# Food prices in Canada vs US



## osc

Why is food so much cheaper 10 km south of the border than 10 km north of it?
Some prices are half, but I think the average is somewhere between 25% and 35% cheaper. I can't think of any reason for the discrepancy. The housing is also much cheaper there so they have higher disposable income. I think they also have salaries 10 to 20% higher for the same job (I am not sure if that is true for all professions, though).


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## HaroldCrump

osc said:


> Why is food so much cheaper 10 km south of the border than 10 km north of it?
> Some prices are half, but I think the average is somewhere between 25% and 35% cheaper. I can't think of any reason for the discrepancy. The housing is also much cheaper there so they have higher disposable income. I think they also have salaries 10 to 20% higher for the same job (I am not sure if that is true for all professions, though).


You are correct.
Most things are cheaper in the US - houses, cars, food, clothing, electronics and so on.
A few reasons I can think of (esp. for food) - bigger market, more competition among retailers, lower transportation costs, lower taxes (no &^*@! HST), more deals/savings options (coupons, etc.).

I'd also add that Canadian stores are used to ripping off our consumers, even with the dollar parity.
Also, Canadian consumers are more than happy to let them.


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## brad

HaroldCrump said:


> A few reasons I can think of (esp. for food) - bigger market, more competition among retailers, lower transportation costs, lower taxes (no &^*@! HST), more deals/savings options (coupons, etc.).


The bigger market is the underlying reason for many of these differences: Canada's population is 1/10 that of the United States, and that drives the greater competition, more choice, etc.


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## plen

I'm not going to work the numbers but here are some charts for you. Due to the difference of units in imperial/metric, they can be difficult to compare.

http://www40.statcan.ca/l01/cst01/econ155a-eng.htm

http://www.bls.gov/ro3/apmw.htm

Here are some reasons off the top of my head:

Purchasing power?
If it's being imported from Mexico/Central America/South America, they've got less of a way to go
Storage in colder climates can be more challenging for some foods
Can depend a lot on a city by city comparison as well.


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## andrewf

A big chunk of food baskets are based on regulated monopolies here in Canada, with milk, eggs, chicken, turkey, etc. being artificially expensive because of our quota system.


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## HaroldCrump

andrewf said:


> A big chunk of food baskets are based on regulated monopolies here in Canada, with milk, eggs, chicken, turkey, etc. being artificially expensive because of our quota system.


True, and of course, we pay more for our oil to be sold back to us.
Price of gasoline determines transportation cost, which is an important factor was well.


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## MoneyGal

andrewf said:


> A big chunk of food baskets are based on regulated monopolies here in Canada, with milk, eggs, chicken, turkey, etc. being artificially expensive because of our quota system.


Indeed. Ontario even has an asparagus marketing board with the authority to set prices on asparagus.


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## Sampson

osc said:


> Why is food so much cheaper 10 km south of the border than 10 km north of it?


The discrepancy also exists within Canada. Food in Toronto is much cheaper than other parts of the country.

Heck, even if you were to compare prices charged across different parts of the country within the same store (i.e. Loblaw's/Superstore) there is significant discrepancy.


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## the-royal-mail

TAXES! We're saturated with them! The HST was the latest attack on the wallet of the middle class.


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## Guest

the-royal-mail said:


> TAXES! We're saturated with them! The HST was the latest attack on the wallet of the middle class.


Americans tend not to tolerate crap like low wages, high prices, and taxes ... whereas Canadians, well


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## the-royal-mail

Yet they tolerate tolls on many of their highways. That's something that really burns me when I go down there. Especially when they stop highway traffic to collect like 60 cents from each car.


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## HaroldCrump

the-royal-mail said:


> Yet they tolerate tolls on many of their highways. That's something that really burns me when I go down there. Especially when they stop highway traffic to collect like 60 cents from each car.


I personally think that is a much better system.
It is "pay-per-use".
I would think that system helps lower the burden on public finances and keeps taxes low[er].
On the other hand, we have a high "tax and spend" system.
Car users complain that they are subsidizing transit users.
Transit users complain that they are not subsidized enough.


