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elwoodblues
Elwood Blues
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join:2006-08-30
Somewhere in
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[Serious] Should consumer border limits be abolished?

There is a lot of talk about the upcoming parliamentary session, and the the government is planning a "consumers first" agenda. This not to be a discussion of pitting one ideology against another, we do that every day in Canpol

The Government has asked the competition bureau to look into reducing the cross border pricing disparity.

I don't see the government trying to control prices and/or levelling the playing field as a bad thing, but I don't exactly approve of it, it's probably one of the few times that the market should be allowed to sort itself out. Which brings me to the question of the topic, should limits on cross border shopping be eliminated? And how do you handle regulated industries such as airlines and telcos?

One way to eliminate the pricing disparity at the retail level, is to allow consumers to bring home as much as they want any time, with no limits (value and/or time),when the loss of sales hits home, the retailers would have no choice but to respond.

The question of course is how, would they drop their prices,or would they simply start laying off staff, and/or changing positions to that of part time nature, reducing their costs as sales go down ,which then pushes that cost back on the books of the government.

The government has already given this companies tax reductions , and recently frozen EI premiums and eliminated many tariffs, ,thus reducing the cost of doing business, yet prices in Canada are stubbornly higher then that in the US.

I'm not buying the argument that there are more of them down south, since the products are made in the same factory in China, and with small differences in labelling(and some companies create "world" labels/manuals),its just a matter of how many you ship to the US vs Canada.

Thoughts?
--
No, I didn't. Honest... I ran out of gas. I... I had a flat tire. I didn't have enough money for cab fare. My tux didn't come back from the cleaners. An old friend came in from out of town. Someone stole my car. There was an earthquake.......


urbanriot
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Canada
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said by elwoodblues:

The government has already given this companies tax reductions , and recently frozen EI premiums and eliminated many tariffs, ,thus reducing the cost of doing business, yet prices in Canada are stubbornly higher then that in the US.

First off due to policies, procedures, regulations, etc., it costs more for a company to get their goods to distribution.

Shipping costs are higher for whatever reason in Canada so it costs more money to get your goods to distributions and also to resellers. Worse than that, a lot of our goods come directly from the United States so it's the cost to get goods from Taiwan to USA to Canada. Even computer goods coming from Chinese distributers in Canada often go through the US first, typically from California.

The cost of labour is higher in retail so goods need to be marked up a bit to compensate for that.

Then we have our bullshit recycling fees, like $39 or whatever it is for a big screen TV.

The only place in Canada where I can easily buy groceries as cheap as I can in the United States is in St. Catharines, where I have quick and easy access to at least 6 or 7 different grocery chains within a 5 minute radius so if I spend a bit of time hopping between stores I can probably save as much. But someone like Gone who has basically Sobeys and Shoppers, maybe Walmart but I'm not sure if his is the grocery kind, he's way better off going over the river.

Freezing EI premiums isn't reducing EI premiums, the cost of employing a human being is still considerably higher than it is in the US.


elwoodblues
Elwood Blues
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Recycling fees have nothing to do with retail prices, it's tacked on at the end, just like HST is.

So your solution is to cut everyone's pay?


dirtyjeffer
Anons on ignore, but not due to fear.
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London, ON
reply to urbanriot
not only that, but our laws require Canadian Entities be established...so it isn't "Wal-Mart", it's Wal-Mart Canada...it isn't McDonalds, it's McDonalds Canada...it isn't Best Buy, it's Best Buy Canada...General Motors Canada, Toyota Canada and the list goes on...all that duplication costs money, but does result in some jobs...if you must have your lowest price, do away with the "xxx Canada" requirement on all businesses, see those people out of work, and get your lower prices...it's that simple.
--
People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.

- George Orwell


elwoodblues
Elwood Blues
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DJ. that's simply for tax purposes, if it was Best Buy US that opened a store in Canada, would they pay double taxation, one to the Canadian goverment, another to the US?

