From cars to books, Canadians pay more for everything

Engine Specialist Jennifer Souch assembles a Camaro engine at the GM factory in Oshawa, Ontario on Friday, June …Want to buy a Canadian-made vehicle? Get ready to spend thousands more than an American buying the same car.

CBC News looked at the relative prices of 26 vehicle models made in Ontario by Ford, GM, Chrysler, Honda and Toyota and found that for 20 of the models, it was cheaper to purchase the vehicle in the United States, Hawaii included, than it was to purchase the Ontario-built cars in Ontario.

Case in point: Buy a Woodstock-made Toyota Rav4 in Woodstock and pay $24,865, plus a freight and pre-delivery charge of $1,465. Buy the same vehicle in Honolulu and pay only $22,650, with extra charges totalling just $810.

Senator Pierrette Ringuette says she invited reps from the Big Three automakers in the United States to explain the price disparities before the Senate finance committee, but they declined.

"How do you justify a car made in Canada being sold for 20 to 25 per cent more in Canada than in the U.S.?" she asked.

Consumer advocates want the Competition Bureau to investigate the issue.

Honda Canada blames pricing on exchange rates, market conditions, and the cost of bilingual business, an excuse Ringuette doesn't buy. Ford Canada says it prices its vehicles to be competitive in the Canadian market and that retail prices are actually "suggested" and should be negotiated with a dealer. Toyota Canada insists that it's a separate company from the below-the-border Toyota Motor Sales U.S.A. and prices its vehicles independently.

Canadians don't have the option to buy over the border, either, as dealers obey orders from automakers to turn away buyers from Canada or risk losing their licence.

The vehicle-buying frustration isn't the only pricing concern for Canadians. Despite an at-par dollar, we still pay more for almost everything than our American neighbours.

Books and magazines, with prices printed in both American and Canadian dollars on their covers, are perhaps the most obviously marked-up merchandise. The reason: old regulations allowed publishers to up the cost of books in Canada to help cover costs when the dollar wasn't at par.

"They allow importers to charge booksellers the price of the book in the country of origin, plus the difference in exchange rates, and an additional 10 or 15 per cent, depending on the country of origin, organizations representing booksellers said. American publishers can charge an additional 10 per cent on books shipped for sale in Canada," CBC News' Laura Payton reports.

Last year, Bank of Canada governor Mark Carney attempted to explain the differences in retail prices, citing taxes, larger American markets, labour costs, productivity gaps and transportation costs as factors in the price gaps.

Carney said relief might be on its way. In fall 2011, the price gap between the two countries was 11 per cent, an improvement from months earlier, when it was 18 per cent in April.

In September, American retailer J.Crew did what few businesses do: it responded to the angry backlash from customers over their hiked Canadian prices in its online store and stopped charging the duties that often resulted in a price 50 percent higher than the American price. Instead, the company charged a flat shipping fee to cover costs.

Still, J.Crew continues to charge about 15 percent more in Canada for its preppy fashions than at their American stores — to cover the costs of doing business in Canada and to reflect a less competitive market in which prices are generally higher.

Diane Brisebois, president of the Retail Council of Canada, told the Globe and Mail that North American and international producers typically charge Canadian retailers 12-to 25-per cent more than they do American merchants because "Canada provides fewer economies of scale, resulting in higher costs to distribute products."

Bruce Cran, president of the Consumers' Association of Canada, complains that retailers show no signs of adjusting to having the Canadian and American dollar at par:

"I'm amazed at how long this is going on," Cran told CTV News last spring. "Canadian retail doesn't seem to match up to any kind of reality. We're being gouged as consumers."

CBC News in Windsor recently did what many Windsor residents do on a regular basis and went grocery shopping in Detroit.

"CBC News in Windsor recently saved $12 on six common grocery items purchased in Michigan. The basket of goods came to $71.37 CAD in the States and $83.63 CAD in Windsor when the Canadian dollar was trading on par with the U.S. dollar," the news agency reported.

New duty rules allow Canadians to purchase $200 of tax-exempt goods in a 24- to 48-hour stay over the border, up from the previous limit of just $50. A two-hour shopping trip doesn't apply, so Canadians would still be charged for their groceries.