Why is oil so much more expensive in Canada?

[Drew2000]

Originally Posted By: oilyriser
I bought a pack of these at Wal Mart in the US last year for a little over $13.

Yeah, but those are the fancy "Enjoliveurs" type. We just get plain' ol wheel covers.

Drew

 

[va3ux]

Everything is more expensive in Canada. Everything.

 

[Yazmeister]

If I remember correctly, Molsom recently started brewing its beer at the Coors Brewing Company brewery in Colorado for the U.S. market.

 

[XS650]

Originally Posted By: Yazmeister
If I remember correctly, Molsom recently started brewing its beer at the Coors Brewing Company brewery in Colorado for the U.S. market.


A good share of US Guinness is brewed by Molson in Canada, eh.





The president of Molson, Budweiser, and Guiness had a meeting. After the meeting, they visited the local pub. Bartender says, "What'll you have?"

Molson president says, "Canadian! Because I am!"
Bud president says, "Bud! The king of beers!"
Guiness president says, "Cola!"
Bartender says, "Cola! Are you kidding?"
Guiness president says, "If these fine gentlemen aren't drinking beer, then neither will I!"

 

[oilyriser]

Those hub caps are calibrated to work at metric speeds.

Would you like to see a 5L jug of Mobil 1 priced at $38?

 

[Patman]

Originally Posted By: byez
CAD vs. USD is pretty close to par.

So why does it cost me $8-10 CAD per quart for Pennzoil Platinum while I hear it goes for $1 USD per quart in the promotions/rebate forum.





I picked up a bunch of Pennzoil Platinum 5w30 a few months ago for $3.69 per quart up here. In fact it's still on for that price at Walmart but in the 10w30 only. ($18.47 per 5qt jug)

It does suck that everything is more expensive up here but it's just the way things are. For the longest time our dollar was only worth 65-75 cents US, so a lot of things worked out to be cheaper up here. When the dollar came up in value, it changed that, but you can't expect manufacturers to adjust their prices drastically overnight, otherwise they'll go out of business. We are beginning to see a lot of our goods come down in price though. Just not oil yet.

 

[pbm]

Originally Posted By: va3ux
Everything is more expensive in Canada. Everything.


Not quite everything. Prescription drugs are cheaper in Canada because the Canadian goverment decides what price they will allow the drug companies to charge for drugs. The pill that cost Americans 10 dollars apiece may only cost Canadians 3 dollars apiece. Since most of the cost of drugs are R&D related the American consumer is subsidizing the Canadian when it comes to pharmaceuticals.

 

[bob_ninja]

Originally Posted By: MGregoir
....
- Transportation. There is 1/10 the population in a greater surface area so the economies of scale for transportation make things much more difficult. Rather than having one distribution center every 400 miles, you may only have a distributor in say, Toronto and Calgary and work from there. This is one of the biggest kickers on most goods in Canada. And of course, for most chains, you can't price everything locally, so the fact it is cheap to ship to Toronto is counteracted by how much it costs to ship to Flin Flon, Manitoba.
....


Again this doesn't work. Often it is CHEAPER for me to order small orders of $100-$200 shipped using USPS or similar and still have total cost 30% or more cheaper than simlpy walking into Canadian Tire and Future Shop. How can such inefficient shipping method like small order still end up being cheaper for me than CT and FS presumably using larger delivery trucks??? And I live in Ottawa, which is a decent size city.

Another example is a news piece about a person in Minnesota I think. She makes order on behalf of canadians who then drive to her place right next to border to pickup. Once again this seems to be a horribly inefficient and expensive shipping method of smaller orders, yet she has a bunch of customers because total costs still ends up far lower. Low enough to justify the hassle of Canadians driving to her place.

Finally, it cannot explain 5K-10K difference on cars. You just don't need to spend 5K more on shipping a car to Canada (I hope

 

[bob_ninja]

Originally Posted By: MGregoir
...
- Labour cost. In most of Canada nobody makes less than $8 an hour, it varies, but there is no cheap labour to be had in Canada. We don't have many illegals, and those who do hardly skew things, and the cheap labour we do bring in is paid over the table and legitimate so not much less expensive than local labour. Right now the kids just out of high school doing oil changes at Mr. Lube are making at least $16 an hour, the people ringing your groceries through in many areas are making $10 or more. I know someone who just quit at a McDonald's making $24 an hour as a swing manager.
....


