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Prime Minister Mark Carney and U.S. President Donald Trump pose during a group photo at the G7 Summit in Kananaskis, Alta., on Monday, June 16, 2025. Photo by File photo /PNimg
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For decades, Canada has coasted, clinging to outdated and ineffective policies that should have been reformed long ago.
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If it was up to the Carney government, Canada would continue to coast for years to come.
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But U.S. President Donald Trump isn’t going to let Canada continue to coast on at least three issues that should have been addressed long ago: Imposing new taxes on foreign companies, underspending on national defence, and clinging to the antiquated system of supply management.
Make no mistake: Trump is bullying the Carney government into shifting its policy approach on several key issues. But on these critical files, Trump is pushing Canada in the right direction.
The Carney government, until a few weeks ago, was fully intent on imposing a punitive new Digital Services Tax on foreign companies that generate a certain amount of revenue from online activities in Canada. This would have resulted in significant new tax bills for companies like Amazon, Apple, and Uber, which in turn would have led to increased prices for Canadian consumers.
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Trump threatened to cut off present trade negotiations if the Carney government went ahead with its plans to start collecting the new tax on June 30. At the eleventh hour, Prime Minister Mark Carney relented and plans to rescind the tax entirely.
Then, there’s national defence.
Trump also sought to hold up trade negotiations due to the Canadian government’s significant underinvestment in national defence. As a member of NATO, Canada has committed to spending 2% of its GDP on national defence for years. But the last time Canada met that target was several decades ago. And this past year, Canada spent less than 1.5% of its GDP on national defence.
Former Prime Minister Justin Trudeau made a throwaway commitment to bring Canada to the 2% target by 2032. For Trump, that wasn’t going to fly. Thankfully, Carney read the tea leaves when he took over and is now promising to ramp up defence spending to 2% of GDP within the year and meet NATO’s new 5% of GDP target within a decade.
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Carney has moved on two of the three key trade irritants that have been holding up a deal with the Trump administration. But there’s one more: supply management.
Through a complicated web of quotas and tariffs, Canada severely restricts the amount of foreign dairy, poultry, and eggs allowed into the country. Even domestically, the amount of product Canadian farmers can make is restricted to the point that farmers are forced to pour out perfectly good milk to avoid exceeding mandatory quotas.
All this does is restrict what Canadian consumers can buy and hikes the prices those very same consumers are ultimately charged.
For example, studies have shown that the price of milk in Canada, with all else being equal, is 20% more expensive than the price of milk in the United States.
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Allowing Canadian farmers to produce more and farmers from the U.S. and elsewhere to export their dairy, poultry, and eggs into Canada would lower prices and increase the variety of goods consumers can access.
Canada’s farmers are some of the best in the world. They compete with farmers across the globe when it comes to products like grain and meat. Why is the government so afraid to let Canadian dairy producers compete like their counterparts in other sectors do?
Sure, there would be an adjustment period for Canadian dairy farmers. But it would encourage efficiency and innovation and ultimately lead to better outcomes for both consumers and producers.
Consider the case of New Zealand. New Zealand used to have a system of supply management too, but the country ended that practice three decades ago.
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The results? Prices are down, efficiency is up, and farming exports are through the roof. There’s no reason why Canada’s consumers and farmers can’t benefit from the very same approach.
No one likes a bully. But the stakes are too high to ignore perfectly reasonable policy demands from the United States. Carney should do what he did on the DST and defence, pivot away from the approach of the Trudeau years, and trigger an end to supply management.
The system can be phased out, but in the end, there’s no doubt about it. Supply management must go.
—Jay Goldberg is the Canadian Affairs Manager at the Consumer Choice Center, and a guest writer for the Winnipeg Sun.
Have thoughts on what’s going on in Winnipeg, Manitoba, Canada or across the world? Send us a letter to the editor at wpgsun.letters@kleinmedia.ca
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