(Ottawa) A record labor shortage and rising wages may sound like good news for workers, but union leaders say employees aren’t really benefiting from corporate gains amid skyrocketing inflation .
Posted at 5:10 p.m.
Canadian Labor Congress President Bea Bruske says workers are feeling the effects on their finances of the rising cost of living.
The year-over-year inflation rate in Canada was 7.6% in July, while wages rose 5.2% over the same period.
Meanwhile, M.me Bruske says companies in sectors like oil and gas have posted record profits.
Tackling this imbalance, she says, is one of the priorities of the labor movement going forward.
“It’s about making sure we actually respond to the affordability crisis by tackling inflation and asking governments to look at the gigantic profits that many employers are reaping right now,” said Mr.me Brusk.
The New Democratic Party (NDP) has urged the federal government to expand the windfall tax, which already applies to financial institutions, to also cover oil and gas companies and big-box retailers.
But some economists worry that these taxes will scare away business investment.
According to an analysis conducted by David Macdonald, senior economist at the Canadian Center for Policy Alternatives, after-tax corporate profits reached a historically high percentage of the total output of the Canadian economy in the second quarter of this year.
By contrast, Macdonald found that workers’ compensation as a share of gross domestic product was trending downward, falling to the lowest level since 2006.
“It’s pretty clear that we’re having record profits and a record proportion of our economy is going to after-tax corporate profits rather than worker wages,” Macdonald said.
The economist says the current windfall tax is “very limited” and suggests extending it to the entire business sector.
Ottawa and District Labor Council President Sean McKenny says some businesses have no doubt been impacted by the COVID-19 pandemic, but seeing some companies’ high profits has been frustrating for workers.
“It bothers workers in general because, again, the fairness isn’t there,” McKenny said.