EXCLUSIVE Adam Patterson of Korth Group on firearm legislation and impacts on industries
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Summary
In this episode, I sit down with the CEO of Korth Group, a firearm distributor based in Alberta, Alberta, Canada. We talk about the importance of the firearm industry, its impact on the economy, and the need to protect the industry.
Transcript
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To start with, kind of explain Korth Group and where you guys land in the firearm industry.
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Like you're not a storefront retailer or things such as that. You're more of a distributor, right?
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Correct. Yeah, we're an importer distributor for a variety of firearms, ammunition, optics,
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accessories, clients. We've been in business since 1977 and we satisfy a market of independent
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dealers, box stores, chain stores, military and law enforcement. We have a group of sales guys
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that span the country and they are product experts in their field and they work their
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areas and work to grow our business in those areas. Excellent. And you're an Alberta based
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company though, right? You have a presence across the country, as you said, but you're
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from out this way. I just like to. Yeah, we're actually down and out the coast. So quite local.
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Most of the people here in the office are born and raised Albertans. I'm not, but they gave me a pass
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and it's worked out well coming out west. Well, we accept you Eastern immigrants, you know,
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when you, when you behave well enough. So thank you. I appreciate it. So, I mean, part of what I want
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to get into, and I've talked with people from the firearms, you know, I guess you could say lobby
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almost or activist groups, people like CSC, but something that doesn't get talked about enough,
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I think, especially when we get grabs or issues like this is that it is an industry. There's a lot
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of people employed in this. There's a lot of facets to the whole world of firearms. You know, people,
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if there was any other industry that you targeted and could potentially put so many people out of work
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and put so many businesses out of business, we'd have a hell of a pushback, but with firearms,
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they seem to get a pass. Isn't that the case? And, you know, the challenging thing we have here
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as firearms owners is that we don't really have a hard written gun rights law like our neighbors.
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So, so one angle that, that the industry has taken is an industry organization, which is essentially
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the business version of the CSSA. The business version is called the Canadian Sporting Arms and
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Ammunition Association. And their, their mandate really is to lobby government to protect the
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industry. You know, we may not have a right to own firearms, per se, but we should have a right
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to earn a living and be able to do that employment in a field that we find interesting, and that is
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Well, absolutely. And I mean, there are, I imagine, I mean, I don't have the stats over,
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there's going to be thousands and thousands of people employed in firearm related fields,
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everywhere from a retail storefront all the way to, well, often it's volunteer or member led,
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but ranges out there and hunting associations, all of these things can fall by the wayside.
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All of these industries can die if we continue to let this government just keep basically disarming
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the entire country. Absolutely. And I can actually provide a few bits of info here for you for
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numbers. So back in 2019, the CSAAA, which is the industry organization and the Ontario Federation
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of Anglers and Hunters commissioned the Conference Board of Canada to conduct an economic impact study
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of the industry in an attempt to use that info to help sway government to say, you know, there's,
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there's so many people that make their living doing what they love, you know, let's give them a break.
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So just some quick numbers for, for your, your viewers. So just over 25,000 people responded
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to the survey and then the conference board used that data to extrapolate out what the total impact
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would be for fishing, hunting, sport shooting, and trapping. We'll focus mostly on the hunting
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and sport shooting today. So 1.3 million Canadians in 2018 hunted and they spent an estimated total
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of 5.9 billion hunting in Canada. In the same year, 1.4 million people were sport shooting
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and they spent 2.6 billion. So the total impact to our economy that in 2018, and that's just the most
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recent data we have was $8.5 billion spent and over 25,000 jobs supported. And as you said, Corey,
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that's people that work retail distribution reps, outfitters, guides, people that are tied to the
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ranges, anybody that may have a hotel or a restaurant that caters to these events.
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So it's a fairly sizable amount of people across the country that, that make their living doing
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Yeah, I was about to say that there's, there's a lot of indirect employment and benefit and things
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to communities. I worked in the oil field for 20 years and we'd get a lot of the people trying to,
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it's an industry that gets quite abused as well, quite often by, by some ideological governments.
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And they like to understate how much impact we had in, in areas when we have crews moving up,
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but it's not just directly employed people in the oil field. When I'm out there in the field,
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I'm buying fuel, I'm eating food, I'm staying in restaurants, I'm shopping in the local town that
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I'm staying in. Likewise, hunters, I mean, they're a very transient group. You can say to me it's the
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wrong term, but they're on the move. They go into areas for a period of time. It employs people.
