Canadian Prices and the USD. Why aren't prices dropping???

[Hack&Lube]

You know what? The Canadian dollar is hovering around 95 cents U.S. and going up. Why are Canadian prices still set at what they were 5-6 years ago when the CDN $ was around 60 cents U.S. ???

It really pisses me off going to a bookstore and seeing the Canadian cover price compared to the US price when they should be almost par these days. Same thing for many items I compared at retailers between the U.S. and Canada, even your everyday goods like electronics, food, toys, sporting equipment, clothes etc.

When is this going to end or do the retailers, suppliers, and wholesalers just hope Canadians won't realize this is happening and they'll pull a fast one and continue making money from us hand over foot at the current and rising exchange rate? If the Canadian dollar ever surpasses the USD again, this would be simply outrageous. I can even save money after shipping on certain goods from ebay these days versus driving down to Wal-Mart to get them.

Some guy on RFD suggested we just exchange our money at the bank at the current rate of nearly a $1 for $1. Then goto a book store or a clothing store and when the Clerk says: "yes that'll be $55.49" you can say, well it says $29.99 US MSRP on the label. Here's some US dollars. I'll pay that price thanks.

[FlamesKickAss]

I totally agree with this post! We are getting ripped off on some stuff. Some things though are the same in the US like cd's and dvd's. I know video games have gotten cheaper up here, they usually convert pretty good.

[Dion]

I was Stateside a few weeks ago and bought 2 pairs of New Balance cross trainers for $89. Sportschek here is selling 1 pair of $99.

The word i'm hearing is the distributor isn't passing the savings on to the retailer.

[GreenTeaFrapp]

Supply and demand. If someone was willing to pay that price a year ago and incomes haven't changed, why not continue to charge that same price.

Prices aren't based upon product cost unless there's a perfectly competitive marketplace. They're based upon consumer demand and product supply.

[TurnedTheCorner]

It seems that prices for some items just don't follow the currency fluctuations that quickly. And yes, it's annoying as hell.

Recent article on the subject.

[Superflyer]

If you ask they will probally say some junk like the cost to get them accross the border is just as high or higher or the cost to ship them here is more or blah blah blah.
I completly agree with what was said and it is junk. I am heading to Orlando next month so I am holding off on buying a lot of stuff just so that I can pick them up down there for less then half the price.

[TurnedTheCorner]

Target tube socks?

[Wookie]

But the reverse is also true. When the loonie fell to less than 62 cents in early 2002, Porter did a similar survey and found consumer prices didn't rise as much as expected. Instead, corporate profits fell.

I don't think things adjust that quickly.. unfortunately for the consumer I guess.

[Cowboy89]

Yes indeed the purchasing power of the Canadian dollar is down relative to the USD. There are some reasons for it.

#1) Demand is still there to sell goods at the same prices in Canadian dollars as before. Many cross-border companies are using Canada as a profit centre to make up for losses south of the border. Example being GM, demand for GM cars in Canada has skyrocketed but at a higher price as expressed in USD, yet GM is still struggling as a whole.

#2) There isn't the same type of competition for goods and services in Canada as in the US which would prompt more price wars. Example here would be Cell phone service. Minimal competition, poor service and high prices. Telus, Bell, and Rogers make their money off of their wireless businesses primerily. Go to the US, in just about every consumer good or service, there is a vast amount of competition for your business. It's a more mature marketplace. .

#3) The exchange rate has been quite volitile the past 5 years with the exchange rate going from 0.62 to 0.95 in that span. Businesses don't want to lower their prices now only to have to raise them a year or two down the road and experience the consumer wrath then. Especially if we're still willing to pay today's prices.

#4) Our infrastruture system, ie freeways/railways isn't as developed as the US. It simply costs more to make and transport goods in Canada. Even if we were at par it would still cost more here for that reason alone.

[GoinAllTheWay]

When it comes to books, don't we put a tarriff or tax of sorts on books coming in from the states or other countries to deliberatley make them more expensive? Only because they were not written in Canada?

[Bobblehead]

Originally Posted by GoinAllTheWay

When it comes to books, don't we put a tarriff or tax of sorts on books coming in from the states or other countries to deliberatley make them more expensive? Only because they were not written in Canada?

For what purpose?

If you are trying to account for the exchange rates then you are going to need to continuously change the tax rate.

If you are trying to protect/create a Canadian book industry then you are taxing all Canadians for the benefit of a small number of publishers, and you are discouraging reading, since overall book prices will be higher.

If you are trying to protect Canadian Culture, then that is admirable but I'm not sure this is the best way to do it. But if you research the Canada/US Free Trade Agreement there should be something in there. Books and Magazines were a contentious issue.

[GoinAllTheWay]

Yes, it is similar to playing 10% Canadian content on the radio or maintaining a minumum number of Canadian players in the CFL.

I really don't think we are the only country doing it to be honest with you.

It certainly doesn't have anything to do with exchange rates from what I understand.

Not saying I agree with it, just the way it has been broken down for me when I asked a similar question.

[FireFly]

I think one of the things this might affect is tourism. Why would anyone come to Canada now when prices are higher than in the US and the dollar is almost the same?

