In efforts to seal the Trans-Pacific trade deal, Canada may be prepared to open up to 10 per cent of this country's dairy market to American milk and related products, according to recent reports, and the news is making Quebec dairy farmers sick to their stomachs.
Quebec accounts for half of Canada's dairy farms, and industry representatives are concerned about the potential impact of the proposed 12-country Trans-Pacific Partnership (TPP), as chief negotiators from the 12 Pacific Rim member countries meet in Atlanta starting today.
The United States, Australia and New Zealand have been pushing for greater access to Canada's dairy sector in particular.
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Dairy farmers and lobbyists have vehemently opposed any trade deal that would endanger their livelihoods, and the futures of their farms.
Trade Minister Ed Fast will be in Atlanta on Wednesday for what may be the final round of TPP negotiations.
Late Saturday, Fast, who has been campaigning for the Oct. 19 federal election, issued a release denying reports that Canada will make dairy sector concessions at the talks, calling them "absolutely false."
"Our government remains committed to defending our system of supply management," he said in the release, adding that Conservative Leader Stephen Harper has made clear that he will only sign an agreement that's in Canada's best interests."
Earlier, the Conservatives' Maxime Bernier, incumbent candidate in the Beauce riding, also said the potential for concessions being reported are false, and that the TPP would create employment opportunities by improving exports.
On a cool but sunny Saturday in Ste-Anne-des-Plaines, Que., dairy farmer Réal Gauthier awoke to his morning chores and was promptly sideswiped by the news of the potential dairy concessions.
"I am in the stable and I [am feeding] the cow, and the phone rings, and people question me, 'Do you look about the news of CBC?'" Gauthier said.
Gauthier said his business is a family one — three brothers, two nephews and one niece also work at the farm.
CBC sources indicate the Conservative government hopes to sign off on the Trans-Pacific trade agreement before the election.
- What is the Trans-Pacific Partnership?
- N.Z., U.S. dairy farmers call on Canada to open market
- TPP: Harper reveals in debate that auto industry won't like it
During Thursday's French-language leaders' debate, Harper said he always defends supply management in trade talks.
On Saturday, Liberal and NDP members said their parties were concerned over what they called a lack of transparency from the Conservatives.
"We insist that we have to know exactly what is taking place at the negotiating table. The stakes are very high in Canada, particularly in my province," said Quebec City riding Liberal Party candidate Jean-Yves Duclos. "I think we have reason to share concerns with our agricultural community in Canada."
"They have not heeded our calls to be transparent about what the negotiating framework is and what they are prepared to sacrifice," said Toronto NDP candidate Andrew Thomson.
TPP almost done
The final offers on market access for dairy products were one of the few things ministers didn't get to during the last trade talks in Maui, Hawaii, in late July.
"Let me put it very simply: We're talking about 40 per cent of the world economy, close to a billion new consumers. This is way too important for Canada not to take part of this deal. Everybody has to make trade-offs. The Americans will make trade-offs, the Australians will make trade-offs, Japan will make trade-offs. So Canada, at some point, will have to make some trade-offs," said Éric Tétrault, president of the lobby group Quebec Manufacturers and Exporters.
The list of outstanding issues is now very short: rules of origin for the automotive sector, which are also sensitive in Canada, as well as intellectual property protections for pharmaceuticals. The deal is portrayed as "98 per cent done."
The short strokes on dairy come down to how much of Canada's domestic market would be opened up to American products to compensate U.S. dairy producers for opening up their market to TPP partners such as New Zealand, an aggressive and competitive dairy exporter.
CBC News has learned Canada is prepared to offer up a significant share of its domestic market (as defined by consumption levels), including not only fluid milk, but also possibly butter, cheese, yogurt or the milk powders and proteins used to make other foods.
No future in dairy farming?
Ten per cent less domestic milk would destabilize the supply chain and potentially increase the consumer price of domestically processed dairy, if fixed costs remain the same with lower volumes. Alternatively, local plants may close.
In some places, Quebec and Atlantic Canada especially, competitive American dairies are only a few hours' drive away.
Meanwhile, Gauthier's 90-cow milking operation has been in his family for six generations — a piece of history that may end with him if the trade deal goes through.
"It's sure to give me a big reflection on this because... what's in the future?" he asked.