Canadian trade minister Ed Fast says Canada has made a commitment to its dairy farmers and it won't scrap its protection of that industry.
Mr Fast has been in New Zealand to lobby for Canada's admission into the free trade Trans Pacific Partnership talks.
But a sticking point is Canada's supply management policy, under which certain agricultural products receive heavy protection, with tariffs on dairy products of up to 300%.
New Zealand wants those barriers removed as part of a high-quality comprehensive free trade deal.
Mr Fast says Canada's dairy farmers will continue to enjoy protection, and New Zealand should recognise the wider trade benefits of having Canada in the talks.
He says there's much to be gained beyond just the dairy component of a comprehensive trade agreement and it opens up vast new opportunities for New Zealand to engage with Canada and vice versa.
Mr Fast says it could open up the market to other goods and services that New Zealand wants to sell in Canada.
But he says Canada has still indicated it's prepared to have some frank, open and productive discussions on dairy.
Japan and Mexico, along with Canada, are keen to join the nine other countries involved in the talks.