Why is oil so much more expensive in Canada?

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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.

Why is a 4.4 litre of Mobil 1, Pennzoil Platinum, Castrol Syntec etc. always over $35 CAD per bottle? Even Castrol GTX goes for around $3-4 CAD per quart.
 
I heard retailers are reluctant to lower prices until they think the loonie will *stay* at par. It has been a few months though, and Walmart at least has started reducing prices. I think I saw jugs of Syntec there for $25-28 recently.

We don't get the crazy rebates that you see south of the border though.
frown.gif
 
Originally Posted By: Bob Woods
TAXES TAXES TAXES


Somebodys got to pay for the "free" health care.
 
The primary reason why price parity isn’t possible is that a U.S. based company is selling products in a foreign country (Canada). Therefore, pricing in Canada will be higher due to business and administrative issues that are independent of currency exchange rates. These issues include wages, taxes, import/export requirements, administrative costs, corporate structure and bilingual labeling, just to name a few.

While other countries expect free access to the US market, those countries erect barriers to imports of US products.
 
Originally Posted By: Mike_dup1
The primary reason why price parity isn’t possible is that a U.S. based company is selling products in a foreign country (Canada). Therefore, pricing in Canada will be higher due to business and administrative issues that are independent of currency exchange rates. These issues include wages, taxes, import/export requirements, administrative costs, corporate structure and bilingual labeling, just to name a few.

While other countries expect free access to the US market, those countries erect barriers to imports of US products.


Canada has Free Trade with the United States (although Canadian softwood lumber is subject to high tariffs for some reason...) and I don't think we're looking for price parity. There is no reasonable justification for the huge price disparity between identical goods sold in the US and Canada...other than higher profit margins.

Car dealers up here tried to justify the huge price differences with a lot of drivel...but now that increasing numbers of Canadians are purchasing their cars in the US the Canadian dealers and major manufacturers are tripping over themselves with large rebates and discount financing.

Try explaining why a case of Canadian beer costs less in the US than it does in Canada...where it's brewed.

On many consumer products, including oil, we're being ripped off and it will continue until enough Canadians start questioning why.
 
The answer is very simple: lack of competition!
Our retailers are very greedy and use every opportunity and every excuse to increase their margins.

Exhibit A: Mad Cow Scare

So we had some mad cow cases in Alberta few years back. Of course, beef prices dropped a lot, many farmers were in trouble, etc. Meat prices in stores *ALL OVER CANADA DIDN'T CHANGE*!!!! Hmmmm, huh????

Turns out meat packers and processors had record profits for a couple of years thereafter.

Exhibit B: Toyota Prius

I had some arguments with ekpolk about Prius' affordability until I realized that whereas in US it costs around $24K (roughly speaking of course) here it is around $35K. Also used Prius cars are no better.

All other explanations about taxes and tarrifs don't work. First, I never heard a specific example of how much are these taxes and tariffs, only vague claims. Second, taxes and other overhead is always present, while Canadian prices didn't change much for the entire 50% jump in our currency. Shouldn't prices have been even higher in the past when C$ was much weaker if the difference is explained by overhead that was present in the past as well?????

No, it is simple a different retailing enviornment that creates bizarre distortions. As an example, I drove to Home Depot accross the border to purchase some shelving and other things. Most things were about 50% to 100% more expensive in Canada. Even when comparing stores from the same chain - Home Depot. How can Home Depot sell stuff so much more expensive between 2 stores less than 100 miles aparat! And that is 2 countries that are NAFTA members!

The bottom line is just stop trying to understand. I just placed an order from a US store. Simple drive down to US and/or order online.

As a final note, you can actually find better deals even in Canada when there is more competition, such as from smaller retailers. I ordered some DVDs from a smaller shop with a web site from Montreal. However, they are not well known. Seems the smaller more obscure retailes have better deals, while well known brands here have the worst prices.

