the economy.
            From the pov of the cheese industry i dont see the value of letting in more heavily subsidized product beyond the fact they are generally likely to be a better product, which at least is a good if it forces our guys to improve their product.

          • Well sure. And from the P.O.V. of the buggy whip makers, the car was a horrible thing.

            Widen the viewpoint. Canada is not, after all, a nation of cheese-makers alone.

            And remember, in order for them to subsidize their cheese makers, they’ve also had to forgo some other area in their economy. That’s an opportunity we can take advantage of.

            So maybe instead of fighting with them over cheese, we employ those people in the areas they’re lacking.. if it’s, oh, I don’t know, say dental services for no particular reason, then we can look at retraining cheese-makers into dental hygienists or something.

          • The cheese makers in question still occupy some very important strategic territory in QC and ON; lets’ see if they all want to become dentist or haberdashers eh:)
            I suspect the size of the cheque Harper will have to cut will be key.

        • Wrong. While subsidies do what you say, they are not sustainable. No one can subsidies exports for long without going broke.

          What you mean is our crooked businesses need protectionism and gouge consumers so they can ignore bad management, union waste and idiocy.

          New Zealand dropped all the dairy tariffs protectionism, and it forced the inefficient price gouging dairy business to become effective, economical and efficient, they now export around the world without subsidies, and the industry actually grew as the old inefficiencies were ferreted out. Even ended up employing more people as efficiencies meant more people could afford their products and that means JOBS.

          Study up on elasticity of pricing and elasticity of taxation. More tax and protectionism most often leads to decline.

          • I think you’ve replied to the wrong guy – i don’t support subsidies.
            But you’re wrong about NZ. They set up another monopoly, not a free market system.

          • I was under the understanding that NZ got rid of their supply management cartel.

          • http://www.theholmteam.ca/Stop.lying.to.canadians.pdf

            I’m struggling to get a handle on the SM debate myself. This guy seems to be an acknowledged expert. And as you can see no fan of MHF’s oversimplification of the issues. Apparently the govt of NZ stacked the deck for their industry too, although I’m not sure if its strictly a case of direct subsidization.

  3. This article is seriously flawed. Of course Canadian domestic market share dropped. That is what is expected by definition. By definition, you are opening up the market to foreigners who were previously handicapped by tariffs, so of course foreigners gain domestic market share, that is the whole intention of free trade! Canadian producers gain market share outside the country, by definition of free trade. That’s the whole point!

    How the heck you could write an entire article while missing this obvious point is almost unbelievable.

    The benefits of free trade are obvious. The best of both countries win out. If the US has a better produced of goods at a lower price, the US producer will win. If the Canadians have a better producer of goods at a lower price, the Canadian producer will win. In the end, consumers pay less for more, while the better producers are rewarded for their success.

    But I repeat, no matter what the case, domestic producers will always lose domestic market share, it is worldwide market share that you must look at.

    So now we’ve got both Wherry and Geddes writing complete failures for articles on CETA. On to Wells, who rarely disappoints.

    • Are you truly that naive to believe the US produces a better product at a lower price then us without massive subsidies of their own.

      • Don’t hit the reply button if you want to start a new topic.

    • By definition, you are opening up the market to foreigners who were previously handicapped by tariffs, so of course foreigners gain domestic market share, that is the whole intention of free trade! Canadian producers gain market share outside the country, by definition of free trade. That’s the whole point!

      How the heck you could write an entire article while missing this obvious point is almost unbelievable.

      Did you read the same article as me?

      It seems to me that the fact that domestic companies lose local market share while gaining foreign market share was a major point of this article. Gedde’s has a whole section in there explaining how foreign competition in the wine sector increased the overall size of the wine market (bigger domestic pie), encouraged more competitive domestic wineries (better Canadian product) and expanded export opportunities (26 million litres exported last year compared to 3.4 million in 1988). Unless we read two different articles, your complaint seems to be that Geddes missed X despite the fact that the thesis of his piece is X.

      • No, you did not read the same article. I read the one where Geddes used a measure of domestic market share to make judgements about free trade, which is equivalent to measuring whether the sun produces light (in case you’re wondering, yes, the sun does produce light and free trade does reduce domestic market share, by definition of free trade).

        • So, you read that part where he mentions the decreased domestic market share, but stopped reading before you got to the part about the increased foreign market share and the better quality of product?

