What Happens When the Loonie Falls?
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Hello, and welcome to the TLDR Podcast, a show about the culture, gossip, and business of money. And this week, how Canadian is Canada Dry? My name is Devin Friedman. I am here with my co-host, Matt Keres, who is the director of product for WellSimple, our sponsor, and an unofficial spokesman for Dunkin' Donuts. Good morning, Matthew. How are you? Good morning, Devin. Yeah, love me a cup of Dunkin'. What's your order? I get the large, hot black coffee. Oh.

- Oh, do you drink black coffee because like you've always preferred it? Or are you like, is that some sort of measure of manhood for you? - I'm lactose intolerant. - They have alternative milks now. - It like destroys my stomach.

I'm like a little weakling. Anything that looks like milk, I don't like. Sarah Rieger is the business and markets correspondent for the Webby award-winning TLDR newsletter. Sarah, how's your week? It's going pretty good. I had a breakfast of champions this morning, which is leftover garlic bread.

That's pretty good. Yeah, could not be happier. And we are joined this week by a friend of the podcast. Elamin Abdel-Mahmoud is a culture writer, the author of the bestselling book, Son of Elsewhere, host of the CBC pop culture podcast, Commotion. Elamin, welcome back. Hello, everybody. May I just say in non-complicated ways, y'all look great. Who looks the best?

When you do that, you make it more complicated. I'm just saying, everybody here, you look great. Give me a signal if it's me. No. Okay, we have a very interesting show for you. We're going to talk about how to buy Canadian. We're going to talk about the Canadian dollar. We're going to talk about the film and TV industry, which is an interesting case study in cross-border trade turbulence. But we will start...

As we often do with a question that gets at the most interesting stories of money right now. Sarah Rieger, who is making or losing money that's interesting to you right now? I don't know if it's fair to say if I've been making or losing money, but I've been spending my money really differently. For a week now, I have not made a single purchase that was not made in Canada. Okay. For those of you who missed last week's show,

It was a blockbuster. Sarah did a piece about cross-border trade. I suggest you go and listen to it if you want to understand how Canadian internal trade is screwed up. But she promised to buy Canadian for one week. And here we are at the one week mark.

And I would like to know how it went. Yeah, like I should say too, like I'm not the only person who's been trying to do this. I think Canadians are really making a concerted effort to shop locally ever since those tariff threats became more real. If you look at like online search trends, searches for buy in Canada, made in Canada just went through the roof in the past few weeks. Okay, so there's some evidence out there that people are actually buying

Pissed off, patriotic. But the question I have is like, how hard was it? What did you learn? If I'm being honest, I thought it was going to be so easy. Did you really? I did. So like, yes, about just under half of the goods that consumers buy in Canada are imported from the U.S. But when I look at my life and shopping habits, I live in a small town that doesn't have giant chain stores or fast food like over the last decade.

couple of years, I've really tried to focus more on buying locally, buying ethically, changing my habits. So when I, on day one of this, like walked into my like little locally owned grocery store, I had such an ego. Like I was like, I'm so ethical. I'm not going to have a single problem. Well, I'm really interested to know what was easy and what was hard. Okay. Well, I hit a small wall almost immediately. So the first thing on my grocery list was salsa.

Salsa? You thought that was the place to start by buying Canadian salsa? Listen, it was the first time on my grocery list. So I'm just doing an order. You weren't pulling punches. You were like, this is what you actually wanted. This was on your grocery list. Okay. Yeah. So then I looked at the jars. I'm looking for like the little maple leaf. And there are three kinds. One says made in Canada. One says imported for Canada. So at least that was kind of easy. I could rule that out. And then one says product of Canada. So like

Suddenly, I'm just standing there in the grocery store, like Googling labels. Right. And I realized really quickly that I had to set rules for myself as to like what counts as a Canadian product.

