The trouble with tariffs by Troy Taylor
It is funny how memories can quickly bring you back to the past. I remember when I was working at Labatt Breweries, and my colleague came in and said, “You have to see this.”
The management team was gathered in the boardroom and on came the “I Am Canadian” ad from Molson. We sat in silence. No one said a word, just nervous glances. They (Molson) had nailed it… And we all knew it.
They managed to capture the zeitgeist of Canadians in a thirty-second spot. Humble, caring, peace-loving and multicultural. The spot illuminated that if you dig a bit deeper, Canadians are a proud bunch. Proud of who we are and what we are becoming.
Although we were in a fiercely competitive industry, I had to smile and agree—”Yup, I am proud to be Canadian and someone finally stood up and shouted, ‘I AM CANADIAN!’” That campaign certainly shifted the beer marketing paradigm and maybe even the Canadian psyche.
Turn the clock forward and Jeff Douglas, from Truro, N.S., the then 20-something hero from the original campaign, now appears in a new spot circulating on social media that is once again getting (inter)national attention.
Jeff is now 53, but the ad captures the same spirit. However, the emotions for me (and I assume all of us) are different this time around. While the first ad made us feel proud of who we were, this time, this spot has more of an edge. A harsher tone. This new ad’s message is more like, “Canadians will pull your jersey over your head and give you a couple of uppercuts if necessary. Elbows up!”
This time, it is clearly aimed at the shenanigans going on down south. It captures the sense of betrayal that Canadians are feeling. While the “man with no plan” dithers, I really don’t think he realizes what he has done, and is doing, and the lasting impact it will have.
To me, it’s more about our collective psyche as much as it is financially… Canadians are a resilient bunch, we will survive, and we are starting to prove it with our “Buy Canadian” campaigns and actions and the world seems to be with us.
What does all of this mean for the hotel sector in the coming months? And our collective psyche?
The hotel sector has been surviving on domestic travel. Business and international travel has not fully rebounded to where it was pre-pandemic. Our domestic travel was partly fueled by some of the savings we accrued through Covid. Certainly, shaky situations around the globe also played a part. Operators happily opened their doors and welcomed Canadians home.
Family economics will play a role… As we brace for impact from the south and the number of mortgages coming due, combined with the rising costs of goods and interest rates, all will mean that many Canadians will “feel” it. That recession feeling moves into action faster than it has ever done before in our history. We know what gets cut first—travel and leisure activities.
Hotels are among the first to be squeezed by recessions and among the last to bounce back. Travel could once again move from a steady flow to a drip, as it did during Covid, but for very different reasons. This would have a significant topline hit.
American tourism is still key for the sector. I hope and trust that most Americans understand this is just politics and not directed toward them personally.
However, there is an undercurrent of anger that runs through the MAGA platform. We are being divided. And history shows that division does not work. It will take time for these sentiments of betrayal to heal, if ever. But today, we’re happily opening our doors a little wider to American travellers.
Controlling costs is paramount. This is where Foodbuy comes into play. I have been on more tariff calls in the last month than anyone needs to be. We are looking at every angle to help our hotel members save on costs. But we all know costs are going to go up if we stay on this path.
In my view, operators have pulled the price lever, leaving little room for maneuvering. The focus is on operations cost savings. All the gains from pricing and cost management may not be enough to hold the bottom line going forward. This will mean operations cuts. And that, ultimately means people. Lost jobs impact our collective psyche.
The last concern is the lack of growth on the supply side. This has broader impacts on the larger economy. The sector was managing well post-Covid, and there was early developer optimism after the world had ground to a halt through Covid. Then a punch from interest rates and a right hook now with tariffs. The one thing corporations shy away from is uncertainty, which signals risk. Risk can shut projects down quickly.
Canada will see a softness in new builds, at least in the short term. The issue is, we know for major centres that means three to five years out for a new build to open. Looking back on Covid, that could mean Canada could have a 10–15-year development gap. An entire generation! That means fewer jobs, which does not bode well for all involved over the mid to long term.
What can we do?
These areas will require a unified approach with governments to get us through and will have to be done quickly, with a wartime mentality. Be it reducing interprovincial barriers, reducing red tape, protectionist measures for workers, rewiring our supply chain, or new trade partners, we need to be unified. Will we have a functioning, strong federal government to lead Canadians through this trade war?
Canadians, as much as we want to pull the jersey over our neighbours’ heads, we will have to remain calm and understand that we need each other. And fight with facts and the law. Trump and team go berserk when fact-checked. Facts can act as a breakwater against the tsunami of disinformation coming from the Trump administration. Our reliance on the 24/7 negative news cycle is a tough addiction to break—lies, hate, fear, and anger spread exponentially faster across social media today. The constant barrage of unchecked facts can change how we feel, and our collective psyche. Trump knows this all too well.
Lastly, try to remember…. It’s just politics.
About the author
Troy Taylor is a 30-year veteran in the foodservice, hospitality and retail sectors where he has held senior roles with Labatt and PepsiCo. Taylor also helped serve the industry through Restaurants Canada where he played a key role in helping operators survive through the pandemic, one of the most trying times in the history of the foodservice industry.
Troy currently manages Foodbuy Canada’s publications that provide actionable insights and purchasing solutions and cost-saving innovations to over 20,000 hospitality and foodservice operators across the country. Foodbuy Canada is a Compass Group Canada Company.