Again, don't dry to understand it. Simply avoid big retailers as much as possible. When they loose our business then they'll start to behave, otherwise they couldn't care less.

P.S.: Ah, just can't stop sorry
wink.gif
The worst items are specialty things like specific camera batteries. My wife's friend didn't want to bother seaching and simply went to a major retailer for her camera's battery. They charged her around $50! Meanwhile my wife buys such things on eBay for $10 to $20 tops. There is some risk of course, but hey you save so much you can buy it multiple times and still save. So for specialty items like that or just harder to find things our retailers are simply m....f..... :o
 
Originally Posted By: pbm
Originally Posted By: Bob Woods
TAXES TAXES TAXES


Somebodys got to pay for the "free" health care.



Canada has VAT, while US does not. So every manufacturer has to pay, basically sales tax, when they buy raw materials, then the next processor has to pay sales tax to buy these materials and so on and so on...

But, you guys get FREE MEDICAL. Which as I understand is not even worth the hassle as it takes months to get Dr. appointments, and it does not include dental. Vote your socialist programs off and enjoy more or less true capitalism.
 
Originally Posted By: blueiedgod


But, you guys get FREE MEDICAL. Which as I understand is not even worth the hassle as it takes months to get Dr. appointments, and it does not include dental. Vote your socialist programs off and enjoy more or less true capitalism.


I think you've been listening to too much right wing propaganda.

I could walk right in to a doctors office in most larger urban centers same day.
Specialised non vital surgery can be a bit of a wait though.

At least I won't have to sell my house to pay the medical bills my private insurance doesn't cover if I'm unlucky enough to have a heart attack from eating too much McDonald's...
 
Producers in Canada get the GST credited back to them, it's not passed along like VAT. You buy lumber for building a crate for $4 plus 20 cents GST, assemble it, and sell it for $10 and 50 cents GST. When you submit your GST remission at the end of the month, you give the government the 30 cents extra, and keep 20 cents to cover your GST payment on materials. 5% GST is exactly the same as your 5% sales tax in many areas in the US.

The reasons things are more expensive in Canada are:

- 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.

- 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.

- 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.

- Overhead costs are higher. There's less people spread out over a greater area demanding services. For utilities this means there is a larger network with fewer users. For localized software this means a smaller user base for the various changes.

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.
 
MGreg... hit it in his TRANSPORTATION paragraph. the 10 to 1 population ratio is the major reason. u.s. retailers have a huge volume buying advantage, as they buy for a huge population. they can sell goods at lower prices, and still make a good profit. there are no conspiracies or plots involved. it's basic supply side economics. his other points are valid, as well.
 
Originally Posted By: blueiedgod
Originally Posted By: pbm
Originally Posted By: Bob Woods
TAXES TAXES TAXES


Somebodys got to pay for the "free" health care.



Canada has VAT, while US does not. So every manufacturer has to pay, basically sales tax, when they buy raw materials, then the next processor has to pay sales tax to buy these materials and so on and so on...

But, you guys get FREE MEDICAL. Which as I understand is not even worth the hassle as it takes months to get Dr. appointments, and it does not include dental. Vote your socialist programs off and enjoy more or less true capitalism.


You need to educate yourself with our health care system. I can get an apointment with my family physician within 2 days if not sooner. Dentist is covered by almost all employers up here, and vision care.

I work in the Medical field and talk to a person from Florida, telling me how it cost them 30,000$ to have there appendix removed. Or hearing stories about how people having cardiac surgery costing over 100,000$. crazy. Iam glad if I get sick, I dont have to worry about money

Ill happily pay small taxes to have the system that we do. I am looking forward to your elections and hope you guys get a national health care system. Everyone deserves health care.
 
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"Because they have to go through the added expense of translating the english labels to canadian. "



Lol.

Its to bad companies get charged bi-lingual fees, for a small % of population (Quebec) have to pay extra for their labels. IMO the goverment should be paying these extra fees,since whiney Quebec has trouble reading 5w30....
 
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