Originally published in 2008 during a rare moment of Canadian-U.S. dollar parity, this article examines how prices in Canada remained up to 18% higher than in the U.S., despite equal currency value. The post offers a critical look at cross-border pricing. It provides a quirky take on behavioral saving through coffee spending. Additionally, there are insights from that year’s housing market trends. While the data is historic, the insights into Canadian consumer pricing and home affordability still echo today. Canada vs US Prices at Dollar Parity may never happen again.
BMO analysts did a survey. Even with the Canadian dollar hovering around parity with its American cousin, prices in Canada are still higher. Things are 18% more expensive in Canada than they are in the U.S. . This is not surprising to me. Price gouging has been going on for Canadians for a good long time. I don’t expect parity in pricing in the next year if the Canadian Dollar stays at parity. When a CD costs $12.99 in Canada and $9.99 in the US (the same one) you can see that the Canadian market is not that important to the manufacturers. Canada vs US Prices at Dollar Parity doesn’t mean as much as you hoped.
Do I sound bitter? You bet.
Tim Horton’s Savings Plan
Now companies like Kia and Rogers are using the ‘If you didn’t buy coffee you could buy this’ in their advertising. I mentioned this first in the Tim Horton’s Savings Plan many years ago. Maybe Tim Horton’s should start their own bank, like PC Financial. Offer points for frequent users. Then they can introduce ‘Save a Nickel with Every Coffee.’ This would be their customer lock. Each time a customer buys with their Pre-paid card, 5 cents is deposited in a savings account for them. This could be their RRSP. Scotiabank already offers something like this. Other financial institutions do too.
Look for the “Bank of the Big Cajun Man” coming soon! 🙂
New Housing Price Increases Still Up
As with last month, this month's year-over-year increase was lower at 5.2% and the month-over-month increase was Zero, which is quite interesting too. Have a look in the attached table for where you live and the new house price increase.
New housing prices increased at their slowest pace in more than two and a half years in April, despite strong markets in Saskatchewan, Newfoundland and Labrador and Nova Scotia.
New Housing Pricing 2008 Stats Canada
| New Housing Price Indexes | |||||
|---|---|---|---|---|---|
| April 2008 | April 2007 to April 2008 | March to April 2008 | |||
| (1997=100) | % change | ||||
| Canada total | 158.4 | 5.2 | 0.0 | ||
| House only | 168.1 | 4.9 | -0.1 | ||
| Land only | 139.5 | 6.2 | 0.2 | ||
| St. John's | 154.1 | 16.3 | 3.6 | ||
| Halifax | 148.2 | 11.3 | 0.0 | ||
| Charlottetown | 119.4 | 2.0 | 0.1 | ||
| Saint John, Fredericton and Moncton | 115.8 | 2.6 | 0.0 | ||
| Quebec | 154.0 | 5.0 | 1.0 | ||
| Montreal | 159.2 | 4.3 | -0.1 | ||
| Ottawa/Gatineau | 166.4 | 3.2 | 0.1 | ||
| Toronto and Oshawa | 145.8 | 4.6 | 0.1 | ||
| Hamilton | 152.9 | 3.2 | -0.1 | ||
| St. Catharines/Niagara | 157.0 | 4.9 | 0.5 | ||
| Kitchener | 142.2 | 3.0 | 0.2 | ||
| London | 141.7 | 4.6 | 0.6 | ||
| Windsor | 103.8 | -0.2 | 0.4 | ||
| Greater Sudbury and Thunder Bay | 110.8 | 5.4 | 0.0 | ||
| Winnipeg | 174.5 | 14.8 | 0.1 | ||
| Regina | 238.3 | 34.0 | 7.1 | ||
| Saskatoon | 241.6 | 43.7 | 0.4 | ||
| Calgary | 251.0 | 2.5 | -0.8 | ||
| Edmonton | 241.5 | 8.1 | -0.6 | ||
| Vancouver | 124.7 | 5.4 | 0.1 | ||
| Victoria | 119.0 | 1.9 | -0.3 | ||
| |||||
I think one of the reasons that we pay more is due to the difference in minimum wage $5.85 per hour in the US vs $8.75 here in Ontario. If you are paying more to staff your store you have to charge more to cover the costs.
That is part of it, but how is it on Amazon.ca I don’t have parity? Amazon’s presence in Canada is an agreement with Canada Post?
–C8j
I don’t think there is any bad news in the new housing index. They tried to twist it in to being bad by adding in the ‘slowest pace in X’ but really 5.4% is still over 3 times inflation for April and I believe over 2 times income growth. That’s still unsustainable over long periods of time and this should be hovering around the same in the 1-3% range just like the CPI and wage growth.