Thursday, November 28, 2013

Once and For All: US and Canadian Retail Prices are Different

As we approach another Black Friday, we are inundated with people asking the age old question in defence of cross-border shopping:
Why are prices in US so much cheaper than Canada? It's not fair!

So once and for all, I offer the simple definitive explanation of why the prices don't match.

The answer begins with the opposite question:
Why would the prices be the same?

Is it because we share the same continent? By that logic, every country in Europe would have the same prices.

Is it because we speak the same language? Nope, obviously unrelated to currency.

Is it because we both call our money "the dollar"? Also irrelevant. (If Thailand changed the name of their Baht to Dollar, would it's value instantly quadruple? I highly doubt it.)

USA and Canada are different countries with different laws, different regulations and different taxes. There's no reason why their prices should be identical.

Still not convinced? For those who doubt the logic, I'll add simple economics:
USA's population is almost 10 times Canada's, so as a country compared to Canada, the US is basically always buying in bulk. As any shopper knows, upping your retail order by a factor of 10 will always get you a better price.

So there you have it: a fundamental explanation to why US/Canadian retail prices are different, based on facts that will not change in my lifetime, so I should never have to hear the question asked again.
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