Do you know the difference between product of Canada and made in Canada? Now I do, so I can share it with everyone. Enlighten us. So according to the Competition Bureau, products can call themselves made in Canada if they're assembled here with at least 51% Canadian ingredients and they've transformed the rest. So say you bring in tomatoes from Italy...

a Canadian production facility actually turns those tomatoes into salsa. Right. And then product of Canada is better. So that one has to be 98% Canadian. So maybe like just, I don't know, just the jalapeno peppers weren't grown here, but everything else was made in the country, even the jar and the label. So to stick to like the spirit of this challenge, I decided I would try to only get produced in Canada items made out of Canadian products and that were only sold in Canadian owned stores. And so the rest of grocery shopping actually wasn't so bad.

dairy meat veggies they were all like made in Canada anyway I only found one item at the grocery store I couldn't find which was gluten-free soy sauce so I could make a different sauce at home it wasn't the hugest deal right so you got out of the grocery store you had the stuff you needed you could definitely live for a week on stuff that was product of Canada what was next on your list of things to buy what did you have to deal with next so I had two more errands that day um also it

Thank you to everyone just listening as I like run my errands. But I stopped by the hardware store on the way home. That actually ended up being really easy too. Local hardware store. I got some drywall anchors. Those were made in Canada. But then I went to fill up my gas tank and that was a problem. What? Canada's oil country. I would figure oil would be the least problematic. Yeah, this is why I thought. First, I had to find a Canadian-owned gas station, which it wasn't super hard. Like there are a couple of options. So I went to Co-op.

But then I had this moment where like I pulled in and I went to go put the gas in my tank and I was like, wait, most of Canada's gas is not refined in Canada. A quick search online, I could not easily see where most of our gas comes from and what

And what I realized is there is no way to know what gas is going into your tank. Like it could have been refined anywhere. It's all like mixed together at the gas station. It's like one of the lesser olive oils that you find out could come from olives from anywhere in the world and also contain things that have nothing to do with olives. That's a different story. Mystery olive oil, mystery gas.

Okay, so is that basically a shrug emoji? Like, maybe I got a Canadian gas, maybe I didn't, who knows? Yeah, and I think that's when, like, the hard part of this, like, really was hitting for me is just about, like, the integration, right? Like, it is so hard to pull apart where domestic production ends and begins. One really good example of this, I think, is a friend texted me to ask if they were still buying Canadian if they got an ice cap at Tim Hortons. And that is actually a really complicated question.

Oh, interesting. Why is that such a hard question? So Restaurant Brands International owns Tim Hortons. It's a joint Canadian-American company. Its largest shareholder is actually a Brazilian investment firm headquartered in New York.

Most Timmy's franchises are Canadian, but their supplies are coming from everywhere. So coffee from Columbia is roasted in Ontario and New York. The roll up the rim cups are maybe made in Canada by this company headquartered in Pennsylvania, which was bought by a firm in New Zealand. Yeah. So it's really weird because on one hand, Tim Hortons is this patriotic brand in a way, you know, it's like very Canadian brand.

But at the same time, it's not even not Canadian. It's not anything. It's a melange of every possible country and global capitalism. Yeah. And I think like that mix, I guess, is something worth considering as people are trying to kind of prioritize Canadian items as this tariff threat is hanging over our heads. I was reading up a lot on different like

boycott movements for this. And it seems like most of them say like kind of the perfect is the enemy of the good. So maybe don't exhaust yourself trying to find Canadian. Yeah, like don't try to be like, oh, I need to replace my laptop with one made in Canada, just that might not even be possible. There's lots of really great resources online. The Reddit group by Canadian, if you search any product in there, I can guarantee there's a thread of people talking about it.

There's also an app made by an Edmonton developer who actually reached out to us to tell us about it before recording called Buying Canadian that lets you scan barcodes. And it lets you know at least if a product was created by a Canadian company or imported by a Canadian company. So it might not be fully Canadian, but it's at least a great place to start.

