Gougers Face Public Shaming as Feds Tackle Canada-U.S. 'Price Discrimination'

By Perkel, Colin | The Canadian Press, December 9, 2014 | Go to article overview

Gougers Face Public Shaming as Feds Tackle Canada-U.S. 'Price Discrimination'


Perkel, Colin, The Canadian Press


Feds tackle Canada-U.S. price gap with bill

--

TORONTO - Companies would be forced to justify why their prices are higher in Canada than in the United States or face naming and shaming under federal legislation introduced Tuesday -- a move some critics called misguided.

Industry Minister James Moore said the aim is to protect Canadian consumers, not regulate prices.

"This unexplained difference in price between American and Canadian prices for the exact same product is frustrating," Moore said at a toy store.

"It's called geographic price discrimination. A more blunt way of putting it is to call it price gouging of consumers."

Under the Price Transparency Act, Canada's Competition Bureau would have the power to compel companies to explain their strategies and how they come by their Canadian prices.

The bureau would then publicize its findings but could not impose sanctions unless anti-competitive practices were uncovered.

Numerous studies have shown prices in Canada to be between 10 and 25 per cent higher on average than in the U.S.

Moore himself rhymed off a list of articles -- shampoo, a television, running shoes -- he said cost as much as double this side of the border.

Last year, a Senate committee cited "country pricing" by manufacturers as one reason for the difference, while a study by the American Economic Review journal also blamed distributors and wholesalers.

Experts often cite a complex set of volatile variables for Canada-U.S. price differences, including the exchange rate, transportation costs, tariffs, and different regulations.

"Those factors do explain some of the price differences but it's certainly not the only story," Moore said.

In 2009, the Conservative government scrapped price discrimination as a longstanding but rarely enforced criminal offence with punishment of up to two years. …

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