I often hear people say how things are cheaper in Canada because the Canadian dollar isn’t worth as much as the American one. I suspect that they think because both currencies are called dollars that there is an implied equivalence that makes things cheaper in Canada. The fact that the Canadian dollar is worth less than the American one shouldn’t mean anything, just as things aren’t cheaper in Japan because the yen is worth less than a penny. I’m thinking that if the Canadians called their currency by some other name, no one would talk about a discount for buying things in Canada, but instead they would just exchange their currency and that would be that. Correct?
No, often, things have the same dollar value in CAN$, thus things are actually cheaper.
Example: Lift ticket at a major US ski slope, Lake Tahoe: US$60
Lift Ticket at major Canadian ski slope, Banff: CAN$60.
Depending on the exchange, the Candian lift ticket costs as little as US$40. Savings over a 5 day trip for comparable quality are notable.
More generally, if you watch the exchange rates between US$ and C$ you’ll find that they wander around quite a bit and sticker prices don’t change in sync with the exchange rates. So, US$40 may be equivalent to C$60 one day and only C$55 six months later (I’ve pulled those numbers out of thin air - the point is that the difference in value between a US$ and a C$ varies).
You might find the Big Mac Index interesting. It’s a slightly tongue-in-cheek but still interesting way of comparing the “real” value of currencies. In particular, you’ll notice that as of last year a Big Mac was in fact a little cheaper in Canada than in the U.S., though not by much.
Doing the rough currency conversions may make you think that some things are cheaper. However, before you count your savings make sure you have accounted for GST and PST which can add a chunk to the total.
On large purchases of some items, if you bring them back to the US, you can get a rebate of the GST at the border but the restrictions are such that it can be a real PITA to go through the process.
When the US dollar was much stronger many things were a bargain in Canada. Generally speaking, from what I’ve seen recently, you don’t go to Canada for shopping bargains.
Also:
If you purchase with a credit card, in all liklihood the credit card company will add a 3% currency conversion charge to the price. It’s a total rip-off by the credit card companies but they get away with it.
Not any more assuming the legislation gets passed (not sure whether it has yet or not).
I prefer the beer index. A pitcher of beer at most places I’ve been to in the Greater Toronto Area seems to run about $15 CDN on average. The exchange rate’s not been too favorable for the last year, about 15%, so that’s still $12.75 for a pitcher of beer. Here in Michigan at most places, it’ll range from $6 to $8 for the very same beer. A case of Blue, then, in Michigan will run abut $17 plus deposit. In the Beer Store, it’ll set you back CDN$35 or so! I’m not sure if that includes a deposit or not. The Beer Store always indicates that they’ll take back the empties for items they sell, but they don’t actually come out and say deposit. On the glass returns, I’ve gotten some discount, but I’m unsure about the aluminum. In any case, that’s still $35 for cheap beer! I would have to re-import Blue just to keep costs down when I was working there.
The GTA is expensive. Once you get a little west, restaurants get downright cheap. Prices with GST/PST are about the same as Michigan prices, but with the advantage of the US discount.
One thing I noticed was that in Ikea in or about York, prices seems reasonable for the quality. I was dragged to Ikea here in SE Michigan over the weekend, and the prices seem high for the quality. I don’t know if it’s a US/Canada difference, or if it’s just Ikea taking advantage of the “new” factor of the store here.
Actually, the credit card companies usually charge a better conversion rate than banks or exchanges do. You pay for converting money no matter where you do it, you know.
Yes, there is a deposit paid on all glass and aluminum. IIRC, it’s ten cents per bottle or can, and included in the price–all Ontario beer drinkers know this, so there’s no need to repeat it. It’s nothing new to Ontarians; the Beer Store has been taking and refunding deposits since 1927.
Also included in the price are federal and provincial excise taxes, and federal and provincial sales taxes. And back in the 90s, there was a non-refundable ten cent environmental levy put on cans, but I’m unsure if it’s still there. But all these taxes and levies and deposits are included in the price charged by the Beer Store. The stuff costs the same to produce, whether it’s being sold in Michigan, USA or Ontario, Canada but the different governments and levels of government have very different ways of taxing it. The price difference is due to tax, not a retailer markup.
Anyway, to return your empties, take them to the Returns counter of the beer store. They will count them, and pay your deposit back accordingly. And they will pay it back; the Returns staff have to reconcile their cash with their empties at the end of the day and more returns taken in than money paid out will result in questions being asked.
