Economy

Why isn’t more clothing made in Canada?

Buying affordable domestically made clothing isn’t as easy as the “shop local” mantra makes it sound. Here’s how we got here—and what it would take for the industry to return to its former glory.

This story was first published in Chatelaine

Midway through 2020, a year in which many people abandoned office attire for the warm embrace of sweatpants, the Toronto-based sustainable fashion label Encircled launched its “comfy dress shirt.” Cut from Modal, a soft, jersey-like fibre made from beechwood pulp, the $134 top represented a happy medium between pre- and post pandemic dressing: relaxed yet still dressy enough to wear for endless Zoom meetings. It sold out in less than 48 hours.

“We were really in the right spot because all we do is make comfy, sustainable clothing that feels like pyjamas you can wear to work,” says Kristi Soomer, founder and CEO. Known for its casual, made-in-Canada basics, Encircled is one of a number of Canadian fashion brands that has experienced an unexpected surge in business during the pandemic. But due to supply chain issues—there were unexpected delays in sourcing more fabric, which was produced overseas—the brand was unable to restock the bestseller for another three months. “We could only grow our business as much as we could get the supply to do so,” says Soomer.

Founded in 2012, Encircled is one of the few Canadian fashion brands to maintain production onshore. According to StatsCan, the apparel manufacturing industry experienced negative growth in gross domestic product between 2011 and 2015, even as consumer appetite for apparel increased.

Enter the pandemic, which has ushered in renewed demand for locally made goods—a recent survey from Canadian Manufacturers & Exporters found that 56 percent of Ontarians intended to seek out domestic goods more often. But ironically, while shopping locally has never been more in vogue, it’s also never been more challenging.

Time for a quick experiment. Get up, walk to your closet and read the labels on every piece of clothing you own. Chances are, made-in-Canada pieces comprise no more than 20 percent of your wardrobe and likely even less than that. As of 2019, the majority of clothing purchased in Canada was imported from China, Bangladesh and Vietnam. Moreover, while many proudly Canadian brands including Roots, Lululemon and Joe Fresh may design their clothing in Canada, the majority is actually produced elsewhere.

This wasn’t always the case. Montreal’s ultra-industrial Rue Chabanel and Toronto’s bustling Spadina Ave., located in the heart of Chinatown, were once hubs of Canadian apparel manufacturing. (Winnipeg has been known for its denim factories, and there are small operations on the West Coast, but today more than 65 percent of the country’s apparel-manufacturing jobs remain in Ontario and Quebec.)

In 1977, Joe Mimran, the founder of Club Monaco and Joe Fresh, entered the industry after his brother, Saul, purchased a small factory in Toronto where they could produce fashion designs by their couturier mother, Esther, on a wider scale. He remembers an entity called the Toronto Dress and Sportswear Manufacturers’ Guild—“a bunch of old-timers, mostly eastern European, who had come to Canada in the ’40s and ’50s and set up manufacturing facilities”—which oversaw the industry. The guild ensured production quality and livable working conditions, and was even involved in the creation of affordable housing. (In 1986, the William A. Villano apartment building, named after a union leader, was built in north Toronto as a joint effort between the guild and the International Ladies’ Garment Workers’ Union.)

Throughout the 1970s and ’80s, Canada was home to a vibrant and thriving clothing industry, and homegrown designers like Simon Chang, Leo Chevalier, Pat McDonagh and Vivian Shyu ruled the roost. “[W]hile fashion arbiters report rapturously from the French prêt-à-porter showings . . .Canadian consumers turn instead to the burgundy pigskin unstructured blazers of Montreal’s Margaret Godfrey or the modified and narrowed (17-inch) trousers of Toronto’s Alfred Sung,” wrote Barbara Amiel in a 1978 Maclean’s article evaluating the state of Canadian fashion.

But even while the Canadian fashion industry was a veritable economic force—when Amiel’s article was published, the garment and textile industries combined employed 200,000 Canadians—there were portents of darkness to come. In the same article, Amiel wrote, “The federal ministry of industry, trade and commerce is awash with studies recommending the gradual phasing out of the Canadian textile and clothing industries.” It cites a C.D. Howe Institute report recommending a “phasing-out program” of garment manufacturing in Canada “to prevent the recruitment of new workers and the investment of new capital into activities that have no competitive future.”

