Canada’s system of dairy supply management has come under fire in recent years, criticized for being a regulated model in an increasingly deregulated world. This background paper explores the historical evolution of dairy in Canada, and why supply management was eventually implemented in the 1960s, bringing rationality and organization to an industry where none had existed before. It also examines the role of international trade negotiations, largely sponsored by the General Agreement on Tariffs and Trade and, after 1995, by the World Trade Organization, in addressing issues of agricultural protectionism and exceptionalism. While supply management has been protected by Canadian governments, rising international pressure has led Canada to begin to reconsider its support, especially as bilateral trade negotiations and partners are unequivocally opposed to dairy supply management.
