Consumer advocates and Finance Minister Jim Flaherty are urging Canadians to use the power of public pressure if they want to see price cuts in the face of a soaring Canadian dollar.
Eleanor Friedland, vice-president of the Consumers Council of Canada, told CTV Newsnet on Sunday that manufacturers and retailers will start cutting prices if consumers complain loudly enough.
"One company starts it and that begins a trend and the others, more than likely, will follow suit," Friedland said. " It's very competitive and consumer relations are a major thing."
Flaherty told CTV's Question Period on Sunday that he will meet with major Canadian retailers this week to pressure them to lower prices despite the advantages of a high dollar.
Flaherty said that Canadian prices should reflect the strength of the loonie's purchasing power, which continues to rise above the U.S. greenback.
"My job, for the government, is to say to the retailers that you should move your inventory prices as quickly as you can to reflect the reality that the Canadian dollar is much stronger than it was even a few months ago," Flaherty said from Washington, where he is attending a meeting of the International Monetary Fund.
But he added that consumers have a role to play too.
"The biggest pressure is not from government, quite frankly," he said. "The biggest pressure is from consumers shopping around, making sure they look for the best deals."
Many Canadians are doing just that, by heading to the U.S. for lower prices amid complaints that Canadian retailers are gouging customers.
Economists estimate that Canadians may be paying as much as 20 per cent more than Americans for similar products sold in the U.S.
Some U.S. auto retailers and Bombardier dealers have been told not to sell to Canadians, in order to protect dealers north of the border.
The Bombardier-made 2007 Sea-Doo GTX Limited, a high-end watercraft, has a U.S. list price of about US$13,000. But in Canada, the same product is nearly $18,000 -- a difference of about $4,400.
Bruce Cran, president of the Consumers Association of Canada, sent an outraged letter to the company, saying: "During the past 70 years the Bombardier group has been the beneficiary of many grants, loans and other assistances provided from taxes contributed by the same Canadian Consumers the company is now working feverishly to rip off."
Flaherty said companies have to get their prices in line, "either by allowing purchases in the United States by Canadians, but preferably, by getting their Canadian prices in line so Canadians can shop at home."
Friedland believes manufactures will be the catalyst to price cuts.
"Manufacturers need to start passing on these savings to their retailers and then their retailers will pass them onto the consumer," he said.
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CTV.ca News Staff
Posted at 2007/10/21 23:06:33
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