Canadians are getting ripped off.
For too long, we’ve been overpaying for software and hardware compared to our neighbours south of the border. Much like we also pay more for many retail goods including books, movies, clothes, and the list goes on.
Some salt was poured in that metaphorical sore point by the just-launched Apple iPad 2. Not only was tablet available sa couple of weeks earlier south of the border, but Americans paid $20 less for the tablet – $499 instead of $519 for the 16 GB, Wi-Fi only version for example.
But the price disparity isn’t limited to consumer goods, nor to hardware. Microsoft’s Windows Intune hosted PC management service launched late last month in both countries at the same time. The subscription fee for the service is $11 per month in the U.S., but $14 per month in Canada.
All this despite the fact that the loonie is sitting at a multi-year high of about USD $1.05.
When I asked Elliot Katz, a senior product manager with Microsoft Canada about why the prices for Windows Intune were not at par, he gave me an answer: “We’re not at the point where we can change our rates every day because the dollar goes up or down,” he said. “There’s a fixed cycle of evaluating exchange rates and setting the price.”
Well it’s time to break that cycle and evaluate the rates now. Canadians don’t want rates changed every day – they want them changed to be equal permanently, because that’s a fair value that reflects the actual value of our currency.
Canadians have been lulled into complacency by years of having a lower dollar than our larger neighbours. It brought benefits, like being able to make stuff that Americans would buy. It also caused strange behaviour, like Ontarians pretending they enjoyed driving across the border to shop at outlet malls in Buffalo – even though our side of Niagara Falls is nicer.
Currently, most economic forecasters are predicting the greenback will continue to worsen. Meanwhile, commodity prices will likely continue to rise and drive up the value of the Canadian dollar. This isn’t a short-term trend that will revert back to 2002 levels (when the dollar hit its all-time low of just under USD $0.62) but the new economic reality.
Historically, the dollar has been above par twice before. The first was when the dollar was unrestrained from artificial controls in 1951, shooting above the greenback until 1960. There was another period between 1970 and 1976 that the dollar enjoyed greater value than the paper pressed with George Washington’s likeness. Then of course, was the all-time high of USD $1.10 just before the recession. So it’s not like we’re wading into new territory here.
I don’t want to pick on Apple or Microsoft here. They are just a couple of the tech vendors that should be reevaluating prices to better reflect the value of the Loonie. Also, businesses should start speaking up and asking for pricing parity if they aren’t being offered it off the bat.
After all, somehow I don’t think vendors – most of them U.S.-based – will be turning around and offering us lower rates when the dollar hits USD $1.20.