Why Justin Trudeau broadened his trade agenda to include ‘dusty penny’ Jamaica

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Trade Minister Mary Ng’s schedule this year suggests that she’s hunting for big game. She visited Washington, D.C., the capital of Canada’s eternal trading partner, at the end of February, and toured India and the Middle East in March before launching trade talks with the United Kingdom later that month.

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So, her trip to Jamaica last month stood out as a curiosity. The Caribbean nation isn’t exactly an economic powerhouse. Its gross domestic product in 2020 was $13.8 billion, which is not negligible, but minuscule compared with the $30 trillion annual GDP of Canada’s main trading partner, the United States. But the island has strong cultural industries, and is known for reggae (popularized by Bob Marley); track and field domination; Rastafarianism; jerk chicken and Jamaican patties.

That’s exactly why Ng, mandated by Prime Minister Justin Trudeau to diversify Canada’s portfolio of trade partners, was smart to work Jamaica into her agenda, said Jamaican-Canadian billionaire Michael Lee-Chin.

“What most people do, is they gravitate toward shiny penny,” Lee-Chin said in an interview. “Instead of saying, ‘Hm, there’s a penny there that is a little bit dusty’ … It doesn’t take much to dust it off to become shiny,” he continued. “It’s going from dusty to shiny — in that process — that you create a lot of wealth.”

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Lee-Chin, chief executive of Burlington, Ont.-based Portland Holdings Inc., is worth some $1.9 billion, according to Forbes, making him the 42nd wealthiest Canadian. In Canada, he is known for his philanthropy, most notably a $30-million donation to the Royal Ontario Museum, which resulted in the Michael Lee-Chin crystal. In Jamaica, he has invested in telecommunications, insurance, asset management, and elsewhere, and is owner of Jamaica’s largest bank, National Commercial Bank Jamaica Ltd., which competes with Bank of Nova Scotia’s 132-year-old Jamaican unit.

Ng visited the Caribbean to strengthen trade partnerships between Canada and the 15 member states of the Caribbean Community (CARICOM). It’s part of a broader effort by the Trudeau government to reduce Canada’s dependence on the United States, which has become a less reliable trading partner in recent years, as both Democratic and Republican lawmakers have developed protectionist streaks. Trudeau pledged in 2018 to increase Canadian exports to countries other than the U.S. by 50 per cent by 2025.

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“This trade mission… underscores the strength of Canada’s long-standing trade and people-to-people ties with Guyana, Jamaica, Barbados, and Trinidad and Tobago,” said Ng. “Our government will continue to strengthen its relationships with the Caribbean region, while opening doors for trade and investment opportunities that will benefit Canadian businesses and exporters.”

‘Saltfish’ and rum

The Jamaican-Canadian trade relationship in particular can be traced back centuries, when Canada began exporting salted codfish to the island, a Jamaican staple colloquially known as “saltfish.” In return, Jamaica exported rum to Canada.

“We have had a very long and important trading relationship,” said Diane Edwards, president of the Jamaican Promotions Organization, or JAMPRO, which helps international businesses set up in Jamaica, a process that can include due diligence, sourcing people and materials, and conducting environmental assessments.

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The Caribbean is a region where Canada has abundant cultural ties, although not as many economic ones, considering the regions share a commercial history as points on the triangular trade routes that British merchants followed as they exploited the resources of the New World to power the Industrial Revolution.

Bank of Nova Scotia, founded by Halifax businessmen in 1831, opened a branch in Jamaica in 1889 to facilitate the trade of rum, sugar, and fish. “The average person would say, ‘Ooh, Jamaica is not a great place to invest, but Scotia knew differently,” said Lee-Chin. “Jamaica was Scotia’s crown jewel.”

Today, if you walk through the international food aisle in a Walmart Inc. store in Aurora, Ont., you can browse the offerings of Jamaican brand Grace Foods, which sells coconut water, sodas and other items. Cool Runnings Foods, which offers jerk and other seasonings, is also a common sight on Canadian shelves. While most of these exports are geared toward Canada’s Jamaican diaspora of 300,000, Jamaican goods, in particular beverages and spirits, aluminum oxides, agricultural products, are among the island’s biggest exports to Canada.

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In 2020, Jamaica supplied Canada with aluminum oxides, foods, beverages, and spirits totalling $84.4 million in exports, while Canada supplied meat products, pharmaceuticals, and electrical machinery and equipment, totalling $122.2 million. (The U.S. is Jamaica’s largest trading partner.)

The Canadian government has pegged produce and processed food as one of the most lucrative areas for Canadian businesses to invest in Jamaica; other sectors with promise include information and communications technologies, infrastructure and clean technology.

Canada also sends hundreds of thousands of visitors to Jamaica yearly, constituting the island’s second-largest source of tourists after the United States. Toronto-based Sunwing Airlines Inc.’s Royalton Luxury Resorts has three locations along the Jamaican coastline.

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Sun and sand

But tourism isn’t the only place Canadian businesses should seek to invest, said Damie Sinanan, manager of competitiveness and export promotion at Caribbean Export, the official export promotion agency for the Caribbean. Sinanan said the region has “very sophisticated” small- and medium-sized businesses that are strong in renewable energy and information technology, for example. “We’re all small islands and we are extremely climate-vulnerable… We have to look at improving the way we do business when it comes to renewable energy.”

“We don’t have that reputation, because we’re the Caribbean, we’re all about sun, sea, and sand,” he said. “But that’s a very popular misconception. The Caribbean region has so much more to offer, especially in the area of serious business.”

