Drugs, Fast Cars and Lots of Tiny Maple Leafs

Canada is truly a great country. Their density of Tim Horton's coffee shops per capita -- one for every 12K people (in contrast with Starbucks in the US which boasts one coffee shop for every 32K people) means that no cold Canadian ever has to go long without a hot cup of coffee. Their use of the Maple Leaf on every product (Wendy's in Canada use a small Maple Leaf in place of an apostrophe) reminds you that despite the fact that you feel like you're in the US you're actually in a foreign country (sort of). And of course, my favorite, they're the inventors and innovators of the BlackBerry (what would we do without it?).

Everything isn't great about our neighbors to the North, however. Just ask any average American on the street and they're aware of the scam being perpetrated by our Maple Leaf-toting friends. Americans are paying for Canadians to have cheap prescription drugs. Actually, that's not really true. US drug companies sell drugs to Canada at a different price than they sell drugs to the US because the US doesn't legislate drug prices (and they shouldn't) and Canada and many other countries do. It's effectively a form of 3rd degree price discrimination that occurs for many products in the marketplace (including those that I sell). For years Americans have felt pained as they supported the huge R&D (and marketing) budgets of Big Pharma while countries with heavy socialized medicine legislation got their drugs at a fraction of the price.

Well, now the Canadians are finding out what it feels like to be on the other side of the loonie. Recently there has been an uproar in Canada over the price of cars. Specifically it's much cheaper for Canadians to buy cars in the US and drive them back to Canada than it is for them to buy the cars in Canada. Needless to say the Canadian car dealers don't like this and want legislation passed. Unfortunately there's this pesky free-trade agreement that they signed back when Clinton was president called NAFTA that guarantees free trade among Canada, Mexico and the US (woah, wait a minute. Mexico is in North America?). With virtually 90% of the the entire population of Canada (roughly 33M people) living within 100 miles of the US border there's little reason for them to pay hefty auto taxes when they can buy the same exact car in the US at a fraction of the price. Funny how free trade lowers prices and helps consumers.