The Conservative government plans to crack down on "unjustified cross-border (Canada-U.S.) price discrimination" that results in Canadians paying more for goods.
The federal budget outlined legislation to end "country pricing" where multinational companies set higher prices for goods in Canada than those charged in the United States.
Canadians have grown accustomed to paying higher prices for everything from books, clothing and appliances to tires and auto parts.
Legislation will address the price gap and empower the country's competition commissioner to enforce the new rules, said Finance Minister Jim Flaherty.
The government has been under pressure from consumers to do something about the long-standing price discrimination.
"There are some companies that look at Canada as a small market, relatively well off, with a large middle class and willing to pay a little more," he said.
A Senate finance committee report said there are several "complex factors" behind the price differences.
These include higher transportation costs across the vast country, the need for English and French wording on items, more onerous packaging requirements, provincial regulatory requirements, a smaller consumer market and tariffs.
Tobacco taxes add $4 to carton of cigarettes
Smokers are paying $4 more for a carton of cigarettes as a result of the federal budget's higher excise taxes on tobacco.
The government also ended the discount on cigarettes sold at duty-free stores by raising taxes there by $6 a carton.
The budget projects a $2.9 billion deficit but with a $3 billion contingency fund.
This will allow the government of Prime Minister Stephen Harper to make good on a promise to balance the budget next year, with a possible $6 billion surplus, in advance of the next federal election.
The Conservatives plan to achieve the surplus by further cuts to program spending and public service compensation costs.
Facts and figures
Canada's dollar moved higher on Friday to 91.18 cents U.S. while the U.S. dollar returned $1.0967 in Canadian funds, before bank exchange fees.
The Bank of Canada's key interest rate is steady at 1 percent while the prime-lending rate remains at 3 percent.
Stock markets are higher, with the Toronto exchange index at 14,049 points and the TSX Venture index 993 points.
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• Ontario Premier Kathleen Wynne's Liberals were rebuffed in two by-elections to fill vacancies in the Legislature. Wynne told supporters of the minority government the "real decision point" will be in the next general election, expected within a year. The New Democrats took Niagara Falls from the Liberals as Wayne Gates, a city councilor, was elected. The Conservatives held Thornhill, north of Toronto, with the election of optometrist Gila Martow.
• A class-action lawsuit arising from the Lac-Megantic train disaster has been expanded to include the Canadian government. Forty-seven people were killed when an unattended runaway train carrying crude oil derailed and exploded in the Quebec community. The suit alleges Transport Canada was "grossly negligent" in its oversight role related to Montreal, Maine & Atlantic Railway's shipping of hazardous cargoes.
• A treasure trove of fossils has been unearthed in Kootenay National Park in southeastern British Columbia. The discovery of items dating back a half billion years was made by a research team from Canada, the United States and Sweden. It could help further explain the evolution of life, said a report of the finding in the scientific journal Nature Communications.
Jim Fox can be reached at firstname.lastname@example.org.
News in brief
• Ford will build the Edge Concept, an all-new utility vehicle, in Canada, which will preserve 2,800 jobs at Ontario's Oakville Assembly Plant. The announcement follows Ford's $700 million investment in the plant for the vehicle that will be exported worldwide. The plant currently makes the Ford Edge and Flex, and Lincoln MKX and MKT. Chrysler also announced it's considering a billion-dollar upgrade at its Windsor, Ontario, plant to build a new minivan.
• Baking giant Grupo Bimbo of Mexico has bought Canada Bread, the country's largest bakery business, for $1.83 billion. Parent company Maple Leaf Foods is selling its bread division that includes Dempsters, Bon Matin and other brands. Grupo Bimbo makes products under such brands as Sara Lee, Mrs. Baird's and Entenmann's in the United States and 18 other countries.