Do you recall how much money Apple is sitting on? It's sitting in a low tax country (Ireland I think) ,in the Apple Ireland "company".

Otherwise Apple could be taxed on their world wide profits.
--
No, I didn't. Honest... I ran out of gas. I... I had a flat tire. I didn't have enough money for cab fare. My tux didn't come back from the cleaners. An old friend came in from out of town. Someone stole my car. There was an earthquake.......


urbanriot
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reply to elwoodblues
said by elwoodblues:

Recycling fees have nothing to do with retail prices, it's tacked on at the end, just like HST is.

... You do realize this is directly related to your pricing disparity point don't you?


dirtyjeffer
Anons on ignore, but not due to fear.
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London, ON
reply to elwoodblues
said by elwoodblues:

DJ. that's simply for tax purposes, if it was Best Buy US that opened a store in Canada, would they pay double taxation, one to the Canadian goverment, another to the US?

of course they have to pay taxes here...however, they wouldn't need a Canadian headquarters (head office), and all the associated staff that go with it (President, VPs, numerous other layers of white collar workers)...may not even need a warehouse with all of its associated costs, unless having said warehouse saves them money in distribution costs.
--
People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.

- George Orwell


WhaleOilBee
What a long strange trip it's been

join:2011-08-02
Manotick, ON
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2 recommendations

reply to elwoodblues
I've never gone to the US expressly to shop. I've only gone to visit and made some minor purchases. I approach the US border with as much joy as I would crossing into Mordor......

"Anything to declare?"
"Just this ring I'm returning"

When purchasing a large-ticket item, I'll shop locally.
Groceries - locally. Really, you'd cross the border to buy milk? Enjoy the hormones!
When something's not available locally and I'm buying on-line, I'll try all the Canadian vendors first, before looking to the US.
Should the government do anything to "level the playing field"? I say no. If Canadians want to pay US prices, I say move to Detroit; I'm sure they'll be happy to have you.


elwoodblues
Elwood Blues
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reply to urbanriot
No, I look at this way, I want to buy a hard drive, 2tb costs about 100 bucks. I think there is a 40c Eco fee on it.

Now in the US that same hard drive costs say $75 (to use a number), any sales taxes and "eco fees" (if there are any) come after.


urbanriot
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Well is this thread about how you look at it or how everyone looks at it?

Here in Niagara, everyone hopes to avoid paying additional taxes coming back over the border with their goods and plenty of people know about the $40 Liberal ECO tax when they buy a screen bigger than 29" so that's all factored into the decision making process.


elwoodblues
Elwood Blues
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It's obvious we have different opinions and I'm providing mine.


WhaleOilBee
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reply to elwoodblues
What I would like to see changed is how an on-line vendor that operates out of the US and just has a "Canadian" web page... employs no one in Canada... ships the product from the same US warehouse ( Thief River Falls, MN )... charges a flat ($8) delivery fee in North America...

can charge so much more to their Canadian customers.

»www.digikey.ca/product-detail/en···D/639537 $498.16
»www.digikey.com/product-search/e···JTAGICE2 $436.25

How is that device suddenly worth ~$60 more when it's shipped to Canada? Taxes are on top of that!

I don't know what the gov't can do about that.


corster
Premium
join:2002-02-23
Gatineau, QC

2 edits
reply to elwoodblues
said by elwoodblues:

Which brings me to the question of the topic, should limits on cross border shopping be eliminated? And how do you handle regulated industries such as airlines and telcos?

One way to eliminate the pricing disparity at the retail level, is to allow consumers to bring home as much as they want any time, with no limits (value and/or time),when the loss of sales hits home, the retailers would have no choice but to respond.

I would implement no duty for personal importations, but all purchases over a certain amount would still be subject to GST/HST/PST and other provincial fees where applicable. This amount would have to be low enough to catch cross-border shoppers, but high enough to not penalize people who go across the border for a Bills game and bring back a case of beer.

