Free trade in milk, eggs, even logs?

Columnist and legislative reporter for Black Press Tom Fletcher on logs

VICTORIA – One of the rituals of life in southern B.C. communities is cross-border shopping for certain items.

Even corner store owners are known to pop down to Washington border towns to load up a van with U.S. milk, taking advantage of a price difference generated by our “supply management” system.

The recent slide in the Canadian dollar reduces this pressure in the short term, but the fact remains that dairy producers are propped up in Canada. And that’s increasingly a problem as Canada pursues entry into the Trans Pacific Partnership, the next big trade deal. With the U.S., Japan, Australia, New Zealand and other countries involved, it would form the largest trading bloc in the world. Canada uses tariffs of up to 300 per cent to protect its dairy and poultry industries from foreign imports, and the higher domestic price on milk and eggs is a burden that falls most heavily on poor people.

The industry group Dairy Farmers of Canada and others argue that reducing or removing Canada’s import protection won’t change the huge farm subsidies paid by European and U.S. governments. The recent trade agreement between Canada and the European Union has already chipped away at this protection. The Conservative government is tiptoeing on this issue as a fall election approaches, with rural seats across the country at stake. But the United Kingdom, Australia and New Zealand have deregulated their dairy industries and the Canadian industry is already facing increased cheese imports due to the European Union agreement.

It’s an issue to watch as the federal election heats up. The NDP has positioned itself as a defender of supply management, a particularly touchy issue in rural Quebec, while the federal Liberals are committed to keeping up with the U.S. and joining the Trans-Pacific Partnership.

The trend toward freer trade is broad and long. The Harper government ended the monopoly of the Canadian Wheat Board in 2012, and grain growers continue to compete globally. A trade deal with Korea saw tariffs come off Korean import vehicles, and life goes on.

Another controlled and protected commodity that is seldom discussed is logs. That’s changed with the push for the Trans Pacific Partnership, as Japan protests federal and provincial restrictions that push up the cost of logs for export.

Ottawa regulates the export of private land logs, but only in B.C. This is a long-standing irritant for private land owners, holding the domestic price for premium “J grade” Douglas fir logs below $80 per cubic metre while the price in Asia and Washington state has climbed above $100.

The U.S. has long complained about B.C.’s cheap Crown land stumpage and low domestic log prices in general, viewing them as a subsidy to lumber production.

Indeed, this whole protection apparatus is designed to stimulate domestic milling, although it doesn’t seem to be working. The main investment by B.C. forest companies recently has been buying southern U.S. sawmills.

The coastal industry has maintained that profits from log exports are keeping logging alive, paying for the harvest and processing of logs in B.C.

With Pacific trade talks in the background, pushed hard by U.S. President Barack Obama, the latest Canada-U.S. lumber agreement is due to expire in October. It will be more difficult to defend what University of Alberta economist Jack Mintz calls a “Soviet-style approach to price determination.”

B.C. used to do something similar to this with wine, protecting a backward industry cranking out mostly god-awful plonk. Competition made the wine industry better, and now it’s world class.

(Tom Fletcher is legislature reporter and columnist for Black Press. Twitter: @tomfletcherbc Email: tfletcher@blackpress.ca

 

Just Posted

Update on Port McNeill’s Beach Drive landslide

Port McNeill has a history of landslides, due to the steep embankment above Beach Drive.

Port Alice loses four volunteer fire fighters

The village has only nine active members left.

Port Hardy Fire Rescue gains eight new recruits

Port Hardy Fire Rescue is still accepting applications for more personnel to join the team.

7 Mile Landfill Sundays not profitable

RDMW to reconsider September Sunday hours

Cottonwood tree causes North Island power outage

BC Hydro’s local crew responded to the outage immediately with a ground patrol to identify the outage

VIDEO: Sears liquidation sales continue across B.C.

Sales are expected to continue into the New Year

B.C. NDP convention set for Victoria

Premier, federal leader Jagmeet Singh to add energy

Ninth annual Mount Waddington Highland Dance Association’s Fall Competition results

During intermission, the audience was treated to a traditional First Nations welcome dance.

A Brush with Henschel: A last blaze of colour

In autumn, the predominant colour varies all the way from a light lemon yellow to a rusty orange.

Silver Creek farm search expands north

RCMP were seen collecting evidence three kilometres north of the farm where human remains were found

INTERACTIVE MAP: Follow the 2017 Tour de Rock

Follow the Tour de Rock, as they pedal more than 1,000 kilometres fundraising to combat paediatric cancer

Bantams go 1-1 on the road against Clippers and Bulldogs

Coach Ryan Handley confirmed the Eagles will be playing in VIAHA’s tier 2 division this season.

VIDEO: Motorcycle catches fire in Nanaimo traffic

Motorcyclist takes fast action to get burning bike off the road along the old Island Highway

Nanaimo man assaulted, tied up and robbed at his home

Incident occurred about 7 a.m. Monday, Oct. 23 at a home on Beverly Drive

Most Read