Throne speech promises to close cross-border price gap
In this Thursday, May 23, 2013 photo, cars from Canada line up to cross into the United States, in Blaine, Wash., at Peace Arch State Park. In April 2013, in its 2014 fiscal year budget proposal, the Department of Homeland Security requested permission to study a fee at the nation's land border crossings. The request has sparked wide opposition among members of Congress from northern states, who vowed to stop it. A fee, they say, would hurt communities on the border that rely on people, goods and money moving between the U.S. and Canada. Elaine Thompson/Associated Press
Wednesday’s budget-focused throne speech promised, among other things, to take steps to close the gap between prices for goods purchased in Canada as compared to the United States.
It's a message to cross-border shoppers that the government intends to do all it can to keep citizens' dollars in Canada.
- Play guess that price: comparing cross-border shopping
- Interactive: The throne speech ceremony
Gov. Gen. David Johnston, laying out the government’s agenda for the next session of Parliament, made mention of an effort to "take further action to end geographic price discrimination against Canadians," in his speech from the Senate chamber in Ottawa.
At this point, it's not clear what that action will look like, however there are a range of factors affecting the cost of goods in this country — including the transportation of goods further for a smaller population base and the cost of paying Canadian minimum wages.
'Our budget is happier' when cross-border shopping
For some, though, bargain hunting across the border has become a necessity.
Dawn Glezos has a family of five young boys and says every discount she gets by shopping in the United States adds up fast. Diapers, for example, cost her $19.99 US when ordered online through Amazon.com, whereas the same product is 10 dollars more in Canada, she said.
“I can feed my kids more. They're happy, I'm happy and our budget is happier,” Glezos told the CBC’s Chris Brown.
Many bank studies show prices in Canada are about 10 per cent more than in the U.S.
One expert says the Harper government's options are limited.
- Visualizing the speech from the throne
- Read the throne speech
“The best they can do is create an environment that is more conducive to competition and to reduce trade friction. That is bring down barriers and [allow] more items back duty free,” Werner Antweiler, of UBC’s Sauder School of Business, said.
Retailers in Canada often complain they're charged more by U.S. suppliers because Canada's marketplace is smaller and distribution costs higher.
The retail industry says having Ottawa onside with their own negotiations is progress.
Mark Startup, from the Retail Council of Canada, says he believes the government’s throne speech pledge to close the price gap is a step in the right direction.
But with a big family to feed and clothe, Glezos says the gap would have to shrink a lot to change her shopping habits.
“I'm not that hopeful,” she said.
The speech also promises to open up Canada's liquor laws so that Canadians can take beer and spirits across provincial boundaries. A law, proposed by Conservative MP Dan Albas, that opened provincial trade in wine was wildly popular across the country.
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