Buffalo, importers tickled with loonie’s parity
For the fourth time in a decade, the Canadian dollar is above parity, and dollar watchers are saying this time it might stick for a while, given continuing U.S. economic weakness. This has made a bunch of people happy—importers, and any exporters who rely heavily on imported raw parts—but consumers are seething once more over the fact that prices for Canadian and U.S. goods are so wildly different.
The price gap is encouraging increasing numbers of Canadians to seek better deals south of the border, a trend that could accelerate this year if domestic retailers don’t bring down prices quickly enough. The dollar has been hovering at par for days and is expected to coast there for most of 2011.
Retailers feeling the most pressure to cut prices are those selling cars, books, electronics, clothes and housewares. That’s because those items can be readily compared online and most – with the notable exception of cars – are relatively easy for consumers to transport to Canada.
The Consumers’ Association of Canada says it has already received “hundreds” of e-mails from shoppers complaining about yawning price gaps on those items.
While most shoppers will be content to unleash their rage on the cashiers or service staff at the nearest Indigo (book prices being particularly galling), we can only assume that electronics stores in Buffalo are going to start getting a lot of shoppers who drop the word “eh” into sentences: laptops, iPads and other electronics really hit that sweet spot of “portable but expensive” that makes cross-border shopping so appealing. Look for lineups at the border when the iPad 2 makes it to the Queen City of the Lakes.
• Retailers feel heat from parity-happy Canadians [Globe and Mail]
• Bets are on factories to carry economy ahead [Globe and Mail]
• Why a dollar at par is a blessing and curse [Toronto Star]
• Trade deficit to stick around in 2011: Report [Toronto Sun]