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Canada and the United States are once again negotiating under the threat of tariffs. Washington has temporarily postponed a proposed 50% tariff on roughly $20 billion in Canadian goods while the two countries attempt to finalize a broader trade arrangement.

CHARLEBOIS: Canadians paid dairy farmers for competition consumers never got Back to video

Dairy access, along with American alcohol sales in Canada, has emerged as a central U.S. grievance. The threatened tariffs are excessive, and their legal justification is debatable. But Ottawa cannot dismiss every American complaint as protectionist fiction. On dairy, Washington is asking Canada to demonstrate that the market access it promised when CUSMA took effect in 2020 is real.

Canada agreed to establish tariff-rate quotas allowing specified quantities of American dairy products to enter at preferential tariff rates. In return for those concessions, Ottawa committed $1.2 billion in direct compensation to dairy farmers. These payments were not based on evidence that individual farms had lost sales or income. They were calculated primarily according to the amount of production quota held by each producer. Ottawa effectively compensated farmers for presumed market displacement before determining whether that displacement would ever occur. Taxpayers paid their part of the bargain. Consumers are still waiting for theirs.

Negotiated access unused

Since July 2020, Canada has made approximately 413 million kilograms of preferential dairy access........

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