Why does tech cost more in Canada?
Cars, clothing, books and computers. They’re all cheaper south of the border. Canadians have always accepted that fact because our dollar was worth so much less than the American greenback. But now it’s worth the same or more. Why haven’t prices come down?
It’s all over the news right now. People are fed up with having to pay a premium compared to their American cousins for the exact same merchandise. The web makes the frustration greater because it’s so easy to price shop and see for ourselves just how big the gap is between the two markets.
Cars are the biggest expense we have after home ownership and thus the difference in car pricing gets a lot of attention and rightfully so. However as someone who primarily watches the technology landscape, I’m especially sensitive to consumer electronics pricing and in a lot of cases, Canadians are getting the short end of the stick.
Here are some examples of price differences at online retailers for identical models, as of the writing of this post:
Apple 24-inch, 2.8 GHz iMac desktop
Apple.ca: $2,449
Apple.com: $2,299
Panasonic 50" Plasma HDTV (TH-50PX75)
BestBuy.ca: $2,199
ButterflyPhoto (via Amazon.com): $1,449
Sony Blu-Ray Disc Player (BDPS300)
FutureShop.ca: $549
B&H Photo Video: $417
Sony Network Sharing Camera (NSCGC1)
sonystyle.ca: $249
sonystyle.com: $199
How can these differences be explained? When I interviewed Pat Foran, CTV News’s Consumer expert, a few weeks ago on this issue, he said that retailers were citing a number of issues, but primarily:
it is a matter of the stock that is currently on the shelf or in the warehouse. Many of these items were purchased six months to a year ago and so the impact of the rising dollar has not been factored into the current selling price. “We can’t sell goods at a loss" businesses will say.
I understand this argument to a certain extent. If I was forced to sell my products for less than I paid for them, I think I’d close up shop pretty quickly. However, this is a short-term issue which should ease as soon as stock leaves the shelves. Moreover, it holds no water whatsoever when it comes to retailers that sell direct to consumer like Apple and Sony. After all, who are they buying from but themselves?
Foran mentions that there are other factors at play that make it more expensive for retailers to do business in Canada including:
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Higher taxes and payroll costs
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Greater shipping costs
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Slower stock turnaround (more products staying longer in warehouses)
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Smaller overall market (Canada is about one tenth the size of the U.S.)
A big reason people are hesitant to shop in the U.S. is the question of warranties. Many Canadian arms of international companies will not honour warranties here on items bought in America. This might well dissuade you whether the item is a car or a camera. However Foran explains that this obstacle might be largely psychological:
If you can save 10,000 dollars on a car purchase or 800 dollars on an SLR camera you may not be concerned about the warranty. Also, in the event you do have a problem you may be able to send it back to the U.S. depending on the contract. Consumers must keep in mind that often warranties are never used anyway.
Where do you stand on the dollar disparity issue? Do you shop at U.S. web retailers if they’ll ship to Canada? Do you cross the border to do your shopping? Does the desire to support local business keep your dollars at home despite the higher prices? How long are you willing to wait before prices match those of the U.S.?
Excitable 
Great post, Simon. Very timely and relevant. And it gives answers as to why thre is still a difference in our dollar value. Good stuff!
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Canadians are being taken advantage of! Here are 2 examples. We build vehicles in Canada & ship them State side. These vehicles cost alot less in the States! We brew Beer in Canada & the same senario applies! Retailers are very quick to increase prices, but are very slow or don't reduce prices!
