Milk Tax In New Brunswick

Milk is subject to tax in New Brunswick, Canada. The province charges a Harmonized Sales Tax (HST) of 15% on most goods and services, including milk. This tax consists of a 10% provincial sales tax and a 5% federal sales tax. While some items are exempt from the HST, milk is not one of them. In addition to taxes, milk prices in New Brunswick have been impacted by rising production costs, leading to periodic price increases for consumers.

New Brunswick milk pricing rules

New Brunswick's milk pricing rules are set by the Farm Products Commission, which has the power to regulate the marketing of milk in the province. The Commission has announced various changes to the pricing of milk in recent years, including price increases and rule changes regarding the pricing and promotion of fluid milk.

In 2017, the Commission announced a nearly 1% increase in the minimum price of milk in New Brunswick, citing increased costs for dairy processors in payroll, energy, packaging, and ingredients. The Commission also stated that the pricing for the school milk program would remain unchanged for that academic year.

In 2023, the Commission again raised milk prices by four cents per litre, attributing the increase to rising production costs for dairy producers and processors. These costs included feed, machinery and equipment repairs, fuel, labour, packaging, manufacturing, transportation, and distribution. The Commission confirmed that the school milk program prices would be unchanged for the current academic year.

Additionally, the Commission has loosened some of its rules regarding the pricing and promotion of fluid milk. These changes allow retailers to apply for product promotions, such as discounts through coupons, and to sell larger formats of milk at a discounted rate of up to 25 cents per litre below the minimum retail price for a limited period.

It is worth noting that while milk prices in New Brunswick may be subject to change due to various factors, the province's sales tax, known as the Harmonized Sales Tax (HST), does not apply to basic groceries, including dairy products. This means that while the price of milk itself may fluctuate, consumers in New Brunswick will not be taxed on their milk purchases.

New Brunswick milk tax exemptions

New Brunswick charges a Harmonized Sales Tax (HST) of 15% on most goods and services. The HST is made up of a 10% provincial sales tax and a 5% federal sales tax. While there are no province-specific exemptions to the HST in New Brunswick, certain categories are exempt or rebated from the tax.

The HST does not apply to basic groceries, including meats, fish, cereals, dairy products, eggs, vegetables, coffee, and tea. However, some food items, such as snack foods, liquor, and carbonated beverages, are subject to the tax. Other exemptions from the federal portion of the HST include prescription drugs, feminine hygiene products, residential resale properties, rental accommodations longer than a month, educational services leading to a certificate or required for a specific practice, and medical and dental services.

The New Brunswick Farm Products Commission regulates the pricing of fluid milk in the province. In 2023, the commission announced changes to the pricing rules, allowing retailers to apply for product promotions and to sell larger formats of milk at a discounted price for a limited time. The commission also clarified that cross-promotion initiatives involving fluid milk and a non-fluid milk product are permitted under certain conditions.

While there is no specific mention of tax exemptions for milk in New Brunswick, it is reasonable to assume that dairy products, including milk, are exempt from the HST as they fall under the category of basic groceries. However, it is important to note that the HST may apply to certain milk products that are considered snack foods or luxury items. Additionally, the pricing of milk in New Brunswick is subject to regulations and may fluctuate due to various factors, such as production costs and market demands.

New Brunswick milk production costs

The price of milk in New Brunswick is determined by the New Brunswick Farm Products Commission, which represents producers, processors, and consumers. The Commission has cited several reasons for the increase in milk prices in the province, including rising production costs faced by dairy producers and processors. These costs include feed, machinery and equipment repairs, fuel and oil, custom work, and hired labour. Additionally, dairy processors have experienced increased costs for packaging, manufacturing, transportation, and distribution.

The Commission's role in setting milk prices aims to ensure that producers and processors can cover their expenses and maintain a healthy industry in the province. However, these pricing decisions have faced criticism as milk prices in New Brunswick are among the highest in Canada. For example, a four-litre jug of milk in New Brunswick can cost $8.28, compared to $6.97 in neighbouring Nova Scotia and a national average of $6.45.