Right. At least you can weed out stuff that's absolutely not Canadian at all. Yeah. Sarah, TLDR it for us, if I may use that expression. What do we take away here from this experiment so far? I feel like I have a personal takeaway. I think I realize I'm not super worried about being really nationalist here. I think I just want to spend money on companies that are doing good. And I think a lot of those luckily are in Canada.

So you feel that the more sort of ethical you are, the more naturally you are shopping Canadian? Yeah. I was in the olive oil business with his father, but that was a long time ago. All right, Matt Karras, you are up. Who is making or losing money right now that's interesting to you?

Well, in some sense, all Canadians are losing money. At least, you know, all of those who are not buying all Canadian. Why are all Canadians losing money? The big thing that happened is, you know, the loonie or the Canadian dollar or the CAD, which I apologize, but I work in finance and that's what everyone calls it around me, has fallen by about 10% over the last year. It fell about

by even more when the tariff threats were, you know, in full force and is actually trading at its lowest level versus the dollar in the last 20 years. You know, what I'm most interested in, I think, is what does this mean if you're, you know, a Canadian consumer? What does it mean if you're a Canadian investor?

Does it teach us any lessons about how to invest and not leave yourself vulnerable to stuff like this happening? But can you tell us a little bit about, you know, how much did the Canadian dollar fall when the tariffs threat happened? And then how much did it recover from there? Are we back to where we were?

So there's a lot of debate about how big of a deal the tariffs have been for driving the Canadian dollar down and having it actually hit the weakest level it's been at since the early 2000s. The fall really started back in around September, October.

And then it got worse over, you know, the tariff weekend in late January. And, you know, it's since recovered, you know, basically to above the level it was when Trump announced those tariffs. But it hasn't recovered back anywhere close to where it was in October. So we're in an environment with a weak Canadian dollar right now, relatively speaking, whether it has to do with

A lot with the tariff trade war situation or it's independent of that, we can leave that question aside for now.

What does it mean for a Canadian consumer? What does it mean for a regular person to have a weak Canadian dollar? Whenever you go and buy a foreign thing, like you actually need to make a currency transaction first. So if you want to go buy a foreign car. Just say Lambo. We know we're thinking about it. If you want to go buy a Lambo, you need to take your CAD. You need to go out and buy some euros from somebody else and then go and use those euros to buy that Lambo.

The most obvious transactions where you need foreign currency are when you go on vacation or you import some specialized item from abroad or you go and make a foreign investment. But in fact, the main way that this impacts the economy is like all of the inputs that you don't see. So like all of the components to your car, all of the components to the tractor that are like, you know, making your locally grown stuff, like all of that stuff becomes more expensive because

and forces businesses to, you know, raise the prices even for the stuff that's produced in Canada. Yeah. So you have all these invisible inputs. Your car has all these parts, even if it's made in Canada. As we've established with Sarah, even if something is made in Canada, it might have all these foreign components to it.

And those things get more expensive. So the thing you're buying gets more expensive. Yeah. Now, I want to know how this relative currency devaluation has affected investors. What type of investors have fared the worst in an environment where the Canadian dollar has gone down and what type of investors have have done relatively better?

So the people who've fared the worst would be ones who've only invested in Canadian securities. They have all their money in CAD. And in particular, those that have their money in like CAD bank accounts or CAD bonds. Obviously, to the extent that you have your money saved in USD or in foreign currencies, then you're more likely

as the traders say, to moves in the CAD? So the first thing is, if you own actual U.S. dollars, you did well. Are there people who just like

have a bunch of U.S. dollars because they think it's going to do better over time? Yeah, there are a lot of them. And actually, you know, U.S. dollar accounts are something that we offer and are available pretty much every... What's a U.S. dollar account? They're an account where instead of the assets you hold in it being, you know, CAD dollars, they're U.S. dollars. Right. I think the really hard thing to keep in mind is that when you're investing, all investments are

are in an asset and in a currency. And so if you want to know who are the people that have been worst off by the fall of the CAD, it has been people that have all of their assets in CAD, first off. And then two, within those investments, they've held stuff that hasn't benefited at all. So it's all in the bank or in bonds. So just to put that in layman's terms,

If you have a savings account, that's more susceptible to currency devaluation than other types of things because you're essentially just holding cash in that currency, right? Yeah. So should people be freaking out and whatever the equivalence of stuffing your money under in your mattress, which seems like a bad idea in a devaluing currency? Most Canadian investors are actually in a better position than they might think.

