What's New

How to scrap supply management – a lesson from down under


If we followed Australia’s lead, we could boost the dairy industry and have cheaper milk

Martha Hall Findlay

May 16, 2014

 In a three-part series Martha Hall Findlay, executive fellow at the University of Calgary’s School of Public Policy and a former Liberal MP, has argued that Canada’s system of supply management for dairy farmers should be dismantled. This is part 3.

Part 1: Why your milk costs so much and what to do about it

Part 2: Why the dairy industry’s defence of supply management is so flawed

The evidence overwhelmingly supports dismantling supply management for dairy, poultry and eggs—our very own cartel of fixed prices, protective tariffs and production quotas. It hurts consumers forced to pay too much for basic nutrition; food processors and the jobs they could create; the 94 per cent of Canadian farmers who are not supply managed together with manufacturers and other exporters, all looking for access to more international markets. It now even hurts dairy farmers themselves, by being denied growth opportunities.

So why has it not changed? Like the rest of the world, Canada has reduced its subsidization for all other agricultural producers, but has, despite significant international pressure, still retained its massive protections for dairy, poultry and eggs. Thanks to the high prices consumers pay for their milk, butter, cheese, and yogurt, the dairy lobby, arguably the most powerful lobby in Canada, has lots of money to spend. And they spend it—an estimated $80-$100 million a year—persuading politicians to keep the system. Frustratingly, those employed by the lobby, due to their own self-interest, lobby their own member farmers, as well, spreading fear of any change. The ‘arguments’ that the dairy lobby, the Dairy Farmers of Canada (DFC), continues to put forward have been shown to be, at best, outdated and misleading, but mostly simply untrue. Unfortunately the lobby seems more interested in perpetuating the “need” for the lobby’s existence itself than in the best options for the farmers that it is supposed to represent.

So what to do? Fighting a powerful lobby is a tough challenge, and too many politicians lack courage if they believe votes are at stake. The answer is two-fold: (i) propose a plan for reform that will benefit the majority of dairy farmers; and (ii) get those farmers to call for the necessary changes themselves.

Win-win reform is possible. There is a plan that would (i) help the more efficient, growth-oriented dairy farmers add capacity, generate more profits from exciting new export markets and make more efficient use of capital; (ii) compensate and provide transition assistance to those dairy farmers who wish to continue to operate their farms in what will be, post-reform, a more competitive environment; and (iii) facilitate, with proper compensation, the exit/retirement of those dairy farmers who choose to leave.  The good news is that this reform can be paid for, not from already-pinched government coffers, but by using the system itself—and spread out over enough time to be relatively painless.

It can be done.

The Australians did it a decade ago—and the majority of the dairy industry there are thriving, thanks in large measure to big increases in exports to those very markets that Canadian farmers could also be taking advantage of.

We Canadians already proved our ability for similar reform, with great success, when we removed protection for our wine industry as part of free trade with the US. At the time, the hue and cry was enormous (just like what we hear now about dairy)—“We can’t compete with big volumes and better climates and soils,” they said. Yet they certainly could compete, and have done so, and the growth and success of Canada’s wine industry since operating in an open market have been immense – not to mention the improvement in the quality of the wine. Yes, it involved compensation and transition assistance – as is entirely appropriate for the farmers who would be affected here. But it was done well, with great results for all concerned.

For dairy, poultry and eggs, an increasing number of academics, economists and analysts are recommending a solution similar to the Australian one:

1. Buy out the dairy quota from the farmers. This will need a formula that addresses the differences between those who ‘received’ quota for free in the 1970s, those who recently acquired quota at $30,000 a cow, and those in between. A new Conference Board of Canada report recommends using book value of quota instead of market value, which they argue is a much fairer approach and much less costly. The current market value of dairy quota is about $23 billion (poultry and eggs another $7 million), whereas book value of dairy quota is estimated to be in the range of $3.6 to $4.7 billion. The actual number, the formula to address historical differences, inter-family transfers and the like would, of course, require some negotiation with the quota-holders).

2. Provide transition assistance. In addition to the buy-out of quota, it would be appropriate to also provide two-pronged transition assistance. One form to those who chose to stay in the industry, in order to enhance their competitive and export capabilities; the other to make leaving the industry economically viable for those who choose to do so.

3. Eliminate all tariffs. This will immediately benefit consumers, who will pay closer to the lower world prices, even with the following proposed levy.

4. Add a small, temporary levy on wholesale milk to pay for the buy-out. This is what will fund the farmers’ compensation. In Australia the levy was 11 cents a litre for 8 years. In Canada, based on the 8 billion litres of milk currently produced annually in Canada, and assuming a buy-out/transition package totalling $5 million, such a levy would amount to only $0.06 a litre if spread over 10 years.

Consumers will pay less than they do now, as the levy would be significantly less than the current difference between Canadian and world prices; they will pay even less once the temporary levy is removed. The beauty of the proposal is that the compensation for the farmers will have come, not from already-strained government coffers, but from the system itself.

Although some proposals suggest a more drawn out, incremental approach, others suggest that all three components would have to happen at the same time. Our trading partners need to see change, and our farmers will need access to those lucrative export markets now, not 10 years from now—otherwise, they will be that much further behind the Australians, the New Zealanders, and now the Americans, in trying to establish a foothold in those markets.

The net result of such reform? Consumers will pay less. Farmers will be appropriately compensated and assisted in transition. The efficient, growth-oriented farmers will be able to consolidate, make more efficient use of their capital, and be able to take advantage of what are now extraordinary export opportunities. And for those farmers who choose to exit, this will provide their retirement fund—an appealing option for many, whose capacity would then be taken up by those who stay in. And finally, Canada will be able to go, immediately, to the world trade tables with open arms, instead of with one hand tied behind its back.

