Thank you for the question.
It's difficult to say what the impact of this particular provision will be five years from now. I think it's important to recall that the export monitoring commitments that Canada agreed to apply exclusively to three particular categories of dairy products: skim milk powder, milk protein concentrates and infant formula. They apply to no other dairy product produced in Canada or exported from Canada. The volumes that are permitted to be exported without any export charge are 55,000 tonnes in the first year, falling to 35,000 tonnes in the second year and then growing indefinitely thereafter.
The question whether the actual export charge that would be applied to exports above that threshold would be commercially prohibitive is difficult to answer now, and it's very difficult to say whether it will continue to be prohibitive as far out as five years from now. If you look at our exports of the covered products in recent years, from a high of 75,000 tonnes of skim milk powder and milk protein concentrate that Canada exported in 2017, we saw only 54,000 tonnes exported in 2019. That is below the threshold provided for in the agreement, and so, had CUSMA been operating last year, there would not have been any commercial impact of that provision on the sector, given the actual level of exports.
It's difficult to know how exports would evolve absent this provision or with the provision. I think we have reason to believe that there will be increased demand for skim milk in the future and perhaps lower growth in demand for butterfat in Canada, which would lead to lower production of certain products. Assessing the long-term implications is thus difficult, but I don't deny that there could be some.