Jen Gerson: Kill supply management. Everybody wins.

We can dismantle a sticky and economically terrible system while sticking it to the Americans, making a bid for national unity, and ultimately reducing grocery costs.

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By: Jen Gerson

It always astonishes me to consider how many of our problems — from separatism to uncertain trade partnerships — can be resolved with a fairly simple guiding principle. Just Make Canada Better. Even just a tiny bit better. 2% better. The pain is in the execution of the goal, of course, and some of our problems really are systemic. But not all of them. There are so many economic and cultural fixes that are immediately available to us with a simple application of common sense and political will.

Let’s start with high grocery prices, for example.

It was genuinely amusing to watch Prime Minister Mark Carney squirm last week at the announcement of a $3.2 billion national food strategy aimed at increasing domestic production and reducing food prices.

The Liberals really do have only one solution to every single problem, don’t they? Just mash a few billion in taxpayer dollars into a fund or a program or a strategy or supercluster and hope people are satisfied with press releases that track inputs while ignoring real results. If any single Liberal ever manages to come up with a single original idea while in office, I swear to God, I will eat a sock.

Anyway, look, the left in this country likes to blame dastardly bread barons like Galen Weston for high food prices, which is emotionally satisfying but doesn’t fix the problem. Grocery store chains in this country make between two and four per cent in net profit depending on how one splits the math. This is a thin profit margin compared to other industries. The grocery stores that bring in higher profits generally do so thanks to items like housewares, general merchandise, and clothing.

In a large and sparsely populated country with significant logistical challenges and short growing seasons, what we have is a pretty straightforward math problem — and one that our grocery chains have solved via consolidation: the lower your profit margin, the bigger you have to be in order to make a serious capital investment worthwhile. To put it simply, grocery stores are complicated businesses and your high bills can’t really be explained by the fact that Weston is a baddie who overcharged you by $40 on bread.

Meanwhile, the grocery industry in Canada generated roughly $115 billion in total revenue in 2025 annually; a $3.2 billion investment in food security over 10 years is just another example of a laughably unserious economic policy coming out of a government ostensibly run by someone who knows better.

The terrible irony is that there is something the government could do to make a material impact on Canadian grocery prices and we’ve all known exactly what it is for decades — kill supply management.

Basic supplies like eggs, butter, milk, and poultry are regulated in this country via an anachronistic quota system that comes right out of the statist economic assumptions of the ’70s. It drives up the cost of staples — even while mandating the destruction of oversupply. It adds an estimated $244 to the annual cost of every Canadian person’s grocery bill every year and is one of the major reasons why milk reliably costs more north of the border. We should have abandoned it when the world came to its senses on these kinds of policies. But we didn’t because Big Dairy is Canada’s National Rifle Association. The country’s political classes cower at the knees of the men who sell milk in bags.

To give you a sense of how insane this policy is: the value of the quota required to legally produce basics like butter now wildly exceeds the cost of the animal that produces the product.

In Ontario, that value has reached more than $30,000 per kilogram of butterfat. An actual cow only sells for about $3,000 per head.

This absurdity is a huge exacerbator of national unity issues, to boot. Where do you think the bulk of our dairy farms are located? For fun, which provinces are more likely to raise cows for meat?

In practice, what this means is that a cow in central Canada is worth magnitudes more than a cow raised in Alberta as a direct result of an arcane agriculture policy that favours constituencies in ridings typically held by Liberals. This is a government that is literally willing to spend billions of your tax dollars on a strategy to lower food prices while simultaneously propping up corporate dairy and poultry producers that raise prices on those very same groceries. Meanwhile, the fact that the Conservative party is equally unwilling to tackle this sacred cow for all the same political reasons makes it all the more maddening.

Hey, for fun, what do you think the average operating profit for a supply managed farm is in this country? If you guessed between 16 and 20 per cent, ding ding ding, you’ve got a winner.

Your typical dairy farmer is every bit as consolidated and capitalistic as Loblaws. The only difference is that the government sanctions their price gouging, which somehow sanctifies a system of rent seeking and transforms it into a moral good in the eyes of our progressives.

The most solid argument for supply management is food chain security. That is, if we were to suffer some kind of collapse in the global food commodity system as a result of war or plague or aliens, I guess we could all survive on butter and local cheese and eggs and chicken and that ain’t nothing.

But do you know what the strongest argument for food security is? A thriving export market in which this country produces way more food than we need to consume. There’s no particular reason we can’t create that. Every other agriculture sector in this country does exactly that, in fact.

Look, hear me out.

Our current troubles with the Americans have given this country a once in a lifetime opportunity to fix obvious but politically sticky problems. We can dismantle a terrible system while sticking it to the Americans, making a bid for national unity, and ultimately reducing grocery costs.

How?

Granted, this idea has been culled from several conversations with conservatives: maintain stringent quotas on U.S. dairy products while winding down supply management. Make a big fuss about how dismantling the system is necessary to increase our productivity and access to international trade in the face of hostile American economic policies.

Offer reasonable compensation for lost quota, while working with farmers in Ontario and Quebec to develop a thriving export market for their products to Asia and Europe. Keeping U.S. tariffs high would give them time to build up a stronger domestic industry — meanwhile, we can develop Canada’s reputation for its products abroad by trading on a reputation for being wholesome, clean, and well regulated. Hell, we can put pictures of Quebec and Ontario on the butterfoil. Lean in. Don’t be subtle.

There’s every reason to believe we can be globally competitive in this field while securing better quality food that costs less, to boot.

We can do all this without sacrificing a point of leverage on trade negotiations with the U.S. Hell, the best part is that we could annoy the hell out of them while focusing their ire on a trade irritant of our choice. In fact, the angrier the Americans get about dairy tariffs, the more domestic buy in the government earns toward getting rid of the supply management system. Anything that pisses them off is a political winner for the Liberals. So please post harder, Donald Trump.

The ire need not be permanent, either. After we’ve beefed up our domestic industry, and if our dear neighbours to the south start acting sane again, then we can chip away at the U.S. tariff. There may yet be a future in which the leaders of our fine nations trade a basket of eggs and butter across the Gordie Howe bridge. I can see the happy day distantly in my mind’s eye.

There are few opportunities to create so many wins for so many different people. Scrap supply management and consumers win, the west is placated, farmers in Quebec and Ontario seize an opportunity to become fabulously rich on global trade, we foster better links with Europe and Asia to further our diversification goals, and we anger the Americans all at the same time. Heck, in the long run, even the Americans win.

I cannot think of a more perfectly passive-aggressive Canadian gambit. Seize the moment. Make the country just a tiny bit better.

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