Nicolas Vincent, deputy governor of the Bank of Canada, claims that businesses continue to increase their pricing more frequently than they did before to the epidemic, which is causing inflation to be greater than anticipated.
In his first speech as deputy governor to the Chamber of Commerce of Metropolitan Montreal on Tuesday, Vincent made the remarks.
The deputy governor claims in his prepared remarks that this pattern has continued and that price hikes have been higher than usual and more frequent than they were before to the outbreak.
Although he points out that since the start of the year, pricing conduct by businesses has been slowly returning to normal.
Following the epidemic, corporate earnings have received a lot of attention since some have questioned if increasing profits during a time of high inflation is fair.
The NDP has criticised these high profits in particular, holding corporations responsible for high inflation and urging the federal government to enact windfall taxes.
Meanwhile, the country's main supermarkets have been singled out by the ruling Liberals for their growing costs, and they have been warned to submit a plan to stabilise prices by Thanksgiving or face repercussions.
According to recent central bank studies, price rises have closely tracked cost increases experienced by businesses. Vincent points out that even steady profit margins would mean that consumers would be fully responsible for increasing costs.
The Bank of Canada is rethinking its presumptions about what causes inflation, according to the deputy governor, in light of recent findings about the impact pricing behaviour may be having on inflation.
source: The Canadian Press