logo
The pandemic drove up inflation. How come, years later, we're still paying more?

The pandemic drove up inflation. How come, years later, we're still paying more?

Calgary Herald4 days ago
Article content
A new report from the C.D. Howe Institute concluded that the Trudeau government's spending splurges played a major role in fuelling inflation during the pandemic. The report pointed the finger at Ottawa's unfunded spending spree — more than the Bank of Canada's monetary policies — that acted as 'helicopter drops' of money for the private sector.
Article content
In 2020, about 20.7 million Canadians out of an adult population of 30.3 million received income from one of the federal pandemic-related programs, according to a 2022 report. During that year alone, the programs are estimated to have cost $270 billion — about 12.5 per cent of Canada's gross domestic product (GDP) — and cumulatively have cost about $360 billion to date.
Article content
While the programs broadly succeeded in providing relief to individuals and businesses and creating a cushion for the economy during a crisis, the C.D. Howe Institute noted that injecting that much extra money into an economy while unemployment is low results in inflation.
Article content
Article content
David Andolfatto, chair of the department of economics at the University of Miami and an international fellow at the C.D. Howe Institute, said inflation should be expected when governments add that much extra demand to the economy. 'Of course prices went up,' he said. 'There's no such thing as a free lunch. Somebody will have to pay.'
Article content
And not only do consumers pay higher prices but they must then pay again with the higher interest rates the central bank then implemented to try bringing those prices back down. In 2020, interest rates were down to 0.25 per cent as the Bank of Canada aimed to cushion the blow from the pandemic; by 2023, the rate had risen 20-fold, to five per cent.
Article content
Jean-Francois Perrault, chief economist at the Bank of Nova Scotia, estimated in a November 2023 report that government spending and pandemic-era transfers to Canadians were responsible for about 42 per cent (200 of the 475 basis points) of the increase in the Bank of Canada's prime interest rate during that period. About one-third of those interest rate hikes can be traced back to provincial governments, he calculated.
Article content
Article content
Since the start of 2023, inflation has remained at less than four per cent, just over the Bank of Canada's preferred band of between one and three per cent, but a big decrease from the peak of pandemic-era inflation.
Article content
And, at least for now, it's largely under control. Statistics Canada reported last week that Canada's inflation rate accelerated to 1.9 per cent in June, up from 1.7 per cent the previous month.
Article content
Why have some prices kept rising since the pandemic?
Article content
When the pandemic subsided, it removed a number of shocks and disruptions to markets. But not all of them.
Article content
The Russian invasion of Ukraine, for example, still hasn't been resolved. Many of the people who started working from home during the pandemic still do so, either part-time or full-time, which puts a little more money in most of their pockets. The glut of baby boomers is also at the stage of life where many are retiring, having saved up their money, and now want to spend it.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Letters to the Editor, July 25, 2025
Letters to the Editor, July 25, 2025

Toronto Sun

time2 hours ago

  • Toronto Sun

Letters to the Editor, July 25, 2025

Friday letters Photo by Illustration / Toronto Sun WHAT YOU WERE ELECTED TO DO This advertisement has not loaded yet, but your article continues below. THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Toronto Sun ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. SUBSCRIBE TO UNLOCK MORE ARTICLES Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Toronto Sun ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. REGISTER / SIGN IN TO UNLOCK MORE ARTICLES Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account. Share your thoughts and join the conversation in the comments. Enjoy additional articles per month. Get email updates from your favourite authors. THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK. Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account Share your thoughts and join the conversation in the comments Enjoy additional articles per month Get email updates from your favourite authors Don't have an account? Create Account Hey, Mark Carney, here's a novel idea. Rather than just meet with the premiers to discuss how you're going to punish Donald Trump over tariffs, which is just going to hurt Canadians, why don't you call or meet with him and negotiate a fair deal for Canada like you were elected to do. Heck, even Japan did that and got a great deal for it citizens. Mark Slobodian York (It seems Canada has put in place the wrong negotiator. Carney is going to have to pivot quickly) TRUMP WASN'T THE PROBLEM With all this talk about the tariff war and how we are led to believe that Trump is the problem, let me remind everyone (especially those with TDS – Trump Derangement Syndrome) that Canada's economy was in the toilet long before Trump even got elected president for the second time and initiated this tariff nonsense. And that, my friends, is because of the cancerous Liberal government here in Canada. Trump isn't helping matters with his tariffs, but the Liberals are 100% at fault here for the abysmal state of our economy. Not to mention the crime. That's a whole other story, and not a good one at that. This advertisement has not loaded yet, but your article continues below. Robert Onyskiw Etobicoke (It is worth repeating – Donald Trump being President for the last six months did not put Canada on its current ruinous economic path – that began over a decade ago under Trudeau) UNREALISTIC PLAN Israel has said that the statement by Canada and 24 other nations on the situation in Gaza and the West Bank is 'disconnected from reality.' I would prefer to say that it is unrealistic. It calls for the 'unconditional release' of hostages, as Canada has always proposed in the past. Hamas has always demanded that some Palestinian prisoners in Israeli custody also be released. It is unlikely that it will ever forgo this condition. The proposal by Canada and the other nations is idealistic and unrealistic in light of what we know about Hamas's position. Bruce Couchman Toronto (No deal without all the hostages being released) Sports Toronto & GTA Canada Toronto & GTA World

