Canada column published on Sunday, Nov. 6/11
THE CANADIAN REPORT
(c) By Jim Fox
Canadians have always paid more than Americans for most goods and services and the price “wedge” between the two countries might always be there.
Bank of Canada Governor Mark Carney made that prediction, saying even with efforts to create a uniform North American market with identical tariffs and regulations won’t fully close the gap.
While the Canadian dollar has been worth more than the U.S. currency for most of this year, shoppers paid an average of 11 percent more than Americans for the same goods in September, he said.
Testifying before a Senate committee looking into the price gap, Carney said the difference is down from 18 percent in April.
Among the factors despite currency fluctuations are higher sales taxes (in the double-digit range) and retail labor costs that are about 20 percent higher in Canada.
Canada has a smaller population, higher transportation costs and economies of scale that allow U.S. retailers to reduce costs, he said.
Canadians living close to the border take advantage of price breaks but cross-border shopping is “quite modest” at about two percent of all retail sales, Carney said.
A report card on world economies says Canada continues to outperform its peers.
The International Monetary Fund said Canada leads other countries in managing its economy but risks include any weakened demand from trading partners, a stronger Canadian dollar, high real-estate prices and rising household debt.
Finance Minister Jim Flaherty said successful measures include tightened rules for government-backed insured mortgages and a banking sector with “high prudential standards and rigorous supervision.”
As the government continues to pay down its debt, it might have to consider temporary spending again if the global economy weakens, the report said.
News in brief:
- Canada will spend more than $200 billon on health care this year as costs have doubled over the past 10 years. The Canadian Institute for Health Information said spending has actually started to slow to four percent after a decade with an average of seven-percent increase a year.
- The Liberals walked out of the House of Commons to protest the appointment of an auditor general not fluent in French. The Conservative government named Michael Ferguson of New Brunswick, who is studying to improve his French, to the spending “watchdog” position. Interim Liberal leader Bob Rae said Ferguson must communicate in Canada’s official languages, English and French.
- Canada’s immigration levels will remain steady next year at an average of 254,000 people. Immigration Minister Jason Kenney said the number will include more skilled workers, refugees, parents and grandparents. Projections show fewer spouses, dependent children and live-in caregivers.
Unexpected job losses of 54,000 positions nationally last month that pushed the unemployment rate to 7.3 percent from 7.1 percent caused Canada's dollar to fall in value on Friday.
The dollar dipped to 98.15 cents U.S. while the U.S. greenback rose to $1.01809 Canadian, before bank exchange fees.
The Bank of Canada’s key interest rate is unchanged 1 percent while the prime lending rate is 3 percent.
Stock markets are mixed, with the Toronto exchange index lower at 12,363 points and the TSX Venture Exchange higher at 1,635 points.
Lotto 6-49: (Wednesday) 3, 22, 32, 40, 45 and 48; bonus 4. (Oct. 29) 5, 8, 13, 16, 40 and 49; bonus 20. Lotto Max: (Oct. 28) 2, 4, 18, 20, 29, 38 and 41; bonus 9.
- Investigators said the forest fire last May that destroyed a third of the town of Slave Lake, Alberta causing $700 million in damage was started by an arsonist. About 2,000 people were left homeless with the loss of 400 houses and businesses after someone ignited the fire, said Frank Oberle, Minister of Sustainable Resources.
- Everything’s ship shape at the Irving Halifax Shipyard that’s swamped with job applications after winning a $25-billion contract to build 21 Canadian combat ships. The shipyard will build destroyers, frigates and Arctic offshore patrol ships over the next 30 years.
- The driver of a stolen flatbed truck led police on a 270-mile chase before pulling over five hours later in Burlington, Ontario. Thousands of people watched the 65-mile-per-hour pursuit on TV and the Internet as police kept their distance for “safety” reasons. The driver turned back toward Toronto after making a run toward the U.S. border at one point and was arrested at gunpoint.
Jim Fox can be reached at firstname.lastname@example.org