Someone else shared this article [1] and I was reading a quote I thought was interesting:

  “[Canada] has a large dairy producing constituency that it wants to protect, so they put a cap on imports that can be accessed at a competitive rate. That's what we call a ‘TRQ’ (tariff rate quota),” says Becky Rasdall Vargas, senior vice president of trade and workforce policy at the International Dairy Foods Association. Under the TRQ, Canada accepts a certain amount of dairy products duty-free, without tariffs.

  "Rather, Rasdall Vargas blames the dispute on “a systemic set of failures” by Canadian administrators that intentionally prevent American dairy exports from reaching the import cap. These protectionist measures are intended to support Canadian dairy farmers. One rule, for example, requires that Canadian dairy processors be the primary recipients of American dairy products.

  “If you’re a U.S. exporter, you're going to want to sell to your customers, not to a competitor,” she says. “Another one is that retailers aren't eligible to obtain an import license quota in Canada. There are layers upon layers of rules that ultimately prevent U.S. exporters from being able to fill those quotas.”

[1] https://www.farmprogress.com/farm-policy/the-real-story-behi...

The limits are often covered pretty misleadingly. If you were to just order a truckload of American butter and import it, you'd be subject to the over-quota tariff regardless of whether the cap was reached. In order to get the preferential rate, you have to file a formal application to use the quota (https://www.international.gc.ca/trade-commerce/controls-cont...), which is subject to all kind of restrictions and limitations. In particular, grocery stores aren't allowed to use the butter quota at all, so if you have some fancy butter you'd like to convince Loblaws to stock you'll always have to pay the higher rate.

(I would emphasize that I don't think this is bad in some cosmic sense, and Canadians have every right to keep the shelves stocked with Canadian butter only if they would like.)

It's never been exceeded because who's going to bother shipping dairy to Canada when you'll be taxed to hell the moment you sell any real volume.