          Yes, Geddes used domestic market share to “make judgments about free trade”, but it seems to me that his judgement is the SAME AS YOURS. While domestic market shares for wine fell after NAFTA, the size of the overall domestic market grew, the quality of Canadian wine increased, and the amount of Canadian wine exported increased nearly ten fold.

          • My Gawd LKO, stop inventing things. Stop fabricating complete nonsense. You can write your own article if you want, and if you do, then don’t hit the reply button.

          • What did I “invent”? I said that Geddes’ point is that while the Canadian market share of domestic wineries fell after NAFTA (as you say, of course it did) that nonetheless the size of the overall domestic market grew, the quality of Canadian wine increased, and the amount of Canadian wine exported increased nearly ten fold, so both American AND Canadian wineries flourished under NAFTA. In other words, YAY NAFTA!

            Here are the relevant sections, to my mind, from the article above (emphasis added):

            “…you’ll excuse me if I’m not rushing to the defence of the Canadian cheese industry on this week’s news that something tolerably close to a deal has been reached in the drawn-out Canada-European Union trade negotiations. There’s just not much oomph left in the arguments for protectionism…

            “[Post NAFTA] foreign wine’s share shot up to 70 per cent from 51 per cent. And yet, over the same period, the number of wineries in B.C. exploded to 206 from just 13, and in Ontario to 142 from the 18 that were turning out mostly plonk at the time the Canada-U.S. trade accord was finalized.”

            “[The Canadian wine industry post-NAFTA] commands a smaller percentage of a much larger pie. Canadian wine sales last year totalled 135 million litres, up from 96 million litres as recently as 2000; imported wine sold here climbed to 308 million litres in 2012, up from 163 million litres in 2000… As well, Canadian wine has migrated to the higher-priced section of the liquor store. Evidence of quality: exports climbed to respectable 26 million litres last year, up from a mere 3.4-million-litre trickle in 1988“.

            “…look at how freer trade both brought more foreign wine to Canadian consumers and spurred the domestic industry to profitable innovation and diversification“.
            In short, I get that you believe that free trade is good, because despite the fact that it means foreign companies gain a larger share of the Canadian market, that is more than offset by the increased access to foreign markets for Canadian companies, and increased competition spurring Canadian companies to improve and innovate. I COMPLETELY AGREE about all of that. The only thing that confuses me is your aversion to this article by Geddes, who, to my eye, is making the exact same point.

          • I commented on Geddes’ article. I did no comment on this reinvention of his article. I don’t want to comment on whatever article you want to write. Go did it in some other thread.

          • You realize that those are quotes from Geddes’ article?

          • I do, and I don’t care, as I’ve said before. I already read his article and I don’t need to read your reinvention of the article.

          • Very well then.

            I’ll leave you to explain to everyone that domestic market share always goes down when a free trade agreement allows more foreign access to our markets, but that this is largely immaterial given that the benefits of increased competition and a larger market for our Canadian producers outweigh said decline in domestic market share. And then, to label Geddes’ article a “complete failure” for making the exact same point.

          • You’ve got issues.

          • Psst! LKO has it right. You are off base.

          • You’ll have to excuse him, LKO.. the internet under his bridge is patchy so it’s hard for him to get the full article.

    • The benefits of free trade are obvious. The best of both countries win out.

      Exactly.

      Just like Geddes says in this article.

      “[Win-win] sounds like the sort of politician’s bromide best greeted with skepticism. How can Europe’s companies and Canada’s simultaneously do better? But look at how freer trade both brought more foreign wine to Canadian consumers and spurred the domestic industry to profitable innovation and diversification“.

      Again, not to harp on it, but your point seems to be “freer trade is good, more industries will benefit from the increase competition and larger marketplace than will be harmed” and yet you’re labelling Geddes piece as a “complete failure” despite that fact that his thesis is “”freer trade is good, more industries will benefit from the increase competition and larger marketplace than will be harmed”.

      • You can either start a new thread or reply to what I said. If you want to start a new thread, don’t hit the reply button.

        • I thought I WAS replying to your comment. You say that free trade is good, and that it benefits the best companies in both jurisdictions. What I’m trying to show you is that this is exactly what GEDDES is saying in the article above. The article you’ve labelled a “complete failure”.

          • You’ve shown me absolutely nothing. Like I said, if you want to write your own article, go ahead, but I have no intention to comment on it. I commented on Geddes’ article.

          • Good God, man. You sound like Emily!