Most observers believe that transition is inevitable, that it’s just a question of time. It’s now up to the farmers. They need to challenge their own lobby, and seek the facts about the alternatives. And if the DFC and others involved in the dairy lobby understand this change, they will start working with their farmers and government leaders to help craft what that transition looks like. There are too many forces now combining to require change – continuing to fight the inevitable risks having something less beneficial forced upon them. The DFC, the farmers—all Canadians—have a vested interest in pursuing reform that benefits everyone.


What's New

Why the dairy industry’s defence of supply management is so flawed

Why the dairy industry’s defence of supply management is so flawed

The evidence against supply management is overwhelming. What are politicians waiting for?

Martha Hall Findlay

May 14, 2014

Martha Hall Findlay is executive fellow at the University of Calgary’s School of Public Policy and a former Liberal MP. This is the second part in a series examining the problems caused by Canada’s system of supply management.

We’ve seen how supply management for dairy, poultry and eggs hurts a) consumers through artificially high prices; b) food processors (and the jobs they could be creating in Canada) because of their inability to compete internationally; c) exporters of all kinds looking for more international trade access, but which Canada is denied because of supply management; d) the majority of Canadian farmers (over 90 per cent)—those who grow and produce beef, pork, grains, oilseeds, pulses, and who are not supply managed—who would also benefit from more international trade access; and finally e) most ironically, dairy farmers themselves, also prevented from exploiting international growth opportunities. All for the sake of what is now a very small number of relatively wealthy dairy, poultry and egg farmers. The overwhelming evidence shows that supply management, although it may have been laudable in the 1970s when it was implemented, is now a big problem, and it must go.

So why do we still have it?

The extraordinarily well-funded Dairy Farmers of Canada (DFC), arguably Canada’s most powerful lobby, spends an estimated $80 to $100 million each year (ironically paid for by the higher prices consumers pay), promoting the following arguments:

“Canadian prices aren’t that high.”

Nonsense, of course they are—that’s why we have tariffs ranging up to 300 per cent, why a “cheese smuggling ring” was recently discovered and why Canadians all along the border, from East to West, make regular weekend driving trips across the border to stock up on milk, cheese and eggs.

“We can’t compete with the heavily subsidized U.S. dairy farmers without supply management.”

Note that this “argument” completely contradicts the first one. Historically, the U.S. has subsidized dairy, but not in a truly significant way for a long time. Those making the “argument” continue to use very old statistics. The calculations for the OECD producer subsidy equivalent (PSE) reflect real support given by countries, whether directly or indirectly, through regulations such as supply management. In 2013 the PSE for Canada came in at 15 per cent—almost all of which is attributed to supply management for dairy, poultry, and eggs (the other 94 per cent of Canadian farmers do not share in this largesse). Contrast this to the United States: only eight per cent, and almost entirely because of its subsidies for sugar, not milk. (In Australia, it was three per cent; New Zealand, one per cent.) The recently-enacted U.S. Agricultural Act of 2014 finally removed three dairy support programs: price supports; export subsidies; and the Milk Income Loss Contract (MILC)—but all three had become largely irrelevant to prices. Price supports (through government purchases of excess supply) had already been cut in the 1980s, so their removal was largely symbolic. The MILC program, although it provided substantial support to smaller farms, did little for the large commercial dairies which supply most of the milk in the United States—and have been selling it at prices based on the market and on their own efficiencies and economies of scale, not the MILC subsidy. Third, U.S. dairy products have already begun competing successfully in global markets—the program of export subsidies had not only become irrelevant but, as a constraint on international trade agreements, was no longer desirable.

“It ‘protects’ the family farm.”

Not only does it not do so, the opposite is true. Consolidation (smaller farms combining into large ones for economies of scale) is a fact of agriculture all around the world, and Canada is no exception. But the statistics show that in Canada, the rate of consolidation has actually been higher—yes, higherin the supply-managed dairy, poultry and eggs sectors, than in most other agricultural sectors. In the 1970s, when supply management was brought in, there were approximately 145,000 dairy farmers; there are now barely more than 12,000—a staggering drop of more than 90 per cent. And supply management only applies to six per cent of Canadian farmers.

“It protects food safety and security.”

Another fallacy. We all want to ensure the quality of all of our food, not just dairy, poultry and eggs. And we do so by regulation, food labelling and food inspection. Some (including this author) would argue that we don’t do well enough in that regard, but the economic structure of supply management has nothing to do with it. The fear-mongers claim that without supply management, we will “let in U.S. milk that is laced with hormones.” It is true that some U.S. dairies use hormones for their herds—just as most Canadian beef farmers do. But the control for that is at the border—not pricing, but control over content. Note that in the recent CETA trade agreement with Europe, Europe insisted on the beef coming from Canada being hormone-free. There is absolutely nothing to prevent Canada from doing the same, either saying that we will not accept milk into Canada that has been produced using hormones, or by requiring thorough labelling so that people can make their own choice and pay whatever price is most appropriate.

“Farmers are hard-done by.”

Not only is this wrong, the opposite is true. Farming can be hard work, no question. But as of 2010, the average dairy farm’s net worth was well over $2.5 million, the average poultry/egg farm’s net worth was almost $4 million, and the net cash income of the average dairy, poultry or egg farm (over and above net worth of assets) was also far higher than that of the average Canadian family (in 2010, net income, including after family wageswas more than $130,000 for dairy and over $150,000 for poultry and eggs).

“It is not subsidized by the government.”

