TORONTO, Nov. 3, 2011 /CNW/ - The Senate committee studying the
Canada-U.S. price gap has heard many experts declare that international
manufacturers and distributors charge Canadian retailers much more than
retailers in the U.S., says Retail Council of Canada (RCC).
In addition, the Senate heard that retailers in Canada pay import duties
on consumer products which are much higher than those paid by their
American competitors. It was also acknowledged that our market is
one-tenth of the size of our southern neighbour.
"We commend the Senate on the thoroughness of the hearings and the broad
perspective presented by the individuals who have testified," said
Diane J. Brisebois, president and CEO of RCC. She added that much of
the testimony reflected the frustration and burden faced by retailers
and consumers in this country.
With that in mind, RCC believes that recent testimony by Bank of Canada
governor Mark Carney requires proper context, adds Brisebois. "Minister
Flaherty asked the Senate committee to look into the price differential
on retail goods sold in Canada. However, Mr. Carney's comments and
finance department calculations lump retail goods in with an enormous
array of other goods such as cars, dump trucks and construction
materials. Obviously this is going to skew the facts."
Brisebois also noted that Mr. Carney acknowledged that the central bank
has not done a detailed analysis on tariffs and that RCC, in its'
Senate presentation, will provide industry data that will shed light on
this issue. "Finance officials, and now Governor Carney are suggesting
that tariffs are insignificant as they only apply to 10 per cent of all
goods imported into Canada," said Brisebois. "However, Minister
Flaherty asked for an examination of retail prices, so we must look at
the percentage of products that a typical retailer sells. Our members
have told us that the number of goods they sell that are subject to a
tariff is far greater than 10 per cent and therefore tariffs are a
significant factor in pricing for our industry."
She said one RCC member noted that duty on hockey skates from China into
the U.S. is set at three per cent while Canadian rates are 18-22 per
cent, thus making it more expensive to sell and buy in Canada.
RCC also notes that Mr. Carney's testimony stating that Canadian
retailers were not as productive as Americans did not match the
findings of a 2010 Industry Canada report. Based on investments in technology and equipment, the retail
sector invested more than the U.S. retail sector. It also concluded
that this investment contributed to the retail sector outpacing the
Canadian economy in terms of labour and multifactor productivity
Ian Gordon, president of Convergence Management Consultants, testified
that retail price differences could primarily be traced to
manufacturers, who accounted for 37 per cent of the total retail shelf
price difference for all the goods considered in the non-automotive
category. Retailers accounted for just nine per cent.
As Canadians head into the busiest shopping season of the year,
retailers in Canada will continue to provide consumers with competitive
pricing and choice, Brisebois noted. "Everybody has a role to play,
including manufacturers who must narrow the gap between what they
charge U.S. and Canadian retailers, and the government which should
eliminate import tariffs."
About Retail Council of Canada
Retail Council of Canada (RCC) has been the Voice of Retail in Canada
since 1963. We speak for an industry that touches the daily lives of
Canadians in every corner of the country - by providing jobs, career
opportunities, and by investing in the communities we serve. RCC is a
not-for-profit, industry-funded association representing more than
45,000 store fronts of all retail formats across Canada, including
department, specialty, discount, and independent stores, and online
merchants. RCC is a strong advocate for retailing in Canada and works
with all levels of government and other stakeholders to support
employment growth and career opportunities in retail, to promote and
sustain retail investments in communities from coast-to-coast, and to
enhance consumer choice and industry competitiveness. RCC also provides
its members with a full range of services and programs including
education and training, benchmarking and best practices, networking,
advocacy, and industry information.
SOURCE Retail Council of Canada
For further information:
Sally Ritchie, VP, Communications and Marketing
(416) 922-0553, ext. 228