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Target stores to carry more Canuck goods

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OTTAWA -- Shoppers anxious to get inside a Target store when doors opens in Canada will find Canadian content inside. The federal ruling announced Friday paves the way for the American retailer to take over Zellers stores across the country.

A spokeswoman for Target wouldn't say how the changes will affect what shoppers see.

"We will be sharing details around our merchandising strategy at a later date. We have had ongoing conversations with our suppliers, including domestic suppliers, for some time now," Target Canada spokeswoman Lisa Gibson said in an email.

The first Target stores will open in Canada by April 2013, Gibson said. There are five Target stores planned for Manitoba -- four for Winnipeg and one for Brandon.

The cabinet decision says Target must invest $3.5 billion in its Canadian stores, which includes hiring up to 25,000 people -- or about 100 to 200 employees per store -- by 2015. Target will also have to sell "uniquely Canadian cultural products."

The approval comes over three months after Heritage Minister James Moore recommended the federal government review Target's takeover plan.

"When you start to force Target to accept a level of Canadian content, you are affecting the nature of the store," said Queen's University business and marketing expert Ken Wong. "That's inappropriate. It's protectionist under any other name."

In January 2011, Target announced a $1.83-billion deal to acquire the leases on up to 220 Zellers stores from Hudson's Bay Co. Target plans to open 125 to 135 stores in Canada and sell off leases for the stores it doesn't need.

The time and investment the company has made was likely a factor in its decision to accept cultural content requirements in order to enter the Canadian market, Wong said.

"If you're Target, you're hoping you can minimize the damage," Wong said.

"I'm sure Target is not pleased about this, but I'm sure Target is asking itself the question of whether it's better to not play at all, or play the modified game."

The Investment Canada Act gives the federal cabinet the ability to have final say on a foreign company's entry into the Canadian market to ensure cultural investments have a net benefit for the country.

For instance, the federal government reviewed and approved Amazon's move into the Canadian market, as well as Apple's iBookstore, but didn't look at Walmart because its cultural sales didn't meet the threshold for review.

Liberal heritage critic Scott Simms said the decision is good news for Canadian cultural producers if the federal government ensures Target follows through on its commitments.

"We're asking them to promote Canadian culture and industry and that's only fair," Simms said.

"On the surface, yes, I like what is being asked here. What the government has to do now, though, is monitor this."

-- Postmedia News

Republished from the Winnipeg Free Press print edition July 7, 2012 B8

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