Technically, this is true—but it is paid for by all Canadians in their roles as consumers, instead of as taxpayers, thanks to the fixing of milk prices. The money comes out of the same pockets. And the international trade authorities have confirmed that, for trade purposes, it amounts to the same thing.

“It doesn’t affect Canada’s trade negotiations—see how many trade deals we’ve signed?”

Again, a fallacy. We are losing access to important international markets. Every trade negotiation is exactly that, a negotiation, with gives and with takes. International trade experts at the Organisation for Economic Co-operation and Development (OECD), the WTO and other organizations all confirm that mandated consumer-paid support distorts trade just as much as direct government subsidies do. Canada thus arrives at every trade negotiation with, in effect, one hand tied behind its back, and it is forced to make concessions in other areas because of insistence on heavy protections for such a tiny group of people.

“We don’t have the votes.”

This is the most frustrating of all the arguments, because it comes from the politicians who have the opportunity to “make the difference” that most say is why they entered politics in the first place. Dismantling supply management would be the right thing to do for by far the majority of Canadians, but politicians are intimidated by the dairy lobby. If only they adhered to their stated desire to implement “evidence-based policy.” The evidence in this case is overwhelming. The irony is that their concern about “not having the votes” is also now unfounded. A recent study has shown that, given the dramatic decrease in the number of supply-managed farms, there are at least twice, often three, four or more times the number of non-supply-managed farms than supply-managed ones in every single federal electoral riding. Even in those with dairy concentrations in Quebec and Ontario, there are far more votes from those who would like it dismantled that those who want to keep it.

Supply management needs to go. But how?

To learn how Canada can dismantle supply management in a way that is win-win for all—based on Canada’s own successful experience with our once-protected wine industry—and on some of the extraordinary and positive growth opportunities for Canada’s farmers, visit www.macleans.ca/tag/supply-management/ over the following week for more from Martha Hall Findlay.


What's New

Why your milk costs so much and what to do about it.

Why your milk costs so much and what to do about it.

Martha Hall Findlay is executive fellow at the University of Calgary’s School of Public Policy and a former Liberal MP.

There is a lot more to Canada’s dairy farms than the idyllic settings portrayed in the TV ads with the dancing cows. Dairy, poultry and egg farming, alone among all of Canada’s food production, is governed by supply management, an archaic, decades-old—and very costly—controlled-market system. We continue to artificially support this small group, barely six per cent of all Canadian farmers, by fixing prices, imposing extremely high tariffs to keep those prices high, and controlling production. This system, Canada’s very own regulated cartel, costs virtually every Canadian, sometimes in multiple ways—yet very few know anything about it, what it costs them, or why they’re paying so dearly for it. [For a full report, see “Supply Management: Problems, Politics – and Possibilities”.]

  • It hurts consumers. The average family pays over $300 a year more than they should for basic nutrition. Worse, it’s regressive, hurting the most vulnerable the hardest—low-income single parent families with small children, those who need access to affordable nutrition the most.
  • It hurts Canadian manufacturers and other exporters because Canada’s insistence on protecting supply management puts Canada at a disadvantage in every trade negotiation, hindering access to international markets. Even in those trade deals that Canada has been able to sign, we have had to give up far too much at the negotiating table.
  • We lose Canadian food processing jobs, because the food processors (the butter, cheese and yogourt makers) who sell internationally, locate their plants (and their jobs) outside of Canada because our milk is too expensive.
  • And for those who like the idea of helping Canadian farmers, supply management actually hurts the majority of them–the 94 per cent who are not supply managed—because by far the majority of Canada’s farmers produce beef, pork, grains, oilseeds and pulses—all products that Canada could sell more of to the rapidly-growing Asian markets, if only we stopped harming our trade options by insisting on protecting supply management for a tiny minority.

Ironically, and perhaps most frustratingly, it hurts many of the dairy farmers themselves—certainly the most efficient ones, as highlighted in “Reforming Dairy Supply Management: The Case for Growth”, a new report by the Conference Board of Canada. Roughly 25 per cent of Canada’s dairy farmers produce half of Canada’s milk. These more efficient, growth-oriented farmers could be reaping significant profit from exporting to international markets, particularly the rapidly-growing Asian markets. Unfortunately it is they who are denying themselves these extraordinary growth and profit opportunities. The report also analyzes how the better farmers are subsidizing the less-productive ones, and how the whole system costs several hundred million dollars a year in debt servicing costs, capital that could be better used to fund tangible and productive assets. In another ironic twist, dairy farmers are also losing sales to less-expensive (and less-nutritious) dairy substitutes such as butteroil/sugar blends (49 per cent milk fat, 51 per cent sugar). These products circumvent import tariffs and are brought into Canada by processors of ice cream and other products. The loss to farmers is estimated at more than $70 million per year.

How does supply management work?

The system is determined by supply, not demand. It is based on three pillars: fixed prices, tariffs, and quotas. The price for milk paid to the producers is based not on the market but on the costs of production (as determined by the producers themselves). High protective tariffs prevent competition from outside, and production is controlled through a regulated quota system.

Price Setting: Milk prices (for consumers as well as processors of butter, cheese, yogurt, and ice cream) are set by the dairy farmers themselves—based on cost of production plus what they determine is the appropriate profit.

Tariffs: To maintain these high domestic price levels, the federal government limits competition from other countries. For all imports (other than a small exempt amount) the tariffs range from 168 percent for eggs, 238 percent for chicken, 246 percent for cheese, to almost 300 percent for butter.

Quotas: This guaranteed price makes for a no-lose, very profitable, and thus attractive enterprise. To prevent overproduction, the government established a quota system that, in 1971, was based on each farmer’s existing production and is now transferable. Quota is currently worth about $30,000 per cow—over $2 million per average farm.

