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Malcolm Jolley: How the weak Canadian dollar is contributing to shrinkflation in the wine world

Commentary

Some years ago I attended a dinner talk put on by The Hub’s own Rudyard Griffiths and Patrick Luciani. It was by the Yale economic historian Paul M. Kennedy. If I wanted to know how long ago it was I could trace the year by looking up the comparative value of the Canadian dollar to the United States.

It must have been the spring of 2011 because that’s the last time the Canadian dollar reached parity and actually exceeded the value of the American one. I know this because although I don’t remember that much about Professor Kennedy’s speech, I do remember a question he took from the audience. It was: “Would a high Canadian dollar mean economic trouble down the road for Canada?”

As I recall and paraphrase, Kennedy said he couldn’t say for sure, but he could say that historically countries with strong currencies tended to have secure futures, whereas ones with currencies of declining value tended to face hardship. I am neither an economist nor a historian, but as a professional wino, I can say with certainty that Kennedy’s answer tracks with Canadian wine consumers.

It tracks in an obvious way, since more than two-thirds of the wine drunk in Canada is imported. A low Canadian dollar means that a bottle of California Zinfandel is going to get more expensive. Or, more insidiously, that bottle is going to cost the Canuck consumer the same amount of loonies, but it’s going to be made with lower-quality grapes. It’s a sort of shrinkflation.

Ultimately, if Canadians can’t afford decent imported wine, the people who make it will have to find other markets that can, and we’ll be left with the dregs—or the luxury brands. If you can regularly afford a $60 bottle of wine off the shelf, you can probably afford a $75 one. But if you’re used to paying $20, $25 looks pretty steep.

Like everything else in the Canadian wine world (with an Alberta exception), the problems above get compounded by the existence of the provincial liquor monopolies. They buy and sell wine at their pleasure without the inconvenience of a competitive market. There are good people who work for them that truly want you to enjoy the wine you buy, but ultimately systems like the LCBO or the SAQ are designed to bring in provincial general revenue while spreading good-paying, quasi-government jobs around every riding.

This must be great news for domestic producers, though, right? Not really. Like many, if not most Canadian industries, Canadian wine producers rely on imported inputs. That includes high-tech equipment in the cellar, like fermentation tanks, and low-tech equipment like barrels and bottles. It certainly includes energy, and almost always labour in the vineyards. Trevor Tombe’s productivity gap applies to the VQA shelf as readily as any other.

I was thinking about all of this at a couple of events last week, hosted by the Oregon Wine Board and the Washington State Wine Commission. The professional associations of wine producers for these neighbouring Pacific Northwest states combine forces to promote their products in export markets like the one I live, Ontario. (Thanks to the provincial and territorial government monopolies, export producers must treat Canada as 13 individual markets, each with their own paperwork and requirements to fulfill.)

The 44 wineries that traveled to Toronto were either in the market or actively trying to get in and willing to book plane tickets and hotels and open sample bottles of wine to trade and media to support their efforts. They were committed. At a big room table-to-table tasting in the city, and the next day at a more intimate tasting and lunch a little more than 100 kilometres away at the Elora Mill, I wondered how they dealt with our low dollar.

The David Hill Winery in Willamette Valley, Oregon. Photo credit: Paul Loofburrow.

I wondered as I tasted, spat, and made notes about their wines. Oregon wines, especially from the cool Willamette Valley, tend towards elegance and are known now mostly for high-end Pinot Noir and Chardonnay. Washington State also makes fancy Chardonnay but is known more for its Bordeaux grape reds, like Cabernet Sauvignon and Merlot, and increasingly warmer climate grapes like Syrah. All analogies are ultimately false, but I tend to think that Northern Oregon wines remind me of Niagara, whereas Eastern Washington wines remind me of the Okanagan Valley.

I didn’t price-check everything I tasted on the first day, but Ontario prices at the second event were printed on a program. They ranged from $25.95 to $150 a bottle, though some wines weren’t in the market, so the producers gave their best guess. All of the wines were worth their prices in the sense that each was well made; the less expensive ones showed good value, and the more expensive ones were indicative of how high demand varied with low supply drives up prices.

