According to a report from the Bank of Montreal, the ‘Buy Canadian’ movement could provide a meaningful boost to the Canadian economy. Such a boost could potentially add around $10 billion annually and support economic growth.
This consumer shift reflects behavioural economics in action. BMO estimates the movement could add approximately 0.3 percentage points to annual GDP growth. This uplift would stem from increased domestic consumption and government procurement. A preference for domestic travel over international trips is another contributing factor.
However, the report emphasises that patriotic purchasing isn’t without drawbacks. Buying Canadian often means higher costs and limited choice. The complex nature of modern supply chains adds further complication. Many goods labelled ‘Made in Canada’ include foreign-sourced parts, with up to 49 per cent of their content imported. Additionally, some Canadian-made products are produced by foreign-owned companies. This raises questions about the true economic benefit when profits are sent offshore.
Despite these complexities, the report suggests consumers shifting just a portion of their spending to Canadian products could redirect $6 billion towards local value-added industries. But the path is far from straightforward. Canada relies heavily on imports for a large share of its household products, vehicles, and electronics. More than 20 per cent of households depend on imports, either directly or through raw materials. Imports dominate some categories, like new vehicles. This remains the case when the vehicles are assembled locally.
The push to buy Canadian also comes with a financial burden for households. While some domestically produced groceries may be cheaper, a full shopping trolley stocked exclusively with Canadian-made goods remains unrealistic. Certain locally made items like cookware and clothing often carry a premium price making them less accessible for everyday consumers. Other examples include personal care products and sporting goods.
Government spending already largely favours Canadian-made goods, but further policy support could enhance the economic benefits. Likewise, travel trends show fewer Canadians heading south of the border. Even a modest shift towards domestic travel may support local tourism and services.
While the Buy Canadian movement has the potential to support economic resilience in the face of trade disruption it also presents some practical and financial challenges. The desire to support local industries is strong but widespread adoption will likely depend on cost and convenience.
Contact Accountancy Insurance
We would love to hear from you.
About Accountancy Insurance
Thousands of accounting firms offer our tax audit insurance solution, Audit Shield to their clients.
Find out why.