From the Fraser Institute

By Alex Whalen and Jake Fuss

On the eve of a possible trade war with the United States, Canadian policymakers have a valuable bargaining chip they can play in any negotiations—namely, Canada’s “supply management” system.

During his first day in the Oval Office, President Donald Trump said he may impose “25 per cent” tariffs on Canadian and Mexican exports into the United States on Feb. 1. In light of his resounding election win and Republican control of both houses of congress, Trump has a strong hand.

In response, Canadian policymakers—including Prime Minister Justin Trudeau and Ontario Premier Doug Ford—have threatened retaliation. But any retaliation (tariffs imposed on the U.S., for example) would likely increase the cost of living for Canadians.

Thankfully, there’s another way. To improve our trade position with the U.S.—and simultaneously benefit Canadian consumers—policymakers could dismantle our outdated system of supply management, which restricts supply, controls imports and allows producers of milk, eggs and poultry to maintain higher prices for their products than would otherwise exist in a competitive market. Government dictates who can produce, what can be produced, when and how much. While some aspects of the system are provincial (such as certain marketing boards), the federal government controls many key components of supply management including import restrictions and national quotas.

How would this help Canada minimize the Trump threat?

In the U.S., farmers backed Trump by a three-to-one margin in the 2024 election, and given Trump’s overall views on trade, the new administration will likely target Canadian supply management in the near future. (Ironically, Trump has cried foul about Canadian tariffs, which underpin our supply management system.) Given the transactional nature of Trump’s leadership, Canadian negotiators could put supply management on the negotiating table as a bargaining chip to counter demands that would actually damage the Canadian economy, such as Trump’s tariffs. This would allow Trump to deliver increased access to the Canadian market for the farmers that overwhelmingly supported him in the election.

And crucially, this would also be good for Canadian consumers. According to a 2015 study, our supply management system costs the average Canadian household an estimated extra $300 to $444 annually, and higher prices hurt lower-income Canadians more than any other group. If we scrapped supply management, we’d see falling prices at the grocery store and increased choice due to dairy imports from the U.S.

Unfortunately, Parliament has been moving in the opposite direction. Bill C-282, which recently passed in the House of Commons and is now before the Senate, would entrench supply management by restricting the ability of Canadian trade negotiators to use increased market access as a tool in international trade negotiations. In other words, the bill—if passed—will rob Canadian negotiators of a key bargaining chip in negotiations with Trump. With a potential federal election looming, any party looking to strengthen Canada’s trade position and benefit consumers here at home should reject Bill C-282.

Trade negotiations in the second Trump era will be difficult so our policymakers in Ottawa and the provinces must avoid self-inflicted wounds. By dismantling Canada’s system of supply management, they could win concessions from Team Trump, possibly avert a destructive tit-for-tat tariff exchange, and reduce the cost of living for Canadians.

Alex Whalen

Director, Atlantic Canada Prosperity, Fraser Institute

Jake Fuss

Director, Fiscal Studies, Fraser Institute

A screen grab captured from a video shows a regional plane that collided in midair with a military helicopter and crashed into the Potomac River in Washington, D.C. on Jan. 29, 2025. Kennedy Center Cam/Anadolu via Getty Images

Squadron primarily used for transporting VIPs around D.C. was apparently familiarizing new pilot with area.

Wednesday night, shortly before 9pm ET, an American Airlines flight carrying 64 people was on its final approach to Ronald Reagan Washington National Airport when it collided with an Army helicopter with three soldiers on board, about 400 feet off the ground, killing everyone on both aircraft.

The Sikorsky UH-60 Black Hawk had departed from Fort Belvoir in Virginia with a flight path that cut directly across the flight path of Reagan National Airport

This final approach is probably the most carefully controlled in the world, as it it lies three miles south of the White House and the Capitol.

According to various media reports, military aircraft frequently train in the congested airspace around D.C. for “familiarization and continuity of government planning.”

Less than 30 seconds before the crash, an air traffic controller asked the helicopter, whose callsign was registered as PAT25, if he could see the arriving plane.

‘PAT25 do you see a CRJ? PAT 25 pass behind the CRJ,’ the air traffic controller said. A few seconds later, a fireball erupted in the night sky above Washington DC as the two aircraft collided.

Secretary of Defense Pete Hegseth issued the following statement on X:

It seems that Blackhawks from the 12th Aviation Battalion out of Davison Army Airfield are primarily used for shuttling VIPs around the D.C. area. The following appears to be a helicopter from this battalion.

On the face of it, it strikes me as very imprudent to conduct training flights at night that cross the final approach to Reagan D.C. To me, the word “training” suggests a potential for making errors that an instructor is called upon to correct.

It also strikes me as very strange that Army Blackhawk helicopters operating in this airspace at night are not required to operate with bright external lights, especially when crossing the final approach to Reagan D.C.

Finally, though it’s nothing more than a vague intuition, it seems to me that there is something very strange about this disaster and the timing of it. I wonder if, for some reason, risk management of such training activities was impaired.

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