Bill C-202, an act to protect Canadian supply management in trade negotiations
Bill C-202 provides trade protection for the Canadian supply management industries: dairy, poultry, and eggs.[2][1] It is a private member's bill proposed by a member of the Bloc Québécois party. Bill C-202 is identical to bill C-282, which was under committee consideration in the Senate when it died on 6 January 2025 following Prime Minister Trudeau's announcement that Parliament would be prorogued, thereby ending the parliamentary session.[3][4][5] The dairy industry lobbied intensively for bills C-202 and C-282.[6] [7] Opposition came from industries that are competitive internationally, and that rely on access to international markets (including beef, cereals, and canola), who argued that the bill sets a bad protectionist precedent for a country reliant on trade.[5] Trade experts say the protection afforded by Bill C-202 is unprecedented, since no other country prohibits its government from including specific commodities in trade negotiations.[6][8] Bill C-202 became law on 26 June 2025.[1] PurposeBill C-202 says that for dairy products, poultry, and eggs, the Minister of Foreign Affairs, Trade and Development cannot commit the Government of Canada, by way of an international trade treaty or agreement, to increase the tariff-free import quota (i.e., the quantity that can be imported without a tariff). Also, the Minister cannot commit to reduce the tariff applicable to these goods when they are imported in excess of the tariff-free import quota.[1] BackgroundThe NAFTA agreement brought removal of tariffs on imports between Canada, the U.S., and Mexico for almost all agricultural products, but Canadian supply-managed sectors (dairy, poultry, eggs) were exempt.[9] Very high tariffs on supply-managed goods imported into Canada were maintained (for example, 241% for liquid milk and 298% for butter), although small amounts could be imported tariff-free.[9] Under the Canada–US–Mexico agreement (CUSMA), the U.S. was granted tariff-free access to 3.6% of the Canadian dairy market, and there were concessions equivalent to 3.25% of the dairy market granted under Canada's entry into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), plus additional market access for 17,500 tons of European cheese under the CETA (the Canada-European Union trade agreement).[9][10][11] By 2031, when the CETA, CPTPP, and CUSMA trade agreements have been fully phased in, tariff-free access for imports is estimated to be equivalent to 10% of the Canadian dairy market.[12][13] Bill C-282 (from the 44th Parliament) is identical to Bill C-202 (from the 45th Parliament), and both are private member's bills introduced by the Bloc Québécois, so they do not represent government policy.[8][1][14] Bill C-282's sponsor, Bloc Québécois member Luc Thériault, said that with the CETA, CPTPP, and CUSMA trade agreements, the government "really did a number" on the supply management agricultural system and food producers and processors "are still assessing the scale of the damage caused by the implementation of these three trade agreements."[15] The Trudeau government says that it is fully compensating producers, including paying over $4.8 billion into the supply-managed sectors, because of negotiated access under the CETA, CPTPP, and CUSMA agreements.[8][16][17] Also, despite initial concerns about the impact of the trade agreements, farmers in supply-managed sectors are doing well and have increased production.[18][8] Prime Minister Justin Trudeau and Agriculture Minister Marie-Claude Bibeau have reiterated the governments' pledge "not to concede any further market shares under supply management during future trade negotiations."[16][8] Evidence for the credibility of this commitment was provided when the U.K., Canada's third-largest trading partner, stepped away from trade negotiations in large measure over the lack of access to Canada's supply-managed markets, especially as they relate to cheese.[8][19] Senators on the foreign affairs committee voted 10-3 to amend Bill C-282 on 6 November 2024 so that the prohibition on supply management changes would not apply to pre-existing trade agreements (such as the existing CUSMA, due for renegotiation by 2026), or to a treaty negotiation that was underway (such as Canada's ongoing talks with the U.K.).[20] Senator Peter Harder said this amendment would "de-risk" the bill.[20] Harder said he wanted the Senate to give adequate consideration to Bill C-282, since the House of Commons' committee consideration was "farcical", with an obvious lack of trade representatives or experts speaking on the trade implications of the bill.[8] Bill C-282 died on 6 January 2025 following Prime Minister Trudeau's announcement that parliament would be prorogued, which ended the parliamentary session.[3] Bill C-202 became law on 26 June 2025.[1] ImpetusInternational trade lawyer Lawrence Herman said parliamentarians have been subject to intense political lobbying by dairy producers, who wield "outsized" power in Ottawa.