Ottawa to invest $350 million to help dairy producers adjust to CETA

Ottawa is setting aside $350 million to help dairy producers weather the impacts of Canada's trade agreement with the European Union, Agriculture Minister Lawrence MacAulay announced Thursday.

A five-year, $250-million fund will help milk producers upgrade their equipment and increase productivity, while a second program will offer $100 million to cheese-makers to encourage them to modernize operations and diversify their products.

MacAulay said the funding would help producers deal with the reality of increased competition from European cheese-makers once the trade deal takes effects.

"While CETA offers enormous opportunities for many of our farmers, there will also be greater access for European cheeses to Canada,'' MacAulay told a news conference.

"The government understands there is a need to supplement the dairy sector's ongoing effort to prepare for this new reality.''

MacAulay added the trade deal would also provide increased opportunities for Canadian producers to sell their products in Europe.

Dairy Farmers of Canada said it welcomes the funding but believes it will only partially offset the damage that will be caused by the trade deal.

In a statement, the group said the agreement would allow market access for nearly 18,000 tonnes of cheese that would no longer be produced in Canada, representing up to two per cent of Canadian milk production.

President Wally Smith said the government has heard producers' concerns and is committed to ``the continued innovation and growth'' of the dairy sector.

"However, in order to ensure the continued sustainability and viability of supply management, there is still work to be done and the government has a significant role to play,'' he said in a statement.

The group also said the announcement did not address several concerns, including domestic regulations and border measures.

The president and CEO of the Dairy Processors Association of Canada called it a ``significant first step'' to helping the dairy sector adjust to new foreign competition from European products.

"Our sector needs transitional measures to help it adapt to the tariff-free import of some 18,000 thousand tonnes of cheese from Europe — cheeses that will be displacing products made here at home with milk from our Canadian producers,'' Jacques Lefebvre said in a statement.

The group estimates the deal could cost the dairy processing sector more than $230 million annually and result in 2,900 job losses.

MacAulay said the federal program is expected to be in place by the time the free-trade agreement takes effect.