[Shelley]

For Canadian consumers, the price is not right

After eight months of the loonie hovering near parity with the U.S. greenback, Canadians can be forgiven for thinking they should pay the same for a Nintendo Wii or a CD as their southern neighbours.

But the fact is that Canadians still pay more for these products -- $30 more for a Wii and $2 for an average CD -- and many other goods.

According to the findings of a BMO Nesbitt Burns study by Deputy Chief Economist Douglas Porter, Canadians are paying an average of about 18 per cent more on everyday items.

For example, the study found:

• A Coldplay CD that costs $12.99 in Canada sold for $9.99 in the U.S., a difference of 30 per cent
• Huggies pull-ups cost $18.97 in Canada, a full $4 more than at American stores
• A Maytag washer and dryer costs about $350 more at a Canadian retailer than the same set sold at a U.S. store

The price gap between Canadian and American stores has narrowed, but it still remains cheaper to shop south of the border for the majority of products.

Porter told CTV Newsnet that part of the price differential is due to what is taking place in the U.S.

"We do have a bit of a higher cost structure here in Canada than in the U.S. ... (but) some of this is a U.S. story as well ... companies are very keen to keep prices as low as possible in the U.S. because it is the most important market in the world and they don't want to lose market share," Porter said.

But there may be another reason for the price disparity -- the too-polite Canadian attitude. Many Canadian shoppers are used to the price differences and don't make much of a fuss to retailers.

"It's something most Canadians have grown to accept," one shopper told CTV's John Vennavally-Rao.

Canadian Finance Minister Jim Flaherty, who met with retailers last year urging them to cut prices, said that consumers need to keep up the pressure.

"I say to Canadians, shop around . . . put pressure on retailers," he said earlier this year. "It's up to consumers to exercise their choice and power in the marketplace and insist on parity."

Many Canadians put pressure on Canadian retailers last year, zipping across the border to take advantage of their new-found consumer power. But with gas prices where they are, it might be cheaper to shop around within Canada for a better price.

One way to shop around is to go to Mom-and-Pop stores, who may be more willing to bargain with a customer about paying the American price on some wares. Already, most comic book shops -- virtually all independently owned -- have adapted to American prices for more than a year.

'No surprise'

Bruce Cran, the president of the Consumers' Association of Canada said he was not surprised by BMO's conclusions. He told CTV.ca they're consistent with his organization's findings of price differences in the 20 to 25 per cent range.

"We get complaints from consumers every day," Cran said Wednesday.

"Canadian retailers have never embraced the rise of the dollar ... I am disappointed that (they) are gouging us in this fashion."

Cran said the price gap is especially significant on big ticket items such as cars. He said many shoppers who have headed to the U.S. to buy their cars have found big savings.

The BMO report found that an "upper end" new vehicle that sold for $67,000 in Canada cost only $51,400 in the U.S. That's a 30 per cent price gap.

"We've had stories about savings of $35,000 to $40,000 at the top end (of the car market) and a few thousand in the lower end," Cran said.

Cran added that consumers will have to decide for themselves if heading south is worth the savings.

"If they want to make a patriotic decision to buy in Canada, that's fine," Cran said. "As long as they are aware they can go across the border and save a substantial amount of money."

The BMO study points out that the "modest narrowing in the Canada/US price gap since last year has been just enough to staunch the wave of cross-border shopping." The report notes, however, that visits to the U.S. have risen almost 14 per cent this year -- "even as Americans have almost stopped coming to Canada."

Source: Sympatico

[SimplyElegant]

Yeah all these little things add up. Also we don't get as many deals like BOGO on makeup and stuff. Just not fair.

[Carolyn]

Most people I know, are not going to the states like they use to.
It's a hassle getting across the border without the appropriate identification.
And now with the gas prises, people are content to shop in Canada.

However, Canada's economy is stronger that the US. It seems to me that the US would want to lure Canadian shoppers by offering deals and discounts. Not paying duty at the border would be nice.

[Adrienne]

I knew Canada paid more than the US but i didn't know the difference was that dramatic!

[ticki]

you canadians also pay more tax on the stuff you buy, so it's a double whammy. that VAT sucks!

[Shelley]

Originally Posted by ticki

you canadians also pay more tax on the stuff you buy, so it's a double whammy. that VAT sucks!

Yes the provincial sales tax (pst) varies in each Province. I pay 7% where I live plus we have to pay goods and services tax which is 5%. So anything I buy- clothes, electronics etc I am taxed this amount. It sure adds up especially when buying large items like appliances, tv's etc.

[LilDee]

I know! It's rediculous! Gas.. electronics.. even magazines and cards!

You should see the price difference of Canadian made snowmobiles.. we're talking thousands of dollars difference.. I can't believe our sleds cost less in USA than right here.. like what the heck! lol