William Watson: For the good of the country, buy non-Canadian

Buying local the thin edge of the protectionist wedge

I got what looked like a nice email from Amazon last week. There were no spelling mistakes, so I figured it wasn’t a Russian bot and I could click on it. I was right. It was Amazon announcing a new initiative promoting Quebec products: “Les produits du Québec.” How the titans of globalization cower before the power of local interests!

Amazon is partnering with a non-profit of that name to help Quebecers like me “shop local and support communities close to home.” The non-profit was founded in 2022 and is, of course, supported by the provincial Ministère de l’Économie, de l’Innovation et de l’Energie. I say “of course” because everything in Quebec, and pretty much everywhere else in this country, is supported by the government. I’m sure it won’t be long before the feds pony up some subsidies, too. (Probably in the corporate person of “Canada Economic Development for Quebec Regions.”)

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Les Produits du Québec has three levels of certification: Product of Québec, Manufactured in Québec and Designed in Québec. This last is like “Designed in California,” which Apple has made famous. It’s for people who don’t like the idea of China producing all their tech but also don’t want tech to cost three times what it currently does. As long as it’s designed by cool Californians — some of whom may even be immigrants, that’s OK — it can be assembled in Chinese mega-factories by people frazzling their eyes and wrecking their spines bending over close work all day long.

To get the label “Product of Quebec,” 85 per cent of “the direct costs related to the purchase of inputs, including raw materials, their processing, and assembly are incurred in Quebec.” Also, the “last substantial transformation of the product,” i.e., not just wrapping it, “must take place in Quebec.” If it only has that last “transformation” bit, it’s just Manufactured in Quebec. For it to be Designed in Quebec, the design staff must be “wholly situated in Quebec” — though you’d think in these days of remote work almost no group within a company, except maybe the people who sweep the floors (if there are floors) are wholly situated in one place. This newspaper is put together by people sitting at screens all across the country. And who knows? There may be robot floor-sweepers that can be controlled from anywhere in the world.

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If you follow the Amazon arrow inviting you to shop Les Produits du Québec, you get 408 results across all Amazon departments. Make-up, food supplements, vegan leather handbags, furniture — a wide range of stuff, though no tech I could see in a quick scroll.

I actually have no problem with this sort of thing. Lots of people want to buy local — “to keep the money in the economy,” as they say — and if Amazon finds a trustworthy, incorruptible certifier who will provide good information about where products come from, more power to them, especially if the costs of running such a system can be built into the prices of the products in question, so the rest of us don’t have to pay them. There’s a market need. Amazon is filling it. Good for Amazon.

In fact, “provide information, let people choose” should be our approach to culture policy, too. It shouldn’t be very costly for Apple, Prime, Netflix and the gang to provide a section of their offerings called “Canadian TV and Movies” so that Canadians who want local content can find it easily. Oops! Some of these services do that already. Fine. Those who want CanCon can get it and those who don’t can make their choice, too.

Classifying such material can be tricky, of course. In past government versions of what constituted a Canadian movie, such things as who did the sound and lighting figured prominently — though there’s no Canadian school of either and it’s really hard when watching to figure out whether the technicians were Canadian or American or whatever. But jobs for the boys (and girls) were key.

I always have two questions for people who favour buying local. First, so they must be OK with Buy America policies then, in which American governments privilege American goods? Fair is fair, after all. Usually the response is: no, that’s Trump-ism. (Though it’s actually Biden-ism, too.)

And second: if people everywhere take this view, what do we do with our export industries? If the whole world wants to buy locally, what happens to international trade? Canadian producers thinking of taking on the world better trim their ambition and size themselves for just our 40-million person market.

Economies of scale aren’t everything, of course. But if you’re building an industry — a battery industry, say — that can only sell to 40 million people, scale economies will be quite limited.

On the other hand, if you’ve got an economy of 340 million or 450 million already-rich people, like the U.S. and EU, respectively, or of 1.4 billion getting-rich people, like China and India both, you can take real advantage of scale. Selling to all 8.1 billion humans would be even better. But you’ll do OK scale-wise. Small economies like ours, however, we’re the ones who really need trade.

You want to do good for the Canadian economy? Don’t give other countries’ protectionists an excuse. Buy non-Canadian.