On Feb. 6, the Government of Canada, Senate Committee, released a study on the Canada -USA Price Gap. Not surprisingly (I mean, really, they had to strike a Senate Committee to discover this?) tariffs appear to be the main reason!

From the Parliament of Canada website:

The CANADA-USA Price Gap

Ottawa, February 6, 2013 – The Government of Canada should conduct a comprehensive review of Canadian tariffs, with the aim of reducing price discrepancies for certain products between Canada and the United States, a report by the Standing Senate Committee on National Finance recommends.

Titled The CANADA-USA Price Gap, the committee’s report sheds light on why large price gaps remain even when the Canadian dollar is at or above par. Even some automobiles made in Canada are priced significantly higher here than in the U.S.

“The study showed that there are many variables that contribute to the price of products. There is no one definitive explanation for the price discrepancies for products between Canada and the United States,” said Senator Joseph A. Day, the committee chair. "However, in spite of the complexity of the issue, the committee made four recommendations to narrow these price gaps.”

“Canadian consumers are feeling ripped off,” added Senator Larry Smith, the deputy chair. “When the Canadian dollar is at parity with the U.S. dollar, Canadian consumers notice that prices here are typically higher than in the United States. We hope this report will help Canadians understand the causes of these price discrepancies".

The committee heard from 53 witnesses, including government officials, consumer groups, retailers, manufacturers, importers, exporters, experts from the academic sector, accountants and independent economists during public hearings that took place over eight months, starting in the fall of 2011.

The committee hopes the report’s recommendations will be given strong consideration, acknowledging that any policy changes must consider the impact on domestic manufacturing.

To read the committee’s report and recommendations, or to learn more about the Standing Senate Committee on National Finance, go to http://senate-senat.ca/nffn-e.asp.

Visit http://senate-senat.ca/nffn-e.asp and click on the sixteenth report to view their findings and recommendations.

The Standing Senate Committee on National Finance recommends the following:
Recommendation 1:
The Committee recommends that the Minister of Finance conduct a comprehensive review of Canadian tariffs, keeping in mind the impact on domestic manufacturing, with the objective of reducing the price discrepancies for certain products between Canada and the United States. (page 19)
Recommendation 2:
The Committee recommends that the Government of Canada, through the Canada-United States Regulatory Cooperation Council, continue to integrate the safety standards between Canada and the United States with the intent to reduce the price discrepancies without compromising the safety needs of the two countries. (page 27)
Recommendation 3:
The Committee recommends that the Government of Canada analyse the costs and benefits of increasing the de minimis threshold for low-value shipments in Canada in order to narrow the price discrepancies for certain goods between Canada and the United States. (page 29)
Recommendation 4:
The Committee recommends that the Minister of Canadian Heritage study the costs and benefits of reducing the 10% mark-up that Canadian exclusive distributors can add to the U.S. list price of American books imported into Canada, adjusted for the exchange rate, as stipulated in section 5(1)(a)(iii) of the Book Importation Regulations. (page 53)

 

All 4 recommendations can be broken down into "do more studies, spend more money, and never get anything done"

 

+1

Talk Talk Talk until the US $ goes back up then all is forgotten.

Just love how ALL the car manufacturers (including Porsche NA) love giving it up our Canadian asses and there's NOTHING we can do about it.

All the while our USELESS politicians talk and talk and talk.

How about a whole bunch of anti trust law suits?

Drag a bunch of the CEOs into court and grill them a bit ..... at least give us that satisfaction.

 

CBC Marketplace is airing a segment on this topic tonight, here's how little Johnny finds out the reason:

http://www.cbc.ca/marketplace/episod...y-pricing.html

 

Bureaucrats spending pubic dollars in an effort to understand something they will never get.

Classic

 

The interesting thing I notice is that people are comparing two products (the exact same item) - one sold in Canada and one sold in the USA and pointing out the price difference. Most of our products came from the far east directly - not the USA. We along with the US are importing the same product - the difference is that the US has a lower tariff on the products from China then OUR Government puts on the same item. The issue of high prices has nothing to do with America or our own retail people jumping the price up just because - it has everything to do with our own Government's outrageous Federal tariff levels that have to be passed on to us by the retailers! Our Government doesn't want you to know this - they want everyone to buy into the 'smaller market then USA' or any other numbers of excuses they think will deflect away from what their policies are doing to Canadian consumers.

 

Maybe they can explain why a Honda that is assembled in Canada is $3195 cheaper in the US. Same exact car; $25990 vs $22795. If those parts came from overseas and were subject to our tariffs, then those would have to be passed on to US buyers. Obviously they are not.

Freight and pre-delivery expense is $810 cheaper for the same car in the US. $1640 vs $830. Honda Canada's answer: it costs a lot to send a car to Yukon. My reply, obviously it costs Honda North America nothing to send a car further to Alaska.

I don't care for their explanations and excuses. Money talks, BS walks!

 

I don't care which way or how you slice or dice it. A larger marketplace will always have a competitive advantage over a smaller one. It's really that simple. Where it gets complicated is not being able to buy a new car in Buffalo NY to import because of price fixing at the highest levels within the industry. In my business if I spoke to a competitor prior to bidding on a job to determine who would go after the work and who should charge a higher price that would be considered price fixing and the RCMP would be paying me a visit.

 

Its a matter of an unwillingness to sell at anything but MSRP. You'd think business would know what the S stood for in that..."suggested".

I happened to know what the difference was between MSRP and dealer cost back when I bought some parts locally....38% off MSRP was dealer cost.

Part of a large order was priced such that if I got 10% off, I'd sooner buy here (the rest of the order went stateside). The local parts shop owner hummed and hawed and had to think about it. Lets see now...38% of $0 or 28% of $1000. Must have been tough to figure out.

 

Well put.

Just wished someone .... anyone in the press would ask Honda NA or any auto manufacture this question and keep on them till they give an answer.

 

They won't even sell you a car anywhere close to the border. My co-worker did get a new Subaru in New Hampshire last year though.

Dealers I popped into could sell you a car if it was used, even if it only had 1 mile on it, but a new never registered car...no way.

It gets even better, the sales manager at a VW dealer in the US told me that VW Canada asked VW North America not to sell to Canadians.