Tax should be assessed at the initial customs booth and collected with a portable debit/credit machine. This eliminates most people from lining up a second time at the cashier, although for practical purposes, those paying cash as opposed to debit/credit would likely still have to.

This would formalize the status-quo of duties not normally being charged, while at the same time simplifying the process of collecting GST/HST/PST by not having to send each car to the Cashier. Part of the reason that cross-border shopping is so attractive these days is that CBSA does not collect GST/HST/PST from many shoppers.

CBSA would have to set somewhat arbitrary limits on what is considered a "personal importation" vs. commercial if my proposal was to be practical, though.


dirtyjeffer
Anons on ignore, but not due to fear.
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reply to WhaleOilBee
said by WhaleOilBee:

How is that device suddenly worth ~$60 more when it's shipped to Canada? Taxes are on top of that!

I don't know what the gov't can do about that.

therein lies all the cost of duplicity...Digikey Canada.
--
People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.

- George Orwell


Gone
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Fort Erie, ON
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reply to urbanriot
said by urbanriot:

The only place in Canada where I can easily buy groceries as cheap as I can in the United States is in St. Catharines, where I have quick and easy access to at least 6 or 7 different grocery chains within a 5 minute radius so if I spend a bit of time hopping between stores I can probably save as much. But someone like Gone who has basically Sobeys and Shoppers, maybe Walmart but I'm not sure if his is the grocery kind, he's way better off going over the river.

We also have a No Frills. There's Joe's ValuMart in Ridgeway but they are by far the most expensive place to buy groceries in town.


LazMan
Premium
join:2003-03-26
canada
reply to elwoodblues
At least part of the problem is the higher taxation in Canada...

Corporate and payroll taxes are higher, therefore the same item has to be sold at an increased markup, to cover the increased taxes the corporation has to pay...


urbanriot
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1 edit
reply to elwoodblues
Ah, okay... weird then, that you don't factor taxes into the equation as pretty much everyone hopes for that bonus. I don't know anyone with a large enough vehicle that will buy a TV in Canada since the $40 ECO tax.

42LN5400 LG 42" LCD TV

Best Buy in Canada after taxes - $677.94
(Liberal Eco Fee + taxes)

Best Buy in USA after their taxes - $525.04
Cost if border agents make you pay our taxes - $589.97

So basically it's $87 cheaper to buy a 42" LED LCD in the US rather than Canada. Why wouldn't you buy it in the US?

Considering there's a possibility of avoiding brokerage fees, you could potentially get it for $150 less in the US.

Edit: Adjusted for currency conversion.


WhaleOilBee
What a long strange trip it's been

join:2011-08-02
Manotick, ON
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·Acanac
reply to dirtyjeffer
said by dirtyjeffer:

said by WhaleOilBee:

How is that device suddenly worth ~$60 more when it's shipped to Canada? Taxes are on top of that!

I don't know what the gov't can do about that.

therein lies all the cost of duplicity...Digikey Canada.

Yeah, really! They had to change the Contact Us page to exclude directions to their office; everything else is the same address and phone.

Funny thing, If you order from the US page, and ship to Canada, you get the US price. I guess they swallow the loss.


WhaleOilBee
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·Acanac
reply to urbanriot
said by urbanriot:

So basically it's $100 cheaper to buy a 42" LED LCD in the US rather than Canada. Why wouldn't you buy it in the US?

Because BestBuy Canada employs Canadians in their store; pays them a living wage. They pay municipal, provincial, and federal taxes.

That's why!


urbanriot
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Canada
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That $40 Liberal Eco tax, which itself is taxed HST, doesn't go to employees.


dirtyjeffer
Anons on ignore, but not due to fear.
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London, ON
reply to urbanriot
said by urbanriot:

Ah, okay... weird then, that you don't factor taxes into the equation as pretty much everyone hopes for that bonus. I don't know anyone with a large enough vehicle that will buy a TV in Canada since the $40 ECO tax.

