Gordon Isfeld | December 9, 2014 | Last Updated: Dec 9 5:22 PM ET

OTTAWA — The federal government may be pushing ahead with a promised crackdown on retailers who jack up their prices — and viewed as widening the gap between Canada and the United States — but a weaker dollar may have already resolved much of that disparity.

Industry Minister James Moore said Tuesday that new legislation will tackle the so-called “geographic price discrimination” between the two countries — a practice he prefers to call “price gouging.”

Mr. Moore said the Competition Bureau will be given “the tools necessary to investigate alleged cases of price discrimination and to publicly report situations where consumers are unfairly targeted with higher prices.”

The bureau will be authorized to “seek court orders to compel the production of evidence to expose discriminatory pricing practices that are not justified by higher costs in Canada and to publicly report to consumers on the findings,” Mr. Moore told reporters at a Toys ‘R’ Us outlet in Etobicoke, Ont.

“It’s called geographic price discrimination. A more blunt way of putting it is to call it price gouging of consumers — price gouging of Canadian consumers because of where Canadian live,” he said.

The legislation was first proposed in the Feb. 11 federal budget. Mr. Moore said the new act is expected to be passed in early 2015.

The legislation will enable the bureau to report cases in which Canadians appear to unfairly pay more for goods and products — both sold in the U.S. or purchased online — than consumers in the United States.

The new law does not carry fines or any other measures against companies found charging more in Canada.

“This legislation will not set or regulate prices in Canada,” Mr. Moore said. “This is about informing the consumer by empowering the competition commissioner so the marketplace can react. . . . This is, in that sense, a tool for the free market.”

Even so, there may be little the government and consumers can do about the price gap that the markets haven’t already done.

Douglas Porter, chief economist at BMNO Capital Markets, said “when we talk about the gap, we’re talking about U.S. prices in Canadian-dollar terms.”

“The gap was basically created by the surge in the [Canadian] exchange rate from the low-60s [U.S.] to over parity. And now, with the exchange rate coming back down close to fair value, it basically brings U.S. prices back closer into line with Canadian [prices] — when they’re converted at the exchange rate,” he said.

On average, international currency watchers put fair value for the Canadian dollar at around US85¢ — generally based on trading history.

“At that level, a basket of goods in Canada costs roughly the same as it does in the U.S.,” Mr. Porter said.
The loonie close at US87.41¢, up 0.32¢ on Tuesday.

“I don’t think the gap has been completely done away. But I suspect it’s just not what it used to be . . . . The currency has largely taken care of the issue, at least for now.”