Mind the price gap

For generations, Canadian consumers have watched enviously as our southern neighbours waltz out of American stores with more stuff for less money. With two such highly integrated economies and close proximity, it’s hard not to notice how much more we pay for just about everything. The difference has been even more visible in recent years as the Canadian dollar has hovered around par with the greenback.

In early February, Canada’s Senate finance committee issued its report The Canada-USA Price Gap, enumerating some of the reasons behind this gap, and laying out a four-point plan for narrowing it. The report didn’t find any one reason for the price differences. Rather, it pointed to three main factors: taxes and tariffs, differing rules and regulations, and economic factors, such as shipping costs and economies of scale. So which factors exactly are responsible for the higher prices you pay on TVs, trucks, jeans and detergent? We looked up a few specific examples of price differences (not average prices by country) and explained the price difference for each to tease out the factors at play.