The complex legacy of Sir John A. MacDonald

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The complex legacy of Sir John A. MacDonald

by Greg Piasetzki

It was only a few short years ago that Sir John A Macdonald was rightly honoured as the first among equals as a Father of Confederation.

There was no one more responsible for creating the Canada that we know today. The list of his achievements both before and after Confederation is unparalleled. He wrote most of the Constitution and established a nation from sea to sea to sea with the purchase of all of northern and western Canada (the Hudson’s Bay Company territory) from Great Britain and with the construction of the Canadian Pacific Railway.

As biographer Richard Gywn succinctly put it, “No Macdonald, no Canada.”

And yet, in recent years, in a nation that has forgotten (or has never been taught) its history, his statues have been toppled and his name effaced from public buildings.

The most recent outrage comes from Ottawa, where Macdonald, ever the political pragmatist, worked his magic and built a nation: the removal of his name from the Ottawa river parkway courtesy of the National Capital Commission. The supposed rationale? His treatment of indigenous Canadians and, in particular, his involvement with Canada’s Indigenous residential school system.

However, contrary to much recent press coverage, Macdonald was not responsible for the residential school system and he was a vigorous advocate for indigenous Canadians.

Indigenous residential and day schools existed long before Confederation and were privately funded and voluntarily attended. The various treaties his government negotiated in the 1870s with indigenous Canadians required the government to build schools when requested by the band leadership, resulting in the construction of about 185 day schools and 20 residential schools.

However, it was the policy of Macdonald’s government that all school attendance for indigenous children, unlike the policy applied to other Canadian children, be voluntary and not compulsory. This policy continued long after the prime minister’s death. Even in the 1950s, most indigenous children, whether at a day school or a residential school, attended for only one year.

And contrary to the anti-Macdonald propaganda, he was also a vigorous defender and supporter of Canada’s indigenous peoples. In Parliament, he advocated for their fair treatment and backed his rhetoric with action and policies. And his impassioned defence of his policies (his speeches were often reprinted in the newspapers of the day) persuaded the Canadian people to support his vision.

Yet what have we heard recently of Macdonald’s many initiatives in support of native Canadians? Initiatives that saved tens of thousands of lives? Those initiatives included:

Smallpox vaccination: Through the 1870s and 1880s, Macdonald’s government ran a national program to vaccinate every indigenous Canadian (including those in the former Hudson Bay Territory) against the scourge of smallpox. The vaccination program was a success, and the threat of smallpox, which in some pre-Confederation years had killed more than 10,000 native Canadians, was ended.

Famine relief for Plains natives: When the much-predicted (for more than 30 years) collapse of the buffalo population finally arrived in the late 1870s, relief programs for Canadians at the time were largely privately funded. However, Macdonald immediately implemented a massive famine relief program run by the federal government. A year later, more than 30,000 indigenous Canadians were being supported by the program, which ran for another five years, was a great success and saved many native lives.

Negotiating treaty rights before allowing settlement in the Hudson Bay territory: The United States allowed settlement of the West before negotiating treaties with the indigenous inhabitants. The result was a series of “Indian Wars” fought over 100 years that resulted in more than 60,000 native deaths and 20,000 settler deaths. Macdonald was determined to avoid a similar outcome in Canada by negotiating land settlement treaties with native Canadians before settlement began. He succeeded: there were no Indian Wars in Canada, and many indigenous lives were saved.

The creation of the North-West Mounted Police (NWMP): An essential piece of Macdonald’s plan to avoid conflict in the new territory was to create a police force to establish a Canadian government presence, deter formal or informal violent incursions from the U.S. and to protect the respective rights of the indigenous and settlers when settlement began. As Macdonald stated in Parliament, “the duty of the police is not only to protect the white man against the Indian but the Indian against the white man”). The NWMP (now the RCMP), relying more on moral suasion than firepower, was a great success.

Canada is a young country. We don’t have many towering figures to look to, political, military or otherwise. A fair-minded review of Macdonald’s contributions to our country, as both a Father of Confederation and as a strong advocate for its indigenous peoples, suggests that he is one that we need to keep.

Greg Piasetzki is a Toronto lawyer, a citizen of the Métis Nation of Ontario, a Senior Fellow with the Aristotle Foundation for Public Policy, and a chapter author ofThe 1867 Project: Why Canada Should Be Cherished – Not Cancelled

Is the Competition Bureau finally ready to take on the food industry?

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Is the Competition Bureau finally ready to take on the food industry?

by Sylvain Charlebois

While the parliamentary investigation into food inflation leans towards political theatrics, the real intrigue lies in the Competition Bureau’s study on the food industry, announced last fall. The Bureau has faced mounting criticism since last year for its perceived failure to foster competitive practices in the food sector, which has left consumers grappling with high food prices.