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I think Canadians are just scared to stand up for themselves we do not and I mean we do not live in this so called sovriegn society we live under dictatorship as we are monitored in everything we do or say. We let the government impose all kinds of taxes and we just sit back and say oh well what are we going to do! Man if people could only stand up for themselves instead of just the odd individual rebelling we should rebell as a whole society. Example is the smoking by-laws in Ontario… no smoking in restaurants and bars …. what is this is this a government establishment? No I dont think so so why does the government have the right to tell me what i can and cant do in my own establishment? Non smokers have the choice to enter or not. these people pay all kinds of fees for licensing and other things …. so if all these people stopped paying and kept running thier business what is the government going to do? Besides by-laws are just guidelines, imagine the government not getting ay revenue from all these establishments. What would happen? would the laws change and allow people to smoke again? I am just using the smoking as an example to show how canadians let the government push them around! it is the same for everything here! Oh the cost of gas rises due to weather in the united states oh no a hurricane so gas shoots through the roof… due they happen to have storms on just fridays and all clears by monday? so if all the gas hype is due to storms and war in the east how come the pump price at petro canada is so high? when it is 100% canadian? refined and drilled in our own country? why can we not drill the oil and live the rich lifestyle like them in the UAE? (united arab emirates) we have more in canada then anywhere else….. wow I am so dissapointed in my fellow canadians ….. the cost of things is just a tip of the iceberg to show how we let companies and government push us around . for every dollar a canadian earns at a legitimate job really we only get to spend around 60 cents of it …. so never mind the arguement of higher payrolls because we are one of the highest taxed nations in the world and our pay is not enough to live a meagre living in this country……
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sorry about the spelling mistakes
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Because they can get away with it! And we let them. Simple economics – not rocket science.
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I have asked this question a lot lately myself. And when speaking to manufacture reps for tech products(Japan based companies for example), the answer is that with 10x the population, the U.S. essentially has more buying power. If you were to buy 100 peanuts from me, I would give you a better price than if you were to buy 10. It's economy of scale. This is what I'm told.
Oil? Yes we are self sufficient and we do sell to the U.S., but we are slave to what the world oil prices are, long before we get taxed at the pump. In some cases, Canadian products have (for example) a 5 or 10 year warranty vs 1 or 2 in the U.S. One could argue that Canadians are essentially paying for an extended warranty. On the other hand keep your additional years of warranty and lower the price, because the tech product will be obsolete in 2 years anyway. What I find most frustrating is the warranty threat that manufacturers hold over our collective heads on the concept of cross border shopping. An SLR camera lens sold in Canada, for example, is made in the same factory as the one sold in the U.S. There can be as much as a $500 difference in price depending on the country of purchase – cheaper in the U.S. obviously. Even if I accept the fact that the U.S. lens has 4 years less warranty coverage than the Canadian version and purchase it on-line, it won't even be looked at here because of where it was purhcased. It has an authentic serial number, made on the same assembly line, but it is looked at as, essentially, a competitors' product. ?!
Right now it's a simple equation. Our dollar has the same value, if not slightly more, than the American dollar. If Canadian retailers want to keep the Canadian dollar here, they need to match prices or else people will continue to buy from "the dark side". Now there's some irony for you…. "Canadian dollar parity leads Canadians to high level of cross border shopping which in turn boosts the American economy and therefore the U.S. dollar gains strength, reversing the trend". I dread that headline.
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Our taxes (income, sales) are higher here, but on the other our health care costs much lower, at least in Ontario due to things like OHIP. Yet companies like to use this excuse, and we are dumb enough to accept it.
AND we must remember that Free Trade is a sham, that merely gave the US access to our resources. So there are all kinds of US Export duties, and Canadian Import duties built into the pricing. Yes, it is only a couple of percentage points.
BUT:
Consider, that for most products, since we manufacture little up here, and import all, that most stuff we buy, we buy 2nd, 3rd, or 4th hand….
The original Manufacturer sells to a Canadian Distributor (Owned by this same manufacturer!), so both levels make a profit. Then the product goes to a store, owned by a franchisor (Of the same Manufacturere!). So yet another hand must be fed along the way.
When you add shipping, handling, and market shares… it all adds up.
2% mark-up at 2(?) levels. 2% taxes at 2(?) levels. 2% for a small market. 2% for shipping and handling. 2% for "whatever the market will accept". 2% for Biligualism.
