Shopping Discussion

Competition Bureau urged to study cross-border price gap

  • Last Updated:
  • Feb 9th, 2012 11:02 am
Deal Addict
Jan 2, 2007
2852 posts
982 upvotes
Toronto

Competition Bureau urged to study cross-border price gap

Competition Bureau urged to study cross-border price gap

The Competition Bureau should look into price differences between goods sold in Canada and the U.S., a consumer group is suggesting.

The bureau, which helps ensure a competitive marketplace in Canada, should study why so many items cost more in Canada than they do in the U.S., the head of the Public Interest Advocacy Centre told the Senate finance committee Tuesday...
link

My favorite is Thule

Check out their prices on nextag price for atlantis boxes. Then click on the link. Instead of taking you to the "rackattack.com" price, you get taken to the Canadian site... usually a $200-$300 price jump.

Last year, I emailed the Thule executive in charge at Sport Dinaco (Martin Cardinal) and as justification he emailed me back a page from Le Journal de Montreal showing other price gougers from last January. Justification is "we are all doing it", ha ha, wtf?

Image

Enough of their bs! B3 forms aren`t worth 30-50%!
16 replies
Deal Addict
Sep 23, 2005
1528 posts
176 upvotes
Burnaby
* Sigh *

Here we go yet again.

I don't work in retail and I don't want to seem like I'm an apologist for the Canadian retail industry. But there are several significant and important factors that DO make higher prices in Canada inevitable:

- We have only 1/9 of the USA's population, scattered over a much larger landscape. Transportation and distribution for each item sold costs vastly more up here than in the US.

- Management and overhead costs per item sold are also much higher -- again, because we don't have the same economies of scale

- We have higher payroll burden up here in Canada, which also affects pricing. (You want cheaper pricing on electric shavers? Are you willing to give up your free healthcare to get it?)

. . . and there are many more valid reasons which i don't have time to go into because my supper is ready. :)

Bottom line is, though, if you want to do a far more realistic analysis of why retail pricing is higher in Canada, don't compare us with Minnesota or New York; compare us with Alaska or Hawaii (which are also US states, though all the whiners seem to conveniently forget that!) Then you'll begin to see a bit more rational picture of how much major cost factors like logistics and localized costs-of-living can affect prices in retail stores.
Deal Addict
Mar 11, 2008
1276 posts
38 upvotes
Langley
I am not sure what this study is going to do other than cost money. Even if the committee suggests that prices are too high in Canada there is no way they can force private industry to lower the prices on items. Retailers are in the business of making as much money as possible and they are not going to lower their prices when people are still willing to pay them.
Deal Expert
User avatar
Jun 14, 2003
23140 posts
173 upvotes
Hunter316 wrote:
Feb 7th, 2012 9:01 pm
I am not sure what this study is going to do other than cost money. Even if the committee suggests that prices are too high in Canada there is no way they can force private industry to lower the prices on items. Retailers are in the business of making as much money as possible and they are not going to lower their prices when people are still willing to pay them.

+1. This is exactly what I was thinking when I read that. It is not the first time, not the 2nd time, .. I don't know how many times this was brought up. The study will say they find nothing wrong with it so that next time somebody brings this up so that there will be yet another study. I am not saying there is nothing wrong with it but the study will. It is a loop to supply money to the studies that come out with the same conclusion again and again (that nobody likes).
Too many people spend money they haven't earned to buy things they don't want, to impress people they don't like. -- Will Smith
Growing older is mandatory. Growing up is optional.
Stay hungry, stay foolish.
Member
Jan 29, 2006
411 posts
13 upvotes
The Thule executive answered the question, though not very diplomatic, it was to the point. It costs more here because they can charge more here. Some products may be more expensive due to duty or tariffs, but even then there is more profit margin built into the price.

The only way get companies to lower prices is enough people demand it. As an example, when J Crew opened up its store in Canada, people were outraged by the fact that prices were significantly higher in the store compared to when they purchased it online. J Crew eventually lowered their prices, though higher than the US prices.

Take a look at No Frills vs Loblaws. Prices for the same product are lower in No Frills vs Loblaws as Loblaws attracts a less price conscious demographic. All other costs of production, distribution etc. are essentially the same.

