It’s no secret that all of Canada’s major political parties say they support the dairy “Supply Management” system and its 245.5% customs duties on imported cheese. This 250% border tax effectively blocks cheese imports. For example, cheese that costs $10/kg before it crosses the Canadian border is subject to customs tariffs of $25, and ends up costing $35/kg when it crosses the border. However, Ottawa’s Tariff Rate Quotas (“TRQs”) allow some of this cheese to enter Canada at a cost of 10/kg, rather than $35/kg. Under Ottawa’s TRQ system, a limited quantity of cheese can enter Canada at a lower or zero rate of customs duties, while imports over this quota are subject to the 245.5% border tax. Cheese TRQs are not the result of Canadian domestic policy.
Instead, TRQs are the result of Canada’s obligations under international trade treaties, including the:
• World Trade Organization (WTO)
• Canada and European Union (EU) Comprehensive Economic and Trade Agreement (CETA)
• Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
• North American Free Trade Agreement (NAFTA), and the Canada-United States-Mexico Agreement (CUSMA).
The Cheese TRQs created in international trade treaties are allocated and administered domestically by a federal government department, Global Affairs Canada (GAC). In sum, cheese importing in Canada is a regulated industry, both at the domestic level, and the international level. GAC’s Notices to Importers allocate and administer TRQs, but international trade treaties create them. That’s why the ICCC is active internationally and in Ottawa. We are working with governments to make sure cheese TRQs are allocated to the persons most likely to use them so that Canadian cheese consumers can have more choice.