Canada’s food retail industry is essentially monopolized by a few key players. Over 85 percent of all food purchases in the country are through Loblaw, Empire/Sobeys, Metro, Walmart, and Costco. Despite this, the Competition Bureau did nothing to prevent this monopolization.

But rumours in the food industry suggest that things are about to change.

Over the years, the Bureau has green-lit many significant transactions, such as Loblaw’s acquisition of Provigo in 1998, Metro and A&P in 2005, and Empire/Sobeys and Safeway in 2013. The recent spike in food prices has illuminated the lack of competition in food retail, while also reminding Canadians of the industry’s controversial past.

One such controversy is the bread price-fixing scheme that allegedly occurred between 2001 and 2015 and which has been back in the news in recent months. Despite the investigation being ongoing for eight years, no progress has been reported, making Canadians wonder what the Competition Bureau has been up to for the past eight years. It was in December of 2017 that Loblaws declared itself as the proverbial ”whistle-blower” and gave all Canadians a $25 gift card to spend in their stores. Since then we have heard nothing about the investigation; no accusations, no fines and nobody sent to prison.

All we know is that by disclosing the identities of its purported conspirators and collaborating with the Competition Bureau’s inquiry, Loblaw, and Weston Bakeries, owned by Loblaw at the time and since sold, obtained protection from legal action. In essence, ills at the grocery store prompted Canadians to feel unprotected and vulnerable.

Rumours now suggest that the Competition Bureau is poised to make substantial breakthroughs. Nothing confirmed of course, but things have been weird. The Bureau has committed to making its study on the food industry public by the end of this month.

This development has left many industry experts on edge, prompting many to play nice or stay quiet.

We know now that Galen Weston who was himself at the centre of the bread price-fixing scandal announced he will leave his post as President in less than a year. Since he announced his replacement, he completely disappeared from airwaves and TV commercials for the company. His voice can be heard in the background of some commercials, but that’s the extent of it.

Michael McCain is another industry leader who has completely disappeared. The President and CEO of Maple Leaf Foods also announced he was leaving his position next year. He too was embroiled in the bread price-fixing scandal as the former owner of Canada Bread, which was sold in 2014, a year before the bread investigation started. Interesting coincidence.

Court documents from 2021 unveiled those emails between high-ranking industry executives, including some at Maple Leaf Foods, suggest an intention to synchronize meat prices, resembling the alleged co-ordination of bread prices. That right, meat. Because of the pandemic, this story barely made headlines, but the food industry is fully aware that the Bureau has evidence that something was up.

Eric Laflèche, the President and CEO of Métro, gave a rare interview in Montreal recently and openly endorsed the code of conduct for the first time. It surprised many. The code of conduct promises to bring more discipline and competition to the marketplace, and Metro has never been warm to the idea, that is until now. Many leaders like Laflèche are now recognising that things can improve, and some solutions ought to be considered. Again, an unexpected predicament from another leader.

One can only guess that the next few months will be interesting. With a government desperate to show Canadians how they are helping families with inflation, a more relevant Bureau may be what Ottawa needs right now. And that is why the industry is very nervous these days.

Dr. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.

Protracted infant formula shortage plagues Canadian parents

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Protracted infant formula shortage plagues Canadian parents

by Sylvain Charlebois

While the COVID-19 pandemic has taken a backseat in the news cycle, concerns surrounding issues like China’s interference and wildfires have taken the forefront. However, for almost 16 months now, Canadian parents with newborns have been grappling with a persistent shortage of infant formula – a predicament that remains far from resolved.

This protracted situation is undeniably embarrassing for Canada, particularly given its increasing reliance on the United States as the primary source of infant formula.

The predicament began in early 2022 with a significant recall at the Abbott Nutrition plant in Sturgis, Michigan. Abbott, the manufacturer of Similac, swiftly took action to recall its infant products and temporarily shut down the Michigan facility due to instances of severe bacterial infections.

Consequently, the plant, which supplies nearly 60 percent of the infant formula received in Canada, has been unable to resume full operations. Compounding the issue, Nestlé, the producer of Gerber baby food products, also faced a recent recall, exacerbating the infant formula supply problem for American and Canadian families.

Regrettably, the challenges facing the industry extend beyond the issues mentioned above. Several months ago, it came to light that the U.S. Justice Department is conducting an ongoing criminal investigation into Abbott regarding the ongoing scarcity of infant formula in the U.S. Additionally, the Federal Trade Commission has launched an investigation into infant formula manufacturers, including Abbott Laboratories and Gerber, to determine whether these companies colluded during the bidding process for lucrative state contracts.

