Business·AMANDA LANG

Addressing the pricing gap is great retail politics, but bad policy

Tackling cross border price differentials is great retail politics — who isn't infuriated to pay 13 per cent more for a flat screen TV? But do we really think that market efficiencies have died some premature death?

Canadians may rail against higher prices north of the border, but can a regulator really change that?

Policing the price gap

The Exchange with Amanda Lang

6 years agoVideo
7:28
Chamber of Commerce CEO Perrin Beatty says a bureaucracy can’t close the Canada-U.S. price gap 7:28

Today's first order of business is the Price Transparency Act — your federal government, working hard to protect you from high prices.

Tackling cross border price differentials is great retail politics — who isn't infuriated to pay 13 per cent more for a flat screen TV?  But do we really think that market efficiencies have died some premature death?

Can it be true that only elected officials in a country controlling two per cent of the world's GDP can set prices accurately? It seems good politics and good policy may be at odds yet again.

— Amanda Lang


Various studies cited by the government found prices for goods in Canada range from 10 to 25 per cent higher than prices in the U.S.

The government says that price gap is  "unexplained." Legislation introduced today aims to uncover an explanation.

It would give powers to Canada's Commissioner of Competition, allowing him to compel companies to reveal confidential evidence related to pricing. That includes producing witnesses, as well as written records.

An inquiry using that evidence would lead to a report, intended to reveal the reasons behind price discrimination.

However, today's announcement hasn't been universally welcomed.

Critics are pointing out that the Commissioner of Competition already has the power to compel evidence, under Section 11 of the Competition Act.

Still, some important voices back the legislation, including the  Retail Council of Canada.

"This legislation will not set or regulate prices in Canada. What it will do, however, is answer the question that has been at the heart of the price discrepancy issue for quite some time: Why?" said Diane Brisebois, president of the Retail Council.

Amanda Lang spoke about the Price Transparency Act with Perrin Beatty, president and CEO of the Canadian Chamber of Commerce.
 

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