Highlights
- Under supply management, Canadian dairy farmers receive no direct subsidies to support their milk production
- Canadian dairy farmers are subject to some of the most stringent standards in the world in areas like milk quality, food safety, sustainability, and animal care.
The state of U.S. dairy market access
The United States has predictable tariff-free access to Canada’s dairy market under the World Trade Organization agreements and the Canada-United States-Mexico Agreement (CUSMA).
-
Under CUSMA, the U.S. can send 49 million litres of milk and millions of kilograms of other dairy products to Canada every year, before a tariff would be imposed.
-
The tariff-free amount under CUSMA is set to continue to grow gradually until 2038. (Key dates and access quantities 2026-2027: TRQs for supply-managed products)
Canada-U.S. Dairy Trade Balance
-
Canada is the U.S.’ second largest export market by volume and its largest per capita. (USDA FAS, FAOSTAT, and Statistics Canada)
-
U.S. dairy exports to Canada rose 150% between 2019 and 2025 (Canadian Dairy Information Centre (CDIC) 2025, Bank of Canada).
-
In 2025, the U.S. had a large dairy trade surplus with Canada, exporting $1.06 billion CAD in dairy products while importing $391 million CAD. (CDIC 2025, Bank of Canada).
-
U.S. imports represented 55% of the value of Canada’s total dairy imports in 2025. (CDIC)
Tariff Rate Quotas
-
A tariff rate quota (TRQ) establishes a limit on how much of a product may be imported at a lower rate of duty (or zero).
-
It is a common trade tool used by many countries for a variety of commodities.
-
A TRQ provides a specific volume of access, but the level to which it is filled depends on multiple factors (e.g. consumer preferences and international prices).
How the U.S. supports its dairy sector
-
Both Canada and the U.S. use TRQs and tariffs for their dairy trade policies.
-
The U.S. also subsidizes milk production, forcing taxpayers to pay twice for their milk (once at the store, and again through their taxes).
-
Under supply management, Canadian dairy farmers receive no direct subsidies to support their milk production
Why a strong domestic dairy supply matters for Canadians
-
Canadian jobs and investment: Dairy supports 270,000 jobs, generates $28 billion in GDP and drives economic activity in rural Canadian communities.
-
Food sovereignty and security: A reliable supply of dairy produced here at home keeps high-quality food, produced here at home, on Canadian tables.
-
High homegrown standards: Canadian dairy farmers are subject to some of the most stringent standards in the world in areas like milk quality, food safety, sustainability, and animal care.