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Montreal Economic Institute: Supply Management makes the poor even poorer


September 2, 2016
By Montral Economic Institute

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September 2, 2016 – With the price of industrial milk set to increase for a second time this year on September 1st as a result of a recent decision by the Canadian Dairy Commission, it is once again the poorest families that will suffer from such a policy, as shown in a Viewpoint published today by the Montral Economic Institute (MEI).

According to numerous studies, Canada’s supply management system, which governs the country’s dairy, egg, and poultry sectors, forces families to bear a large cost by imposing higher prices than those that could be obtained on open markets.

“Supply management hits the poorest Canadian families the hardest by forcing them to pay $339 more per year to feed themselves,” explains Vincent Geloso, economist and co-author of the publication. “These measures are highly regressive, costing poor families five times more than rich families, in proportion to their incomes.”

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The authors’ calculations show that a considerable number of Canadians are hurt by supply management. Using different thresholds measuring economic vulnerability, an estimated 133,032 to 189,278 Canadians find themselves in poverty because of this system.

“Supply management protects 13,500 Canadian producers of dairy, poultry, and eggs, but this represents just one eighth of all the farms in the country,” argues Alexandre Moreau, Public Policy Analyst at the MEI and co-author of the Viewpoint. “While it may help certain farms, supply management hurts 35 million Canadian consumers who are forced to pay higher prices.”

“The government should once and for all abolish supply management, which is nothing more than an unjust, inefficient policy that impoverishes the most vulnerable Canadian families,” concludes Vincent Geloso.

The Viewpoint entitled “Supply Management Makes the Poor Even Poorer” was prepared by Vincent Geloso, economist, and Alexandre Moreau, Public Policy Analyst at the MEI. This publication is available on our website.