It happens quite frequently that I’m looking for something online and could not find a reasonable price in Canadian stores or it’s just unavailable and when I find something in a US shop, even with the currency exchange rate its still quite cheaper. Why do I feel like we are getting screwed here?
- Economies of scale
- Lack of regulation
- Dollar conversion fucks us with no lube
- Tariffs on importation
Why does it seem like almost everything is cheaper in the US compared to Canada?
It doesn’t “seem” generally most things are cheaper in the US. They have a larger market, more competitions etc…
Growing up in Windsor, almost everyone I knew would drive across to Detroit to do Grocery shopping, Shopping or to get gas. Everything has always been cheaper
Awe yes, the famous “support local” initiative with a 2-300% markup.
It “seems” that way because it is.
The US has nearly 10x the population of Canada, and is also more densely populated, so larger market than Canada. This allows an economy with more competition than Canada. They also have more economies of scale than Canada. And because they have more competition and economies of scale, they inevitably have more competitive pricing than Canada.
There’s also the fact that the US is the largest economy in the world, and large corporations there have the kind of buying and negotiating power for imports that Canadian companies simply don’t.
Oh, and let’s not forget Canada’s protectionism, like how the government’s giving Robelus free reign is a direct reason behind why our telecom prices are so pathetic.
And we haven’t yet mentioned how they have lower taxes in the US.
So yes, US is generally cheaper than Canada, but that’s not all. Here’s the double whammy: in a lot of (most?) professions, the salaries in the US are higher, too.
I recall a few years back when loonie was at par with the greenback, Canadian government ordered a study to investigate and confirm why Canadians are paying more for the same stuff, than the Americans, even though the supply chain networks are, essentially the same. And, including items that were produced in or directly imported into Canada.
A few months and a couple of million dollars later the result was: “Canadian retailers are charging more because Canadians are willing to pay more”. All the other bull crap about Canadian market being smaller, supply chains being more complex, cost of last mile delivery being higher, competition stiffer in the US turned out to be unjustified. The government swept the results under the rug and never spoke about it again……
PS: was trying to find that formal report and having issues. You can see by search results that price parity was a hot topic around 2009-2011, when the price transparency legislation was introduced, and then again in 2014 and then kinda disappeared from the agenda…
I work in the trade community and live on the border. Years ago when there was a huge disparity in things like tires, lumber, cars, etc. There was a quote from one mfg or industry rep I think it was tires, and his explanation was “Canadians are willing to pay more.” Literally we are used to getting ripped off so we just pay it. They used to manufacture vinyl fencing in Ontario and you could drive across the border and buy it for half the price in the USA. Now a part of this comes from a larger market and negotiating power with manufacturers in the USA. May have something to do with wages and costs of production as well. It used to be wayyyyyy worse than it is now, very few people going to the USA to save on deals. Another thing is there is more selection and more opportunity to find deals and closeouts in a bigger US market if shopping online, but not always true. Gotta check everywhere.
Isn’t it fun how crossing that border adds 10k to a vehicle? Oh let’s not forget that when our dollar was worth more than their’s they would refuse to sell us vehicles without voiding the warrantee.
Because it is. The USA has various trade deals that are better, they hold the world’s reserve currency making their buying power and the power of their dollar stronger, they have lower sales taxes in general (for my home state it was 6%).
There are far fewer import/export taxes, at least, when I was living there, there was no import tax on items coming from China, and the Free Trade Agreement with China kept consumer goods at SUPER low prices.
Then you couple that with just the sheer number of people and retailers being able to get way bigger bulk discounts, because they serve 350 MILLION consumers, and you get lower prices.
There’s also the fact that wages are lower, shipping costs less because gas prices are lower, and you have a recipe for cheap goods even after they leave customs at ports.
There are more roadways, more expressways, more highways, and infrastructure is better while enforcement of rules like weight limits is spotty at best.
On top of that, fewer regulations results in lower operating costs for businesses. Water and Electricity are generally lower, insurance rates are SUPER LOW compared to Canada (God, I miss my 70 dollars/month for PLPD on my junky old car), and when every single cost is lower, the prices go down for consumers, while companies still post MASSIVE profits.
The only places in the USA that requires anything to be FLOWN in, would be Alaska, and Hawaii, and their COL reflects that.
Meanwhile almost every province in Canada has small towns way up north with spotty or no road access where goods have to be flown in. The protectionism and supply management regimes here, as well as the duopolies (only 2 or 3 major companies actually operating within a given space, while they have multiple brands which give the illusion of choice) which allow for easy conspiring against consumers to fix prices… See: Bread price fixing scandal, or the Dairy Cartels, keep prices absurdly high for certain basic staples.
Aside from all the answers listed above, there are quite a few tariffs on goods crossing the border, and artificially high fees because shipping companies are bastards.
Bought something that steel in it from down south and got slapped with a tax.
One factor is the cost of distribution across our country is a lot higher. Since chain stores like to have consistent pricing, you’re paying for the cost of trucking to the remote corners of Newfoundland, even if you’re buying it down the road from the factory it was built it. Since the US is much more densely populated, this is less of an issue there
Because your friends/family/neighbours/countrymen own oligopolistic distribution rights of the products you want and they determine the price you buy it at in canada. They know you dont want to pay the exchange rate, 20% duty, shipping fees and handling fees so they just set the price to slightly higher than that.
Definitely more competition keeping prices competitive.
i crochet and literally envy the yarn sales they have down there. We have michaels (30% off one regular item, still $7 a skein) and walmart to get decent priced yarn but they have joanne’s, hobbie lobby, michaels, walmart, target as big chain stores so there’s always amazing deals you can find $1-$2 skeins of yarn down there that we would rarely get to see here.
Too many monopolies in Canada.
Yes, of course it is. The US has more people, more supply, more people = more demand - so they can keep prices lower than vs. In Canada.
Import fees, smaller market, higher sales tax
Because Canadians just sit there and take anything from their government and do not stand up for themselves. It’s that simple
Higher taxes, higher gas price, less productive economy, more regulation, etc.
Fitness supplements are one place where government policy extremely noticeable in a bad way. Way less selection and higher prices.
We are getting screwed. This country sucks