Canadians Officially Study Higher Prices

[bush_cheney2004]

I guess it's official....Canada's Senate will release a report to satisfy the masses' questions about why prices are higher in Canada than "south of the border". This chronic complaint is not just the stuff of idle chatter or bickering...no...it actually manifests itself as physical travel to cross an international border in search of thriftier commerce in the U.S.. It's no wonder that cross border shopping in the world's best armed mall remains a Canadian passion.

Canada-U.S. price differences report coming tomorrow

Canadians may soon know why they pay more for many products than shoppers south of the border.

The final report of a Senate finance committee study into price differences between Canada and the U.S. is due tomorrow.

The committee heard from more than 50 witnesses over a little more than a year, including Bank of Canada Governor Mark Carney, consumer groups and retailers.

http://www.cbc.ca/news/business/story/2013/02/05/pol-canada-us-price-differences-report-coming.html

Isn't living in Canada worth paying more for an identical product with a shorter warranty?

[jacee]

Yes.

But only for good reason - better pay/benefits for workers, for example. Taxes for health care, pensions, free services.

Complicated reasons

Carney explained that pricing is complicated, with many factors playing a role including:

Taxes.

Higher sales and larger markets in the U.S.

Labour costs.

Productivity gaps.

Transportation costs, which in Canada include both gas taxes and a vast area.

Even if the Canadian dollar rises in value against the U.S. dollar, retailers still have to pay many of these costs in Canadian dollars, he said. That means they don't save as much as consumers may think just by looking at the exchange rate.

"The greater the value-added in Canada to a good or a service, the smaller the role played by the exchange rate in its price," Carney told senators on the national finance committee in November, 2011.

The Bank of Canada estimated the price gap between the two countries at 11 per cent in September 2011, compared with 18 per cent in April 2011. Carney cautioned, however, that the estimates are based on a handful of categories in the consumer price index, as well as on an informal survey done by the bank, so there's "some uncertainty" around them.

Well there we go.

Are we surprised?

Really all we want to know is whether we're paying for a bigger profit margin.

Not for Carney to say.

Who's talking?

[Shady]

I guess it's official....Canada's Senate will release a report to satisfy the masses' questions about why prices are higher in Canada than "south of the border". This chronic complaint is not just the stuff of idle chatter or bickering...no...it actually manifests itself as physical travel to cross an international border in search of thriftier commerce in the U.S.. It's no wonder that cross border shopping in the world's best armed mall remains a Canadian passion.

Canada-U.S. price differences report coming tomorrow

Canadians may soon know why they pay more for many products than shoppers south of the border.

The final report of a Senate finance committee study into price differences between Canada and the U.S. is due tomorrow.

The committee heard from more than 50 witnesses over a little more than a year, including Bank of Canada Governor Mark Carney, consumer groups and retailers.

http://www.cbc.ca/news/business/story/2013/02/05/pol-canada-us-price-differences-report-coming.html

Isn't living in Canada worth paying more for an identical product with a shorter warranty?

Apparently these geniuses need a study to figure out that higher taxes make the prices of goods and services higher as well. Shazzam!!

[Shady]

Yes.

But only for good reason - better pay/benefits for workers, for example. Taxes for health care, pensions, free services.

Complicated reasons

Carney explained that pricing is complicated, with many factors playing a role including:

Taxes.

Higher sales and larger markets in the U.S.

Labour costs.

Productivity gaps.

Transportation costs, which in Canada include both gas taxes and a vast area.

Even if the Canadian dollar rises in value against the U.S. dollar, retailers still have to pay many of these costs in Canadian dollars, he said. That means they don't save as much as consumers may think just by looking at the exchange rate.

"The greater the value-added in Canada to a good or a service, the smaller the role played by the exchange rate in its price," Carney told senators on the national finance committee in November, 2011.

The Bank of Canada estimated the price gap between the two countries at 11 per cent in September 2011, compared with 18 per cent in April 2011. Carney cautioned, however, that the estimates are based on a handful of categories in the consumer price index, as well as on an informal survey done by the bank, so there's "some uncertainty" around them.

Well there we go.

Are we surprised?

