New bill seeks to level U.S./Canada price gap
It’s no secret that consumers in Canada often pay higher prices for a product that sells for much less in the U.S. The Canadian government has introduced legislation to address what it calls the U.S./Canada price gap. But many say the new law comes with no teeth.
The bill is the latest addition to the Harper government's "Consumers First" agenda in the lead-up to a national election sometime next year. The proposed Price Transparency Act was announced by Industry minister James Moore at a Toronto toy store.
Moore says the new legislation would give Canada's competition bureau new powers to investigate why many items cost less in the U.S. than they do in Canada.
"A 1.5 liter bottle of shampoo, priced at roughly 30 percent higher in Canada than in the United States, a 46 inch television priced at 30 percent higher than in the United States, a container of aspirin cost roughly double in Canada than in the United States, running shoes sold for noticeably less in Buffalo, New York than the Eaton's Centre in Toronto," said Moore.
Moore describes it as geographic price discrimination or price gouging of consumers. He says the aim
of the legislation is to see that Canadian consumers pay the same price, or as near the same, as Americans.
"[This] will not set or regulate prices in Canada. What it will do is provide the tools necessary to the commissioner of competition to investigate and to expose cases of unjustified price discrimination that hurt Canadian families and that hurt Canadian retailers," Moore said.
Moore says the commissioner would have the ability to obtain court orders compelling companies to produce documents to prove the difference in what they charge is reasonable. But beyond that, there are no consequences and that has some industry groups calling the plan unworkable.
There are also questions about exactly what is unjustified price discrimination or why it would be illegal in a free market economy, leading some critics to suggest Canadians shouldn't get too excited about lower prices any time soon.