I would assume that most of the labour involved is for production and there is little labour involved in distribution. This is especially true for web stores like Tiger Direct. Yet when you compare say tiger direct prices between their US and Canadian sites you still often find higher canadian prices.

I would expect labour differences to account for a small difference of no more than 5%.

 

[bob_ninja]

Originally Posted By: MGregoir
...
- Standards variations. Not everything legal in the US is legal in Canada, there are different requirements for everything from labelling to certain cars (notably the Pontiac GTO of recent years) not being able to pass the rear impact crash standards. When a variation of a product has to be made for a smaller market with fewer customers to spread it over, price goes up.
...


I was under the impression that most companies just don't bother with any customization for Canada. If a change is needed they simply don't sell here. As an example, VW was selling a bunch of diesel models here that are illegal in US (due to more strict air pollution standards). Here VW diesle sold very well. Then last year VW decided they don't want to bother and were planning to stop selling them. I guess we are small market, low volume, etc. However diesel models accounted for half the sales so HQ backed off.

Therefore most customization due to different standard would be minimal, hence cost little. Majority of companies just don't bother with any significant changes.

Also our standards and laws are so close that the need for changes is minial in the 1st place. Again maybe up to 5% cost delta.

 

[bob_ninja]

Originally Posted By: MGregoir
....

The economies of scale for everything in the US are much greater, and the overhead and labour costs of everything are much lower. It's not completely us getting hosed by price fixing, things like milk on both sides of the border cost basically the same.

Add to this that many of these products are produced in the US rather than Canada and have to go through customs and the complete warehousing and distribution process again on this side of the border, you basically pay overhead twice.

I am sure there are holes in this but this is basically why everything is more expensive here. Except milk.


Yes, economies of scale bu far is the most significant factor. However most things ARE NOT MADE IN USA any more as we know very well

Most things are made in China and other places. So if a container ship arrives to LA from China it can as easily go to Vancouver (and many do). Just as stuff made in China is distributed by rail from the west coast in US so it gets distributed here as well. The main difference in distribution systems is volume. Clearly US will move much more volume. Once again, the volume difference should account for 5% or so.

At the end of the day it is just impossible to explain that a personal vehicle of a limited capacity going across border to US, caryying a small load back and paying all the taxes (GST/PST) at the border, all legal, can still yield a 50% to 100% lower total cost than large transport rigs for Canadian distributors?!?!?! Just doesn't make sense.

Unless our distributors/retailers are horribly inefficient and/or demand very high profits.

 

[oilyriser]

Canada is ripe with monopolies and oligopolies. The competition bureau does nothing to enforce the laws against them.

 

[bob_ninja]

Yep. Not enough competition.

Speaking of volumes, as Canadians notice the cheaper prices in US and are ordering more and more stuff from US as well as simply driving to US, that actually shifts even MORE volume to US retailers. So Canadian retailers are shooting themselves in the foot.

They already have a hard time competing with US retailers having bigger volumes. Now as they refuse to adjust prices they are actually pushing even more volume AWAY from them to US?!?!?

 

[BullyT]

Originally Posted By: pbm
Originally Posted By: va3ux
Everything is more expensive in Canada. Everything.


Not quite everything. Prescription drugs are cheaper in Canada because the Canadian goverment decides what price they will allow the drug companies to charge for drugs. The pill that cost Americans 10 dollars apiece may only cost Canadians 3 dollars apiece. Since most of the cost of drugs are R&D related the American consumer is subsidizing the Canadian when it comes to pharmaceuticals.



Some prescription drugs are cheaper in Canada, but I think it is a stretch to say that American consumers are subsidizing Canadian consumers. The Canadian government only regulates the prices of drugs that are covered by a Canadian patent. Drug manufacturers still make huge profits, even on drugs that are regulated. The government has no control over prices charged for generic drugs or drugs where a Canadian patent has not been applied for and granted.

 

[va3ux]

Now that is true. I wasn't thinking about prescription drugs whe I wrote that.