Good afternoon.
My name is Joel Prins, and I've been involved in the dairy industry my whole life. I grew up and currently farm outside of the small village of Warburg, Alberta, an hour southwest of Edmonton.
My parents, like so many other dairy farmers in our area, both immigrated from the Netherlands to Canada in search of new opportunities. In the mid-1980s, they were able to put aside enough money to put a down payment on a small dairy farm that consisted of 37 cows and 160 acres of land. From that point on, they worked day and night to make sure they could raise me and my three younger brothers on the farm.
As my brothers and I were growing up, we were taught many valuable lessons, from the importance of caring for animals to the importance of commitment and dedication to finishing tasks. In elementary school, my brothers and I would get up before school started and make sure to feed all the calves before racing back to the house to get ready to catch the bus.
It was no different after school. We would often run off the bus to go help our parents in the field, raking or baling hay, or in the barn, milking cows. You could say that dairy farming was instilled into my brothers and me from a very young age, and I learned that it was a lifestyle, not just a job. With that mindset, as my brothers and I got older, we were able to continue to grow the farm to the current 400 cows that we milk today.
The supply-managed system is the predominant reason we were able to thrive. Supply management allows farmers like my family to continue investing back into the industry, knowing that there will be stability into the future. It also ensures that we receive a fair price for the product we sell, and not rely on direct subsidies from the government for production, which dairy farmers in other countries rely on so heavily.
For example, European farmers receive €55 billion in subsidies per year, and Americans paid $4 billion in subsidies in 2009. Canadian dairy farmers earn their income from the market, not from the government. We appreciate the government's compensation programs to alleviate some of the impact of our reduced market, but if we had our choice, we would much rather have a domestic market that's not influenced by trade deals, with no dairy compensation programs.
Dairy farmers are also a big driver of the Canadian economy. The dairy industry continues to generate $20 billion towards Canada's GDP every year. Dairy farmers also greatly support our local rural economies. On our farm alone, we employ five local employees and create a lot of spin-off by purchases we make in the surrounding communities to help keep our rural economy strong.
Overall, the dairy industry employs over 220,000 Canadians, from the farm to processing to the retailer, and all the steps in between. Not only does supply management employ locals, but it allows consumers to have the knowledge that their milk is local and that they are supporting the farms in their backyard. In poll after poll, it's clear that Canadians support local dairy farms and locally produced milk. This is reassuring to many, as Canadian milk has some of the highest standards in the world. What's worrisome is that foreign milk coming into Canada through these trade deals does not need to adhere to the same standards for production.
On our farm, over the last two years, my family has been going through the steps of succession planning. My brothers and I are all starting young families of our own and want nothing more than to raise our kids on a dairy farm where we can teach them the values that they can only get from being on a farm. This succession planning required a great deal of trust in our supply-managed system and in the government, that they would continue to support our industry by standing up for it and protecting it.
We all took on millions of dollars of debt, which will take many years to pay off. However, lately we question our decision of taking on that kind of risk. It seems that our industry is continually being put up as a sacrificial lamb in order to make a trade deal complete. Starting with CETA, followed by CPTPP and now the CUSMA deal, supply management in Canada has been eroding away.
The current CUSMA deal alone is asking for 3.9% of our domestic market. When you add up the three deals, it equates to 18% of our domestic market by the year 2024, when everything is implemented. This market access dramatically impacts our farms and likely has a very minimal impact on the countries that have that increased access.
For example, 3.9% access for an American dairy farmer is hardly a solution to their overproduction problem. The state of Wisconsin produces more milk than all of Canada, so this small access for them doesn't help their situation and dramatically hurts our local farms. Not only does the trade deal increase access to our domestic markets, but it also requires us to limit our class 7 milk.
Other concessions included a worldwide export cap that limits Canadian dairy products from being exported globally. This is very worrisome, as the implications of this cap go beyond the three countries that the trade deal is negotiated around. Canada should be allowed to stand up for its own rights and trade implications in those countries instead of having our neighbouring countries dictate them for us.
Beyond the increased market access, the elimination one of our classes of milk and a global cap on exports, most concerning is the fact that the Canadian dairy industry will also need to consult the United States for any domestic milk class policy changes. This is a severe breach of our Canadian sovereignty. The Canadian dairy industry should not need the approval of an outside country to make changes to a domestic policy.
We feel this will impede our ability to adjust and react to market demands and to innovate. We will no longer have the ability to make decisions that serve the best interests of Canadians, since we will be required to consult with the U.S. before making policy changes. This policy does not serve the best interests of Albertans or Canadians. The economic effect of this clause is difficult to determine; however, one could assume that the U.S. will not support a policy that will see Canadians benefit in the face of the American dairy industry. Ask yourselves: Would the U.S. or Mexico have agreed to this if the roles had been reversed?
The CUSMA trade deal has many negative impacts on us as a supply-managed dairy industry. Even with the deal still waiting to be signed, there have been many ramifications. Processors have been reluctant to re-invest in Canada, with some even pulling the plug on new projects that were steps away from being finalized. These are missed opportunities for growth in the Canadian economy.
Even on the farm level, when speaking with fellow farmers, there's an uneasiness and reluctance about what to do next. I even had a few neighbours who decided to get out of the industry due to the increased stress that the trade deals brought upon them. They continue to point out that there are more trade deals to come and worry that we will be the final sacrificial piece once again. Even for my brothers and me, this trade deal has been weighing on our minds greatly. We just took over from our parents, and seeing our growth in our domestic market being given away every few years makes us discouraged and frustrated.
How does an industry survive if you ask it to stagnate or decrease in size in order for foreign countries to bring in their products? This will not continue to work over the long run.
In closing, I would like to say that dairy farmers just want to be able to make a living from their market, doing what they love to do without a constant threat that the government will continually sell them out in the next trade agreement. I personally want to be able to wake up 30 years from now and pass on a successful dairy to my son, and know that he would also be able to do that for his kids one day. I want to share the story of how our government stood behind our dairy farms and valued our contributions to this great country, but right now, I don't know if I'll be able to have that conversation, if we are continually faced with the roadblocks the government is putting up against our industry.
Thank you very much for the opportunity to speak here today to highlight some of the implications of CUSMA for my dairy farm, dairy farms across Canada and what the future looks like for our industry.
Thanks.