It seems like almost overnight, people shifted from obsessing about COVID-19 to obsessing about inflation.
There is a sense of panic in the air. Everything is becoming less affordable: gas, groceries, sports gear, insurance, and housing.
There are no breaks to be found as prices continue to rise. And, right when we started to feel the financial pressure of those rising prices, the Bank of Canada started raising interest rates.
Why? Ostensibly to temper inflation. What I have wondered is when the media is going to start calling out corporations for the role they play in increasing prices?
Let’s look at some of Canada’s largest, most well-known, and most successful companies.
Loblaws, Canada's largest food retailer reported a 30.1 per cent increase in profits in its last fiscal quarter of 2021! It expects another profit boost in 2022. Sunlife, Canada’s largest insurance company posted a $3,934 million net income in 2021, a 64 per cent increase over 2020. Canadian Tire, which also owns SportChek, Mark’s, Party City, and PartSource reported $1,261 billion in profits in 2021 and increased its quarterly dividend payments to shareholders by 25 per cent in the first quarter of 2022.
Canada’s big five banks have also raked in record-breaking profits recently. RBC’s first-quarter profits for 2022 were $4.1 billion. TD Bank reported $3.7 billion in profits in the first quarter of 2022.
CIBC had a 15 per cent increase in the first quarter of 2022 compared to 2021 with $1.869 billion in profits. BMO had $2,933 million in profit for its first quarter of 2022, a 45 per cent increase over 2021. And Scotiabank reported $2,740 million in profits in the first quarter of 2022.
Finally, the gas and oil companies. Shell Oil reported $9.1 billion in profits in its first quarter of 2022. A record for the company. Enbridge, Canada’s largest oil and gas company, reported $1.7 billion in profits in its first quarter of 2022.
Yet despite these astounding profits, all these companies are increasing their prices. And because they are increasing their prices, the powers that be think it is wise to increase interest rates, so the banks bring in more profits.
It is insanity!
I feel quite strongly that we are being screwed by all sides and we all need to pay more attention.
The reason for the increase in food prices is beyond our control. China is the largest agricultural exporter in the world. It is also home to seven of the world’s ten largest seaports. The Chinese government is still locking down tens of millions of people because of COVID. These lockdowns impact both agricultural output and port traffic. Ukraine is the breadbasket of Europe. The war with Russia has dramatically impacted food security for Europe. And of course, the United States is also a huge agricultural producer, but it has been ravaged by extreme weather, floods, droughts, and forest fires. These things increase the price of food. The only thing raising interest rates will do is make other things more unaffordable. As for gas price increases, there is no reason for them. Refer to Shell Oil profits if you don’t believe me.
If the government were sincere in its desire to help the working masses, then it would direct its attention to corporations. Price fixing and price gouging need to be addressed. Every company listed here, along with many more, could decrease their profits by half and use the money to give their workers pay increases, and their customers a price break. Some measures should also be in place that prohibits banks and other creditors from charging exorbitant interest rates. Mortgage rates may have been low for a while now, but mortgage interest is still a massive gouge of consumers. Amortization keeps us all beholden to the banks for far too long. A better system should be implemented. The shareholders would still make money, but things would be a little more equitable.
It’s time to stop expecting the average Canadian to tighten their belt, do with less, and struggle more, while CEOs are taking home multi-million-dollar compensation packages, and shareholders who do nothing, collect fat dividend cheques. Canadians should be screaming at the top of their lungs about rising interest rates. Prices will not come down with increased rates, but many Canadians will see a sudden and unaffordable increase in their monthly payments. Then companies will cry recession and use this as an excuse to treat workers worse.
We are all being played for fools while the elite laughs all the way to the bank!
- Racquel Foran, Coquitlam