An export manager for a winery that hoped to introduce a wine in the $30 or so range told my tasting group that their winery would be willing to undercut their U.S. pricing to get into the provincial retail monopoly, to the extent that the first allotments would not be profitable. When I asked, the manager confirmed that after an initial market test, they would likely increase the price year after year, hoping to keep enough customers to make it viable.

Another winery representative, who was pouring a very high-end collection of wines, confirmed that this producer essentially kept their prices at or close to a false parity. They charged here in Canadian dollars what they charged there in the U.S. They laughed when I said that was a kind of reverse shrinkflation.

I didn’t ask, but I suspect the luxury producer could charge less in the Canadian markets because their margins are healthy enough at a high price that it’s still viable to export north. It’s also likely true that the quantity of exports, relative to their other sales, is small, and whatever pain they feel is inconsequential to the big picture.

Unlike California which makes an ocean of wine in the Central Valley and keeps prices low, most Pacific Northwest producers are overwhelmingly small and making craft wines. Their price floor is higher, and they can have trouble getting people to pay a bit more to try them out.

I like the wines of Washington and Oregon, and I like that they’re willing to export to their poorer cousins despite the trouble our system and discount dollar create. I hope we see more of them and keep seeing more of them north of the border.

Karamveer Lalh: Poilievre’s addiction policies show the two sides are speaking a different language

Commentary

There is a notion that Pierre Poilievre’s detox and rehab policy and the liberal “safe supply” approach to addiction are two sides of the same coin, both aiming to solve the same problem. However, this assumption is incorrect.

These policies stem from fundamentally different understandings of the problem and its solution, thus reflecting the stark differences between conservative and liberal philosophies. Put simply, they are not two different answers to the same question but rather two distinct answers to two separate questions.

At the heart of this ideological divide lies the question of whether one can commit a crime against oneself. The liberal perspective, focusing on empowering and encouraging individuals to make good choices, refrains from casting blame on past decisions that led to their current predicament. In this view, while selling drugs may be a crime, being addicted to them is not.

On the other hand, the conservative viewpoint takes a more paternalistic approach: an addict has made a series of poor decisions and must face the consequences. To a conservative, an addict has committed a crime against themselves.

To unpack this further, we must consider how conservatives and liberals perceive crime. In a broader sense, crime is not merely an act against an individual but against society, or as we conceptualize it in Canada, against the Crown. For example, our criminal cases are presented as R v [Accused], where R stands for Rex (King) or Regina (Queen), symbolizing the societal nature of crime.

Crime demands both discipline and punishment. Society demands satisfaction through the punishment of crimes, and those who emerge from punishment should be “corrected” and not re-offend. This is broadly agreed in our politics. Where the disagreement lies is in what sorts of crimes warrant more discipline and which require more punishment. The mandatory treatment approach conservatives propose is a paternalistic solution fitting neatly into this framework. For example, a conservative, when prompted to imagine a drug addict harassing someone on the street or the subway, may feel disgusted rather than sympathetic to that addict. A conservative may see them as a person who should be disciplined into seeking treatment and becoming a productive member of society rather than coaxed, incentivized, or have their “relative harm” reduced.

This fundamental difference in how we view societal problems is evident in the current debate over drug policy. It’s also a question that divides the Right, with small-c conservatives affirming and right liberals (and libertarians) denying that committing a crime against oneself is possible.

The non-aggression principle (NAP), the cornerstone of the conception of liberal (and libertarian) morality, attempts to answer this question. Very generally, it can be considered as follows: no aggression against an individual, their property, or contracts is permitted without that individual’s consent. This principle does not contemplate any instances where an individual can harm oneself because if one were to harm oneself, one consents to do so. A more traditional conservative would criticize this idea because it operates on the assumption that all humans are always rational actors, which is patently untrue. 

