Representatives of the Retail Council of Canada are expected to meet with Finance Minister Jim Flaherty next week about the high value of the Canadian dollar.

Flaherty is concerned that prices haven't been lowered by retailers despite the dramatic rise in the Canada's loonie over the past year.

"It's an opportunity for us to be persuasive on behalf of the Canadian people to encourage retailers to reflect in their prices that they have an advantage with respect to costs now," Flaherty said.

"If their costs go down because of the increased value of our currency that should be reflected in prices, and the sooner the better."

Don Drummond, chief economist for TD Bank, says the minister could be a part of putting pressure on retailers. But he noted retailers are most affected by increased competition and consumer pressure.

He told CTV's Mike Duffy Live on Friday that "If consumers say 'no,' they're not going to buy that product, are much more diligent in doing their shopping ... all of these are going to act to force these prices to come down."

But some retailers are already lowering their prices in response to the soaring loonie.

Zellers sees price cuts

The Hudson's Bay Co. announced that it will use the strong dollar to cut prices on some merchandise at its Zellers department stores. The company says that the it has more leverage with suppliers of imported goods because of the rise in the Canadian dollar. It traded above $1.03 on Friday.

"We have worked with our vendors to obtain better deals on merchandise at Zellers,'' HBC president Rob Johnston said in a statement reported by the Canadian Press.

"We understand that the rising Canadian dollar has led to a demand for lower pricing and this is our attempt to provide real savings for Canadian families.''

The cuts went into effect Friday and covers items as diverse as diapers and garbage bags imported from the U.S. The Canadian Press also notes that Wal-Mart of Canada announced earlier this week that it would cut video game prices to U.S. levels during the upcoming holiday season.

But it's not just big retailers who are cutting prices. Small business owners are also having to compete for customers who are heading south for deals.

"I want to see my customers stay in Canada and shop at a Canadian business," said Christopher Smith of Collected Works bookstore.

His solution: if a book in his store has an American and Canadian price on the cover, he'll charge Canadians the lower U.S. price.

Economists estimate that Canadians may be paying as much as 20 per cent more than Americans for similar products sold in the U.S. That may be the reason for a jump in cross-border shopping trips. According to Statistics Canada they rose by 4.2 per cent in August from July.

On Thursday, Bank of Canada governor David Dodge said Canadians have already benefited from a strong loonie. Gas prices are lower as are some food products. But he cautioned Canadians not to expect instant cuts in prices in all retail sectors. He added that Consumers may want to pressure retailers if they want to see prices drop.

B.C. film industry

The strong loonie has also affected Canada's film industry, particularly in B.C. To keep attracting American filmmakers to shoot in that province, the B.C. government plans to extend tax credits to the film industry for another five years.

U.S. filmmakers have been attracted by savings of shooting in Canada because of what had been a low Canadian dollar. But those savings have diminished as the loonie has soared.

B.C. Premier Gordon Campbell says that a continuation of tax credits will keep the province competitive with American states and other provinces. The film industry generates $1.2 billion in B.C. every year. It also employs 20,000 people.

With files from The Canadian Press