Higher dollar? Canadians still paying more than Americans for the same goods
Canadians are paying 20 per cent more on average than Americans for identical products even though the value of the loonie has soared to three-year high above the U.S. greenback, according to according to a recent study by BMO Nesbitt Burns.
That difference was only 7 per cent when the firm conducted a similar study in July 2009, even though the loonie was trading around 92 U.S. cents at the time.
This only confirms what most of know already. Nearly four years after the dollar first hit parity, we’re still paying a big premium on imported goods.
“There has been precious little movement in underlying relative prices in the past two years despite the currency’s record sprint,” Porter says.
But is it that simple?
The American market for consumer goods is quite simply more competitive than in most other countries, Canada’s included, Porter points out. And most Canadian retailers face higher tariffs and taxes compared to their U.S. counterparts.
Some retailers are restricted by contracts under which manufacturers dictate what they can charge in Canada. This so-called 'country pricing' can really make a difference, says the Retail Council of Canada.
But Bruce Cran, head of the Consumers’ Association of Canada, feels this is a bogus argument: “The very simple solution is greed on the part of Canadian retailers. They refuse to pass on the savings,” he told the Financial Post.
"The way we see it, we've been virtually at parity for four years and Canadian consumers have every right to expect more equity in the prices between Canadian and U.S prices," he says.
With just about every economist agreeing that the loonie — fueled by surging commodities prices, a retreating U.S. dollar and the widespread belief that Canada is a financial safe harbour — will stay comfortably above the U.S. dollar for some time to come, this issue isn’t about to go away anytime soon.
How are you taking adavantage of a higher loonie? Have you quizzed local retailers on the topic? How did that work out?
By Gordon Powers, MSN Money
* Follow Gordon on Twitter here.
Posted by: Chip | Apr 19, 2021 3:22:57 AM
Shopaholics... like other "holics" are idiots. Whoopee !! Ya get to save maybe $50. plus a bit of tax. That'll really cover your time, gasoline, border crossing fee, probable restaurant and hotel costs etc. Unless you're already planning a trip or vacation to the USA... you'll save more money by buying in Canada from all the US based big box stores. Just wait for the deals to come around.
Posted by: Gordy | Apr 19, 2021 9:07:23 AM
When this type of corporate greed happens, my family refuses to buy anything that is priced well above where it should be. If we really need to buy, we buy from U.S. retailers. The problem in Canada is consumers are not exactly a savvy bunch and laziness leads to our wasted hard earned dollars. If we really want prices to drop - STOP buying overpriced items. Prices will come down. I have no sympathy any longer for the greed of the corporations and/or the retailers. Shop around, and buy from the cheapest. Even if you have to pay duties, it sends a message that you will not cave into this madness! Of course, most people will carry on oblivious and keep paying, and thats pretty much why you won't see any price reductions any time soon.
You can lead the cattle to water, but you can't make them drink.
Posted by: PeterD | Apr 19, 2021 10:52:01 AM
As someone with a foot in both camps(dual citizenship) We have observed that Canadian business does not understand competition. Can anyone say "PRICE GOUGING?"
Posted by: CuckholdDon | Apr 19, 2021 11:33:15 AM
YUP--" We'll save a lot of money spending money we don't got"(Stompin Tom Conners)!
Canadians personal debt is getting higher all the time!
Under or unemployed Canadians---So What -Why should I care?
Chip is right-You end up spending more moey crossing the border, one way or another!
It's only the "Well to Do" who can afford the time& money to cross boder shop& they don't even need the ""savings""--These are folks who live in the "Nicer" part of town& are allways calling themselves"struggling middle class"
Most Canadians wish they could live 1/2 that style of life!
Across the border the workers are paid Lower wages--& well to do folks love to take advantage of the "Little" guy!
But they do that at home to!
Thier tipping habit are really dismal-ask taxi drivers/waitreses(esp. in places like coffeeshops(Tims ect.) or fast food or the guy who deliverers food to thier house in the burbs-min wage& using his own car(bosses don't cover gas,maintanace,or extra repairs) delivery folks are "LUCKY" to get a $2. tip!
These are the same folks who cry about paying taxes(no matter how well they are living compared to most Canadians& want cutbacks for the lower income folks--Not for them!
They don't care if the elderly& disabled have to live far below the poverty level---They just say"I" want to pay lower taxes& the hell with "Those" others" less fortunate than ME!
I find the selfishness& greed astonishing!
Posted by: CuckholdDon | Apr 19, 2021 11:42:53 AM
I might add that these folks with enough money to play this game(cross border shopping) think nothing of buying products built in third world countrys"sweat shops"& even using child labour!
Morals don't count when they want something& they are teaching thier kids just that!
