Government of Canada commits $1.7 billion to supply managed sectors for USMCA compensation

The federal government will pay approximately $1.7 billion to Canada’s supply-managed dairy, poultry, and egg producers and processors to compensate for market access concessions made in the Canada-United States-Mexico Agreement (CUSMA or USMCA).

Agriculture Minister Marie-Claude Bibeau made the announcement in Ascot Corner, Quebec on Monday, Nov. 13, expanding on the commitment made in the federal government’s fall economic update earlier this month.

The government says the money is to “help dairy, poultry and egg producers and processors make key investments and improve their operations to be even more competitive and sustainable.”

Dairy farmers will receive up to $1.2 billion over six years through the Dairy Direct Payment Program to account for the impacts of the trade agreement. This is in addition to monies received (or yet to be received) as compensation for the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

The total compensation across all sectors for all three trade deals will reach up to $4.8 billion.

From 2024 to 2029, the owner of a farm with 80 milking cows may receive compensation through a direct payment of up to $106,000 in six yearly instalments on a declining scale, the government says.  Based on 2021 production, the compensation for a dairy producer with an average herd of 80 head will be $26,507 (25%) for 2024, $22,089 (21%) for 2025, $22,089 (21%) for 2026, $13,253 (13%) for 2027, $13,253 (13%) for 2028 and $8,835 (8%) for 2029.

Starting in 2023, $300 million will go in to a new program to support innovation and investment into large-scale projects to add value to solids-non-fat, a by-product of milk processing. The government says this program is still being developed.

For poultry and egg producers, there will be an additional $112 million released under the Poultry and Egg On-Farm Investment Program. Producers will receive payments based on quota holdings.

The final $105 million will be put into the Supply Management Processing Investment Fund to support dairy, poultry and egg processing plants, to grow productivity or efficiency through new equipment and automation technologies.