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Building resilience in light of American aggression

Trade chaos came thick and fast after the most recent U.S. presidential election. With significant tariffs and general obstructions to cross-border trade a now omnipresent threat, if not hard reality, Canada’s fruit and vegetable growers are strapping in for what might prove a difficult and tumultuous period. 

However, not all hope is lost and the fruit and vegetable sector faces opportunities to build domestic resilience, and potentially, other markets.

Consumers must bear costs

Jan VanderHout, greenhouse vegetable grower from the Hamilton, Ont. region, says tariffs on Canadian-grown produce will have a very significant impact given the greenhouse sector exports over 80 per cent of its product to America.  

“Quite frankly there are no margins, hardly, these days. There’s no way under the sun that this can come out of our pocket,” VanderHout says. The additional costs will thus be borne by the end consumer.

On the production side, getting ahead of potential tariffs by stockpiling important materials is also very difficult. At the time of writing, for example, the imposition of 25 per cent across-the-board tariffs on Canadian goods was delayed by one month. Even if that month reprieve had lasted – the White House announced 25 per cent tariffs on Canadian steel and aluminium mere days after announcing the previous general reprieve. VanderHout says it would not have been enough time to order and receive even basic supplies, such as corrugated boxes. 

VanderHout does wonder whether tariffs could spur some opportunity domestically, though, at least for specific products. 

If American produce – apples from Washington state for example – are hit with counter tariffs, consumers might be more attracted to grown-in-Canada options which had been previously undermined by cheaper American imports. The same might not be said for more perishable products. Regardless, VanderHout thinks it’s a good time to reconsider how Canada’s food system works, and what would be required to ensure it’s both secure and “vibrant,” rather than “just surviving.”

“I really hope that we can find some diplomatic way to resolve this tariff conversation,” he says. “The complications around a border like ours are far and great.”

Shoring up domestic resilience

The current trade confusion reflects the general market unpredictability long known to Canada’s produce sector, according to Massimo Bergamini, executive director of Fruit and Vegetable Growers of Canada. The “very mercurial” nature of the sitting American president – and the fact that it’s “very difficult to engage in traditional diplomacy” because no one knows who has the president’s ear at any given time – necessitates reflection on how Canadian agricultural safety nets could be enhanced.

Making improvements to farm safety nets, Bergamini says, could include financial structures and payment periods more fitting of produce growers’ cash-flow realities. Another improvement could be the inclusion of greenhouse producers in economic safety programming – something which he says is not the case currently. Analyzing vulnerabilities across fruit and vegetable supply chains is also important since “tariff dislocation up and down the supply chain” will be felt for years.

“In as much as these tariffs are in place for a period of time, providing some adjustment assistance for the sector to do their work is an absolute necessity,” Bergamini says. 

Finding alternative markets for Canadian produce, while taking steps to improve domestic food security, are additional actions to be considered. Bergamini admits alternative market development and the perishable nature of many fruit and vegetable products make finding new destinations more challenging. Nonetheless, he argues Canada is “at a pivot point” where long-standing economic relationships with our to-date largest trading partner must be reimagined. Similarly, rising food insecurity among Canadian families should spur policymakers to “embrace a food lens” when developing any strategic policy. Does a carbon tax on agricultural-use petroleum, for example, make sense from a competitiveness and food security perspective? If not, Bergamini suggests the policy should be reconsidered. 

After attending the federal government’s economic summit in Toronto on February 7, Bergamini – one of only two agriculture sector representatives he was aware of in attendance – says he was heartened to notice a widespread and “clear-eyed assessment” of the need to show solidarity in the face of aggression from south of the border. 

“I came out of that meeting inspired, feeling energized. I think everyone I spoke to felt that same way,” Bergamini says. He hopes, however, the lack of agricultural ambassadors in the room “doesn’t reflect a sense that agrifood is a secondary concern.”

“We do have a responsibility as leaders in the sector to be very clear with the government of Canada. It is absolutely essential the government of Canada focuses on the needs of our industry very closely so we don’t get caught in massive Covid-like adjustment programs that may or may not work.”

A siege mentality

For Tom Heeman, berry grower and cider maker based near London, Ont., local demand for his family’s farm products have been a great insulator against international trade issues. He considers their diversification as a multi-faceted farm market and agritourism business a vital means of avoiding the need to participate in produce export. 

Things are different with his cider and mead production, though. 

Currently producing a combined 70,000 litres per year, Heeman has been working with an American distributor to export both products to retailers in the United States. An additional 25 per cent import tariff cost, and the possible impact on sales, is concerning to both parties. The price of aluminium, the material in which Heeman packages the beverages, is another area of concern given the focus on metals in tariff talks. 

“There’s no consideration for the independent businessperson,” says Heeman about entrepreneurs on both sides of the border. He adds the last time tariffs were imposed on aluminum and steel, his packaging costs “went though the roof.”

“We just have to act like it’s business as usual. It’s a siege mentality. Whoever breaks their spirit first is going to lose . . . It’s a bit of a game of chicken.”

Bergamini expresses a similar sentiment, referring to the new U.S. presidential administration as engaging in “tariff carpet bombing.”

“Canadians have fought in all the big battles. We’ve never backed away from a fight and we’re not going to back away today.” •

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