YOU have to demand U.S. prices

Two days ago, my blog topic was on the price differences between Canada and the U.S. for similar, and in some cases, identical goods. Despite the parity of our currencies, we here in Canada are paying a lot more for the exact same things. I said Canadians were within their moral rights to shop across the border if the price differences were considerable. At the end of that blog entry, I said I was looking for an actual price comparison for a basket of goods in Canada versus the U.S. Well, with the help of a government of Canada staffer in Ottawa, I've found one. Turns out Douglas Porter, deputy chief economist with BMO Nesbitt Burns, has been tracking prices on both sides of the border for a year or more. He wrote an article called "The Price is Wrong" in September 2007. He followed that up with "The Price is Still Wrong" in June.

A year ago, when the two currencies reached parity, Porter started looking at the glaring price differences. He said in September '07 that it would take a few months for the price gap to catch up with the closed currency gap, but he said it should happen. Now he says "times up!"

In fairness, he says prices did come down in response to the higher loonie, but he says they could have come down further. The bad news, he says, is that retailers probably will not adjust prices any further unless consumers demand it. "Without further pressure, this may be as good as it gets for Canadian shoppers." That puts the onus on you to remind retailers when they're prices are out of line.

I'll close with a few of Porter's price comparisons:

New vehicles (average for five mid-range models): Canada, $32,766; U.S., $27,485

New vehicles (average for eight high-end models): Canada, $67,020; U.S., $51,425

Dell laptop: Canada, $774; U.S., $699

Huggies Pullups diapers (40 count): Canada, $18.97; U.S., $14.97

Toro snow blower: Canada, $399; U.S., $299

He did not compare any specific farm equipment or input products. Click the file name below for the June edition of BMO Focus in which the full Porter feature appears.

focus080613.pdf