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TORONTO — Amazon.ca will launch an aggressive push next year on cutting its prices even further to offer the best deals in Canada, yet another challenge for domestic retailers already overwhelmed by steep competition.

What is more, the U.S.-owned on-line retailer will pay special attention to the troubled music sector as it scrambles to snip away at those prices too, Marven Krug, general manager of Amazon.ca, said yesterday.

The move comes at a time when conventional music retailers are feeling the squeeze of consumers opting for free music downloads.

"Next year is all about sharpening our pencils, becoming even more of an everyday low-price retailer," Mr. Krug said in an interview in Toronto. "We are all about having the best price on- or off-line. . . .

"In a year from now, you'll see noticeably lower prices across the board."

To help keep prices low, Amazon.ca yesterday launched a feature that allows consumers to buy and sell used and collectible goods on-line. The site now touts the prices of used books, music and software next to the higher prices for the new products.

The feature has been successful at Seattle-based parent Amazon.com, but has triggered an angry reaction from some publishers, authors and retailers who feel they are losing business to the site.

Amazon.ca has consistently raised the stakes in Canadian retailing since it entered the market in June, 2002. It has added features such as free shipping and expanded product categories, forcing rivals to follow suit.

Mr. Krug said Amazon will continue to roll back prices, in the same way as giant discounter Wal-Mart Canada Corp. keeps on reducing its prices.

This fall, Amazon.ca cut some music prices by about 30 per cent after one of the big suppliers, Universal Music, dropped its wholesale prices by about the same amount. A number of other major retailers, such as Best Buy and Future Shop, have made similar moves.

Amazon.ca's new buy-and-sell feature is expected to stir similar controversy here as it did south of the border.

But Mr. Krug said the feature has proved to rack up additional business, rather than take away from existing sales.

He said customers of used goods often buy new products while they're at the site. And people often use the proceeds from selling old goods to buy something new at Amazon.ca, he said.

Mr. Krug expects Amazon.ca to branch out in other areas also. He is talking with Canadian retailers about teaming up to help run their Web site. Earlier this year, Amazon.ca partnered with HMV Canada to provide it technical support for its relaunched HMV.com.

South of the border, Amazon.com works with Target, Circuit City, Borders, Toys "R" Us and Virgin.

Mr. Krug has his eye on eventually adding more categories of merchandise to Amazon.ca, such as toys and electronics, which are now available on the U.S. site.

As well, he wants to bring to Canada a new feature on Amazon.com that allows shoppers to browse through books on-line.

"The potential is absolutely huge," he said about future business opportunities in Canada.

Among these opportunities is being able to "cross-sell" music to customers who buy books and other products, Mr. Krug said.