But times have changed.

Over the last 40 years the number of dairy producers has dropped a staggering 91 percent, from about 145,000 in 1971 to barely more than 12,000. There are fewer than 3,000 poultry farmers and fewer than 1,000 egg farmers. And the idea of consumers supporting hard-pressed farmers may have been a laudable goal decades ago, but it no longer applies: In 2010, the average dairy farm’s net worth was well more than $2.5 million; the average poultry/egg farm’s net worth was almost $4 million—far more than all other Canadian farmers, and far, far more than the average Canadian family. Yet governments in Canada continue to protect this small segment—less than one-half of one per cent of Canada’s economy—even though the system significantly, and adversely, affects much larger parts of the economy.

So why do we still have it?

Many politicians acknowledge, privately, that supply management should go, but they are loth to do anything because they feel that “they just don’t have the votes.” The well-funded dairy lobby spends a great deal of money (an estimated $80 to $100 million each year—ironically paid for by the higher prices consumers pay), persuading federal and provincial politicians that supply management “protects the family farm,” “ensures food security” and that, because these farmers are so numerous, doing anything to upset them would be political suicide.

These are complete fallacies. There has been more consolidation in dairy, poultry and eggs than in almost every other agricultural sector—even with supply management. So much for “protecting the family farm.” And food security is protected by regulation of what we allow as ingredients in both what we produce and what we import, which we do for all of our other food—not through cartel economics. Arguably we should be doing even more in terms of food security, but for all—it has nothing to do with supply management. And for the politicians: as shown, the number of farms (and therefore voting influence) has dropped dramatically. Something clearly should be done. The big question now is how.


For more on why the industry’s defence of supply management doesn’t stand up to scrutiny, and how to dismantle the system in a way that is beneficial to all involved, visit www.macleans.ca/tag/supply-management/ over the following week for more from Martha Hall Findlay.


What's New

Jim Flaherty and the Importance of Public Service

Here is the speech former Finance Minister Jim Flaherty gave to students in 2011:

Ivey School speech on public service

Oct. 11, 2011

I am happy to be here. This is a room full of important people. You are the people our country needs in the highly competitive and challenging global marketplace of today and tomorrow.

Our future success depends on you.

You are the leaders of tomorrow.

I want to talk about tomorrow. But first I want to spend a few moments on yesterday.

I was raised in a household of eight children. Needless to say, my mother kept the house in order and ruled the roost.

My mother believed firmly in the benefits of cod liver oil for the treatment of various maladies, in fact, most maladies. It tasted awful. So, my seven brothers and sisters and I would resist at first. We would relent in the end for two reasons: it was actually good for us and, perhaps more importantly, mother was not to be disobeyed.

I am not your mother. I don’t have to be obeyed. But today I am here to urge you to consider something that will be good for you. I want you to consider public service as part of your career path. I recommend it, knowing from experience that public service will not be easy to take at times but it will be good for you in the end result. I can offer no greater assurance.

After taking the good advice of my mother, I eventually graduated high school and moved from home. I was fortunate to take my undergraduate degree at Princeton University. During that time, it was my privilege to attend a speech delivered by Robert Kennedy. His message to my own generation was crystal clear: “I need you. Your country needs you. The world needs you. You are the best and brightest of your generation.”

Today, about 40 years after I heard Kennedy speak, my message is the same: Canada needs you – your skills, talents, idealism, energy and enthusiasm.

Now, more than ever.

At the same time, you need Canada.

Because, as I can tell you, public service is good for you. It will give perspective to your life by expanding your horizons, your thoughts, and your view of the world. You will learn that some issues and concerns are more important than others. This leads to discernment as choices must be made. This perspective will be useful in all aspects of your life.

Public service reminds us all that there exists a genuine concept of the public good in the broad public interest. While we value individual liberty and protect it, as Canadians we also maintain a strong tradition of the public good, that is, what is good for society as a whole, on balance, taking into account disparate interests and adopting the longer view. In public service you will participate in advancing this public good.

Public service is good for you. It will give your life a greater impact on others and your country. My high school, Loyola High School in Montreal, has its motto: “a man for others” (It’s an all boys school). My alma mater maintains its motto of “Princeton in the nation’s service”. Woodrow Wilson, president of Princeton before becoming President of the United States, had this to say in 1916 to the graduates of the U.S Naval Academy:

“I congratulate you that you are going to live your lives under the most stimulating compulsion that any man can feel, the sense, not of private duty merely, but of public duty also. And then if you perform that duty, there is a reward awaiting you which is superior to any other reward in this world. That is the affectionate remembrance of your fellow men – their honour, their affection.”

In many ways ranging from individual matters to community concerns to national and global issues, the opportunities to be a positive force for others in public service are both plentiful and fulfilling.

That will make you happier ultimately. We are, of course, not in the world alone and our lives here are finite. People seek to have an impact on broader public issues recognizing the intrinsic value of reaching out to others not only to maintain and reinforce shared common values, but also to create new initiatives and innovations. This societal public good is not incompatible with the private good. Our individual and family responsibilities are primary. Yet the desire to accumulate private goods in the end does not lead to satisfaction simply because, as we all learn, enough is never enough. On that train, some people will always be in the cars ahead.

If money was all that mattered to me, I would still be working as a lawyer in downtown Toronto. Because I can tell you, I would be making a lot more money than I am now. But I would have missed out on so many experiences that have enriched my life. And I would have missed out on so many opportunities to shape and implement public policies that, in my opinion, have enriched others’ lives and made our communities and country stronger.

Public service is good for you. You will have opportunities to change the world around you in varying ways and to different degrees, large and small.

