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Ottawa, The federal government has unveiled new legislation aimed at narrowing the price gap between items sold in Canada and the U.S.
Federal Industry Minister James Moore announced the “Price Transparency Act” Tuesday, which grants new powers to the head of the Competition Bureau.
Under the new legislation, the Commissioner of Competition will be able to investigate alleged cases of suspected price discrimination and publicly report situations where Canadian consumers are targeted with higher prices.
As well, the commissioner will also be able to authorize court documents forcing retailers to disclose details on how they arrived at their pricing scheme, and to provide evidence that their price difference is justified. The commissioner will report any findings from those documents to the public.
Moore said the new act, which will be tabled in Parliament Tuesday, will help ensure Canadians pay “comparable prices for comparable goods.”
The minister acknowledged that there are legitimate costs of doing business in Canada which result in higher prices for certain goods. However, some retailers are practicing “price discrimination,” he said.
“Geographic price discrimination is real and it’s a significant burden to the bottom line of hard working families and retailers,” Moore said. “Ultimately, consumers should know whether the differences in Canadian and U.S. prices are justified.”
Retail Council of Canada President Diane Brisebois said the council supports the act.
“This bill is an important step toward enabling Canadian retailers to compete on a level playing field and offer their consumers the best possible prices,” she said in a statement.
In recent years, Canadian consumers have noted the higher prices they pay compared to Americans for the same items, particularly as the loonie reached parity with the U.S. dollar.
Statistics Canada estimates from 2011 found that Canadian prices were about 25 per cent higher than U.S. prices for many goods.
Retailers have said that several factors including transport costs, market size, and tariffs and fees are behind the increased Canadian prices. A 2013 Senate report found that the pricing practices of a particular country, the volatility of the exchange rate and customs tariffs all contributed to the inflated prices.
‘Immediate downward pressure on prices’
Moore said that while the act will not regulate prices, granting the commissioner the power to expose cases of unfair pricing will have an immediate effect on retailers.
“We think this is an effective tool that makes sense now,” he said. “Upon enactment of this legislation coming into force, I think it will have an immediate downward pressure on prices which will help Canadian families.
“There’s an influence on the market and there’s an influence on business behaviour that I think will protect consumers just by the fact that the commissioner has these powers as a result of this bill.”
He said that after the commissioner reports cases of price discrimination to the public, it’s ultimately up to Canadians to decide if they want to continue supporting a particular company.
“This is about informing the consumer by empowering the (Commissioner of Competition) so that the marketplace can react. So this is, in that sense, a tool for the free market,” he said.
