To mitigate the negative impact of the increase in market access under CUSMA, we propose a twofold approach: first, the allocation of dairy import licences to Canadian dairy processors; and second, a dairy processor investment program.
We want to reiterate today that dairy import licences, commonly known as dairy TRQs, must be allocated to dairy processors. Dairy processors possess the expertise and the distribution network to import a wide variety of dairy products that complement the domestic offering, as opposed to replacing it. The government must refrain from repeating the same mistake it made for CETA, where it allocated more than half of the CETA cheese TRQ to non-dairy stakeholders such as retailers and brokers. Those non-dairy stakeholders do not have a vested interest, as dairy processors do, in importing dairy products that would minimize the impact on existing production line and manufacturing platforms in Canada without displacing Canadian farm milk. In addition, dairy processors continue to invest, maintain and generate well-paying jobs across the country, particularly in rural areas. Additional imports that are poorly planned or poorly targeted will undermine the survival of many businesses.
The second mitigation tool we recommend is a dairy processor investment program. The diary-processing industry is made up of businesses of various sizes and product mixes, all of which will experience the impact of these trade agreements in different ways. As such, we recommend that the government create a program for dairy investment and compensation that would aim at supporting investment in dairy-processing capacity, competitiveness and modernization. That program would include tools such as non-repayable investment contributions and refundable tax credits. The program would work on a matching principle basis. In order to receive funds, a dairy processor would have to commit to making investments here at home.