          • Emily is your girlfriend, not mine. Stop behaving like a child. You and LKO like to have temper tantrums, but rest assured that your crybaby routine doesn’t work on me.

          • See what I mean? Exactly the kind of thing she’d say…

          • So what? Emily’s got more class than you will ever know. She might be a troll, but she doesn’t wander around the web site talking about you, and your own total stupidity, the way you wander around insulting her and me, at the end of a conversation that you had no part in. Here you are, pretending to be classy, when you happen to be taking someone else’s name, someone not around on this comment board, and using her name as an insult. Real classy. You are a piece of work.
            Welcome to the etiquette lessons from the dignified gentleman from Brampton. Lesson number 1: throw out peoples’ names when they’re not around, as nothing more than an insult, and act all high and mighty when you’re doing it. Do this at the end of a conversation which you had no part in, and contributed nothing. That’s how you become an internet robin hood, saving LKO and trashing Emily and scf, all in just a few sentences! What a masterpiece!

          • Actually, she has. And said slanderous things about me to boot. Which is why I have no compunction about doing the same.

            As for my joining in – this is a public comment board. Plus LKO had already said anything I would have so why repeat?

            If you don’t want to be compared to Emily – don’t act like her.

          • Classy as always.

    • Canadian consumption of alcohol has changed over the years – shifting from beer consumption to wine. Whether or not that has resulted from free trade is debatable.

      So, depends how you define “market share”. As pct of all alcohol, could be that domestic wine producers did increase.

      • Well yes, domestic market share can increase or decrease for all sorts of reasons, and like you said, there are many other factors other than free trade involved in the economy. My point still stands that lowering tariffs makes foreign producers more competitive domestically, by definition. So, all other things being equal, that could only increase foreigner’s market share.

        As for the reasons why Canadians drink more wine than beer these days… I’m not sure what’s going on there. Canadians also drink far more high-quality imported beers and high-quality domestic beers (premium beers, they call them) than they used to. Maybe that’s part of the same trend? I’m part of that trend. I buy wine and I buy beers like Kilkenny and Newcastle. I never buy Coors/Molson/Budweiser anymore. I would guess that Canadians buy more of these things because they are more available and more affordable than they used to be. There is more selection in the stores and for cheaper prices. so it’s easy to get the better product than before. So yes, that could be free trade at work.

      • So, depends how you define “market share”. As pct of all alcohol, could be that domestic wine producers did increase.

        I think the point that Geddes makes is most important on this front. Post-NAFTA the domestic pie got bigger, and the domestic product got better.

        As Geddes points out, domestic wineries went from 49% of the domestic market by volume, to 30% of the market by volume, but that’s not what’s important to look at. What’s important is that in 1988 Canadian wineries exported just 3.4 million litres of wine, and last year it was 26 million litres. Meanwhile, domestic sales of Canadian wines have increased from 96 million litres in 2000, to 135 million litres last year. In other words, today’s Canadian wineries sell way more wine, even domestically, than they did pre-NAFTA. That 30% today is worth way more to Canadian wineries than the 49% was back in 1987. Which, as Geddes also points out, is why while there were 31 wineries in Ontario and B.C. combined before NAFTA, today there are 348, many making a much better product, sold for a higher profit.

        In other words, given the explosive post-NAFTA success of the Canadian wine industry, despite the doom and gloom predictions that NAFTA would kill it, there’s no reason to believe that our many excellent Canadian cheese makers won’t similarly flourish under CETA. And if some crappy Canadian chesse makers go under, while we all get cheaper cheese from a wider variety of cheese makers worldwide, so much the better!

    • Reading the article, it seems John Geddes would agree. In fact, he seems to be having some fun at the expense of his previously more-protectionist self – the idealistic young journalist who went to interview depressed vineyard owners and write the obit for the Canadian wine industry after the FTA was signed in 1988.

      • Yes, I agree.

        What I take issue with is his long-winded amazing discovery that free trade reduces domestic market share, which is of course equivalent to discovering that the sky is blue. Yes, when you do not handicap foreigners with tariffs, foreigners do better in the marketplace. What an incredible discovery!

        • At least he discovered it. And he’s trying to help some readers along in discovering it themselves. I’m guessing that’s a lot better than what we’ll find in the Toronto Star. They’ll be interviewing depressed dairy farmers and unemployed Canadian cheese makers for the next 6 years. Even if they have to interview the same ones twice.