A thorny issue for right liberals arises when considering entirely fictional child pornography, like drawings or AI-generated photos. The libertarian argument of “no harm, no foul” is a difficult position to defend, particularly because such material elicits a powerful disgust response. Beyond any grand ideas of morality, we collectively oppose even artificially generated child pornography because it is disgusting. While often overlooked, this emotion plays a significant role in our moral calculus.

Disgust, powerful and visceral, is both a smoke alarm and a nuisance. While it should not be the sole guiding force of our morality—in fact, one should absolutely consider the fact that disgust is often tied to dehumanization, and dehumanization leads to human catastrophe—it does warrant the understanding that many of our moral judgements are strongly tied to disgust. This leads us to question whether our societal response to imperfect human behaviour should be. The conservative conception of morality stated ecumenically as possible would suggest that it is possible to commit a crime against one’s soul, and a crime against one’s soul may sometimes warrant state intervention to discipline and punish that individual for weakening the overall moral fibre of society.

Everyone agrees that parents may prevent children from eating candy for breakfast every day, even though this is a perfectly permissible (albeit certainly not one that is recommended) choice for an adult. The question of what “harms” parents are allowed or not allowed to prevent for their children is complex, and liberal arguments often break down when applied to non-adults.I do not claim to offer any bright line rule here, but we know of several examples of such debates: should a parent be notified if a child expresses to a teacher that they have body dysphoria? Is there a meaningful difference between that and children who display signs of depression or suicidal ideation? What about an eating disorder (a type of body dysphoria) versus gender dysphoria? The usual response is that these are heavily context-dependent, which makes writing legal rules for a diverse society extremely challenging.

Similarly, addicts, who can often be seen as dependents due to their inability to make rational decisions about their addiction, pose a significant policy challenge. The question of when intervention is necessary is not easily answered by the NAP alone, suggesting the need for a more paternalistic approach. The very fact that drug addicts continue to exist despite a safe supply is evidence enough for a conservative to question the effectiveness of a purely incentive-based approach. Similarly, the persistent existence of violent criminals even after posting bail is a testament to the limitations of the liberal approach.

In this context, the stance of Poilievre becomes especially relevant. The more fundamental disagreement underpinning his policy is whether quality of life is considered in these decisions. Are all lives equally worthwhile? Should they all be protected equally? With finite resources, how do we decide how they get allocated? On its face, the argument is that pouring money into a safe supply seems especially unwise when we lack options for treatment and recovery.

This dichotomy between conservatives and liberals can be understood better if one realizes they are not even speaking the same language. The conservative is focused on the specific, where the existence of crime is itself repugnant and warrants a stricter approach. In contrast, the liberal is focused on the general, where more gentle nudging and incentives will eventually produce their ideal society.

Conservatives hold the more intuitive position that our emotions are the primary driver of our morality. However, they often fail to articulate this in a language that could counter a general principle such as the NAP. Conservatives need to remember that moral judgments are not merely subjective expressions of feelings but reflect objective claims about what is good for humans in relation to their social roles and traditions.

In this sense, there is rationality in our emotions. They are not simply expressions of hooray or boo but rather reflect what conservatives hold to be objective truths. Accordingly, there is a rational basis for their morality that goes beyond the limitations of the NAP: conservatives oppose consuming illicit drugs, the consumption of AI-generated child pornography, and eating candy for breakfast because these actions do not contribute to a fulfilling life.

The respective perceptions of crime, punishment, discipline, and harm of each side underpin their approach to policy-making around crime. It’s crucial to understand these differences, as they define the very problems our society is perceived to be facing. Furthermore, the role of emotions, often under-discussed, must be given due consideration in shaping our moral and political discourse. Without a thorough understanding of one’s opponent’s worldview, our political discourse, and ultimately our democracy, risks further deterioration.

By acknowledging the rationality in our emotions and the limitations of a purely incentive-based approach, we can foster a more nuanced understanding of these complex societal issues. The conservative and liberal approaches to drug policy are not simply two sides of the same coin—they are distinct philosophical perspectives that shape our understanding of crime, punishment, and societal well-being.