A record labor shortage and rising wages may seem like good news for workers, but labor leaders say workers are not seeing the gains companies are experiencing amid inflation. Canadian Labor Congress president Bea Bruske says workers are feeling the squeeze as the cost of living rises. Canada’s annual inflation rate was 7.6 percent in July, while wages rose 5.2 percent over the same period. Meanwhile, Bruske says companies in industries like oil and gas have posted record profits. Addressing this imbalance, he says, is one of the priorities of the labor movement going forward. “It ensures that we really tackle the affordability crisis by tackling inflation and getting governments to look at the giant profits that many employers are currently making,” Bruske said. The NDP is pushing the federal government to extend the windfall tax levied on financial institutions to oil and gas companies, as well as large retailers. But some economists are weary of surprise taxes, worried they could 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 Canadian economy’s total output in the second quarter of this year. Instead, Macdonald found that workers’ compensation as a share of gross domestic product was on a downward trend, falling to its lowest level since 2006. “It’s very clear that we’re seeing record high profits and the record percentage of our economy is going to be after-tax corporate profits as opposed to workers’ wages,” Macdonald said. The economist says the current windfall tax is “too limited” and suggests extending it across the corporate sector. Ottawa and Provincial Labor Council president Sean McKenney says there are some businesses that have undoubtedly taken a hit during the COVID-19 pandemic, but seeing the high profits of some companies has been disappointing for workers. “That bothers workers in general because, again, the fairness isn’t there,” McKenny said. This report by The Canadian Press was first published on September 5, 2022.
