What can be done to encourage Canadians to support local retailers?

Question

A group of Canadian shoppers claim a Canadian border guard delayed and even chastised them for spending money in the US (more here: http://ca.news.yahoo.com/s/cbc/071105/canada/canada_bus_shoppers_6).

Meanwhile, Finance Minister Jim Flaherty says he's 'encouraged' to see some retailers cutting their prices in light of the super-strong loonie (http://ca.news.yahoo.com/s/capress/071105/national/loonie_economy_8).

Answer 1

The sad fact is, that you can not convince Canadians to spend their money in Canada.

We have tried for years to get that message out to them, and they refuse to buy into it.
As a result, thousands upon thousands of well paying Canadian jobs have left the country.

This was the case in textiles, they bought foreign, and the Canadian manufacturers went out of business, the same with electronics, and now the same thing is happening with the automotive industry
Canadians love a bargain, just as long as it does not hurt them.

What they do not realize is that eventually it will hurt them.

Answer 2

The only reason that I would not shop in US because the stuff in Canada are cheaper. Stuff meaning clothing, electronics, appliances, toys, cars, and things that are outside of necessity.

There are three solutions I can think of to this matter. One is to ask the company to reduce the price down to lower than the price in US. Remember, we still have to pay the 14% tax, so the reduced price should be 14% less than the US price. Keep in mind that the reduced price has to be low enough that the Canadian residences feel they are gain more value by shopping in Canada. This solution might take longer for the chain stores due to the fact that most of them based out of US, so would they really care? And how would they compromise the cost?

The second solution would involve the Canadian government. We could reduce the tax amount. I want to say 0% on everything the Canadian residences buy from now until Jan 5th, 2008. But for this to actually works, I think 4% tax will be more viable. Let's do a quick cal of how does this 4% is coming from. 14% (gst+pst) minus 8.5% (US tax) minus 1.5% (bonus reduction from the love of our govt) equals 4%. To me, it is the quickest and happiest solution since we, the Canadian government, are the only party involve in this decision making. If this gets approved, it can happen tomorrow.

The third solution being also quick and with some madness. The Canadian check point could start charging people from going across the boarder. Some what around $50 per person, kids under 12 are free, just to make this sounds nicer. This would be the way to go if the Canadian government would want the residences to hate them (although not everyone likes them). I don't know if the government could do that, really, but it's an idea.

Answer 3

I asked a large retailer to match a US price. They wouldn't, even within their own chain.
The only intelligent question / comment they had was I might not get a valid warranty. I can order online through another retailer what I want for $300 US, pay $40 shipping, save $70 due to exchange rate and price difference, and get a lifetime warranty. The only difference is I have to wait a week or two and save 10%.
I plan to go back with the numbers and ask the retailer again to match the price, with all the answers. I'll give them the chance to match, but if they don't want to, then I will let them know exactly why I am not buying from them. They will match or beat each other locally, but not cross border, even against themselves.
Even the excuse that the exchange rate has changed too fast doesn't justify the high prices. If inventory was ordered 6 months ago when the dollar was at 0.90 April 30 (Bank of Canada data), a 16% price difference now is still too high. The same thing was 25-30% higher until the last week or two.
The more of us that push for reasonable pricing and tell them why we aren't buying from them, the more likely they will change. Or go out of business. Have to try a smaller retailer and see what they say ...

Answer 4

vThey wouldn't, even within their own chain.
The only intelligent question / comment they had was I might not get a valid warranty. I can order online through another retailer what I want for $300 US, pay $40 shipping, save $70 due to exchange rate and price difference, and get a lifetime warranty. The only difference is I have to wait a week or two and save 10%.
I plan to go back with the numbers and ask the retailer again to match the price, with all the answers. I'll give them the chance to match, but if they don't want to, then I will let them know exactly why I am not buying from them. They will match or beat each other locally, but not cross border, even against themselves.
Even the excuse that the exchange rate has changed too fast doesn't justify the high prices. If inventory was ordered 6 months ago when the dollar was at 0.90 April 30 (Bank of Canada data), a 16% price difference now is still too high. The same thing was 25-30% higher until the last week or two.

Answer 5

Well, the answer is obvious, lower canadian prices. But for those of you that have already posted, you have to know that for most LARGE retailers, they buy their inventory, in some cases 6 to 8 months in advance, and cannot lower prices immediate because those products were purchased at a higher rate. Not only this, but any retailer importing into canada products from overseas (namely China) has to pay taxes, tarrifs, and duties that perhaps the United states has to pay. Also, if you take a look at what wages are earned in Canada compared to the U.S., you will find that Canadians get paid more for the same job than their U.S. counter parts. In some states, a gas bar attendent there makes 5 dollars an hour vs. 8 dollars an hour for the same position in Canada. This reflects a higher overhead cost to the retailer, and their prices have to reflect that. ALSO canadian retailers pay higher workers compensation and employment insurance premiums for their employees, and are taxed higher than in the US. So in all reality the only way you can get people to continue to shop here is to get the government to relax tariffs and taxes that Canadian retailers have to pay, and lower the rates required by Canadian retailers to pay for EI etc. We have a surplus, lower income taxes, wich can mean lower wages, which in turn should reflect lower prices in stores. However, some retailers are really cashing in, and should be lowering prices anyway, perhaps not exactly the same as the US but enough to justify a little higher margin because of the circumstances stated above. Everyone would have to give a little to get a little, consumers, retailers AND the government are responsible for the high prices, they should work together to find a common ground and maybe, just maybe, things might end up cheaper here. BARE IN MIND THAT I AM NOT A RETAIL OWNER, JUST SOMEONE LOOKING AT IT FROM ALL SIDES.

Answer 6

Things to consider about cross border pricing with a strong loonie.