[6][7] In 2023–24, there were hundreds of meetings between the Dairy Farmers of Canada and the prime minister's office, dozens of federal departments and agencies, members of parliament and senators.[6] Among the most prominent subjects discussed were international trade and Bill C-282.[6] Canada's lobby registry shows 141 actively registered advocates for the dairy industry (compared with 121 for pharmaceuticals), with spending of around $80 to $120 million annually.[21] Supply management proponents pressure politicians, academics, and groups advocating for reform, and no major political party opposes the protection afforded to the sector.[18][8][22][23][6][24] Responses to Bill C-202 and Bill C-282Response by supply-managed sectorsProducers in the supply-managed dairy, egg, and poultry sectors supported Bill C-202 and Bill C-282.[5][25] Advocates argue it will provide income stability and "a living wage" for farmers.[26][27] Activity from supply-managed farms supports rural economies.[27][28] Also, the supply management system will privilege locally produced dairy, eggs, and poultry, consistent with the concept of food sovereignty.[26] Response by trade expertsNo other country in the world has legislation that prohibits its government from including specific commodities in trade negotiations, according to the Associate Assistant Deputy Minister at the Department of Foreign Affairs, Trade and Development.[6][8] Former Canadian ambassador to the World Trade Organization and chief negotiator for the NAFTA, John Weekes, said passing Bill C-282 would be "like slapping the Americans in the face," and it would ensure that reform of supply management would be a top American demand in CUSMA renegotiations.[29] Bill C-282 would be "extremely damaging" according to a group of 19 former trade negotiators, because it handicaps Canadian governments in the give-and-take of future trade talks.[30] They maintain that trade talks are vital to opening up new markets and securing access for Canadian products abroad and, because the bill narrows the scope of trade negotiations, it removes the flexibility needed to secure the best deals for the country as a whole.[30][31] Response of trading partnersGlobal Affairs Canada trade official Doug Forsyth said all of Canada's trading partners were watching the bill, and the U.S. reaction was likely to be negative.[32][33][34] Bill C-282 could even be counterproductive for the dairy sector by making it a target of foreign negotiators.[30][35] The U.S. Ambassador expressed concern about Bill C-282 because he didn't think a good way to resolve differences was for Canada to unilaterally take an issue off the table without discussing it.[36] Senior U.S. officials have said passing such legislation could lead the U.S. to "raise the bargaining stakes" such as by demanding concessions on supply management during the 2026 mandatory review of the CUSMA.[8] Response of other industriesIndustries that are competitive internationally, and rely on access to international markets, were most concerned about Bill C-202, and before it, Bill C-282.[5][37] The Canadian Agri-Food Trade Alliance, which includes growers of cereals, pulses, beef, and canola, was "profoundly disappointed" that Bill C-282 was passed in the House of Commons.[38] It says the legislation sets a bad protectionist precedent for a country reliant on trade.[39] The Alliance says it's "shocking" how many MPs really don't know about the bill and its ramifications.[38] The Canadian Cattlemen's Association opposed the bill, noting that free and open trade is instrumental to the beef industry's success, and that beef is the second largest single source of farm income in Canada.[40][41] Exports support over a million agri-food jobs, and 3.3 million jobs overall in Canada, approximately ten times the 0.35 million jobs supported by supply management.[42][28][38] In contrast to the export-oriented industries' concerns with market access, the supply-managed dairy sector is not allowed to export much dairy product following a WTO panel ruling, because of Canada's protection of the dairy industry.[43] Also, under the CUSMA, Canada has agreed to limit its dairy exports and, in 2023, dairy exports of $488.1 million were just 5.7% of net dairy farm cash receipts.[44][9][45] Implications for supply management and future trade negotiationsSome opponents of Bill C-202 have noted that, while the law constrains the Minister of Foreign Affairs, the Government of Canada retains the power to reform supply management for domestic goals, such as consumer price reductions, or to remove interprovincial trade barriers.[46][47][24][4] For example, the government could allow sales of imported cheese to consumers, rather than requiring all potential imports to go through Canadian processors.[46][48] Also, the government could include a clause in future legislation that allows a trade deal to supersede Bill C-202.[49] See also
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