06 February 2013

Canadians Continue to Complain About "Price Gap"


It is irritating for Canadians no doubt.  The Canadian and American dollars are currently at par, yet every time a resident of Canada goes to make an online purchased they are faced with the fact that the price is lower in the United States.  14% lower according to the article above (based on a Bank of Montreal study of a basket of goods).

I am still baffled as to why the main arguments here seem to be about tariffs and discrimination?  It doesn't take an econometric study to confidently state that distribution costs are much higher for large corporations in Canada. Getting goods to people just costs more! Although much of Canada's population is concentrated in South Western Ontario and on the west Coast of British Columbia it remains the case that Canada is a country of 9,984,670 sq km and only 34,300,083 (July 2012 est.) people.  Compare this to the United States with a population of 313,847,465 (July 2012 est.) inhabiting 9,826,675 sq km (including Alaska) and if anything it is surprising that the price discrepancy isn't larger.  The model of distribution for large online retailers is the same as the (struggling) postal service.  Charge more than shipping cost to people in concentrated population centers to offset the cost of getting goods to people is sparsely populated areas. 

This is a call to my fellow Canadian's.  Every since I can remember being first aware of the existence of the United States as a child, I felt as if all Canadians had a neglected little brother type inferiority complex.  It is time to stop feeling this way, economically and otherwise.  Perhaps prices are 15% higher, but is Canada not at least 15% more wonderful?  Subjectively speaking of course, but life expectancy, literacy rates and self reported happiness have to count for at least as much as prices on Amazon.com? 

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