The center’s three locations currently serve about 400 meals a day — a 40 percent increase from 2019. Through the pandemic, it allowed families to pick up groceries twice a month, but was forced to change that practice. “With the cost of food and the growing number of new customers, this has become increasingly difficult to maintain, so we are now returning to access once a month per household,” said Maria Rio, director of development and communications at The Stop. “This brings organizations to a place where we have to choose between serving more people in need or the future viability of our programming.” Inflation has hit Canadian wallets hard this year. A recent CBC survey found that one in five people eat less than they should because of rising costs, while food bank usage has skyrocketed. For the poor workers and people with stable incomes – especially income incomes that are not adjusted for inflation – price increases have forced many to choose between food and rent.
Meanwhile, Canadian Center for Alternative Policy (CCPA) economist David Macdonald found that grocery stores “closed $ 7.3 billion in profits before taxes in 2021.” That is “more than double what they cleaned the year before the pandemic,” says Macdonald. “We are seeing more and more people turning to us for help because of the effects of the coronavirus, inflation, unaffordable housing and stagnant rates of social assistance and wages,” Rio said. Sixty-two percent of The Stop visitors spend more than half of their income on housing and 67 percent on social assistance. Half of the latter group is participating in the Ontario Disability Support Program. “There needs to be systemic public policy changes that will actually address the problems facing people living in poverty,” Rio said. “Poverty is not inevitable. It is a policy choice. “With bills piling up, debt piling up and people unable to make ends meet, Toronto is in a crisis that is deepening rapidly.” Food banks in Toronto and elsewhere have seen increased demand during the pandemic and amid continuing inflation.

Central bank loosening or corporate speculation?

A debate revolves around the source of inflationary pressures. On the one hand, the Conservative leadership candidate, Pierre Poiliev, says the problem must be put at the feet of the central bank. His campaign targets Bank of Canada Governor Tiff Macklem, whom Poilievre vows to fire in light of Macklem’s surrender for “30 years of high inflation.” “Justin Trudeau wanted to spend a fortune and could not find the money,” Poilievre said in a recent campaign video. “So he put the central bank to print it. “More dollars pursuing fewer goods increases the price of all these goods and makes your life more expensive.” “That’s why you can not afford gas, groceries or – God forbid – not even a house. “It’s a transfer of wealth from those who do not own yachts.” At the last point of Poilievre, left-wing economists will agree: we are indeed seeing a massive transfer of wealth from the poor to the rich. But their explanations for the frenzy of inflation – and what needs to be done about it – could not be more different. For economists such as Jim Stanford, director of the Center for Future Jobs and a longtime union researcher, Poilievre’s solution to Canada’s inflation woes is largely unknown. Responding to rising inflation by imposing “monetary and fiscal austerity,” Stanford argues, will leave workers holding the bag for corporate speculation. Rise in interest rates usually reduces business investment, increasing unemployment and reducing the ability of workers to fight for higher wages. Cuts in public spending, meanwhile, are weakening the welfare net on which the working class depends while attacking good jobs in the public sector. In this political response, ordinary people – not the beneficiaries of high inflation – are being recruited to make sacrifices for the “greater good” of the economy.
“If we buy the right-wing argument that workers just have to suffer and remain silent and accept the decline in their standard of living,” Stanford told The Breach, “all we have to do is facilitate a massive transfer of wealth from workers to the owners of the energy companies, the real estate builders and the grocery chains that have really benefited from it “.
Stanford adds that the rise in inflation since mid-2021 is largely linked to the pandemic and the consequent opening up of the economy. “The most important were the breaks in some global supply chains, such as semiconductors and cars, the jump in housing prices due to credit and the shock in oil prices that followed the invasion of Ukraine,” he said. Some “demand-side” factors, such as increased household savings, have also put some pressure. But Stanford says companies are using panic to boost their profit margins “above and beyond” what required higher gas and supply chain costs. He says it is “a sign that companies are ‘exploiting’ consumers,” but adds that “this is the meaning of capitalism: companies were invented to make the most of their owners, and that ‘s exactly what they’re doing.” In a recent speech also presented at Stanford, Canadian Civil Servants economist Angella MacEwan argued that grocery chains are key examples of this impulse to action. “Low-income people are struggling to make ends meet with high food prices, but the Loblaws have seen their net profits increase by 40 percent in the last quarter,” he said, adding that “their profit margin was almost double. At the same time that their profit margin doubled, they increased the shareholders’ quarterly dividend “. Federal Conservative candidate Pierre Poilievre has taken advantage of Canadians’ anger and frustration over inflation and rising cost of living. But his political response is out of the question and will hurt ordinary people while letting companies break up. Photo: Pierre Poilievre / YouTube.

cartel of canada

Of course, Loblaw is not the only hike. Every other big chain has squeezed its customers proportionately as well. The way in which prices have risen rapidly is generally due to close corporate integration. Loblaws, Costco, Sobeys, Metro and Walmart account for more than 60 percent of retail food sales. “When one of them raises prices, it allows the others,” MacEwan said. These five companies control most of the grocery market share – a situation known financially as the “oligopoly” or more seriously as the “cartel” – which isolates large companies from competitive pressure. In a more competitive market, companies can offer cheaper prices or higher wages. But in an oligopolistic grocery market, the opposite happened. Instead of lowering prices, for example, grocery chains worked together to set the price of bread for 14 years. And instead of seeing permanent pay rises, their workforce saw a reduction in the $ 2 an hour pandemic bonus — from all companies, all in the same week. Now, in the midst of the inflation frenzy, they are moving inactivity again to raise food prices, using “higher inputs” and “supply chain disruption” as cover.

Check inaccessibility

For the federal NDP, the CCPA and other economists, excessive profit tax can be a tool when it comes to creating a more effective policy response to inflation. Historically, these taxes have been used during the war to discourage the profits of war. They target companies whose profits have grown far more than they would normally have increased during a crisis — such as a war or a pandemic. As the NDP proposes, the tax will be a temporary measure imposed on companies such as grocery stores or energy companies. The money will then help fund redistributive measures, such as social programs, to reduce the pandemic burden. Not a strange idea: Canada’s 2021 federal budget actually introduced an excessive tax on profits, if moderate, in banks and insurance companies. Some economists also advocate greater labor market intervention. Sectoral negotiations and policies that facilitate trade unionism can have a lasting impact on workers’ finances by gaining them a larger share of the pie. But these shifts will take time and effort to win — if at all — giving employees minimal respite from current rising prices. A more immediate response to inflation would be to index all wage and income support. At present, welfare – already meager in most counties – is adjusting for inflation only in Quebec, New Brunswick and the Yukon. “Wages can and must rise to keep pace with inflation,” says Stanford. “This would protect the real incomes of the workers, while the real causes of this inflation – supply chain issues, energy prices, housing costs – are being addressed.” However, inflation is only one component of a growing crisis of affordability: in addition to rising gas and grocery prices, the cost of housing has been burning for a decade – something Poilievre has done as a hobby. Although his policies, such as shrinking public spending and raising interest rates, would hit them “no”, his program is sure to have an impact. Where other politicians only criticize the status quo sideways, his campaign directly validates the tangible frustration of the people, channeling this anger to specific institutions, bureaucrats or politicians. Poilievre’s populist messages push the NDP and the labor movement to offer a similar alternative …