Regardless, the domestic garment industry continued to flourish well into the 1990s, when a whopping 70 percent of the textile and clothing products consumed in Canada were made in this country. After Canada joined the North American Free Trade Agreement (NAFTA) in 1994—which eliminated tariffs on most goods circulating among Canada, the United States and Mexico, thus making it cheaper to buy many foreign-made items, including clothing—Canadian manufacturing across the board showed symptoms of decline but still continued to chug along. Then, in 2001, China joined the World Trade Organization—meaning consumers had greater access to less expensive Chinese goods. Four years later, on January 1, 2005—after a decade of eroding import quotas—the federal government made apparel free to import, meaning unlimited amounts of foreign-made clothing could enter the country. Without these quotas, fast fashion exploded, and consumers grew accustomed to $15 T-shirts without giving a second thought to the often exploitative labour conditions that precipitated those low prices in the first place. Bob Kirke, executive director of the Canadian Apparel Federation, calls the elimination of quotas the “single biggest blow” to the Canadian garment industry.

At the same, the Canadian fashion industry was grappling with another significant crisis: a sharp decrease in investment.

From 1992 to 2004, the Matinée Fashion Foundation, funded by Imperial Tobacco, was a significant sponsor of Canadian designers, doling out more than $7 million in business-development grants, part of an overall $50 million investment in promoting the industry. Then the federal government passed legislation that effectively banned cigarette companies from advertising their products (including through sponsorships). “[The industry] can adapt to change, but when it all happens at once, it’s too much,” says Jonathan Walford, curatorial director of the Fashion History Museum in Cambridge, Ont. Susan Langdon, executive director of the Toronto Fashion Incubator, recalls selling $500,000 in merchandise as a rookie fashion designer in the 1980s during the first season she launched—in part because she had the help of a financial backer. “At the time, there was money to be made in apparel manufacturing,” she says, thanks to the sterling reputation of Canadian-made goods. “If you had a million dollars, you’d invest it in a fledgling designer. Now you buy a condo in Toronto and watch it accrue in value.”

The sudden proliferation of less expensive foreign-made clothing combined with a broad lack of investment weakened the apparel-manufacturing industry to such a degree that it found itself unable to compete. Made-in-Canada clothing naturally costs more than foreign-made apparel because of labour: The average minimum wage across Canada is between $11 and $16 per hour, while the minimum wage for garment workers in Bangladesh is the equivalent of $113 per month. The higher costs of manufacturing in Canada are passed down to consumers. Those who can afford it are paying not only for a great piece of clothing but also, ostensibly, for workers to receive a better wage and, in some cases, far safer working conditions. (The deadliest garment-industry accident in modern history occurred in Bangladesh in 2013, when the Rana Plaza complex collapsed, killing more than 1,100 people and injuring 2,500.)

As of 2015, the most recent data on record, only 20,000 garment industry jobs remained in Canada. One area in which the country continues to excel is the production of high-quality knits, like French terry and fleece. That’s why Julie Brown and Jeremy Watt, the co-founders of Province of Canada, decided to start out making sweatpants when they launched their brand in 2014. Brown grew up in the small town of Huntingdon, Que., which was home to two textile mills that shut down in 2005, eliminating more than 800 jobs in a town of only 2,600. She witnessed first-hand how the decline of textile manufacturing decimated her hometown, and it made her passionate about building a competitive business that maintains production onshore.

The brand started off with loungewear, embroidering their logo on made-in-Canada jogging pants and sweatshirts (ranging in price from $98 to $128) sourced from a family-owned Canadian factory. As Province of Canada grew, they started sending their own designs to the factory to produce, including ones for slightly more complicated garments, like rugby shirts that range in price from $112 to $138. They’ve now set their sights on button-down denim shirts—their take on the Canadian tuxedo.

“I always say we’re not a fashion company. I look at us as the Canadian lifestyle goal of Disney,” says Watt. “We want to create a company that’s sustainable, all the way down to the packaging, that delivers joy and that people feel joyful supporting.” The brand sends thank-you emails to everyone who orders—and receives enthusiastic replies.

