Flaherty to tackle price gap with U.S.
OTTAWA — Finance Minister Jim Flaherty’s budget Tuesday is expected to include new measures to further combat the price gap between identical goods that sell for more in Canada than in the United States.
The budget is also expected to include new measures as part of the Conservative government’s longawaited digital economy strategy, including expanding broadband Internet coverage in rural areas. Flaherty has also promised the document will include new investment in infrastructure and action to address stubbornly high youth unemployment.
As part of its efforts to address cross-border price discrepancies, the Conservative government will give the Competition Bureau new powers to ensure Canadians pay a fair price for products in a competi- tive market and that companies don’t abuse their strong positions in the marketplace, according to a report in La Presse.
The government already promised in the throne speech it will take further action to “end geographic price discrimination against Canadians.”
Moreover, Flaherty said over the weekend the budget will contain additional measures to address the Canada-U.S. price gap, something potentially more difficult to do with the Canadian dollar dropping in value.
The 2013 budget eliminated tariffs on baby clothes and sporting equipment, in what the government acknowledged was a bit of a test case to see if cheaper prices trickled down to Canadians. The Retail Council of Canada said last week that consumers are, indeed, seeing savings passed on.
A Senate committee that studied the Canada-U.S. price gap, and re- ported back about a year ago, noted several witnesses identified “the lack of competition in the Canadian retail market as an important factor contributing to higher prices in Canada than in the United States.”
However, officials from the Competition Bureau told the committee that high prices don’t necessarily mean a market is uncompetitive, or suggest anti-competitive behaviour such as price-fixing or abusing a dominant position in a market.
The budget could also address other throne speech promises, including ending “pay to pay” policies so consumers don’t have to pay extra to receive paper bills; expanding no-cost basic banking services; and cracking down on “predatory payday lenders.”
Flaherty has indicated the budget will contain changes addressing the charitable status of some groups engaging in questionable conduct or spending too much of their resources on political activities.