Canadians are paying an average of 20 per cent more than Americans for the same goods, including luxury cars, gadgets and the basics, a new study reveals.
Released Thursday, the report by BMO Nesbitt Burns details the widening price gap between Canada and the U.S., despite the soaring loonie, which remained three cents above par during trading Thursday.
Everything from golf balls and clothes to books and Blu-ray discs are more expensive in Canada.
Now in the double digits, the gap was just seven per cent in mid-2009.
Bank of Montreal economist Douglas Porter says the soaring loonie is here to stay, so Canadians should get used to their currency being above the dollar for some time to come.
Porter says the loonie is likely to stay above par through 2012.
That brings some positives and some negatives. A strong loonie will cap inflation, hold prices lower and tend to keep interest rates relatively low, Porter says.
On the flip side is the price gap, with Canadians paying top dollar for all kinds of products.
Porter says, a strong dollar will help Canadian businesses to spend more on new machinery and equipment as the price of imported gear drops, but that won't necessarily translate into higher industrial productivity.
With files from The Canadian Press
