James Alexander Michie: Bill to end system becomes an estimated increase to about $ 35 billion | The Globe and Mail

Business

Author: James Alexander Michie

It is important to say that the supply of licenses is strictly controlled, and they change hands in open markets, with taxi medallions and milk quotas sold to new or expanding players. Historically, the prices of both increased dramatically as demand outstripped supply, but it should be noted that both markets are currently under pressure regardless of anything. either for shared-travel services such as Uber and Lyft or, in the case of milk, for the renegotiation of a free trade agreement in Washington.

We must not forget the fact that both Canadian milk producers have political influence and the government is committed to compensating them if the quotas disappear. The bill to end the system will be transformed significantly high, but that is why an unknown question arises: how high? Estimates vary up to $ 35 billion.

Now there is no debate about the merits or failures that may exist in the administration of the supply, whether it has done a good job of protecting milk standards and market stability or has caused exorbitantly higher food prices for farmers. consumers, but what is a fact is that the administration of supply is a bargaining chip in current and future trade negotiations, while quotas are eliminated, governments need a fair compensation system that compensates those who really deserve it, but not to those who have already reaped vast benefits.

It is necessary to mention that there are almost a million dairy cows in Canada, including some 650,000 in Ontario and Quebec together, because of this, quotas are a great investment for the nation’s 10,000 dairy farms, which often represent Half the value of their operations.

Likewise, it should be mentioned that in such a case that dairy quotas would evaporate, the ones really damaged and deserving of payment would be recent buyers who have not recovered, for example, the $ 50,000 fee for B.C. cow.

Take a read: https://www.theglobeandmail.com/business/commentary/article-supply-managements-35-billion-question/

Source: Leonard Waverman | The Globe and Mail

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