Bigger bang for my buck

I travel a lot on business, and I end up in the United States almost as much as I'm in Canada, so I'm pretty aware of things like currency rates.

And I have to tell you that what's happened with the Canadian dollar in the past month has really surprised me.

Keep in mind, too, that it's only been in the past month - and a few days - that the loonie and the greenback have flipped positions, with the Canadian dollar worth more than the American. That's never happened before in my lifetime.

As a consumer, the strength of our dollar excites me, especially when I'm in the U.S. all the time. Prices in the U.S. are usually cheaper, so with our dollar worth more than theirs, it means I can get even more bang for my buck.

But I'm not going too crazy making big purchases south of the 49th.

A friend of mine asked me the other day why I wasn't buying cars and big-screen televisions in the States, and I guess if you weren't back and forth across the border all the time, you might not realize why that's not always a good idea, even with our dollar being as strong as it is.

First of all, the reason things are priced differently in the States and Canada is not just because of the value of our currency. The prices of things up here also has to do with duties - taxes - that our federal government imposes on products coming into Canada, and the GST, and a bunch of other market forces that I can't always get my head around (so much for those economics courses in university).

So if you want to buy a car in the States and bring it back to Canada, you still have to pay the duties that the government would have collected if the car was brought in by a dealer, and you still have to pay the GST, and any other taxes. So those "savings" can disappear in a hurry.

Unless you want to try and smuggle the car across the border. But I wouldn't recommend trying that.

More importantly, though - especially with big-ticket items such as cars and massive flat screen TVs - is that importing the products to Canada - which is what you are doing when you buy products down there - you can invalidate any warranty. Sure, you saved $10,000 by purchasing that Ford Focus in the States, but what happens if the transmission goes at 10,000 clicks? That would cost you a dollar per kilometre. There goes any savings you made when you purchased the car.

There are two businesses that would be tricky to be in right now. One is any industry that exports to the U.S., because they are making about 20 percent less on every unit sold at this point. The second is retail, because the public outcry about consumer pricing has been so loud.

Of course consumers want prices to come down because our dollar is strong. And the sticker prices of many items are being reduced.

Those companies that manufacturer their own products and operate worldwide have been the quickest to respond. Apple and Sony and many electronics manufacturers have dropped their Canadian prices to get them in line with the currency rate.

Retailers such as Future Shop have already cut prices on things like flat-panel televisions, MP3 players, video-game consoles like the Xbox 360 and PlayStation 3.

The longer our dollar stays as strong as it is, the further I expect prices will fall.

Remember: this has all happened in just over a month. It takes time for adjustments on prices to work their way through the system. Plus, the currency markets are so volatile that our dollar could be back down to US$ 0.90 in another month. Businesses are waiting to see how stable our soaring loonie is going to be before they lock in any lower prices.

Yesterday, the dollar was back below $1.02.

But I don't think retailers in Canada will ever have the exact same prices as retailers in the U.S. because of the reasons listed above, and also because Canada isn't the U.S.

We're twice the size of the U.S. but have a tenth of the population. Those realities alone mean that prices will be higher in our country because the individual buying power is reduced because there are fewer of us clamoring for the same product and because when things are shipped from one place to another, they have to travel so much further. These factors make prices higher in Canada.

But the other thing I'd say is that if you want U.S. prices, move to the U.S. Then you can have U.S. prices. And with those cheaper prices you can have a weaker economy, a slumping dollar, a country at war with the world, skyrocketing health care costs, and all the rest.

And you'd be missing Hockey Night in Canada every Saturday night.