The high milk prices in New Brunswick have been attributed to the rules governing the prices retailers are required to pay to the Agropur dairy in Miramichi, which is the sole processor of milk for consumers in the province. Retailers cannot negotiate prices with Agropur and must pay at or above a minimum set by the Commission. This dynamic has made it challenging to implement effective discounts for consumers, even with the Commission's recent efforts to introduce promotions and exceptions.

The strict regulations and high prices have led to concerns about milk affordability for households, particularly those with children. Food banks in the province have reported high demand for milk, and charities also struggle with the cost of providing it. Despite the challenges, the Commission maintains that its pricing regulations are necessary to support a healthy dairy industry in New Brunswick.

To address the issue of high milk prices, the New Brunswick Farm Products Commission has implemented some changes. They have allowed retailers to apply for product promotions, such as discounts through coupons, and to sell larger formats of milk at a maximum of 25 cents below the minimum retail price during a "milk pricing holiday" twice a year. These measures aim to provide some relief to consumers, but it remains to be seen how effective they will be in lowering milk prices for New Brunswick residents.

New Brunswick milk marketing regulations

The marketing of milk in New Brunswick is regulated by the Farm Products Marketing Commission of New Brunswick and the New Brunswick Milk Marketing Board, which was changed to the Dairy Farmers of New Brunswick. These bodies are responsible for setting the price of fluid milk products in the province. The Commission has the power to regulate the purchase, transportation, handling, processing, preparation, storing, delivery, sale, and distribution of milk or cream within the province. It can also set the terms and conditions for the production, handling, and sale of milk or cream, and determine the butterfat or other components of milk or cream.

The Commission's role includes requiring any person who produces milk to sell it through the Commission or the Dairy Farmers of New Brunswick. No person can market milk other than through these entities. Additionally, the Commission can fix, impose, and collect service charges to cover the expenses of marketing milk or cream.

The Dairy Farmers of New Brunswick have the power to prohibit the marketing of milk in whole or in part, as well as to regulate the time, place, and manner in which milk is marketed. They can also require that milk be marketed on a quota basis and that any person who produces milk offer to sell it to or through the Board.

In terms of pricing, the Commission has the authority to set the minimum price that consumers pay for milk. For instance, in 2017, the minimum price for one litre of milk in a carton or plastic jug was $1.69, and the maximum was $2.06. The Commission announced a nearly 1% increase in the minimum price of milk, effective February 1, 2024, due to increased costs for dairy producers.

Retailers can apply to the Commission for permission to engage in certain product promotions, such as offering discounts through coupons, and to sell larger formats of milk at a discounted rate of up to 25 cents per litre below the minimum retail price for a limited time.

New Brunswick milk pricing by weight

The price of milk in New Brunswick is determined by weight and is subject to change over time. The New Brunswick Farm Products Commission is responsible for setting the price of fluid milk products in the province. The commission considers various factors, including production costs incurred by dairy farmers and processors, when determining the price.

As of 2023, the price of milk in New Brunswick has been adjusted multiple times. In January 2023, the Farm Products Commission announced an increase in the minimum price of milk by four cents per litre, citing rising production costs for dairy producers and processors. This increase took effect on February 1, 2023.

Prior to this, in 2017, the commission had announced a nearly 1% increase in the minimum price of milk, which took effect on February 1 of that year. At the time, consumers in New Brunswick paid a minimum of $1.69 and a maximum of $2.06 for one litre of milk in a carton or plastic jug.

The commission has also implemented rules and promotions to regulate the pricing and promotion of fluid milk in the province. For instance, retailers can apply to the commission for permission to engage in product promotions, such as offering discounts through coupons, for specific fluid milk products. Additionally, retailers can request approval to sell larger formats of 2% milk, 1% milk, skim milk, or chocolate milk at a maximum of 25 cents per litre below the minimum retail price during a "milk pricing holiday," which occurs twice a year for a period of ten days each time.

The pricing of milk in New Brunswick has been a topic of discussion, with some expressing concern over the high costs that make it challenging for individuals and charities to afford. The province's rules against low milk prices have been criticized for hindering efforts to provide discounts to consumers.

Frequently asked questions