Buy Canadian vs. cupboard economics

Patriotism ranks second to price, Sylvain Charlebois writes.

After the G7 summit, Prime Minister Justin Trudeau showed very Canadian diplomacy, poise and resilience in the face of U.S. President Donald Trump’s antics. But the Canadian public seems to be taking another approach.

Everywhere on social media, Canadians are encouraging each other to go “Trump-free” — to shop for groceries without buying American products. Even some restaurants are jumping on the bandwagon by serving “Trump-free” dishes. These are interesting reactions in the face of Washington’s somewhat contradictory foreign trade policies.

The “Buy Canadian” campaign targeting food products is nothing new. Canadians tend to rally and support specific sectors when these are faced with adversity. In 2003, during the mad cow crisis in which the cattle industry took a $7-billion hit, Canadians showed their love for Canadian beef — so much so that Canada became the first country in the world to see its domestic demand for beef go up after its first native mad cow case.

But this support was shortlived compared with the crisis itself, which lasted more than two years. Retail sales for beef in Canada remained high for about the first nine months, then decreased steadily.

This is because consumers have busy lives, fixed habits and, most important, specific budgets. Once the media had moved on to the next crisis, most people had already forgotten there had ever been a mad cow crisis.

Trade disputes are notorious for their capacity to damage economies, affecting everyone involved. We trade for a reason. Some nations can produce certain goods at a lower price than others. A nation’s competitive advantage can both develop its own economy and serve other economies in need of innovative products they can’t produce themselves for whatever reason.

With food, however, innovation is not nearly as big an issue as food security. Food systems operate with the premise of serving a budgetstretched consumer. Studies have shown we are bargain hunters, whether we realize it or not. Food is temporary, and as such, cannot help consumers integrate into a certain social class, perceptually speaking. Unlike durable products, consumers cannot show off their new jam, strawberries or freshly purchased chicken. This is the nature of “cupboard economics.” People can visit a beautiful home but never see what’s kept inside the cupboards. At the restaurant though, it’s different. Here, the “Buy Canadian” campaign is more fitting.

Patriotism ranks second to price. This is the ideal time of year to use patriotism to justify some of our retail purchases. As Canada Day approaches, more consumers will feel the urge to buy Canadian, and why not? But here again, consumers are fickle and will opt for the product that offers the best quality for the lowest price, regardless of country of origin.

But here’s another reality: The highly integrated nature of the two economies plays out on our grocery store shelves. Many U.S. food products have at least one Canadian ingredient, and vice versa. Defining what a Canadian product is can be tricky. In the produce section, fruits and vegetables are clearly labelled as to country of origin. But it is much less obvious with processed goods.

Finding a maple leaf on the package is only half the battle. Many ingredients in packaged foods come from elsewhere, since current regulations require Canadian manufactured food products to undergo only the last stage of processing in Canada.

In short, if we want to be assured of buying Canadian, we should go out to eat Canadian more often, or buy fresh products in the grocery store. Kudos to those Canadians willing to do so. However, if our trade war with the U.S. escalates, not only will we not have a choice in buying Canadian, it will cost a lot more to feed ourselves.

Sylvain Charlebois is dean of the Faculty of Management and professor in Food Distribution and Policy at Dalhousie University in Halifax.