It’s a fact that currencies fluctuate, and that there are winners and losers when that happens. Canadians who can make the trip like to shop in the U.S. for the larger selection of goods – and for the usually lower prices. From books to cars, many things simply cost more in Canada – sometimes a lot more. The mystery is why that is still the case, when Canadian dollar is near or above parity, as has been true for most of this year?
This article in the Globe and Mail covers that long-simmering irritant. The good news is products now cost an average of just 11% more over U.S. prices, down from 18% in April. But what keeps the gap so wide in the first place?
Bank of Canada Governor Mark Carney just appeared before the Canadian Senate’s standing committee on national finance. Reasons for price disparity likely include:
….higher taxes, higher labour costs, higher transportation costs – in part because of a smaller, more widely dispersed population – differences in inventory levels and a more concentrated sector on this side of the border that reduces competitive pressure to cut prices.
[Carney said] “In Canada, the top four retailers have a 28-per-cent market share, compared with only 12 per cent in the United States”
Finance Minister Jim Flaherty wrote to the Senate committee asking it to study the issue back in September.
“Canadians are rightly irritated when they see large price discrepancies on the exact same products being sold on different sides of the border,” the minister wrote. “I share their irritation.”
The comment section for the article is full of frustration, and plain puzzlement, as with this post from “alamogordo”:
Recently a friend of mine in NY purchased a Regency wood stove which is made in BC Canada. The price difference was more than 1,200 dollars less in the US on a stove that retails for $3,600 in Canada.
That’s quite a difference.
It’s good for retailers in the U.S., but Canadians consumers are not amused.
So, how would you explain this? Higher taxes? Pure uncompetitive price gouging?
What’s your best example of doing well by shopping across the border?