Canadians have complained loudly in recent years about paying more for things at home than in the United States despite a dollar that has been close to, or even higher than, parity with the U.S dollar.
What they may not realize however, according to data released by Statistics Canada on Wednesday, is that they have received relative discounts - bigger than the premiums they're paying now -- when the Canadian dollar was at depressed levels.
The federal agency compared currency fluctuations between 1970 and 2010 to what purchasing power was, based on prices for goods and services in Canada and the U.S.
The most recent figures in this data showed that despite Canadians enjoying a dollar that averaged about 97 cents U.S. in 2010, prices in Canada gave consumers here a purchasing power that was about eight cents less.
The Statistics Canada report did not include 2011, when for most of the year the Canadian dollar was worth more than its U.S. counterpart. The Bank of Canada had estimated that, as of September, consumer prices in Canada were 11% higher than in the U.S. when adjusted for currency.
On the other side of the same loonie, the Statistics Canada study showed Canadians were enjoying a discount of almost 20 cents on the dollar compared to Americans in the early 2000s, when the loonie was worth around 65 cents U.S. but our purchasing power at home was closer to 85 cents U.S.
A chart produced by Statistics Canada shows the purchasing power of Canadians and value of the dollar, since 1970, have tended to gravitate toward each other. Changes in relative prices, however, have lagged those of the currency and have been more subtle.
While the report did not extensively detail aspects that influence both currency levels and elative purchasing power, it isted product and industry ixes within each country, trade atterns, money supply and pro-uctivity levels as likely factors.
The figures show that Canadian purchasing power was worth about $1.02 U.S. in 1970 when the dollar's average value was 96 cents U.S. The two levels converged over the next few years, with purchasing power gradually falling to 92 cents U.S. in 1976 compared to a Canadian dollar worth $1.01 U.S.
As the Canadian dollar fell for the next decade, it led to Canadians enjoying a beneficial price differential to the U.S. during the early 1980s. The dollar averaged 72 cents U.S. in 1986, but retail prices in Canada were as good as having it at 82 cents U.S. That changed again as the dollar rose to about 87 cents U.S. in 1991 while Canadians' purchasing power reflected a dollar worth 81 cents U.S.
Such figures did not sway Bruce Cran, president of the Consumers' Association of Canada, who has been highly critical of retailers whose prices have not been reduced in recent years. "I'm not interested in 40 years ago, nor is any other consumer," he said. "I'm not even really interested in up to five years ago. ... We're interested in the current ripoff."
A separate study released by Statistics Canada on Wednesday showed that, while a higher Canadian dollar generally corresponds with higher prices in Canada compared to the U.S. when adjusted for currency, there are wide variances in the extent of such differences between products.
For example, tobacco and alcohol products went from being almost equal in price in 2002 to being about 80% more expensive in Canada in 2008, this report said. That was while a general basket of goods and services went from having a discount of about 10% in Canada in 2002 to being 20% more expensive in 2008.
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