Canadians should clamour for lower prices: analyst

The loonie may be hovering around parity with the U.S. dollar but Canadian consumers are paying more than their American counterparts for the same goods, according to one analyst.

'If Bob Barker was still on the job, he would likely say, 'Canadian retail prices, come on down!' and Canadian consumers should too.' —Douglas Porter, BMO economist

Douglas Porter, BMO deputy chief economist, said in a report Thursday that while some prices in Canada have been appropriately adjusted, the average price gap is considerable.

"Canadian consumers are far from reaping the full rewards of the massive run-up in their currency in the past five years," Porter wrote.

"This is keeping inflation higher than it otherwise should be, contributing to the upward pressure on interest rates. If Bob Barker was still on the job, he would likely say, 'Canadian retail prices, come on down!' and Canadian consumers should too."

Do price comparisons, consumer group urges

Bruce Cran, president of the Consumers' Association of Canada, said there's no excuse for the price differential.

"There's absolutely no justification for this," he said. "Somebody is making windfall profits … and they can't beweaned from this."

Cran said consumers should do price comparisons between stores in the U.S. and shop accordingly.

"We're recommending that people be aware, be informedabout what the prices are in the two countries and if they are satisfied that they're going to get a better deal across the line, that's where they should go," he said.

A general survey of consumer items reflects significant differences. Some examples:

• Bill Clinton's newest book, Giving, is discounted to $20.96 in Canada and $14.97 in the U.S.
• A Sony Ericsson Walkman camera is priced at $359 in Canada and $299 in the U.S.
• A box of Hamburger Helper at a Bellingham, Wash., grocery store sells for $1.75 as compared with $3.49 at a Vancouver supermarket.
• A pair of women's long and lean jeans from the Gap in the U.S. is $39.99 versus $69.50 in Canada.

Book prices won't reflect exchange rate until 2008

Consumer Yoland Antione in Toronto said she was surprised to see such a significant difference in book prices. One book she was browsing was listed as $12.95 in the U.S. and $18.95 in Canada.

"That's six dollars. That's a lot of money," she said. "[I won't] be paying that."

Ian Donker, the owner of the independent chain Book City, said he's been fielding many complaints about pricing lately.

"It hurts the local bookseller when you have this price disparity printed on the book and all our other costs have stayed the same," he said.

But consumers shouldn't expect book prices to reflect the new exchange rate until the new year, said Tracy Turriff, vice-president of corporate communications for Random House Canada.

"The price changes that we've made now to reflect the current exchange rate will appear on books that are going on sale in early 2008," she said.

Porter said cross-border shopping may increase despite high pump prices and border delays. He noted personal exemptions have increased from $200 to $400 for a 48-hour period and wide price gaps may compel some consumers to make the trip.