Canadian consumers pay a milk premium

- Last updated on GMT

Canada's supply management system for milk may be costing consumers
$2.5 billion a year, according to the Fraser Institute.

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.

Related topics: Market Trends

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