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November 03, 2021

Canada-U.S. goods price gap shrinking: report

On a recent trip to the U.S., a gallon of gas went for somewhere in the $3.64-$3.69 range.

That’s about, if we measure the loonie and greenback as equal for argument’s sake, 96 cents per litre. By contrast, you couldn’t find gas in Toronto for any less than $1.15 on Thursday.

But wait, you say: that’s gas. There are so many tax and tariff components that it’s unfair to compare those consumer costs north and south of the border.

Perhaps, but the real story here is that, even with a discrepancy that wide, such a U.S.-Canada price gap is still way down from where it stood earlier in 2011.

According to the Bank of Canada, Canadian consumers now pay an average of 11 per cent more for goods than Americans – everything from books to DVDs to clothes to cars.

*Bing: Where are the top cross-border shopping destinations?

Surely, you know it’s this wide – just take a look at an Amazon.ca listing and that same product on Amazon.com.

But what’s most intriguing from the Bank of Canada’s latest survey is that 11 per cent is peanuts to how raw a deal Canadians got back in the spring.

In April, according to BOC Governor Mark Carney, that price differential was estimated at 18 per cent.

What gives? Tax structures, market size, labour and transportation costs are to blame for higher prices in Canada, but still, Canucks don’t care.

By a recent CBC poll, nearly half (47 per cent) admitted to shopping in the U.S. to get a better deal, while 34 per cent said they’ll avoid retailers that sell the same products for more in Canada than they do in the U.S.

So, if you’re scoring at home, this isn’t exactly the best indicator for the “Buy Canadian” mantra. Canuck shoppers will go where the cheapest prices are, and that’s it.

By Jason Buckland, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...