That's already between 10 and 14%… maybe more. And since everyone must make a profit along the way… Up goes the price.
The solution? I don't know. I don't even think a consumer's strike would help, even if someone had the balls to organize one.
Hewers of wood. Drawers of water. Lambs led to the slaughter. We gotta diversify! We gotta stand up for ourselves!
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If the Us buys 100 peanuts, the chances are pretty much in favor that Canada will buy 10 peanuts, so why not divide the cost by 110? I know all about the banking cartels' historical fun and games, and the incoming Amero. Do you?
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Well done on the article. And, well done to Dave; I couldn't agree with you more my friend
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I think us Canadians are to nice for our own good. The canadian Govt. walks all over us, concerning cost of articles, taxes etc. We have to speak up more.
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Which is why something has to be done… and unfortunately, as much as you want to fight all these wrong taxes and economic rules, you can't. The only way to escape from having to pay more and more money is to work with the laws and taxes. Being a business owner cuts that down a lot. And Pierre is very right. I own a business and know economics very thoroughly, and anywhere from 65 to 85 cents on EVERY dollar goes to the middle men – this includes brokers, wholesalers, retailers, etc. – until the product finally reaches the customer. When you cut these middle men out, things get a lot cheaper. Not to mention all of the money manufacturers spend on advertising, as well as retailers because they want you to buy from THEM, not the other store down the street. It's all a game of more money, so get in on it rather than watching from the sidelines and feeling the concequences! Canada is no longer a home for manufacturing – we import everything. Canada is the land for distribution! If you know how to work the system, you no longer have to be a slave to taxes and high prices. All I can say is to go looking for new oppertunities in this area – they do exist! Regular Joes and Janes like you and me can do it too. Its virtually impossible to ever be able to take a real consumer's strike and even if we did, how long can we really go without the necessities of daily life (food, water, hygenic products)? Seriously, Canadians need to take a stand and start working towards something for themselves, where they control what they pay and what they buy rather than letting the economic powerhouses decide for them.
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It's a pretty complex issue but at the heart of it are taxes and wages. Higher payroll taxes, higher municipal taxes (our municipal employees, teachers, police and firefighters are paid more per capita here in Canada than the U.S.)and generally higher retail wages weigh heavily in the equation. Add to that the fact that we have a Canadian head office for all the major brands that have jack up the costs in order to justify their existance and you have a price disparity.
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As none of the tech products are made in the US or Canada. And since the US dollar has dropped against all other currency. It is not the prices in Canada that need to come down, as much as consumers would like that, but the prices in the US that need to rise. Given that the US economy is in recession (which is what caused the USD to drop to begin with) retailers are afraid to do this. In any case we live in a socialist state here in Canada, due to years of Liberal dictatorships, and it costs moey to keep such a large government a float. We do get some value for our tax dollars and overall I would take the lifestyle of the average Canadian over the average American any time. Great to be rich in the US of A but not so great to be average.
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Consider the fact that the USD was much higher than the CDN$ for many years. This was a constant, given fact. Right now the CDN$ is volatile, though has been staying at over parity for a few weeks. It would cost alot to change all prices, only to have the CDN$ drop again, and then have to revert to older prices. I think it's this uncertainty about the CDN$ strength that is holding business back, coupled with many previously mentioned factors.
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A well done article, and nice to see that someone "gets" what retailers are up against right now. As a non-tech retailer, we are really suffering with the dollar parity, as our customers are able to go over the border or online and buy the same product we would sell them – often for LESS than what we as a retailer are buying them for wholesale with disounts. What many people don't realize is that Canada doesn't import as much as it buys imported goods from the US and distributes them in Canada, meaning many Canadian retailers are buying goods at the US retail price. Combine this with a relatively small market share, geographical distribution / shipping issues, climate differences, as well as business taxes, wages, rent… all these things cost more in Canada.
