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4 Monday, June 25, 2018 • Last Mountain Times
‘Buy Canadian’ economics carry a steep cost
While Canadians may embrace buying Canadian food
products in retaliation for the trade dispute with the U.S.,
it won’t come cheap
Canadians are encouraging one another
to go “Trump-free” - that is, to shop
for groceries without buying a single
American product. Even 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. In a nutshell, here’s what happened
following the G7 summit: Prime
Minister Justin Trudeau plays nice with
U.S. President Donald Trump, Trump
tears Trudeau apart on social media,
Trudeau plays nice again. While Trudeau
showed very Canadian diplomacy, poise
and resilience, the Canadian public
seems to be taking another approach.
The Buy Canadian campaign targeting
food products is nothing new. We’ve
shown our solidarity in the grocery store
before. Canadians tend to rally and support
specific sectors when these sectors
are faced with adversity. In 2003, during
the mad cow crisis in which the cattle
industry took a $7-billioin 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
short-lived compared to the crisis itself,
which lasted more than two years. Retail
sales for beef in Canada remained high
for about the first nine months and then
decreased steadily. 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. Many Canadian farmers
ended up losing their farms because
of the mad cow mess. But the public
tends to react to things that are front of
mind and that affect them directly.
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. With food,
however, innovation is not nearly as big
an issue as food security. Food systems
operate with the premise of serving a
budget-stretched consumer. Studies show
that we’re bargain hunters, whether we
realize it or not. Food is temporary and,
as such, can’t help consumers integrate
into a certain social class, perceptually
speaking. Unlike durable products,
consumers can’t 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. But 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. In other
words, they’ll most often choose the
lowest-priced item, regardless of country
of origin.
But here’s another reality for consumers
to consider while on their quest to
find Canadian products: The highly integrated
nature of both economies plays
out on our grocery store shelves. Many
American food products have at least
one Canadian ingredient and vice versa.
Defining what’s a Canadian product can
be tricky. In the produce section, for
example, it’s easy to choose Canadian
items over American ones, since fruits
and vegetables are clearly labelled as to
EDITORIALS, LETTERS & OPINIONS
country of origin.
It’s much less
obvious with
processed goods.
And finding a
maple leaf on the
package is only
half the battle.
Many ingredients
in packaged foods Sylvain Charlebois
come from elsewhere, since regulations
only require Canadian manufactured
food products to undergo the last stage of
processing in Canada.
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 also cost us a lot more to feed
ourselves.
-Sylvain Charlebois is dean of the Faculty of
Management and a professor in the Faculty
of Agriculture at Dalhousie University, senior
fellow with the Atlantic Institute for Market
Studies, and author of Food Safety, Risk
Intelligence and Benchmarking, published by
Wiley-Blackwell (2017). www.troymedia.com
Disclaimer: opinions expressed
are those of the writer
Canada needs an official poverty line
Would enable a government to set
targets and focus its policy agenda on
effective change.
Poverty is hard to measure. There are many aspects
besides living on low income, including having disabilities
or costly health problems, not being able to find decent
housing, not being able to understand and communicate
in an environment with increasing technological
and legal complexity, and being unable to find nutritious
food at reasonable prices. Still, the federal government
has embarked on formulating a major poverty-reduction
strategy and it would presumably like to have meaningful
ways of measuring and monitoring progress toward
the goal of reducing poverty in Canada - what Social
Development Minister Jean-Yves Duclos has called the
3Ms. It’s time the federal government established an
official poverty line - a dollar amount of income below
which a person or family would be deemed to be poor.
Many citizens may be surprised Canada doesn’t have
one already. Statistics Canada has been producing various
low-income lines since the 1960s but has steadfastly
refused to call these poverty lines, for the simple reason
that poverty involves more than living with low income.
This is a reasonable position for a national statistical
agency because there’s no purely statistical method
for deriving a poverty line (nor a low-income line for
that matter). However, it’s entirely reasonable for a
government to specify a poverty line, even it embodies
arbitrary judgments. That’s well within the purview of
elected representatives.
Having a clearly-defined poverty line enables a government
to set targets, such as reducing the prevalence
of measured poverty by 50 per cent over the next decade.
This kind of target enables a government to focus
its policy agenda on the interventions and program
changes most likely to be effective in meeting the target.
It further allows Canadians to monitor the government’s
progress toward meeting its target.
A critical challenge is whether it’s possible to construct
a meaningful measure of poverty. A poverty line
defined by an income level should only be a starting
point because it needs to be complemented by a dashboard
of other measures in domains such as access to
assets and social support, disability, literacy, housing
and food insecurity. What kind of income line would
best fit the requirements for a meaningful official poverty
line? Statistics Canada produces three sets of lines.
All are flawed.
The oldest is the Low Income Cut-Offs (LICO). It’s
based on arcane statistical estimation and has not been
revised since 1992 since it can bounce around in ways
that defy logic. LICOs should be
completely abandoned. Starting
in 1992, Statistics Canada began
publishing Low income Measures
(LIM). LIM is very simple
and transparent. It’s anchored at
half the median family income,
after taking account of family
Michael Wolfson
size. LIMs vary for families
of different sizes according to an “equivalence scale,”
which is widely used internationally. Starting in 2000,
at the request of social affairs ministers from across
Canada, Statistics Canada began publishing a Market
Basket Measure or MBM. While LIM fails to make a
distinction along an urban-rural spectrum, MBM has
different lines for each of 50 municipalities and geographic
regions. This regional variation is important to
reflect differences in costs across the country.
MBM uses the same equivalence scale as LIM. However,
MBM uses a complex mixture of items to make up
its market basket. The mixture is not at all transparent
and when one examines the nearly 100-page document
describing the most recent 2010 detailed revisions,
many will find the specific items arbitrary. As a result,
both LIM and MBM have strong and weak points. For-
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