It just doesn't happen overnight. Just as we don't see an immediate price swing when the dollar is low, there isn't a fast swing when things go up. Give it more time.

1. Canadian businesses are taxed more than American businesses.

2. Wages are higher in Canada.

3. Goods produced in America could still be coming from stock that was made when the dollar was lower.. going forward prices should change.

4. Many Canadian companies are provided with prices from American suppliers, their costs have gone up as a result of their weaker dollar, maybe no change or price increases can still happen.

5. If some Canadian companies do nothing for their communities, then American companies certainly will do nothing for local Canadian communities.

6. If you think it's worth the time and hastle (depending on where you live and the circumstances) then go for it. Sometimes, some "better deals" don't really save you time or energy or even money in the long run. Find out what your time and effort is worth and weigh that into the factors as well.

7. Go in business for yourself and find out exactly why price changes don't happen overnight and listen to everyone that thinks you're ripping them off. I highly doubt there is a big wad of cash piling up in most Canadian retailers in this very recent and sudden dollar increase.

Answer 7

Come on! This is not advanced calculus! The reason people are flocking south is price. Dead simple. The same products sold here are going for significantly less across the border. Even though i understand that our social system costs more and that price is carried on to the consumer, I do believe there is a certain amount of gouging and markup going on under cover of 'business expenses'. Retailers know damn fine that people will continue to greedily consume at any cost.

If you want the thrifties to stay here, lower the prices.

I heartily encourage supporting your local grassroots economy, for example, I will buy Ontario produce EVERY TIME when available, even if it is double the price as the same product from say, California. I will spend the extra because I know it is fresher, purer, an all round superior product. Furthermore I get the added bonus of warm fuzzies knowing I'm supporting Farmer Jim down the road to stay in business. it's not only win-win, it's WIN-WIN.

However, when faced with buying products (like semi and durable goods) made in offshore industries, from retailers that 90% of the time are not Canadian owned anyway, and the product is exactly the same whether here or there, well...of course, price is often the bottom line. It is the only incentive.

Answer 8

First off, I have lived in the 'States for a little more than a year, so I know how well they have it over there. For one thing, significantly less tax or non at all on 'necessity' items like clothing, grooming, etc.

I agree with many opinions. Prices need to be lowered. Our dollar has been close to equal the American dollar for a loooonnnggg time. Yet, when I went to Shoppers' the other day to buy a birthday card, I figured what the heck, I'll buy a Christmas card, too. But quickly changed my mind when I decided that I did not want to pay $2 more Canadian on a $4 American card.
What about fast food. You see the dollar menu advertised on TV for the 'States. Yet ours is still $1.49.... Hmmm.... an extra 50 cents more because the American dollar was stronger. I'm sorry, I can't justify paying that much more in Canada, even when our dollar is weak. (not to mention KFC in the States has double the menu as here)

I think by buying in the States, we are making our problem of higher prices worse. We need to keep buying in Canada (Canadian made products) to show those Americans that we don't need their merchandise to keep our economy strong.
Support local small businesses and restaurants to keep those American retail chains our of our wallets.
If you want a good bargain, try local discount stores, or EBay.

Answer 9

I own a furniture store, specialising in Canadian made products. We, like many of our competitors, have seen a substantial drop in business due to "the Dollar" (not that people are buying furniture south of the border, but we all have only so much disposable income). Our fixed costs have not dropped - Hydro is not suddenly getting their electricity from the US, our store is still in Canada, being charged loacl rental rates, our staff still want to be paid in Canadian Dollars etc. Our manufacturers still charge us the same, their labour is Canadian. OK, some of the raw material may have come from the US, but this is a small proportion of the total costs. Dropping their price would help, but not substantially.

The issue is that Canadians have been led to believe (admittedly by the retail industry) that if they pay full price they are being ripped off - hence mark up the prices so you can offer a sale price and the customer thinks they are getting a deal. So as a consumer if you see a sticker price lower in the US, don't be surprised, it's not necessarily gouging by the Canadian retailer.

Answer 10

They could lower the prices for sure, I'm from the USA and now happily married to a Canadian living in Alberta and I am very shocked at some of the prices, I dont see the reasoning behind some of the prices at all... There are many things that I refuse to buy due to the extremely high cost here in Canada.. and I dont mean just letting folks have the magazines and books for the USA price and if they can lower prices where there are major border crossing cities in the different province's should lower the prices in all the stores no matter what province or city or town or village that you live in.. Some one some where is making the money so why not pass the savings on to we the people whom make their jobs possible.. Gosh I better stop, I could just go on and on lol

Answer 11

You buy a 10-pack of something vs. a single item, you pay less per unit, right? Now imagine you're a large electronics retailer. You buy 10,000 items wholesale while your competitor in the states buys 100,000. Which store do you think pays more? If you're a book publisher, same thing. You print 5,000 they print 50,000, you pay more....even if the books are printed at the same time for international publisher for the Canada and the US, the Canadian portion will cost more AND more per unit to ship.

Is it really that hard to figure out?

Canada is not a small country, 30 million is a lot, but many posters on here are only comparing us to the U.S. market. Of course many things are cheaper down there....and if you compared many US-bought good to those bought in China, guess whose would be cheaper?

Similiar "international brand" goods bought in Canada are the same or higher price in the UK and Europe.

Canada also pays way more in shipping and manufactuer's tax than the US.

If you want a lower American standard of living versus a higher Canadian standard of living, they by all means gas up your car, drive a few hours and go shop in the US. If you can't afford the slightly higher cost to live at a Canadian standard of living, then perhaps that's a good option. And don't worry, if ignore your local retailers long enough and watch jobs start disappearing, you'll be living at American standards and paying US prices soon enough.