Tens of thousands flee their homes as Thailand and Cambodia clash
Tens of thousands flee their homes as Thailand and Cambodia clash

Winnipeg Free Press

time2 hours ago

  • Winnipeg Free Press

Tens of thousands flee their homes as Thailand and Cambodia clash

SURIN, Thailand (AP) — Tens of thousands of people sought refuge on Friday as border fighting between Thailand and Cambodia entered a second day, heightening fears of a broader conflict. The U.N. Security Council is scheduled to hold an emergency meeting on the crisis later Friday in New York, while Malaysia, which chairs a regional bloc that includes both countries, called for an end to hostilities and offered to mediate. The Health Ministry on Friday said more than 58,000 have fled from villages to temporary shelters in four affected Thai border provinces, while Cambodian authorities said more than 4,000 people have evacuated from areas near the border. The fighting has killed at least 14 people in Thailand, while Cambodia confirmed its first fatality on Friday. Tensions over a disputed border area erupted into fighting after a land mine explosion along the border on wounded five Thai soldiers on Wednesday. Clashes break out across border areas The Thai military reported clashes early Friday in multiple areas, including along the border at Chong Bok and Phu Makhuea in Thailand's Ubon Ratchathani province, at Phanom Dong Rak in Surin province, and near the ancient Ta Muen Thom temple. Associated Press reporters near the border could hear sounds of artillery from early morning hours. The Thai army said Cambodian forces had used heavy artillery and Russian-made BM-21 rocket launchers, prompting what Thai officials described as 'appropriate supporting fire' in return. Thailand said one soldier and 13 civilians were killed, including children, while 15 soldiers and 30 civilians were wounded. Cambodia's chief official in Oddar Meanchey province, Gen. Khov Ly, said a man died instantly Thurday after a Thai rocket hit a Buddhist pagoda where he was hiding. At least four civilians were also wounded in Thursday's fighting there. Thailand's army on Friday denied it targeted civilian sites in Cambodia, and accused Cambodia of using 'human shields' by positioning their weapons near residential areas. Thousands flee villages near the border As the fighting intensified, villagers on both sides have been caught in the crossfire, leading many to flee. Around 600 people took shelter at a gymnasium in a university in Surin, Thailand, about 80 kilometers from the border. Evacuees sat in groups, on mats and blankets, and queued for food and drinks. Seamstress Pornpan Sooksai was accompanied by four cats in two fabric cages. She said she was doing laundry at her home near Ta Muen Thom temple when shelling began Thursday. 'I just heard, boom, boom. We already prepared the cages, clothes and everything, so we ran and carried our things to the car. I was frightened, scared,' she recalled. Rattana Meeying, another evacuee, said she had also lived through the 2011 clashes between the two countries but described this flare-up as worse. 'Children, old people, were hit out of the blue,' she said. 'I never imagined it would be this violent.' At the nearby Phanom Dong Rak hospital, periodic explosions could be heard Friday, and a military truck arrived with three injured Thai soldiers, including one who had both legs severed. Thursday's shelling shattered windows at one of the hospital's buildings and damaged its roof. In the neighboring Sisaket province, more villagers took their belongings and left homes in a stream of cars, trucks and motorbikes after they received an evacuation order on Friday. Across the border in Cambodia, villages on the outskirts of Oddar Meanchey province were largely deserted. Homes stood locked, while chickens and dogs roamed outside. Some villagers earlier dug holes to create makeshift underground bunkers, covering them with wood, tarpaulin and zinc sheets to shield themselves from shelling. Families with children were seen packing their belongings on home-made tractors to evacuate, though a few men refused to leave. Several hundred Cambodian villagers have evacuated to a remote Buddhist temple surrounded by rice fields. Women rest in hammocks, some cradle babies, while children run about. Makeshift plastic tents are being set up under the trees. Veng Chin, 74, pleaded with both governments to negotiate a settlement 'so that I can return to my home and work on the farm.' ASEAN chair calls for calm The conflict marks a rare instance of armed confrontation between member countries of the Association of Southeast Asian Nation, though Thailand has tangled with Cambodia before over the border and has had sporadic skirmishes with western neighbor Myanmar. Malaysia, the current ASEAN chair, expressed concern. Malaysian Prime Minister Anwar Ibrahim said Thursday he spoke to both Cambodian leader Hun Manet and Thai Acting Prime Minister Phumtham Wechayachai and urged them to open space for 'peaceful dialogue and diplomatic resolution.' Malaysia is willing to facilitate talks, he said. U.N. Secretary-General Antonio Guterres has also called for restraint and urged both countries to resolve disputes through dialogue, according to U.N. deputy spokesman Farhan Haq. A longstanding border problem Border tensions between the two nations are not new. Their 800-kilometer (500-mile) frontier has been disputed for decades, with past confrontations typically limited and brief. The last major flare-up in 2011 left 20 dead. The current tensions broke out in May when a Cambodian soldier was killed in a confrontation. The two countries said afterwards they agreed to de-escalate the situation, but both continued to implement or threaten measures including trade and travel restrictions, keeping tensions high. But things got worse when a land mine wounded five Thai soldiers on Wednesday. That led Bangkok to withdraw its ambassador from Cambodia and expel Cambodia's envoy to Thailand. Thailand also sealed all land border crossings and urged its citizens to leave Cambodia. Officials said all seven Thai airlines were willing to help evacuate nationals. Cambodia retaliated by downgrading diplomatic ties and recalling all Cambodian staff from its embassy in Bangkok. On Thursday, clashes broke out along the border. Both militaries accused the other of using drones before escalating to artillery and rockets. Thailand said it responded with airstrikes after Cambodian forces launched truck-mounted rockets. The Thai air force said F-16 jets carried out two bombing runs on Cambodian positions. Cambodia claimed those bombs landed near the Preah Vihear temple, a UNESCO World Heritage site that has been at the center of past disputes. Authorities in Phnom Penh released photos they said showed damage to the site and pledged to seek international justice. The border dispute has also roiled Thailand's domestic politics. Prime Minister Paetongtarn Shinawatra, under scrutiny over a phone call with Cambodia's former Prime Minister Hun Sen, still a power broker in his country, was suspended from office on July 1 pending an investigation into possible ethics violations over the matter. ___ Associated Press writer Eileen Ng in Kuala Lumpur contributed to this report.

