Canada’s Dairy Processers Deeply Disappointed in USMCA

More nutrients in grass lead to more nutrients in dairy products. Credit: iStock/Ina Peters

OTTAWA – Canada’s dairy processing industry is deeply disappointed by today’s announcement that Canada has agreed to significant dairy concessions, including market access and changes to domestic dairy policies, as part of the new United States-Mexico-Canada Agreement (USMCA).

“Over the past year and a half, we have repeatedly heard our government state that it would stand up for the Canadian dairy sector. However, what was agreed to last night demonstrates very little support for our interests,” said Mathieu Frigon, President and Chief Executive Officer of the Dairy Processors Association of Canada (DPAC). “Rather, along with CETA and CPTPP, the commitments Canada has made under USMCA significantly undermine its domestic dairy sector. In order to address these issues head-on, we expect to be part of the industry working group promised by Minister Freeland in order to address these issues head-on.”

Access granted to Canada’s dairy market via CETA, CPTPP, and now USMCA, will decrease domestic production and greatly affect the dairy processing industry’s ability to see returns on investments. Combined, it is estimated that losses stemming just from the agreements’ market access will stand at more than $2 billion over the course of implementation.

This estimate does not account for the further–and very substantial losses–that will be incurred as part of Canada reported agreement to suddenly change its domestic dairy policies as part of the USMCA. This decision will stifle innovation, stunt market growth, and create additional losses for those dairy processors who have made significant capital investments recently to improve Canada’s domestic processing capacity.

“USMCA is definitely the wrong deal for Canada’s dairy sector–its farmers, processors, and the thousands of hard-working Canadians they employ,” says Mr. Frigon. “This is something we would have told the government had we been consulted yesterday; unfortunately, we were not consulted and have relied on the media to hear of government plans for our sector.”

DPAC has been adamant that the outcome of any agreement with the United States must continue to contribute to the economic growth of both dairy farmers and processors in Canada. It is unclear how this weekend’s agreement will help Canada reach this goal.

About the dairy processing industry
The dairy processing industry is the second-largest food processing industry in Canada. It directly employs 24,500 Canadians with an aggregate payroll with more than $1.2 billion annually. Dairy processing has a material presence in every province in Canada, with 207 federal ridings having at least one dairy processing facility.

About the Dairy Processors Association of Canada
DPAC is Canada’s national industry association representing the public policy and regulatory interest of the Canadian dairy processing industry. DPAC’s members represent some of the most recognized food brands in Canada.

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