          • “And he’s trying to help some readers along in discovering it themselves”

            Actually, no, I don’t see that. He wrote a thousand words without mentioning the one major benefit of free trade for producers: access to foreign markets.
            There was only one line mentioning foreign markets at all: “Evidence of quality: exports climbed to respectable 26 million litres last year, up from a mere 3.4-million-litre trickle in 1988.”

            Rather than note that the major benefit of free trade for producers is lowered foreign tariffs, hence increased exports, he ascribes increased exports entirely to higher quality. No mention of foreign market access due to lowered tariffs, the one primary goal of free trade. Complete and total myopic focus on domestic producers in domestic markets, which is exactly what opponents of free trade obsess about, rather than foreign markets and consumers both domestic and foreign. The entire article was written from the viewpoint of someone who didn’t understand free trade, still doesn’t understand it, used to oppose it, no longer opposes it because of the actual results (kudos for that), yet still doesn’t understand any of it (hence the failure). Someone reading this article would not learn a thing. But the article had some interesting tidbits at least.

            I agree that the Toronto Star will be interviewing depressed dairy farmers and unemployed Canadian cheese makers for the next 6 years when they are not sending reporters into Rob Ford’s backyard.

          • I believe Geddes was focusing on the more obscure domestic benefits of enhanced competition. As for the Star, they won’t remove anyone from Rob Ford duty. I imagine they’ll hire extra staff. Increasing the number of journalists covering the “devastating” effects of free trade is just another invisible way CETA will increase employment.

          • The problem with many Canadians is that they believe that Canadian products will never be good enough for an international marketplace; that they need to be propped up by an in-country protectionism plan.

          • These same people claim that Canada has the best standard of living. So Canada can produce the best of everything, yet Canada cannot compete, according to those people. Cognitive dissonance.

  4. The whole EU subsidy meme is a bit of a red herring unsupported by any (recent) hard facts. Can anyone match the $25,000/cow figure for Canada’s notorious farm supply management system?

    Milk, cheese and eggs & chicken cost less here in the Netherlands (or in the US) than they do in Canada. Some recent guests liked the soft boiled eggs we prepared. They were brown shelled with rich yolks, the kind they associate with ‘premium’ eggs in Canada ($6 for 6?). We just buy the supermarket house brand large (€1.99 for 10). And they are not refrigerated in the store – don’t need to be. There is a fresh batch every day. And each eggshell is marked with a case lot # for tracking. That is proper farm supply management.

    There has never been an equivalent management supply system cartel for beef or pork producers in Canada. They compete in a free market. Europeans are highly suspicious of the hormone enhanced US farm factories. You are more likely to see beef imported from South America here than from the US.

    Europe is a great market opportunity for Canadian producers.The EU market is bigger than the US market. It’s crazy not to do more trade with Europe.

    And Canada’s farm management supply system is a travesty. For years all it has done is artificially inflate the price of simple nutritious foods that families rely on.

    • Turkey is by far the worst. Turkey farmers with small, antiquated operations still make a killing. I know some of them personally.

      • What is really crazy is that when it comes to farming, people have this notion that the struggling family farm is some “noble calling” and should be propped up no matter how badly it is being run. They don’t see it as a small business that should either survive or fail based on the merits of how it is run. Rather, they romanticize it.

    • There is no beef supply management in Canada….there never has been. Further, eggs do not have to be refrigerated anywhere. That brown color is typical of what you would find on the farm…some brown shells, some white shells. The color of yoke has to do with what the chickens are fed…grass fed makes for a dark yellow more tasty yoke. Grain fed have lighter, less flavorful yokes. It is the same for butter. Butter on the farm is almost cream colored. Sometimes a light yellow. They add a coloring to it to make it that very yellow color. They also add red dye to meat in the store. Raw meat does not look that way. The Canadians are now producing “hormone free” beef for Europe and they have been exporting tariff free since 2010. That market will just keep expanding. They have always exported bison there as well because it is pretty much organic….no antibiotics and no hormones. They feed off the land mostly.

      • There is no beef supply management in Canada….there never has been.

        I never said there was. And most supermarket eggs in Canada are in the coolers because they stay fresher longer.

        So, according to your description, I pay 1.99 for 10 farm eggs from from grass fed chickens. What do you have to pay in Canada for that?

