U.S.-Canada price gap defies easy answers: experts

Here's an easy answer: Greed.

Oh, the US is just as greedy. The Canadian companies just are used to earning their money without working as hard for it. But there are other factors as well. The Americans pay their workers even less than we do, so the prices rest on the backs of the working poor. And economies of scale do apply, including to transportation costs.

You're making a common error. You're confusing supply and demand. Workers' wages are not a factor in pricing.

What? Every time I bring up raising the minimum wage I'm told it's impossible because it will just raise prices and the workers will be left exactly where they were before. I don't agree with that, but surely prices have a wage component in them - that's why so much manufacturing has been sent to China.

Think about it. When you go to the store to purchase something, does the wage the worker makes affect your decision? Let's say you were shopping for a new Chevy truck. You go to the dealer and see that the blue one is $40K and the black one is $45K. You ask the sales-creep "Why's the black one $5K more?" and he answers "Well, the blue ones are made in the USA where wages are cheaper, but the black ones are made in Canada, so they're more expensive." Are you going to pay the extra $5K just because one truck is made with higher labour costs? Of course not.

I think you're off base here Lemmy. I'm going to buy the 45k one because it's available in Canada, but not the 40K one. It's a hassle to go to the US to buy the 40k one, and the warranty may not be honored. But make that price diff high enough, because of those differing labor costs, and every one of us would go to the US to buy that truck. But if the truck made in Canada really costs 5k more, then the seller is going have to charge 5k more, or close too it, or go out of business.

If the product costs more in Canada, it could well be in part because of different labor costs. The product is probably made in China anyway, for both us and the US, so cost the same to make in either case. But service, transportation and administration costs still have a wage component in them, that will be reflected in the differing price between our two countries

Yup, and consumers having less competition.

and taxes.


We're getting royally screwed.

There are all kinds of rackets involved.

When I was in the fishing tackle business I saw how greedy Canadian wholesalers had 'exclusive rights' to certain lines-like Coleman coolers or certain fishing lures.

Canadian retailers could only buy from that wholesaler-who's price was almost as high as US retail.

And that's a racket-the price difference comes from sticky wholesale fingers in the pie.

No, no, no...you're changing the parameters of my example. Your last sentence makes sense, but now you're talking about profit, not price.


Dude, you're not understanding basic economics. Wage costs affect PROFITABILITY, not price. If you're not "getting that" I can't help you, but don't go telling me I'm off base. I have 100 years of economics on my side on this one.

Cost and price are different concepts and profit is a third. You're muddling between the three. Input prices are a factor of SUPPLY. Sale prices are a factor of DEMAND and they are NOT related. You're making the same mistake people make when bitching about Maple Leafs' tickets. They blame the high price of tickets on players' salaries. But the salaries are A RESULT of the price, which is a result of demand, not a cause of it. Sorry, andy, but you just don't know what you're talking about on this one.

For example I needed to buy 60 printer over 2 years in order to replace gradually the 20 years old printer I have. At first there was a 18% difference between the best retail price I could find in the state versus the best deal my Canadian supplier (Insight) could give me. So I bought 3 and continue to look around I even had a plan to import them directly from the state since we had truck coming and going to the state, and that there was no duty for this type of printer (impact printer).

Then another big shot supplier (CDW) gave us a call and try to get our business. At first they had EXACTLY the same price has insight. So I told them that I wanted the best US retail price or I was going to import them myself.

two day later I had my price!

If you intend to buy in large quantity Negotiate and even be ready to import the good yourself if you have to!!! you will be surprise how cooperative those Canadian Supplier can BE

Aside from basic consumables like groceries, I make most of my purchases from online retailers.

I ALWAYS price check between the American and Canadian websites. I pay a little more for shipping, but the sticker price is usually very similar. Much less than what it would cost in a retail outlet in Canada.

No, no, no...you're changing the parameters of my example. Your last sentence makes sense, but now you're talking about profit, not price.


Dude, you're not understanding basic economics. Wage costs affect PROFITABILITY, not price. If you're not "getting that" I can't help you, but don't go telling me I'm off base. I have 100 years of economics on my side on this one.

Cost and price are different concepts and profit is a third. You're muddling between the three. Input prices are a factor of SUPPLY. Sale prices are a factor of DEMAND and they are NOT related. You're making the same mistake people make when bitching about Maple Leafs' tickets. They blame the high price of tickets on players' salaries. But the salaries are A RESULT of the price, which is a result of demand, not a cause of it. Sorry, andy, but you just don't know what you're talking about on this one.

So then by your reasoning, demand is higher in Canada than the US. Why?

I didn't say that. There are other factors at play, chief among them being competition and regulation.

It doesn't seem like a one way relationship to me. If the price is too high, there's no demand for a product that's not vital to life. You could raise the price of those Leafs tickets until nobody was willing to pay it. And if the players had managed to negotiate salaries that made those high prices necessary for the owners to stay in business, then the whole thing would collapse. But before it collapsed there would be a reduction in demand.

If a product costs the seller more at the point of sale than it does in the US, then he's going to have to charge more for it to stay in business. That cost includes whatever labor components are higher in Canada. So demand in Canada is elastic enough to keep that price higher, because otherwise that product would not be on sale in Canada because there would be no demand for it and so no profit in selling it.