You will get opportunities to use your talents to implement your thoughts and beliefs. In concert with others, accomplishments will follow. Great adventure this, for disappointments and failure will follow also. Boredom, however, is not on the agenda.

One little anecdote. One of the most testing times in my career in public service was the recession that began in the Fall of 2008.

In fact, we were in the midst of an election when it hit with full force. Had we been aware of the crisis on the horizon, the Prime Minister would have been unlikely to call the election.

Nevertheless, that was the situation. So I found myself campaigning for re-election in Whitby-Oshawa while juggling an increasing number of phone calls with the G7 finance ministers as we all became more aware of the breadth of the worldwide economic crisis.

One of the most surreal moments was Election Day itself. I was doing what we call in politics a Burmashave where you stand by the road and wave at passing motorists. While I don’t know if this technique actually gets you votes, I do know that it keeps nervous candidates busy and not bothering their campaign team, the ones doing the real work.

At one point that morning I had to run down from the side of the road into the Whitby Brick parking lot and get on my cell phone to discuss the latest twists in the crisis with the American Secretary of the Treasury and my other G7 colleagues.

When I was your age, had anyone ever told me I’d one day be speaking to an American cabinet officer and Britain’s Chancellor of the Exchequer while in a department store parking lot, I would have questioned their sanity.

But this is what could await you. In this room it’s conceivable that we could have future mayors, future Deputy Ministers, Chairs of School Boards, a Minister of Foreign Affairs, or perhaps even a future Prime Minister.

In order for this to happen, however, you have to answer the call – the call like the one I heard Bobby Kennedy make so many years ago. Being involved in the public service is an honour for me. I know that all MPs of all parties in the House of Commons, and members of the non-partisan public service at all levels, feel the same way.

Public service is good for you. It’s unlike any other career. It features long hours, relatively lower rates of pay than comparable positions on Bay Street, and it is often decades before you can witness the positive results of your labour.

Some of you might then ask: “If the hours are long and the pay low, why would I do it?”

The answer is simple: It is the most satisfying and personally enriching career you will ever find. This, my friends, is priceless.

Your parents will definitely remember Bill Davis. Mr. Davis served as Premier of Ontario from 1971 to 1985. Quite rightly, politicians and commentators of all political persuasions consider him one of the great Ontario Premiers of the 20th century.

After his retirement from politics, Mr. Davis, a lawyer by profession, was offered a position at one of Toronto’s leading law firms. The job finally allowed him to realize a salary equal to what his fellow law school graduates had been making for years, while he worked at Queen’s Park as a young backbencher, cabinet minister and later Premier and party leader. The new job also came with an impressive office and fine view of Toronto’s downtown – much better, I might add, than the view from the Premier’s Office at the Ontario Legislature.

Two-years after accepting this position – which he excelled at – Mr. Davis was interviewed by Steve Paikin of TV Ontario.

“Steven, let me tell you something,” the former Premier said, “This job– on the most exciting, interesting day– can’t touch being Premier of Ontario on the dullest.”

So I return to my theme.

Public service is good for you. It will develop your character as you will need courage to act on crucial issues while rejecting the venality and self-interest that frequent public affairs. Character requires purposefulness, steadfastness and, as Sir John A. McDonald was fond of saying, “looking a little ahead, my friends”. Character contrasts with short term celebrity witnessing, as we do, the tendency of celebrities to under achieve in public service and to fail to stay the course.

Anyone in this profession will tell you that working in the public sector is more than simply coming in every day and finishing a series of tasks.

Rather, public service is a higher calling, one which can result in long days and little sleep, but rewards you with the knowledge that rather than working for the interests of a company, or a corporation, you work in the interest of every single citizen within this great country.

Therefore it’s with great pride that I can stand here before you and say “I’ve answered this call”. It is something that makes me truly happy.  But it’s important to know why this, more than any other career I’ve had, makes me happy.

I don’t mean to say that I’m “happy” because this job is easy, it doesn’t make me happy because I get to meet so-called important people, it doesn’t make me happy because I get to see my name in the newspaper, or my face on TV. No… it makes me happy because I know that making the decision to enter public service was right.

I know that it is right to want to serve your country. That it is right to want to help your fellow citizen. That it is right to want to work for a better, stronger, and more robust country. That it is right to say “we can do better”. And that it is right to stand up and be there for Canada.

It is good for me. And it will be good for you. You will be challenged in many dimensions. Your heart and mind will be engaged on public issues for the public good.

Public service will enrich your skills and your resumes  — even if you don’t decide to work your whole careers in the public sector. Public service offers valuable training opportunities such as the chance to interact with Canadians across Canada or to perform high-tech research alongside the top scientists in Canada. These are skills and experiences in wide demand in the private sector as well.

Now, politics in the sense of standing for or holding public office, is a form of public service but only one form.

There are many others:

  • Community groups such as local chambers of commerce or environmental organizations
  • Local service organizations like the Lions Club or the Knights of Columbus
  • Charitable organizations like the Red Cross,
  • Cultural entities like the local library or heritage association
  • The civil service
  • School boards, church groups, and local minor sports organizations.

My choice, in recent years, has been public office. So I will return to that. Oftentimes, the public perception of those who seek or obtain elected office is jaded.

Some of this pessimism is earned: the world of politics, like other occupations, does not exclude the self-absorbed or the narrow minded.

While there are necessary yet at least temporarily unpopular decisions taken from time to time by governments, and certainly there are some disappointing elected persons, the public good in my view would be served better if all of us in all walks of life sought more balance in our perspectives.

That is, the balance that comes with the acceptance of the realization that we are all in this together attempting to discuss the public good and that, with the exception of some scoundrels to be found in all walks of life, including politics, we share that goal. So, the paramount question for all of us, including the media, remains: What is the public good for the country?

