Matter of opinion
By Jason Brooks
The trouble with the Canadian government is it isn’t Zellers. The fools who run it think the lowest price should be against the law.
If you’ve visited the baby-food aisle of your local store lately, you may have noticed prices are higher than just a few months ago and there’s now a jarred baby-food monopoly in Canada — thanks to the Canadian government.
The baby-food mess goes like this: Last year, Heinz complained to Revenue Canada that Gerber was dumping baby food. Gerber Canada, which is US-owned, imports its baby food from the United States. Gerber sold the imported food for less in Canada than in the U.S. — the technical definition of dumping.
Gerber sold for as low as 33 cents a jar — about 10 cents less than Heinz.
While most people rejoice at lower prices, Revenue Canada sees low-priced imports as attempts by foreigners to undermine the Canadian economy. Despite free trade, protectionism thrives.
In May, the Canadian International Trade Tribunal, the judicial panel that decides dumping cases, told Gerber to raise prices 60 per cent. Gerber says it can’t compete at the new prices, so has abandoned the Canadian market after 49 years, leaving 100 per cent of the jarred baby-food market to rival Heinz. While US-owned, Heinz makes its baby food in Canada, enjoying “domestic” producer protection.
Gerber Canada president Martin Lasher says he hasn’t imported a jar of baby food since April. In Ottawa, most stores have cleared their Gerber stock or are down to their last few jars — inevitably the wretched mashed carrots.
Now, consumer groups are outraged. Children’s advocates fear price increases may force low-income parents to water down baby food, endangering babies’ health. Under pressure, the tribunal is reconsidering its mashed-peas-for-brains decision.
And the bureaucracy bumbles on. In a bizarre twist, the federal government’s competition watchdog, the Competition Bureau, is appealing the anti-dumping decision to a North American Free Trade Agreement panel, set to convene in January. It will be Ottawa versus Ottawa before the international panel, the first time since the establishment of NAFTA in 1994 that one country has gone to war with itself.
The Gerber case is a comic extreme. But it illustrates a broader point: protectionism hurts Canadians.
In the last five years, the anti-dumping police have forced us to pay more for bicycles, sugar, fresh garlic, home canning lids and jars and even tombstones, among other things.
As the tribunal reconsiders its ruling, Canadians should ask: why are we paying people to make things more expensive for us and limit our choices in the first place?