BUSINESS

Canadians Pay More Than Americans For Canadian-Made Vehicles

06/13/2012 05:59 EDT | Updated 08/13/2012 05:12 EDT
AP

Consumer advocates say the Competition Bureau should investigate why Canadians are paying thousands of dollars more than Americans for vehicles manufactured here in Canada.

CBC News looked at the relative prices of 24 models made in Ontario by the five big automakers — Ford, GM, Chrysler, Honda and Toyota — and found that in 18 cases, the models cost thousands of dollars more to buy in Ontario than in the United States, including Hawaii.

Based on the manufacturer's suggested retail prices, the two-wheel drive Toyota Rav4 would cost $22,650 in Honolulu, with an additional charge for freight and pre-delivery inspection (PDI) of $810.

A resident in Woodstock, Ont., however, would pay $24,865, plus a freight and PDI charge of $1,465, for the same model, despite the Rav4 being manufactured in Woodstock.

Likewise, a resident in Alliston, Ont., where the Acura MDX is made, would pay $52,690 based on the suggested retail price, while in the U.S. the vehicle's suggested price is $43,030. (See chart at bottom of article for a full list of vehicle price comparisons.)

The Canadian prices for Canadian-made vehicles tend to be lower or on par with American prices for the more affordable vehicles like the Honda Civic or Toyota Corolla.

But for more expensive vehicles, the price differences are particularly noticeable, especially considering the relative dollar parity between Canada and the United States.

Senator says price gap not justified

Senator Pierrette Ringuette said she invited representatives from the Big Three automakers in the U.S. to appear before the Senate finance committee to explain the price disparities, but they declined.

"How do you justify a car made in Canada being sold for 20 to 25 per cent more in Canada than in the U.S.?" she said.

At least one manufacturer, Honda Canada, said Canada's price was determined by a number of factors, including exchange rates, market conditions, Canadian-specific content and the cost of doing business in two official languages.

But Ringuette said the cost of translation is a red herring.

"You do it once and it's done. So that was not an issue either. So what's left?" she asked.

She also says Transport Canada officials have told the Senate committee that Canadian-specific safety features (such as those designed to meet higher bumper standards in Canada) would at most add $200 to the cost of a new car. Many newer models sold in the US already meet the Canadian standard anyway.

Manufacturers respond

Ford Canada spokeswoman Chantel Bowen said the company prices its vehicles to be competitive in the Canadian market and said the actual price may vary.

"Manufacturer's suggested retail prices (MSRPs) in Canada and the U.S. are 'suggested' retail prices. What a customer actually pays for a vehicle is negotiated with the dealer," said Bowen.

Toyota Canada said it is a separate company from Toyota Motor Sales U.S.A. and so prices its vehicles differently.

The price disparity might tempt Canadians to make a run for the border to pick up a new vehicle, but consumer advocate Rob Lamb says most U.S. dealers will not sell to Canadians.

Lamb, the founder of the website Cars without Borders, says U.S. dealers obey orders from the automakers to turn Canadian buyers away.

"If you're a U.S. dealer you're not going to sell a brand-new car to a Canadian and that's it, and if you do you'll lose your licence, you'll be penalized. So dealers across the states are not selling new cars to Canadians," said Lamb.

Ringuette says that's an issue Canada's Competition Bureau should investigate.

The Competition Bureau said in an email response it conducts its investigations confidentially and so would not comment on whether it had received any complaints about anti-competitive practices by car manufacturers or whether it has any investigations on the subject.

Also on HuffPost

5 Reasons Why You Pay High Gas Prices