Torontoist is ending the year by naming our Heroes and Villains of 2007––the people, places, and things that we’ve either fallen head over heels in love with or developed uncontrollable rage towards over the past twelve months. Get your dose, starting Boxing Day and running into the new year, three times a day––sunrise, noon, and sunset.
Despite the loonie’s heroic achievement this year, there was still an unpalatable flip-side to its gratifying performance for many Canadian consumers.
Although the intense scrutiny of the media has died down as of late, there were more than a few Canadian retailers who simply chose—and continue to choose—to disregard the loonie’s value and charge prices that are almost laughably out-of-whack with the prices of the same products in the US.
There are those who allege that due to fixed costs for Canadian retailers and the fact that retailer costs are in Canadian dollars, it will take year or two for prices to truly reach a comparable level with the our southern neighbours. Even if that were true, however, Canadian retailers still have the ability to engender some goodwill amongst their native consumers by cutting prices (some of them have), and yet many continue to choose not to. In an article originally published in the Globe and Mail, Ken Georgetti explains what most of us were probably thinking anyway: retailers are happy to reap the benefits of the value of the dollar by keeping prices high.
Mr. Georgetti had a different take on the old “fixed-cost” excuse: “Retailers in Canada buy many of their products in U.S. dollars or related Asian currencies, but sell them in Canadian dollars. As the exchange rate swings in the loonie’s favour, their costs fall. Lower import prices should have been passed onto Canadian consumers as their revenues rose.” “The Bank of Montreal estimates that,” Georgetti relates, “even with the Canadian dollar worth as much as the U.S. dollar, a typical basket of consumer goods costs 25 per cent more before taxes on this side of the border. While retail prices should not necessarily be identical, there is no justification for such a huge markup.”
At the end of the day, you can always shop online or head across the border to take advantage of our dollar’s value. The question is, why should you have to?
Photo by girl-anachronism from the Torontoist Flickr Pool.