Ten Years of NAFTA:

A snapshot of the milling industry

Western Canadian farmers, who suffered disastrous consequences with the elimination of the Crow Rate in the 1990s, were promised that free trade would go a long way to rescuing the farm economy. Under the Free Trade Agreement (FTA) and then the North American Free Trade Agreement (NAFTA), they were told they would have access to major markets for their crops. The spinoffs would be tremendous for the rural economy, as the close proximity of major American markets would result in the construction of dozens of mills to transform Canadian grain into flour for export.

In fact, nothing of the sort has taken place. While it is true that exports of grains to the U.S. and Mexico have increased under the trade deals, there has been no explosion of value-added production. Canadian-ownership in the milling industry has actually shrunk during the last decade and a half, falling from just over 20 per cent in 1988 to less than ten per cent in 2003. At the same time, production in Canada has remained stagnant -- in 1993, the U.S. produced 79 per cent of the flour consumed in North America. In 2003, the U.S. continued to produce 79 per cent, with Canada producing 10 per cent and Mexico 11 per cent.