Canada-U.S. price gap complaints could soon trigger investigations

[Mr. Ambien]

http://www.cbc.ca/news/politics/canada-u-s-price-gap-complaints-could-soon-trigger-investigations-1.2865235

Canadian shoppers may get some relief from higher prices. Industry Minister James Moore has tabled legislation in the House of Commons to give the Competition Bureau new power to investigate cases of suspected price gouging in a bid to end unjustified same-item price differences between Canada and the U.S. (Chris Young/Canadian Press)

The federal government is unveiling legislation to give the Competition Bureau new power to investigate cases of price gouging in Canada.

Industry Minister James Moore, speaking at a Toronto toy store, says the proposed price transparency act follows through on the Conservatives’ promise to end unjustified price differences between Canada and the United States, for the same items.

Canadian consumers have long complained that they pay higher prices than Americans on a wide range of items, including toys, books, electronics and cars. The Conservatives responded in the February budget, vowing to narrow the so-called price gap between the two countries as part of their consumer-first agenda.

"It's called geographic price discrimination. A more blunt way of putting it is to call it ... price gouging of Canadian consumers because of where Canadians live," Moore said.

"These price differences are real, they hurt the bottom line of hard-working families, and they hurt Canadian retailers who have to absorb this cost of unfair pricing."

The bill, tabled in the Commons today, will:

• give the commissioner of competition the power to investigate suspected cases of price discrimination.
• give the commissioner of competition the power to obtain court orders compelling companies to produce documents to prove the difference in what they charge is reasonable.

While higher labour costs, tariffs and the cost of transporting goods to Canada are some of the reasons goods can cost more here than in the U.S., Moore said the bill takes aim at country pricing, the practice of charging different prices depending on the country in which the good is sold.

Plan unworkable, industry groups say

Moore says the bill has the support of the Retail Council of Canada, as well as the country's largest consumer groups.

The promise is likely to go over well with consumers tired of paying more or of having to drive to the U.S. for bargains.

But other industry groups say the government’s plan is unworkable.

They argue the Competition Bureau will need to go on a hiring spree to be able to investigate every link in the supply chain — manufacturers, distributors, retailers — and to determine who, if anyone, is responsible for inflating prices.

And with more and more Canadian shopping online, it may have little effect.

In an op-ed piece published in August, the president of the Canadian Chamber of Commerce, Perrin Beatty, also questioned how the commissioner’s decisions would be made.

"The budget did nothing to explain what 'unjustified price discrimination' is, or why it would be illegal," Beatty wrote.

"No doubt many Canadians are rubbing their hands eagerly at the thought of the government bringing them bargains. They should think again. This cure is worse than the disease."

Legitimate reasons for higher prices

The government acknowledged in the budget that there are legitimate reasons for higher prices in Canada than the U.S., including higher labour costs, excise duties and shipping fees in a bigger, more sparsely populated country.

Those can account for as much as 10 per cent price difference, sources say.

Another complicating factor is that the value of the Canadian dollar has steadily lost value against the U.S. greenback this year, closing Monday at 87 cents US.

Sources say the goal of the legislation is to focus on the most obvious cases of price discrimination.

But even here, critics warn, the costs of complying with an investigation will be significant — costs that will likely be passed on to consumers.

This seemingly is akin to the CRTC blowing hot air to appease consumers, but I'm iffy on both notions that we really will/can close any gaps, and that perhaps it has more to do with market factors. We're good at doing studies and investigations so I guess we can wait this one out.

[nuckin_futz]

"The federal government is unveiling legislation to give the Competition Bureau new power to investigate cases of price gouging in Canada."

I don't know about you guys but I feel so much better knowing they are going to "investigate".

Must be an election coming. What better time to pander and dole out empty promises.

[GMJB]

Lol I thought it said invasions when i first read the title.

[TheSecretIsMe]

This sounds like one of those highly touted ideas that never come to fruition. Some sort of road-block will definitely be created by the corporations and the cronyism across the US and Canada will probably play a major role.

[Aladeen]

Start with the Dairy board IMO... how we pay at minimum 3X the price for Dairy is ridiculous since they can't claim tariffs or shipping to be major costs above what US dairy companies pay.

[D-Money]

LOL at the retailers claiming "it's unworkable". It's easier than ever to find discrepancies in pricing. Just look online at the .ca and .com of major retailers operating in both countries.

All the high-falootin' excuses in the world still can't explain why our regular price for a 2.5L bottle of ketchup is 75% higher than across the border.

[RUPERTKBD]

The one that has bugged me for years is books. It's even printed right on the jacket: $6.99 in the USA and $9.99 in Canada.

