More Parity

The loonie closed higher than the greenback one day last week and after that I stopped tracking. Sigh.

The dollars have been pretty much at par long enough that people north of the border are now starting (starting?!!!??) to do some comparison shopping. And, Omigosh! the reporters say breathlessly, Canadian consumers have been getting ripped off!

Even when the exchange rate was greater, Canadians were paying 25% to 50% more for consumer products--mostly big-ticket items like cars, but also weird stuff like shoes and even toys. (How could they not know this? Could they not do the math before?) Now, with the dollars at par, why are Canadians paying higher prices for the same consumer goods?

Recently, American car dealers in places like Buffalo have been ordered by their parent companies to not sell to Canadians. Even with duty and import fees, cars are cheaper to buy in the U.S. and import than they are to buy north of the border. But Canadian dealerships don't like it, and the automakers are bowing to the pressure from them. It remains to be seen whether customers exert similar pressure.

Retailers up here are complaining that customers expect prices to drop too quickly; they bought their stock with a different exchange rate and don't think they should be expected to take a loss. Consumers aren't impressed with this reasoning--retailers can certainly jack up prices at a moment's notice. Why not cut the consumer a break this time, for once? And while you're at it, improve your customer service.

One benefit from all the news stories about cross-border shopping: the newspaper recently listed all the products that are exempt from duty at the border. Books are on this list, as well as artwork and most articles made in the U.S. or Mexico. You have to declare this stuff, but you don't have to include it in the total value of goods you're bringing back from the U.S. when you cross into Canada.

("You" meaning Canadian residents and citizens. Canada customs doesn't care what you Yanks bring in, as long as you're not leaving it.) (Except potatoes. Prince Edward Islanders grow lots of those, so you can't bring spuds in.) (And there are probably laws about alcohol and tobacco, and there are definitely serious laws about firearms, but I don't even begin to try to keep up with those.) If I'm gone 24 hours, I can bring in $60 worth of goods. If I'm gone longer (I think a week), I can bring in $400 in stuff. And now I know most of the stuff I buy, except during the odd trip to Kohl's, is exempt!

Woo-hoo--another reason to buy books in the U.S. The Canadian prices on the back covers are often some 33% higher than the U.S. prices, and they're printed on there, so no Canadian retailer is going to be selling for less any time soon. And now that I know I won't pay duty on them--well, Drury Lane Bookstore in scenic Grand Marais, here I come.

I'm not normally a big shopper. But since I bring money across the border to live, I want to be sure that I take advantage of exchange rates as much as I can. The banks and retailers sure are.