Esprit Rock

Canada keeps a high tariff for most dairy products

Canada keeps a high tariff for most dairy products. The duty on milk is 270%, which leaves most US imports out of Canada, while helping to support higher domestic prices. Ultrafiltered milk and other protein-rich dairy ingredients used to make dairy products such as cheese and yoghurt are an exception. The North American Free Trade Rules do not cover these ingredients and are duty-free in Canada. In recent years, American dairies have developed a thriving business that sells these low-cost products to Canadian dairies. About a year ago, Canadian dairy farmers decided to end the tariff violation with a new strategy. They persuaded regulators to create a new class of low-priced industrial milk to encourage dairies to produce in Canada from Canadian milk. The result was predictable: US imports fell in 2016 and have fallen sharply since the beginning of the year.

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