Undoubtedly, the sector finds itself in a state of disarray.

Understandably, parents are deeply concerned about the persistent disruptions in the supply of baby formula. The formula they rely on for their infants may not be readily accessible when needed, and finding suitable alternatives is challenging. Consequently, this distressing situation has prompted some individuals to panic buying, rapidly depleting reasonably priced products from store shelves and exacerbating the challenges parents face.

In response, Health Canada has facilitated the temporary importation of formula from Europe to enhance product availability in Canada. Retail stores and pharmacies nationwide are now starting to stock new standard infant formulas, with additional supplies expected to arrive this month. While this development is undoubtedly a step in the right direction, the pace of improvement may not be swift enough for many parents who continue to grapple with the scarcity issue even after 16 months.

Many Canadians are left wondering why Canada does not produce its own infant formula. The economics of manufacturing infant formula are not particularly attractive due to declining birth rates in Western countries, including Canada, resulting in a stagnant market. Consequently, it becomes challenging to incentivize companies to invest in this sector under such circumstances.

However, most Canadians are unaware that Canada is home to an infant formula manufacturer – Feihe International, a Chinese conglomerate. Operating in Kingston under Canada Royal Milk, a division of Feihe International, a plant was established in 2019 with the support of Canadian taxpayers. While Queen’s Park provided a grant of $24 million, the exact amount provided by Ottawa has never been disclosed.

Initially, the project held promise, with expectations of generating approximately 250 direct employment opportunities, over 1,500 indirect jobs, and around 400 construction positions over a two-year period. A few years ago, it was reported that the plant would focus on infant formula production from cow and goat milk, with all its production intended for shipment to China.

However, the facility remains largely inactive at present, with only a select few individuals possessing knowledge about the underlying reasons behind its current state of idleness. Consequently, this represents an untapped manufacturing capacity that could potentially be utilized, albeit temporarily.

The general understanding is that dairy farmers often encounter surplus milk that requires proper disposal. In February of this year, Jerry Huigen, a resident of Dunville, Ontario, gained attention when he recorded himself discarding a significant quantity of milk – specifically, 30,000 litres – in accordance with the instructions provided by the Dairy Farmers of Ontario. It is worth noting that the Dairy Farmers of Ontario maintains some form of supply agreement with Canada Royal Milk.

Since the video’s release, Huigen has purposefully maintained a low public profile. However, it is crucial to acknowledge that the practice of milk disposal on farms is not a recent occurrence and offers an opportunity to repurpose all the discarded milk to meet the needs of Canadian families seeking accessible and affordable infant formula.

In our most recent federal budget, a significant allocation of $333 million was granted to our dairy farmers for the Dairy Innovation and Investment Fund. This funding aims to support research and the development of new products, particularly those derived from non-fat solids. That would include infant formula as well.

A strange coincidence …Dr. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.

Restaurant visits and spending rise in Q1 2023

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Restaurant visits and spending rise in Q1 2023

by Sylvain Charlebois

If there’s one sector that deserves some good news, it’s the restaurant industry. This sector has been through hell due to the pandemic, putting our restaurateurs and their employees to the test. However, recently published reports indicate that the restaurant industry is making a strong comeback.

According to a report from Circana, the restaurant industry continued its robust recovery in the first quarter of 2023. Restaurant visits increased by 11 percent, and spending rose by 18 percent during the quarter ending in March compared to the same period last year.

This is great news considering the painful challenges this sector has faced in recent years. Since March 2020, despite higher prices, consumers appear to be visiting restaurants more often.

According to the Circana report, the increase in visits to food services at different times of the day can be attributed to changing behaviours, such as the gradual return of people to workplaces and engaging in formal or informal routines outside the home. Breakfast and morning snack periods experienced significant growth, with morning meal demand up by 13 percent, representing the largest share of daily traffic. Lunch and dinner visits also grew 10 percent, while afternoon snack demand increased by eight percent compared to the same quarter last year – all very encouraging metrics for the sector.

In summary, full-service restaurants showed the highest growth in traffic, with a remarkable gain of 24 percent. However, quick-service establishments still dominated with a 67 percent share of all food service visits, showing a nine percent increase during the quarter. Full-service establishments accounted for 22 percent of the total visits. The remaining share of traffic represents retail dining, including prepared foods in convenience stores and grocery stores, which experienced a five percent decline compared to the previous year.

No surprise here. The latest results from McDonald’s and Restaurant Brands International, the parent company of Tim Hortons and Popeyes, for example, indicate that the fast-food sector is doing better. This may not be desirable for some, but at least people are going out.

