Canadian shoppers are still paying 18 per cent more on average than Americans for the same items, BMO Nesbitt Burns says in a study that suggests consumers aren’t reaping the benefits of a strong dollar.
The rest of the article seems to indicate that, in fact, the report suggests Canadian consumers aren’t fully extracting the penny-for-penny benefits of the strong C$. That’s a different conclusion. However, as the report, entitled “Uh oh… The Price is Still Wrong,” isn’t yet posted to the BMO website, I can’t confirm that.
In the interim, here are some other interesting things that are still true:
– Canada’s population is still 89% smaller than the U.S. population.
– Canada’s minimum wages are still higher than U.S. minimum wages — ranging from $7.75-$8.75 per hour, vs. $5.85-$8.07 per hour.
– Canada’s payroll taxes are likely not the same as U.S. payroll taxes, though I don’t feel like adding it all up to be sure. (Interestingly, it’s incredibly easy to look up payroll taxes in the U.S., while a similar search in Canada leads to a million vendors of software and payroll outsourcing services. This may mean something.)
– Canada is still physically larger than the U.S. Except, as it turns out, in terms of actual land, on which humans might live, the U.S. has us beat — 9.16 million sq km vs. 9.09 million sq km. Who knew? Nonetheless, there are certainly vaster tracts of undeveloped land separating cities in Canada than in the U.S..
Could some or any of these factors play a role in keeping prices in Canada at a different level? I didn’t think a year in retail analysis would be necessary to come to that conclusion, but perhaps I’m wrong. And as BMO’s Doug Porter usually likes to mention in his reports, the GST is only 5% now. Buy, buy, buy.