Bank of Canada said the way to fight inflation is to raise interest rate to crush demand. It sounds like people have too much money in their pockets, so the central bank needs to make it harder for them to buy stuff. Some even blame the covid relief fund. Perhaps they should talk to those who received the fund. Many of them lost income and face financial hardship due to the pandemic.
Supply chain disruption, War in Ukraine, China zero Covid policy all contributed to global inflation. Unfortunately, those are out of control for many governments around the world. High inflation is a huge social issue especially for those on fixed income or low income. The common tool at central bank disposal is interest rate, but it is a blunt tool. It can also cause a lot of pain to many. Is there any other way?
Perhaps we could add one more reason for inflation — corporate greed. Canada competition bureau is investigating grocery industry in midst of soring food prices. There is allegation that grocery chains use inflation as an excuse to scourge consumers and make outsized profits. Grocery chain Loblaw just announced to freeze the prices of No Name brand products for three months. It was criticized as disingenuous PR stunt. My favorite CBC comedy show “22 minutes” made a very timely satire about it. Hit the nail right on the head. Great acting by the way. 😊
I can’t help but recall Canada bread price-fixing scandal a few years ago. The price fixing went on for 15 years! Bread is necessity so it is despicable that it hurts the most financially vulnerable.
Perhaps the fundamental issue is severe lack of competition. The Canada industries are too concentrated on a few big players.
It hurts the employees too besides the consumers. The grocery chains gave $2/hour raise to entice workers to work in the stores when Covid pandemic started. It was called hero’s pay because employees are risking their health to work on the front lines. Soon enough the $2/hour extra pay was cut in all chains on the same date! This is employee pay fixing! It should be a crime just like the price fixing. Need better laws and regulations.
Now Rogers is buying Shaw. Did the government already forget Rogers long outage this summer? They are too big to fail. They provide critical service to too many customers already.
Canada desperately need more competition in most industries.
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