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Why it costs more to buy Canadian

Retail council president spreads blame around

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Retail Council of Canada president Diane Brisebois talks Canadian prices, tariffs and cross-border shopping at a Manitoba Chambers of Commerce breakfast Wednesday.

KEN GIGLIOTTI / WINNIPEG FREE PRESS Enlarge Image

Retail Council of Canada president Diane Brisebois talks Canadian prices, tariffs and cross-border shopping at a Manitoba Chambers of Commerce breakfast Wednesday. Photo Store

The national voice for Canada's retail industry slammed the federal government Wednesday for not admitting to Canadians that high import tariffs are the main reason many consumer items cost more in Canada than in the United States.

"Have you ever heard a government official explain that? No!" Diane Brisebois, president and CEO of the Retail Council of Canada (RCC) told a Manitoba Chambers of Commerce event Wednesday in Winnipeg.

Instead, they let Canadians go on thinking retailers are mainly to blame for the price gap -- that they're gouging consumers, she said.

"And that is the most irresponsible thing to do."

Brisebois cited hockey equipment as a prime example of the kind of impact higher Canadian tariffs can have on retail prices, saying it costs a Canadian family $200 more than a U.S. family to outfit a child with hockey gear.

Brisebois said the Canadian government, to its credit, took steps in last April's budget to address that particular imbalance by eliminating many tariffs on imported sports and athletic equipment and on baby clothes.

"That was huge," she said in an interview after her speech. "Now we're asking them to look at other tariffs (on other imported goods)."

Other consumer items the retail council says are still subject to high import tariffs include soccer boots (17.5 per cent), bicycles (13 per cent), women's shoes (18 per cent) and winter tires (seven per cent).

Brisebois said many of the tariffs were introduced decades ago to protect Canadian manufacturers. But many of these goods are no longer made in this country, she added, "so the tariffs should disappear."

The RCC president didn't limit her criticism to the federal government and its tariffs on imported goods. She said multinational manufacturers are also partly to blame because they often charge Canadian retailers more than their U.S counterparts for the same item. In some of the examples she cited, the difference is more than 30 per cent.

She said manufacturers justify the markups by saying it costs more to do business in Canada. That argument might have held water when the Canadian dollar was trading at close to 60 cents US, but Brisebois said it doesn't fly when the loonie is trading at more than 90 cents US.

"As the dollar increased in value, you might have expected these price differences to shrink," she said. "But in fact, our members... have reported they (suppliers) did not even try to change their price markups."

She said the retail council has asked the federal government to look into whether there are any legislative changes it can make to give Canadian retailers more leverage in their negotiations with international suppliers.

"But we don't know if that's going to happen."

Brisebois said reducing the Canada-U.S. price gap would go a long way to helping curb cross-border shopping, which cost Canadian retailers $16 billion in lost sales in 2012 and cost Canadian governments millions of dollars in lost tax revenue.

On the cross-border shopping issue, the RCC president had some tough words for municipal and provincial politicians in Canada. She said they should be speaking out about the negative impact cross-border shopping has on their local communities and encouraging residents to spend their shopping dollars in this country.

One local retailer attending Wednesday's breakfast session -- Lisa Malbranck, co-owner of Winnipeg's Diamond Gallery jewelry store -- said she'd love to see the federal government do more to educate consumers about the reasons behind the Canada-U.S. price gap.

She would also welcome any efforts to try curbing cross-border shopping.

"There's only so much individual retailers can do," she said.

murray.mcneill@freepress.mb.ca

We're paying a hefty markup

Diane Brisebois, president of the Retail Council of Canada, says manufacturers routinely charge Canadian retailers a higher wholesale price than American retailers. Here are some examples, courtesy of the Retail Council of Canada:

Item U.S. price Canadian price Canadian markup
16-bar pack of soap $6.99 $8.95 28%
Shampoo $9.33 $12.46 34%
Auto tires $128.21 $169.69 32%
Coffee maker $127.76 $167.19 31%

-- Source: Retail Council of Canada

Republished from the Winnipeg Free Press print edition December 12, 2013 B4

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Updated on Thursday, December 12, 2013 at 6:53 AM CST: Replaces photo, formats table

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