Canada-U.S. price gap measures to be announced

The federal government will unveil legislation on Tuesday to give the Competition Bureau new power to investigate cases of price gouging in Canada.Industry Minister James Moore will make the announcement at a Toronto toy store, saying the proposed price transparency act follows through on the Conservatives’ promise to end unjustified price differences between Canada and the United States on the same items.Canadian consumers have long complained that they pay higher prices than Americans on a wide range of items, including toys, books, electronics and cars. The Conservatives responded in the February budget, vowing to narrow the so-called price gap between the two countries as part of their consumer-first agenda.Sources tell CBC News the bill to be tabled in the Commons on Tuesday will give the commissioner of competition the power to investigate suspected cases of price discrimination and to obtain court orders compelling companies to produce documents to show that the difference in what they charge is reasonable.The legislation is also expected to give the commissioner the power to impose fines.The promise is likely to go over well with consumers tired of paying more or of having to drive to the U.S. for bargains. The Retail Council of Canada is also supporting the plan and will be with Moore at Tuesday’s announcement.Plan unworkable, industry groups sayBut other industry groups say the government’s plan is unworkable.They argue the Competition Bureau will need to go on a hiring spree to be able to investigate every link in the supply chain — manufacturers, distributors, retailers — and to determine who, if anyone, is responsible for inflating prices.And with more and more Canadian shopping online, it may have little effect.In an op-ed piece published in August, the president of the Canadian Chamber of Commerce, PerrinBeatty, also questioned how the commissioner’s decisions would be made.“The budget did nothing to explain what 'unjustified price discrimination' is, or why it would be illegal,’’ Beatty wrote.No doubt many Canadians are rubbing their hands eagerly at the thought of the government bringing them bargains. They should think again. This cure is worse than the disease.”The government acknowledged in the budget that there are legitimate reasons for higher prices in Canada than the U.S., including higher labour costs, excise duties and shipping fees in a bigger, more sparsely populated country.Those can account for as much as 10 per cent price difference, sources say.Another complicating factor is that the value of the Canadian dollar has steadily lost value against the U.S. greenback this year, closing Monday at 87 cents US.Sources say the goal of the legislation is to focus on the most obvious cases of price discrimination.But even here, critics warn, the costs of complying with an investigation will be significant — costs that will likely be passed on to consumers. The federal government will unveil legislation on Tuesday to give the Competition Bureau new power to investigate cases of price gouging in Canada. Industry Minister James Moore will make the announcement at a Toronto toy store, saying the proposed price transparency act follows through on the Conservatives’ promise to end unjustified price differences between Canada and the United States on the same items. Canadian consumers have long complained that they pay higher prices than Americans on a wide range of items, including toys, books, electronics and cars. The Conservatives responded in the February budget, vowing to narrow the so-called price gap between the two countries as part of their consumer-first agenda. Sources tell CBC News the bill to be tabled in the Commons on Tuesday will give the commissioner of competition the power to investigate suspected cases of price discrimination and to obtain court orders compelling companies to produce documents to show that the difference in what they charge is reasonable. The legislation is also expected to give the commissioner the power to impose fines. The promise is likely to go over well with consumers tired of paying more or of having to drive to the U.S. for bargains. The Retail Council of Canada is also supporting the plan and will be with Moore at Tuesday’s announcement. Plan unworkable, industry groups say But other industry groups say the government’s plan is unworkable. They argue the Competition Bureau will need to go on a hiring spree to be able to investigate every link in the supply chain — manufacturers, distributors, retailers — and to determine who, if anyone, is responsible for inflating prices. And with more and more Canadian shopping online, it may have little effect. In an op-ed piece published in August, the president of the Canadian Chamber of Commerce, PerrinBeatty, also questioned how the commissioner’s decisions would be made. “The budget did nothing to explain what 'unjustified price discrimination' is, or why it would be illegal,’’ Beatty wrote. No doubt many Canadians are rubbing their hands eagerly at the thought of the government bringing them bargains. They should think again. This cure is worse than the disease.” The government acknowledged in the budget that there are legitimate reasons for higher prices in Canada than the U.S., including higher labour costs, excise duties and shipping fees in a bigger, more sparsely populated country. Those can account for as much as 10 per cent price difference, sources say. Another complicating factor is that the value of the Canadian dollar has steadily lost value against the U.S. greenback this year, closing Monday at 87 cents US. Sources say the goal of the legislation is to focus on the most obvious cases of price discrimination. But even here, critics warn, the costs of complying with an investigation will be significant — costs that will likely be passed on to consumers.