Atlantic Canadians are paying more for milk: report

Milk prices in Canada’s coastal provinces have been the focus of attention, sparking discussions about interprovincial trade barriers.

Milk prices vary across Canada, depending on where you buy it and where you live, but the differences are most pronounced in the Atlantic region, especially in the cities of Moncton, New Brunswick, and Charlottetown, Prince Edward Island. In those areas, the price of a four-litre bottle of 2% milk is the highest in the country.

Jeff Doucette, director of Field Agent Canada, says the main reason for the differences in milk prices in Canada is that each province has its own milk regulatory board, which operates under the Canadian Dairy Commission.

“Provincial regulations make it difficult for milk to move between provinces. The dairy industry operates on a pricing model called ‘cost plus profit,’ which means you take the cost of producing milk on the farm and add a profit to that,” he adds.

Field Agent Canada has been tracking milk prices across the country for more than 10 years and has consistently found that milk prices in the Atlantic provinces are higher than in the rest of Canada. Doucette says there is a significant difference in milk prices from city to city.

In June 2024, the company released a report on milk prices in Canada after the farm gate price hike. The figures showed that Moncton and Charlottetown had the highest prices, with a four-litre bottle of milk costing $8.34, compared to $7.30 in Halifax, $7.89 in Quebec and $6.44 in Toronto.

Dr. Sylvain Charlebois, director of the Food Industry Analysis Laboratory, says the cost of producing milk in the Atlantic region is higher because farms are smaller than in other parts of Canada, which drives up costs.

However, he notes that many Atlantic residents buy two litres of milk instead of four, which is more competitively priced compared to other parts of Canada.

“Consumers are shopping smart. They compare prices per 100 litres and may find that buying two two-litre bottles is cheaper than buying one four-litre bottle. As a result, depending on the price, people are changing their shopping habits to reduce their costs.”

On the other hand, with the threat of tariffs and trade tensions between Canada and the United States increasing, Doucette believes that Canada’s dairy industry needs to become more efficient to compete internationally.

He explains that most of Canada’s milk processing plants are owned by large national companies, not local Atlantic companies. Therefore, if these plants can source milk from provinces where production costs are lower, prices will come down.

Doucette compares this to the pricing of similar products, such as Coca-Cola, saying:

“If you look at the price of a two-liter bottle of Coke on Walmart’s website, it’s pretty much the same across the country. That’s because Coke can produce wherever it’s cheaper and distribute it freely across the country. Milk, on the other hand, is locked into its local market and can’t be distributed interprovincially.”

He believes the first step to lowering milk prices in the Atlantic region is to reduce trade barriers and make the market more competitive with neighboring provinces like Quebec and Ontario.

“Given how the milk industry works, there are simple cost-cutting measures that can help families afford milk. It’s not fair that a basic product like milk is so much more expensive in some parts of the country.”

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