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Real Wages are Recovering… and That’s Good News!
The beginning of 2024 brought some good labour market news for a change: average real wages in Canada increased in 2023, reversing some of the damage from post-COVID inflation.
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Risks and Uncertainties Facing Canada’s Economy in 2024
Canada’s economy enters the New Year facing a wide range of challenges and uncertainties: high interest rates, stalling economic growth, and rising unemployment. To review the outlook, CBC Radio’s Sunday Magazine, hosted by Piya Chattopadhyay, recently broadcast a full 20-minute interview with Centre for Future Work Director Jim Stanford.
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Review of Gas Price Roller-Coaster in 2023 Revealed Important Lessons
As 2023 drew to a close, it wa3s instructive to review the path of gasoline prices (which are the most volatile major component in Canada’s consumer price index) over the year. According to the GasBuddy website, the average price on December 31 was $1.39/litre. That was 5₵ cheaper than at the beginning of 2023. But gas prices followed a long, winding road to get there.
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New Data on Continued Record Profits in Canadian Food Retail
Economy-wide inflation in Canada slowed down notably in 2023. The unique factors that drove the initial surge in inflation after the COVID pandemic (including shortages of key commodities, disrupted supply chains, and a global oil price shock) have mostly abated. High interest rates imposed by central banks in Canada and elsewhere have undermined economic growth and job-creation...
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Canada’s Grocery Giants Spend Billions on their Own Shares
Amidst public anger at high food prices, Canada’s major supermarket chains have argued they are not the source of the problem. Food prices are high, they claim, because of higher costs charged by food processors and other suppliers. While their profits have grown to record highs during the current inflationary episode, they claim this merely reflects a normal profit ‘margin’...
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Inflation Accelerates in July Despite Higher Unemployment
Statistics Canada reported this week that consumer price inflation in Canada accelerated modestly in July, with the headline year-over-year rate rising to 3.3% (from 2.8% in June). In this commentary, Centre for Future Work Director Jim Stanford argues this adds to growing evidence that there’s no reliable correlation between inflation and unemployment. The commentary originally appeared at rabble.ca.
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The Supply Chain, Profits, and Food Prices: Recent Developments and an Excellent New Video
It’s been a busy couple of weeks in the food inflation debate. Recent developments include: 1. The federal government imposed a $50 million fine (the highest in history) on Canada Bread for its role in a bread price fixing scandal dating back to 2007. 2. The House of Commons Agriculture & Agri-Food committee released a report of its investigations into grocery profits and higher food prices. (See the Centre for Future Work’s submission to that inquiry, documenting the sustained rise in food retail profit margins since the pandemic.) 3. The latest inflation data from Statistics Canada has confirmed that food inflation is continuing at historically high rates, despite the slowdown…
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At Last, Wages are Growing Faster Than Prices… and That’s Good
A turning point has recently been reached in the current inflationary upsurge in Canada. Beginning in February, for the first time in two years, the growth in average hourly wages over the previous 12 months finally matched, and slightly exceeded, the corresponding growth in prices. This is a positive development – but doesn’t mean that workers have ‘caught up’ to recent inflation. Because real wages fell so much in 2021 and 2022, wages will need to grow faster than prices for some years to come to repair the damage to workers’ living standards
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No Correlation Between Inflation and Carbon Pricing
Canadian conservatives have repeatedly tried to pin the blame for post-pandemic inflation on the present federal government, and even personally on Prime Minister Justin Trudeau (with their ‘JustInflation’ label). The latest incarnation of that strategy claims the surge in inflation over the last two years is due to the federal carbon tax – which applies in those provinces (such as Ontario and Alberta) which have refused to participate directly in the Canada-wide carbon pricing system. In this report, originally published in Canadian Dimension magazine, Centre for Future Work Director Jim Stanford shows there is no empirical correlation or theoretical link between carbon taxes and economy-wide inflation. Top Ten Reasons We…
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Inflation is Coming Down – But Interest Rates Have Nothing To Do With It
New inflation data indicates a welcome slowing of inflation. Prices increased by an average of 4.3% over the 12 months ending in March. That’s barely half the year-over-year inflation rate just 9 months ago, in June 2022 (when inflation peaked at 8.1%). Despite this encouraging news, however, there are some important and worrying factors lurking in the weeds...