It was somewhat understandable several years ago, when our dollar was worth about $0.70, but it didn't change at all, when we were at par.

Price gouging. Plain and simple.

[aGENT]

Pretty sure I've seen this news story before and it didn't do squat about the pricing then...

[riffraff]

Here Here for cheaper beer!!!!

[Electro Rock]

The fact that it took until now for the issue to be raised says a lot about how politically passive and gullible the average Canadian is...

The other thing too is selection, as in there is none in Canada, outside of maybe Toronto and Montreal.

Everywhere else its like you're living in some isolated frontier town.

[Warhippy]

Note some fo the things quoted including transportation and population.

almost 3/4 of the entire Canadian population lives within 3 hours of the border. The dollar sat at or above parity for years and nothing was done.

The amazing thing is 4 years ago it was a serious electoral promise by Jim Flaherty (rip) who promised to do something about it.

He made a committee. They used some of the same excuses but also pointed to businesses in canada as well as current laws regarding multi national companies such as target, wal mart home depot and more; as the prime reasons why prices were so high as at the end fo the day businesses set the prices they sell their items for.

Wholesaler sells for an MSRP of X in the US same wholesaler sells for an MSRP of Y in canada, businesses then take said MSRP and jack it up.

There was a repealing of SOME items cost via tarrif reduction, but is anyone remembers the price of a pair of skates actually went up as businesses increased their prices for no good reason other than greed and their profit margins.

Flaherty promised even mroe measures via the committees tabled report and Corps then complained about a loss of money and having to pull out of Canada if this happened. The issue died.

Now another election year another promise to fix things, yet now the dollar is dropping and it is ALL just a joke and falling on deaf ears as just like with the HST repealing, prices will stay the same even IF there is a parity legislation tabled.

Nobody cares for the people

[Tortorella's Rant]

Here Here for cheaper beer!!!!

I am a tall beer drinker recently. I'm all for this

[DonLever]

Prices in the US are generally lower in the US because of lower taxes and lower wages. And a bigger population. There is nothing really Canadians politicians can do about this.

[ronthecivil]

Prices in the US are generally lower in the US because of lower taxes and lower wages. And a bigger population. There is nothing really Canadians politicians can do about this.

Exactly. And really trying to institute price controls is hardly a free market idea that a conservative government should be willing to touch with a ten foot pole.

Simple pandering with an empty promise for sure.

[ronthecivil]

The one that has bugged me for years is books. It's even printed right on the jacket: $6.99 in the USA and $9.99 in Canada.

It was somewhat understandable several years ago, when our dollar was worth about $0.70, but it didn't change at all, when we were at par.

Price gouging. Plain and simple.

Don't buy the book then. Besides, mostly obsolete anyways.

[ronthecivil]

LOL at the retailers claiming "it's unworkable". It's easier than ever to find discrepancies in pricing. Just look online at the .ca and .com of major retailers operating in both countries.

All the high-falootin' excuses in the world still can't explain why our regular price for a 2.5L bottle of ketchup is 75% higher than across the border.

Canadians must be a bunch of ketchup addicts.

Don't buy the ketchup if it's too expensive.....

The problem is Canadians are too passive to say anything and too lazy to shop around for deals. That's why we pay more.

[Guest]

Don't buy the book then. Besides, mostly obsolete anyways.

Great advice. In a world where most kids can't read a sentence (not calling Rupert a kid) if it's not text speak, your response is "don't buy a book then.

Brilliant.

[Guest]

Canadians must be a bunch of ketchup addicts.

Don't buy the ketchup if it's too expensive.....

The problem is Canadians are too passive to say anything and too lazy to shop around for deals. That's why we pay more.

You don't think it has something to do with our market being the size of California population wise, but 15x larger? Even then, that doesn't explain the gauging from dollar values.

[ronthecivil]

Great advice. In a world where most kids can't read a sentence (not calling Rupert a kid) if it's not text speak, your response is "don't buy a book then.

Brilliant.

I said don't BUY the book. Not read a book. Ever hear of a library?

[ronthecivil]

You don't think it has something to do with our market being the size of California population wise, but 15x larger? Even then, that doesn't explain the gauging from dollar values.

That we don't have as big a population as the states does in fact explain a lot.

We also have higher taxes and are located further from places that produce things like tomatoes while Cali has the tomatoes for the ketchup and odds are the factory in their back yards.

Now, if there's collusion or a monopoly in place, then by all means, the government can step in and give them a slap or break the companies up as required in order to fix that. But above and beyond that and unless it's pretty blatant you are simply contributing to a bad business environment which only helps to contribute to less competition which would make the problem worse.

And besides, as I like to mention over and over, you can't control the free market. Even if you go draconian, it just paints itself black and keeps on existing.