42LN5400 LG 42" LCD TV

Best Buy in Canada after taxes - $677.94

Best Buy in USA after their taxes - $509.58
Cost if border agents make you pay our taxes - $572.59

So basically it's $100 cheaper to buy a 42" LED LCD in the US rather than Canada. Why wouldn't you buy it in the US?

Considering there's a possibility of avoiding brokerage fees, you could potentially get it for $160 less in the US.

that TV is available from Costco as well.

»www.costco.ca/LG-42LN5400-42-in.···951.html

$620.37 taxes in, delivered to your door...it is likely about $30 cheaper if you just pick it up in store, so somewhat comparable to BestBuy USA...also, the US warranty is likely 90 days, vs Costco's 2 year warranty...plus, if you so choose, you can make it a 5 year warranty for only $60...Bestbuy (CAN) wants $150 for 4 years of coverage.
--
People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.

- George Orwell

PX Eliezer
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reply to elwoodblues
said by elwoodblues:

One way to eliminate the pricing disparity at the retail level, is to allow consumers to bring home as much as they want any time, with no limits (value and/or time),when the loss of sales hits home, the retailers would have no choice but to respond.

The question of course is how, would they drop their prices,or would they simply start laying off staff, and/or changing positions to that of part time nature, reducing their costs as sales go down ,which then pushes that cost back on the books of the government.

That approach would try to provide more competition essentially by placing US stores more in competition with Canadian stores.

My question is: Why isn't there more competition within Canada to begin with?

Or am I wrong about that basic premise?


dirtyjeffer
Anons on ignore, but not due to fear.
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London, ON
reply to WhaleOilBee
said by WhaleOilBee:

Yeah, really! They had to change the Contact Us page to exclude directions to their office; everything else is the same address and phone.

Funny thing, If you order from the US page, and ship to Canada, you get the US price. I guess they swallow the loss.

but it isn't the same.

if you buy it from the US site, and simply have it shipped to Canada, getting the US price makes sense.

buying it from the Canadian site, and paying a higher price also makes sense.

DigiKey Canada adds another layer of cost to DigiKey's business...separate entity, separate accounting, separate tax implications, separate banking accounts, separate credit card/paypal transaction/accounts...everything associated with operating DigiKey must be duplicated for DigiKey Canada, even if only "behind the scenes".
--
People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.

- George Orwell


dirtyjeffer
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reply to PX Eliezer
said by PX Eliezer:

My question is: Why isn't there more competition within Canada to begin with?

Or am I wrong about that basic premise?

there is plenty of competition already (depending on the item)...the issue being brought forth is pricing...if they want to have US prices, then we need to bury the requirement of "Canadian Entities"...essentially, Canada would be little more than a 51st US State (in terms of doing business).
--
People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.

- George Orwell


urbanriot
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Canada
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reply to dirtyjeffer
said by dirtyjeffer:

that TV is available from Costco as well.

»www.costco.ca/LG-42LN5400-42-in.···951.html

$620.37 taxes in, delivered to your door...

That's not accurate, it's $666.63 taxes in from Costco.

($549.99 + $39.95) * 1.13 = $666.63

It's still $141 cheaper to buy it in the US if they don't bring you in or it's still $76.66 cheaper all taxes in if you buy it in the US and are roped in.

The question is, is it worth $76 to have it shipped from Costco or drive over the river and bring it over in a truck?


WhaleOilBee
What a long strange trip it's been

join:2011-08-02
Manotick, ON
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·Acanac
reply to dirtyjeffer
said by dirtyjeffer:

DigiKey Canada adds another layer of cost to DigiKey's business...separate entity, separate accounting, separate tax implications, separate banking accounts, separate credit card/paypal transaction/accounts...everything associated with operating DigiKey must be duplicated for DigiKey Canada, even if only "behind the scenes".

