Where are your inflation dollars going? Inflation broken down by profit, wages and by industry
19 January 2023
The finance and insurance industries represent the next largest inflation category: Finance and insurance received $7.6 billion of the $72 billion in extra inflationary dollars paid to the business sector in the third quarter of 2022. [...] The increase in quarterly profits in the oil and gas extraction and support services between the third quarter of 2020 and the third quarter of 2022 was $20 billion (the industry lost $5.8 billion in the third quarter of 2020 and made $14.2 billion in the third quarter of 2022, a difference of $19.9 billion).4 Comparatively, the increase for mining and quarrying sector quarterly profits over that. [...] To properly understand inflation, the focus needs to be broadened from the change in the retail price of goods and services sold to consumers to include the entirety of the business sector. [...] Policy-makers need to understand the changes in the intermediate prices all the way up the supply chain to better understand the change in the final retail price. [...] Given the size of fed- eral supports, like the Canada Emergency Wage Subsidy, for the business sector during the pandemic, which were considered “subsidies”, properly disaggregated data would be interesting to review.17 Figure 7 graphs the results of the above equation with a line for the labour productivity data and a second for the income statements in the business sector.