Posted by: Gerry H | Apr 19, 2021 11:48:53 AM
I agree with Peter D. We have far less competition in Canada. That being said, it’s hard to tell where corporate greed ends and repressive taxation begins. The taxes paid by Canadians at all levels are crazy. Wholesalers, transportation companies, retailers, and their employees all pay ridiculous levels of taxes and these extra costs must be covered so that the links of our supply chains can stay in business. But we have stood by and done nothing as this has developed over decades. We are getting what we deserve; uncontrolled taxation to support uncontrolled spending. If you think it’s bad now, wait ten years! We are sheep being led to slaughter. Baaaaaaaa.
Posted by: Waky Georges | Apr 19, 2021 12:09:15 PM
How come a 2011 Grand cherokee retails for $51,351.00 here in Canada and for $41,600.00 in the U.S. that its outright greed, just because we are canadian we have to pay 25% more plus the 4% that we would gain on the exchange... I think the Canadian goverment should step in and disallow such travesty from happening to Canadians.. We pay more taxes and we have come to resolute to that fact but why would companies like Chrysler, GM and Ford treat Canadians like they are doing. The Dealerships dont make any more the manufacturer is the one setting the cost prices. I think that enough is enough, the Canadian leaders of these corporations should be looking out for us.
Posted by: Susan | Apr 19, 2021 12:10:55 PM
As a retailer I would like to know why wholesale prices have not gone down? I purchase staock the same way cunsumers purchase. The imprters have not decreased their pricing, therfore I can not decrease mine.
Also, the HST has greatly decreased my buying power.
Posted by: colin munro | Apr 19, 2021 12:27:22 PM
8000 dollar difference sonata GLS between u.s. and canada . 11000 dollar difference on a hyuundai genesis. 11000 dollar difference on a lincoln MKZ u.s. and canada. can somone explain that other than us subsidizing the car companies?????
Posted by: CuckholdDon | Apr 19, 2021 12:33:39 PM
SEE--Point proven again!
Well to do folks Crying about TAXES that support healthcare& social programs-Not to mention better police/fire protection/education(even in poorer nieghbourhoods)ect.ect. ect.!
They just want MORE Tax cuts(no matter how high thier lifestyle is allready!
They don't much care about "Polution(land,air or water) or thier fellow Canadians!
I allways told my kids(when they got thier first paychecks& were complaining about the taxes deducted) that this helped less fortunate Canadians& they should look forewad to paying a million dollars a yr in taxes--(That would meen they are "LIVING" a GREAT lifestyle!)
Way too many folks have little or no appretiation of what they get for thier tax dollars(including a better society than in the states)& just how GOOD they have it being Canadian!
Posted by: Lee | Apr 19, 2021 1:15:57 PM
I actually do not have a problem with higher costs on luxury items. I think there should be even more taxes on some of them. What concerns me is the price increases on essentials like food and utlilies. Why are people up in arms about prices on cars and appliances when we have such an issue with the bare basics?
Posted by: C | Apr 19, 2021 1:47:14 PM
This article needs to make a distinction between retailer, wholesaler and manufacturer. This article puts all the blame on the retailer. I can assure you that stores in Canada are not making an extra $50 a unit on an Ipod Touch compared to their US counterparts. The stores will pay $50 more for the unit just like the customer does. Any increase in profit likely goes right to the manufacturer.
I am in the auto industry and it is true that we pay thousands more for the same car compared to the US. The retailer, ie dealership, is not making any more money, our margins are still very thin. The extra profits due to the increased Canadian dollar are absorbed by the manufacturer.
Unfortunately, going across the border to buy goods to "send a message" is sending a message to the wrong people. Whether you buy your Ipod in Canada or the US, Apple is still getting their money and feels no pressure to lower their prices in Canada.
Posted by: Wayne | Apr 19, 2021 1:50:17 PM
It's got nothing to do with taxes. Get that out of your heads now. It's all corp greed! 100% of it. The Canadian government can't force corp's to drop prices because of a rise in the dollar. We as consumers need to force the corp's to drop prices. For people that live close to the 49th parallel it's fine. My wife and I make regular trips to US to buy goods. We have items shipped to friends houses that live just on the other side of the border. We drive down, pick them up and declare the items when we come back to Canada. 85% of the time we get through without paying duty or other domestic taxes, and why should we pay anyways? Why should we get shafted by corp's greed and reckless gouging, then pay the 12% taxes on top of the inflated price. I feel sorry for the citizens of Canada that have no other option but to buy goods in Canada. It's a shame that the cost of living in a great country has become so outrageous! For all you fools that think Capitalisim is such a great thing, remember that you loose your chance to complain about prices when you give the corp's your nod of approval!
Posted by: Eryn | Apr 19, 2021 1:59:48 PM
Shopping in the US right now is amazing! For those who live close to the border it is worth going into the US. It takes me the same amount of time to get into the US as it does to get into the closest grocery store where I live in Canada. With a lot of grocery items costing less, (dairy, poultry, etc) why wouldn't I shop in the US? And the US has more coupons for groceries etc then I can find here in Canada. I was just over the other day and also went to JCPenny. 3 dresses, 1 jacket, and 6 pairs of dress pants all bought 50% off, plus had a 20% coupon. Total was around 180$ and the savings were close to 400$. Duty paid when coming back to Canada, was around 40$. Total spent 220$ after savings. I am going back to work in May after having a baby and needed some work clothes, and there would be no way I could get the same amount of clothes as I did in the US here in Canada. Well maybe if I bought second hand clothes at some thrift shop. I get twice the amount of groceries if I shop in the US then I would for the same amount of money then if I bought them in Canada.
