Whether or not Canadians are cross-border shopping, the fact that cheaper goods are a short drive away is depressing the price of items such as used cars, RVs and women's clothing.

Statistics Canada reported yesterday that sales edged up 0.1 per cent to about $34.5 billion, continuing a trend toward stagnation in recent months.

Weak sales in Ontario virtually offset sales gains in eight provinces, leaving retail sales in Canada almost unchanged in October.

The 0.5 per cent decline in Ontario retail sales, which represents about 35 per cent of all retail sales in Canada, cooled off October's retail trade performance. But it's important to recognize that sales declines are also reflecting price changes.

Claude Bilodeau, economist at StatsCan, said retail sales in constant dollars rose 0.5 per cent in October, indicating that there was an increase in volume. This decline was primarily due to sales declines at general merchandise stores and used and recreational motor vehicles and parts dealers.

Peter Woolford, vice-president of policy and research at the Retail Council of Canada, said women's clothing (which accounts for 50 per cent of all apparel purchases) dropped on top of a medium-term trend toward deflation in clothing for the past 10 years.

"Retailers have got more aggressive in pricing due to pressure from U.S. retailers and websites. It's a similar story in a number of other categories."

He referred to sales declines in computers and accessories. "Prices in that area are dropping dramatically, something like 15 to 20 per cent a year."

Roger Sicard at his Smithville RV dealership Sicard Holiday Campers, said some of his store's inventory was purchased in U.S. dollars before the loonie took flight.

"When I sold those off, I lost my shirt," he said. "Price cuts are drastic. You have no choice but to sell it (at U.S. prices). It didn't take our sales down, it took our profits down."

There's an upside for consumers, however, especially for those looking to buy a used car.

George Iny, president of the Auto Protection Association, a Canadian consumer group, said prices have been dropping for used cars for a few months now and will likely drop even further in the first quarter of 2008.

Kevin Bavelaar, a director of the Ontario Motor Vehicle Industry Council and a Toronto-based used car dealer, said the price differences between U.S. and Canadian cars put pressure on dealers to adjust prices, particularly for higher-end vehicles. Porsche, BMW and Lexus were among the first to make adjustments.

"Every time the price is adjusted in the showroom, you can take exactly the same price off the one-year-old model," he said. "The margin slims down as (cars) get older, but everything is corrected." Still, Bavelaar said prices for used Honda Civics, Toyota Corollas and other "bread-and-butter" cars haven't dropped as much.

"Everyone talks about going down to the States to buy a car, but no one is actually doing it but they're not buying cars here either so guys are adjusting prices to get them to buy."

Bavelaar said shoppers should remember that in Ontario there are consumer protection measures when buying used cars where there are none in the United States.

"People also need to consider that in three years when everyone forgets about this U.S./Canadian border shopping stuff, now you go to trade your U.S. car in, what's it worth? The dealer will know you bought it cheaper and will price it accordingly."

lmarr@thespec.com

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