Consumer advocates and Finance Minister Jim Flaherty are urging Canadians to use the power of public pressure if they want to see price cuts in the face of a soaring Canadian dollar.
Eleanor Friedland, vice-president of the Consumers Council of Canada, told 愛污传媒net on Sunday that manufacturers and retailers will start cutting prices if consumers complain loudly enough.
"One company starts it and that begins a trend and the others, more than likely, will follow suit," Friedland said. " It's very competitive and consumer relations are a major thing."
Flaherty told CTV's Question Period on Sunday that he will meet with major Canadian retailers this week to pressure them to lower prices despite the advantages of a high dollar.
Flaherty said that Canadian prices should reflect the strength of the loonie's purchasing power, which continues to rise above the U.S. greenback.
"My job, for the government, is to say to the retailers that you should move your inventory prices as quickly as you can to reflect the reality that the Canadian dollar is much stronger than it was even a few months ago," Flaherty said from Washington, where he is attending a meeting of the International Monetary Fund.
But he added that consumers have a role to play too.
"The biggest pressure is not from government, quite frankly," he said. "The biggest pressure is from consumers shopping around, making sure they look for the best deals."
Many Canadians are doing just that, by heading to the U.S. for lower prices amid complaints that Canadian retailers are gouging customers.
Economists estimate that Canadians may be paying as much as 20 per cent more than Americans for similar products sold in the U.S.
Some U.S. auto retailers and Bombardier dealers have been told not to sell to Canadians, in order to protect dealers north of the border.
The Bombardier-made 2007 Sea-Doo GTX Limited, a high-end watercraft, has a U.S. list price of about US$13,000. But in Canada, the same product is nearly $18,000 -- a difference of about $4,400.
Bruce Cran, president of the Consumers Association of Canada, sent an outraged letter to the company, saying: "During the past 70 years the Bombardier group has been the beneficiary of many grants, loans and other assistances provided from taxes contributed by the same Canadian Consumers the company is now working feverishly to rip off."
Flaherty said companies have to get their prices in line, "either by allowing purchases in the United States by Canadians, but preferably, by getting their Canadian prices in line so Canadians can shop at home."
Friedland believes manufactures will be the catalyst to price cuts.
"Manufacturers need to start passing on these savings to their retailers and then their retailers will pass them onto the consumer," he said.
Some Canadian retailers are listening to consumer woes and have lowered prices in stores.
The Hudson's Bay Co. announced that it will cut prices on some merchandise at its Zellers department stores. The company said that it has more leverage with suppliers of imported goods because of the rise in the Canadian dollar.
The cuts went into effect Friday and covers items as diverse as diapers and garbage bags imported from the U.S.
Wal-Mart of Canada announced earlier this week that it would cut video game prices to U.S. levels during the upcoming holiday season.
The weakened U.S. dollar and credit crunch in the housing sector has sparked North American recession fears and forced Canada to support its neighbour to the south.
"Canada has borne a disproportionate burden in terms of the depreciation of the U.S. dollar. We've suffered a third of that burden with the European community, but we're only 33 million people and they are 300 million people or more," Flaherty said.
He reassured Canadians that despite a projected downturn in the economy next year, the central bank expects solid growth on this side of the border.
With a report by CTV's David Akin
