Yes, Profits Have Risen With Prices
That unbelievably expensive grocery bill? Turns out there’s a simple explanation: a new report in Canada finds that corporate profits have doubled since before the outbreak of the pandemic.
Edwin Lopez sorts the money in the cash register at Frankie’s Pizza on January 12, 2022 in Miami, Florida. (Joe Raedle / Getty Images)
The cost-of-living crisis shows no sign of abating. A new report from Canadians for Tax Fairness may explain why. The report finds that 2023 pretax corporate profits in Canada were up 54 percent over 2019, the year before COVID-19 hit the planet. Profit margins — the percentage rate of revenue a company earns after costs — were also up. As companies made more, they contributed to inflation and the cost-of-living crisis. As if that wasn’t enough, rather than investing those profits back into the economy, companies chose to pay themselves off. Researcher Silas Xuereb explains how this works.
David Moscrop
What happened to corporate profits and to corporate profit margins during and immediately after the pandemic?
Silas Xuereb
Initially, in 2020, there was a small dip, but towards the end of 2020 and through 2021, corporate profits nearly doubled compared to their average from 2010 to 2019. In total, pretax corporate profits were $685 billion in 2022. From 2010–2019, they averaged $314 billion.
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