When German economist Isabella Weber spoke at Toronto Metropolitan University in May 2024, she argued that Canadians, “need an inflation fighting toolbox that buffers against supply shocks in essential sectors, prevents price explosions, and contains sellers’ inflation.” This policy prescription came after Canadians experienced the economic shocks of the COVID-19 Pandemic, with the inflation rate peaking at 8.1% in June 2022, while wages struggled to catch up.
Though initially criticized for her analysis and policy proposals made at the height of the Pandemic, she has since been vindicated. Weber presented the evidence that corporate profiteering is responsible for much of the price explosion we saw through that period, and Canadian economists agreed: we should be listening to Isabella Weber. Today, her analysis remains relevant to the affordability crisis that Canadians continue to experience – but did Canadian policymakers listen?
Some took the hint. In November 2024, then NDP leader Jagmeet Singh proposed inflation fighting measures for groceries, cutting the GST from essential commodities, paired with a windfall profits tax – policies coming straight out of Weber’s toolbox. What followed a week after this announcement was the Trudeau government’s last policy pitch to Canadians: a GST “vacation” and tax rebate. Some argued the government’s version of Weber’s policy set would not fix affordability.
Then Finance Minister Chrystia Freeland thought this missed the mark entirely, leading to her resignation. In her run for Liberal Party leadership, she borrowed from Weber’s toolbox as well, calling for a cap on grocery profits. With the ascension of Prime Minister Mark Carney, however, these tools have been put down. Carney’s nation-building Major Projects agenda has not directly addressed fighting inflation or affordability for everyday Canadians, but Weber has warned that inflation “kills” governments. It may not be apparent while the federal Liberals enjoy strong popularity amid US President Donald Trump’s economic attacks, but how long can affordability be ignored?
In her forthcoming book, Anti-Fascist Economics, Weber argues that explosive price shocks throughout history have led to far-right electoral victories when policymakers refuse to fight inflation. The US New Deal policy package introduced during the Great Depression is the textbook example of how governments can defend democracy against authoritarianism, helping the economy rebuild by taxing the rich, creating jobs, and protecting affordability.
This was a key difference between the rise of Nazi Germany and the defence of democracy in the US under President Roosevelt in the 1930s. While policymakers of the Weimar Republic let inflation run its course towards disaster, US Democrats of the day advocated for the policy tools included in Weber’s arsenal such as price caps, profit taxes, and programs that defend jobs.
Weber’s toolbox may have been retrieved from the lost and found. The BC NDP, in their snap election campaign, have announced several promises straight out of the toolbox. Perhaps recognizing that inflation kills governments, Premier David Eby has announced a permanent “price guard” that empowers the BC Utilities Commission to enforce rules and cap industry profits. Another price guard to defend citizens against rising grocery prices through tackling shrinkflation, capping profits on essentials, and enforcing rules on the grocery industry also hit on this suite of policy ideas.
While these policy announcements are certainly welcome on the frontlines of the affordability fight, their success also hinges on whether citizens can trust policymakers to follow through. This is what helped the meteoric success of Mayor Zohran Mamdani in New York City soon after election, and so there must be accountability and timelines for the roll out of affordability promises in BC.
Weber returns to Canada to launch Anti-Fascist Economics in Ottawa on October 20 in a fireside chat with NDP Leader Avi Lewis. While it is now safe to say that there are Canadian policymakers listening to Weber’s answers to the cost-of-living crisis, the next step must be turning those policy ideas into reality – to ensure affordability and defend Canadian democracy.