Being a member on this forum, you probably are price conscious. I am sure you probably have many friends who are not price conscious and are more then willing to pay full retail prices whatever it may be. Unfortunately there usually are a lot more of them that are keeping these store's cash registers ringing thereby reducing the store's incentive to lower prices (take Apple fanatics as an example).
Deal Fanatic
User avatar
Mar 12, 2005
6223 posts
443 upvotes
Victoria
I don't really buy the Canada is bigger argument. 80% of the population lives in Urban centres, and most big box stores are only located in those centres. Transporation costs might factor a bit, but the main reason is they do it because they can. They were slow to change prices when the Canadian dollar went on the rise and then to par. They realized people will pay. So why lower them?

There's no incentive to lower prices. Some business gets lost to buy from the US, but for the most part, shipping fees (or even any kind of option to ship) decrease ones ability to import from the US.

I'm not sure what anyone can do it about. There's enough demand to support the prices. Maybe the question should be, why don't they charge more in the US?
Deal Addict
Sep 23, 2005
1528 posts
176 upvotes
Burnaby
zod wrote:
Feb 8th, 2012 1:18 am
I don't really buy the Canada is bigger argument. 80% of the population lives in Urban centres, and most big box stores are only located in those centres.
If you seriously believe transportation costs are not dramatically higher here you've never done any full-load truck shipping of goods. Yes, most of us live in urban centres . . . but stretched out in a thin belt across 4000 km! Moreover, those of us in urban centres have to effectively subsidize the logistics costs for the remainder who live in rural and remote areas. Walmart and Canadian Tire do not charge more for a particular microwave oven or table hockey game in Terrace, BC or Gander, NL, than they do in Vancouver or Toronto, but the costs of getting those things to those respective locales are quite different.

The fact we're clustered in urban centres actually works against us in Canada. In the US - despite all the metropolis-sized cities - a majority of the population actually lives in what are considered rural areas. This kind of spreading out of the population makes it much easier to operate transportation networks more efficiently and at a much lower averaged cost per freight pound-mile.
Deal Guru
User avatar
Oct 14, 2003
13318 posts
675 upvotes
Wages are a big factor too now that the dollar is on par or close to it. Lets face it most retailers are owned by American parent companies. Ontario's (since this is where most of you are from) min wage is 10.25 per hour. The two states mentioned already in this thread, New York's is 7.25, and Minnesota is $6.15, plus differences in benefits and taxes. It's just plain more expensive to run a business in Canada and those costs need to be made up somewhere.

http://www.dol.gov/whd/minwage/america.htm
http://www.labour.gov.on.ca/english/es/ ... inwage.php
Science
is the new
rock 'n'
roll.
Deal Fanatic
User avatar
May 25, 2009
7641 posts
798 upvotes
Who cares. This is just a study being done by the competition bureau... which is exactly what it sounds like. A study, into something most of us already know.

The most they can do with this study is issue a report of their findings and make non-binding recommendations that no one has to follow.

Waste of time and money if you ask me.
"God's in His heaven. All's right with the world." - Robert Browning (1812-1889)
Deal Fanatic
User avatar
May 12, 2004
8214 posts
2352 upvotes
Ottawa
Wingding wrote:
Feb 7th, 2012 8:32 pm
* Sigh *

Here we go yet again.

- We have only 1/9 of the USA's population, scattered over a much larger landscape. Transportation and distribution for each item sold costs vastly more up here than in the US.

- Management and overhead costs per item sold are also much higher -- again, because we don't have the same economies of scale

- We have higher payroll burden up here in Canada, which also affects pricing. (You want cheaper pricing on electric shavers? Are you willing to give up your free healthcare to get it?)

. . . and there are many more valid reasons which i don't have time to go into because my supper is ready. :)

* Sigh *

Here we go yet again.

How many of our consumer goods are produced in Asia? What's the quickest way for the goods to get to the north eastern states? Have you ever traveled on US route 20? It's also no coincidence that 1000 BNSF freight trains a day travel from Vancouver to distribution centers in the mid-west (en route to north eastern states). Asian products destined to the southern states are served by the port in San Pedro.

That being said, odds are your product arrived to Canada before being shipped to eastern US a few 100 km from where you live. Your transportation and distribution excuse is BS they've been feeding you.

Again, we do not have free healthcare in Canada. Your provincial government does not print currency to pay the doctors and build hospitals etc.. There is no multi-billionnaire that decided to cover healthcare needs for all 30 million of his countrymates.