Spoons
Ex-Beer Store Employee
Yes, the conversion rate on the CC may be better than at a cash exchange. My point however, is that if you are visiting Canada and see a price on something and you plan to pay with a CC then figure the price is actually 3% higher. The CC company will charge the conversion fee on the tax also.
When I visited Vietnam I used a CC for purchases and the transactions were billed in US dollars, not Vietnamese dong. Therefore, no conversion fees. Good job on the part of the Vietnamese! I don’t know if there are other countries that do the same thing.
Good example of how the exchange rate can work in your favor.
I was in BC just before Christmas one year doing some my Christmas shopping. I stopped in Starbucks for a coffee. While waiting I was browsing the items for sale. I found a really cool gift that would be perfect for one of my friends. I thought I would pick one up at a local SBs in LA. Then I looked at the price $18 US $20 CDN
:eek: 
At the time the exchange rate was right on 40% $18 + 40% != $20CDN.
I found a space in my suitcase.
Also in shopping in Canada, as shown above many times the difference in price is less than the difference in exchange rates. It is just not as common to have both prices placed on the item for you to compare.
Sometimes the item can cost more in Canada especially now since the exchange rate is damn close (12% last time I visited)
As far as the taxes go, in California you have 8.25% sales tax. PST is 7% in BC, so I am 1.25% ahead. I can get GST back if I jump though the hoops when I leave.
Most likely the Starbucks put that pricing on to discourage people from paying with US funds. I know it is (or was a few years ago) common in Windsor, ON to accept US currency at par. Sure the US bucks are worth more, but it’s a hassle for a retail establishment to constantly be converting US cash so if you want to use it you’ll be paying for the privilege.
I often find that items are cheaper in the States than in Canada. This makes sense because the US marketplace is so much larger they have economies of scale. However importing to Canada usually erases that difference. That is because you have to pay taxes, duty, shipping charges, exchange rate and sometimes customs/ brokerage fees. Land’s End, I’m looking at you.
If you are looking at the price of meals or accomodations, it depends where you are looking. Just like the States, some areas are quite reasonable, while my hometown is becoming ridiculous.
Don’t forget that when claiming GST refunds, each receipt has to be over $100 Canadian. So likely they won’t be giving you a refund for your CD purchase, Rick, even if you did jump through the hoops.
Using Ontario for comparing Beer Prices probably isn’t a great idea… I was in the Beer Store in Carleton Place (of all places!) just yesterday and saw that a 12 of Rickard’s Red was in the range of 22$, while we paid 12.99$ for it at our local dépanneur just last week.
Air Canada kind of screws you over too, if you only have American cash on hand. All of their food items for in-flight purchase are on par… you can get a pop+chips+Subway sandwich for 10$ US or 10$ CDN!!
When I was a kid we used to drive into Vermont to see movies and shop and even gas up because the price difference was worth it. Not any more. I don’t really hear of anyone bothering to border hop just to save a few bucks.
Those are not the same product, so your point isn’t relevant.
Generally speaking, consumer prices are roughly the same once you account for the exchange rate. However, it depends on the product or industry you’re dealing with and their local pricing strategy, tax implications, how fast they respond to exchange rate movement, etc.
In Canada, for instance, books are much more expensive because the publishers still charge Canadians as if the exchange rate is 65 cents on the dollar. Perhaps they’re just slow to respond.
As I mentioned in a previous message, don’t bet on it!
My experience with the GST refund (crossing from Ontario to New York) is that the receipts had to total over $200 and no receipt could be under $50. That is highly restrictive. No P[rovincial]ST is refunded.
If what Canadjun says (and the web site supports it), that the GST refund is going to be stopped, then forget about any real savings by buying in Canada.
Yes, you might be able to buy some locally produced product at a bargain but if you can buy it at home it will probably be cheaper.
They are slow, since they set the price months before printing and then sell them to bookstores at a discount off that price. The bookstore will still have lots of books they bought at a higher price when the dollar was weaker. But newer releases have been cheaper lately. Not keeping pace with the dollar, though. They aren’t in a rush to give up that extra dollar when people are accustomed to a higher price.
I noticed that if you go buy DVDs at a store like Best Buy the prices are pretty much the same in the US and Canada, and if you go to a record store like Virgin in the States and HMV in Canada, CDs and DVDs are essentially the same price. A 9.99 DVD here is a 9.99 DVD there. That was kind of disappointing to me when I was in the US! I figured a 20 dollar CD here would be 14.99 or something in the US, but no. 