Supply management - flexible federalism at its best?
Monday, February 20, 2012
So suggested the Supreme Court of Canada recently, despite what the pundits and think tanks say
by BARRY WILSON
As 2011 ended, Canada's supply management system was under the most sustained attack from the media, academics and agri-food critics that it had ever faced.
Rarely a week went by without a new criticism from a business shill, a think tank, an international source, media columnist or television commentator.
The only good news was that World Trade Organization talks in Geneva remained deadlocked after a December ministerial meeting and even the optimists predicted at least a two-year hiatus. More likely, the round is dead.
That removes one major threat to the system, but potential concessions in a promised 2012 Canada-European Union trade deal, with Trans-Pacific Partnership negotiations also on the horizon, continue to haunt the industry. So let's take time out from all the critics for some rare supply management system praise from no less an exalted source than the Supreme Court of Canada.
To be clear, Supreme Court judges have not pronounced on the economic or trade merits of the system. But they ended the year extolling supply management as an example of flexible federalism at its best, the kind of policy that has kept this complicated country operating successfully for 144 years.
Supply management is a poster child for Canadian flexible federalism? Take a deep breath and read on.
In a Dec. 22 ruling on a federal proposal to create a national system to regulate the securities market, the nine Supreme Court justices said Ottawa was over-stepping its constitutional boundaries by moving from the federal right to regulate trade and commerce into the provincial right to control property and civil rights within their jurisdiction.
The result is the political and economic embarrassment of leaving Canada as the only major world economy with no national control over securities trading, but rather 13 regulation sets in provinces and territories. Investors say it is a major impediment to dealing with Canada where investments flow across jurisdictions.
Of course, practical economic or political issues were not the court's concern. The issue before the judges was the constitutional division of powers. But, in deference to the recognized need for a national system of securities regulations, the court said federal-provincial co-operation is a recommended course. And the 1970s federal-provincial deal to create national poultry and egg marketing boards was cited as a model.
The court cited an earlier judgment by Justice Rosie Abella in a challenge to the national chicken marketing system. "In my view, the 1978 federal-provincial agreement … both reflects and reaffirms Canadian federalism's constitutionalism creativity and co-operative flexibility."
That deal allowed provinces to keep control of provincial production quotas, but within a national planning scheme.
In fact, supply management was a creative response by politicians facing dairy, poultry and egg markets in crisis and provinces involved in destructive trade wars.
As Pierre Trudeau's first agriculture minister, conservative right-leaning Alberta Liberal and former Socred Bud Olson was the father of the enabling legislation in 1971 in the face of fierce Progressive Conservative and cattle industry resistance in his own province. Successor agriculture minister Eugene Whelan presided over creation of the national systems.
It was a case of economic reality trumping typical government territorial protection and ideology. "We could see there was market chaos out there and a way to fix it," the right-wing but practical Olson once said in a later interview. "That's all."
Forty years later, do politicians facing jurisdictional securities chaos have the same practical fix-it genius? BF
Barry Wilson is a member of the Parliamentary Press Gallery specializing in agriculture.