Even the stronger loonie hasn’t been able to overcome obstacles that include import tariffs ranging as high as 18 per cent, a number of higher fixed costs and, admittedly, the fact that retailers in Canada can simply get away with charging more.

“The people who should win from a stronger Canadian dollar are consumers,” said BMO’s deputy chief economist, Douglas Porter. “They don’t feel that way.”

“We have been above parity for basically all of 2011 and when you get to those levels it makes the price comparisons very straightforward and it’s frustrating for consumers,” said Porter, who has been tracking price differences between the two countries since the loonie soared in 2007.

Hockey parents have noticed that equipment is cheaper in the United States and some are finding ways to bring it back to Canada unnoticed.

“It depends on the equipment, but it can vary from 20 per cent to 45 per cent cheaper in the U.S.,” said one parent. “When you get into the high-quality products, the price difference is higher.”

Some U.S. retailers such as Hollister, the California surfer clothes chain, are upfront about advertising their two-tiered policy, listing both Canadian and U.S. prices on their price tags.

Others, like American fashion retailer J. Crew, charge an average of about 15 per cent more in Canada compared with its U.S. stores and website. A Senate committee plans to study the price gap, a process that will take time and could run into 2012, which would miss the holiday shopping season.

Tariffs on most goods between Canada, the United States and Mexico were phased out under trade deals signed in the late 1980s and early 1990s. But there are still import duties paid on some goods not covered by these trade agreements as well as a range of clothing and sporting goods that come into Canada from Asia, Europe, South America and other countries.

There’s also the cost of doing business in Canada, which adds to the price of goods — from bilingual labelling to transportation, payroll taxes and real estate, said marketing professor Ken Wong of Queen’s University in Kingston, Ont.

“The other part of it is quite simply what the market will bear,” Wong added.

“So, to a certain extent, there is an element of artificial inflation of some Canadian prices. From a consumer perspective, you could say it is gouging. From a manufacturer’s perspective, I would guess you see it as smart business.”

Cotton clothing such as T-shirts and track suits, women’s and girl’s ski jackets and overcoats, pillows, cotton bras, towels and bed linen face import duties of between 14 and 18 per cent, according to the Retail Council of Canada.

These items aren’t out of the ordinary, said Anne Kothawala, a spokeswoman for the council, which would like to see the tariffs removed.

“Clothing and sporting equipment are the particularly egregious areas,” she said.

Federal Finance Minister Jim Flaherty has conceded that removing such tariffs might be one way the government could help, but he wants the Senate committee to take a thorough look at the whole issue.

A bright spot for Canadians is consumer electronics, such as TVs and laptops, because the price difference between the two countries usually isn’t significant, according to Christopher Bennett, spokesman for Best Buy Canada and Future Shop.

“It could be $50 more or it could be $50 less in Canada or the U.S.,” Bennett said.

Technology is getting cheaper and being mass produced and is resulting in ever lower prices, he said from Vancouver.

“The up and downs every month of the dollar in the U.S. or Canada won’t drive your excitement,” Bennett said of consumers buying consumer electronics.

Meanwhile, Kothawala said there was “no question” Canadians would see a reduction in prices if import tariffs were removed.

“However, because of the time lag in the supply chain and the time it takes to place an order for products, that will not be able to happen overnight,” she said.

Kothawala also noted that Canada retailers are typically charged more by multinational suppliers than their U.S. counterparts, making goods more expensive.

And, she added that Canadians shouldn’t expect to see absolute parity on consumer goods even if tariffs are removed.

“Our fixed costs are in Canadian dollars — they’re not coming down because the Canadian dollar has gone up,” she said.

Stats-Canada also says credit market debt grew by 1.3 per cent in the quarter, while personal disposable income grew by 0.7 per cent.

In the report, Bank of Montreal economists Douglas Porter and Sal Guatieri say households “can’t fully resist the lure of interest rates at persistently rock-bottom levels.”

They note that household credit market debt climbed to a new high of 147.3 per cent of disposable income, on the back of the Bank of Canada’s decision to leave overnight rates unchanged since last September.

“Canadian debt ratios are now leaving their U.S. counterparts in the rear-view mirror, despite the repeated exhortations by domestic policymakers to rein in borrowing. It seems that (interest rate) actions speak louder than words.”

However, the increase in consumer credit debt slowed along with lower household spending.