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You all seem frustrated about what to do with the price discrepancy between goods purchased in the US and Canada. There is a course of action that is legal and effective. Become involved in a political party and remember to vote on election day. You must be active in politics at all levels (municipal, provincial and federal)if you want to bring about change. I recognize that it is a slow process but it is the way to influence changes in taxation and ultimately trade agreements.
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I liked this article very much, I can understand the problem of selling off the old stock. I shop online all the time for certain items and even with duty, GST and shipping can save over a hundred dollars on someitems. Wise to ave your stuff sent US parcel post and it is much cheaper than couriers, if they won't ship parcel post shop somewhere else. Courrier fees and custom agent fees are way to expensive. In Canada you can have up to 1500.00 dollars worth of stuff send directly to your mailing address via parcel post and pay the gst and duty at the post office . Greg
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I have written to the local MP at least 3 ties regarding the fuel price difference between Canada and the U.S.A.
So far, he hasen't bothered to answer. So much for a responsible Conservative Government! Yes, I was a Conservative supporter but I'm really starting to think that all politicians are painted with the same brush!
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Let's face it, Canada. We are a Mickey Mouse operation. Our large cities are run like a small town, our government is small potato, our retail shops are embarrasing compared to the US retailers. Why do we shop south of the border? Because you get a better deal all around (price, value, service, lower retail tax).
We will never be able to compete.
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Great article!!! Truth here is that the CDN $ didn't all of a sudden reach parity. It has been consistently climbing for the last 6 years. Despite this there are price differences of 30% or more on all types of items. Some companies have just used their additional purchasing power to add to their bottom lines and nothing more. I can see at most a 10% difference as a possible increased cost of doing business, but even that may be pushing it. To save on costs most of these companies only order as they need. The story of buying 6-18 months in advance doesn't seem to hold water anymore. We are definitely getting gouged.
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FREE TRADE, CANADIAN STYLE
Even when the Canadian dollar was at its lowest, I found that a wide range of goods (e.g. windsurfing boards, sails, audio/visual products, most foods) was much cheaper in the U.S. after the conversion. Canadians tend to be a parochial people: most Cdn retailers I talked to then seemed to assume that, because our dollar was lower, Americans came up to Canada to shop; retailers were miffed when I told them prices were lower in the states–didn't I realize that everything is better up here?. No doubt, just as Canadians rationalize high taxes, they'll continue (in that smug way) to make excuses for high prices now that the currencies have equalized. I see evidence of that on this blog. Incidentally, before the onset of so called 'free trade', it was cheaper to order personal consumer items into Canada–the two taxes we presently pay add up to more than what the duty used to be and now the bureaucracy tries to squeeze you for a brokerage fee, even on tiny items.
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I'm having some problems with the excuse of keeping the prices up because they have to sell off old stock. It begs the question: When our dollar first tanked, did they wait to deplete all their old stock before raising the prices? I seriously doubt it. I agree that they've probably just built the extra bucks into their bottom line.
I have been and will continue to cross border shop every chance I get for everything I can truck back. Charge me GST, duty, whatever. I don't care. It's still cheaper to buy in the US.
