I have to admit to being somewhat puzzled as to how the recent increases in interest rates will combat inflation, given that it is mostly caused by external factors over which we have little control. While some have suggested it will bring a much-needed cooling to a housing market that has soared nationwide to absurd heights, it is only Heather Scoffield who has put it into a different, some would say sinister, context.
She starts off by observing that Joe Biden seems to be directing his attention toward profiteers in the corporate sector.
He issued an executive order, set up a high-profile antitrust unit, told it to crack down on profiteering, and pinpointed exactly where he wanted to see action.
Airlines, telecommunications, prescription drugs, the web giants — the executive order called them out.
Such boldness and focus are absent in Canada.
Here, the focus is on making sure workers hit by higher consumer prices don’t push for higher wages. The fear is they’ll set off a wage-price spiral that would launch already-high inflation into the stratosphere.
Wages have been creeping up at a much slower pace than inflation. In February, average hourly earnings rose 2.7 per cent from a year earlier, while consumer prices rose 5.7 per cent. Of course, the numbers bounce around month to month, and wages are picking up a bit of steam. But they’re not on fire like the prices workers face when they go to buy their groceries or fill their cars with gas.
Just to make sure wages don’t surge, the federal government is easing the way for a huge influx of temporary foreign workers in low-wage industries.
While the Bank of Canada is putting its foot on the necks of workers, corporations seem to be enjoying a free and fast rise to record profits.
Net income for corporations across all industries was up 5.9 per cent in the fourth quarter of 2021 compared to the three months earlier. On an annual basis, non-financial industries were seeing profits 52.2 per cent higher, while financial industries were up 14.2 per cent on the year.
And while the government has made mewling mention of improper corporate behaviour, our country
has fallen far behind its global counterparts in cracking down on anti-competitive behaviour.
And I have yet to see any sweat forming on the collective brow of Corporate Canada, no doubt reassured that it is pulling the strings on a federal government it knows identifies with and fears it far more than it does the working person.
Perhaps Allan Baker of Scarborough, writing in The Star's Sunday print edition, sums it up best and demonstrates that corporate fealty is not limited to the feds:
Politicians help corporations as people go hungry
Our friends and neighbours, who are working in low-wage industries, are already suffering from higher housing costs, increased food prices and gouging at the gas pumps.
Scoffield also reports on the increases in corporate profits over the past year: “Non-financial industries were seeing profit 52.2 per cent higher.” At Loblaws, Canada’s largest grocery chain, profits were up nearly 40 per cent over 2021, which was also a profit-making year for the company. Loblaws eliminated a temporary increase in pay for front-line workers long before the pandemic ended.