“People have told us, ‘It’s been years since I’ve been able to find a quality made-in-Canada sweat, like I used to buy at Cotton Ginny,’ ” says Brown. (Once a popular retailer of colourful cotton casualwear that was initially made by Tiger Brand Knitting in Cambridge, Ont., Cotton Ginny shuttered in 2011 after filing for bankruptcy multiple times.)

Kathy Cheng, the president of Scarborough, Ont.-based Redwood Classics Apparel and WS&Co. manufacturing, has lived through the Canadian garment industry’s peaks and valleys. She grew up in the business; both of her parents were apparel workers in Toronto and instead of hiring a babysitter, they took her to work. “My dad would prop me up on the rolls of fabric, and at lunchtime, he would take me down,” she says. Her father co-founded the factory with his brother and sister in 1988, and by the late 1990s, it employed close to 500 people and stretched across approximately 200,000 square feet. Then came China’s ascension into the WTO, and the elimination of import quotas. By the time Cheng joined the company in 2009, it had to restructure down to 40 employees. But in the years that followed, the business began to rebound—and its workforce nearly tripled. Shopping local, Cheng stresses, is “an investment beyond a product.”

“People are sick and tired of throwaway clothing, especially in a pandemic,” says Nikki Francies, co-founder of CRW Design, a knit apparel production house in Toronto that handles manufacturing for the clothing brands Miik, Encircled and Blondie Apparel. With her business partner, Sherri Carlson, Francies founded CRW in 2010 with a total of six clients. Over the course of two years, the business grew to more than 100 clients across Canada. Now CRW produces close to 14,000 garments per month in its own production facilities, and partners with three other Ontario factories to produce an additional 8,000 units.

Some of the brands for which CRW manages production have doubled their business during the pandemic—CRW is in a unique spot because it only traffics in knit fabrics like fleece, jersey and French terry, which have seen a rise in popularity due to the greater demand for comfortwear. “In the entire pandemic, we’ve only lost one customer,” says Francies.

As promising as sales might be, it’s naive to think the increased momentum of the shop-local movement signals a new era of revitalization for garment manufacturing in Canada. “For every individual company that’s doing better, I could give you five that have laid off 500 people,” says Kirke, of the Canadian Apparel Federation. To be clear, he supports the renewed interest in shopping local but is realistic about the pros and cons of globalization—including the fact that better-quality, less expensive fabric and production can often be sourced overseas.

And Canadian production can be a challenge. One of the greatest obstacles the industry faces is an aging workforce—for a variety of reasons. There are just not enough younger skilled workers to make up for the number of workers aging out of the profession. Sewing itself is no longer a practical skill that’s passed down from generation to generation. People who attend fashion school largely want to learn how to design clothes, not sew them, and can get by on minimal technical skills. Only a handful of schools in Canada offer training in industrial production.

Looking at the big picture, it seems as though the only solution to bolstering the Canadian garment manufacturing industry—thereby creating more jobs and securing economic growth—lies in government intervention.

In 2014, the now-defunct Fashion Design Council of Canada submitted a report to the minister of heritage outlining the industry’s economic impact and requesting more funding to support its endeavours. The Canadian fashion industry has been lobbying the federal government to treat it like any other cultural industry ever since—to no avail. Clothing manufacturing generated $1.2 billion in GDP for the national economy as of 2017, the most recent year on record, yet remains ineligible for the millions of dollars in government subsidies allocated for other cultural industries, including film, music and the arts. For example, while the Canadian music industry generates a far smaller GDP—approximately $240 million as of 2012—it received $10 million in the 2019 federal budget to be distributed to artists throughout 2020, 2021 and 2022. Meanwhile, the only recent federal government contribution to the fashion industry was for $600,000 in funding to be granted through the Quebec Economic Development Program over the next three years.

“The growth we’ve experienced [during the pandemic] has given us a bigger purpose to continue to exist,” says Watt. There are no easy answers for solving the predicament the Canadian garment industry is in, but it’s a vibrant sector with limitless potential that is nowhere near ready to be phased out.