Retail Council of Canada attended a press conference to launch the Price Transparency Act on December 9, 2014.
The Minister of Industry, the Honourable James Moore, introduced legislation that will empower the Competition Bureau to study the root causes of the unjustified price differences between Canada and U.S. In particular the Commissioner will be directed to:
- Study broad product categories where there is evidence of higher Canadian prices, and;
- Publish a report detailing the Bureau’s findings on root causes – these findings could include supplier country pricing strategies, as well as other cost drivers such as tariffs and inconsistent regulations.
The government’s intent is to shine a light on the issue of country pricing to facilitate correction through market forces. The report may also recommend steps to reduce price discrepancies, which could include further tariff reductions or a specific legislative solution.
It is expected that the Bureau will select three to five product categories for the focus of the initial studies within product categories with substantial price differences between Canada and the US.
RCC and its members have long been aware of the price discrimination issue. RCC first met with the Minister of Finance to discuss the problem in 2007. RCC worked closely with the Standing Senate Committee on National Finance which was charged with studying the potential reasons for price discrepancies between Canada and the United States.
The committee’s recommendations, released in 2013, included the need to reduce tariffs, address supplier country pricing practices, and improve regulatory harmonization – all recommendations put forward and supported by RCC. The Federal Budget of 2013 announced the elimination of tariffs on baby clothes and some sporting goods, totaling $79 million – an important step on behalf of both retailers – and consumers.
The Price Transparency Act will allow the Government of Canada to examine differences in specific product categories around the practice of supplier country pricing to answer the long-asked question of why prices are different in Canada and the U.S.
RCC members are on the front line of this issue. As demonstrated in the Senate Report pricing is a complex set of volatile variables including the exchange rate, transportation costs, differences in regulations and so on.
If you have any questions or concerns, please don't hesitate to contact: David Wilkes, Senior VP, Government Relations & Grocery Division, [email protected] or 416-467-3767