Editor’s note: This interview with Ron Lemaire was recorded before Canadian Prime Minister Mark Carney’s announcement to remove all of Canada’s tariffs on U.S. goods specifically covered under USMCA.
When asked about the biggest drivers of change in the fresh produce industry for Canada and globally, Canadian Produce Marketing Association President Ron Lemaire says there are a few forces at play; on this episode of “The Packer Podcast,” Lemaire lists wildfires, heat waves, logistics, geopolitical issues and more.
“It’s not one thing that’s really driving challenges for everyone within our supply chain,” he says. “It’s the compounding of challenges that we’re living with. And you know what the amazing thing is? The industry is so resilient. We still pivot. We still adjust, and that’s something that I think we can be proud of.”
Lemaire says tariffs are another big force in the global fresh produce trade. While most fresh produce falls under the U.S.-Mexico-Canada Agreement (USMCA), some imports such as beans, citrus, melons and more face 25% retaliatory tariffs. U.S. and Canadian officials have been engaged in conversations on the potential to remove those tariffs and also build better trading relationships, says Lemaire, adding that the Canadian government has taken a strong stance on those 25% tariffs remaining in place in response to the U.S. government’s initial fentanyl tariffs.
Lemaire says there are opportunities for a remission of duty for products not found anywhere else.
“Lemons are having a real hard time globally,” he says. “The U.S. is one of our primary sources, and it’s a market that we need, so importers could apply for a remission of duty to hopefully get that 25% back to leave some of the stress within the system.”
Lemaire says there have been discussions on the Canadian side of trade about the minimum tariff the country’s importers could live with.
“For me it is zero,” he says. “The fact that we’re talking about minimizing tariff frameworks and saying, ‘Maybe 10% is okay.’” The approach I want to win for us moving forward is getting back to a USMCA framework, removal of the tariffs for fresh produce, and then go and look at if there is a tariff regime in play.”
Lemaire says he and fellow association colleagues see any tariff on fresh produce as being a challenge for the industry.
“When you start looking at the production challenges, the tight margins that we all function within, even a 10% base tariff or even a 5% tariff is detrimental to how we conduct business,” he says. “A big part of that is part of my biggest concern today is that the U.S. administration has set the context for a baseline tariff discussion.”
Lemaire says that as the U.S. put the original fentanyl tariffs in place, Canadian shoppers developed anti-American goods sentiments. While those beliefs still remain, he says he’s seen a softening.
“When we look at the fresh fruit and vegetable sector in Canada, $4 to $5 spent on fresh produce at retail is spent on imported product, and a majority of that comes out of the U.S.,” he says.
Lemaire says Mexico is also a major fresh produce trading partner, so the future of the North American fresh produce industry depends on a good business strategy that works for the entire fresh produce industry.
“We’re seeing consumption fairly static in Canada,” he says. “We’re seeing price still a driver. We’re seeing consumers still shopping at discount and mass merchants and really feeling the impact; where banners are still thriving, and you’re looking at club stores also doing well relative to value proposition.”
And Lemaire says that Canada has begun to engage with other geographic zones as a response to these increased tariffs on certain fresh produce goods.
“If you grow a product and you only have a window where North America is your market because of perishability, we need to make sure we get rid of the tariff framework,” he says. “We need to make sure we have open flow of trade across borders. … When we sit down and look at it, the consumer at the end holds the power. If they’re buying and they are increasing consumption, we all win.”
Regaining Canadian consumer confidence in U.S. goods is an important next step in the future of North American trade, Lemaire says.
“We’ve encouraged and had discussions with the U.S. Embassy in Ottawa, saying how do we rebuild and begin starting to look at a buy U.S. or some type of strategy that gets Canadians back on track relative to not only enjoying Canadian product and the products that they may not have access to through domestic production, but let’s look at the strategy that brings North America back together,” he says.
