Carney FLIPS on supply management, Food Professor explains why food inflation is going UP in Canada
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Summary
Candice Malan talks about the new chief of staff for the Prime Minister, Marc-Andr Blanchard, and why she thinks he s a good fit for the job. She also talks to food economist Sylvian Charlebeau about the impact of food inflation on the economy.
Transcript
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Hi, I'm Candice Malcolm, and this is The Candice Malcolm Show. Thank you so much for tuning
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in. We have an excellent episode for you today. I hope everyone had a wonderful weekend.
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So over the weekend, Prime Minister Mark Carney was in Calgary, and he was there to
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meet with energy industry leaders. I've heard this from several people, including Brett
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Wilson, who was on the show with us last week. And he said that Mark Carney plays a good
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game, talks a good game about developing energy, developing oil and gas. While he's
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in Calgary, he's positive about pipelines. And then as soon as he leaves, he sort of strikes
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a different tone. So we're going to keep an eye on that. Of course, Mark Carney today is
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in Saskatoon, and he's at the First Minister's meeting. So he's having a meeting with all
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of the premiers. We're going to keep an eye on that, and we're going to dive into it a
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little later in the week. But I did want to point out one interesting thing. So we did
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learn, like I said, Carney was in Calgary yesterday talking about how he wants to make Canada
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an energy superpower, not really specifically saying oil and gas or pipelines, but energy
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broadly. And then he also quietly appointed a new chief of staff on Sunday. And now I know
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personnel issues aren't the most interesting things to talk about, but this individual,
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Marc-André Blanchard, will serve as chief of staff. And this is only interesting because
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of his own background and what it signals, right? There are two flanks in the Liberal Party.
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There is a sort of pro-business, business as usual side that Mark Carney tries to represent,
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like a departure from Justin Trudeau and the sort of radical anti-oil agenda that he had.
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And then that other side, which is sort of the Gerald Butts flank of the Liberal Party. Well,
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Marc-André Blanchard very much comes from that Gerald Butts flank of the party. And don't just
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trust me. I mean, when Gerald Butts stepped down in 2019, Marc-André profusely thanked him for his
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service and his deep commitment. And he said that he was, you know, an idol and his leadership in
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fighting against climate change and inequalities was inspiring to others. His background is that
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he was the executive vice president and global head of sustainability at the CDPQ Global, which is a
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Quebec-based institutional investment firm. And he was very much on board with the net zero. He's a net
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zero investor. And he previously said that it's essential to not increase oil and gas and coal
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production and focus on renewable and transitional energy. So that is where we're coming from with
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this chief of staff. And what that is signaling to Canadians is not exactly the same kind of thing
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that Carney was saying yesterday in Calgary. Okay, I want to introduce our guests. I'm very pleased to
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have this guest. We had him on the election show, which was great to talk to him. I'm talking about
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Dr. Sylvian Charlebeau. He's not online as the food professor. He runs an excellent, excellent
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ex-account. He leads the Agri-Food Analytics Lab at Dalhousie University. And he's host of the
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Food Professor podcast. So Sylvian, thank you so much for joining the show.
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Hi, great to have you. So I want to talk a little bit about the food inflation that's happening in
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Canada. Specifically, we learned today or yesterday that Mark Carney is endorsing the dairy cartel
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protectionist bill that's put forth by the blog. This is Rebel News reporting that Mark Carney
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backed a Quebec war dairy bill amid the ongoing trade disputes with Donald Trump's supply management
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will never, never be on the negotiating table, Mark Carney told the House of Commons supply
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management will be protected according to Blacklock's reporter. So I'm wondering what you make of this
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bill and Mark Carney agreeing to back it. Well, I'm not surprised. So you're talking about
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Bill C-282 coming from Parliament No. 44. It has survived. And politically, I would say that no one in
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Parliament has any choice. The dairy lobby in particular is incredibly powerful. And they know
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how to destroy political careers. Just talk to Maxime Bernier about that. I mean, they are incredibly
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influential. And the dairy lobby is advocating for a system that very few people understand. Even I would
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say that many politicians don't understand. But what they do understand is that if they actually go against
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it, they will pay the price. As a scientist myself, my job is to make sure that people understand what the
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system is all about and how costly it can be for an economy. So, yes, we are stuck with Bill C-282.
