So who's laughing now? All those
overconfident Americans calling our beloved dollar coin
the "northern peso" have suddenly stopped. Or maybe
they've been drowned out by boisterous outbursts of
O Canada.
The loonie is now hovering around
parity with its US counterpart. The day after it first
hit the mark, Canadians crossed the border en masse
to patriotically announce the news with a shopping spree.
But let's put the bravado away
for a second, Dr Canuck, and reel in our frugal, money-conscious
sensibilities. A spending spree feels good in a retail-therapy
kind of way. But is there any value in heading south
instead of shopping here?
At least one economist thinks so.
"If someone is going to the States
for a few days, it's well worth going to your limit,"
says Doug Porter, deputy chief economist at BMO Capital
Markets.
LOOSE
CHANGE
But do we really have to stuff our trunks at outlet
malls in Buffalo, NY, and Bellingham, Washington. and
tell white lies to border guards about how much we spent?
Why doesn't the now-powerful loonie, one of the strongest
performing currencies in the world this year, give us
savings on our own side of the border?
Mr Porter and his pals examined
the price tags of a basket of products. Based on his
sample, prices were on average 24% higher in Canada.
There are three main reasons for this: the exchange
rate has been altered so fast that prices already stamped
on goods are out of date once they hit the shelves;
costs that retailers face, such as rent, haven't changed
despite the soaring loonie; and, frankly, it's a free
market.
"The pressure is going to be on
manufacturers or retailers to narrow that gap," Mr Porter
says.
PRICE
DISPARITY
It seems retailers haven't got the message: despite
the loonie's climb, a price disparity remains. Take
Giving by Bill Clinton, for example. The undiscounted
price is $29.95 in Canada. In the US it's $24.95 - 20%
cheaper.
But why make the trip, especially
when the price of gas is more than a dollar per litre?
The answer: don't drive. Go online.
It should be noted, however, that
online shopping doesn't work for everything. The ubiquitous
16 GB iPod touch, for instance, is $50 higher, before
shipping and taxes, on Apple's Canadian website compared
to the American version. And cars don't exactly fit
neatly into FedEx boxes.
What about your practice? The price
disparity applies on medical equipment, too. The regular
price for an exam table at Surgo Surgical Supply, an
Ontario-based company, is $1,425, according to its website.
The same table at medmarketplace.com and medplususa.com,
two American companies, is $1,042. Buy it here and you'll
pay 37% more before shipping and taxes.
HEAD
SOUTH
Unfortunately, prices in Canada won't drop immediately
unless one retailer takes the lead and forces competitors
to follow suit, Mr Porter says. "The longer the Canadian
dollar hangs around parity, the more pressure there
is for retailers to bring prices down."
If you've ever dreamed of driving
a Porsche, now might be your chance. The luxury car
company slashed their prices last month by 10% in Canada.
A Cayman coupe is now only $63,500. With the money you'll
save you can make your friends jealous, fill up the
tank and cruise past the awestruck border guards on
your way to the closest outlet mall oasis.
And hey, since you're frolicking
in the US, you could always buy a house. Our American
neighbours don't appear so inclined after new and existing
home sales keep sliding, with the real-estate sector
spiralling into a deeper slump. Prices dropped 4% in
20 metropolitan cities during a 12-month period ending
in July, so there might be a few bargains here and there.
If what you're looking for isn't
on such a grand scale, your best bet is to hunt online
for deals that brick-and-mortar stores can't offer and
then make the occasional weekend jaunt across the border.
Mr Porter predicts the loonie to linger around parity
for at least a few more quarters. So until the price
disparity shrinks—if it does so enough to make
a difference—a stateside mall might turn into your
favourite shopping sanctuary.
It's time to party like it's 1976,
the last time we were even with the Americans. Think
they'll mind if we do it in their backyard?
|
PHYSICIAN LIFE
