The Teamsters Canada dairy division represents workers in dairies from Vancouver Island to St. John's, Newfoundland and Labrador. Teamsters pick up milk from the farm gate, work to produce milk and dairy products and deliver them to retail, and prepare shipments to wholesale clients.
The TPP allotment of quota will permanently disrupt Canada's dairy supply management system. The TPP quota limit has been given as 3.25% of the total market; however, that number is for year five. Given the incremental 1% increase of quota each year, the final impact will reach 4.35% of the total market, or about 400 TMT. Depending upon the product, the TPP's impact appears to be from 5% to 10% of the market for dairy product.
The TPP will not affect IREP, the program that allows dairies to import milk to process for export. That's about 54 TMT and worth about $90 million. We understand that all the TPP quota and IREP allotments will be filled. It's double-dipping, but it shows the cumulative effect of the programs. On CETA, which deals with cheese, our questions about the cumulative effect were met with “it's only cheese”, so we have not factored that into the numbers.
Eighty-five per cent of the 56.9 TMT liquid milk quota will be reserved for dairies. It's a positive for dairy workers; however, our expectation is that most of this milk will come from the United States.
Only 83% of U.S. liquid milk is hormone free, while Canadian farmers must follow Canadian regulations regarding no hormones. Will consumers in Canada be protected? From our consultations on the purity in the imports and on the commitments between dairies and U.S. suppliers, there would be no requirements on direct U.S. importation of liquid milk on the shelf. We hope concerns about the hormone-free status of milk will not erode the market for milk and milk products in Canada or abroad. If environmentalists in Europe were to claim that Canadian cheese was tainted, how much cheese do you think would be sold there?
Currently, imports of dairy products exceed exports by a 70% to 30% margin, about $250 million, mostly ice cream, cheese, and whey. In our consultations, the best answer we could get about decreasing this margin was that the TPP would create opportunity. If the TPP is really going to increase export opportunity, then we must assume that the billions of dollars the previous government was extending the industry were unneeded.
We understand why dairy farmers may need to be compensated for actual and opportunity loss. We have a hard time understanding why dairies require taxpayer funds, and we do not support it. If the TPP is good for business, we must assume that the private sector would be chewing at the bit to invest.
We believe that if processor modernization compensation is to be given to the industry because of the TPP, then workers in the industry should be included in the compensation package, for example, with money to help bridge older workers to retirement, training to find new work beyond existing programs, and training for new technologies that may be introduced on the job.