Are Canadians paying more for products than Americans?
The price gap between Canadian and U.S. goods is shrinking, but it’s still too high. Despite a dip of six per cent from last year, products are still 14 per cent less expensive in the U.S.
With data from BMO Capital Markets, here are the goods Canadian consumers are paying more for.
*All U.S. prices have been converted to Cdn. dollars, unless otherwise noted.
Increased cost in Canada (as compared to U.S.): 7%
For years, the price gap on books has taunted Canadians from the back flap, where the retail tag for both Canadian and U.S. prices are printed for all to see. Yet consumers north-of-the-border should also know it’s not just in-store they’re getting ripped off. While BMO Capital Markets found a random sampling of in-store books cost seven per cent more in Canada than they did in the U.S., a similar price discrepancy exists online. On Amazon.ca, for instance, the housewife-approved Fifty Shades paperback trilogy costs $38.51. On Amazon.com? Just US$28.71, or $29.43 in Canadian dollars.
Increased cost in Canada (as compared to U.S.): 37%
Of a random recent sampling of name brand running shoes in the U.S., BMO Capital Markets found the average cost of five pairs came to $106.73. Yet the average cost of those exact same shoes, when observed at Canadian retailers, skyrockets to $145.99. At a price gap of 37 per cent, no other goods studied by BMO cost more in Canada when compared to prices in the U.S.
Increased cost in Canada (as compared to U.S.): 8%
By the most recent numbers, Canadian residents take more than 50 million visits to the U.S. each year. And who could blame us? Even simple items like Blu-ray movies cost less in the U.S. The real-dollar difference may be only a few bucks per high-definition movie, but on a percentage basis Blu-rays lay claim to a Canada-U.S. price gap even larger than that of books.
Increased cost in Canada (as compared to U.S.): 11%
It isn’t just small items costing Canadians more. There has been plenty of ink spilled on whether it makes sense for Canadian drivers to buy cars south of the border, but BMO Capital Markets’ numbers make a compelling case to make the trip. According to a random sampling of seven vehicles, the bank’s study found an 11 per cent price gap on cars between countries. On an auto costing in the low-to-mid $30,000s, that’s the equivalent of a nearly $3,500 difference on the retail tag.
Increased cost in Canada (as compared to U.S.): 9%
Even celebrating a birthday appears to cost Canadian consumers more. At a low cost of $5.45 each at many stores, Canucks aren’t exactly breaking the bank on birthday cards each year. But at an average cost of nearly 50 cents less per card in the U.S., birthday cards are just another example of Canadian shoppers spending more on trivial goods than their American counterparts.
Increased cost in Canada (as compared to U.S.): 19%
BMO’s Capital Markets’ survey does not just cover generic goods. As many cross-border shoppers note, items found at stores that exist in both Canada and the U.S. are often much cheaper in America. A recent sampling of a kids t-shirt at clothing retailer Gap found a sizeable price discrepancy, despite being the exact same garment on both sides of the border. The shirt, according to BMO, costs nearly $5 less in the U.S.
Increased cost in Canada (as compared to U.S.): 32%
Effective June 1, new duty-free limits were implemented, effecting how much Canadian shoppers can purchase in the U.S. On visits lasting more than 24 hours, consumers are now able to bring back $200 tax-free (up from $50), and on visits lasting more than 48 hours, consumers can bring back $800 tax-free (up from a two-tiered system that previously allowed between $400-$750 before). That ought to ensure more big-ticket items like lawn mowers — BMO recently found a 32 per cent price gap on the same Toro lawn mower — are brought back by Canadians shopping abroad.
Increased cost in Canada (as compared to U.S.): 12%
Cross-border price gaps are tied to exchange rates, so as the loonie goes often the difference between Canadian and U.S. goods goes, too. Today’s 14 per cent price gap may seem large, but once upon a time it was nearly twice that. In the fall of 2007, goods in Canada cost a stupefying 25 per cent more than they did in the U.S. At that rate, golf balls would have cost as much as 21 per cent more in Canada than they do in the U.S. — nine per cent more than what BMO observed them at in its most recent study.
Increased cost in Canada (as compared to U.S.): 17%
It would appear the printed word simply costs more in Canada than it does south of the border. Books, as we covered earlier, are much cheaper in the U.S., and so too are magazines, which cost as much as 17 per cent more in Canada. Such price discrepancies extend to subscriptions, too. Before tax, a yearly subscription to Sports Illustrated costs $39 for U.S. readers. For Canadians, that same subscription costs more than $66 each year (though there is a small premium included for international shipping).
Source: Money MSN