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When it comes to investing in Jamaica, Canadian businesses should consider agribusiness, said Edwards of JAMPRO. “Canada has a short growing season just because of its physical location, whereas Jamaica has a long growing season… so we can complement Canada in many ways.”

The Jamaican affinity for agriculture often goes overlooked by Canadian investors, said Michael Allen, CEO of Land We Love Organic Greenhouse. He is closing his greenhouses in British Columbia and re-opening in Braes River, St. Elizabeth parish, around 126 kilometres west of the Jamaica’s capital, Kingston.

Allen said investors are not paying attention to food insecurity, and the instability of the global food supply chain. “They look at tourism, and yet tourism is too volatile,” he said in an interview. “Jamaica has huge potential, because it has so much agricultural land that is unused.”

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The Ministry of Agriculture and Fisheries recently allocated 9,000 unused acres to farming, and roughly 11 per cent of Jamaica’s land is arable, according to the World Bank.

‘Everything is agriculture’

Allen, who is originally from Jamaica, emigrated to North America in 1974 to pursue a career in professional football that saw him play for the Winnipeg Blue Bombers, Ottawa Rough Riders, and B.C. Lions. Throughout his football career, Allen grew produce as a hobby, a passion he had developed in his home parish of Clarendon, a municipality roughly 53 kilometres from Kingston.

“Growing up in Clarendon, everything is agriculture,” Allen said. “We had everything in our field and prepared it in every way possible.”

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Once he retired from football, he decided to pursue agriculture as a business.

Allen owned greenhouses in British Columbia, and was a distributor for large retailers such as Whole Foods Market IP Inc. and Empire Co. Ltd.’s Sobeys chain. Now, he’s looking to grow fruit and vegetables in the Caribbean and export back to Canada.

Combining the Jamaican love for agriculture and agri-technology has been the recipe for success for Land We Love, which recently finalized a large exclusive partnership with a large Canadian supplier that the company declined to name. There is still room for investment, however. Canadian businesses will be able to buy Land We Love’s field produce including yams, turmeric and ginger, as early as early 2023, said Allen.

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“Land We Love was able to bring in agri-tech and pair that with the Jamaican connectivity to the land, and create the most optimal grow environment,” said CFO Dee Choy. One example is a retractable roof greenhouse able to withstand a category five hurricane and maintain a stable temperature and humidity, which is all controlled automatically by a computer system.

“There’s so much expertise, and so much pride in living off the land that the Jamaican people have,” said Choy. “We basically used science to help facilitate what they’re normally great at.”

‘A lot of gatekeepers’

To be sure, investing in Jamaica is not without its difficulties. Allen said that JAMPRO has been essential in helping him through the approvals process for expanding to Jamaica.

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“You can bypass all the headaches. If you go in and try to do it without JAMPRO, you would be spinning your wheels,” Allen said. “If there’s one negative thing about Jamaica, it’s that there are a lot of gatekeepers.”

Allen added that banking can also be a problem on the island. Businesspeople from Canada or the U.S. need to jump through a number of hoops to get a business account opened. “A simple bank account that would take 45-60 minutes in Canada to open can take months there, which can be irritating,” he said. “The first thing you better do… is to try to get your banking going or else it’s going to be a problem.”

Navigating differences in culture will indeed be tricky, even with the support of organizations like JAMPRO, said Sinanan of Caribbean Export. “We need to understand doing business within each other’s territory, which goes beyond dollars and cents sometimes,” he said. “You have to look at culture, you have to look at language, you have to look at market requirements.”

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Businesses who come to Jamaica, for example, often express reservations about crime. If one were to judge Jamaica based on news reports alone, “you’d think Jamaica is being overridden by criminals, but that’s not the case,” said Lee-Chin. Investors should take advantage of the negative perceptions, as there’s relatively little competition for profitable opportunities in addressing the inefficiencies of the Jamaican market, he said.

JAMPRO’s Edwards said that since Jamaica is a developing country, people may assume that business transactions will be corrupt, and they will need to pay bribes in order to get things done. “That is absolutely not the case in Jamaica,” she said. “I always tell them, `If Usain Bolt can walk around free without a body guard, so can you,’ because everyone knows who he is.”

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In the World Bank’s 2019 Doing Business report, the island ranked first in the Caribbean for the ease of doing business. Canada and Jamaica’s shared history as Commonwealth nations also means that they have a similar legal system, based on English common law, which makes it easy for new businesses to navigate licensing and legal requirements, said Edwards. The two countries also share a common language. Jamaica is located along the Panama Canal maritime shipping route. The Port of Kingston is one of the deepest ports in the Caribbean, which, at a depth of 8000 feet, is able to accommodate mammoth cargo ships.

“The government has a growth agenda, and trade is a big part of it,” said Joan Thomas-Edwards, Jamaica’s under-secretary for foreign trade at the Ministry of Foreign Affairs and Foreign Trade. “We have to trade our way into becoming… a more developed country.”

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Yet, according to Sinanan, there is still work to be done to ensure that Canada and the Caribbean optimize trade relations. “We just have a lot of work to do to make sure everybody sort of engages with one another and we understand that there is an opportunity, and understand what the opportunities are.” He added that there is limited awareness of The Caribbean Canada Trade Agreement (CARIBCAN), which was established between Canada and the Commonwealth Caribbean countries in 1986. But that might bolster Lee-Chin’s point about Jamaica being a dusty penny: it won’t take much for it to become shinier one.

“What most people do before they invest: they pick up the World Bank report, and they look at the country,” he said. “There’s a difference between perception and reality.”

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