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## Plugging Along

As others have stated, there are numerous reason...

Top one being the market size. The state of CA is almost the same population as all of Canada. When you factor in the transportation costs, taxes, the turnover rate etc, it makes the prices a lot lower.

When we were in the States, I found that the local Walmart was turning over their whole food inventory in about 2 days, this was almost a small supermarket size. This alone leads to lower storage costs, the ability to buy more, etc. 

Wages vary from place to place, just like they do in Canada. The advantage they do have is lower taxes.


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## the-royal-mail

True enough Harold, but I've found that if "they tax it they will spend it" - remember the GST? That was supposed to be our miracle pill tax. What did it do for us? The gov't still can't balance the da-n books after stealing billions of extra tax dollars from us since 1991.

You do make a good point though. At least toll roads are something the public can benefit from, rather than many social programs that only benefit specific groups.


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## m3s

In Canada you pay highway tolls in the form of tax built in to the price of gas. Simple and it encourages fuel efficiency

Much better than stopping highway traffic for 60 cents. I remember stopping like 10 times to cross Chicago for a total of like $2 US and the merging traffic was trying to cross the lineups  There were however express lanes for transponders or something




plen said:


> Here are some reasons off the top of my head:
> 
> Purchasing power?
> If it's being imported from Mexico/Central America/South America, they've got less of a way to go
> Storage in colder climates can be more challenging for some foods
> Can depend a lot on a city by city comparison as well.


Most Canadians live on the US border and the temperature doesn't suddenly rise 30 degrees when you cross it..

Everyone complains that prices haven't adjusted for US currency but how would you like your salary to adjust for US currency??? I work with Americans living in Canada and you should see the look on their face when they see Canadian prices. They also can't stand the lack of variety and miss a lot of their favourite foods. Living in the US as a Canadian is sweet but I wouldn't want to be one

If you want to feel better, just look at the taxes and prices in Europe


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## Addy

There is a lot of food items I won't eat in the US. Full of crap, worse than here and we have it bad enough. They are starting to put high fructose corn syrup in meat now. I don't care how "cheap" a food item is, if it's full of crap I don't want it at any price.


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## andrewf

the-royal-mail said:


> TAXES! We're saturated with them! The HST was the latest attack on the wallet of the middle class.


Good lord! The vast majority of food items in the grocery store are exempt!


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## andrewf

Sampson said:


> The discrepancy also exists within Canada. Food in Toronto is much cheaper than other parts of the country.
> 
> Heck, even if you were to compare prices charged across different parts of the country within the same store (i.e. Loblaw's/Superstore) there is significant discrepancy.


I have some knowledge of this industry. Toronto itself actually pays a bit more than the surrounding suburbs due to higher real estate costs. Remote areas (northern areas, rural areas, Newfoundland, etc.) are more expensive due to higher logistics costs. This last is due to lower densities to spread supply chain costs over and higher transportation costs. Many of the goods you buy are distributed/manufactured in southern Ontario, hence the lower costs in this area on processed goods. There aren't too many areas where stores have the kind of pricing power to significantly overcharge due to lack of competition. If someone else could do it cheaper, they would.


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## osc

Let's take an example. I see US poultry in a US store 20 km from the border is half the price of Canadian poultry in a Canadian store. Why can't a store in Canada buy US poultry from the same provider as the US one and sell it much cheaper than the Canadian poultry? Are there any taxes for importing that, or are there any costs that I'm not aware of in doing that? 
Lots of private individuals living near the border are starting to regularly shop in US. Why aren't the Canadian stores doing the same?


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## MoneyGal

Chicken is a regulated commodity in Ontario. The production is limited through the use of a quota system. 

Prices for chicken are either set by the Chicken Farmers of Ontario marketing board, or negotiated by the board with the buyers. It is illegal to sell or purchase chicken outside the regulated quota system in Ontario. 

(Seriously, no one is from a farming heritage on this board? Or has lived in a farming community?)

