Canada-U.S. price gap blamed on multinational companies

Many brand-name products still cost 35 to 40 per cent more in Canada compared to south of the border, and a major retail group says suppliers — not merchants — are to blame.

Prices up to 40% higher than in U.S. on brand-name goods, Senate committee hears

There are several reasons brand-name prices are up to 40 per cent higher in Canada than in the U.S., leading a Canadian retail group to say merchants are being unfairly singled out. (Ted S. Warren/Associated Press)

Many brand-name products still cost 35 to 40 per cent more in Canada compared to the United States even though the loonie has been above parity for most of the past year, and retailers are blaming their suppliers.

Diane Brisebois, CEO of the Retail Council of Canada, said the merchants she represents are being unfairly singled out for having higher prices than their U.S. counterparts. Because Canada's population is so small in comparison to the U.S., large multinational vendors can enforce a special Canadian price for brand-name products, she told a Senate committee looking into the issue on Tuesday.

Some studies show the countrywide price gap averages more than 20 per cent, but a Bank of Canada analysis in September put the discrepancy at 11 per cent, a drop from 18 per cent last April.

Brisebois told the Senate’s committee on national finance that there are other reasons, as well, for the price differences. The Bank of Canada analysis said those include taxes, and labour and transportation costs.

The Retail Council of Canada said it wants the Senate committee to look at the companies that supply Canadian retailers, but noted they had not yet been called before the committee.

Testifying after Brisebois on Tuesday was a tax specialist from multinational hockey equipment maker Reebok-CCM, a subsidiary of sporting goods giant Adidas.

The Senate committee has been holding hearings on the cross-border price discrepancy since last year.

With files from The Canadian Press