Why Can't Canadians Buy Cars In The U.S.? TV Investigation Says It's Deliberate

October 24, 2013

Crossing borders to purchase things on the cheap is a centuries-old tradition -- and a centuries-old problem. For example, Canadian pharmacies made headlines in recent years, offering Americans cheaper prescription drugs than they could ever get in the U.S.

Now, however, the snowshoe is on the other foot. Canada's CTV Television Network reports that many Canadians attempt to purchase vehicles in the U.S., where they can find cars, trucks, and SUV for thousands of dollars cheaper than in the Great White North. But unfortunately for bargain-hunters, the process isn't always simple.

A Saskatoon man, for example, was able to buy a brand-new Honda Pilot in the U.S. for about $13,000 less than he would've paid in Canada. But he was only able to do so because he happens to have friends and relatives in the States who allow him to use their American address. Without that, it appears that most U.S. dealers -- at least those close to the Canadian border -- wouldn't have sold him the vehicle. 

The report doesn't draw any firm conclusions, but through a series of phone calls and tips, it appears that U.S. and Canadian dealerships are participating in a secret, unwritten agreement.

On record, the automakers contacted by CTV say that dealers in the U.S. are free to sell to whomever they like, though some caution that standards for U.S. and Canadian vehicles may not always align. There's nothing in the North American Free Trade Agreement that would prohibit U.S. sales to Canadians either (or vice versa).

An anonymous U.S. dealer, however, suggests that he and others have been told not to sell to Canadians over fears that they'd put Canadian dealers out of business.

The root of the problem seems to stem from the bottom line at Canadian dealerships, which is allegedly slimmer than automakers would like. To increase profit margins, they've boosted prices --  and to keep shoppers shopping, Canada's dealer lobby may be pressuring U.S. showrooms to prohibit cross-border sales.

Perhaps most sinister of all, CTV knows that complaints about this matter have been filed with Canada's Competition Bureau, "an independent law enforcement agency... [that] ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace". However, reporters were told that the content of such complaints and investigations was classified -- even though complaints and investigations about other industries are made available to the press on a regular basis. 

Interestingly, this discrepancy only seems to apply to new-car sales: cross-border used-car sales don't appear to be an issue. So, until this matter gets resolved -- if it ever does -- we suggest our Canadian friends look into "new used" cars south of the border.

To watch CTV's entire report, visit TheGlobeAndMail.com.


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