Almost 100 years ago, one of Canada’s greatest Prime Ministers, Sir Wilfrid Laurier, addressed a group of Ontario youth. It was less than a month before his death in February 1919.

He admitted that his generation had not solved all of Canada’s problems and was leaving much unfinished in their wake. Through public service, Laurier said, Canada’s young people would have to face these challenges themselves. And to do so, he left them the following words of advice.

“Let your aim and purpose, in good report or ill, in victory or defeat, be so to live, so to strive, so to serve as to do your part to raise even higher the standard of life and living.”

Just as in Laurier’s time, my generation doesn’t have all the answers. We have done the best we can. The levers of decision making will soon be in your hands. It matters little to me if you are, or end up, a Conservative, Liberal, NDP or Green party supporter. What matters most is when you walk out of this institution on graduation day you get engaged in your community, province and country.

Because your country is a land of opportunity for public service in these challenging times. Canada is looked to as an example of a country that worked during the recent global economic crisis and that has a plan to ensure the country continues to work into the future. Being part of shaping that future will be an amazing, enriching experience for any of you who choose it. Your country needs you. But it also has much to offer you.

So, one more time I will say: Public service is good for you. You may have noticed that I have not said public service is your duty or obligation. Whether it is or it isn’t – the choice is yours. I do recommend it as part of your career because public service will make your life exhilarating and satisfying for, among other things, the reasons I have stated. So, in your life plan as you consider your priorities and define your thoughts, create space for the fascinating world of public service.

I can promise you that if you do, you will be rewarded in ways no other calling grants you. You will become, as Theodore Roosevelt once said after his retirement from politics, one of those who, and I quote: “knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

That is the challenge I leave you with.

Answer the call.

You will never regret it.

Do it for your country.

Do it for yourself.

Do it to make your mother proud.

The cod liver oil is optional.

Thank you for inviting me here today.


What's New

Thank You Jim, For Your Friendship and Your Service

Jim's Last Tweet

Jim’s last tweet on March 18, 2014.  “It has been an honour to serve Canada.  Thank you for the opportunity”.


Jim will be missed by a great many people. First and foremost, our deep condolences go to his family and close friends — he was taken far too soon.

He will be missed by the legions of other friends that he developed over the years.

And he will be missed by his political colleagues — ally and opponent alike. He will be remembered with fondness, because that’s the kind of guy he was; and with respect, because he was tenacious, tough and very capable. He stood his ground because he believed in what he stood for. He was one of those too-rare politicians who entered public life for the right reasons, believing that his public service was just that — service.

Although we got to know each other through politics, my own favourite memory of Jim is entirely personal. Whenever we ended up at the same event, same function — as soon as we spied each other across the room, he’d smile a big grin, as would I. His eyes would twinkle, and we’d make our way over to each other for a big hug. Nothing partisan. Indeed, transcending partisanship. Just plain old respect and affection.

Thank you, Jim, for your friendship and your service. And thank you to your family for sharing you with us and the country for so long.


A Just Society, Government and Democracy, What's New

Hugh B. Hall, Joe Sullivan, Charles Dunk and World War II

This is a story about war, and certain Canadians who fought in World War II. Why? We’re half a year away from Remembrance Day. We’re a few months away from the anniversary of D-Day, or of any other significant military date in Canadian history. So why write something now about World War II?

Because this is a personal story, one to be told regardless of time. Recent events have prompted a whole series of emotions for me, my family and people close to us — regret, sorrow and sadness, in remembering sacrifices that Canadians made in World War II. Yet, some of those same recent events have created wonderful connections.

Let me explain…

My father, Hugh Baldwin Hall, landed on D-Day June 6, 1944.

He was all of 22 years old, a Lieutenant with the Royal Canadian Corps of Signals, commanding a platoon of Stormont Dundas Glengarry Highlanders – the “Glens”. After surviving the landing in Normandy, they lived in trenches, in horrible conditions and under almost constant fire, for 56 days straight. They were the first Allied soldiers to enter Caen July 9, and they went on to liberate Holland.

But those who survived did so only after watching too many of their friends and colleagues die trying.

My father passed away over 20 years ago. He didn’t talk much about the war. And the relationship that he had with his six children (of which I am one) was difficult.

Being presented with the Military Cross by Field Marshal Montgomery

Being presented with the Military Cross by Field Marshal Montgomery

After he returned from the war, he became a successful businessman, but he also became an alcoholic, had a troubled marriage, and for many reasons our relationship was strained — at best. One unfortunate consequence was that we, his children, never really learned about his war experiences. We didn’t ask — he didn’t tell. He had been awarded the Military Cross by Field Marshall Montgomery – there were vague stories about motorcycles full of bullet holes and signal lines kept open, but we never knew much about what had happened.

This is where a wonderful woman named Cathy Ruch comes in, and an extraordinary man by the name of Joe Sullivan. You see, Joe was in my dad’s platoon. They both landed on Juno beach that day. (Joe was in the boat that you can see in the most famous photo of the Canadian landing at Juno beach – Dad was in a different one.) But we would never have known, or made the connection, without Cathy.

Photo of Cathy, Betsy, Joe and Martha 13 March 2014

Cathy, Betsy, Joe and Martha – March 2014

It is such a cliché, but it really is a small world. Cathy’s grandfather Charles R. Dunk, also a member of the Glens, had also landed on D-Day. A few years ago, curious, she began research on her grandfather and what he had done in the War, though he had passed away some time before. That research connected her with Joe Sullivan and they struck up a friendship. Separately, I had published a blog that mentioned my Dad, which Cathy had seen. She made the connection and wrote to me about her work, and about Joe.

