Nobody pays the $39 here in Toronto. The price is generally $32.50 on the street (401 Games on Yonge St., to be specific).
When it comes to Gaming stuff though - we actually have it cheaper than in the States for the most part. For example, I buy a case of 12 D&D mini boosters for $120 CDN.... about $104 USD.
When I was in Gencon, I bought stuff I wouldn't find very easily back home. Otherwise, the cost was just way too high to justify it.
For general goods, we used to get the good end of the exchange rate. Prices were less here 3-5 years ago than the US. Essentially, for no other reason than to actually charge the same in US dollars after converting to Canadian resulted in a sticker price people here just wouldn't pay.
We got a good deal before - bad deal now. Especially on cars and electonics. Try buying an Xbox360 in Canada. It is significantly more expensive. I know - I got one today. After the bundles and add-ons and other gizmos, if I had got it in Buffalo, it would have been about $75 CDN cheaper. Same equipment - 2 hours away.
Inertia is another issue. There are a lot of consumer electronics mftrs for audio video electronics that jack their prices 60% higher in Canada. No reason - they just do. And they nearly ALL do it too. It's price-fixing via gentleman's agreement, not much doubt of it.
And they nearly all refuse to ship from US online sellers to Canada too so their price racket is preserved. (No, this is not a question of different distributor in Canada).
I went through this with an Onkyo HTS system here last year. They wanted more than double the price for a system they were selling for $399 USD at Circuit City. Canadian price? $1,050CDN.
I spoke with the president of Onkyo Canada on the phone and he gave me such incredible B.S. to justify it - I got so ticked, I ebayed it privately and gave em the virtual finger.
Market inertia, expectations and price-fixing in some sectors of the economy counts for a lot.