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There's a lot of, particularly in isolated communities. I mean, guiding is very important
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to a lot of indigenous communities for people going out hunting. And again, that's under threat
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if a person can't have a firearm. Absolutely. And so much of our industry is more rural and
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suburban based. And, you know, the, the money that's generated at these independent businesses
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and over 90% of our retailers are family run mom and pop independent businesses. They're in small
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geographic areas that may not have the same opportunity. Some of the bigger centers have
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and all the money that's generated in the store and wages to the staff is spent back in that local
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economy. And as you say, with, with hunting, generally we're not in urban centers when we're
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harvesting animals. So you're going into the more remote, more backwoods areas in some cases,
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and some of the small motels and hotels, B and B's and whatever rely on that travel throughout the
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hunting seasons to keep the business afloat. So right now, now due to the, the, the proposed
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anyways, firearms freeze, particularly with the, the handguns, uh, we, we already, I imagined you
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guys have suffered from supply chain issues over the last couple of years, like everybody else.
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So particularly with that, I, I'm guessing shipping must've been a bitch. Um, there's been quite a run
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though. I mean, now finding a, a, a handgun for sale is, it's darn near impossible. It seems they've
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kind of on the short-term had the opposite effect of what they wanted to do. It sure appears that way.
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And an initial expectation from the government, from what we've been told is that they, they
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assume most Canadians would sort of tuck tail and, and cower and wait for bill C-21 to be passed.
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And the initial pitch was that the first reading happened a couple of weeks ago. They had the
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second reading, I think last week. Um, and the initial concept is that third reading and Royal
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sent for beats bill C-21 would be achieved in the early fall. Uh, but Canadians have reacted in my
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opinion, the correct way and purchased every handgun they could find. Uh, it's, it's been
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phenomenal. There's never been a run on handguns like this ever in our history from everybody that
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I've talked to. Um, and so because of that, it appears now as though the, the feds are trying to
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push the third reading and Royal ascent before they break for the summer, which I think is, uh, late
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next week, uh, they wrap up for the year. Uh, so we've got to rush on this and, uh, I would hope
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that they can stall this. This is a big piece of legislation. This has a lot of potential consequences.
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If they ran that through that fast, well, I can see the lawsuits already starting. I mean, people
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have invested and done things because of the basis of this legislation being on the way and for them to
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rush it and stop everything in transit. I don't think it's going to end well.
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Well, and it'll have zero impact on, on anything other than disrupting independent business and
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people spending their after-tax dollars to recreate the way they choose. Uh, and that's what everybody
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in the industry has the biggest issue with that with this handgun freeze, they're calling it a
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freeze right now, but we'll see what happens. Um, you know, most of our dealers, 30 to 90% of their
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business is geared towards handgun sales. And so it isn't just the firearm. It's the accessories and
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it's upgrades and repairs. When consumers are walking through a retail store, they are going to
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end up, you know, impulse buying other things that may not be related to a handgun. And if they're
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not able to buy any new firearms, we're going to lose that foot traffic coming into our retailers.
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Yeah. That's another good point. I mean, it's just like when you go into a grocery store,
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they stick the dairy and the meat in the far back for a good reason, because they know you're coming
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in for that. And chances are, you're going to grab a little more on the way. You never see the hunting
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section in the Canadian tire up by the front doors. They make sure I walk by all that impulse buy crap that
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usually I do end up leaving, you know, I went in to get a box of 22 shells and somehow I spent $200
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on other stuff while I'm at it. But it's, it's, it's a real important facet. I mean, you know,
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I mean, you kind of chuckle about that, but this is integrated with a lot of businesses. How do they
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fill that space? How do they keep people employed? What do they do if these areas are suddenly gone?
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Oh, exactly. And how do you make up that revenue? And how do you keep your staff employed when you're
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going to lose what could be your entire business? You know, we have dealers that their entire
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business model is catering to the sport shooting, competitive handgun community. And it's going to
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be really challenging for them to pivot and try and reestablish themselves as hunting store,
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or something else entirely when they've built a brand around handguns.
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Yeah. So getting a little farther, I mean, regulating stuff to death. It's another area
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that it's not, this is, this is a sense of how they're going to be doing it anyways. But I remember
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way back in the nineties, you look like you might be a little young to remember most of that, but with
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the big battles of the registry back then, something that had happened due to that was, and that registry
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failed, but every firearm dealer was suddenly going to have to spend, I believe it was like $35 per firearm
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to register their stock in the stores. Some of them had hundreds and hundreds of firearms. I mean,
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this was a sudden expense of far more than they were willing or able often to take on.
