Price gap on tires between Canada and U.S. said to be closing
Tire dealers mount 'a direct attack on the big U.S. shopping season'
Some Ontario tire dealerships have dropped their prices this year, closing the price gap between Canada and the U.S.
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Some dealers say manufactures are to thank for the price decrease.
"A lot of the tire manufactures have really listened to our complaints and they have brought their pricing a lot closer to the U.S.," said Tammy Meye, the General Manager at Heritage Tire.
She said last year there was a 20-25 per cent price gap between prices at her shop and U.S. competitors.
According to the CBSA, tires manufactured in the U.S. and that are imported via Ontario are subject to 13 per cent HST and are duty free under the North American Free Trade Agreement (NAFTA), while tires manufactured in other countries are subject to 13 per cent HST as well as seven per cent duty.
A year ago, the Senate committee on finance confirmed that "country pricing" by tire manufacturers forces consumers across Canada to pay anywhere from 30 to 50 per cent more for the same tires selling in the U.S.
"Now we're seeing it very, very close," said Meye. "I actually had a customer there last week who had priced over there and priced over here — we were $1 different a tire, so that's fantastic to see."
According to Dave Santing, president of OK Tire, retail tire sales are up by 15 per cent this season, and tire prices are down 3-5 per cent.
It's a bit of a different market than last year, when U.S. competitors were luring customers over with rock bottom prices.
"Retail tire sales are stronger than the previous year," he said. "From the manufactures, some of the pricing did come down slightly."
Santing said falling prices aren't common. Typically prices are up every year.
He said the last time he saw prices drop like this was 8-10 years ago.
Kevin Rathwell said he likes to spend his money on the Canadian side of the border. But when he bought his winter tires in Windsor this year he noticed the difference.
Rathwell spent $500 dollars on a set of winter tires this year.
"It was a better price then it has been in the past," he said.
Bob Bignell, executive director of the Tire Dealers Association in Ontario said a few factors have contributed to the lower tire prices, including the lower Canadian dollar.
"They've been pretty competitive this year, it's not just the tire dealers ... all retailers across Canada have stood up and protected their turf and they've taken a direct attack on the big U.S. shopping season," Bignell said.
Bignell said it has been a better tire season than Canada has seen in decades.
"It's just been a re-adjustment, the manufactures value the relationship with the tire dealers. The independent tire dealers are really the expert conduit to the consumer for the manufacturer," he said.
Low dollar, winter demand also factors
"There's a lot more of a realization of the importance of putting winter tires on so that's contributed to it as well," said Bignell. "With the dollar being the way it is … and an early snow contributed to a real big season for the tire dealers."
He said retailers have been so busy this year, some are already running out of stock.
Bignell has spoken with a few tire dealers and they've told him "this has been absolutely frenzied this year, to put tires on."
But will these prices last, is the question everyone is asking.
"The weather we can't predict for next year, we can't predict the dollar, but I think the pricing, from the manufacturing and the programs, it looks like they're starting to pair up, hopefully that will continue from here on," Bignell said.