        • Eggs are in the supermarket in Canada due to the perception that we tend have that they need to be refrigerated even though it really is not true.
          In Canada people don’t want grass-fed eggs in the supermarket so they aren’t available there. Those unfamiliar with them likely wouldn’t approve of the sharper flavor. We in Canada seem to prefer all of our food to look and taste a certain way…kind of a fake “perfection”….bland color and flavor. That is why we color our meat, butter and cheese. Now if we go to the farmers market here in Canada, we can likely get the same deal you do on the eggs if not a little better from local farmers such as the Hutterites.

          • We in Canada seem to prefer all of our food to look and taste a certain way…kind of a fake “perfection”….bland color and flavor. That is why we color our meat, butter and cheese.

            For the record, I’m from Calgary and spent the better part of 50 years there. I still visit regularly. I pretty sure you can still buy different types of eggs at different prices at a supermarket near you.

            Your description of Canadian foods reads like a 20 year old dispatch from a soviet era state-controlled newspaper.

          • What Safeway in Calgary did you buy your grass-fed eggs at?
            Are you really trying to say that they don’t dye the food or are you just being an a-hole because they do and I think you know they do. You can buy different eggs…small, medium and large!

          • are you just being an a-hole because they do

            LOL – so you live in Calgary? Shop at Safeway? Vote PC? Have Rob Anders as your MP?

          • Not Rob, no but I certainly have voted PC. Never have denied that. Yes I shop at Safeway and no, they don’t carry any eggs except grain-fed. I have shopped at Sunterra Market, Sobies, Superstore…never have seen grass-fed eggs at any of those places. You can find them online at certain “farms” that sell organic beef or I am sure the larger farmer’s markets have them. However, as an expert on shopping in Calgary, maybe you could enlighten us Calgarians which supermarkets carry them.

  5. I had to chuckle to myself when listening to CBC’s As it Happens one day this week. A beef farmer called in to claim what a big give-away the EU deal was on beef – more hormone free beef allowed as exports.

    His reply was – “well, the Canadian packers don’t differentiate between hormone and non hormone beef. And besides, we only grow enough beef for Canadian domestic consumption, so there is no upside. Yeah, some deal.”

    And for all these years, I thought all the excess hormone free cattle just wandered around endlessly, wasting away, yearning for the opportunity to visit the land of Heidi…

    • And besides, we only grow enough beef for Canadian domestic consumption, so there is no upside. Yeah, some deal.”

      One wonders how someone in the beef industry could be that ignorant about the beef industry. Canada doesn’t export beef? We only raise enough for ourselves? Really? I guess when the US government shut the border to our beef over mad cow concerns, they just did so as a precaution, since Canada clearly has never produced enough beef for export.

      • Well, trust the CBC to find that guy.

      • Yes, it isn’t like we have been exporting beef around the world…hahaha! Are people that gullible to believe anybody who calls in and pretends to be “an expert”? Further, we are already exporting hormone free beef to EU since 2010.

    • There has been a deal in place since 2010 for tariff free exports of hormone-free beef to to the EU. Anyone interested can look at the government of Canada website and see the press release from that time. This person who the CBC dragged in for an interview is obviously grossly misinformed if he doesn’t think that beef producers aren’t producing enough beef to sell outside the country or that there is not a market for hormone free and organic beef and bison. He doesn’t sound like the sharpest knife in the drawer.

  6. Yes. Surely it was all the result of competition that caused our vintners to push for better quality and touring the wine industry. Were it not for that spur of foreign competition in 1988, we never would have passed that legislation in 1978 to encourage the growth of small wineries. Nor would the federal government have purchased 4000 European variety vines to conduct agro-experiments across BC in 1974 — some lasting for over 8 years — to develop the varieties of grapes that have since become the BC wine industries backbone.

    After all, if it hadn’t been for foreign competition, it would have happened much sooner right? It’s not like grape vines take a few years to start producing grapes that are suitable for wine-making. Nah, you can just harvest those suckers a few months after you plant and they’ll be just fine right?

    Yup, because free trade spurred on the wine industry all by itself, without any such thing as a 28 million dollar grant from the Canadian Federal government called the Grape and Wine Sector Adjustment Assistance Program (also known as the GWSAAP) that paid up to 8100/acre for wine growers to remove the old Labrusca variety vines in favor of the European vinifera varieties, or gave a million dollars to help establish the BC Wine Institute for five years we should expect the cheese market will do just as well on its own too, right?

