Rising Loonie Hasn't Narrowed Pricing Gap

Economists and various other experts have pronounced this a great moment and perhaps it was. According to economic theory, a stronger dollar is supposed to make imports cheaper and increase consumer purchasing power. The trouble is, a lot of ordinary Canadians simply don't believe the experts on this. They cannot see that the price of consumer goods reflects the appreciation of the Canadian dollar this year. Hundreds of people in border communities have been heading south to Buffalo, Bellingham and other U.S. centres and they have reported finding startling differences in the pricing of retail merchandise. [...] Douglas Porter, deputy chief economist at BMO Capital Markets, has compared a basket of goods that includes books, magazines, cars, cameras, fast food and shoes, and found that prices in Canada were on average 24 per cent higher. So, what's going on? "We have been conditioned for 31 years to believe that our money is not worth as much as theirs," says Winter. "That's finished. There is no reason any more for these price differences." He foresees a big increase in cross-border shopping. He also anticipates that consumers are going to rebel - particularly when the pricing gap is staring them in the face... http://www.businessedge.ca/article.cfm/newsID/16361.cfm

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