After multiple emails back and forth, one of my sisters and I finally met both Cathy and Joe in Peterborough, where Joe still lives.

Joe Sullivan is 93 (he admits with a grin). He walks with a spring in his step, is as sharp as a tack, is wonderfully articulate, and has a memory worth a dozen history books. Although we missed the opportunity to ask our own Dad about what happened, and what he went through, Joe Sullivan told us stories that helped us finally understand – at least what one can without having been there.

It was awful. War is awful. The stories of the shelling, the shooting, the rain, the mud, the carnage, the dead and the maimed… Many, many people died. Good people lost good friends. Sons, brothers, fathers, lovers. There was immeasurable suffering. But Joe also has stories of deep friendship and the kind of camaraderie you can only develop in times of common danger. Some of those friendships lasted only a brief time amid the fighting because of lives lost – others have lasted whole lifetimes. It’s amazing what happens when your lives depend on each other.

We learned more about our Dad’s wartime experience from Joe Sullivan than we had learned from Dad. We regret not asking more when we had the chance.

Three of my siblings and I will be visiting Normandy this coming June to participate in the 70th anniversary commemoration of D-Day. We do so out of respect for our father, for what he did, for what so many people sacrificed. We hope Dad will be watching and understands. And we hope that Joe and Cathy will join us.

We also hope that Canadians will always remember the sacrifices that too may men and women have made; we hope that, in remembering, we have learned from these awful experiences, and that we all work to prevent such damage from ever happening again.


As we leave 2013… all the best of the holidays, and a wonderful 2014 to all.

Best wishes of the season to everyone!

I hope that you are all enjoying the holidays — and if you’re in Toronto, New Brunswick and other areas hit by the storm, that you are now back with power. Mine was gone for a while, but I have two sons whose houses were unaffected, and — much luckier than most — we were able to turn the challenge into some extra family time.

As we take the holidays to pause a bit before the New Year starts, we can reflect on the year that is almost over. I hope that it has been a good one for everyone.

It certainly has been an eventful one here. There’s nothing quite like being in the throes of a national leadership campaign to start it off – and of course that kept us going full-tilt until April. Once that was over, though, one might have thought that a bit of ‘slowing down’ would have been in order — but that wasn’t to be.

As Executive Fellow with the School of Public Policy, I’ve participated as a panellist and moderator in some outstanding conferences on topics including telecommunications, international trade, urban infrastructure, Asian markets, and state-owned enterprises and foreign investment.

On the business side, wearing my other hat as Chief Legal Officer at EnStream, we’re experiencing an explosion of activity. EnStream is the mobile payments joint venture set up by Rogers, Bell and TELUS. Mobile payment technology is finally here in Canada, it’s just starting to be available commercially, and 2014 is going to be extraordinary. It’s exciting to be on the leading edge of this activity.

I’ve also kept a pretty busy schedule giving speeches and writing the occasional op ed. NotableSupply management is increasingly in the news (particularly after the CETA deal with Europe was announced – see my op ed in the Globe and Mail). The more people learn about it, the more people there are advocating that it be dismantled, so we’re making progress. Another recent issue that has my support is Michael Chong’s proposed Reform Act.  It would not be a panacea, and I don’t agree with all of it, but I commend the effort and we need the debate – something certainly needs to be done.

Over the summer I benefitted from plenty of carpentry therapy, as our very rustic cottage in Georgian Bay (a Georgian Bay Land Trust property) is, at 102 years old, pretty needy.

Cottage October 2010

That was followed by a September road trip in Portugal and Spain with my sister, which was wonderful. The excuse was kite boarding, a sport I started in the spring (see the pictures of me learning in April in Cape Hatteras, and then of kiting at Tarifa, Spain) – but that was really just a bonus, as I’d never been to either country, loved both, and Betsy and I had a great road trip together.

MHF Learning to Kite at Hatteras 2013 copy

Tarifa kiting

I was also elected to the Board of Directors of Alpine Canada. Having been a ski racer, a ski coach, and the parent of three ski racers, I felt that it was time to give back to a sport that has meant so much to me and to my family. (This will explain the upsurge in my twitter activity supporting our athletes on their way to Sochi…)

ACA logo

Last, but most important of all — what I noticed most about leaving politics (reinforced by my decision not to run again in 2015), is the time I’ve been able to spend with friends and family. My kids are all grown up (now 28, 30 and 32), so when entering politics a decade ago, I wasn’t burdened with the traditional concerns parents with smaller children have about the demands of politics – who would look after them when one is away in Ottawa, who will help with homework, who will attend soccer practice, etc. My kids certainly didn’t need ‘looking after’, even then. But this past year I’ve spent a lot more time with them than I have in a long while, and I have enjoyed it immensely. (I can’t speak for them, of course, but as long as I have beer in the fridge, they seem happy to come visit!) And I’ve re-connected with good friends I’d barely seen for years.

Family at Patty's

Family on the porch having too much fun 2013

All in all, it’s been a great year, and I am looking forward to exciting times ahead.

I hope that everyone has had a similarly fulfilling 2013, and that 2014 is filled with health, happiness, prosperity, and time with family and friends.


What's New

Dad, Granddad, Uncle Bob and Uncle Don

Being presented with the Military Cross by Field Marshal Montgomery

Hugh B. Hall being presented with the Military Cross by Field Marshal Montgomery

Dad was imperfect – as every human being is.  He had good looks, great charm, was athletic and industrious. He was a Harvard MBA and ran a very successful business. He had 6 great kids and provided for us all well. But he had his personal demons, too. Who knows how many of them came from those few years, when he was so young, in France and then Holland. How could he not have been scarred?