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So what they did, I remember walking into one and that shooting range is gone now, but they actually
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had a bucket full of 303s that were all laying there. They'd had them for years and they said,
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50 bucks each, grab them while you can before the registry gets here. And off they went. I mean,
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again, it was another run on gun sales. It was a liquidation sale in that case. They were just trying to
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get rid of them because nobody could afford to hang on to them. But did that make anybody safer?
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Did it make anything better? Did it improve anything? In fact, the registry got thrown away
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eventually. Well, anybody that bought those Enfields sure made out like a bandit with what they've
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become value-wise now. They're one of the most coveted millsurf guns out there. So hopefully people
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made well on that deal, but you're absolutely right. There's no positive outcome from any of this.
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The hard reality is that people are going to lose jobs and it will have zero impact on anything
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other than those job losses. So just a side note, since we do have a live show, I've got commenters
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asking, Brad Haugen, he keeps asking, he's looking for 303 shells. Maybe you might know about it.
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They're apparently really hard to find. Is that a supply chain issue going on or do you have any idea?
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Absolutely. Yeah. There's real delays in everything right now as we're experiencing everywhere as
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consumers. Part of the challenges that the ammunition manufacturers face, there are only
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so many companies that provide the raw materials, your brass, copper, lead, powder, primers. There's
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only so much of that product to be had. And we've seen unprecedented volumes in the last two years,
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partly because of COVID, partly because of various things going on in the US. Canada is subjected to
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supply chain challenges, as is the rest of the world. And I know the manufacturers are doing their
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best to try and get the product up here. But we see the panic buying tends to breed more panic buying
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that the guy that might buy one box of 303 and use that for a couple of years, couldn't find any last
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year. And now when he does find it, he's going to buy everything he can get his hands on. So it does
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sort of perpetuate the issue of not enough ammunition being had across the country.
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Yeah. It's just getting disrupted all over the place. And again, with panic buying and hoarding,
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and it doesn't help anybody. Again, it doesn't make anybody any safer or anything either. That's the
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frustrating part is they always make the case that this is somehow going to make the society safer.
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So I mean, you're part of that commercial association, you guys are of the legal
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arm of firearm sales, handguns, I mean, heavily regulated, very controlled, very well documented,
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tracked. You don't deal with your firearms being used in crimes, or you don't see that down the road?
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No, I mean, very, very few legal firearms are used to commit crime. The vast majority of the crime
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guns that are found in Canada are smuggled into the country. And that's a really hard hurdle to overcome.
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Ultimately, regardless of what we do as a legal group, there's always going to be that criminal
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element and always going to be access to illicit firearms. And I think the challenge for the
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government is how do you deal with that problem? Ultimately, lots of people joke that drugs won the
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war on drugs because they can't stop them from coming into the country. How are they going to
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stop the illegal firearms? You know, we legal gun owners are an easy target, you know, politicians can
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stand up and, and rant and rave about how unsafe guns are and how dangerous guns are and so on and so
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forth. And they have an active list of where each of us live that own handguns in this country and what
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we own and when we bought it, and how it's supposed to be stored. So it's really easy to come after the
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law by a gun owner, simply because they know where we are. And it can appear as though they're doing
00:13:01.600
something to combat gun crime. Well, that's it. It's the low hanging fruit. I mean, anybody who has
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purchased a handgun, I mean, this legislation has been in for decades and decades and decades.
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You're registered, you have to have a range membership, you can't transport it, you have to
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take a course, a restricted firearms course, all of these things that the people who would go through
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all of those steps in order to get a handgun, it says two things. For one, they very much enjoy
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and are dedicated to their handguns for target shooting or whatever else they may like with it.
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And also their rule following law abiding people, they're following the process,
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they're doing everything right. And then they're getting targeted by the government for having done it.
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Yeah, yeah, they sure are. And you know, some of these people are competing at the club level,
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with national competitions, international competitions, we have a couple of pro staff
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brand ambassador type shooters that that work with us, that are both on the Canadian IPSC team. And
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IPSC is an action shooting sport where you're, you're trying to be as accurate and fast as possible
00:14:03.040
to shoot a pre setup stage. It's a pile of fun. If you've never tried it, I highly recommend trying
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it. But these two guys are on the Canadian team, and are going to Thailand next year to compete for
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Canada at the world level in IPSC. So this isn't always just a casual plinking on a Sunday afternoon
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type thing. You know, these guys are shooting 80,000 rounds a year, and replacing product and
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buying backup guns and spending massive amounts of money on their sport and their hobby because
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they're so passionate about it. Yeah, so, again, as you said, we're just starting right now with a
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freeze that they're eager to get on to. And I won't, you know, necessarily expect to speculate,
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I suspect they have no intention of stopping there. That's just step one before they move on to seizure.
