So, the Finance Minister wants retailers to roll back prices because the Canadian dollar has climbed to parity with the US. It is quite obvious that Flaherty either has no idea of how international commerce works or he has spent too much time staring at this navel to know what happens in business as a whole.
Recently I bought a specialty mirror in the US for a project in Canada. The wholesale price to me was $US600, the same price as is charged to US companies like mine . In the US the mirror retails for $US1000. The US retailer after paying shipping and taxes has a gross profit (before selling, warehousing, and other expenses) of $280.
If I retailed the same mirror in Canada at $1000, assuming parity with US pricing, my gross profit would be $65. In addition to similar shipping costs that the US dealer incurs, I pay broker fees, shipping to Custom inspectors (so they can make sure that it is in fact a mirror and not... I assume... meat or dope or something else), time spent to move the import around the bureaucracy and a higher corporate tax rate.
In order to make the same gross profit on the mirror as my US counterpart, I have to sell the mirror for $1330. So much for FREE TRADE. And so much for Jim Flaherty.
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