I pay $30 000 in taxes every year. My sister in Providence pays $20 000 on a very similar income but her employer covers her full health care for her family. Those who are not covered can purchase subsidized healthcare for $200/month. I'm not even touching the capital gains tax racket we have in Canada compared to the US.

Definition; Free: Without cost or payment

That being said, if you're gullible enough to think we have free healthcare I've got a bridge to sell you.
Censorship is telling a man he can't have a steak just because a baby can't chew it.
- Mark Twain
Deal Fanatic
User avatar
Jun 19, 2001
7049 posts
914 upvotes
It takes about 2 minutes to debunk the "canadian stores are ripping us off' conspiracy theorists.

There are still a number of Canadain only retailers. Go read their annual report. if you are lazy just scroll down to the income statement and find the net margin.

Take that figure, and remove their entire profit from their prices...and realize that woudn't make any difference in the whining about prices.

Then go find comparable american only stores and compare their net margin to their canadian counterparts...come back and show us your evidence canadian stores are making far more. if they are it should be immediately obvious and be very easy for you to do.
Canadian Code of Advertising Standards http://tinyurl.com/48ercz5 Submit advertising complaints http://tinyurl.com/5uxezyk
Deceptive Marketing Practices Under the Competition Act http://tinyurl.com/4coy4qd

There is NO HST on "Free item" or the free part of a "Buy 1 get 1" manufacturer coupon http://tinyurl.com/4ys45jg
Deal Addict
User avatar
Oct 16, 2008
3639 posts
755 upvotes
I am willing to live with SOME price gap as these are two different countries we're talking about. However, price gouging upwards of 50-60% is downright criminal. Especially when other products in similar categories only have 10-20% price gaps. You are left sitting there wondering why some companies can provide a narrower price gap over others while working under similar factors.
Deal Guru
User avatar
Aug 20, 2005
10455 posts
1956 upvotes
Cas77 wrote:
Feb 8th, 2012 12:44 pm
Again, we do not have free healthcare in Canada. Your provincial government does not print currency to pay the doctors and build hospitals etc.. There is no multi-billionnaire that decided to cover healthcare needs for all 30 million of his countrymates.

I pay $30 000 in taxes every year. My sister in Providence pays $20 000 on a very similar income but her employer covers her full health care for her family. Those who are not covered can purchase subsidized healthcare for $200/month. I'm not even touching the capital gains tax racket we have in Canada compared to the US.

Definition; Free: Without cost or payment

That being said, if you're gullible enough to think we have free healthcare I've got a bridge to sell you.

Where's that bridge? Whether you pay $30,000 a year in taxes or you pay nothing in taxes, you still have health care. Our access to health care is not based on our income. If your sister loses her job, she loses her health care. Our taxes do not go solely into health care. We have many benefits and services that are lacking in the US and a much smaller population base to cover those expenditures. So you really can't compare apples to oranges. Even with a health care plan in the US, they still pay alot out of pocket that we don't pay. We don't have co-pays or deductibles here on our basic health care. Employer covered health care is paid for by the employee in terms of lower wages as it is part of the whole remuneration package. The US spends alot more per capita on healthcare than any other country but with far worse results. Taxes also go into education and have you looked at what the cost of a post secondary education is in the US. I guess it depends on your priorities but health care and education are important to me and they both are cheaper here.
Deal Fanatic
Aug 14, 2007
6894 posts
345 upvotes
Toronto
gman wrote:
Feb 7th, 2012 11:18 pm
+1. This is exactly what I was thinking when I read that. It is not the first time, not the 2nd time, .. I don't know how many times this was brought up. The study will say they find nothing wrong with it so that next time somebody brings this up so that there will be yet another study. I am not saying there is nothing wrong with it but the study will. It is a loop to supply money to the studies that come out with the same conclusion again and again (that nobody likes).

The question is why does a study need to be done when the answers are right in front of us...
Deal Expert
User avatar
Jun 14, 2003
23140 posts
173 upvotes
XtremeModder wrote:
Feb 8th, 2012 5:17 pm
The question is why does a study need to be done when the answers are right in front of us...

So that somebody will earn the money from the study. Then, they will do again and again and again.
Too many people spend money they haven't earned to buy things they don't want, to impress people they don't like. -- Will Smith
Growing older is mandatory. Growing up is optional.
Stay hungry, stay foolish.
× < >

Top