Why the difference

Most of us have noted that the sticker price of goods in Canada is much higher for the same things in the United States. That, despite that the Canadian currency was at parity with the counterpart in the United States. Given the above situation, what are the explanations?

Thus, it is very disconcerting to note on the book’s fly-leaf of, say $40 for Canada and maybe $25 in the United States. This columnist recently purchased a greeting card for $3, while the posted price in the United States was $1.75. The same disparity is evident for a whole host of goods, for instance a bicycle or perhaps a pair of skis, where Canadian sales are pre-dominant

Given the schedule of cost here, are we just being ripped off? The discrepancy is actually the result of many legitimate factors.

Volumes of sales are lower here, so a retailer must try to compensate over a smaller volume of items. Hence, a retailer cannot be criticized for trying to recoup some expenses.

Then a retailer selling a product made south of the border is entailing paper and other obvious expenses, such as the cost of shipping.

Also too, a store cannot afford easily to stock different sizes and styles.

Frequently, a book store must keep abreast of customers’ demands. That may require home phone calls and some knowledge of books currently being published, information obtained from a list of popular books being printed.

For imported merchandise, foreign exchange has to be obtained, with the offering price of the U.S. dollar above the listed asking price.

Costs in Canada are much higher than south of the border. Minimum wages in Canada are above those in parts of the United States. Fuel costs are higher; witness the premium we pay for oil and gasoline. U.S. interest rates are below those in Canada. Housing-rents are higher here, reflecting more costly construction needed in our climate.

In some cases, the free flow of goods across the border such as with as with automobile tends to smooth out the price differences.

U.S. retailers accept smaller profit margins because of fierce competition. Finally, Canadian products require the cost of health care, not provided for by U.S. counterparts. Hence, taxes here are higher than in the United States.

The foregoing suggests that the price differential is the result of higher cost structures here. Perhaps, however, one may say that our superior quality of life is a small price to pay for the privilege of being a Canadian.




Bruce Whitestone