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  • Writer's picturePopCan

Ottawa gets an inflation dividend. The rest of us don't

Financial Post: "In this expensive holiday season, many families are finding their budgets stretched thin. With industrial prices up almost a whopping 15 per cent so far this year and wages rising because of labour shortages, businesses will be pressed to raise consumer prices further to make up for shrinking margins. Article content There is only one sector of the economy that gets a holiday gift from inflation. You guessed it, the government. As shown in last week’s federal economic and fiscal update, a one percentage point increase in the inflation rate pushes up federal revenues by $3.9 billion annually. With the GDP deflator rising 7.6 per cent in fiscal year 2021/22, that means the federal government is pocketing an extra $30 billion in revenue from taxpayers. Call that an “inflation dividend” — for the government, not for us."

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