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“Canadians are rightly annoyed and perplexed when they see price discrepancies on the exact same products being sold on different sides of the border, be they clothing for their children, tools for their work, or vehicles for their day-to-day travels.”

Flaherty cited one example brought to his attention — a DVD that sold in Canada for $29, compared to $21 in the U.S. He said price discrepancies on products often range from 20% to 30%.

Flaherty said that in 2007, he publicly raised this concern with retailers, distributors and wholesalers.

“I strongly urged them to reduce prices and be more open about their pricing practices, to ensure consumer prices reflected the new reality of a stronger Canadian dollar at the time.”

The Finance Minister bluntly noted the dangers to the Canadian economy if the issue isn’t resolved — consumers will shop with their feet.

“While we all would like Canadians to shop at and support local businesses, we live in a market economy, and Canadians know the value and power of shopping around,” said Flaherty.

“If we want our consumers to shop here, we need competitive and clear explanations of the prices Canadians pay.”

Flaherty said the price of many consumer goods have fallen in recent years in response to the stronger Canadian dollar. And yet, he says, many Canadians still have concerns with a “persisting price gap” between the U.S. and Canada.

Liberal Sen. Art Eggleton asked Flaherty what the government can do to fix the problem. Flaherty said the government has control over tariffs and has a code of conduct for credit card companies. Moreover, he said “we have informal persuasive powers.”

“We have ways of encouraging good behaviour through the tax system.”

Flaherty said he welcomes the work of the Senate committee, which hopes to find out why such price discrepancies still exist.

In the months ahead, the committee will hear testimony from consumer groups, economists, retail organizations, small businesses, distributors, importers, and retail analysts.

mkennedy@postmedia.com

Twitter.com/Mark—Kennedy—