Parity

Image stolen from CBC News.

As of Thursday morning, with the US Dollar continuing to plummet, the Canadian dollar achieved parity with the US greenback for the first time in 30 years.

Now, will this translate into lower prices on goods in Canada? According to analysts (like this one writing for the Globe and Mail) recent appreciation by the Loonie of 15% has been accompanied by only a 6.4% reduction in import prices, all of which has been enjoyed by import and manufacturing companies with little or no passing on of savings to Canadian consumers. Further, we apparently shouldn't expect this to change anytime soon.

Now, I understand that the US market and the Canadian market are distinct. Supply and demand might differ significantly, there might be higher costs to doing business in Canada due to differences in taxes and reduced economy of scale due to our dispersed population and smaller advertising markets.

However, we live in a smaller world now than 30 years ago - it is much easier today to quickly compare prices on identical goods between US and Canadian retailers, which should drive consumers to vote with their wallets by either 1) waiting for the price drop to come or, 2) cross-border shopping.

Some obvious discrepancies that will be difficult to ignore:

- Prices on Amazon.com vs. Amazon.ca. The links are for identical products: the Knocked Up 2-disc set coming out next week. Which is 39.86% more expensive to buy in Canada. Which, what, gets me closer to free shipping faster?

- I was planning to buy that DVD on Tuesday anyway from a brick-and-mortar store. Maybe I'll go to Best Buy, where the difference is only 26.1%?

- Yesterday was New Comic Book Day. US and CDN prices are both included on the cover. Marvel comics are about 25% more expensive in Canada, while DC books are over 33% more expensive. Maybe we have to pay extra to ship comics from the States to Canada - paper is heavy, you know - but both publishers PRINT THEIR COMICS IN CANADA!

To be fair, extending my searches to books on Amazon, I found that William Gibson's Spook Country, while having a higher cover price in Canada, as actually being sold for a lower price here. So I guess there's that. But it now makes sense, for medium-ticket items, to wait until we have an opportunity to cross the border. Even if you declare what you buy, you'll still save - and books and DVDs are no more difficult to sneak across without declaring. iPods are only about 10% more expensive here, but where's the break-even point? Last year, I bought a Mac Mini in Buffalo and, including taxes etc, spent a couple of hundred dollars less than I would have to buy the same machine here, and that was with a Canadian dollar worth less than 90 cents USD. Now, I'm not saying that I crossed the border without declaring a desktop computer (and a printer) but I'm also not saying that they noticed it was there, you know?