And the good news doesn’t stop there. Statistics Canada also added its two cents last week by mentioning that even though retail food sales have been declining for some time due to persistent food inflation, the percentage of food service, in relation to total food sales, seems to have returned to its pre-pandemic level for the first time. Before the pandemic, the percentage stood at 39 percent. According to Statistics Canada’s data, the percentage in the first quarter reached 39 percent again, a four percent increase from a year ago. In other words, when it comes to dining out, consumers are returning to their pre-pandemic habits.

The restaurant industry remains one of the most important sectors in our economy. If the restaurant industry thrives, so will retail. Restaurants are the ultimate lure for the retail business, enticing people to go out. But according to Statistics Canada, we also observed that the sector generated as much revenue as in the first quarter of 2019 – the last complete pre-pandemic first quarter – but with approximately 100,000 fewer employees in the sector, including accommodation sites.

In short, the data from the restaurant industry is reassuring. Everything indicates that consumers may be going out to forget their despair at the grocery store. Perhaps the “might as well” syndrome is driving people to go out despite wallets still being intimidated by inflation.

Dr. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.

First Nations people deserve right to fee simple land ownership

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First Nations people deserve right to fee simple land ownership

by Joseph Quesnel

It is time for Canada to confront its colonial legacy and take decisive steps toward ending it. Granting the 630 First Nations in the country full and unconditional title to their reserve lands is a crucial and necessary first step. This issue should no longer be a subject of controversy and must transcend partisan politics. It is a matter of fundamental justice and reconciliation.

However, granting title to reserve lands is – again – just the first step. Individual First Nations must also go further by providing their people with the right to own land in fee simple, as all other Canadians can. This would ensure true equality and empower First Nations individuals to participate fully in the economic life of the country.

The need to do so became clear to me when I appeared as a witness before the House of Commons Standing Committee on Indigenous and Northern Affairs last April. The committee was looking at how the housing shortage was impacting Indigenous peoples. No surprise: testimony kept coming back to how First Nations on reserve were locked out of modern economic life by provisions of the Indian Act that prevent land from being bought and sold on the market.

Fee-simple land ownership is the norm in Canada, allowing owners to rent or sell their land and use it as collateral for loans. It is unjustifiable to deny individual First Nations people the right to fee simple title when many of the country’s 43 fully self-governing First Nations already possess this privilege.

Examples like the Tsawwassen First Nation in British Columbia, self-governing since 2009, the Labrador Inuit Nunatsiavut Government, and the Metis settlement governments in Alberta and Nunavut demonstrate that all First Nations, regardless of their governance structure, should have the option to receive title over their lands in fee simple.

Critics often argue that granting property rights on reserves will lead to the dispossession of First Nations’ lands. However, this argument has been debunked by real-life examples. Self-governing First Nations have shown their ability to ensure that land remains within the community by imposing restrictions on land transfers and non-Indigenous land ownership. They exercise their land rights responsibly, safeguarding their communities and protecting their lands from external interests.

The Nisga’a Nation in British Columbia serves as a successful example. Through the implementation of the Landholding Transition Act in 2012, Nisga’a members were given the opportunity to own residential lots, comprising only 0.05 per cent of their total lands. Data indicates that this cautious approach has been successful, with no defaults on mortgage payments and all 76 parcels of land owned by Nisga’a citizens. This is far from the doomsday scenario of mass privatization often invoked by opponents.

Another example is the James Bay Cree government, which removed the 75-year limit on land leases in 2019. This change has empowered Cree members to build equity in their homes without relying on band guarantees for mortgages. However, it has been cautious in the roll-out of this new housing strategy. For example, it helps teach new owners and renters about financial literacy and home maintenance.

During the Harper government years, the First Nations Tax Commission proposed the First Nations Property Ownership Initiative. This initiative aimed to transfer title from the Crown to participating First Nations, giving them the power to grant individual property rights or adopt protective measures to safeguard communal lands. Such an approach would respect existing treaty and Indigenous rights, as the land would always remain under First Nations jurisdiction.

Unfortunately, the law was never introduced, and the Liberals did not take it up again.

While some argue that the Framework Agreement on First Nation Land Management Act (FNLMA) renders full property ownership unnecessary, adopting the FNLMA framework alone falls short of addressing the underlying issues. Although it allows First Nations more control over land management, the land remains as reserve land. Opening up even a small percentage of reserve lands to fee simple ownership would unlock real gains in terms of increased land values and economic opportunity.

Adopting the FNLMA framework is a great option for First Nations, but ending colonialism means full property rights to individual First Nations people and trusting communities to make correct decisions.

Joseph Quesnel is a senior research associate with the Frontier Centre for Public Policy.

With lower commodity prices, why aren’t food prices dropping?

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With lower commodity prices, why aren’t food prices dropping?