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But is your industry association then getting ready to try and challenge this like from a
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association point of view or anything like that? There's certainly an interest to try. The biggest
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challenge that we have as an industry is that our voice really is not heard. We were fortunate with the
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previous public safety minister, his office was willing to speak with the industry. The current public
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safety ministers are not quite as as free flowing with conversation with us. And quite often, anytime
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there's a firearms panel to be created, the industry is left out of it. The focus is primarily on victims
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groups, which, you know, for a mother that's lost her son in a drive by shooting, it's horrendous.
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Everybody's heart goes out to her. Anything that they change, though, would not have changed that
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outcome. So the biggest challenge for us right now is that we would like to see some change.
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But with the current structure of the government, with the Liberals NDP partnering, they're both very
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much anti-gun. The Bloc is anti-gun. So really, the only group that's standing behind us are the
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Conservatives. And there just isn't enough of a voice to have an actual say at the moment.
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Yeah, well, they play on a lot of emotions. I mean, nobody wants to see, of course, those horrible
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stories when firearms are misused and people die or hurt. But I mean, it's just a villainized
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industry. And it's just been so wrong. And that's a bit of what your association has to try to
00:16:07.600
counter. I mean, the most comparable industry I can think of is like the tobacco industry that
00:16:12.000
got chased around. But the difference is, there's no safe or really realistic case made
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that can be made to consume tobacco. There's no real good reason to smoke anything else. There's
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a safe, you know, harmless use of firearms or even productive use of firearms, whether it's
00:16:27.920
for hunting or target shooting or collecting all of those things, they aren't going to hurt anybody.
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So I mean, I don't think it's fair to compare that industry to tobacco, but it's getting the same
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abuse as tobacco. Yeah, it sure is. You know, the biggest problem we face as an organization,
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as an industry and as users is that a lot of Canadians that are not interested in what we do
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are indifferent or ignorant. And I don't mean ignorant in a negative way. They just
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don't know. So when they hear these politicians spouting off about making Canada safer and yada,
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yada, yada, it makes sense, right? They don't realize that there is a massive increase of women
00:17:05.520
and girls participating in shooting and hunting and what an inclusive community it is. You know,
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when you go to these events, there's people from all walks of life and all backgrounds and all classes
00:17:15.920
and different languages. And it's so awesome because they've, they've come here and they weren't
00:17:20.960
allowed to, or maybe minimal access to firearms in their home country. And they've come to Canada
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and they can participate in something they're passionate about. And that side of the sport
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is never shown. It's always everything, the messaging in the legacy media focuses so much on
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crime and a lot of issues that don't even happen in our country. You know, this Bill C-21 miraculously
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was released 10 days after a bunch of children were killed in Texas. Personally, I think it's in poor
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taste on the government to have done that. They did the same thing after the mass killing in New
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Brunswick two years ago, and use that as a great springboard to launch their plan to get rid of guns.
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And they're really not shining the correct lens on our sport at all.
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And I'm glad you also brought that up. It was something I hadn't thought of, but you're right.
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Is this the social cost? I mean, these ranges, these hunting groups, these clubs, these sporting
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organizations, this is where these are the social center for a lot of people. That's where their
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circle of friends is. That's where they get together. That's where they have annual banquets,
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all of these things. Because I was talking earlier about actually some of the costs of the pandemic
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lockdowns. And again, I don't want to tie that so much into this, but that's a social cost. When you
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suddenly isolate people and get them stuck in their households, rather than getting out and socializing,
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they can have a hard time. And there's a lot of people whose big social focus is around something
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firearm related. And if they lose those, that harms people as well.
00:18:39.600
Absolutely. Absolutely. And so much of what we do is a family and friend-based activity,
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like you said, Corey. But there's a generational aspect of this too. We have dealers that
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are second, third generation ownership and dealers that have been in business for for 50 years.
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And here, as I mentioned, we started in 1977 and Terry and his dad started
00:19:00.720
the company at that time. And now the next generation is involved in the business.
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And it's such a great community that really were not ever displayed, in my opinion,
00:19:10.800
No. And again, if any community, I think at all is going to be most opposed to the criminal
00:19:16.400
use of firearms, it's all the people who responsibly use them because they're tired of
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getting labeled and potentially losing their rights.
