Good morning. The Buy Canadian movement is colliding with rising inflation and thinning consumer patience. Today, we look at whether the cost of living will curb its momentum.
In the news
Retail: Couche-Tard looking at other global acquisition opportunities, as its pursuit of Seven & i inches forward.
Politics: Canada is speeding up livestock feed approvals, scrapping outdated mad cow rules and rethinking produce labels to help food producers withstand tariffs.
Economics: Canada’s temporary resident population has declined for the first time in three years.
On our radar
- Bank of Canada Governor Tiff Macklem is speaking today at 1 p.m. EDT to the Calgary Economic Development organization on tariffs and monetary policy.
- Canadians are going to the polls on April 28, sources tell The Globe.
Victor Yarbrough, chief executive of Brough Brothers Distillery, removes the cover from an empty barrel of bourbon his facility in Louisville, Ky.Jon Cherry/The Associated Press
In focus
The price of patriotism
Rising costs are putting the Buy Canadian movement through a financial stress test. In February, Canada’s inflation rate jumped to 2.6 per cent from 1.9 per cent, surpassing the Bank of Canada’s target for the first time in seven months. The increase was driven by the end of the federal tax holiday as well as mounting price pressures across the economy.
For now, many Canadians are making the effort to buy domestic. Grocery chains are reporting increased sales of Canadian-made products, liquor boards are pulling American bourbon and border crossings have dropped as more opt to spend to keep up the Canada-first push. But with prices climbing, some supporters might be reconsidering how much they are willing to pay to stick with it.
And for a movement built on spending, a slowdown in consumer confidence is an inconvenient problem. Canadians are already cutting back because of tariff uncertainty, which undermines the momentum of a campaign driven by retail choices. Home sales are weak, which doesn’t bode well for furniture brands, home renovation stores and other sectors tied to big-ticket spending. The Bank of Canada’s challenging rate-cut path means any hope of relief on interest rates – and with it, more room in household budgets for discretionary spending – might not come as quickly as expected.
Good intentions, bad timing
Consumer habits are shifting, but inflation is making those decisions more difficult. Diane Brisebois, president of the Retail Council of Canada, said shoppers are still motivated by nationalism but are becoming more pragmatic as prices climb. “There is the Buy Canadian movement, but there’s also the Buy Anything-But-U.S. movement,” she said. “And then there’s the third option: I need this product, and there’s no alternative.”
Prices of some Canadian goods – particularly staples like dairy, flour, and frozen veggies – are still comparable. But pressures such as supply constraints and tariffs on U.S. imports are driving up costs, making it harder for consumers to justify paying more for Canadian alternatives. Fresh produce, nuts, confectionery, cosmetics and cleaning products are another challenge: hard to replace, and when alternatives do exist, they are often more expensive.
Retailers have tried to shield shoppers from rising costs, Brisebois said, but they may be reaching their limit. “Consumers have a limited amount of disposable income, and if we are starting to see prices go up because of the trade dispute, that may affect their ability to make those choices,” she said. “Retailers know they have to try to be as competitive as possible, so they will absorb as much of the cost as possible. But eventually, that’s impossible to do if it starts to affect not just their bottom line, but their ability to sustain their business.”
This again?
Shoppers are examining grocery labels like they’re decoding the Dead Sea Scrolls, but their patience might eventually give way to the convenience and cost savings of familiar choices. After years of high grocery bills, rising rents and shrinking disposable income, Canadians have little appetite for more financial strain.
Pau S. Pujolas, an international trade economist at McMaster University, said inflation will test consumers’ commitment to the movement. “The biggest hurdle is patience,” he said. “Unless the U.S. keeps provoking Canada, people could tire of the movement.
“Initially, they switched to buying Canadian products to make a statement,” he said. “But over time, they may revert to their old habits if they find the alternatives better.”
But if Trump keeps fuelling tensions, Pujolas said, that dynamic could change. His continued claims that Canada is the “51st state” have inflamed nationalist sentiment and could keep the movement alive, even as inflation makes buying Canadian more expensive. Economic pressure matters, but so does identity – if Canadians feel their sovereignty is under threat, their willingness to pay a premium for homegrown products may persist.
Spirited debates
Canada isn’t the first country to face a choice between economic self-preservation and national pride. It isn’t even the first in recent years where the fight played out, in part, over region-specific booze, Pujolas said.
In 2017, Catalonia’s independence push sparked a boycott of Catalan goods – perhaps most notably Cava, a sparkling white wine similar to Champagne. After Madrid declared a referendum illegal and imposed direct rule, nationalist tensions escalated, with consumers on both sides refusing to buy each other’s products.
Eventually, though, Spaniards returned to buying Cava – not because the politics changed, but because Cava was still the best option, Pujolas said. And that is the other challenge for the Buy Canadian movement: Beyond inflation, fatigue is a battle-tested foe. “At some point, the question becomes whether people will continue to inconvenience themselves indefinitely,” he said.
Conscientious Canada
No matter what, Brisebois said, this moment represents a significant shift in consumer thinking. “Canadians are a lot better informed than they ever were about how our economy works, how we partner with different countries, and how that relationship can benefit or negatively impact us.”
If Spain’s Cava boycott is any indication, perhaps Canadians won’t abandon Buy Canadian – but learn to choose between bourbon and other battles.
Charted
When ‘tranq’ takes its toll
Xylazine is for animals, but chances are that it’s laced into the street drugs where you live – and it can cost users their memories, limbs and lives. How did it come to Canada, and what’s being done about it? A new investigation from The Globe and Mail.
Bookmarked
On our reading list
In Florida: Fewer Canadians – and less fun – at a St. Petersburg mobile home park.
In court: Being a trade lawyer in the middle of the tariff chaos.
In my belly: Are we in an omakase bubble? The expensive Japanese tasting menu has gone mainstream.
Morning update
Global markets were down after a Wall Street rally yesterday on optimism that the U.S. Federal Reserve could still deliver two rate cuts this year. Wall Street futures were in negative territory as economic uncertainties persist and TSX futures followed sentiment lower.
Overseas, the pan-European STOXX 600 was down 0.88 per cent in morning trading. Britain’s FTSE 100 slid 0.13 per cent, Germany’s DAX gave back 1.58 per cent and France’s CAC 40 declined 1.11 per cent.
In Asia, Japan’s Nikkei closed 0.25 per cent lower, while Hong Kong’s Hang Seng fell 2.23 per cent.
The Canadian dollar traded at 69.54 U.S. cents.
