Playing Russian Roulette with Food Safety – Lake Superior News
Government should not compensate Canadian businesses affected by sanctions, including agribusiness
THUNDER BAY, ONTARIO ~~~~~ March 12, 2022 (LSNews) With war come economic sanctions. Instead of sending troops to fight the old fashioned way, wars are fought over money, and Russia’s invasion of Ukraine is no exception.
The United States, United Kingdom, Australia, Japan, European Union, Turkey and a few others have sanctioned Russia in one way or another.
Canada has targeted the banking system and banned Russian airlines from using its airspace. It also canceled all export permits and halted new ones, mainly affecting the aerospace industry.
No one knows for sure if these sanctions will work, but the energy and food sectors have so far been spared by all sanctioning nations.
The sanctions are designed to affect President Vladimir Putin’s regime, not the Russian people, recognizing that many Russians may not support invading Ukraine.
Companies are also potentially affected, as some Canadian food companies have invested in Russia over the years. US giants Coca-Cola, McDonald’s and Starbucks have now withdrawn from Russia.
Canadian company McCain Foods – which was building a $200 million plant in Russia’s Tula region – has opted to halt construction for the time being. The company could decide to withdraw its project in the coming days. But it has been reported that McCain is still doing business in Russia.
Meanwhile, McCain announced he would donate $200,000 to relief efforts in Ukraine, making it clear he condemned Putin’s actions.
On the other hand, Maple Leaf Foods has no business in Russia and has donated $500,000 in relief funds to help Ukrainians. Of course on them.
Convenience store giant Alimentation Couche-Tard also operates stores in Russia and could be hit by sanctions. The company has just announced that it is suspending its activities in Russia. The company, which controls the Circle K chain, has only 38 stores and more than 320 employees in Russia. It was present in Russia through the Norwegian Statoil Fuel and Retail.
Some Canadians have called for a boycott of Canada-based Mac’s and Circle K stores operated by Alimentation Couche-Tard until the Quebec company makes a clear decision to cease operations in Russia. That’s probably why he did it. The company has also donated $1.5 million to the Red Cross in recent days.
Restaurant Brands International, the parent company of Tim Hortons, is another major Canadian food player in Russia. He also owns Burger King and the chain operates 800 stores in Russia. Other than a corporate statement raising concerns about the invasion, no clear decision has been made. Many people have recently taken to social media to demand that the chain stop doing business in Russia.
Asking these companies to pull out and stop doing business with Russia is the easiest and most obvious thing to do. The atrocity of the invasion is simply inexcusable.
But we must also keep in mind that these Canadian companies are an integral part of the food security fabric of the Russian people. At first glance, closing convenience stores or fast food outlets or not selling French fries might be considered trivial. But any corporate decision to pull out or stop doing business in the country would jeopardize Russia’s access to food, penalizing its people.
It really is a delicate balancing act between reputational risk and food safety. The stakes are different compared to other economic sectors.
Last week, Prime Minister Justin Trudeau was vague and evasive on whether his government would compensate Canadian companies affected by sanctions imposed on Russia. Compensating companies doing business abroad affected by wartime sanctions would set a very dangerous precedent.
The federal government should not compensate Canadian companies harmed by the sanctions imposed on Russia, including companies in the agri-food sector. Geopolitical risks are always present when investing abroad, and it was these companies, not Canadians, who assumed those risks when they chose to invest in Russia.
Additionally, many of these companies have insurance against such penalties. And the sanctions against Russia actually started over eight years ago when Russia invaded Crimea.
Canadian businesses should not be surprised at how things are going, and Canadian taxpayers should not be held accountable for their choices.
Dr. Sylvain Charlebois
Senior director of the food analysis laboratory
Professor of Food Distribution and Policy at Dalhousie University.
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The opinions expressed in this opinion piece are solely those of their author and are not necessarily shared or endorsed by Lake Superior News/Lake Superior Media.
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