The weakness in consumer spending also reflects the fact that higher energy and particularly gasoline prices are taking a bigger bite out of household budgets, leaving less for other spending. That, combined with high levels of indebtedness are expected to weigh down purchases going forward.

“Although household debt growth has cooled notably in recent months–April’s 5.5 per cent (year-over-year) was the slowest pace since early 2002–the plain fact remains that it continues to outstrip income growth,” Porter and Guatieri wrote.

Consumer credit slowed more than mortgages in the first quarter, as mortgage borrowing may have been boosted by a rush into the housing market ahead of tighter mortgage lending rules that took effect in March.

The debt-service ratio — the ratio of cash available to pay principal, interest and lease payments — also rose in the first quarter, due to weaker income growth and moderately higher borrowing costs.

Bank of Canada governor Mark Carney warned last week that Canada’s housing market is entering overheated territory and many Canadians could be financially hurt once interest rates begin to rise.

Carney has been cautioning Canadians for about two years against getting overextended on mortgage borrowing, but his speech to the Vancouver Board of Trade last week suggested some frustration that his words have mostly fallen on deaf ears.

The governor said he has been expecting the housing market to slow, but besides some stuttering signals, it has picked up again recently, along with borrowing and mortgage credit.

Canada’s Consumer Product Safety Act was proclaimed into law a year ago after years of being stalled in the legislative process, including objections in the Senate, and because of the frequency of federal elections.

Starting Monday, when the law comes into force, federal ministers will be granted new powers to pull unsafe toys, sporting goods, cribs and some other household products off the shelves instead of just requesting producers do so.

The act does not affect products such as autos and their integral parts, food or drugs. They come under other legislation.

Under the old act, the government can only request that suppliers take action.

New law ‘long overdue’

A government official said the new rules put Canada more in line with how other countries, particularly the United States, deal with unsafe products.

As well, Ottawa will be able to require that manufacturers and importers provide test and study results on their products, and report serious incidents.

The act also allows the government to prevent the importation of products believed to pose a danger to the public.

Health Minister Leona Aglukkaq has scheduled an event at a toy store in Ottawa on Monday to extol the changes to the 40-year-old act.

It took too long to make the changes said Bruce Cran, president of the Consumers Association of Canada, an organization that has lobbied incessantly for passage of the act.

“For consumers this is very much a good thing,” he said. “It’s long overdue and very welcome and I think this will be a great benefit to all Canadians.”

The inadequacy of the old law were brought home in 2009 with the recall of Canadian-made Stork Craft baby cribs following reports of more than a dozen incidents, including four child suffocations in the U.S. Canada only learned of the incidents from American regulators.

Somewhat surprisingly, there is little or no difference among age groups, educations levels or urban and rural populations on this question. At present, approximately 85 per cent of internet users in Canada get news online at least once a month.

Key findings:

• Ninety-two per cent of Canadians who get news online say they would find another free site if their favourite news sites started charging for content.
• Eighty-one per cent say they definitely will not pay to continue reading their favourite online news site.
• Canadians are more willing to pay for music, games, e-books and even ringtones than they are to pay for news but even in these categories, the numbers are not high
• The vast majority of consumers is unwilling to accept fees but up to 30 per cent indicate they would definitely or probably pay, if there were no other choice
• Charges are most acceptable for breaking news (28 %) or hard news (22 %). Nineteen per cent indicate they would pay for international news and 16 per cent would purchase feature and analytical news.

Read the full survey release about consumer reaction to the use of newspaper paywalls from the CMRC.

Read our FREE online magazine here

“For the average buyer of mid-level vehicles like Toyota Sienna or Honda Odyssey, savings can be found on vehicles 2 years of age or newer” claims Viraf Baliwalla, President of Automall Network, an auto buying service with clients throughout Canada. “The general rule of thumb, the newer the vehicle, the greater the difference”.

For those that can afford a little more, even better deals are available on higher end vehicles like Mercedes, BMW, Audi, Lexus, Acura, Land Rover, Cadillac, etc. After all is said and done, the differences between Canadian prices and US prices can easily amount to $10,000-$15,000 by the time it lands in your driveway.

“On a recent Lamborghini import, the difference was approximately $130,000. Unfortunately, by the time transportation, duties, taxes, fees and other costs were factored in, the savings were whittled down to a mere $90,000″ says Baliwalla.

