Dairy Direct Payment Program

The Dairy Direct Payment Program offers financial compensation to dairy producers affected by Canada's international trade agreements, particularly in relation to the Canada-United States-Mexico Agreement (CUSMA). By distributing funds based on milk quota holdings, the program seeks to provide economic support and stability to the dairy industry amidst these trade impacts.

The Dairy Direct Payment Program is a strategic initiative established to mitigate the economic impact of market access commitments undertaken by Canada through recent international trade agreements. Specifically, the program addresses the concerns of the dairy industry by offering a series of direct payments totaling $1.2 billion over a six-year period, commencing in the fall of 2023. The program is carefully designed to distribute annual payments to eligible dairy producers, with the 2023-24 fiscal year seeing an allocation of $300 million. Producers receive payments predicated on the amount of milk quota they hold, a system that ensures the aid is proportionately distributed based on individual production capabilities. For the 2023-24 period, each eligible producer must have their registration signed and submitted by March 31, 2024, to qualify for that year’s payment. The payments are structured to provide decreasing amounts over the subsequent years, reflecting the transitional nature and objectives of the financial aid. Specifically, the planned yearly distributions are set at $250 million for 2024-25 and 2025-26, followed by $150 million in 2026-27 and 2027-28, and concluding with $100 million in 2028-29.The fund distribution also takes into account regional quotas, with the national allocation broken down provincially. This is to ensure that allocation percentages reflect each province's contribution to the national milk supply. In the 2023-24 term, Quebec and Ontario receive the largest allocations, reflective of their significant dairy production capacities. With Quebec securing $111,072,244 and Ontario $96,366,142, these provinces together represent a major portion of the Canadian dairy output.Previously, from 2019 to 2023, the Dairy Direct Payment Program allocated $1.75 billion to mitigate the impacts of other major trade agreements, such as the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This history of support underscores the commitment by Canadian authorities to cushion domestic producers from external economic pressures.The Canadian Dairy Commission (CDC) oversees the delivery of this program. Through its established network and data collection systems, such as collaborating with provincial milk marketing boards, the CDC calculates individual payments and expedites the distribution of funds. This collaboration ensures that the program efficiently supports dairy producers by leveraging regional expertise and infrastructure.In conclusion, the Dairy Direct Payment Program represents a significant effort by the Canadian government to support its domestic dairy industry amidst challenges posed by international trade agreements. By directly funding producers based on milk quota, the program not only aims to shield them from potential trade-related market volatility but also secures the sustained productivity and economic viability of the Canadian dairy sector. As such, it forms a crucial part of the broader strategy to maintain the competitiveness and sustainability of agriculture in Canada.