The Liberal Party, now led by Mark Carney, has secured a fourth consecutive term, albeit once again with a minority mandate. This time, however, the Liberals have a stronger hand, as they can rely not only on the NDP but also the Bloc Québécois to maintain power. This broader base of parliamentary support could provide much-needed political stability at a crucial time, particularly as Canada prepares for a new round of trade negotiations with the United States and Mexico.
For the agri-food sector, the implications are significant.
First and foremost, carbon pricing will remain a central issue. Carney has made it clear that the industrial carbon tax will stay — a policy that continues to erode the competitiveness of Canada’s agri-food sector. The tax, currently set at $95 per metric tonne, is scheduled to climb to $170 by 2030. While consumers may not see this tax directly, businesses certainly do. More concerning is the Liberals’ intention to introduce a border carbon adjustment for imports from countries without equivalent carbon pricing regimes. While this could theoretically protect Canadian industry, it also risks making food even more expensive for Canadian consumers, particularly if the United States — our largest trading partner — remains uninterested in adopting similar carbon measures.
Carbon pricing can only work in a North American context if Canada, the United States, and Mexico move in lockstep. Acting alone risks undermining our own food security and competitiveness.
Supply Management Likely to Surface in Trade Talks
Another looming issue is supply management. Although all parties pledged during the campaign not to alter Canada’s supply management system for dairy, poultry, and eggs, it is almost certain to be a topic in trade negotiations. The American dairy lobby, in particular, will continue to demand greater access to Canadian markets. Canada’s supply management system — characterized by quota controls and exorbitant tariffs — is increasingly outdated. If the Liberals are serious about strengthening the agri-food sector, they would use this opportunity to chart a path toward reform. Modernizing supply management could lead to a more competitive, resilient industry while providing consumers with greater choice and better prices.
The previous Parliament’s passage of Bill C-282, which sought to shield supply management sectors from all future trade negotiations, was a deeply flawed move. Fortunately, the composition of the new Parliament should make it far less likely that such protectionist legislation will survive. A more pragmatic approach to trade policy appears possible.
On the domestic front, there are reasons for cautious optimism. The Liberals have promised to eliminate remaining federal barriers to interprovincial trade and to improve labour mobility — longstanding obstacles to the efficient movement of agri-food products across Canada. Momentum was building before the election, and it must continue if we are serious about building a stronger domestic food economy.
Infrastructure investment is another bright spot. The Liberals pledged over $5 billion through a Trade Diversification Corridor Fund to improve Canada’s export infrastructure, helping to lessen our dependency on the United States. Canada’s trade gateways are severely undercapitalized; strategic investment here is overdue and critical for agri-food exporters.
Commitment to Strengthening Food Processing in Canada
Finally, the Liberal platform was alone in explicitly committing to support food processing in Canada — a crucial pillar of domestic food security. An increased focus on manufacturing will not only create jobs but also reduce reliance on imported food products, making Canada more resilient in the face of global disruptions.
Historically, Liberal governments have been more urban-centric, with the agri-food sector — and especially farmers — often left feeling marginalized. The past four years have been particularly difficult, with frequent clashes over regulatory and trade policies. The hope now is that with greater political stability and a clearer focus on competitiveness, the next four years will bring a more constructive relationship between Ottawa and Canada’s agri-food sector.
The stakes are high. Canada’s food security, trade competitiveness, and rural vitality depend on it.
Avoiding a carbon adjustment is easy. Don’t import U.S. products. This is also easy for consumers. Buy fresh and buy local. In winter, buy fruits and vegetables grown locally from the frozen foods section. If you have space plant a garden and freeze your own. Canadians now have access to a variety of hydroponically grown vegetables. Stay away from anything overly processed and overly packaged.
And the government better not touch my supply-manage, organic, free range eggs. I’ll continue to buy them even on a limited budget because they taste better.
Actually, the Liberals do not have a “stronger hand” post-election because, as a minority, they will still have to rely on the support of either the NDP or the Bloc Quebecois. Both parties, the BQ in particular, will be adamant that supply management be non-negotiable in any transborder trade talks. This will limit the government’s room for manoeuvre. Indeed, last year the BQ introduced a private member’s bill in the Commons to prevent concessions on supply management in trade negotiations.
It’s true that the U.S. dairy lobby will continue to demand more access to Canada’s market. However, the strongest rebuttal comes from President Trump himself, who noted that the U.S. already produces many of the goods it imports from Canada, such as autos, lumber and energy, and therefore doesn’t “need” Canadian imports. Canadian negotiators can use the president’s logic and point out that Canada already produces adequate quantities of dairy products domestically and therefore doesn’t “need” U.S. dairy imports either.