Conservative leadership candidate Maxime Bernier says there's no way to reconcile his free-market principles with support for Canada's supply-managed agriculture sector, so he's parting company with longstanding party policy.

Canada must change the marketing board system now in place for Canada's dairy, poultry and egg farmers because it is "inefficient and fundamentally unfair," he told reporters Tuesday.

He's hoping other Tories will join him in a vigorous debate leading up to next year's leadership contest.

"It is a government cartel," Bernier told a press conference on Parliament Hill. "It is the opposite of free markets."

Bernier acknowledged that his move resembles a flip flop.

As the minister for small business and tourism specifically, and as a Conservative MP since 2006 generally, he'd repeatedly voiced support for the supply-managed farm sector, a significant source of employment in his rural Quebec riding.

"I was not in a position to question the party's democratic decision, or cabinet solidarity," he said. "And so I went along with it, even though I had grave misgivings about it for all these years."

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Conservative leadership candidate Maxime Bernier told reporters Tuesday that the members of his party believe in the free market. He said he had the courage to speak for 35 million consumers against supply-managed farming. (Adrian Wyld/Canadian Press)

The Conservative Party just concluded a policy convention in Vancouver over the weekend. Revisiting the party's official support for supply management was not on the agenda.

Although Bernier said when he launched his leadership campaign in April that he'd be taking a position on supply management, he didn't reveal anything when he was speaking to delegates in Vancouver.

Instead, he returned to Ottawa to kick off what he hopes will be a vigorous debate on the issue in the race for the party's leadership. The vote is just under a year away, on May 27, 2017.

"I cannot defend supply management with passion and conviction," he said in his remarks. "I think Conservatives are not credible when we talk about principles and then defend policies that squarely contradict these principles."

'Fundamentally unfair'

Bernier echoed earlier studies that have suggested Canadian consumers pay $2.6 billion a year more than the world price for milk, part of a system he said was "fundamentally unfair to Canadian families."

"In order to protect 10 per cent of farmers, we are forcing all Canadian families, especially those with children and low-income families, to pay hundreds of dollars more every year for dairy, eggs and poultry products," he said.

The current system isn't adaptable enough to changing markets and discourages innovation and productivity, he said.

The current fight over diafiltered milk — a product derived from milk and used in the manufacturing of dairy products that's currently exploiting a loophole to enter Canada tariff-free, displacing Canadian milk — is "just the latest illustration of what happens when a system is too inflexible."

Bernier said supply management could be wound down with a multi-year phase-out of the quota system and the import restrictions that protect it.

A "temporary levy" on food products could be used to raise funds to compensate farmers for the cost of their lost quota. (Roughly $24,000 per dairy cow, with some figures putting the quota value for all supply sectors as high as $35 billion nationally.)

He pointed to reforms in Australia as a model for Canada. But he did not explain exactly how his plan would work in a Canadian context, where both the weather (Canadian livestock needs to be in barns during the winter, for example, adding to production costs) and geographic location (right next to large U.S. suppliers) make for a different operating environment.

'Weird' proposition

The Canadian dairy industry disagrees that Australia is a success story, pointing to studies that show the prices consumers pay are not significantly lower than in Canada. Australia's dairy sector has contracted in some areas and been stagnant in others.

"France, Germany, Belgium, Australia, New Zealand, Ireland, Iceland... they have all deregulated and right now they are all giving money to their farmers to preserve their national dairy industry," said Isabelle Bouchard, a spokesperson for the Dairy Farmers of Canada. 

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Bernier visited the Conservative Party of Canada's office on April 7 to file his leadership papers. Opposing supply management is the first major platform position he's taken in the race. (Justin Tang/Canadian Press)

Last week for example, Australia's government announced a $555 million "dairy recovery" loan scheme to try to offset losses from falling prices. 

"His whole proposition is weird," she said, saying Bernier's comparison of Canadian farm prices with the world retail price is flawed methodologically. "I don't think it's helping any of his credibility issues."

"Conservatives have been counting on rural Canada to get elected. And Maxime Bernier now seems to go against that," she said. 

Bernier's campaign co-chair, Jacques Gourde, supports supply management. On Tuesday, Bernier fielded tough questions about how one of his key Quebec organizers disagrees with him on the first issue he's raised.

'Priced right off the menu'

Bernier called the supply-managed industries a "small, but powerful lobby." 

But others in the restaurant and food business have campaigned equally hard to discredit supply management.

"It's refreshing to see a politician standing up for Canadian restaurants and consumers who have been subsidizing these products for more than 40 years," Joyce Reynolds, the executive vice-president of Restaurants Canada wrote to CBC News. "Under the current system, dairy products are being priced right off the menu."

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Dairy farmers hit the streets of Ottawa during last fall's election campaign and they're poised to return on Thursday. (Sean Kilpatrick/CP)

June 1 is World Milk Day.

Dairy farmers have a series of events planned to draw attention to their issues on Wednesday and Thursday, including two convoys of tractors heading to Ottawa from Quebec and Eastern Ontario, as well as other protests in Regina and at Agriculture Minister Lawrence MacAulay's office in Prince Edward Island.