Really all we want to know is whether we're paying for a bigger profit margin.

Not for Carney to say.

Who's talking?

There's no such thing as "free" services. It's also irrelevant what a certain businesses profit margin is. Their job is to charge whatever price that somebody is willing to pay for their product or service. If you don't like it, don't buy it, or produce the good or service yourself.

[bush_cheney2004]

There's no such thing as "free" services. It's also irrelevant what a certain businesses profit margin is. Their job is to charge whatever price that somebody is willing to pay for their product or service. If you don't like it, don't buy it, or produce the good or service yourself.

This is what some of the data indicates as well.....Canada has less competition, less retail productivity, and less retail square footage per consumer. Such is true even for the higher population densities of Montreal or Vancouver. Canadians have less choice...and pay more.

[Guest Derek L]

This is what some of the data indicates as well.....Canada has less competition, less retail productivity, and less retail square footage per consumer. Such is true even for the higher population densities of Montreal or Vancouver. Canadians have less choice...and pay more.

So that’s why my wife, a highly educated women, is giddy for Target to open shop here……….I think I’d have to have her committed if when Macy’s opened up…….

[bush_cheney2004]

Well it's a given that some Canadians are drawn to lower prices in the U.S., but it remains to be seen if a big box retailer like Target will give up the higher margins available in Canada. I shop at a Super Target at least twice a week (only 3 blocks away), and their 5% off "Red Card" pays most of the sales tax.

[jacee]

There's no such thing as "free" services. It's also irrelevant what a certain businesses profit margin is. Their job is to charge whatever price that somebody is willing to pay for their product or service. If you don't like it, don't buy it, or produce the good or service yourself.

Well apparently plenty of us are asking the questions, to see if we're willing.

And the Senate is answering us.

We'll decide when we know if they're gouging us.

[Bonam]

Apparently these geniuses need a study to figure out that higher taxes make the prices of goods and services higher as well. Shazzam!!

I suspect there is a lot more to it than differing tax rates. As BC_2004 mentioned, higher prices in Canada may also be symptomatic of lower competition and lower retailer efficiency. Even then, however, the huge differences in prices seem too extreme to be explained by such things, Canadian prices on many products are often 30-50% higher than they would be in America, often just a 1-2 hour drive away. My guess is that the reality is that Canadians are simply willing to pay such prices, and retailers are only too happy to charge them.

[cybercoma]

Apparently these geniuses need a study to figure out that higher taxes make the prices of goods and services higher as well. Shazzam!!

In an overly simplified and ignorant mind, sure. This doesn't at all take into account the price elasticity of demand though.

[Shady]

In an overly simplified and ignorant mind, sure. This doesn't at all take into account the price elasticity of demand though.

Nonsense. Higher labour costs and higher taxes equal higher prices.

[Shady]

I suspect there is a lot more to it than differing tax rates. As BC_2004 mentioned, higher prices in Canada may also be symptomatic of lower competition and lower retailer efficiency. Even then, however, the huge differences in prices seem too extreme to be explained by such things, Canadian prices on many products are often 30-50% higher than they would be in America, often just a 1-2 hour drive away. My guess is that the reality is that Canadians are simply willing to pay such prices, and retailers are only too happy to charge them.

An hour or two away means nothing if that jurisdiction operates under lower labour costs, lower regulatory burdens and lower taxes. It amazes me that people think they can get American prices under Canadian tax and labour structure.

[Shady]

Well apparently plenty of us are asking the questions, to see if we're willing.

And the Senate is answering us.

We'll decide when we know if they're gouging us.

You want all the "free" services you love? Suck it up and pay for it then.

[bush_cheney2004]

An hour or two away means nothing if that jurisdiction operates under lower labour costs, lower regulatory burdens and lower taxes. It amazes me that people think they can get American prices under Canadian tax and labour structure.

Yes....it is curious that such higher costs are not readily accepted as the price to pay for living in a country with a higher happiness ranking than the U.S.

[Smallc]

An hour or two away means nothing if that jurisdiction operates under lower labour costs, lower regulatory burdens and lower taxes. It amazes me that people think they can get American prices under Canadian tax and labour structure.

