Originally Posted by ADP02
I don't buy that!!! The only time I agreed was when the Canadian dollar was worth $.62US.
1) American dollar went back up? Still, when our dollar was worth $1.10US, our prices did not move for 6 months. There excuse was that they said it takes 6 months to adjust. So that must rule out that dip we just had the last week or so!!!
2) Transport & population: Transport to Canada is worse because its bigger? Yes its bigger but USA is very big too and the smaller towns are priced better too! While Canada is bigger most of its population is concentrated in the bigger cities. So if you live close to the North Pole (exaggerating) you can see an extra transport charge but if you live in a place like Toronto or Montreal then it should be CHEAPER than the small town close to your border. My city is 100 times more populated than the border city in the US and MUST have a more efficient transport system than the border town. So with this logic AGAIN it should be cheaper than the border town yet its actually the opposite.
3) Health costs. In fact its the opposite. Example, car companies prefer to make a car in Canada because they will not have to pay for the health costs since in Canada we have Universal Health Care. That is, health care is free. While there is still Health Insurance for the employees (ie. for dentist and eye glasses) it is relatively cheaper. For example, it would cost the employer $6,800 to cover an employee's Health insurance in USA compared to about $750 for a Canadian employee.
4) We don't make it in Canada so its more expensive? Maybe we don't make everything but what we do make STILL costs us more!!! For example, we make certain cars in Canada yet its still way more expensive than USA. My neighbor just bought a car in USA. He said brand new, in Canada it was priced at $57,000 and in USA $40,000!!! Another example is oil. We SHIP IT TO USA yet we pay close to $6/gallon while USA are paying about $3.80/gallon. Shouldn't we be paying less at the pump since logicalyy that would make sense!
5) I work as a consultant and my present project is with an American company. Guess who is making more money? You would think its me since I am a consultant but from what they said I am a bargain!!!
I can see a difference relative to the currency, taxes and transport but it must indicate REALITY. In many (not all) cases, we are getting conned BIG TIME!!!
Still, if you shop around you may get the dealer to bring down the price.
TopShelf, don't take any of this personal. I just want people to realize the truth.
What I do agree with is that I love CANADA too!!!
Let's tackle these concerns one at a time:
1) The world market place is dominated by the American dollar. When the American economy takes a hit, we do as well. They are our largest trading partner. We are intertwined, whether you like it or not. They are presently suffering through a significant fiscal defecit this year (425-250 billion I believe was reported) and our economy is slowing down as well. Most economists in the world believe this is a short time event and the American economy will recover, as ours will as well. Our rise was short lived. The market place understands this. No one is going to change prices that quickly, knowing it will drop in the short term.
2) The American population, last time I looked, was almost 10 times that of Canada. When you tool up to make one widget, you have to recover all the costs plus a profit margin on that one sale. When you make 10 widgets you can spread the tool up costs to all 10 customers. I'm sure you understand the theory here. If Panasonic plasmas are assembled in Mexico, then when they ship them to LA and NY, they can ship more because the market is there to purchase the goods. When they continue the shipment to Vancouver and St John's, not only are the shipping costs higher because they have to travel futher, but the number they sell are significantly less; hence the higher costs.
3) In Canada I agree we have universal health costs, but who pays for this? The government you may say. Well, where does the government get the money? Through taxes I say. Who pays these taxes? Why the companies that employ people and the people themselves when they pay their personal taxes and buy goods. You normally match your company's contribution. I simply do not agree with your comment on health costs. Companies have to pay more for these employee benefits than their American counterparts, from a health perspective. A significant number of Americans do not have health or insurance coverage that we Canadians have.
4) Canada has a wealth of natural resources. Unfortunately, we ship some of our resources to the States or oversees in bulk, only to see it come back as polished or finished goods. These goods come back to us at a price...............a higher price in shipment and marketing costs. Blame the middle man on this one. On your car example.........see #3. I blame the unions in Ontario and Quebec for driving up the costs of Canadian cars with their $50+ hourly rates on the production line. Simply ridiculous. Your gas example is another example of economy of scale. I doubt what we ship the States is anything compared what they get off shore. Why do you think they have such interest in the Middle East?
5) I am about to join you in the consulting business, so I have an interest in this topic. In Canada, we have a history of paying American consultants more than Canadian consultants. I know this because in my present job I have hired both over the years. We readily accept others as being more experienced and knowledgeable than ourselves and are therefore willing to pay them more. Americans have a higher per capita income than Canadians. In your personal example, they make more, so they spend more, which aligns with my comments on purchasing more goods and reducing the per unit costs which, because they operate in a free enterprise system, are forced to lower their costs to be competitve and sell goods. We dont see the competion in Canada that you see in the States. We don't have the choice or number of competing companies here. Competition is good for the consumer. It's a check and balance system that helps keep prices down.
You bring good points forth ADP02, but I happen to see things from a different perspective.