But how does one go about navigating the red tape and hurdles to take advantage of such savings? Automall Network is a seasoned expert in importing vehicles, has been featured in the media and is the preferred member benefit for some very high profile associations. In this article, they share their secrets and the steps they go through for the entire process.

Step 1 – Sourcing the vehicle

Normally, US dealers will not sell a new car for the purpose of export as it goes against their franchise agreements. That’s not to say it never happens, but finding a dealer that will co-operate is the trick and you then may face serviceability issues. “Manufacturers can decide not to service a vehicle, even for recalls, if the buyer doesn’t play by the rules” claims Baliwalla. “It may not be worth the risk”.

Some manufacturers are fine with new cars coming across the border but they are few and far between. Automall Network will import new cars from such manufacturers but otherwise recommends slightly used vehicles with very low mileage. “If clients must have a new car from a manufacturer that won’t allow US dealers to sell to Canadians, we can put the deal through our network here in Canada at very aggressive prices” says Baliwalla.

Once a vehicle has been titled in the US, manufacturers’ rules don’t apply. “We often find vehicles that are a few months to a year or two old with very little mileage. The few thousand miles depreciates the vehicle significantly in price” says Baliwalla.

Automall Network has access to good condition, off lease vehicles through the dealer only auctions and that is where they search first. If they can’t find something suitable at the auction, they search the following sites: Autotrader.com, Cars.com,Edmunds.com, EbayMotors.com, KBB.com and individual dealer websites. “We recommend that you only buy through licensed dealers. When buying long distance, we don’t typically recommend buying from private individuals” cautions Baliwalla.

Step 2 – Negotiating the price

For consumers, negotiating the best retail price long distance with a US dealer is not so easy. The dealers know they already have the vehicle attractively priced compared to Canada, so they may not be very flexible. If the difference is already significant, people will buy it at full price. “Remember, it is you that has called them to buy their vehicle” says Baliwalla. “This gives them greater negotiation leverage”.

Automall Network recommends you don’t let on that you are from Canada initially. Turn on call blocking on your phone. Try to work your best deal as if you were a local buyer.

“Fortunately, as a dealer, we are extended trade pricing which we pass on to our clients” says Baliwalla. “We don’t have to play those games”.

Step 3 – Doing your homework

Taking shortcuts in your homework will most likely result in costly problems down the road. People have been known to pay tens of thousands of dollars for vehicles which cannot be operated in Canada. DO YOUR HOMEWORK. Check for importability restrictions, whether the vehicle comes with all the features necessary to pass the RIV inspections, what will be involved in getting a recall clearance letter, cross border warranty coverage, and most importantly, vehicle accident and lien history. Also, make sure to have the vehicle independently inspected by a qualified, licensed mechanic BEFORE YOU PAY A DEPOSIT.

“We put the vehicle through a very comprehensive independent inspection so we know what we’re buying on behalf of our customers. You won’t believe the peace of mind this brings” says Baliwalla. “We’ve cancelled deals after the inspection because there were undisclosed problems with the vehicle”.

Step 4 – Paperwork and customs clearance

You will need the bill of sale and the title when you cross the border. However the paperwork must be sent to the US border 72 hours in advance of the vehicle showing up. If you plan on driving the vehicle back yourself, allow a few days’ stay in the US and budget meals and accommodation. Duty at 6.1% of the purchase price will be charged at the border if the vehicle was manufactured outside of Canada, US or Mexico. You will also be charged GST at the border and possibly Green Levies for gas guzzlers. The PST will be charged at the local rate when you license the vehicle in your home province.

Step 5 – Transportation

As a retail consumer, you have the choice of flying down to pick up the vehicle and driving it back or driving down with someone and driving back separately. You are often able to get a temporary tag (plate) which is valid for several days. But be careful. Some states require you to pay local sales tax to get one.

This would mean that you will ultimately pay the local state sales tax plus the duty, if applicable, plus Canadian sales tax (HST or GST & PST). No matter what, you cannot get around paying the Canadian sales tax. To avoid double taxation, you can hire a trucking company to bring the vehicle back for you however you will not be able to drive around to get the vehicle inspected or certified without that temporary tag.

“As a dealer, we have contracts with trucking companies and customs brokers and we have a dealer license plate which allows us to avoid US taxes and drive the vehicle to various inspection stations in Canada to get the vehicle registered” says Baliwalla.

