U.S. tariffs will cause havoc, but not on grocery bills. Here’s why
Simon Laroche called a special meeting on Monday afternoon in the cafeteria of Kraft Heinz Co.‘s Toronto office. The place was more crowded than he’d ever seen on a Monday, and his people were anxious. With a day to go before an impending trade war with the U.S., Laroche, president of the Kraft Heinz’s Canadian operations, had been noticing “Buy Canada” campaigns that vilified his company’s products as American-made.
“I get a little bit upset because it’s not true,” Laroche said on Monday, moments before speaking to Kraft Heinz’s roughly 1,500 Canadian employees.
Later in the day, Prime Minister Justin Trudeau announced that U.S. President Donald Trump had agreed to hold off on his threat of 25 per cent tariffs for 30 days, to allow for negotiations between the countries. Trump made a similar agreement with Mexico earlier in the day.
But even before the reprieve was announced on Monday, executives in the Canadian food industry were trying to reassure consumers that tariffs on U.S. food imports weren’t likely to cause a spike in grocery bills.
Michael Graydon, head of the food manufacturing lobby group Food, Health and Consumer Products of Canada, said Ottawa was “as surgical as possible” when drawing up the tariffs, at least when it comes to food. A lot of the food on the list were commodities that are already manufactured domestically, or available overseas, making it easy to swerve around expensive U.S. imports.
For example, Canada included American eggs, poultry and cheese on its tariff list, but those goods are already hard to find in most Canadian supermarkets. That has to do with the federal government’s controversial supply management policies, which already use high tariffs to shelter Canadian farmers from foreign competition.
American pasta is also on the list, but Canada is a global powerhouse in growing durum wheat — the main ingredient in pasta. Any foreign pasta on shelves is typically Italian, not American. As for tomatoes, the greenhouse industry in southwestern Ontario produces an ample supply. And on American orange juice, Graydon said persistent issues with Florida’s crop means much of the juice concentrate sourced in Canada comes from elsewhere, including Brazil.
Vince Bisogno, a senior manager with a produce importer at the Ontario Food Terminal, said any tariff on American fruit, like California oranges, would likely mean he’d just bring in more from other countries.
“You’re going to have an orange from, you know, Turkey or Spain or Morocco,” he said. “You’re going to have everything you need for citrus.”
American ketchup was also on the list, which has been a sore subject for the employees at the Kraft Heinz Toronto office. Heinz sparked backlash in 2014 for closing its Ontario facility and moving its ketchup production south of the border. But in 2020, the company began making ketchup in Canada again.
At his meeting in the Kraft Heinz cafeteria, Laroche wanted to assure his staff that the public wasn’t going to turn on them.
“Today, they’re worried,” he told the Star.
During the meeting, he said was going to lay out his plan to prove to Canadian grocery shoppers that buying Canadian is easier, and cheaper, than they think. Kraft Heinz, the global food giant based in Chicago, produces roughly 70 per cent of its Canadian-sold products domestically, mostly out of its factory in Montreal. That includes Kraft Peanut Butter, Heinz Ketchup, Kraft Singles and Philadelphia Cream Cheese, though some products, including peanut butter, use ingredients, like peanuts, that were sourced from other countries.
For any food to be labelled “product of Canada,” it requires 98 per cent of all ingredients, processing and labour be domestic.
“If there is one thing that people can be sure is all made in Canada … it’s Philadelphia Cream Cheese,” he said.
With files from Mark Colley
This article was first reported by The Star