Sylvain Charlebois

Many Canadians are wondering why food prices are not dropping at the same rate as agricultural commodity prices. Last year, Russia’s invasion of Ukraine pushed prices to astronomical levels. One year later, the agricultural commodity landscape looks incredibly different.

Prices for agricultural commodities have dropped significantly in the last 12 months. Wheat prices have fallen by a whopping 47 per cent since last year; corn is down 22 per cent; soy is close to corn, down 23 per cent; and oats are down 31 per cent. Other commodities are also down: coffee by 21 per cent; canola by 42 per cent; sunflower oil by 60 per cent; and pork by 31 per cent. Chicken, a popular animal protein globally, is down 16 per cent, while eggs are down 56 per cent. As for dairy, cheese is down by 30 per cent from last year and milk by 36 per cent. And the list goes on and on.

It is tempting to think that these prices should have a bearing on grocery prices. Input costs do impact prices, but not in the ways you might think.

Research by Dalhousie University, along with the University of Guelph, the University of Saskatchewan, and the University of British Columbia, concluded many years ago, while working on Canada’s Food Price Report, that commodity prices have little to do with retail prices in the industrial world, including in Canada. The reality is that the correlation between commodity prices and retail prices is, for the most part, weak. They can affect retail, given time, but the effects are still minimal.

The reason is simply this: a number of factors will increase prices at retail. These include labour challenges, wages, and measures like carbon pricing and currency fluctuations. There is also the issue of food geopolitics, which includes trade restrictions and embargoes. Not to mention packaging costs and adjustments to changing regulations, food safety measures … the list goes on. Supply chain economics are impacted by many factors, especially in advanced economies, where the effect of numerous transactional costs outweighs how inputs affect retail prices.

We also need to remind ourselves that food companies have contractual arrangements which may or may not help them keep costs down. These contracts will commit companies to paying similar prices for several weeks, sometimes months, at a time. So it’s quite challenging to gauge how fluctuating commodity prices will impact food prices over time.

But if they do impact prices, expect some lag, except with categories like fresh produce, since there is little or no processing involved. Produce is by far the most volatile food category out there for that very reason.

Policies also play a role. Canada has supply-managed commodities like chicken, eggs, and milk. Global price fluctuations don’t mean much to us since the intent of the supply management regime is to stabilize prices and assure Canadians have a steady supply of such commodities. Comparing Canadian dairy, poultry, and egg prices to those in the rest of the world is like comparing, well, apples to oranges.

But the other culprit rarely talked about is public spending. Over the last few years, since the start of the pandemic, many governments, including Canada’s, have spent a significant amount on providing socioeconomic safety nets for those in need. Companies have also received funding to cope with economic uncertainties. The “grocery rebate” 11 million Canadians will receive on July 5 won’t help our inflation problem one bit. Coupled with many provinces sending more money to voters as they politicize food inflation, this extra $2.5 billion program could push food prices higher, hurting more people along the way.

That is mainly why governments don’t mind the attacks aimed at grocers and the food industry. They make for a convenient distraction, getting consumers to avoid focusing on how it is governments that have made food inflation an unmanageable problem for many. Call it policy pivoting, if you will. It’s much easier to point the finger at the likes of Galen Weston than explain to the populace how monetary policies actually work and how they can work against consumers over time.

At least Canada is not implementing measures like those in the U.K. British supermarkets are facing pressure to cap food prices on select foods, with a voluntary approach allowing retailers to pick which items to offer at lower rates. This type of measure can only lead to chaos, higher food prices, and more shortages over time.

Ultimately, supply chain economics are hard to understand, even for farmers. They have always been frustrated by how retail prices rarely reflect the prices they see on the farm. Their piece of the action seldom grows with food inflation. It’s not supposed to unless farmers are vertically integrated, and few are. Price-taking entanglements are just different.

Dr. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.

Proposals in federal budget to increase costs for railway shippers

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Proposals in federal budget to increase costs for railway shippers

Daniel Dufort

Canada’s competitiveness relative to the U.S. is in decline, and that affects our standard of living. Our GDP per capita is currently lower than it was in 2019 – an alarming development that should really be front-page news.

The federal government is short on effective responses. Desperate attempts to extend tens of billions of dollars to foreign companies like Volkswagen – so they will deign to invest in Canada – are more symptoms of the problem than likely solutions. Our current situation brings to mind what former U.S. President Ronald Reagan used to say about government’s view of the economy: “If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

Thankfully, large swathes of our economy are still moving – some literally. A case in point is the railway industry, in which two Canadian companies – CPKC and CN – are uncontested leaders. Unfortunately for them, their success means the government has them in its sights and plans to regulate them in an even more harmful fashion than it already does.

