by Colin Creasey
Over the past few weeks, it’s been hard to escape “inflation mania” in our Parliament. Conservative finance critic, Pierre Poilievre, and his boss, Erin O’Toole, are in full meltdown over a 4.7% inflation rate. While it is true that inflation is currently above the Bank of Canada’s midpoint target of 2%, it is also the case that the Bank has fallen short of this target frequently since the Great Recession in 2010. It is also the case that this bout of inflation is a result of supply shortages and other disruptions stemming from the pandemic and a difficult economic reopening.
Alongside temporary supply chain issues, such as clogged ports and unloaded shipping containers, a main driver of this current episode of inflation is high energy prices, which have risen 25.5% relative to October, 2020. Gasoline is responsible for nearly 42% of the yearly change in inflation, while meat accounts for another 10%, so this is a sector-specific problem. Remove these, and the current inflation rate drops to 3.3%.
Poilievre and O’Toole’s daily diatribes about inflationary deficits and the like, while ignoring the facts, hasn’t stopped Conservatives and neo-liberals alike from using panic about inflation as an opportunity to impose their political-economic programme of austere spending cuts. There isn’t one instance that these tactics have ever worked, except for the wealthy, and yet Conservatives and neo-liberals cling to this economic nonsense.
There is a risk, however, that a similar process could unfold now, which would curb the pandemic recovery and disproportionally harm those who are currently struggling. In the current moment, we need political interventions that respond to workers’ material concerns, and that don’t dismiss the ways in which high prices for consumer necessities disproportionally harm low-wage workers. Without this, we leave these workers open to the political framing and false solutions offered by the right.
The problem isn’t only with supply chain disruptions. Corporate profiteering is an integral part of the explanation for our current above-average inflation. Corporations are using supply shortages to engage in historic price increases. Thanks, in part, to relatively strong stimulus spending during the pandemic, corporate profits in Canada grew from $291 billion in 2019, to $382.7 billion in 2021, the largest 2-year increase in a decade.
This is how capitalists respond to shortages, particularly after deregulation has allowed them to dictate the terms of trade, and harm consumers in the process. In global shipping, the container ship industry booked net profits of $48.1 billion in the third quarter of 2021, a nine-fold increase in the same period for 2020. In other words, price gouging is a central part of the current inflation story, though you are not likely to hear much about that in the mainstream news media, and certainly not at all from those on the right.
What we should be asking our governments is why these industries are not regulated to prevent this sort of gouging, but I think that we all know the answer to that, which is that these industries are the very ones that fill the coffers of the main Parties in our country. If you are fed up, as I am, with the interests of the wealthy being more important than the rest of us, the only way that is going to change is at the ballot box.
While the wealthy dictate every move that the current governments make, nothing is going to change, and in this current climate crisis, we need a government that is going to do things differently, not repeating the same old failed policies. At this coming, and future, elections, we need to be bold, and let all Parties know that the status quo is not acceptable, and cast our ballots accordingly. I have said this before, and will say it again: We have dinosaur politics. It is up to you, the voter, to demand something better. Politics as usual, which is what we get with the two main Parties, isn’t going to cut it.