Canadian business taxes are in fact lower. You need to get some facts.

[Shady]

Canadian business taxes are in fact lower. You need to get some facts.

You do. The corporate tax rate is lower, but many businesses pay under the top marginal rate. Additionally, some provinces have higher provincial taxes. Additionally, the 5% GST adds to the cost of most goods and services, at each step along the process of production. So your weak, short, simpleton response is moot.

[bush_cheney2004]

....Additionally, the 5% GST adds to the cost of most goods and services, at each step along the process of production.

Wait...it gets worse. Trying to ship items into Canada adds more costs and barriers to commerce. Fees and charges just keep adding up depending on postal service, FedEx, or UPS. It is easier to get items from China to the U.S. than it is to ship into Canada. And then there is the waiting....sometimes weeks to clear customs.

As stated earlier, my previous client set up a strawman shipper in Winnepeg to beat these costs and fool the rubes in Quebec, who resented getting products from an American address.

What the hell is going on up there ?

[bush_cheney2004]

Well, the Senate Big Report (of the obvious) is out and it looks like Canada has mostly screwed itself on purpose with:

• Taxes
  
• Surcharges
  
• Tariffs
  
• Fees
  

That, and the Senate reports that Canadians are just used to paying more, as in "patriotic suckers" ?

http://www.cbc.ca/news/politics/story/2013/02/06/pol-senate-reports-on-canada-us-price-differences.html

Edited February 6, 2013 by bush_cheney2004

[guyser]

Well, the Senate Big Report (of the obvious) is out and it looks like Canada has mostly screwed itself on purpose with:

• Taxes
  
• Surcharges
  
• Tariffs
  
• Fees
  

That, and the Senate reports that Canadians are just used to paying more, as in "patriotic suckers" ?

http://www.cbc.ca/ne...ifferences.html

I guess someone has reading comprehension problems.

It said virtually none of the above as laid out. Qu'elle surprise !

[bush_cheney2004]

I guess someone has reading comprehension problems.

It said virtually none of the above as laid out. Qu'elle surprise !

You are making this a habit....before you had a problem with "non-existent", and today it is "virtually none".

[jacee]

Apparently these geniuses need a study to figure out that higher taxes make the prices of goods and services higher as well. Shazzam!!

Ahh ... so you know for sure that we're not being charged for higher profit margins?

How so?

[guyser]

You are making this a habit....before you had a problem with "non-existent", and today it is "virtually none".

And?

Funny..."I had a problem" ? No , sorry but you havent got the ability to see that a statistical minor variance is considered non-existant. Kind of like that snow .

If you post shite and ascribe the same shite to an article , it best match.

Otherwise you might as well post banana's and reference the Eiffel Tower.

In this case, your post did not match at all, save for a little bit.

Like I said, qu'elle surprise. What is funny is your mocking about Canucks obsesed with Americans has in fact turned out that one person alone is obsessed with Canada and thats pretty funny.

[cybercoma]

Additionally, the 5% GST adds to the cost of most goods and services, at each step along the process of production.

Businesses don't pay GST on things they charge GST for. So when someone is producing a product and buying materials for making that product, they apply for a credit on the GST they pay on the inputs. Of course, you don't know this because you come on here and defecate your opinions all over this forum without actually knowing what you're talking about.

[Shady]

Ahh ... so you know for sure that we're not being charged for higher profit margins?

How so?

You're not making any sense. A profit margin is whatever a business can charge for a good or service and still attract consumers to purchase said good and or service. Sometimes they're big, sometimes they're small. It all depends on how many producers of such goods and services exist, and what the demand for them are. Honestly, this is high school economics. Our education system has severely failed us.

[Shady]

Businesses don't pay GST on things they charge GST for. So when someone is producing a product and buying materials for making that product, they apply for a credit on the GST they pay on the inputs. Of course, you don't know this because you come on here and defecate your opinions all over this forum without actually knowing what you're talking about.

You're making my point for me. Like I said, higher taxes, higher labour costs, and more burdensome regulations all contribute to higher costs. Or do you think having to apply for a credit on the GST they pay doesn't cost them time, money and man power?