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Very bad for business. That's another aspect I won't get you to speculating on. When you
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criminalize the whole thing in the works, there's going to be a number of people who just decide,
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well, I'm no longer going to abide. And then now you've created criminals rather than solved
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anything. And it's just not an improvement whatsoever.
00:19:39.120
Absolutely. And if I could just throw another comment on that, Corey, that one of the big
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challenges all of us face, whether we're in industry or as users, is the lack of communication.
00:19:49.280
So, you know, a few years ago, the government prohibited Ruger 1022 magazines that had the
00:19:54.320
capacity of more than 10 rounds. And so there were hundreds of thousands of these 25-round
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banana mags, people would call them the Butler Creek mags primarily, that were now prohibited,
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but no communication was ever sent out to the populace to let them know. Industry do,
00:20:08.480
because we can no longer import them. But me as a gun owner that owns a 1022,
00:20:13.440
I never received any communication to say that, hey, this item is now prohibited.
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And there have been people that have been caught with them, whether they knew or not,
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I can't speculate. But the communication is really lacking. And even from the industry side,
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we're not told when changes are going to take effect. But the May 2020 Order and Council was
00:20:32.720
as of May 1, and I think they told us on April 30, AR-15s are now banned. We have inventory,
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dealers have inventory, there's product that's now stuck in a type of purgatory that we can't sell,
00:20:44.960
and we can't easily export back to the US despite the government telling us that we can.
00:20:49.680
That's not how it works. So there's a lot of product that's tied up at all levels of distribution
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and supply chain that cannot be sold because we were not given any notice to maybe cancel orders
00:21:00.240
or try and clear what we had before VAN took place.
00:21:03.200
Yeah, I guess. And even on a smaller level, I mean, one of the changes they're looking to bring about
00:21:07.040
with this legislation. I mean, I've got a little Rimfire 22 that has a 10-round magazine in it.
00:21:13.120
And if this legislation goes through, suddenly that magazine is going to be illegal for me to
00:21:17.040
have in my possession. Plus, everybody, I guess, who owns a business that sells those or distributes
00:21:21.920
those magazines is now holding onto a criminal item. They're either going to have to destroy it or
00:21:28.400
Yeah, well, it's yet to be seen. And that change is actually going to come upon us by order of
00:21:34.400
council. So we will be told someday, whenever that's going to be this week, next week, September,
00:21:40.160
we don't know that all of a sudden, we can no longer import or sell any firearm with more than
00:21:44.800
a five-round magazine. But the feds didn't separate Rimfire or firearms that have an internal magazine,
00:21:53.840
like an old lever gun, for example. So the challenge now for us as importers is that
00:21:58.960
manufacturers are going to need to build Canadian-specific product SKUs so that your 22 rifle
00:22:05.600
is now shipped with a five-round magazine instead of a 10-round magazine. So there's going to be delays
00:22:10.080
and complications with the ordering process. And it's possible it will drive costs up because now
00:22:15.040
the manufacturers have to build a special makeup SKU for Canada, where they could just sell us the
00:22:20.240
regular product before. So the trickle-down impact of this is massive, as you say, and all the inventory
00:22:26.160
that's out there. People that have hundreds of magazines or across the country, you know, hundreds
00:22:30.640
of thousands of magazines that are now going to be prohibited and all that value will be gone.
00:22:34.800
And you might get charged if you get caught with them.
00:22:37.280
Well, you might even forget the magazines in the back of your cabinet there and it's sitting there.
00:22:42.080
I mean, it's just ridiculous. Well, all we can do is keep pushing and keep hoping. I appreciate you
00:22:48.400
coming on to talk about that. And like I said, I just wanted to, because you don't hear the conversation
00:22:52.000
enough, you know, lend the industry viewpoint out of this. I mean, there's a lot of people very dependent
00:22:56.240
on this industry working directly within it, and they don't get a voice at all when these legislations
00:23:01.040
come along. So I appreciate you coming on. Where can we find more information about what your group
00:23:05.440
does or where you're at? You can check us out at korthgroup.com. We also have
00:23:10.480
pages on Facebook and Instagram. And thank you, Corey, and your team for having us on. Because
00:23:15.040
as you say, we don't get a chance to really speak from the business side. And we really appreciate
00:23:18.880
the opportunity to prop Korth Group up a little bit and to speak about what we do. And I sure hope
00:23:24.400
that we see some positivity out of all this at some point. Thanks. We like to support good Alberta
00:23:29.760
businesses and appreciate it. All right. Thanks, Adam. We'll talk again soon. Maybe we'll have some