The major Canadian and U.S. auto manufacturers are about to be hit with a $2-billion class-action suit in Canada over their sales practices, which a law firm alleges artificially enhances the price of vehicles in Canada and dissuades consumers from crossing the border to take advantage of a stronger dollar to purchase or lease cheaper vehicles in the United States.
Toronto class-action law firm Juroviesky and Ricci is expected to file the suit on behalf of four Toronto residents who say they paid more for cars in Canada, after factoring in the exchange rate, than the comparable or identical cars cost in the United States. The suit covers consumers who bought cars between August, 2005, and August, 2007, a period when the Canadian dollar was rapidly appreciating. It also seeks $100-million in punitive damages.
The action, which also names the Canadian Automobile Dealers Association (CADA) and its U.S. counterpart, the National Automobile Dealers Association (NADA), alleges the defendants "conspired to lessen competition and to unreasonably enhance the price of new cars sold in Canada," contrary to the Competition Act.