EMAIL
| PRINT
| REPORT TYPO
| SEND YOUR FEEDBACK
|
The price gap and your consumer rights
- November 2, 2007 9:52 AM |
- By Your Voice
As the value of the Canadian dollar continues to climb, consumers are left wondering why there is such a big gap between Canadian and US retail prices. From the price of books to electronics and automobiles, why are we still paying more and how can Canadians get the most bang for their buck?
Bruce Cran is the president of the Consumers’ Association of Canada and has long been an advocate for consumer rights. He took your questions on Canada and the United States.
- Download the audio of the interview (Runs 27:01)
Categories
All News blogs
Most Commented
Most Recommended
Your Interview
Most Commented
Most Recommended
Recent Entries
- Staying healthy: How to monitor and reduce your risk of disease
- For decades, the most popular tool for assessing a person's risk for obesity-related problems like diabetes and heart disease was the body mass index, or BMI. But some experts think physicians should focus on their patients' waist measurements, and a... Continue reading this post
- Privacy online: How to stay secure in the age of social media
- Following another round of criticism over its privacy settings, Facebook is tinkering with its policies once again. But many users are starting to ask whether it's too little, too late. The site has struggled with negative user feedback, while continuing... Continue reading this post
- Your Interview: How to talk to your kids about sex
- By Renee RamsarranSex education is an ongoing process that usually starts at home. Children learn about sex and sexuality through their parents, yet families often hesitate to talk about certain issues with their kids. How can you take an active... Continue reading this post
Comments (7)
It has always baffled me, when the dollar goes down the manufacturer, wholesaler, retailer adjust their prices rather quickly but when the dollar rises it always takes a long time to see parity with US prices. What is behind that?
Bruce Cran: Well, we’ve noticed that too Bert. I don’t know why the difference, I think there’s a reluctance, there’s been a reluctance on the part of a lot of retailers to recognize that they’ve got a problem and that’s exactly what they have. When they’re asking Canadian customers to buy from them, that’s like they’re just asking them to subsidize their businesses. I’ve been in business all my life and I’ve, a few times, been in trouble with almost the same thing and I can tell you from personal experience that if you don’t recognize and remedy it quickly, you’re going to end up with a lot of old stock on your hands. I really don’t know the reason behind it, maybe there was a reluctance on people’s part to realize the dollar had risen and maybe they thought it was going to go back down the next week or something but I don’t think that’s going to happen. At the moment we’re trading at over $1.10 today and I think it’ll go higher yet. But I don’t think it’ll go below parity for quite some time.
Taking the current value of our dollar,as Consumers, how can we put the pressure on to insure that we are paying a fair price?
Bruce Cran: I think the consumers generally will end up establishing value and this will be done through the market place. It took a heck of a time for it to start to work, but it was going to work last week and I think with that threat, and it’s a very real threat, it’s going to happen. Unless Canadians figure out a way around dealing with the situation, as retailers give us some more value. I really don’t think we’re looking for goods to be the same price, we’re looking for a heck of a better deal than we’re seeing at the moment.
What can be done to force the federal government to make the costs of doing business in Canada less expensive? For one, why are import duties so high?
Regards.
Bruce Cran: I think that Mr. Flaherty could be taking a very serious look at removing duties, as I said before, on things that no longer need it. There’s lots of rather odd duties and tariffs out there to protect industries that no longer exist. I think the federal government could look through that lot and remove all those tariffs and give the retailers some relief. In fact I think that’s about the only thing he can do, other than make everyone aware of the current situation, but I think Mr. Flaherty’s already done that.
When purchasing large ticket item in the usa is the exchange better if a credit card is used, versus changing over your money at the canadian bank first.
Bruce Cran: It should be pretty much the same. I think the main banks and credit card companies take two or three per cent, you’ll lose that anyway. We’ve got a lot of calls this morning saying that finally some of the stores are up to par, that’s because the dollar’s reached $1.10. That’s not exactly the most generous thing. Today as you’re going down there you should be getting $1.06 or $1.07, if you were changing Canadian money. But by far the best process for most people is to buy their American money in Canada first. Now with regard to the credit cards, they should be about the same rate. I have spoken to the major credit card companies and their interest rate seems to be pretty close to the banks. So it should be alright to use a credit card in theory.
I presume that until our Canadian retailer have a chance to replace their current stock with stock purchased at more favorable exchange rates, the prices will not go down.
So my questions are:
1). How quickly does merchandise turn over on the average (and is there a way to find/figure it out)?
2). Do retailers buy stock in advance to make their costs more predictable in the short run?
PS: It also seems the strenght of the CDN$ came at a particularly bad time for retailers, since I undestand many of them make most of their profits from the Christmas season.
Bruce Cran: I don’t think this question is relevant to the current situation. There’s only one question at the moment, what does it cost across the border and what does it cost in Canada? Retailers that can’t adapt and recognize it and reduce their prices, or increase their service or in some other way enhance their position, they’re going to fail. I wish them luck because they have my utmost sympathy, but that’s the way it is. At the moment it’s a buyer’s market and I don’t think buying at high prices from car dealers or car companies or any retailer at a higher price is making a patriotic gesture. That money is in the hands of the consumer and the consumer should do the best he can with what he’s got. At the moment that’s the decision they’ve got to make.
I would suggest that the auto industry doesn't want to reduce pricing as it would have a serious impact on their leasing business. At the termination of existing leases, will lessees buyout such used vehicles at prices equal to or in excess of a lower cost new vehicle then on the market?
I think not, what do you think?
Bruce Cran: Yes, this is what the automobile manufacturers have been trying to protect all along. They’re trying to protect the cost of used vehicles — I just don’t see that it’s going to work out very well. There are several class action lawsuits in both the States and Canada challenging what they’re doing in the States. In other words, denying access to Canadian buyers. What are they gonna do next, eliminate Chinese, Japanese and Australians? I really don’t know where that’s going to go and it doesn’t seem as if that is something they should be doing. I know there’s been some challenges about the warranty in California, which I believe have been straightened out. So if you buy a car in California it’s my understanding that they can’t deny you the warranty. There are certain other rights down there that apply no matter where you come from.
Why do more and more online businesses with both a canadian presence and a U.S presence think it is "good practise" to do their best to prevent Canadians from comparing prices by including new auto-redirects on their websites so if you are using a Canadian based ISP to go only to the canadian site.
(example: oakley.com / oakley.ca prices are about 50% higher on oakley.ca but that comparison was done a few weeks ago before they started to redirect the online traffic.)
Bruce Cran: I’m aware of this but I really don’t understand the philosophy behind it. It seems really quite ludicrous to me. I have bought, in the last month, several items from U.S. websites. It doesn’t make sense to me that they would have a policy like that.