Trade

Prior to 1995, Canada had a range of measures which placed limits on dairy product imports in order to maintain the stability of its national milk supply management system. These controls changed significantly in 1995, however, as a result of the World Trade Organization (WTO) Agreement on Agriculture whereby Canada and other signatories agreed to replace quantitative import restrictions with tariffs and tariff rate quotas. This effectively moved Canada into a much more global marketplace. Under this agreement, most dairy products are subjet to tariff rate quotas (TRQs). Summaries of tariff rate imports and lists of quota holders can be viewed on the Global Affairs Canada website.

In 2014, imports of dairy products totaled 201,667 tonnes and exports reached 95,258 tonnes. Imports of dairy products have been consistently higher than exports due to a continuous increase in the strength of the Canadian dollar and market structure. Demand for products such as dairy protein ingredients is rising steadily and cannot be entirely supplied by domestic production.

Volumes imported under the Import for Re‐Export Program (IREP) have been significant. Dairy products imported under the IREP are mainly used to manufacture further processed food products for the export market. Imports under the IREP increased 1% to 54,347 tons. In 2014, the IREP imports accounted for 36% of total dairy imports (in volume). Canada is not a large exporter of dairy products. Our milk and dairy production is primarily to meet domestic requirements. Major Canadian dairy exports include ice cream and cheese.

Canada's Dairy Industry at a Glance page on the Canadian Dairy Information Centre's web site provides a broader overview of the Canadian dairy trade. 

Imports

In 2015, the value of Canadian dairy imports decreased to $899.4 million. Top products imported by value were specialty cheeses (34.5%), followed by milk protein substances (20.5%), and whey products (9.2%). The largest suppliers in value terms were the United States (52.8%), New Zealand (9.3%) France (6.9%) and Italy (6.3%).

Imports of dairy products

Exports

In 2015, the value of Canadian exports of dairy products decreased 25% to $210.7 million. Cheese represented 26.6% of export values, followed by whey products (22.4%) and skim milk powder (17.6%). Main destinations for Canada's dairy exports were the United States (49.5%), Egypt (9.5%), and China (4.7%).

Exports of dairy products

Outlook

In 2011, the Canadian dairy trade deficit was $417 million in 2011, representing a 9% increase from last year’s deficit of $383 million. Demand for imports of specialty cheese and milk ingredients is expected to persist as the domestic supply is not sufficient. Whey product imports will likely decrease further due to rising prices. Canada’s exports of skim milk and whole milk powders will not face any challenges in finding markets. South Korea and in particular, Mexico, are favourable markets for Canadian milk powder exports.

Source: Canadian Dairy Trade Bulletin: 2012, Agriculture and Agri-Food Canada