Andrew McClelland
The Advocate
The Canadian government will pay out $333 million over the next 10 years to dairy processors and producers to offset market losses resulting from international trade deals.
Newly re-appointed federal minister of agriculture Lawrence MacAulay announced late last month the creation of the Dairy Innovation and Investment Fund, a compensation package designed to “help the Canadian dairy sector adapt to new market realities.”
Through the fund, for-profit dairy organizations can apply for financial support for a whole host of activities, from purchasing new equipment to constructing new facilities.
“This fund will help the sector manage the growing surplus of solids non-fat, create more opportunities for dairy processors and farmers, and build a more sustainable dairy sector,” said MacAulay at a press conference held in St. Hyacinthe on Sept. 29.
Canada is facing a growing surplus of “solids non-fat” (SNF), the remaining component once cow’s milk is processed. The fat is removed for use in products like butter and cream. Canada’s limited processing capacity for SNF has meant that dairy processors and farmers are losing out on turning the component into a money-maker.
The new fund will be managed by the Canadian Dairy Commission on behalf of Agriculture and Agri-Food Canada.
“The Canadian Dairy Commission is committed to addressing the challenge of structural surplus of solids non-fat,” said Gaspé-based dairy producer and CDC chair Jennifer Hayes. “By supporting innovation and investments into medium to large-scale projects to add value to SNF, the Dairy Innovation and Investment Fund will help improve the competitiveness and sustainability of the Canadian dairy sector.”
The federal government hopes the injection of $333 million into the dairy industry will help operations take on large-scale projects that will “modernize, replace and/or increase processing capacity for SNF and minimize skim milk that is not marketed.”
“The dairy sector is an integral part of Canada’s economy and rural landscape, supporting strong and vibrant communities across the country,” said Francis Drouin, MacAulay’s parliamentary secretary. “This new fund will drive innovation and increase processing capacity, enabling the sector to stay competitive by maximizing the full value of solids non-fat.”
Trade losses
The launch of the Dairy Innovation and Investment Fund comes hot on the heels of Canada losing a dairy dispute with New Zealand.
Both countries are signees of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Eighteen months ago, New Zealand filed a complaint with the agreement’s arbitration panel claiming that Canada was not allowing access to its dairy exporters. Just last month, the panel ruled in favour of New Zealand.
The fund also builds on the compensation packages announced by then-minister of agriculture Marie-Claire Bibeau in November 2020, intended to support dairy, poultry and egg producers after those supply-managed sectors lost certain protections in the Canada-United States-Mexico Agreement.
“We will always stand up for the supply management system and we have delivered on our commitment to compensate our hard-working producers and processors who have been impacted by recent trade agreements,” said MacAulay last month.
Dairy industry satisfied
Nonetheless, the Dairy Innovation and Investment Fund was welcomed by representatives from Canada’s dairy industry, with the Dairy Farmers of Canada stating that it “is pleased to see the federal government honouring its commitment” to compensate dairy producers after trade agreement losses.
“These investments will not only benefit the dairy industry, but, ultimately, the entire Canadian economy,” said Phil J. Vanderpol of the Dairy Processors Association of Canada.
Applications to the fund are being accepted until Nov. 3, and costs are retroactive to Nov. 17, 2022. Only dairy products made from cow’s milk are eligible at this time.
The program will support eligible costs of capital assets and contracted services, including:
- removing and disposing of existing equipment
- purchasing, shipping, installing and commissioning of new equipment, software and production lines
- installation of new, or expansion of existing, milk reception and milk storage areas as required to meet the objectives of the project
- retrofits/renovations of existing facilities related to the installation and operation of eligible equipment
- construction of a new facility
- training necessary to operate eligible equipment, and
- translation of materials related to training on the new equipment
Costs related to the purchase of land or research and development are not eligible.
To apply, visit: https://cdc-ccl.ca/en/dairy-innovation-and-investment-fund-what-program-offers
Cutline: Agriculture and Agri-Food Minister Lawrence MacAulay announced the creation of a fund to inject $333 million into Canada’s dairy production and processing sectors in St. Hyacinthe last month.