Everybody is talking about inflation these days. According to Statistics Canada, this April, consumer prices were up on average 6.8 percent over the same time last year.
You’re probably feeling that at the grocery store. We certainly are.
For example, the cost of an orange is up 10 percent, pasta nearly 20 percent, and a loaf of bread more than 12 percent.
Do you think wages have gone up an equal amount? Not likely. Nearly two-thirds of Canadians have experienced a drop in real wages over the past two years.
Typically prices go up when demand for products and services increases.
Think of it this way: tickets to an NHL playoff game are more expensive than regular-season games.
Why? Because more people want to see that playoff game. Demand goes up, so the prices do, too.
Sometimes prices go up because the government is printing more money to stimulate the economy. Governments use that strategy to offset things like recessions. But all that extra money can put upward pressure on prices.
So can supply chain and labour shortages. And we’ve had a lot of those since the pandemic hit. Cargo ships were backed up after last year’s flooding shut down rail shipments heading in and out of Vancouver’s port for a while.
That means today’s inflation is a simple case of supply and demand, right?
Well, no—it’s not that simple.
A dollar doesn’t go nearly as far as it did a year ago. And that hurts everybody—everybody except corporations, that is.
That’s why some are calling this “greedflation.”
Many corporations are making record profits right now, while the rest of us are getting hosed at the grocery store and gas pumps.
David MacDonald is a senior economist at the Canadian Centre for Policy Alternatives. His recent study shows that more than a quarter of price inflation is due to corporate profits, not wage and supply issues.
Don’t think it’s true? Then think about what the CFO of Loblaws, Canada’s biggest grocery retailer, recently told investors about pricing.
He said the company bases its prices on what competitors are charging. So, in other words, Loblaws is gouging us because other companies are gouging us.
Everyone else is doing it. Why can’t we?
During World War II, there was a name for that: profiteering. And our government passed aggressive laws to ban it and hold bad actors accountable.
But now, profiteering seems to be the norm for many of Canada’s biggest companies.
Canada’s third-richest family owns Loblaws. The Westons are reportedly worth $8.7 billion. They also own Real Canadian Superstore, Extra Foods, and 20 other drugstore and grocery brands. The company posted a $437 million profit in the first three months of 2022. That’s up from 2021’s profits of $313 million.
Oil companies are also posting record profits. Canada’s Cenovus posted its best first quarter ever this year by raking in $1.6 billion in profit.
All while we struggle to fill the tank.
So the next time someone tells you that inflation is because of Justin Trudeau or supply and demand, think again.
Corporations are the big winners in Canada, and their record profits show it.
In the UK, almost two-in-three people support a 25 percent tax on windfall profits from greedy corporations.
More and more Canadians are asking, when will our provincial and federal governments step in and stop the corporate profiteering and greedflation?