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The solution is quite simple. Stop buying Canadian manufactured goods that aren't cross-border competitive. Yes, that is right, stop buying Canadian. My example is Bombardier of Canada and their manufacture of leisure products. A prime example is the Skidoo brand snowmobile. Any given model is $3K CDN cheaper in the U.S. (see a recent CBC Newsfile) Why is that? The U.S. government doesn't bail out Bombardier on a regular basis with interest-free business loans. The Canadian government does, and with Canadian tax-payer money. These are the same taxpayers that Bombardier wants to pay $3K more for their products over the U.S. resident. Let's start by making an example of Bombardier and watch the others fall in line; GM of Canada, Ford of Canada, Chrysler Canada, BMW of Canada, etc. Wake up Canada! Free trade isn't free for the average you and me. You will never be able to go purchase anything you want in the U.S. without paying the Canadian government some sort of tax. Free trade indeed…
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I keep reading about the reasons that prices haven't changed in Canadian retail, but the truth is that if a retailer is purchasing things across the border to sell in Canada then nothing has changed for them except that they are paying less, because of the money exchange, so this savings should be passed on to the Canadian consumer. The retail prices in the store will not be the same as our American neighbours, because of exporting fees and higher Canadian wages, but prices should be lower than what they were before. I don't care if prices were set last January for the year, then reset them. Retailers are just making excuses so that they can gain in extra profits at the expense of the consumer. Making up excuses to try and prolong their extra profits for as long as possible. If it is costing you less then it should be costing us less. Guess what, the store with the lowest prices will win, because the consumer will flock to the stores with the lowest prices and that store will make more profit than the ones that don't lower their prices by shear quantity alone. Just today I've read that Zellers is lowering some of their prices and that makes me want to go and check it out. The internet is different and selling over the internet should be closer to American prices, because some of the middle men are eliminated.
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I just came back from the US and saved over400.00 dollars on a set of 4 micheline tires and a tom tom GPS and I bought them in Travers City Mich and thats alot further north than Toronto Ont. so shipping does not have that much to do with priceing
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Canadian ougth to use capitalism to their advantage. Shop around and buy stuff in the US and have it ship over here. After a few month of reduced sales, canadian retailers will have to reduce their price.
The only way to express disatisfaction is not to buy from canadian retailers. All the retailers care about is the money they can grab from your pocket. Don't gave them this opportunity and be cruel as they are toward you.
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I totally agree what Fred wrote on October 23. We – Canadians – should simply avoid to buy in Canada and therefore force the Canadian retailers to adjust their prices to reflect the current rate of exchange $C to $US.
There are no longer any excuses for the prices beeing so different in the US versus Canada.
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Talking about cars,
Take an Canadian Assembled 2008 Acura MDX
Canada -Base $52,300 + $1,855 Transport & Prep = $54,155
USA – Base $40,195 + $715 Transport & Prep = $40,910
This is a 32.38% more expensive then in the USA.
Just for Transport alone, over double the cost in Canada.
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Cars are a great example:
2000 Honda Civic LX was around $17,000 NEW and that was when our dollar was around $0.70(approx). 2008 Honda Civic DX (base model) is $18,500 and our dollar is on par. Not much of an increase over 8 years and now you get WAY more car for $1,500 difference!
I don't know how companies come up with their pricing, but Canada is a smaller market and in the case of cars, they are made specifically for our market and are NOT the same as US cars.
If the Canadian market reacted to the dollar's market value, prices would change constantly like the price of gas. I don't know about you, but I sure don't want that! Once the dollar goes back down (which it will) things will get back to normal. This is just the media stirring the pot and not knowing what they are talking about (as usual).
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Bought a printer at Staples last weekend cost with taxes and 110.86. Was in Portland this weekend, the same printer at Fry's 49.99. That is one hell of a difference.
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Bought a printer at Staples last weekend cost with taxes 110.86. Was in Portland this weekend, the same printer at Fry's 49.99. That is one hell of a difference.
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I agree with Mike Mcneil, i'm tired of subsidizing the jobs of municipal employees, firemen,police, city workers, 52 pay cheques every year, privatize all these jobs and you will get better prices.
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A certain motorcycle is $13,000+ in the US and $18,000+. There is no good reason to pay $5000 more here. The bike is made in Japan and so should be the same. This is a new model for 2008, so the old stock excuse can't work. The warranty is one year, and I've never had the warranties ever needed.
This is not to mention books and greeting cards with fixed differences
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Boycott the stores or the places that are gouging us. I went to order a computer from Dell and checked the US price for the exact same computer I wanted to order from Dell Canada. The difference was $698.00 when I asked about that I was told by a Dell operator they would not answer that question.
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Greetings I priced out a chev 2500 hd diesel price in canada 53700.00 same truck in the us 44900.00 almost 9000.00 difference and buy the way the truck is made in canada. Thanks Canadian Retailers.