And as for Chip's comment on border crossing fee? What fee is that? No one has to pay a fee to cross into the US, or pay a fee to cross into Canada.
Posted by: Canadian taxpayer | Apr 19, 2021 2:03:30 PM
The only thing I buy in Canada is a tanks of gas and haircuts.
I haven't bought any clothes or accessories in Canada for at least 3 years.
I recently discovered a new mustang GT is $10000 less in Usa which means I will also buy my next car there and import it. Sorry to say but I will not be buying any more goods in Canada.
I also import my beer from Montana, even with duty it's only $22 for a 24 box.
Posted by: Mike Maslen | Apr 19, 2021 2:45:11 PM
Two things to remember; there are more cars sold in the State of California than in all of Canada every year volume speaks....volume when it comes to car pricing.
In the years previous when the dollar was 20 -30 cents below par, car manufacturers didn't increase the cost an additional 20-28%.
I despise our high taxation but remember also that we are looking at two distinct economies, populations and markets. We can't compete with our physical size when we have 10% of the population of the US and survive if we pay the same. The markets are very differant.
Our wages are higher but we don't get to write off our mortgage interest at tax time( think real estate and mortgage collapse which helped raise the Canadian dollar). The US also doesn't pay into a social medical system( think not getting surgery because you can't afford it).
You can all keep shopping in the States and continue to make it worse by driving up Canadian costs, soon we will send all of our jobs to Mexico like they did, and make your car cheaper.
Posted by: ditto | Apr 19, 2021 2:47:13 PM
id have to comment on the beer from canadiantaxpayer . Light hearted , but truthfully
i say , you can bring a truckload of diarrhea inducing USA beer from USA , it will never equal even one small box of Canuck beer :)- And yes we are taxed to death , literally
Posted by: Jules | Apr 19, 2021 3:25:51 PM
With our dollar higher lately I have happily been shopping in the US either when we go visit friends or online. Even with the shipping costs if you have to ship to Canada the savings can be fantastic if you want to shop around and are not in a hurry for items. Recently I have even bought from the UK and received goods in just over a week. Our dollar is better all around. Canadian retailers need to get with the game and lower prices or more people could shop elsewhere. The selection of clothing and shoes is much better in the US as well - and cheaper too!
Posted by: SuperGeek | Apr 19, 2021 3:44:33 PM
Well for all of you talking about the "well to do" here in Canada and blaming them, I have an interesting story. Recently I needed a product from my home, I inquired at my local store and was told where I may find it in the store. The product was $199 dollars in that store. While examining it I noted a web site for more information, when I got home I went to that site and noted that the product was listed at $138, that's a 60 dollar difference, but I was mistaken, I had gone to .com not .ca. When I redirected my browser I found the product for $189. So I called the distributer and asked the exact question being asked here, "why is this product more in CA when the dollar is higher"? I was given some story about the product coming in from the US and so more shipping costs. Ok, I can understand that, but $50 / unit more, are they being hand delivered I asked? Well I was told we do have a special, add 10% to the US price and the HST and we can do it at that price. Now I was planning a trip to the US anyway so I ordered it once I got to my destination. The product arrived three days later, no shipping costs, no HST and for actually $10 cheaper than the web price, i.e., $148.
Just for fun I tracked the shipment on the UPS web site. The product had been shipped from Vaughn Ontario to St Louis free of charge and $60 dollars cheaper than the CA store price, how does this make sense?
I agree that going all the way to the US to save $60 is not worth it but I had to be there anyway. There are times, however, when it is worth it. A few years ago I changed my windows in my house. The installed price from CA installers was over $25K, I got quotes on windows only for $13K. Does a contractor really need to make $12K for two days work? But, the story gets better. I purchased superior windows plus and entry door and a double entry door from Home Depot in the US for $5.7. This time I did have to make a special trip but it was worth it. Now I am lucky, I am able to change out my won windows but it took five days of working by myself to get it done but I saved a great deal of money.
So to all those who say the "well to do" are the problem, I agree but not the middle class, if there is one left, it's the guys with 33 million dollar yachts, like the guy who is a co-founder of Tim Horton’s, Ron Joyce and people like him who get a tax break at every turn.
Posted by: rob roy | Apr 19, 2021 3:49:43 PM
Hey Coolin--the car prices were highly different BEFORE the recent subsidy (last few years only)..
lokk atthe other reAL ELEMENTS OF FELLOW POSTS..AND dON-YOU CLASS ENVY IS JUST TOO NEGATIVE--LESS TAX LETS YOU KEEP (OR SPEND) MORE--STOP BEING DISGRUNTLED! NO ONE is wanting to take from the less fortunate.