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Testimony to House of Commons Finance Committee Pre-Budget Hearings
Centre for Future Work Economist and Director Jim Stanford was invited to present testimony to the House of Commons Standing Committee on Finance, as part of its annual pre-budget hearings. Here are his opening remarks, presented on October 19, 2023.
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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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House of Cards: Interest Rates, Household Debt, and the Housing Crisis
Last week the Bank of Canada increased its overnight interest rate, for the 9th time in little over a year, to 4.75%. In making its announcement, the Bank cited a slight increase in year-over-year headline CPI inflation last month. This, the Bank suggested, was one reason why it abandoned a temporary ‘hold’ on further interest rate increases announced in January. The Bank’s rationale is ironic, because the Bank’s rapid run-up in interest rates was the main cause of that small uptick in inflation
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The Failures of ‘Trickle-Down’ Economics in Alberta
Since its election in 2019, the current provincial government in Alberta has emphasized a classic ‘trickle-down’ economic strategy. It argues that by boosting profits of private business, capital investment will grow, and job-creation, rising incomes, and economic growth will then ‘trickle down’ to the rest of the population.
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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...
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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.