Despite a general perception to the contrary, Canadian and U.S. prices don’t match up once adjusted for inflation, according to two economic analyses released this morning by Statistics Canada.
The research looked at prices between the countries over the past 40 years. It found that prices in the two countries generally do not equate.
Statistics Canada found, for example, that when the Canadian dollar depreciated relative to the U.S. dollar in the 1990s and early 2000s, Canadian prices did not increase to reflect the higher cost of imported products.
It noted that generally, Canadians tend to pay relatively less for goods when the Canadian dollar depreciates, and relatively more when it gains value.
The studies found that since 1970, movements in the market exchange rate and the purchasing power parity exchange rate have been similar but not identical.
Jenny Wagler
@JennyWagler_BIV