Canadians may need to make changes to their food and alcohol consumption as the trade war with the U.S. ramps up.
Mike von Massow, a food economist at the University of Guelph, said Canadian food producers will likely see a cross-border shipping slowdown due to the high tariffs. But that could lead to more supply available in Canada and, in turn, benefit shoppers.
“If anything, it might decrease the cost of some products in Canada because there will be more supply available here,” he said. “If we can’t find alternative markets, it might decrease prices in Canada.”
According to von Massow, grocery stores will need to source products from other countries and, if Canada puts tariffs on leafy greens, that’s likely where grocery store prices will see the biggest increase.
Finding alternatives for certain vegetables, however, could help lower grocery costs.
“It’s important to remember that not all of our vegetables and fruits come from the U.S. in the winter,” von Massow said. “One of the things we’re doing in our household is we’re buying fewer American vegetables, but we’re having to shift our consumption.”
Impact on food industry
Canadian alcohol producers are already seeing an industry shift.
While LCBO has removed more than 3,600 American-made products from its shelves in retaliation to the U.S. tariffs, smaller Canadian producers, like Dixon’s Distilled Spirits in Guelph, they are seeing an increase in client orders.
“We are getting some inquiries from them saying, ‘Hey, we’re looking for more Canadian product,’” said founder JD Dixon.
Dixon’s uses raw Canadian materials for its alcohol products, though it is still sourcing the origin of its citrus peel flavouring.
Owner JD Dixon said it’s still too early to say if the U.S. tariffs will be good for business, but if the LCBO starts replenishing its shelves with Canadian products, it could be amazing opportunity for local producers.
“Why were we buying $1 billion worth of American booze when we have great products, from not just Ontario but from across all the provinces?” Dixon asked. “Why [haven’t] we have been doing that before?”
Borealis Grille & Bar in Kitchener only has one bottle of bourbon left and, while they don’t plan on replacing it, said the trade war is another good reason to encourage Canadian-made purchases.
“It doesn’t really faze us that much because 80 per cent of the products that we buy are all from just within Ontario, probably another 10 per cent are from within Canada, and another 10 per cent are from various places that we just can’t get here,” explained Court Desautels, CEO and president of the Neighbourhood Group.
In terms of alcohol, he said 99 per cent of the liquor sold at Borealis is already produced in Ontario and they don’t expect an issue with turning off the American beer taps.
“I think one of the biggest concerns around breweries would be the hop supply,” Desautels said. “We’re getting all of our two-row malts, everything, all supplied generally throughout Canada. Pretty easy thing. We do have some hops being grown in Canada, but predominantly it’s coming from Pacific Northwest, Europe and New Zealand.”
As for their menu, Borealis said it already sources 80 per cent of its food from Ontario, so they aren’t making any big adjustments – at least right now.
“I think people are pretty concerned about making any price changes at this time to really see what the impacts are, but I think you’ll start to see them roll out,” Desautels said. “Our biggest fear is what happened over Covid, is that everybody just started increasing their prices, trying to take advantage of the opportunity to increase.”
One worry is that bigger restaurant chains may switch to the same local suppliers that Borealis uses, but Desautels hopes they will honour any deals that were already in place.