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And I testified before Senate in December against Bill C-282. I think Senate listened. We were going to be
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successful. But now, of course, we all know what happened next. We went into an election, a leadership race,
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an election, and here we are. Well, it's interesting because during the election campaign, Mark Carney,
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he affirmed that he had unwavering support for the dairy supply management system in the face of
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President Trump. So I'm going to play this clip, but I'm going to play another clip that showed
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something slightly different. So first, here's a clip of Carney saying that he had unwavering support
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of supply management. We will never have discussions with respect to supply management. It's off the
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table. So that's sort of the typical Canadian politician response. But then a few days later,
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speaking on a panel with Radio Canada journalists, this is the French language. Mark Carney said that
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there isn't a need to pass a law to protect supply management, saying it's not necessary to make new
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laws for negotiating positions, adding, I know how to negotiate. So this was sort of an interesting,
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I felt like maybe opening the door to possibly just saying that it's time to evolve the system. So
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let's play this clip. It's French, but I believe it's dubbed in English, and then I'll get you to
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You refused today to committing to legislation to protect supply management for people in agriculture.
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Why? In my opinion, it's not necessarily to make laws for negotiation positions. It's not about
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legislation to have a negotiation with you, say, as a European and with regards to critical minerals.
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So to me, that's the interesting point here, because he's saying that when you're negotiating
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with a foreign country, you don't want to be bound by legislation that could hurt your negotiating
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position. And so that, again, that was sort of applying that maybe he would have some room to
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negotiate. And he was pretty adamant there saying that it's not necessary. And then yet here we are
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seeing him go ahead and back the very bill that he said wasn't necessary. So what do you make of that?
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Yeah. So the second version, the French debate, what he was saying is accurate. I don't think you need
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to do this. And honestly, I think it would position, it would put Canada in a very weak position moving
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forward with any country, to be honest. Because typically, when you start negotiating with another
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country, you will put on the table sensitive sectors. And so there would be an automatic for Canada. Do you need
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a bill? Do you need a law to protect that sector? I don't think so, to be honest, because eventually, we're
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probably going to have to make some compromises along the way, as we did with the United States-Mexico-Canadian
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deal that was ratified in 2020. And of course, we all know what happened next. We all had to pay
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a $1.2 billion bill given back to dairy farmers as compensation, if you will, even though, Candace,
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I'm not sure if you were aware, but dairy farmers don't lose a cent with these deals at all. I mean,
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when you actually look at how much money they're losing, they're not losing at all. They recalibrate
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quotas, which indicates how politicians poorly understand the system. It's all about theater.
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It's about artifacts. So I think what Prime Minister Carney is understanding now is that he needs to
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go ahead with this bill only to show that he cares very much about supply management. But it doesn't
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mean that there aren't going to be compromises made along the way. Okay. So you're saying that maybe
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this is just posturing because- Oh, absolutely. I mean, he just won an election. It's not like
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we're heading into another election anytime soon. So I don't really understand why he has to do this.
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To me, the one sort of silver lining of being in a trade war with our closest friends and allies
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is that maybe it would be a time for introspection and reflection upon our own policies so that we can
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go ahead and get rid of the protectionist policies that really severely benefit a small, small group of
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people and harm the rest of Canadians. And we're talking about this in light of crippling food
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inflation as it is. The cost of dairy is more expensive in Canada because of this system. The
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system was designed, I think, in the 1950s. Maybe you can correct me if I'm wrong.
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Okay. 1970s. It seems like it's quite out of date and maybe we should adapt and have a sort of more
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modern laissez-faire free market system. And yet that seems to be completely off the table. I want to read
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a tweet that you posted because I love this. You said, for Canada to truly have a thriving agri-food
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economy, provincial dairy boards that manage quotas must be eliminated, but don't hold your breath. If
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anything, the 45th parliament is likely to repeat the same mistakes as the last one, doubling down on
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protecting dairy. It's interesting because I remember when Stephen Harper was the prime minister and the
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conservative government got rid of the wheat board and that was a huge victory. And I thought, you know,
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next will be the dairy board. And yet that was, preferably, you know, no pun intended, but the sacred cow
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of Canadian politics. And it seems like it still is. So what do you make of all that?
