Author Topic: Why does Canada have lower selections and is more expensive than the US?  (Read 3052 times)

shalab

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I am trying to understand the economics - most of Canada lives within 50 miles of the USA border. So, this is definitely not due to supply chain issues. However, when I look at amazon for simple things like cell phones, orange juice etc., the cost in Canada is higher than the US. The selections are also lower.

Canada being a richer country, I find this interesting. It also seems competition in Canada is not what it is in the USA. Is it because of protectionist policy or border adjustment taxes or something else?

Search for windows phone in US:

https://www.amazon.com/s/ref=nb_sb_noss_2?url=search-alias%3Daps&field-keywords=windows+phone+unlocked

Search for windows phone in Canada:

https://www.amazon.ca/s/ref=nb_sb_noss_1?url=search-alias%3Daps&field-keywords=windows+phone+unlocked&rh=i%3Aaps%2Ck%3Awindows+phone+unlocked


Cardboard

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" most of Canada lives within 50 miles of the USA border. So, this is definitely not due to supply chain issues."

Right there you have a large chunk of your desired explanation.

With the vast majority of the population living on a straight line of around 5,000 km, logistics requires shipment over long distances in many instances.

Shipment across borders is also not free. I can order something online from California and my shipping cost will be higher than for anyone in the U.S. Then if my shipment gets inspected by Canadian customs, they will charge me a $9.95 fee + federal and provincial sales taxes.

Cardboard

Spekulatius

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Smaller market, different regulation and taxes, less competitive. There are differences in cost for products in Europe as well, even with the EU and having the same currency.

Sometimes things are the way they are, because they always have been.
To be a realist, one has to believe in miracles.

rkbabang

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Whenever something doesn't make logical sense it is a good bet that government(s) are the cause.  My guess is that the imaginary line between the two gang territories (called a "border") is the reason for the inefficiencies in the market that you are noticing.

doc75

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There used to be a number of large US retailers who simply would not ship to Canada.  I'd run into this all the time with camping equipment and find it pretty frustrating.  Maybe that's changed now and you just have to navigate duties/taxes/exchange.  You also used to routinely get screwed on "brokerage charges", but again I haven't ordered from the States for a while so may be smoother now.

Whenever I look at Amazon in the US or in Europe I'm a little frustrated at how much more limited our online options are in Canada. I have a good friend who came from the US who loves it here, with one exception: online shopping.

As for Canada being richer than the US.  The OP is having fun making hay with this idea, but obviously it's only true in a very narrow sense.  The US market and wealth is literally an order of magnitude bigger.  We don't have free flow of goods across the border, so you'd expect the US to be more competitive.

I think the US is pushing Canada to allow more duty-free trade, particularly online.  But the Canadian retail lobby is pretty strongly opposed for obvious reasons.

shalab

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Average Canadian (50th percentile) is richer than average American in income and net worth. I am guessing this is also true for an average Australian, average French person, average west europian. Canada has done a smart thing by giving visas to a lot of wealthy people from HongKong, China and some from India. Many of the smarter ones ultimately land in the USA.


Don't get me wrong, USA is still the place to be for people with ambition, brains, passion or ideas. In terms of human potential, don't think any other country comes close. It is also a giant economy which is probably 15 times the size of Canada and 5-6 times the size of Germany. However, when it comes to the person in the middle (50th percentile) or below - it is not necessarily the best place on the planet.

Despite the recent hoopla on immigration, USA is probably the most open country on earth - I just read this today on quora.
https://www.quora.com/I-recently-got-PR-acceptance-for-Canada-and-my-brother-is-saying-I-should-not-come-What-should-I-do

However, the great thing in Canada is that an average person ( e.g:, a loblaw union worker, truck driver or janitor ) can accumulate more wealth and income. Having friendly ties with the USA also helps a lot - most of the innovation from USA easily percolates, dont need to spend on defense or border security, citizens have good opportunities for education and then employment in USA (most multinational USA firms consider Canadian colleges on par with US colleges), the huge market is open for all Canadian citizens, companies to invest, participate in.

...

As for Canada being richer than the US.  The OP is having fun making hay with this idea, but obviously it's only true in a very narrow sense.  The US market and wealth is literally an order of magnitude bigger.  We don't have free flow of goods across the border, so you'd expect the US to be more competitive.

...
« Last Edit: July 13, 2018, 07:43:52 PM by shalab »

rukawa

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I would guess you could eliminate almost the whole difference by just getting rid of the de-minimus threshold or even lowering it to point where its cost of collection = taxes revenue.

Basically the Canadian government has a policy of keeping frictions at the border on purpose in order to protect Canadian retailers. Its essentially government policy.

doc75

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Average Canadian (50th percentile) is richer than average American in income and net worth. I am guessing this is also true for an average Australian, average French person, average west europian. Canada has done a smart thing by giving visas to a lot of wealthy people from HongKong, China and some from India. Many of the smarter ones ultimately land in the USA.

Yes, I understand that you're talking about median wealth,   But why are you surprised at differences in the retail landscape based on this?   There's less competition and higher prices  because the border isn't free-flow and it's a much smaller market by both population and aggregate wealth.

Do visa programs for the wealthy have a dramatic effect on median income?  And do you have any data for the bolded text above?

I think you're demonstrating your credulity by drawing conclusions about immigration from a single answer on Quora. The US is quite exceptional in many regards, but the numbers would suggest that it is likely not the most open country on Earth.

https://www.npr.org/2014/10/29/359963625/dozens-of-countries-take-in-more-immigrants-per-capita-than-the-u-s

doc75

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I would guess you could eliminate almost the whole difference by just getting rid of the de-minimus threshold or even lowering it to point where its cost of collection = taxes revenue.

Basically the Canadian government has a policy of keeping frictions at the border on purpose in order to protect Canadian retailers. Its essentially government policy.

Do you think we'll ever see the de-minimus eliminated?  Or even a meaningful raise, perhaps with the Nafta renegotiation?

Seems sacrosanct so I'm not expecting much change.

wachtwoord

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Whenever something doesn't make logical sense it is a good bet that government(s) are the cause.  My guess is that the imaginary line between the two gang territories (called a "border") is the reason for the inefficiencies in the market that you are noticing.

+1
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