Strong dollar not lowering high prices

Financial analysts said the soaring dollar would translate to lower prices for Canadians because importers aren’t paying nearly as much for commodities, but this hasn’t happened in any significant way yet.

Case in point - books. Some booksellers have plenty of reasons to explain to confused customers why books must be sold with the suggested list price found on the back cover.

Other, independent bookstores are going head-to-head against the big box booksellers and are now charging the lower (U.S.) price to attract consumers to buy from Canadian-owned stores. How long small businesses can continue to do this is yet to be determined as they try to convince shoppers to look around and purchase competitively.

The Canada-U.S. Free Trade Agreement was supposed to mean just that - free trade - but this is far from reality. Canada continues to levy tariffs on goods imported from the U.S., yet in many cases the tariff doesn’t match the levy the U.S. places on imports from their northern neighbor.

The blame cannot be laid completely on the Canadian government. Retailers, manufacturers and suppliers also have a role to play to better reflect the change in our dollar value and ensure cost decreases are passed on to the consumer.

Customers mutter under their breath every time they pull out their wallets to pay for commodities that should be lower in price, but remain as they were before the dollar soared. A recent Bank of Montreal study found that prices in Canada are on average 24 per cent higher than in the U.S.

Because retailers often order months in advance, many paid a higher price for goods than if they were bought after the dollar reached parity with the greenback. This explains why some goods are still considered to be overpriced, but at least consumers can understand that buying something at a high price and selling it at a loss isn’t good for any business.

The Canadian dollar was trading at 85 cents U.S. in January and expenses like higher costs for energy, taxes and wages are not immediately affected by the dollar’s surge.

Americans subsidize some of their industries heavily, such as agriculture, forest products and a litany of manufactured goods, including automobiles. To remain competitive on the world market, the U.S. has no choice but to continue to provide subsidies for their industries, especially since their currency is so unstable and their debt is in the trillions.

Ours is not as substantial, of course, and we can look forward with great anticipation to oil and gas revenues to pour money into Nova Scotia in the not-too-distant future. Perhaps then the province’s new-found wealth may give consumers more purchasing power.

Hopefully, too, the offshore boon will stall the mass exodus of our youngest and brightest to the west and slow the population decline. In our view, it all can’t happen fast enough.