Founded 80 years ago by two Quebec entrepreneurs, home improvement chain RONA has long considered itself a Canadian icon.
The retailer went so far as to paste the words “Truly Canadian” and “Proudly Canadian” in large letters on many of its storefronts.
But RONA — which was acquired by American retail giant Lowe’s in 2016 — has reluctantly removed those signs after Canada’s Ad Standards council found they “conveyed an inaccurate general impression” given the company’s new ownership.
According to a copy of the decision published on the council’s website, RONA fought the ruling by tracing “the Canadian roots of RONA, its many Canadian connections, and the number of high-level employees in RONA’s Canadian operations, who are Canadian.”
But the council’s decision said that “did not alter the fact that RONA is not owned and controlled by a ‘Truly Canadian’ entity.”
‘RONA’S entire history is rooted in Canada’
The Ad Standards council made an initial ruling on the advertising last January after receiving two complaints from members of the public. RONA appealed the decision, which was upheld by a second council.
In a statement to the CBC, the company said that although it “strongly disagrees” with the decision, the signs have been removed from stores across the country “out of respect for the process.”
“RONA’S entire history is rooted in Canada,” the company said.
“It is incorporated in Quebec under Quebec law. Its head office is located in Boucherville (Quebec), where strategic and operational decisions regarding the company’s activities are made by RONA’s executive team, which is composed exclusively of Canadians. All RONA employees are employed in Canada.”
RONA began in 1939 as an alliance of independent hardware stores self-styled as “Les Marchands en Quincaillerie,” which roughly translates into “The Merchants of Hardware.”
The name changed to RONA in 1960 using the first-name letters of founders Rolland Dansereau and Napoleon Piotte.
Lowe’s bought RONA for $3.2 billion Cdn in 2016 and maintains a network of more than 400 stores across the country.
‘Where does the ownership lie?’
Marketing expert Alan Middleton says the rules are fairly clear-cut around corporate Canadian-ness.
“Where does the ownership lie?” said Middleton, with York University’s Schulich School of Business.
“And if the majority ownership and the decision-making around that ownership and the profits lie out of Canada, then they legitimately cannot say they are Canadian.”
Canadians are not driven to make consumer decisions based on patriotism in the same way that many Americans are, Middleton says, but it can be a preference.
“The interesting thing I find about this is they want to keep saying they’re Canadian-owned,” he said. “So they obviously see not so much an advantage in that, but a disadvantage with not being able to say it. And it will affect a number of their customers.”
Middleton pointed to competition within the home hardware industry from both Home Depot, which is American-owned and Home Hardware, which is Canadian-owned and franchise-based.
“[Home Hardware] is not only Canadian, but very locally Canadian, owned by franchisees in local communities,” Middleton said. “It could be used as a weapon against them.”
‘An active Canadian corporate citizen’
By comparison, Middleton points to Tim Hortons: The coffee chain is majority-owned by Brazil-based 3G Capital, but structured in a way that allows the company to say it is Canadian.
“You still may have foreign shareholders and you send out money, but that decision and the accounts and the income statement are approved in Canada by an auditor in Canada,” he said.
The Ad Standards council does not discuss details of its deliberations, which happen before panels which are generally made up of seven people — four from the industry and three from the general public.
“RONA has deep connections to, and participated in, Canadian business and industry groups,” the company said.
“Finally, RONA is an active Canadian corporate citizen, supporting over 260 local not-for-profit organizations and public schools across the country in communities where it is present.”