I don't think so. I only see one corporation in both web sites. They just had to register a .ca domain, change "espanol" to "francais", and jack up the prices. Am I wrong? Do you see a Canadian Incorporation anywhere?


dirtyjeffer
Anons on ignore, but not due to fear.
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reply to urbanriot
my apologies, i didn't factor in the eco fee...here's a question though, if you bought it from outside of Ontario, why don't you still have to pay the Eco fee??...i guess it would be impossible from out of Province (we don't have customs between provinces), but i would have thought if you were bringing a TV across the border, you would have to pay the ECO fee as well, no?

Tig

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Carrying Place, ON
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1 edit
reply to elwoodblues
When I had visibility to how products were priced it went like this;
Parent company treated Canadian division like a customer and bumped the price. That bump is passed on to the consumer. Parent company does not care where you buy their product, because they always get their cut.
The border restrictions help keep jobs in Canada.


dirtyjeffer
Anons on ignore, but not due to fear.
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London, ON
reply to WhaleOilBee
said by WhaleOilBee:

I don't think so. I only see one corporation in both web sites. They just had to register a .ca domain, change "espanol" to "francais", and jack up the prices. Am I wrong? Do you see a Canadian Incorporation anywhere?

which is why i said "behind the scenes"...it is very possible that DigiKey Canada doesn't have a headquarters, a President, it's own marketing and accounting department here...however, even it's entity would require its own financial accounting and reporting...if DigiKey USA allows you to buy from the US website and ship to Canada, simply do that...be aware you may need to factor in duty and brokerage when it crosses the border, depending on what the item is.
--
People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.

- George Orwell


elwoodblues
Elwood Blues
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1 edit
reply to urbanriot
said by urbanriot:

Ah, okay... weird then, that you don't factor taxes into the equation as pretty much everyone hopes for that bonus. I don't know anyone with a large enough vehicle that will buy a TV in Canada since the $40 ECO tax.

42LN5400 LG 42" LCD TV

Best Buy in Canada after taxes - $677.94
(Liberal Eco Fee + taxes)

Best Buy in USA after their taxes - $525.04
Cost if border agents make you pay our taxes - $589.97

So basically it's $87 cheaper to buy a 42" LED LCD in the US rather than Canada. Why wouldn't you buy it in the US?

Considering there's a possibility of avoiding brokerage fees, you could potentially get it for $150 less in the US.

Now I own a truck and can shove about a 60" plasma in the back, with my knees in my chest , if you don't own one, you then have to add the cost of the truck into the equation.

Now as I said It's an hour for me, BigSensFan lives in Whitby, so tack on another 30-45 minutes each way for him (just to get to my starting point).
DJ, what's it for you about 2hrs each way?

So yes, if you live in the Niagara region it's damn convenient, but for the rest of us it's not.

Edit: Adjusted for currency conversion.

For me, it's going to cost me about a tank of gas to drive to Buffalo and back (a little over $70 at today's gas prices) .

Then we can talk about time, it takes me roughly and hour to drive to Niagara falls, and currently it's 40m both ways on the lewiston bridge, and roughly 10-20 on the other bridges.

I don;t know if you value your time, but i do value mine.

So at this moment I have to take 2 to 2 3/4 hrs of mine time (and going to the store is a wash) to save maybe (in real money) 80 bucks.

Then we can talk about warranty, why would I buy a $500+ TV effectively "as is" since LG won't warrant the TV in Canada.

When I was looking for tires 2yrs ago I factored all that in, and it was cheaper in the end to buy it at Costco(again time is excluded since value can't really be assessed).
--
No, I didn't. Honest... I ran out of gas. I... I had a flat tire. I didn't have enough money for cab fare. My tux didn't come back from the cleaners. An old friend came in from out of town. Someone stole my car. There was an earthquake.......