And Addy - have you seen this story about "meat" at Taco Bell? In order to be legally described as "meat," the stuff in their tacos must be at least 40% meat by weight (and that in itself is kind of gross). The suit alleges that Taco Beat's "seasoned meat filling" is only 35% meat. 

Coming back to say there are agricultural marketing boards in every province in Canada. I used Ontario as an example because I'm most familiar with the Ontario system. 

Also, in addition to the marketing boards which regulate domestic production, supply and pricing, there are a series of agricultural import quotas and tariffs on chicken imported from other countries into Canada. The tariff and quota system is imposed under World Trade Organization and NAFTA agreements.


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## kcowan

We are also burdened by having to hire legal immigrants with full medicare coverage. Those costs affect prices. I had a friend who ran a supermarket in West Vancouver and he said that these extra costs apply at every element in the food chain. From the pickers to the distributors. If it is not picked, then it is imported or purchased from a marketing board. If it is packaged here, then bilingual labeling raises the price.

If you look at the profits of retailers in Canada, you can see that the extra costs are endemic and not a result of higher profits.

Retired people who are "snowbirds" benefit from the lower prices for part of the year. But they bear the extra costs for accommodation and insurance by doing so.


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## osc

MoneyGal said:


> Prices for chicken are either set by the Chicken Farmers of Ontario marketing board, or negotiated by the board with the buyers. It is illegal to sell or purchase chicken outside the regulated quota system in Ontario.


Are people ok with this? 
I never heard a politician discussing why our prices are so much higher than south of the border. And, in general, why our after tax incomes are lower and what we get for that from the government.


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## Toronto.gal

I apologize for being off topic.....

I went to Michael's Stores, which just opened in Toronto last December and was surprised to see items priced in $US and $CDN; the difference was huge, for example, a floral item was priced at US$6.99 and C$11.99, hmmm, why didn't I think to pay in USD?

Why would the store show its US pricing? I wrote the company to ask about the difference and got a silly answer. Next time I went to the store, the US pricing had been ripped off.


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## HaroldCrump

Seen the USD and CAD pricing on the back covers of books?
They are still using exchange rates from like 20 years ago.


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## manishg

Well pls dont compare ,its very simple because of the diffrent taxation laws and other international policies across the border,that is the not just with us and canada but between every neigbhours .


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## andrewf

Canadians will always pay a bit more by virtue of the fact that we're a small market. 

osc, most people don't seem to think about our insane food policies and how much it really costs us all (hundreds of dollars a year per family). And the people who do think about it want to make sure our farmers make a good living. Thing is, farmers don't necessarily benefit from the quota system. Most of the assets of a typical dairy farm are quota. An entirely notional, unproductive, intangible asset that they have to get a mortgage for...


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## I'm Howard

We spend half the year down South, and except for alcohol, food prices are generally pretty similar.

Milk and Dairy are lower here, but cereal, pop etc are pretty even.

Produce selection here is terrible, freshness is not good, We miss our Loblaws store and would gladly pay more for their quality and selection.

The food also tastes differently to what we are used to, we bring our own Margarine, Tuna and other staples.

A major differance, every store has someone to carry your bags to your car, in many cases they are people in their 70's who still need to work.

Shopping for clothes is entirely differant, No HST, a $ at par, same ASICS shoes bought for $140 at Sporting Life, $40 here.

Many stores offer a Seniors Discounts, a discount if you open a credit card, Macy's has a special 10% discount for Canadians, plus the other discounts that apply, plus some stores give you a credit note when you buy that you can use the next time you shop.

Selection is much better, staff way more helpful and friendly.

We pay US Cash so credit card companies don't add on extra %'s , and Bonus, TD has opened up many branches in Florida, now the sixth largest Florida Bank.


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## cosmica76

Good question!

From my point of view the main reason presents bigger and dynamical market in US. Ok, Canadian market is more progressive and powerful in recent times, but US market is still flexible. I suppose that food prices will be higher in US, because low prices might create the bubble of price.


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## ILT

It is very popular dilemma or question between people. As far as I know a regulation of food prices set up better position for this segment. And apparently the larger market is key in US.