The omnibus bill to implement the 2023 federal budget contains measures that will increase costs for railway shippers and, ultimately, all consumers. The extension of the regulated “interswitching” distance hides, under innocuous bureaucrats, enormous costs that will have to be shouldered by all rail shippers.

As things currently stand, shippers with access to only one railway but located within 30 km of an interchange can avail themselves of government-fixed rates to have their cargo shipped to a competitor. The government is now keen on extending this distance to 160 kilometres – the distance that was in effect between 2014 and 2017 – and that was rightly criticized in former minister David Emerson’s 2016 report. Regulations aside, choosing a different railway is something shippers can do at any given interchange, provided they are ready to pay for it.

To be completely clear: the federal government is forcing the railways to offer shippers a below-market rate set by the government for the transfer of train cars to the railway network of a competitor. That government-set price likely won’t allow railway companies to break even. Ultimately, these costs are passed on to consumers and eventually paid for in large part by you and me at the checkout counter.

We’ve all watched as goods and food prices have shot up in recent months. Unfortunately, instead of acting to slow rising food costs, the government’s action risks exacerbating the situation with costly new regulation, all in aid of anti-market economic populism.

Encouraging the switching of cars from one railway to another undermines the fluidity of our logistics chains and can lead to delays. In fact, the hit to productivity by complicating our supply chains is essentially what led to the elimination of the 2014-17 policy. Considering the supply chain problems we’ve faced since then, building back an extra layer of complexity seems needlessly reckless.

Both CPKC and CN already devote between 20 and 25 per cent of their revenues to capital investments that make our supply chains more resilient. By undermining these companies’ profitability, the government puts these investments at risk. Simply to score easy points with its NDP electoral coalition partners, Ottawa is ready to risk a decline in the quality of our transportation infrastructure.

American railway transport companies must be rubbing their hands with glee before this sad spectacle of self-sabotage as they stand to benefit from a slower and less efficient railway system up north.

If we really want producers and manufacturers in remote regions to get their goods to market more cheaply, we need to look to other measures. Government policy based on an attractive fiscal framework and flexible regulation is more likely to attract new investment and exert downward pressure on prices. Unfortunately, what we’re being offered is the exact opposite of that.

A thorough review of the risks and dangers of our current approach to the economy is long overdue. We should start with the golden rule of policy: first, do no harm.

Daniel Dufort is President and CEO of the Montreal Economic Institute.

Long gone are the days of Prime Minister Pierre Elliott Trudeau’s love affair with China

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Long gone are the days of Prime Minister Pierre Elliott Trudeau’s love affair with China

Sylvain Charlebois

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China’s recent expulsion of a Canadian diplomat in response to a similar action taken by Canada has raised concerns about the future of the two countries bilateral relationship.

This tit-for-tat exchange is nothing new, especially when dealing with China, but it has left many commodity groups apprehensive about the potential consequences for Canada’s agricultural sector.

Remember 2018? In December of that year, Canadian authorities arrested Huawei’s Chief Financial Officer, Meng Wenzhou, to be extradited to the United States. China responded by detaining two Canadians and changing a drug smuggling sentence against a third Canadian to the death penalty.

China’s actions, along with Ottawa’s expressed concerns, led to a significant slowdown in trade between the two countries. Canadian exporters had to seek alternative routes to reach the Chinese market. Some experts suggest that was the moment when Cold War II started and that it will last a while, perhaps as long as the last one.

The current situation again raises uncertainties about various exports, including lobster, canola, wheat, pork, beef, and even the popular coffee chain Tim Horton’s, which operates over 800 stores in China.

Canada needs to be ready for this. Unlike Cold War I, agri-food trades can be weaponized since we now have massive economic involvement between nations. Knowing more about your enemy is much, much easier now. Our economies have provided open access to people and data. This is not at all reassuring.

According to Farm Credit Canada, after canola and wheat, crustaceans such as lobster, crab, and shrimp were Canada’s third-largest agricultural export to China last year, with a value of over $1 billion. Canada’s agriculture and agri-food products worth more than $8 billion were consumed by China, which happens to be the second-largest export market for Canada.

In contrast to numerous other trading partners, exports to China have continuously risen and were not affected by the global economic crisis. But that relationship now comes with some significant diplomatic baggage. Canada essentially feeds China, and has done so for a few decades now. But China has also grown and has increased its capacity to feed itself. As a nation obsessed with control, China won’t hesitate to compromise its own food security to take a stand. But food insecurity is much less of an issue now than just a few years ago.

Despite having less than 10 per cent of the world’s arable land available for cultivation, China manages to produce one-fourth of the world’s grain and feed one-fifth of the world’s population. China’s agricultural output is the largest globally, yet only 10 per cent of its total land area can be used for farming. And the country is only getting more efficient. It is building hog farms that can produce one million pigs annually. China has more options than before.

