Feeling Broke? Blame Big Oil.
Canada’s affordability crisis and fossil fuel company profits are linked, says report.
Surging oil were the single largest driver of early pandemic inflation raising prices on everything from gas to groceries, according to a report published last week from the Centre for Future Work.
Meanwhile, industry’s profits increased almost as much as Canadians paid. All told, oil price spikes cost Canadians nearly $200 billion in three years from 2022 to the end of 2024. Over the same period, oil company profits grew by $151 billion relative to pre-pandemic levels.
“I think it’s important that we understand what happened,” economist and report co-author, Jim Stanford, told The Tyee. “Otherwise people are going to get misled into blaming other scapegoats for the problem.”
While carbon taxes became a magnet for frustration during the inflation crisis, Stanford says oil companies were actually the biggest driver of rising costs. And [sic] among the industries that profited most during Canada’s inflation surge, fossil fuel companies were in a league of their own.
The report traced the roots of the oil price spike to Russia’s invasion of Ukraine and a subsequent frenzy of speculation as traders bet on oil prices going up or down. High oil prices then filtered through Canada’s economy, triggering inflation and the Bank of Canada’s subsequent interest rate hikes. Those rates brought prices down, but at a cost, triggering job losses, and higher debt payments.
With more political uncertainty on the horizon, the report warns of future price spikes ahead.
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