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The monopsony that impacted barley and wheat, I was actually in Saskatchewan at the time and it was really a
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different system and it was easier to dismantle because, to be honest, a lot of farmers were discontent,
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were unhappy with the system. They were able to trade better than the Canadian wheat board based out of
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Winnipeg. And that's why it was easier for Chuck Strahl at the time. He was the minister of agriculture
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to get rid of it, really, through a plebiscite. The supply management system is much more complicated.
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There's a lot of fiscal baggage here. You have a quota system, first of all. Secondly, you have
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provinces managing quotas. And that, of course, would include Quebec. And Quebec, with only 20% of the
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population, produces almost 40% of all the milk we have in Canada. So you can tell that Quebec has a
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lot to lose, which makes it a very political, well, hot potato. I was asked by many politicians over the
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years, if I were to have superpowers and eliminate or at least make supply management better, what would
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you do? If there's one thing I would do right now would be to harmonize the allocation of quotas
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nationally, not provincially, but nationally. And that's where you're going to start seeing more
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efficiencies. And to your point about costs, you would probably reduce the cost to produce milk and
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butterfat in Canada because the money will go where efficiencies are built in Alberta, in Saskatchewan,
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in BC. So the money would actually flow west. And Quebec and Ontario, both provinces absolutely
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know this. That's why they're adamant in protecting the status quo.
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Well, I'm guessing that's part of the reason why those changes aren't being seriously discussed,
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because if the benefit is in Ontario and Quebec, the system is going to be protected to keep it that
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way. I want to tie this into food inflation and what many Canadians are experiencing when they go to
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the grocery store, which is just that the prices continue to go up. So this was a report that came
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out over the weekend. Food inflation continues to rise. Here's what it means for your fridge.
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According to Loblaw's company, May food inflation report, grocery prices rose 3.8 percent per year
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over year from last April, surpassing the general consumer price index. This marks the third consecutive
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month where food inflation has outstripped overall inflation noted by Statistics Canada. You had an
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article over in Troy Media about a week and a half ago saying, blaming the U.S. won't cut it.
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Canada's food inflation crisis is largely the result of Ottawa's poor policy choices. So can you help us
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So 3.8 percent is the highest food inflation rate amongst G7 countries, with the exception of Japan.
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Okay. So it's got to be policy driven. Absolutely. And right now, food inflation is 2.1 percent above
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inflation, which means that if you and I want to go to the grocery store, when we see high prices,
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we'll notice. That's really what it means. And so what's going on right now, counter tariffs have not
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helped. So in March, from March the 3rd to through March, April and beginning of May, we actually,
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a lot of importers had to deal with counter tariffs. But the one thing that you may not know, Candace,
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is that during the election, Mark Carney decided to pause counter tariffs affecting the food industry
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effective May 7th, a few weeks ago, until October. So Loblaw came out a few weeks ago saying,
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well, we're going to have 6,000 products affected by counter tariffs. It's terrible. Well,
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not quite, because as of May 7th, which is the day after Mark Carney met with President Trump,
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by the way, no coincidence, tariffs were paused. And so counter tariffs aren't going to be a problem
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for May, June. So we are expecting the food inflation rate to actually drop. But the troubling part of all
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this is that no one has actually talked about it. And the first person I would point to is Prime
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Mr. Carney, he should have said during the elbows up campaign that perhaps
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implementing counter tariffs actually will penalize Canadians first. He knows that. And so he did it
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very quietly in a very subtle way and let Sean Pine do the dirty work.