[octothorp]

Generally, American books sold in Canada are picked up by a distributor, who then has exclusive rights to sell the book in Canada. Because the distributor has exclusive rights, he can pretty much set his price as high as the market allows. For any bookstore not part of the Chapters/Indigo consortium, the high dollar is actually not a good thing: they're still paying the same amount to the Canadian distributors, yet the amazon.com prices continue to drop for Canadian customers. The only exception would be books that don't have an exclusive Canadian distributor (by far the minority of books that most bookstores deal with), where the bookstore can buy directly from the publisher or american distributor.

[Dion]

I went to Chapters this morning to buy a book. Told the cashier I wanted to pay the American price and pulled out some US dollars. She said I still had to pay the Canadian price so I asked her to get the manager. After a short discussion I got the book for the American price.

[Burninator]

If anyone is the new car market right now is the time to look into buying a car in the states. Even after the exchange, duty and taxes the car is typically cheaper.

For example. If you wanted to buy a Subaru WRX STi.

Canada: $48,995 CDN.
With taxes and freight it comes out to about $53,000 CDN.

US: $34,120 USD ($36,060 CDN)
With freight.

You shouldn't have to pay states taxes, but you will have to pay a 6.1% duty and 6% sales tax. (there is also some other minor taxes and costs).

So the total is roughly $40,400 CDN.

So you are saving in the neighbourhood of 10,000-12,000 dollars. It is more of a hassle, yes, but if that is hassle is too much to save that much money then I want your job. Also if the car you want is made in North America then you don't have to pay that additional 6.1% duty.

[arsenal]

Originally Posted by Burninator

If anyone is the new car market right now is the time to look into buying a car in the states. Even after the exchange, duty and taxes the car is typically cheaper.

For example. If you wanted to buy a Subaru WRX STi.

Canada: $48,995 CDN.
With taxes and freight it comes out to about $53,000 CDN.

US: $34,120 USD ($36,060 CDN)
With freight.

You shouldn't have to pay states taxes, but you will have to pay a 6.1% duty and 6% sales tax. (there is also some other minor taxes and costs).

So the total is roughly $40,400 CDN.

So you are saving in the neighbourhood of 10,000-12,000 dollars. It is more of a hassle, yes, but if that is hassle is too much to save that much money then I want your job. Also if the car you want is made in North America then you don't have to pay that additional 6.1% duty.

That doesn't work on all vehicles though. Usually the higher priced vehicles you will save enough in the exchange to make it worth it. If you are looking at something cheaper (civic etc), I don't think the final price difference warrents this.
I haven't found many other vehicles that you can do this with. When the Evo and GTR come out next year, those 2 might be worth to purchase in the states. It may work for the corvettes as well, but I haven't tried it with those.

[Dion]

Originally Posted by Burninator

If anyone is the new car market right now is the time to look into buying a car in the states. Even after the exchange, duty and taxes the car is typically cheaper.

For example. If you wanted to buy a Subaru WRX STi.

Canada: $48,995 CDN.
With taxes and freight it comes out to about $53,000 CDN.

US: $34,120 USD ($36,060 CDN)
With freight.

You shouldn't have to pay states taxes, but you will have to pay a 6.1% duty and 6% sales tax. (there is also some other minor taxes and costs).

So the total is roughly $40,400 CDN.

So you are saving in the neighbourhood of 10,000-12,000 dollars. It is more of a hassle, yes, but if that is hassle is too much to save that much money then I want your job. Also if the car you want is made in North America then you don't have to pay that additional 6.1% duty.

If you buy a vehicle in the States and bring it back to Canada, depending on the automaker, your vehicle warranty would be nul and void.

Also I found this.......
http://forums.canadianbusiness.com/t...00985&tstart=0

We've done it a few times, and are actually planning to do it again later this year (assuming the exchange rate holds)

What I have found is that it is worth doing only on more expensive cars. Generally, on vehicles worth at least $45000Cdn. On less expensive cars, for the few thousand we may save, it's not worth the time or hassle.

Things that you need to factor in include (but not limited)
- taxes - GST is paid on the full amount
- Fees for the Fed inspection, about $300
- If it's an SUV, then there is an additional tax
- If the vehicle is manufactured outside of North America, there is another tax. You can only tell this base on the VIN. We only purchase vehicles that have the North American VIN.
- You need to make sure that you have all your paper work prior to immigration.
- How you're getting the car back. Transportaion/freight forwarding cost are usually between $2000-3000
- Also, you have to make sure that your car is allowed in Canada, there is a list of cars that cannot be imported in

For us, we have purchased the vehicles, and plan a vacation around the transportation back. We also have relatives who are in the industry in the US, so we get pretty good deals on that front too. We also pay for our vehicles in cash, so if you need financing, that brings another factor to consider.

It can be a hassle the first time you do it, but the last few times, it's been easy.

We saved between $5000 - $15000 cdn on our vehicles after factoring all costs.

[Bertuzzied]

For those who want to take advantage of US shopping set up an account with US global mail. Just finalizing my account.

Basically there are a whole bunch of internet sites in the states who are unwilling to ship to Canada. You set up an account in Houston where you have all your purchases sent and then they will package it all up to send to you, where YOU fill out the customs forms. Only $15/us/ month.

[Ironhorse]

Originally Posted by Kobatuzzied

Basically there are a whole bunch of internet sites in the states who are unwilling to ship to Canada. You set up an account in Houston where you have all your purchases sent and then they will package it all up to send to you, where YOU fill out the customs forms. Only $15/us/ month.

Mr. Burns: Excellent.........