Why do books cost more in Canada?

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Aaditya Kandpal asks:

During the book fair at my school I wanted to buy a diary that had the price listed for $14.99 USD and $17.99 for CAD. My question is why does it cost more in Canada?

Books will often come with dual prices, listing the cost for American consumers in U.S. dollars and a higher price for Canadian consumers. At times, that price differential has been a point of contention for Canadian booksellers who have raised the issue to lawmakers.

The difference in price stems from regulations written in 1999, when the Canadian dollar was worth significantly less than the U.S. dollar. "Regulations stipulate that an importer can charge a bookseller the price of a book in the country of origin, plus the difference in exchange rates between the two countries, plus an additional 10 percent if those books are from the U.S.," said one bookstore manager at a 2012 Senate hearing in Canada on price differences. The higher price help U.S. publishers cover distribution costs.

Ryan Monarch, an associate professor of economics at Syracuse University, pointed out that it can be harder to get books to the more remote areas of Canada, accounting for more costly logistical expenses.

After the late '90s, the Canadian dollar strengthened and became closer in value to the U.S. dollar. Bookworms also had even more options for their purchases – including outside of Canada. Booksellers at the 2012 Canadian Senate hearing said that consumers were able to buy books more cheaply through internet retailers.

At the same hearing, organizations pointed out that Canadian prices are set far ahead in advance, which means the exchange rate can fluctuate in the meantime.

And one of the challenges with books especially is that the prices are printed on the books themselves, which means you can't just change them that easily when the currency exchange rate changes, Monarch said. A book that's six years old may have a price that becomes more unfair for the Canadian consumer over time.

Currency value fluctuations were an especially big issue during the 2008 financial crisis, when the U.S. dollar hit a historic low, said Jane Friedman, a publishing expert and creator of “The Bottom Line,” a newsletter about the publishing industry.

When currency values fluctuate, Friedman said there are Canadian distributors who will sticker the books with the appropriate Canadian price. But it's less likely you'll see the U.S. publisher actually change the Canadian price unless they think it's a long-term change, Friedman said.

"They're not going to keep adjusting the Canadian price based on month-to-month fluctuations," Friedman said.