It’s fixing a problem Parliament created and you’ll end up paying for
Key points
- Your grocery bill is higher because dairy, eggs, and poultry are restricted under supply management.
- Ottawa chose to boost GST rebates instead of fixing that policy.
- The money borrowed for those rebates adds to federal debt, which taxpayers are ultimately responsible for paying back.
- Adding more debt and cash to the economy pushes prices up. More money is chasing the same limited food supply, which drives higher inflation and higher food prices.
- Parliament accepted this trade-off to protect a system that benefits a small group, leaving ordinary families paying more at the store, through taxes, and through inflation.
What’s this?
On Jan. 26, Prime Minister Mark Carney stood in an Ottawa grocery store and announced a boost to the GST credit just months after Parliament voted unanimously to lock in the very system that keeps groceries expensive: supply management.
It was on June 5, 2025, that Parliament unanimously passed Bill C-202, permanently prohibiting Canada from offering any market access concessions on dairy, poultry, and eggs in future trade negotiations, effectively preventing future governments from trading away supply management protections. Every party voted for it. Not one dissenting voice. Not one.
In other words, Parliament voted to keep groceries expensive, then borrowed billions to help you afford them. The GST credit boost will send up to $1,890 this year to qualifying families of four and about $1,400 a year for the next four years. The Parliamentary Budget Officer estimates the program will cost $12.4 billion over six years.
The arsonist is selling fire insurance.
Supply management, the system of production quotas, fixed prices, and tariffs approaching 300 per cent on some dairy products, limits how much dairy, poultry, and eggs can be produced regardless of demand. It costs the average Canadian family between $400 and $550 per year in inflated grocery prices. A peer-reviewed study pegs it at $444 per household. The Montreal Economic Institute found the system pushes between 133,000 and 189,000 Canadians below the poverty line. It is a regressive tax that hits the poorest hardest.
And who benefits? Statistics Canada’s taxation records show dairy farms reported an average net operating income of $246,264 in 2022. Poultry and egg farm families saw their off-farm income alone reach $133,212 in 2023, already above the national average for all farm families, before a dollar of farm profit is counted. The median after-tax income for all Canadian families was $73,000. Supply management transfers money from the bottom of the income distribution to some of the wealthiest agricultural operators in the country.
The grocery rebate makes this worse, not better. Canadians are now paying three times. First, at the checkout, with inflated prices on dairy, eggs, and poultry. Second, through the federal treasury, with new debt added to a deficit the PBO projects at $78.3 billion. Third, through inflation: Injecting $3.13 billion this year into an economy where food production is restricted by quota does not reduce prices. It raises them. A former central banker should understand this better than anyone.
Why does every party defend this system? Why does every party defend this system? Because politicians who challenge supply management face political consequences. The costs are spread thin across consumers, while the benefits are concentrated and aggressively defended.
The 2017 Conservative leadership race showed how it works. Maxime Bernier campaigned on abolishing supply management and lost after the dairy lobby mobilized against him. Conservative leader Andrew Scheer’s office later assured Dairy Farmers of Canada that reform would never appear in his party’s platform. Two years later, the Conservatives defeated Bernier in his own riding. Bill C-202 confirmed the lesson by turning a political warning into binding law.
The solution is straightforward: phase out supply management over a clear transition period, compensate quota holders as Australia did, and let prices fall to reflect actual supply and demand. The savings would be immediate and permanent: no new bureaucracy, no new debt, no inflationary spending.
Parliament voted to make your groceries more expensive. Then the Prime Minister promised to help you afford them. The cheque is in the mail. So is the bill.
Marco Navarro-Genie is vice-president of research at the Frontier Centre for Public Policy and co-author, with Barry Cooper, of Canada’s COVID: The Story of a Pandemic Moral Panic (2023).
Explore more on Supply Management, Food prices, Federal debt and deficit, Federal politics, Federal taxes
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