He landed at Juno Beach on DDay.  He was the first Allied soldier in Caen. He was awarded the Military Cross for his work in laying and keeping open the signal lines under fire, and he went on to help liberate Holland. I am only able to tell this story because he was one of the lucky ones who was able to come home and build a family—of which I am one. But his demons led to a too-early death. He should have been a happier man.

Uncle Bob (Mum’s brother) didn’t bring demons home — because he never came home. The plane he was piloting went down in what was then called the Sea of Burma. The scars were left  to be borne by his family and friends. Granddad (Mum’s dad) was a pilot in WWI – he flew with Billy Bishop against the famous Red Baron. He came home, but to my knowledge never spoke about those years. He died before I was old enough to ask him about his experiences, but I’m not sure he would have told me.

Uncle Don (another of Mum’s brothers) was a pilot with the naval air force.  He was too young to go to war, but he made the navy his life’s career.

I am very proud of my family’s contributions.  I am very proud of the fact that, when called upon to help internationally, Canada and Canadians have not only stepped up to the challenge, they have done so with passion and courage — above and beyond. But war damages everyone – those who make the ultimate sacrifice, those who come home, but scarred, physically and emotionally, and the families and friends of those either gone or who will never be the same.

Today we remember, and we say thank you. Let us honour these men and women by doing all we can to to promote peace – to prevent the carnage in the first place.

What's New


November 1, 2013 — Newsflash!!

The Harper government has decided that its ongoing battle with Rogers, Bell and TELUS, our “big three” wireless companies, is over.

The telco lobbyists have convinced the government that the majority of voters – well, at least those in a half dozen or so ridings in Ontario and Quebec – actually like them. Therefore, in the interests of family values, motherhood and apple pie – and the voters in those half dozen ridings – the government has announced the following:

As of today, the government will stop all artificial efforts to force more competition – it will stop all subsidized spectrum set asides, and stop all efforts to artificially force prices down.

It has announced that, in the interests of Canadians, rather than encouraging more competition, it is henceforth closing the market for wireless service in Canada. After all, the prices currently being charged are necessary for the telcos to provide high quality service and earn a reasonable return.

The Harper government is going further: Rogers, Bell and TELUS are now to stop all efforts to compete with each other, whether on network coverage, data speeds, handsets, or prices. “Consumers derive no benefit from having the telcos try to outdo each other on any of those things – it would only be a race to the bottom,” a government spokesperson said. “Consumers will benefit more from cooperation and coordination among the big three.” The government has made it clear that it will legislate and enforce regulation to that effect.

However – the details of that cooperation and coordination cannot be left to just anyone, certainly not economists. Canadians need the people who “know” the business to make those decisions. The government is therefore appointing a board of industry representatives – people from Rogers, Bell and TELUS – who will determine what the “Canadian” wireless prices will be; determine the extent of network coverage; decide the maximum amounts of data they will allow across the networks; limit the speeds at which they will permit it to flow; and control what handsets will work on “their” networks and be available to consumers.

And from now on, wireless prices and rate plans will be based purely on what those Rogers, Bell and TELUS representatives, collectively, decide is the cost of providing the service – plus, of course, what they determine is an appropriate level of profit for their efforts. The government recognizes that Canada’s geography, subscriber usage and other factors have, to date, led to the highest wireless capital investment per subscriber in the world, so it is acknowledged that Canadian prices will now go up significantly to reflect that level of cost.

To ensure that these prices and this effort is protected, the government will, by way of our international trade arrangements and other regulation, stop all efforts to attract foreign industry players – indeed will prevent anyone, domestic or foreign, from setting up a new wireless company. After all, the only way the system will work is by way of a closed market. Each of the big three will be allocated a certain quota, and from now on, the only way anyone will be able to get into the wireless business in Canada will be to buy part of the quota that Rogers, Bell and TELUS already have, and join the system. Indeed, anyone who dares try to offer wireless service outside the system – for example with data speeds different that what the system decides – will be fined and shut down.

The Harper government has acknowledged that this will result in higher profits for the big three telcos, and will spark a significant increase in the share price for all three. However, the telcos have assured the government that they will use those greater profits, and enhanced access to capital, to innovate and become more efficient (other than, of course, the portion that will go to the telco lobbyists, who will need to spend a lot of money to keep the government on side).

Hmmmm.  A bit preposterous?

Of course. But that’s exactly the protectionist, market-controlled supply management system we already have in Canada with dairy, poultry and eggs – the artificial protection given to what is a tiny fraction (barely 6%) of Canadian farmers. It ensures that the average Canadian family pays upwards of $300 more a year for basic foodstuffs of milk, cheese, chicken and eggs than they should – which is bad enough for all of us, but it hurts single parent families living in poverty the most. Why is it that Canadians are so upset about over cellphone bills, but not artificially high prices for basic food necessities? Is it because we “like” farmers more than the telcos? Perhaps, but – ironically – by far the majority of the other 94% of Canadian farmers, those who grow and produce non-protected things like beef, pork, grains, oilseeds and pulses are in fact disadvantaged by the system that creates real impediments to their access to world markets.

This approach is so obviously ridiculous for the wireless industry. So why do we still have it for dairy? Maybe it’s the estimated $80-100 million dollars a year spent by the dairy lobby. The much-criticized ad campaign this summer by Canada’s large telcos was like the last drop of milk squeezed from a cow’s teat compared to the bucket-full of propaganda waged to keep Canadians paying far more than they should be for basic food.

For a full description of the supply management system, the challenges it causes, and, most importantly, positive recommendations for an exit strategy that is win-win – including for dairy farmers – see this report from the School of Public Policy.