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Editor's letter: Why this American billionaire thinks Canadians are too nice

HBC owner Richard Baker.

Adrian Wyld/The Canadian Press/Adrian Wyld/The Canadian Press

Greetings from New York, where this week some of us from The Globe tried to explain the meaning of Canada to American advertisers.

Who better to ask, we thought, than Richard Baker, the Connecticut real-estate mogul who also serves as governor of the Hudson's Bay Company. An American through and through, Mr. Baker has endured a crash course in Canadian studies since his family bought the retail chain in 2008.

Friday morning, I moderated a discussion between Mr. Baker and our publisher, Phillip Crawley, to explain how the Canadian market is unique and a good opportunity.

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Here's a summary of Baker's insights:

1. It's true, we're too nice for our own good. Mr. Baker recalled an early HBC experience trying to get a much larger Bay sign placed on a store. The landlord didn't want it, even though the lease gave HBC the right to determine signage. Mr. Baker's Canadian rep came back to him with what he said was good news – a medium-sized sign had been selected, to ensure that everyone would be happy. Never would that happen in win-at-all-costs America, Mr. Baker said, citing a business culture in which "people stab you in the heart and move to the next meeting." He chalks it up to America's original conquest culture, in contrast to the foundational compromise that led to the original HBC and, in turn, Canada.

2. Higher costs. Wages are generally higher in Canada because of health-care costs, but that's not all. Canadians don't have an obsession with cost cutting.

3. Protectionism. Even in 2013, a quarter-century into continental free trade, Canada is in many ways a protected market. We have far fewer luxury magazines, for instance, than many similar countries because of protections for Canadian media companies. You could add the costs for phones, cheese, airfares, books, and on and on to a general cost of living that is higher north of the border.

4. Middlemen. A lot more of them in Canada, which further drive up prices. Mr. Baker cited the example of the wildly popular Ugg boots, which his company buys directly from the producer for its American stores. In Canada, the market is too small to warrant direct wholesaling, so the Bay goes through a long-time distributor and pays more.

5. Advertising. It's generally less in-your-face in Canada, and it's not just brasher creative messages that we shy away from. Americans need to be told things directly, he says, such as a store opening or being renovated. Canadians can figure it out on their own.

6. Internet shopping. It's been slower to spread in Canada, in part because of the lack of physical stores. Canadians won't buy from macys.com because they can't easily return merchandise. That will change with the American retail invasion now under way as the likes of Target and Nordstrom arrive on our landscape. The Bay is about to launch an aggressive Internet sales operation, based on a clicks-and-mortar philosophy.

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7. Under-retailed. Canadians may like the fact that we don't have nearly as many malls as America. Doesn't matter. It's changing. American retailers and mall developers look at Canada's population and economic growth and see more malls on the horizon.

8. Quebec. It's the most unusual market in North America. Most American companies don't understand that Quebec is a distinct economy and not just for language. Quebec consumers have higher-end fashion tastes, which are more European than American.

9. Demographics. The dominant American trends are the growth of the Hispanic and African American consumer segments. In Canada, the rise of more disparate, affluent immigrant communities is the emerging retail opportunity. The Bay has recruited Farsi-speaking staff for its Vancouver stores, for instance.

10. Hockey. Yes, even in the heart of Manhattan, we're seen as a hockey people. Mr. Baker realized he had crossed a threshold during the gold medal hockey game at the Vancouver Olympics in 2010. As an official sponsor (remember the red mittens?), the Bay had a corporate box and Mr. Baker had invited Wayne Gretzky and Mark Messier to sit with him and his Canadian guests for the Canada-U.S. final. He told his American colleagues they'd have to sit in the stands, away from the box. Sure enough, when the U.S. team tied the game in the third period, Mr. Baker could feel his heart sink, a sentiment most Canadians shared in those tortuous minutes while Americans (save for Mr. Baker) celebrated. "When you have as many billions invested in Canada as I do," he said, "you're going to cheer for Canada." Maybe that's one difference that doesn't exist between the two countries: Money's money, no matter its colour.

Why this Canadian became American

Another fascinating take on the essence of being Canadian (and American) can be found in this weekend's Lunch with Charles Bronfman, who broke bread with our New York bureau chief Joanna Slater. Mr. Bronfman speaks about his passion for philanthropy, following his decision to make the Warren Buffett billionaire pledge to give away half his fortune. He also reveals his new American citizenship – a step he took at age 81 so he could vote in the next presidential election – and speaks to the Bronfman family divisions over the decline of the Seagram fortune.

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Enjoy the weekend,

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