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K.A.A. Business Solutions Newsletter 7:1. November 2011

 

Why do Canadians pay more? It's complicated

Much has been made in the press lately that prices on consumer goods in Canada are too high in relationship to the same items in the USA. This is not a new issue but one that is of great concern with the Canadian dollar hovering on par for many months and the global economy so fragile. Retailers know why prices are higher in Canada than in the USA and now it looks like at least the Bank of Canada governor Mark Carney know too. “In his testimony Nov 2 before the Senate committee studying the differences he stated

 

He explained that pricing is complicated, with many factors playing a role including:

Taxes, higher sales and larger markets in the U.S., labour costs, productivity gaps.

transportation costs, which in Canada include both gas taxes and a vast area to cover.

 

Even if the Canadian dollar rises in value compared to the U.S. dollar, retailers still have to pay many of these costs in Canadian dollars, he said. That means they don't save as much as consumers may think just by looking at the exchange rate.” Source: Laura Payton, CBC News Posted: Nov 2, 2011 8:50 PM ET

 

Price check  (source CBC)

 

 

 

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Kurt Badenhausen, Forbes Staff

October 4, 2011

 

Canada ranks No. 1 in our annual look at the Best Countries for Business. While the U.S. is paralyzed by fears of a double-dip recession and Europe struggles with sovereign debt issues, Canada’s economy has held up better than most. The $1.6 trillion economy is the ninth biggest in the world and grew 3.1% last year. It is expected to expand 2.4% in 2011, according to the Royal Bank of Canada.

 

For Business And Careers Canada skirted the banking meltdown that plagued the U.S. and Europe. Banks like Royal Bank of Canada, Bank of Nova Scotia and Bank of Montreal avoided bailouts and were profitable during the financial crises that started in 2007. Canadian banks emerged from the tumult among the strongest in the world thanks to their conservative lending practices.

 

Canada is the only country that ranks in the top 20 in 10 metrics that we considered to determine the Best Countries for Business (we factored in 11 overall). It ranks in the top five for both investor protection as well as lack of red tape, which measures how easy it is to start a business.

 

Canada moves up from No. 4 in last year’s ranking thanks to its improved tax standing. It ranks ninth overall for tax burden compared to No. 23 in 2010. Credit a reformed tax structure with a Harmonized Sales Tax introduced in Ontario and British Columbia in 2010. The goal is to make Canadian businesses more competitive. Canada’s tax status also improved thanks to reduced corporate and employee tax rates.

 

Canada leans on the U.S. economy heavily: it’s the biggest oil supplier to Uncle Sam and three-quarters of its exports end up in the U.S. each year. Yet while U.S. unemployment has stayed above 9%, it’s only 7.3% in Canada compared to the 25-year average of 8.5%. The eurozone unemployment rate is 10%.

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