Trump's trip to Scotland as his new golf course opens blurs politics and the family's business
Trump's trip to Scotland as his new golf course opens blurs politics and the family's business

Winnipeg Free Press

time4 hours ago

  • Winnipeg Free Press

Trump's trip to Scotland as his new golf course opens blurs politics and the family's business

EDINBURGH, Scotland (AP) — Lashed by cold winds and overlooking choppy, steel-gray North Sea waters, the breathtaking sand dunes of Scotland's northeastern coast rank among Donald Trump 's favorite spots on earth. 'At some point, maybe in my very old age, I'll go there and do the most beautiful thing you've ever seen,' Trump said in 2023, during his New York civil fraud trial, talking about his plans for future developments on his property in Balmedie, Aberdeenshire. At 79 and back in the White House, Trump is making at least part of that pledge a reality, traveling to Scotland on Friday as his family's business prepares for the Aug. 13 opening of a new course it is billing as 'the greatest 36 holes in golf.' While there, Trump will talk trade with British Prime Minister Keir Starmer, a meeting he's said will take place at 'probably one of my properties.' The Aberdeen area is already home to another of his courses, Trump International Scotland, and the president also plans to visit a Trump course near Turnberry, around 200 miles (320 kilometers) away on Scotland's southwest coast. Using this week's presidential overseas trip — with its sprawling entourage of advisers, White House and support staffers, Secret Service agents and reporters — to help show off Trump-brand golf destinations demonstrates how the president has become increasingly comfortable intermingling his governing pursuits with promoting his family's business interests. The White House has brushed off questions about potential conflicts of interest, arguing that Trump's business success before he entered politics was a key to his appeal with voters. White House spokesperson Taylor Rogers called the Scotland swing a 'working trip.' But she added that Trump 'has built the best and most beautiful world-class golf courses anywhere in the world, which is why they continue to be used for prestigious tournaments and by the most elite players in the sport.' Trump family's new golf course has tee times for sale Trump went to Scotland to play his Turnberry course during his first term in 2018 while en route to a meeting in Finland with Russian President Vladimir Putin. This time, his trip comes as the new golf course is about to debut and is already actively selling tee times. It's not cheap for the president to travel. The helicopters that operate as Marine One when the president is on board cost between $16,700 and nearly $20,000 per hour to operate, according to Pentagon data for fiscal year 2022. The modified Boeing 747s that serve as the iconic Air Force One cost about $200,000 per hour to fly. That's not to mention the military cargo aircraft that fly ahead of the president with his armored limousines and other official vehicles. 'We're at a point where the Trump administration is so intertwined with the Trump business that he doesn't seem to see much of a difference,' said Jordan Libowitz, vice president and spokesperson for the ethics watchdog organization Citizens for Responsibility and Ethics in Washington. 