Mr. Speaker, it is always a privilege to bring greetings on behalf of the great people of Kings—Hants, even if it is virtually, but that is the world we are living in.
I would like to thank the member opposite for bringing forward this legislation and giving me the opportunity to speak on the importance of supply management and what it means to rural communities across the country. I was a little disappointed in the member opposite's comments. He mentioned Ontario, Alberta and, of course, Quebec, but he did not mention the importance this has across the country, including the communities that I represent here in Nova Scotia. I look forward, in the next nine and a half minutes, to explaining what this industry means to the people I represent.
I grew up in a region called East Hants in the Kings—Hants area. It has the highest concentration of dairy and poultry supply managed farms east of Quebec, so this is a very important sector for us. It is also a key piece of our identity. Not only is it an economic driver in the sense of jobs and opportunities for producers, it is also a key piece of agricultural communities. This is not just in Kings—Hants. It is across the country. Going to high school, we would see tractors going up and down the road. Some of the students and colleagues that I went to high school with would bring their tractors to prom from whatever farm, but most importantly, from our supply managed sector.
I do not mean to pick on the member opposite because his intentions were good in bringing this to the House, but he mentioned at some point that this is a small percentage of our GDP. That may be the case, but $22 billion is the figure that I have in front of me, and is what the supply managed sector means to rural Canada. That is larger than the auto sector. That just shows the significance of what this means and the importance of having robust programs in place to support it.
I want to talk about the history of supply management for those who might be watching and may not know, or for some urban colleagues who might not know as much about supply management and its benefits. It was created, as the parliamentary secretary mentioned during questions and comments, in the 1970s by a Liberal government. At the time, there was a massive disconnect between the amount of supply that was being provided in the market and the prices that were being returned to producers. The reason for creating rationality was because our supply managed sectors deal with perishable products and producers may not have been able to get them to market in time. This program was put in place to make sure there was an equitable program to support farmers, but also to give the market certainty.
There have been critics. I would be naive to stand in the House, virtually, and suggest that people have not criticized this system and sought an alternative program to move forward, but I want to highlight some of the benefits of supply management. First of all, for me, perhaps most importantly, it allows smaller family farms to still be able to contribute in the marketplace. Whether it is the milk pooling agreements in the dairy sector or otherwise through the SM5, supply management allows farmers that are in more rural and remote parts of the country to have equal access to markets. That is ideologically important to me, and it is important for our economy to create that supply chain throughout rural Canada, from Newfoundland and Labrador, as we heard at the agriculture committee this evening, all the way to Yukon. This is truly a national policy that creates benefits.
I also want to talk about the importance of what this means. Before I was in the House and had the privilege of serving as a member of Parliament, I was an outspoken advocate for this system and what it represents. It truly is the lifeblood of rural communities. It is important that we are able to maintain it and keep it in place to support our farmers. I will relate a quick personal story, if I may.
I was a competitive hockey player. I played junior hockey in a small community called Amherst, Nova Scotia, and had the good fortune to be billeted at a dairy farm just outside of town in Linden, Nova Scotia. I stayed on the farm, played junior hockey and got to see the inner workings of a small family farm in rural Cumberland County. I can attest to the hard work that our farmers put in and the importance of this system, which allows farms like that to exist.
There are critics who would suggest that if we were to get rid of supply management it would actually lead to a reduction in prices at the retail level. I want to challenge some of those assumptions on the record here in the House. The ideology of some of the critics is perhaps conservative and more free-market based.
I am not against free-market principles, but there have been challenges. New Zealand, for example, went with a much more deregulated model. It got rid of some of its supply managed system and saw an increase in price at the retail level for milk supplies. We also talk about the World Trade Organization, and this is one way to support farmers to be able to create an equitable price.
There are other programs out there, such as the dairy margin protection program in the United States. Maybe some of my colleagues will recall a bipartisan fight in 2012. There was a chance the farm bill would not go through Congress at the time. There was speculation that milk prices would almost double in the United States without the subsidy provided.
In Europe, there is a common agricultural policy that provides billions of dollars every year to producers. Other jurisdictions of the world choose to go about it a different way. When we consider things like the importance of looking at the environment and having sustainable means moving forward, supply management becomes even more in vogue in how important it is to be able to match our domestic demand to supply, and for sustainability and efficiency.
I also want to challenge the notion there is not a competitive model built within the supply managed sector as it relates to the dairy industry. Many critics would suggest it is a system that allows all farmers to benefit and to succeed. It is simply not the case. The way the Canadian Dairy Commission helps set the price of milk, or I should say the kilograms of butterfat in different products, is based on a model that only allows 70% of farmers to break even after their costs of capital are considered.
This means that, for 30% of farms, if one is not good at managing costs, whether a larger farm or a smaller one, it is going to be challenging to get the money to recapitalize infrastructure. It is a myth, and I want to put on the record that there is not a competitive model built within the supply managed system.
I want to turn to why I am proud to be standing with a government that has fought since 1970 for supply management. When we look at CUSMA and what that trade relationship looks like, the president of the United States wanted to use the word dairy. This was important for him politically in being able to get concessions from the Canadian government.
I contrast that with the Conservative government under CETA and the CPTPP. At the time, I believe the member for Abbotsford was the minister responsible for international trade. It was a much different situation, in terms of pressure, and what the relationships of those trade deals meant versus our relationship with the largest trading partner in the world.
Our minister for trade at the time worked extremely hard. We did everything to keep the integrity of supply management in place. I contrast that with two trade deals that of course are important, and I would never suggest they are not, but the pressure to get rid of our supply management, or give concessions, was nowhere near the same.
When I talk with farmers in my riding, they seem to understand the difference and how the government was between a rock and a hard place, including on products and things that matter to the member from the Bloc such as aluminum, for example.
I could highlight the programs we put in place, such as the dairy direct payment program, which is certainly extremely important. It was $345 million to help compensate for the trade access that was given under the former Conservative government when it signed these, along with COVID supports.
I am proud to be part of a government focused on our supply managed producers. I mentioned dairy a lot, but that is not to say poultry, eggs, broiler hens and turkeys are not important. It is all so important and it all matters to the people I represent. I am pleased to see a piece of legislation in which we can talk about the importance of this system in rural Canada, and I would like to thank the member opposite for bringing this forward.
I really appreciated the time to talk about a system that matters to rural Canadians. As the rural caucus chair for the Liberal Party, I am very pleased to bring some remarks to the House tonight.