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Canadian consumers pay a milk premium


Canada's supply management system for milk may be costing consumers $2.5 billion a year, according to the Fraser Institute. The free-market think-tank says that after adjusting for levels of national income the Canadian cost of milk is 25 per cent higher than in the United States - and 135 per cent above the world price, a Canadian press story reports. The institute's study, titled The Perfect Food in a Perfect Mess, says Canadians pay almost $1 billion more annually for milk products than they would at U.S. prices, and up to $2.47 billion more than they would in a free market.

"If burdening Canadian household budgets is not reason enough to re-examine milk supply management, the system undermines Canada's trade credibility just as federal negotiators prepare to seek concessions at the WTO meeting in Doha, Qatar," says Owen Lippert, the study's author.

Lippert says Canada has among the highest dairy tariffs in the world, thanks to "the complicated and antiquated regulations" under which the federal and provincial governments determine the supply and price of milk.

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