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Well, it's interesting because one of the things you note in your piece is that food inflation is going
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down in the United States. So they're the ones that are implementing tariffs on just about absolutely
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everybody. And yet their inflation is going down. It was 2 percent, 2.1 percent. And Canada's is almost
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double that. And there's a really simple reason for that. The American economy can absorb
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geopolitical shocks like tariffs. Absolutely. That's what it says. In Canada, we have a less
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competitive food industry. So when you implement counter tariffs, it will hurt Canadians. When President
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Trump said to Walmart, well, with tariffs, you can eat it up. He's absolutely right. Walmart can eat
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up the tariffs because it's such an efficient company. We don't have a company like Walmart in
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Canada. Well, possibly because we don't have the same kind of competition. So they are a little bit
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complacent. And when it comes to that, you had another interesting concept in this article I hadn't
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really heard or really understood. Although you see it when you go to the grocery store and that was,
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you call it maple washing, where companies overstate or exaggerate a product's connection
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to Canada. I noticed when I go to the grocery store, it's almost obnoxious, Sylvain, because
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a Canadian product, you know, they put like a huge maple leaf on it. They really want you to know that
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this product is Canadian. And they kind of like try to hide the non-Canadian products, even though the
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Canadian ones often are more expensive. So could you help us understand what you mean by maple washing?
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Yeah. If you've been following my work over the last few years, you'll know that I always give the
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benefit of the doubt to business. But sometimes businesses tend to make stupid decisions.
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The bread price fixing scandal is certainly one. The maple washing is another one. I actually do
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receive pictures from readers almost daily. And one time I got a reader sending me a picture of
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Canadian naval oranges, Candice. Canadian naval oranges. Yeah. Unprocessed. So you can tell that
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something was going on. So the person actually went to management and said, listen, you have a problem
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here. You can't have Canadian oranges. They rectified the situation. He came, he went back the next day,
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the next day, same store, same shelf, only to discover that those naval oranges were in fact from
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Egypt. And they were 12.5% less expensive. Now that is maple washing.
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Interesting. Interesting. Well, I, there was a funny political cartoon during the campaign and it was
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all these Canadians, it was, it was a picture of a whole bunch of Canadians lining up to go into
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Walmart. And yeah. And they were all saying, elbows up, buy Canadian, you know, and like shopping.
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Right next door, there's the bankrupt Bay, the Bay Hudson Bay. Yeah. Yeah. Yeah. That's, that's
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typically, and of course, Nelson IQ last week. So for the last few months, we've seen several
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surveys telling us, oh, Canadians are buying Canadian. They're buying Canadian elbows up.
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They're boycotting America at the grocery store. But last week we heard from Nelson IQ. And again,
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this is something that hasn't been reported overly by, by, by legacy media. Sales for Canadian food
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products are up in the last few months by 4.4%, not 10%, not 20%, 4.4% with inflation. When you look at
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American food products, they're down of course, but by 4.1%. So we're talking about a shift of about 4%,
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which is actually important, but we're not talking about a huge boycott, a huge shift towards
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Canadian products here because people have budgets. People, uh, only have so much money to spend on
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food. Right. And at the end of the day, if the, you know, imported American, uh, blueberries or half
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a price or even just to get blueberries at this time of year, uh, people are at the end of the day,
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they're going to do that. Uh, if, if, if you were advising Mark Kearney, or if you could advise
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one, one thing to do to help lower the costs of food and groceries in Canada, what, uh, what would
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that be? Well, the one thing that we haven't discussed yet is the Grocer Code of Conduct. It's
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actually, uh, going in, uh, it's going to be implemented as of January 1st. I would, I would make
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sure that this code works for all to, uh, the liberals actually didn't make a promise investing
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more in food processing. I'd make sure it happens. So they've committed to a $200 million fund,
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which is not a whole lot. Uh, I certainly would like to see more, but it is the only,
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only platform during the election that actually did promise to give some attention to processing.
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And if we want to build a stronger agri-food sector, if we want to gain some ability to
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support our farmers and innovate more, we need a stronger food processing sector.
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Interesting. Interesting points. Well, Dr. Charlebois, I really appreciate your time,
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uh, and insights. Thank you so much. That's Dr. Sylvan Charlebois of, uh, Dalhousie University.
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Thank you. My pleasure. All right, folks, this is all the time we have for today. We'll be back
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again tomorrow with all the news. I'm Candace Malcolm. This is Candace Malcolm Show. Thank you and God
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