• Environment & Work,  Inflation,  Research

    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…

  • Commentary,  Inflation,  Wages

    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...

  • Commentary,  Finance,  Inflation,  Macroeconomics

    Getting Ready for GFC 2.0

    One consequence of the unprecedented tightening of monetary policy imposed by central banks in most countries (including Canada) over the past year has been growing fragility in the broader financial system. Banks, near-banks, and other financial players – many of them highly leveraged after 15 years of near-zero interest rates – are now grappling with the impacts of higher interest rates on their investments and balance sheets.

  • Commentary,  Inflation,  Macroeconomics,  Wages

    We Need More Goods, not Less Money

    In this commentary article, originally published in the Toronto Star, Jim Stanford challenges the adage that inflation results from ‘too much money’ in the economy. In fact, the current inflation – sparked by the repercussions from lockdowns and other supply disruptions during the pandemic – clearly indicates the problem is too few goods. That requires a very different approach to managing rising prices.

  • Inflation,  Research

    Stanford for Agriculture Committee on Food Prices and Profits

    The Centre for Future Work’s Director, Jim Stanford, appeared as an invited expert witness before the House of Commons Standing Committee on Agriculture and Agri-Food on February 13, as part of the committee’s inquiry into food price inflation. Here is the formal submission Dr. Stanford tabled along with his testimony. The evidence was based on analysis of Statistics Canada industry-wide data on revenues and profits in the broad food retail sector. The data confirms that aggregate profits have doubled since pre-pandemic norms, profit margins (relative to total revenues) have increased by about three-quarters, and that the real quantity of groceries purchased by Canadians has been shrinking in the face of…

  • Commentary,  Employment & Unemployment,  Inflation,  Macroeconomics

    Is the Economy “Hot”? Or is it Cold, and Getting Colder?

    The Bank of Canada is widely expected to increase its policy interest rate again this week, for the eighth time in the last 10 months. Media and financial market commentary on its decision has made numerous throwaway references to how Canada’s economy is still “running hot,” and that i why a rate hike is needed.  This common claim is surprising, and not consistent with economic evidence. Canada’s economy is not “running hot” by any concrete measure. Here are six: Final domestic demand in Canada has been weakening for over a year, and was shrinking in the third quarter of 2022 (latest data). Were it not for the export sector (with…

  • Commentary,  Finance,  Inflation

    Profits, Not Wages, Have Driven Canadian Inflation

    Every January, the Globe and Mail newspaper publishes a fascinating set of charts (curated by journalist Jason Kirby) prepared by Canadian economists, with their insights into economic trends likely to shape the following year. Centre for Future Work Director Jim Stanford was invited again to participate in the collection. He submitted the following chart and text, highlighting the dramatic increases in corporate profits in Canada that have been the dominant distributional outcome of recent inflation. In recent months, the Bank of Canada has focused on the labour market as the main culprit behind higher inflation: The unemployment rate is too low, wages are rising too fast and this so-called “overheating”…

  • Commentary,  Inflation

    CBC Podcast on Power, Profits, and Inflation

    CBC’s top-rated podcast series, Front Burner, recently featured a 30-minute interview with Centre for Future Work Director Jim Stanford on the continuing debate about whether corporate profits have contributed to recent Canadian inflation. The interview responds to recent claims of supermarket CEOs (in their appearance before a Parliamentary inquiry) that their profit margins on sales are modest and stable. In fact, compared to pre-pandemic norms, profit margins have grown by about three-quarters – and the mass of after-tax profits collected in the food retail sector has more than doubled. The podcast also considered the role of record profits in driving painful price increases in other sectors of the economy, too:…

  • Commentary,  Inflation

    Yes, Virginia, Supermarket Profits HAVE Increased

    The following commentary was first published by Centre for Future Work Director Jim Stanford at the Progressive Economics Forum’s blog site, and then republished by Heterodox Economics Blogs and covered by rabble.ca. Supermarket executives were up on Parliament Hill last week, appearing before the Standing Committee on Agriculture and Agri-Food’s inquiry into food inflation grocery chain profits. They repeated the now-familiar argument that supermarkets have not caused food inflation, they have merely passed along higher input costs to their customers; their profit margins have been stable, it is claimed. Don’t believe them. Here are a few data points on the argument that the chains haven’t actually profited from inflation, since their…