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I understand why retailers don't want to lower their prices especially when they bought the merchandise beforehand. But there are stores out there that are lowering their prices and trying to compete with the american prices, like Claire's for example. Even though Claire's is an accessory store and sells mostly costume jewelry (not cars or computers), it's nice to know that there are some stores and companys out there that are actually trying.
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I have the same problem, checking prices for a 2008 Honda Ridgeline. Cdn MSRP starts at 35000, while the exact same thing in the States starts at 28000! Thats a huge difference and I can but a third party warranty for 1500 bucks if need be. I was told by a salesman with Honda to wait it out till possibly Xmas to see if the numbers will close up a bit. I want to spend my money here since I earned it here, but someone is holding the purse strings pretty tight instead of realizing that there is a sleeping giant of consumers wanting to buy here. I realize that they make take a bit of a loss on remaining stock, even though we have been gouged by the same for the last 10 years. If you want to get the economy racing in Canada, then you have to get the people of Canada to take their money and spend it here, regardless of the profit margins…once these units are gone then the retailer can replace their stock with cheaper ones, thus regaining those margins. Best thing to do is wait them out. I don't need anything bad enough to take a hit of 7000 so I am gonna cross my fingers and hold on.
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Let's stop patronizing Canadian businesses that charge more than their US counterparts. Write to their marketing or PR departments and remind them that we have a choice. Of course it isn't easy to exercise that choice, especially if we are thousands of miles from the US border. However with a little patience and organization it can be done. Team up with 3 friends and drive to the US for a long weekend of shopping, sharing car and hotel expenses. Do your online research beforehand and maybe order in advance for in-store pick up to be sure to get exactly what you want. If a drive isn't practical you must offset air fare costs and practicality of bringing bulky goods on a plane aganst Canadian prices. Remember too that import duties may be applicable; though if you are out of the country for 7 days the amount you can bring tax-free increases. I frequently travel to Houston, Texas (one of the cheapest shopping cities in the US) to shop. I buy almost nothing in Canada, and I make sure that companies such as Best Buy, Future Shop, and The Bay know that I am not buying their high prices.
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There is a lot of numbers and large BS terms being flown around here. Obviously there is a lot of people that have taken Economics 101, without the side course of Common Sense. Yes the overall costs have changed due a high loonie, and yes the prices seem wrong. Lets go through some odd thoughts some people are having…. Buying power. Do youreally think that when Bust Buy sells a product in Canada and the US they buy them on seperate contracts. Of course not. Best buy pays the same price no matter where they intend to sell it. …. Cars are built here so should be cheaper here. In order to make as much money in all divisions, large companies charge XXX dollars for a delivery fee, but typically that is only half the story. The facilites that prepare shipments have the same cost to prepare any care if it is shipped across the province, or all the way to Texas. …. Old stock, discussion dead. Most companies I have dealt with in the last 10 years realize that the best warehouse is no warehouse. This means they keep stock levels low, to reduce overall costs, and ensure new technology is always coming in the door The old stock for most of the products we are discussing are long since sold.
Now lets get to a couple of somewhat more resonable ideas. Costs in Canada are much greater the American equals. Our wages, taxes, and cost of living is overall much greater. Well that should answer it now shouldn't it….
Remember when I said something about common sense. Can anybody tell me how much of a decrease the Canadian retail market has taken over the last 2 months…. Very little. As long as the market dictates (AKA people keep buying) then the prices will stay high. Kind of like that old marketing concept…. what was it. Oh right. SUPPLY AND DEMAND. Supply has not changed. Demand has not changed. Why would the price change.
Last thought for the day. Imagine for a moment, you own a camera shop. You are selling 20 units per week, and are making about 20% over all. You are happy. Due to some piss poor planning by the government, the cost of the cameras you are selling goes down by 20%. What would you do… really. Would you drop your price? Would you wait and see if you can still manage to sell 20 cameras /wk?