'It's as if the White House were almost an arm of the Trump Organization.' During his first term, the Trump Organization signed an ethics pact barring deals with foreign companies. An ethics frameworks for Trump's second term allows them. Trump's assets are in a trust run by his children, who are also handling day-to-day operations of the Trump Organization while he's in the White House. The company has inked many recent, lucrative foreign agreements involving golf courses, including plans to build luxury developments in Qatar and Vietnam, even as the administration continues to negotiate tariff rates for those countries and around the globe. Trump's first Aberdeen course has sparked legal battles Trump's existing Aberdeenshire course, meanwhile, has a history nearly as rocky as the area's cliffs. It has struggled to turn a profit and was found by Scottish conservation authorities to have partially destroyed nearby sand dunes. Trump's company also was ordered to cover the Scottish government's legal costs after the course unsuccessfully sued over the construction of a nearby wind farm, arguing in part that it hurt golfers' views. And the development was part of the massive civil case, which accused Trump of inflating his wealth to secure loans and make business deals. Trump's company's initial plans for his first Aberdeen-area course called for a luxury hotel and nearby housing. His company received permission to build 500 houses, but Trump suggested he'd be allowed to build five times as many and borrowed against their values without actually building any homes, the lawsuit alleged. Judge Arthur Engoron found Trump liable last year and ordered his company to pay $355 million in fines — a judgment that has grown with interest to more than $510 million as Trump appeals. Golfers-in-chief Family financial interests aside, Trump isn't the first sitting U.S. president to golf in Scotland. That was Dwight D. Eisenhower, who played in Turnberry in 1959. George W. Bush visited the famed course at Gleneagles in 2005 but didn't play. Many historians trace golf back to Scotland in the Middle Ages. Among the earliest known references to game was a Scottish Parliament resolution in 1457 that tried to ban it, along with soccer, because of fears both were distracting men from practicing archery — then considered vital to national defense. The first U.S. president to golf regularly was William Howard Taft, who served from 1909 to 1913 and ignored warnings from his predecessor, Teddy Roosevelt, that playing too much would make it seem like he wasn't working hard enough. Woodrow Wilson played nearly every day but Sundays, and even had the Secret Service paint his golf balls red so he could practice in the snow, said Mike Trostel, director of the World Golf Hall of Fame. Warren G. Harding trained his dog Laddie Boy to fetch golf balls while he practiced. Lyndon B. Johnson's swing was sometimes described as looking like a man trying to kill a rattlesnake. Bill Clinton, who liked to joke that he was the only president whose game improved while in office, restored a putting green on the White House's South Lawn. It was originally installed by Eisenhower, who was such an avid user that he left cleat marks in the wooden floors of the Oval Office by the door leading out to it. Bush stopped golfing after the start of the Iraq war in 2003 because of the optics. Barack Obama had a golf simulator installed in the White House that Trump upgraded during his first term, Trostel said. John F. Kennedy largely hid his love of the game as president, but he played on Harvard's golf team and nearly made a hole-in-one at California's renowned Cypress Point Golf Club just before the 1960 Democratic National Convention. 'I'd say, between President Trump and President John F. Kennedy, those are two of the most skilled golfers we've had in the White House,' Trostel said. Trump, Trostel said, has a handicap index — how many strokes above par a golfer is likely to score — of a very strong 2.5, though he's not posted an official round with the U.S. Golf Association since 2021. That's better than Joe Biden's handicap of 6.7, which also might be outdated, and Obama, who once described his own handicap as an 'honest 13.' The White House described Trump as a championship-level golfer but said he plays with no handicap. ___ Associated Press writer Chris Megerian in Washington contributed to this report.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store