Cowed by the dairy industry?

Prime Minister Mark Carney has set a bold 30-day deadline for the United States to strike a trade deal with Canada, with escalating tariffs on aluminum and steel looming if progress isn't made by July 21. The Canadian government is under pressure to resolve these talks whilst protecting domestic industries. A new bill, passed by Parliament, now makes it illegal to negotiate changes in supply management policy, including crucial quotas on dairy production. This law could further complicate trade discussions, as supply management has been a sticking point not just with the U.S., but with other nations like the U.K.

Consumers still recall the "Buttergate" scandal of 2021, where changes in butter consistency were blamed on the heavy use of palm oil in dairy feed—a situation exacerbated by Canada's protectionist dairy policies. The government now faces the added complexity of its digital sales tax on U.S. tech giants such as Amazon and Meta, poised for enforcement on June 30, despite potential trade ramifications. Industries like auto, steel, aluminum, and oil and gas, particularly in Ontario and Alberta, continue to bear the brunt of the trade tension. This forms a stark contrast to the government's decisive action in protecting the dairy sector through legislation. With more Canadian jobs and industries hanging in the balance, the government's strategic decisions in these negotiations will be more scrutinized than ever.