It’s hard to argue with the statement that China is not worthy of our democracy, and that no such relationship is warranted. Still, taking a stand will always come with a response, and China is in a powerful position to hurt many nations through trade sanctions.

Global food geopolitics aren’t what they used to be. During the Cold War I, you just picked a side. Canada picked the side which won in the end. But choosing sides in the current geopolitical landscape is not as straightforward as it was during the Cold War I. With China’s ascent and a weakening United States, Europe, South America, the Middle East, and Canada find themselves in between. Aligning solely with the U.S. carries significant risks.

Canada’s relationship and proximity with the United States is a growing problem for our country, no matter who’s in power: Trump, Biden or anyone else for that matter. Many agri-food trade groups like the Lobster Council of Canada, the Canadian Meat Council, and the Canola Council are fully aware that the writing is on the wall and have already made efforts to open new markets in the Asian-Pacific region. Ottawa just opened an office in the region for that exact purpose.

India is certainly an underdeveloped market for Canada. Increased export market diversity beyond the U.S. and China is more critical than ever. Canada exports more than $85 billion of agri-food products a year now, supporting our economy. That can’t be underscored enough.

Long gone are the days of Prime Minister Pierre Elliott Trudeau’s love affair with China in the 70s. The world has changed. China’s President Xi Jinping’s tenure is set to outlast many U.S. Presidents and Prime Ministers. The ‘America buys while China sells’ paradigm is ending as China is no longer cheap and an afterthought; it aims to dominate.

With significant holdings of America’s debt and control over many parts of Africa, a new world order is well underway.

Dr. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.

King Charles is a 21st century monarch for Canada

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King Charles is a 21st century monarch for Canada

Constantine Passaris

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Watching the live-streamed coronation proceedings for King Charles at Government House, the seat of the Lieutenant Governor of New Brunswick in Fredericton, I was struck by this transformative milestone for the monarchy in the United Kingdom and the Commonwealth.

Indeed, King Charles’ coronation signalled a new leadership style for the monarchy that is people-centred and modernized. Charles is well suited to usher in his version of the 21st-century monarch. By demeanour, disposition, and design, he is focused on making his reign an opportunity to promote equality, inclusion, and diversity through social engineering.

King Charles, now the reigning monarch of the United Kingdom, also inherited the role of head of state for 14 Commonwealth countries, including Canada. The procession of the Commonwealth Governors General and the Prime Ministers filing into Westminster Abbey behind their respective flags was a clear recognition of the multicultural profile that exists across the countries of the Commonwealth and, indeed, within countries such as Canada.

The days of the British Empire when monarchs ruled their colonial lands with a stiff upper lip are behind us. The British Empire has morphed into the British Commonwealth of Nations which have lived the colonial experience. All of this has left festering wounds and contemporary vexations regarding the modern role of Indigenous peoples in the Commonwealth countries.

King Charles is by no means a newbie at his new responsibilities. At 74, he is the longest-serving heir apparent in British history. Like his mother, Queen Elizabeth II, the word service is steeped in his apprenticeship and foundational to his orientation.

The pomp and ceremony of King Charles’ coronation had Canada – a country he is particularly fond of and enjoys on his official and personal visits – written all over it. He has not forgotten the military training he received in the 1970s at the Canadian Forces Base Gagetown near Fredericton.

Canadian troops were on parade, including some from Base Gagetown. As well, five mounted RCMP officers led the return procession from Westminster Abbey to Buckingham Palace. In addition, two Canadian military officers walked alongside the Gold State Coach as it rolled through central London.

On environmental issues, King Charles was ahead of his time. If there ever was such a title as a “green monarch,” Charles deserves it in spades. He raised environmental concerns about climate change and biodiversity loss before they were on the radar of governments and civil society. In this regard, he was truly an environmental visionary.

I admire his sensitivity and determination to right social wrongs on another issue. I have noticed his body language, caring demeanour, and inspired initiatives to improve the well-being of communities in our contemporary society who are discriminated against and marginalized. In this regard, I see an opportunity for Charles to serve as a convener of decision-makers to hold difficult conversations and build bridges. This will lead to positive change and contribute to significant progress on Indigenous reconciliation in Canada.

King Charles has another attribute that makes him stand out as a modern monarch of the 21st century. He is comfortable and indeed enjoys the multicultural dimension of contemporary society in the United Kingdom and Canada. This was underlined in the coronation liturgy when faith leaders and representatives from the Jewish, Greek Orthodox, Muslim, Sikh, Buddhist, Hindu, Jain, Bahai and Zoroastrian communities participated in the proceedings at Westminster Abbey. This represented the multifaith nature of our contemporary society and the importance of the inclusion of other faiths while respecting the social integrity of the different traditions.

