The ongoing concerns about tariffs from the United States, although postponed until at least the end of February, are causing quite a stir amongst Canadians. Spending habits are changing, national anthems are being booed at sporting events, and the trend towards buying Canadian products is picking up steam.
As consumers become increasingly aware of where their products are coming from, a common approach is to simply look for a ‘Made in Canada’ or a ‘Product of Canada’ mark on the label.
What standards have to be met for something to be recognized as ‘Made in Canada’ or a ‘Product of Canada’? We spoke with David Williams, Associate Professor of Marketing at the Edwards School of Business to find out.
“Product of Canada means that it (the product) is actually sourced and made in Canada,” explained Williams.
That differs from a product being considered ‘Made in Canada’. Which requires a minimum of 51 per cent of the product to be assembled in country. Up to 49 per cent (raw materials, components, etc.) could potentially be assembled or imported from abroad and still qualify for that label.
He explained that it will be more difficult than people realize to truly get away from American products while doing their shopping. The complex and intertwined nature of modern corporations and entities can obfuscate exactly from where, and who made their products.
“I would say the problem is a lot of (companies) are American owned, but people don't realize it. Like McDonald's and Walmart are American owned but are seen as being Canadian because they are employing the local community, but they are American based companies which would do business in Canada.”
“Another example, which would be not relevant anymore, would be something like Sears. Sears would probably be seen as Canadian, but it was an American. A lot of companies like Tim Horton's are US owned.”
According to Williams, shoppers may find themselves doing more research than anticipated to figure out where a product truly comes from and where the companies are operating from.
“Some companies are purely Canadian owned and local such as Co-op. It's owned by the community, like the Federated Co-op. It's owned by the community, mostly Canadian products, so that would be one other one would be those which have traditionally been using the Canadian label.”
“Transparency and honesty are the key. If people suddenly start putting the Maple Leaf on things, it would be a little bit suspicious.”
As the country comes together to combat the economic threat, it would be no surprise to Williams if companies begin to lean into the ‘Buy Canadian’ angle, and if tensions continue long enough, packaging and marketing strategies may follow the consumer trends.
“I think for the brands which have always been ‘Made in Canada’, or a ‘Product of Canada, it would be fine. What you are seeing now is brands that people don't realize are ‘Made in Canada’ emphasizing that they are Canadian.”
There are two other factors beyond the ‘Canadian-ness’ that have to be considered before consumers are able to fully transition away from US-made products, those being the willingness to change (brand loyalty) and the potential price differences between Canadian and American products.
“If the Canadian made product is more expensive, that could be a test of loyalty. There is an old saying that people shop with their wallet and their feet.”
“(People) say ‘buy local’, but when you look at foot traffic, a lot of it is in big stores. It’s easier to have intentions, behaviour is harder.”
That begs the question: can Canadians truly distance themselves from imported products from the US?
“Not completely, no. Produce and certain products, not 100 per cent. There will be some who claim they can... We’re so entwined and integrated in the sourcing of products and imports and exports.”
“We can reduce it, but I don’t think we can eliminate it.”
The final outcome of the economic tensions between Canada and the United States is yet to be known, with Williams calling the situation unprecedented, as a similar situation has not come to pass in the recent memory.
“It goes beyond marketing and business in terms of society. It's more of a cultural reaction to someone who's been aggressive. So, it's filtered down to ‘What action can we both take as individuals to defend our country?’”
A major consideration that must be made is if Canadian consumers can shoulder the financial burden imposed by the back-and-forth tariffs, and for how long.
“We have to wait until the prices come through. So having an expectation of 25 per cent, let's see how it filters through. Companies will raise prices, cars will be more expensive, but that's a discretionary purchase and grocery prices are already high. I think people will try, but at the end of the day, if you’re on a limited budget, you’ll likely override some of the cultural factors.”
He explained that the situation is fraught with uncertainty due to its dynamic nature, and that only time will tell as to how much of the reaction is vocalized displeasure and how much is actual intention.
“One of the biggest drivers to purchase is culture, especially a shared culture, the collective identity of being Canadian.”
“That’s such an important factor, when you knock a country, it can really motivate people.”