If you actually look at traditional average Canadian equity portfolio that most people have up until when they're relatively close to retirement, that portfolio only has about 30% to 40% of its money in CAD investments. It actually has more than 60% in foreign assets, and those assets are typically in foreign currency. So most Canadians actually, if they're that kind of investor, actually have more foreign currency than they think.

Sarah, as a Canadian investor, what have you gleaned about different investment choices you can make given the uncertainty of the world at the moment? I think it was reassuring to learn that I shouldn't be, I don't know, trying to switch and double down on Canada or double down on America and make a bunch of changes. Like, it sounds to me like as someone with an already diversified portfolio, I can feel okay about just kind of sitting tight. ♪

Oh my God! Okay, it's happening. Everybody stay calm. What's the procedure, everyone? What's the procedure? Stay f***ed! Okay, Elamin. We've been talking a lot about the trade war, the effects of that, the patriotism that is engendered, the bi-Canada movement, the stumbling Canadian dollar, all that stuff. And you are here to talk about a very specific industry that

that is incredibly tied into all the issues that we're talking about, which is, of course, the film and television industry, which is both a huge economic engine in Canada and also very closely tied to the whims of the American market. What's the current state of affairs now in that world?

Okay, well, we are right now at a particularly unpleasant point. You know, I don't know if you can sort of look at the moves that Donald Trump is making and say, oh, this follows this school of logic. It's in pursuit of this particular end. And barring any explicit reason that everybody can kind of go like, oh, this is the end that the U.S. is trying to arrive at. You

you do end up in this environment of complete uncertainty. And television and movie production as an industry is not exempt from that. Let's tell the good part first. Well, the good part is...

There has been a deepening relationship between Hollywood and Canadian movie and television production over the last decade or so. As streaming has expanded and Netflix and Disney Plus and Hulu make more shows, they're doing so increasingly right here in Canada. So many of them are shot in Vancouver or shot in Hamilton or shot in Saskatchewan or shot in Winnipeg. You know, like Shogun, made in British Columbia. You know, a

A show like Severance, it's the talk of the town. That's a show that's partly filmed in Newfoundland. So you could compare it in a way to an auto plant that makes American cars, where you have this American company and they're making an American product, but it's being made in Canada with Canadian workers.

Yes, exactly correct. And there's a sort of increasing relationship when it comes to how much Hollywood has been spending, willing to spend in this country, to the point where by the time that you get to 2023 or so, you see a...

staggering amount of the money spent on film and television production spent on American stuff. And what's noteworthy about that number is that now there is a significant decline in Canadian production. So in 2024, the amount of

money that was spent in Canadian production was 20% lower than the previous year, which is to say we are more reliant right now on American productions than we have been before. Right. So there's this big apparatus. There are specialists now who live in Canada who make great film and TV. Yes. And there's places to do it and all that stuff. But you're still reliant on the appetites of

of American corporations because it all comes from them and goes to them. Yes, and the whims of American production culture, which is to say when you have a writer's strike and an actor's strike, suddenly the Canadian industry becomes very startled at how, just how dependent we are on Americans coming here to make movies and TV shows.

The intertwining of the two industries has deepened so much to the point that when you get a story like the terrorist story, everyone kind of looks around and says, oh boy, we are in a bit of trouble here because we don't know what's going to be affected.

So initially, when we had this idea to talk about this on the show, the thinking was, hey, the Canadian dollar took a dive. It's rebounded a little bit. But what could be a benefit to that? Well, if you are going to make film and TV in Canada because it's cheaper, well, it just got even cheaper. So maybe the sales pitch to Hollywood got even better.