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## fraser

The main food items that we buy in the US when we take a quick trip down for gas are dairy and poultry products...cheese, milk, butter. It is not unusual to buy a frozen turkey for .69 a pound or less. The way I look at is that any Canadian product that has a 'marketing' board between the producer and the consumer is in all probability grossly overpriced in Canada. It starts with milk and extends to other grocery items that are staples for many Canadians

Like dopes, we accept it, with the time worn excuse that marketing boards stablize prices and guarantee supply. Don't know that I have noticed any supply challenges or significant price fluctuations in US dairy products over the past 40 years but Canadians seem to buy story this hook,line, and sinker. One think that I found interesting when we took an Alaska cruise out of Vancouver was that all of the dairy products appeared to come from Washington state....cartons of milk, yougurt, etc. I don't blame them.


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## Dana

fraser said:


> The main food items that we buy in the US when we take a quick trip down for gas are dairy and poultry products...cheese, milk, butter. One think that I found interesting when we took an Alaska cruise out of Vancouver was that all of the dairy products appeared to come from Washington state....cartons of milk, yougurt, etc. I don't blame them.


This is totally off topic, but a few years ago on a trip to the US my husband became violently ill with stomach cramping, nausea and other gross symptoms. We had always noticed that he tends to come home from his US trips feeling worse than when he left, but this time he was very ill and needed immediate medical attention. 

Turns out he is allergic to BHG (bovine growth hormone) it is a hormone found in pregnant cows and makes them lactate up to 30% more volume of milk. This is given to cows in the US - it is found in their milk, cream, butter - pretty much all dairy products. His allergic reaction occurred after a dairy rich meal of pizza, milk and ice cream. 

 The United States is the only developed nation to permit humans to drink milk from cows given artificial growth hormone.[1] Posilac was banned from use in Canada, Australia, New Zealand, Japan and all European Union countries (currently numbering 27), by 2000 or earlier.


Canadian milk is also anti-biotic free while the use of anti-biotics in milk-producing cows in the US is untested. 

Now, we avoid all US dairy products.


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## andrewf

Yeah. I wouldn't touch US dairy. Their food safety standards are laxer for quite a few other animal products as well. If I had to eat in the US, I'd go for organic products, which are less likely to be full of hormone and antibiotics. I don't bother with organic in Canada for the most part.


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## Benswt2

*Prices?*

I was in Canada last week and the prices for food, alcohol and almost everything blew me away. I have read many reasons as to why this might be, but none of them alone can explain why some things are five times higher in Canada. Maybe all of them added together can explain some of the price differences. Even then I don't believe it fully explains the "why" when our dollars are relatively par. 
Growth hormones alone cannot explain why cream cheese is $5 in Canada when we purchase it on sale all the time for $1. Quotas, fuel prices and taxes added with growth hormones still cannot explain a multiple of 5. 
I don't think Canadians fully understand the higher prices on fuel are not only something they pay when the put fuel in their tanks. They are also paying the extra charge over and over and over in everything they purchase. Every importer, wholesaler, middle man and retailer are adding the extra fuel charge. 
Logistics have not changed since my first trip to Canada in 1965. Population differences have not changed. I have been to Canada many times, but I have not gone since 2007. Many people are talking about the high cost of everything in Canada, and I believe it is only going to hurt Canadians more over time. Tourist will make their trips more infrequently or elimnate them altogether. I love Canada, and I am afraid of what is to come for their tourist economy. It is so sad. 
We have many problems here too. Most of them can be layed at governments feet. I believe this is the largest problem with Canada also. We are going to fight to stop more and more government, and I hope Canadians will recognize unstainability is exactly what it means. Government will only change if we make them. If we just accepted everything and anything this country would be a disaster. Look at Greece for the meaning of unsustainability. Look at what it is doing to the people not the country.


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## marina628

I just got back from Nascar and we went to a restaurant where Oysters were $10 for 24 .In Canada we pay $40.00 for 24,I will save a fortune to move to Florida just on my dinner lol.Soft drinks at Steak Houses better than the Keg was only $1.50 yet we pay $3.00+ here.We are getting ripped off especially on food.


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