I am an honest hardworking (Just don't ask my wife) person. If it were me, I would have a pretty hard time giving that money away. I would wait and see if the market held. if I kept selling at least 18 cameras a week, I am still making more money than I was last week.
Like I said… What would you do?
PS: I like to see that there is a lot of different theories being thrown around. Refreshing hearing an discussion instead of a straight up bitch session.
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I forgot to mention…
Dear transamerica. Say high to the staff at Fry's for me. If you are in Houston, I assume you have a couple of hours logged in that joint.
Cheers,
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People need to let the major companies know their opinions. Large corporations don't listen to individuals – but they do look at large numbers!
I recently purchased a digital SLR. I first looked at Sony, and saw that the prices at sony.com are in some cases 40% higher than at sony.ca, for the same product. I sent Sony an email asking for an explanation, and received a reply that said, in effect "tough luck".
I finally bought a digital SLR made by another company, but only because the retailer gave me a good deal.
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I was impressed that at least some places are making the adjustment (HBC, eBay) but I'm not expecting any real significant changes.
Truthfully though, it really is an odd system we live in. We buy a house, and attempt to be called the owners. Yet we continue to pay 'rent' in the form of property tax.
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It's pretty rough on smaller businesses I think.
They buy from suppliers in both Canada and the US, or a supplier in Canada that is based out of the states.
I myself own and operate a computer store.
My one supplier has 4 warehouses in the states, one in Vancouver and one in Toronto.
I have noticed significant price drops over the past month from them and other local suppliers.
Yes taxes, payroll etc make our stuff cost more.
But certain items have plummeted and it's thanks to our strong dollar.
For example, a high end video card made by PNY in the US went down almost 30% in price.
It was a PNY Quadro FX 4600. This is a high-end professional graphics card that 1 month ago was $1,800. it is now $1,400 and the only reason is because of the dollar.
I can buy directly from PNY as a reseller, and before it made good sense because it was about $1,400 US. Now I can buy from them an save at most $100, or I can deal with my supplier.
We will see a drop, but the dollar needs to stay strong for 2-3 months.
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If we really want to change this, it is not the government that we need to change, it is ourselves. The government will change with us. We do not stand for ourselves because, honestly, we do not want to change. We are special. We are Canadians and that has a price! I call it the Canadian Premium. I put it this way: comparatively, the average Canadian has the lifestyle of the rich Americans. The problem is that we are so special that we cannot consume the same products that the rest of the world, or in this case, the USA. Manufacturers have to modify their products to meet our requirements (which we establish through Canadian regulations, restrictions, standards, specifications and so on). The cost of those modifications have to be paid by, let's say, 30 million Canadians only (the Canadian Premium). Manufacturers cannot charge those costs to USA or EU consumers. Comparatively, if China requires a modification, it would be paid by more than 1 billion Chinese people. If we want to pay the same price than USA consumers pay for the products, we have to start by consuming the same products. We have to start by using the same standards that the rest of the world uses. We have to accept the same specifications, configurations, features, functionality, etc. But then, we will feel like we are not special anymore. We cannot keep saying “We are not like the Americans!”. Since its birth as a Nation, Canada has always fought for making clear we are different. If we want to change, we will have to start by accepting we are like the rest of the world. The truth is out there. It is up to us to make the decision. But whatever we decide, we have to keep in mind that the things are like they are because we want it that way. And have peace of mind, then.
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Hey John, you mentioned privatizing
"the jobs of municipal employees, firemen,police, city workers"
… were you aware that firemen were privatized in the past and would let houses burn if they hadn't paid their fire insurance? And if you privatize the police, isn't that creating a mafia?
Y'know, a protection racket?
Before we got too conservatively dogmatic tell me who will decide the price of butterflies and stop signs?
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So to the original question,One gentlemen got the answer before the vehicle rhetoric…margins are higher therefore retailers will keep as long as possible while being outwardly conciliatory… this is business guys!
