Winnipeg Free Press - PRINT EDITION

Committee urges review of tariff policy

Senators study reasons for price gaps between Canadian and U.S. products

  • Print

OTTAWA -- The federal government needs to launch a comprehensive review of its tariff policy to help bridge a yawning price gap between Canadian and American retail prices, a Senate committee said Wednesday.

After studying the issue for eight months, the Senate finance committee said tariffs on consumer imports are not the only, or even major, reason for the price differential, but they are a significant factor and one that government can do something about.

The senators noted Canada still has an 18 per cent tariff on hockey pants, even though it could find no manufacturer still producing them in Canada.

And the problem is compounded depending on when the tariff is applied in the supply chain -- by the time it gets to the consumer, the duty could have multiplied two or three times.

"We're not saying get rid of all tariffs; we're saying study this and determine if they are appropriate and in most cases they are not," said Joseph Day, the chairman of the committee.

Prior to the report's release, Finance Minister Jim Flaherty, who asked the committee to look into the issue in the first place, said the government has "been looking at our tariff situation carefully, particularly with respect to consumer goods in Canada, to see what we could do."

But he also noted tariffs bring in needed revenues for the government. According to the report, they brought in $3.6 billion in 2010-11.

The long-awaited report makes clear there is no one reason -- or fix -- for the price differential, leading tens of thousands of Canadians to cross the border to stock up on clothes, alcohol, food, books, household supplies and even car tires.

Economies of scale, the bigger U.S. market, higher input costs -- particularly transportation costs -- and so-called country pricing, whereby manufacturers and suppliers charge Canadian retailers a higher price for brand-name items than their U.S. counterparts, all contribute to the phenomenon.

The report contains some head-scratchers.

For example, a Toyota made in Woodstock, Ont., costs more in the southwestern Ontario community than in Honolulu. Books are routinely cheaper in the U.S. by up to 40 per cent with some titles.

The report points out 90 per cent of goods enter Canada duty-free, meaning even if all tariffs are eliminated, prices would drop on only a minority of goods.

The senators said some of the fault lies with shoppers. Canadians are not price-savvy enough and don't bargain enough, they said, but they believe with the advent of online shopping, that will change.

The report makes three other recommendations to help close the price gap:

-- Canada and the U.S. should integrate safety standards and regulations as much as possible, because any difference usually results in higher costs for the smaller market.

-- Ottawa should look at raising the threshold of "de minimis" fees on low-value shipments into Canada from the current $20. The U.S. threshold is $200.

-- And lastly, it says the government should explore reducing the 10 per cent markup Canadian distributors can add to the list price of American books.

-- The Canadian Press

Republished from the Winnipeg Free Press print edition February 7, 2013 A10

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes


  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.


Make text: Larger | Smaller


Jets this week with Tim and Gary in Anaheim

View more like this

Photo Store Gallery

  • A Canada goose makes takes flight on Wilkes Ave Friday afternoon- See Bryksa’s 30 Day goose a day challenge- Day 09- May 11, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)
  • Marc Gallant / Winnipeg Free Press. Local- Weather standup. Sundog. Refraction of light through ice crystals which caused both the sun dog and and fog along McPhillips Road early Wednesday morning. 071205.

View More Gallery Photos


Do you agree with the sale of the Canadian Wheat Board to foreign companies?

View Results

View Related Story

Ads by Google