Minister MacAulay launches new program to support the Canadian dairy sector

Lawrence MacAulay announced the launch of the new Dairy Innovation and Investment Fund, with an investment of up to $333 million over the next 10 years

The Fund is part of the Government of Canada’s commitment to support supply-managed sectors for the impacts of the Canada-United States-Mexico Agreement (CUSMA).

Like most dairy-producing countries, Canada is facing a growing surplus of solids non-fat (SNF), the remaining component once cow’s milk is processed and the fat is removed for use in products like butter and cream. Limited processing capacity for SNF results in lost opportunities for dairy processors and farmers.

 

 “This Fund will help the sector manage the growing surplus of solids non-fat, create more opportunities for dairy processors and farmers, and build a more sustainable dairy sector.”

 

“We will always stand up for the supply management system and we have delivered on our commitment to compensate our hardworking producers and processors who have been impacted by recent trade agreements,” MacAulay stated. “This Fund will help the sector manage the growing surplus of solids non-fat, create more opportunities for dairy processors and farmers, and build a more sustainable dairy sector.”

Through the Dairy Innovation and Investment Fund, Canadian dairy processors will have access to support for medium to large-scale projects that will help the sector better manage the surplus of SNF in Canada. The Fund will support activities that help modernize, replace and/or increase processing capacity for SNF and minimize skim milk that is not marketed.

“The dairy sector is an integral part of Canada’s economy and rural landscape, supporting strong and vibrant communities across the country,” added Francis Drouin, Parliamentary Secretary to the Minister of Agriculture and Agri-Food. “This new Fund will drive innovation and increase processing capacity, enabling the sector to stay competitive by maximizing the full value of solids non-fat.”

The Government is also exploring how the Supply Management Processing Investment Fund can support small-scale projects to address SNF issues within the objective of the program, by focusing on competitiveness and productivity.

“This new program will support the much-needed investments in milk processing capacity in Canada. As it is a matching fund program, dairy processors must commit to investing in plant capacity expansion to access government contributions,” said Phil J. Vanderpol, Chair, Dairy Processors Association of Canada. “These investments will not only benefit the dairy industry, but ultimately the entire Canadian economy.”

With today’s announcement, all compensation programming to producers and processors for lost market share under recent international trade agreements has been launched. The Government of Canada will continue to preserve, protect and defend Canada’s supply management system and is committed to not making any additional market access concessions for supply-managed products in future trade agreements.

“Dairy Farmers of Canada welcomes the announcement of the Dairy Innovation and Investment Fund and is pleased to see the federal government honouring its commitment,” David Wiens, President, Dairy Farmers of Canada added. “This initiative will help the industry identify and implement solutions to better manage solid non-fats and contribute to the future of a vibrant Canadian dairy sector.”

The new Dairy Innovation and Investment Fund, originally announced in Budget 2023, will provide Canadian dairy processors with non-repayable contributions to help the dairy sector better manage the structural surplus of solids non-fat in Canada.