This will be all canadian retailers positions with some jumping to the forefront and posturing price reductions for all of the media attention they can recieve.
However nothing will convince an already suspicious and imbittered canadian consumer that anything other than parity or better will be acceptable I think we all know that already.
If this not achieved soon the en-masse US purchase frenzy will grow at a rate such that any canadian retailer not at par will cease to exist.All retailers in their respective business plans know what their operational costs bottom line is. It will be their choice under the current situation whether to operate or not, but they will ultimately have no choice but to follow the US lead or be extinct.
The problem with this is that when the next fed rate cut comes the US dollar will continue to drop which will mean we are about to lose alot of small retailers. Shopping across the border will continue to escalate directly and online as more people see how easy it is and more businesses will be set-up to facilitate this.
Regardless of volume this will have no affect on the USD as the forces affecting it are much larger.It will however make close border economies in the US understandably boom.
But lets move on to a larger question Canadians we are at a very unique position right now… Our dollar has appreciated against almost all other curencies over the last 10 yrs in some cases 50 to 100% except the british pound and the euro… so we are the richest we have ever been in along time buying power wise but conversely our exports are at their highest prices (bad)…so what are you you going to do with your new wealth during this brief window of opportunity while our currency is being speculated ….This window will only last before the US dollar gets too low, inflation hits US consumers and a large recession/depression hits the US which slows down import consumption commodity consumption and which will ultimately come back to us regardless of increased exports elsewhere.affecting our realestate bubble etc..What would be the smartest thing to do at this point..?
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The tax and market size arguments ONLY make sense for products that are actually brought into Canada and shipped from warehouses within Canada.
However, if you're a major company like Samsung, Apple, Lenovo or Dell, that's simply a stupid way to do business. These companies hold larger warehouses in the US and could fulfill their customer demands by simply drop shipping from the US. The only difference would be sales tax (which we GET and won't hold against them) and shipping.
The way they make this work is, as you note, to prohibit the US branch to allow sales to Canadians.
Interestingly, in Europe. the EU rules *prohibit* this kind of action (as Apple recently discovered when they tried to limit who could buy from regionalised iTunes). It's perfectly ok for a company to charge different rates in different regions of Europe – but it is illegal to prevent a consumer from buying anywhere within Europe at the best price.
We need rules like this here. If a company like Samsung refuses to carry products in Canada or charge out of line prices for the products they do carry AND prohibit Canadians from buying in the US, they should be ruled in violation of anti-trust laws for manipulating the market and interfereing with a competitive market.
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To Forest Dump:
The right thing to be doing for consumers AND retailors is to stop latching onto the US market as if it were the only producer or consumer in the world. We should be looking to Europe and Asia for new opportunities and new products.
The world doesn't actually revolve around the US – we just keep pushing the wheel around it.
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Lets not forget it was 90%, if not more, of the Liberals making these deals with the U.S. And the eastern side of Canada putting them in office. Like I said 1000 times, Canadians are the most foolish people on this planet.
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Amazing that some believe the BS companies put out. Yes there is no doubt that some costs are higher here in Canada when compared with the USA, this has always been the case no change there. BUT, we are talking about the cost of items, because the Canadian dollar is doing so well it should be reflected in the end price.
There is no reason for two items shipped from Taiwan should have such a large difference in price between Canada and the US, the strong Canadian dollar should have closed that gap substantially for most items. Spare me the larger market scenario, it doesn't matter, it was the case when our dollar was worth 60 cents US as it is now at par.
In fact all conditions, wages, taxes, shipping, etc… were in play when our dollar was worth 60 cents, these things didn't change because the dollar is worth a dollar. But cost of items should have since our dollar is now at par, so yes we are being ripped off by business. Sadly so many are buying into the BS excuses.
This idea that because they set thier prices at the start of the year, they have to wait to change them. Duh! Come on people, are you really buying into this?
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