• 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…

  • Employment & Unemployment,  Macroeconomics,  Research,  Wages

    Fifteen Super-Profitable Industries are Driving Canadian Inflation

    A new research paper from the Centre for Future Work sheds new light on the role of surging corporate profits in driving higher Canadian inflation. The report provides details on net income in 15 super-profitable private-sector industries in Canada, based on newly released data from Statistics Canada. It compares the most recent 12-month period to profit levels before the pandemic (in 2019). Combined profits in those 15 sectors grew by 89%, rising by a total of $143 billion. In contrast, profits in the other 37 business sectors tracked by Statistics Canada fell over the same time. The oil and gas industry experienced by far the largest increase in profits: up…

  • Research,  Trade Unions,  Wages

    Sector Bargaining and Broader Based Bargaining

    Labour advocates and researchers around the world have been investigating the possibility of new systems of broader based collective bargaining, as a promising strategy for reversing the decline in collective bargaining coverage which has occurred in many countries. Sectoral, occupational, and other broader-based bargaining systems allow negotiations to occur at more than one workplace or enterprise at a time: across occupations, sectors, or regions. They can allow bargainers to establish common terms across multiple worksites – such as covering all franchises within a large commercial chain. And by establishing terms and conditions that apply evenly across broader sets of businesses, broader based bargaining does not disadvantage any particular company or…

  • Employment & Unemployment,  Inflation,  Macroeconomics,  Research

    Orthodox Cure for Inflation Will Be Worse than the Disease

    Evidence is growing that Canada’s economy, and most other OECD nations, is heading into recession. Dramatic increases in interest rates around the world, motivated by a desire to clamp down inflation that broke out after the COVID pandemic, is undermining investment, job creation, and household spending power. The Centre for Future Work has jointly released a major new report with the Canadian Labour Congress documenting the flaws in the Bank of Canada’s diagnosis of current inflation, and the risks in its one-sided approach to solving the problem. The report, titled A Cure Worse than the Disease? Toward a More Balanced Understanding of Inflation and What to Do About It, was…

  • Inflation,  Macroeconomics,  Research

    Slowing Economy Should Give Bank of Canada Pause … But It Won’t

    New GDP data released last week confirm that higher interest rates and other headwinds have already slowed economic growth in Canada to a crawl. This should give the Bank of Canada pause to reconsider its schedule of aggressive interest rate hikes. That inflation was never attributable to overheated domestic economic conditions. Instead, statistical evidence indicates that current inflation is mostly the result of several unique post-pandemic factors: supply chain disruptions, higher energy prices, and a catch-up of consumer spending from depressed pandemic levels. Moreover, those largely temporary forces are already abating: several key global price indicators have fallen substantially in recent months (including petroleum, food, and shipping costs). By undercutting…

  • Inflation,  Macroeconomics,  Research,  Wages

    Wage Growth Picking Up, but Shows Important Differences Across Categories

    There are some signs of a modest acceleration in nominal wage growth in Canada. This is not surprising, given both relatively tight labour markets and the impact of accelerating inflation on the wage demands of Canadian workers. Average hourly wages paid across the labour market grew 3.9% in the 12 months ending in May (latest data). That is an increase from year-over-year growth rates of 2.5% to 3% recorded in late 2021 and early in 2022. Wages are still growing at only about half the pace of consumer prices, which grew 7.7% (according to the Consumer Price Index) over the same period. Since wage growth is weaker than price inflation,…

  • Employment & Unemployment,  Inflation,  Macroeconomics,  Research

    Corporate Power and Post-Pandemic Inflation: A Deeper Dive

    There is abundant research (including from the Centre for Future Work, here here and here) showing that corporate profit margins have expanded significantly in the course of the current acceleration of inflation. It is not solely a process of companies passing along higher input and labour costs to consumers through higher prices. Rather, corporations have used their market power and disruptions in normal supply channels to widen their profit margins.  In Canada, after-tax corporate profits have increased to their highest share of GDP ever, coincident with the sharp rise in consumer prices. Since it’s corporations who literally set those prices, perhaps this shouldn’t be surprising. Labour costs, meanwhile, have lagged…

  • Employment & Unemployment,  Future of Work,  Research,  Technology

    Canadian Workers Need More Technology, Not Less

    There is little evidence that robots and other advanced technologies are displacing workers and causing technological unemployment in Canada. To the contrary, Canada’s adoption of new technology has surprisingly slowed down in recent years. That is the conclusion of a major new report on innovation and automation in Canada’s economy, from the Centre for Future Work. The report, titled Where are the Robots?, reviews nine empirical indicators of Canadian innovation, technology adoption, and robotization. They paint a worrisome picture that Canadian businesses have dramatically reduced their innovation effort since the turn of the century, and are lagging well behind other industrial countries in putting new technology to work in the…

  • COVID,  Income Security,  Labour Standards,  Research

    Income Security and Workers’ Power: Work, Wages, and Basic Income after COVID

    The success of the CERB and complementary policies in helping Canadian households through the COVID pandemic confirmed the effectiveness and feasibility of much stronger income security. The CERB was not designed to be a “basic income”, but its broad coverage, generally adequate benefit level ($500 per week), and effectiveness in preventing mass dislocation during the pandemic has spurred arguments for a permanent form of basic income. Thanks to the CERB, poverty actually fell in Canada despite the pandemic. That confirmed we could achieve permanent reductions in poverty with similar, permanent income supports. Employers, however, complained loudly that the CERB undermined the “incentive to work” among current or prospective staff. Indeed,…

  • Industry & Sector,  Research,  Trade Unions,  Wages

    Solid Wage Gains for Construction Workers Needed to Cement Productivity Gains

    Paycheques for workers in Ontario’s booming construction industry are coming up short despite surging productivity and a sharp rise in building activity, a new report from the Centre for Future Work shows. Relative to consumer prices, the real purchasing power of construction wages has been stagnant in recent years even though real labour productivity in the sector has grown very strongly. Workers are generating more output and revenue for their employers, but not getting their fair share of the value they’re creating. Nominal wages in construction grew at an average rate of 1.9% over the last five years, considerably slower than broader wages in Ontario’s labour market (which grew at…