The Liberal government will not make concessions concerning the country’s supply management system, International Trade Minister Mary Ng says, as U.S. President Donald Trump is threatening steep tariffs and hinting he wants expanded access to Canada’s dairy market.
When asked during a Feb. 6 interview on CTV News if Canada would be willing to concede on the issue, Ng simply replied, “No.” She said Canada’s supply-managed sectors are “really important to the Canadian economy,” and had been negotiated as part of the United States-Mexico-Canada Agreement during Trump’s first term as president.
“With respect to supply management, I would also say that the Americans absolutely have taken advantage of the dispute settlement system that is a part of our trade agreement,” Ng added.
Trump declared a last-minute pause to sweeping tariffs on Canada on Feb. 3, following discussions with Prime Minister Justin Trudeau on border security measures. Trump had signed an executive order on Feb. 1 to impose 25 percent tariffs on Canadian goods and 10 percent tariffs on oil and gas, but agreed to pause the taxes for 30 days.
Trudeau said Ottawa would appoint a fentanyl czar, designate drug cartels as terrorist organizations, and commit $200 million for intelligence operations to combat fentanyl. Trump has repeatedly said the incoming tariffs on both Canada and Mexico were in response to drugs and illegal immigrants coming over the borders, and that he wanted the two countries to take action to stem these flows.
Trump said on Feb. 3 he was “pleased with the initial outcome,” noting the pause on tariffs would allow for the assessment of whether a “final economic deal with Canada can be structured.” The U.S. president has mentioned several economic issues he would like to see Canada change, such as allowing U.S. banks to do business in Canada.
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Trump’s pick for commerce secretary Howard Lutnick testified at his confirmation hearing on Jan. 29 that he would like to see more U.S. dairy products exported to Canada, and accused Ottawa of treating American farmers “horribly.”
Canada has a supply management system that regulates the production and demand of dairy and poultry products. The system was created in 1972 in response to decreasing prices for the products, providing stable prices for farmers and consumers.
Trump pledged during his October election campaign to renegotiate the free trade agreement his country has with Canada and Mexico. Known as the United States-Mexico-Canada Agreement (USMCA), it came into effect in 2020 as a replacement for the North American Free Trade Agreement, which Trump re-negotiated during his first term. In the deal, Canada to made adjustments to its supply management system, providing new trade privileges exclusively for the U.S. dairy market, among others.
The Bloc Québécois previously introduced a bill in Parliament in 2022 that would protect Canada’s supply management system from “further dilution in future international trade negotiations.” While the legislation passed the House of Commons, it became bogged down in the Senate, where several Senators raised concerns it would limit the Canadian government’s flexibility in trade negotiation.
Bill C-282 was killed when Parliament was prorogued on Jan. 6, 2025. It would have to be reintroduced in a new session of Parliament to move ahead.
Foreign Affairs Minister Mélanie Joly told reporters on Feb. 4 the government would defend Canadian dairy producers.
“The Liberal party is the party that put supply management in place,“ she said. ”We are the ones who protected it during the last [free trade] renegotiation, and we’ll be there to protect it.”