But what you're essentially saying is that it's possible that the increased attractiveness of Canada is a place to go make stuff because it's cheaper, right?

could be nullified by the fact that there's so much uncertainty around what's going to happen. If you are an American production company and you're being pitched a TV show and you're about to green light it and say, go shoot this thing in Hamilton in six months. Here's money to do it. Suddenly, your green lighting meeting looks a little bit different because we don't know whether the budget we've given you is going to be able to deliver the show or not.

All of which is to say uncertainty makes people very nervous. It makes people kind of hold off and say, we're not going to jump on that just yet. Matt, is this endemic of the way businesses are feeling in general about making plans for the future? It's hard to know. You very clearly see that like the policymakers are worried that like the tariff threats and the uncertainty are going to like cause businesses to shut down preemptively and stuff like that.

The governor of the Bank of Canada, Tiff Macklem, just had some comments about that last week. But beyond that, like you don't see CEOs coming out and making big announcements about it. Instead, you see most, you know, Canadian CEOs talking about how this is an opportunity for them. I sort of wonder how much of that is like patriotism. But it is interesting and it would be a dot towards just how much room is there for Canadian companies in the entertainment industry to like reshore.

Sarah talked a lot about, you know, the sentiment of buying Canadian, onshoring stuff, you know, looking around and saying, okay, what can we do to bolster our own economy and to build the industries that we care about? Is there that movement in the entertainment industry? Are people like, enough making, you know, The Last of Us and Shogun, let's make some Canadian stuff for Canadians?

I mean, it's posing a question that comes up every once in a while in the Canadian culture sector, which is like, how overexposed or over-indexed are we on American-ness?

the ways that we've maybe gotten too used to how much America kind of occupies our cultural airspace. And I think there are people who are sort of like asking themselves, what does it mean for me to, you know, pay attention to consuming Canadian in terms of like TV shows that I watch? Doesn't this raise the question of like, what is a Canadian show? Which is to say, like, if your top line stars are American and,

And the money flows to an American production company that benefits from the making of the show. But it involved thousands of Canadians in making the show. How Canadian is that show? It's like buying gas in Alberta. Yes, it is. It's like, I don't know. I don't know. It's a globally integrated supply chain. That's right.

You know, I think the problem will be that it's just very hard to compete with, you know, a country that has an industry that has a much bigger audience and much more funding. And that, you know, everyone who sort of makes it and wants to get to the next level moves there. It starts to feel a little hopeless sometimes. I'm reflecting on my buy Canadian goals now. And I think for me now, it just means only buying DVDs of Don McKellar movies. That's it.

Okay, Sarah, it is time to tell the people what they learned. We learned that buying Canadian prompts a lot of questions about what does Canadian actually mean. We learned that to protect Canada's film industry, we should consider applying retaliatory tariffs to Tom Cruise. And we learned that when the loony falls, it's probably costing you, even if you don't realize it.

Well, that is it for this week. Thank you for listening. We are so glad that you came and we hope you come back. This show is sponsored by Wealthsimple. It is made by me, Devin Friedman, Matt Karras, Sarah Rieger, with Matilda Erfolino, Leah Fetter, and Jared Sullivan. Help from Juanita Leon and Allison Hopkins. Fact-checking by Brennan Doherty. Theme music by Andy Huckvale. And engineering by Emma Munger. Special thanks, of course, this week to Alameen Abdel-Mahmoud.

The TLDR podcast is offered by Wealthsimple Media Incorporated and is for informational purposes only. The content in the TLDR podcast is not investment advice, a recommendation to buy or sell assets or securities, and does not represent the views of Wealthsimple Financial Corporation or any of its other subsidiaries or affiliates. Wealthsimple Media Incorporated does not endorse any third-party views referencing this content. More information at wealthsimple.com slash TLDR.