I recall my first introduction to King Charles during his visit to New Brunswick in April 1996. Having been invited as chair of the New Brunswick Human Rights Commission, I was introduced by then-Premier Frank McKenna by name and public service function. Upon hearing my name, Charles looked at me and said, “That’s Greek, isn’t it?” To which I replied. “Yes, just like your Dad.” This started a cordial conversation about Prince Philip’s birthplace. It’s not common knowledge that Prince Philip was born at the Greek royal family’s summer residence on the Greek island of Corfu.

Charles honoured his father’s memory by including a segment of Greek Orthodox music selected by Alexandros Ligas, a Greek-Canadian musicologist, in his enthronement ceremony.

Dr. Constantine Passaris is a Professor of Economics at the University of New Brunswick. He is a recipient of the Order of New Brunswick and the Queen Elizabeth II Platinum Jubilee Medal.

The bad news? Era of dirt-cheap food is over

Troy Media
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The bad news? Era of dirt-cheap food is over

Sylvain Charlebois

We learned last week that Canada’s food inflation rate in March dropped for a second month in a row to 8.9 per cent. However, prices at food stores rose 9.7 per cent year-to-year. While prices increased by 0.3 per cent in one month, the lowest percentage so far in 2023, the gap between food inflation and the general inflation rate reached 4.6 per cent, the highest it has been since 2009.

Even though Canada still has the third-lowest food inflation rate within the G7, after Japan and the United States, a stubbornly high food inflation rate compared to that in other economic sectors will continue to cause sticker shock at the grocery store.

Many are asking when food prices will return to pre-2022 levels. The truth is, they won’t. With higher wages and increasing packaging and energy costs, food prices just won’t drop. Some food companies will raise salaries by more than 10 per cent over the next three years just to increase employee retention. It’s challenging to recruit for many remotely located agri-food companies, and the work, in some cases, can be physically demanding.

Consumers are feeling the impact of these financial adjustments on the food supply chain. Grocers are paying more for goods, as shown in their financial statements for several months now.

Our best hope is to see the food inflation rate drop. With a lower food inflation rate comes more predictability for the industry. Many households are dedicating a larger percentage of their total budget to food purchases.

Or are they?

The retail sales numbers released by Statistics Canada over the past few years tell us an interesting story.

In January 2017, Canadians were spending 48 per cent on food, among all other goods bought at retail. This went down to 46 per cent just before the pandemic started. In March 2020, this rate shot up to 74 per cent for obvious reasons – nothing was open for business. Today, 41 per cent of the money spent on retail goods is for food, excluding alcohol and cannabis. These numbers exclude major components of our economy like services and housing.

The data seems counter-intuitive but may, in fact, suggest a few things. For one, while this certainly means inflation is impacting all aspects of our lives, the data is telling us that Canadians are still spending.

Most important, however, total retail sales for grocery and specialty food stores appear to have almost plateaued. In February 2023, the monthly food expenditures per capita were about $583. In February 2020, three years earlier, the monthly food expenditures per capita were roughly $618.

Since we get less for our dollar now, these numbers are astonishing. If we are to believe these numbers, Canadians are likely buying less food in volume and are also spending less in food retail. And, as major grocers’ revenues, including Loblaw, Empire/Sobeys and Metro, have increased in recent years, this may also indicate that independent grocers are simply selling less food.

Again, these numbers don’t provide a complete retail picture since they exclude services, but numbers suggest that while the size of our retail market is still increasing, food retail in Canada is stagnating. In fact, from January 2022 to January 2023, retail food sales have dropped in Canada by more than five per cent. By mid-2022, when food inflation was really putting more pressure on everyone, food retail sales started to drop despite more people coming to Canada.

Unsurprisingly, many, many households are just spending less and being more frugal about food purchases in times of financial stress. They may also be wasting less food as well and are more careful with food inventories they have at home. Or is it more gardening or more visits to farmers’ markets?

This causes concern about the numerous health and nutritional compromises consumers are making due to higher food prices. We can see how trading down at the grocery store can have long-term effects on the health of individuals and families, especially children.

It certainly has been confusing for Canadian shoppers over the last 12 months. Grocery shopping takes more thought and analysis on the part of the consumer. We can’t just drop by the grocery store and pick up what we’ll need for the next few days.

The bad news is that Canadians are coming out of an era during which food was dirt cheap. In fact, the world is experiencing the same challenges, not just Canada. The good news is that things are slowly calming down for the food industry, giving them much-needed breathing room, and allowing food retail to offer consumers more frequent and better discounts.

So, yes, with food inflation, patience will pay off.

Dr. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.

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