OTTAWA (Reuters) - The strength of the Canadian dollar means Canadian consumers deserve to pay prices closer to U.S. levels, Finance Minister Jim Flaherty said on Wednesday.
The Senate finance committee is studying the price differentials at the request of Flaherty, who led a campaign in 2007 to convince retailers, distributors and wholesalers to reduce their prices.
“Over the past five years, as we all know, the Canadian dollar has strengthened considerably compared to the United States dollar. This has presented great opportunities and challenges for Canadian entrepreneurs, exporters and our economy alike,” he said in a prepared text of his remarks.
“Clearly, we all want a stronger dollar to benefit Canadian consumers as well....When they spend their hard-earned money, they deserve to pay a price that reflects the strength of our dollar.”
The price discrepancy is most obvious on books and greeting cards where both U.S. and Canadian prices are displayed; the prices were often set when the Canadian dollar was well below the greenback. It is now close to parity.
Flaherty referred to a BMO Capital Markets study in April that found Canadians were paying about 20 percent more than Americans for the same items.
Among the factors the committee might look at, Flaherty suggested, were how prices were affected by the size of the Canadian market, transportation and freight costs, tariffs on consumer goods and real estate costs.
Reporting by Randall Palmer; Editing by Leslie Adler