Step 6 – RIV (Registrar of Imported Vehicles)

As the vehicle crosses the border, you will be given a “Form 1″. Allow a few days for RIV to get the paperwork and in the mean time, contact the manufacturer to obtain a recall clearance letter. Some manufacturers will charge for the letter while others will make you go through expensive and often unnecessary modifications first which can add upwards of$10,000 to the final price. “We have ways to avoid the unnecessary costs” says Baliwalla. “Some manufacturers’ Canadian offices simply want to dissuade you from importing into their territory”.

Once you have the recall clearance letter, it must be faxed to RIV and an online payment of$195 must be made. A few days later, your “Form 2″ will be ready. Download and print it, then take the vehicle to the nearest RIV authorized inspection station. As long as the regulatory requirements are met, the inspector will stamp the “Form 2″.

Step 7 – Certification

The vehicle must then be certified before it can be legally licensed in Canada. Ontario also requires an emission test. If you drove the vehicle back with a temporary tag, you will have a few days left to do this running around but get it done as quickly as possible. If you had the vehicle shipped up to avoid the state sales tax, you will need to truck or tow the vehicle to an inspection station till you get your plates.

Step 8 – Licensing and insurance

Make sure you have adequate insurance coverage on the vehicle from the date you plan to pick it up. Take the vehicle into a Ministry of Transportation office with the Form 2, bill of sale, safety, insurance slip and any other paperwork. You can purchase new plates or transfer your old plates from a previous vehicle. In either case, the plates can now be mounted on the vehicle.

And presto! Your vehicle is now a Canadian.

There are a lot of steps here. Taking shortcuts in one or more areas could have very costly consequences.

Automall Network provides two levels of service for their importing clients. With their full service, they manage and coordinate all of the above steps for a flat fee of $1500. For more exotic vehicles like the Lamborghini, the flat fee is $2500. In addition, clients reimburse the wholesale auction price or trade rates as paid by Automall Network for the vehicle and associated costs.

They also provide an “à la carte” version of their offerings called their “Easy Import Service” for those that want to do some of these steps on their own. Pricing is as follows:

• Homework on the vehicle: $400
• Customs clearance: $599
• Transportation: typically $750-2000 depending on distance
• Regulatory items: $650.

The Canadian Black Book “Best Retained Value Awards” were introduced in 2006. Retained value is a strong indicator for how a vehicle may perform in the future. For consumers, selecting a vehicle with a high retained value (lower depreciation rate) will reduce their overall cost-of-ownership.

New this year is the naming of not only the #1 picks…but also includes the first two runners-up in each category.

The 2011 Canadian Black Book “Best Retained Value Award” winners are:

As they did in 2010, Toyota and Lexus combined scored the most winners, earning six number one spots. Volkswagen increased its number of first-place finishes to three. New to the winner’s circle are Volvo with two awards, along with Jaguar and Jeep winning one each.

“Depreciation is the largest expense associated with vehicle ownership and for six years these awards have helped buyers identify which vehicles depreciate the least,” says Kathy Ward, CEO of Canadian Black Book. “Consumers want as much information as they can get when buying or selling a vehicle. These awards along with the vehicle future value tool on CanadianBlackBook.com, help consumers make smart vehicle purchase decisions.”

“This year’s awards are particularly exciting given the new winners in several categories,” says Larry Shred, president of Canadian Black Book. “Some of the old-faithfuls have returned, reinforcing the strength of their brands through thick-and-thin, while other new winners motivate everyone to keep up their game. This raises the bar for our entire industry and ultimately, it is the consumers who win.”

There are many ways to protect yourself as you potentially make a major investment in a used vehicle. Here are ICBC‘s top five tips to help you make the right choice:

A little research can go a long way in protecting you when you’re buying a used vehicle. Arm yourself with as much knowledge as possible before signing on the dotted line and handing over payment. If at any point along the process something causes you concern, your best option may be to walk away from the sale. Importantly, if a deal on a vehicle seems too good to be true – it probably is.

Visit icbc.com for more tips on buying a used vehicle including important guidelines on transfer of ownership and registering, licensing and insuring your vehicle. You can also download a copy of our used vehicle buyer’s checklist and get tips on selling a used vehicle and buying a new vehicle.