OTTAWA, Ontario — Steamed, sautéed or stir-fried, cauliflower is standard fare on many dinner tables. In Canada, it is a luxury.
A head of cauliflower there now goes for around 8 Canadian dollars, a tripling in price, the strange foodie fallout from the low price of oil and other commodities.
The recipe for high-priced cauliflower starts with the currency.
As prices for commodities have dropped, the value of the Canadian dollar has fallen, a direct link to an economy that is dependent on oil and other resources. It makes imports, like fresh U.S. vegetables during the dark Canadian winter, look especially costly.
Two years ago, one Canadian dollar was worth 93 U.S. cents. On Wednesday, it stood at 69 U.S. cents.
The drought in California, where Canadians get most of their vegetables in the off-season, just compounds the sticker shock. With less bounty in the fields, farmers’ prices, in U.S. dollars, are higher than normal.
As a result, fresh vegetables feel more like a splurge for Canadian consumers.
Iceberg lettuce sells for 3 Canadian dollars, up from the typical 90 Canadian cents. One head of broccoli goes for $4, compared with $1.50 for two in the past. Last winter, a head of cauliflower was selling for 2.50 Canadian.
“We’ve gone through this cycle before with the dollar,” said Jim McKeen, owner of McKeen Metro Glebe, a grocery store in downtown Ottawa. “But there were issues on prices anyways because of supply in addition to this whole fiasco with the Canadian dollar. It’s a perfect storm.”
The Canadian dollar, in part, reflects the trouble in the country’s economy.
For years, Canada rode the global commodities boom. The rapidly growing Chinese economy — and its seemingly insatiable appetite for commodities — helped increase the price of oil, potash, nickel and the other Canadian resources.
With China’s demand now faltering, commodity prices have reversed course. Oversupply of oil has similarly devastated its price. Both factors are taking their toll on the Canadian economy. The gross domestic product increased just 0.6 percent in the third quarter of 2015, after six months of negative growth.
Since October, the decline in the Canadian dollar, already looking shaky against a surging U.S. currency, has picked up speed.
In many ways, a weaker currency is helpful to the economy. The United States is overwhelmingly the largest market for Canadian exports, which are now less expensive across the border because of the currency’s fall.
And commodity exports are almost all priced in U.S. dollars. So foreign exchange gains have helped cushion some of the blow to Canadian oil producers and mining companies, which largely sell their resources elsewhere.
“From a household point of view, what Canadians see is that their dollar isn’t going as far,” said Craig Alexander, vice president of economic research at the C.D. Howe Institute, an economic analysis and policy group “But it’s good for Canadians, it’s good for jobs. The primary driver for economic growth going forward has to come from non-resource export sectors.”
Canada’s tourism industry and other service sectors, which had been suffering, are already experiencing gains from the currency drop. Luke Azevedo, the film commissioner for Calgary Economic Development said there had been a notable rise in production in Alberta, where large portions of the movie “The Revenant” and the television series “Fargo” were filmed last year.
“It’s across the country and the dollar plays a fairly significant role,” Azevedo said.
Speaking at the World Economic Forum in Davos, Switzerland, on Wednesday, Prime Minister Justin Trudeau emphasized Canada’s strengths in technology and education rather than its ailing natural resource sector.
“Our natural resources are important and always will be,” Trudeau said. “But Canadians know that growth and prosperity is not only based on what’s under our feet but particularly on what we have between our ears.”
What’s good for the broader economy in the long term, though, isn’t necessarily good for consumers’ wallets in the near term.
Consumer costs are creeping up in a number of areas.
Just over a year ago, a 16-gigabyte iPad Mini 2 cost roughly the same in Canada and the United States. But this week, it was priced at $269 in the United States and 329 Canadian dollars.
Still, it could be worse. If the device’s price were based on the full movement in the exchange rate, the iPad would have been around 390 Canadian dollars.
Food is more price-sensitive.
The turnover in the grocery aisle, compared with, say, a clothing store, is faster, meaning changes in currency are more quickly reflected. And profit margins are thin, so grocery stores are less willing to absorb the losses.
The current collapse of the country’s dollar could have a more significant impact in supermarkets than it did in the early 2000s, according to Sylvain Charlebois, a professor at the University of Guelph in Ontario and one of the authors of an annual study of Canadian food prices.
Charlebois estimated that about 140 Canadian food processing plants have closed in recent years. Many were owned by multinationals that have replaced Canadian production with imports from their larger U.S. plants. Kellogg’s ended a century of production in London, Ontario, just over a year ago.
The result, Charlebois said, is that price increases will be seen throughout grocery stores and not just in their fresh produce aisles. Already, he said, some breakfast cereals have hit 10 Canadian dollars.
“We’re only 35 million people in Canada,” he said. “It’s a very small market on the global scale.”
Certain foods may be more insulated.
Charlebois said prices had risen only slightly for dairy, poultry and eggs. Those products are protected by a government-sanctioned cartel. The system limits production by farmers to keep prices stable, if high, in comparison to the United States, while effectively shutting out price competition from imports through extremely high tariffs.
After announcing on Wednesday that the country’s key lending rate would stay at 0.5 percent, Stephen Poloz, the governor of the Bank of Canada, noted the impact of oil prices on the dollar and the cost of groceries.
“I sympathize very much for those for who food is a bigger percentage of their spending,” he said during a news conference. But he added that overall, savings from lower energy costs had more than offset price increases for imported products.
Nonetheless, food prices in Canada are climbing, leaving wholesalers, restaurateurs and grocery store owners scrambling to limit the damage.
Fishermen in Prince Edward Island now send most of their oyster harvest to the United States to capitalize on the currency difference. That’s leading to shortages at Canadian fishmongers, forcing some restaurant owners to reimport from the United States.
“It’s mind-boggling that I have to buy Malpeque oysters from my American importer in Boston,” said David McMillan, the co-owner of Joe Beef and two other restaurants in Montreal, adding that the cost of the oyster from Prince Edward Island had risen to 120 Canadian dollars a box from about 90 Canadian dollars. “That’s a lot of money for not a special oyster.”
A similar pattern is developing with Canadian beef heading to the United States. It has prompted McMillan to develop menus based around less expensive cuts and the recipes that suit them, like stews.
“We’re getting back to basics,” he said. “You roll with the punches. A good restaurant adapts.”
Sal Howell, the owner of two Calgary restaurants, River Cafe and Boxwood, said she was placing a renewed focus on locally available produce, not always an easy task during Canada’s winter.
“There’s a lot to do to wean yourself off of head lettuce from California,” she said. “I think root vegetables will definitely be the kind of thing people are talking about.”
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