    Oh wait.. http://tinyurl.com/lv82qtf

    Still.. thank goodness for free trade growing our wine industry, I’d run the numbers to see exactly how much our domestic market has grown and what we would have been selling had we maintained the same proportion, but Geddes hasn’t provided us with comparable figures, as the 49% is 1988, but the earliest volumes he gives are from 2000 — however, we can be confident from his assertion that it would have been less. After all, had it not been for free trade, the market wouldn’t have grown at all. It’s not like there’s been any other growth in this world over the past 15 years or so.. certainly not population or anything..

    None of this is to say I’m not in favor of free trade with respect to cheese.. but looking at the Canadian wine industry as being at all analogous is not a good idea.

    • The point it, the FTA didn’t kill the Canadian wine industry. It got stronger. You can attribute that to competition, or to government subsidies. Likely some combination of both.

      • Yes, it got stronger. Did it get as strong as it would have without the FTA though? It’d be interesting to see actual comparable numbers. Who knows, perhaps the market for wine overall has grown enough on its own that had we maintained that 49% share (plus whatever share we had of the international market) it would have made up for the increase in exports that the FTA provided to our wineries. Or maybe not. But since none of the numbers are really comparable, and because there was *so* much government intervention and assistance provided to the wine industry, anybody who looks at that and says, “Oh, the cheese industry will be just fine” isn’t talking from evidence anymore than someone who says it’ll crash and burn.

        • Unfortunately we don’t have comparables. It’s a major defect in macroeconomics in general. You can’t run repeated experiments. All of your data must come from real time and there are no do-overs. What we do know is that there was a sense of ugrency in the late 1980s that if we didn’t improve our grapes, we were screwed. Whereas we wouldn’t have been screwed in a protected market. So we improved our grapes.

          • Wrong. That sense of urgency was in the late 70s.. that’s when it was considered so urgent that the gov’t started bringing in the European vines.. when the market was protected anyway.

  7. Cheese business will do well. Protectionism is still there in quotas. And tariffs still in place to price fix the market.

    New Zealand ditched their protectionism, consumer prices dropped and they became more competitive and now export cheese around the world as they are no longer inefficient and economically wasteful as they were under protectionism. Everyone wins but the incompetent who got replace with the competent.

    Canada should do the same and eliminate all taxes on all foods. As it isn’t just cheese with wild sized protectionism taxes and price gouging.

    $11 kg ($5/lb) for rib-eye in Montana, $25 kg in Calgary….insane protectionism screwing consumers. Lots of farmer lobby bribe governments, it pays them well. And USDA really inspects the meat.

    Its why a lot of stuff is cheaper in USA, because it isn’t part of $40+ billion in hidden tax tariffs we pay on food, clothes, cars, other items.

    And I bet this does little to fix it. Lots of noise, lots of pomp and media, but doesn’t really help the tax battered Canadian middle class consumer one bit.

    • If you are paying a different price for beef in Calgary vs. Montana, it is not due to protectionism because there is no beef board. In fact, beef flows over the border so easily that it is hard to tell which beef you are buying in Montana, American or Alberta beef. As for these “farmer lobbies”, keep in mind that when the Alberta Govt. paid out $300 million for mad cow, none of it went to the farmers (ranchers), it all went to the processing plants, which were all American owned. The ranchers said nothing because then they would be black-balled. The big lobby is American and it is out of Montana. “r calf” is an American beef lobby group that tries its best to keep Canadian beef from coming across the border into the US. There is no such lobby group in Canada.

  8. Lets focus on dairy. Protectionism tariffs have screwed us all. We pay 3 times what we should pay for cheese because of up to 284% tariffs cheese (and you though only booze/cigs was hyper taxed).

    But then fewer people could afford cheese, and no one buys mediocre cheese at 3 times the price for export. Canada exports very little cheese as out domestic price is well, stupid high cost to protect bad management and waste.

    But if we eliminated all tariffs, all protectionism, the business would smarten up, become efficient, and the efficiencies not only make it cheaper for domestic Canadians, we could be far more attractive to export to Europe and USA and get a lot more jobs.

    New Zealand did this years ago and it worked just that way. More dairy workers and jobs because they are not limed to domestic markets and are attractive to export their product and they are efficient and productive. Even more revenue for government as while they lose protectionism tariffs they gain in job income tax and economic activity. Even have less welfare.

    Taxation and protectionism have elasticity, and Canada is well into the unproductive areas of protectionism and tax greed harming the economy. Its why shopping USA has more value and I buy a lot of cheese when I go to the USA.

Sign in to comment.