Inflation has increased sharply across the world over the past year. Global supply challenges, elevated commodity prices, and a war in Ukraine all contributed to inflation in Canada. Global and domestic pressures combined to push inflation to 40-year highs.

When prices go up, money can’t buy as much as it used to. This loss of purchasing power hurts everyone’s standard of living. When inflation is high, consumers, businesses and investors are uncertain about what their costs will be from one day to the next. High inflation is often unstable and unpredictable, and that keeps the economy from performing at its best.

Manitobans have felt the impact of high inflation this past year, including having to pay higher prices for groceries, fuel, and rent. Inflation is especially challenging for people on fixed incomes, and it’s bad for business.

Earlier this year, the Manitoba Chambers of Commerce released our annual Manitoba Business Outlook Survey commissioned by Leger. It should perhaps come as no surprise that inflation was the number one concern expressed by businesses.

In fact, three out of four Manitoba business leaders told us that inflation is the biggest barrier to economic recovery.

In terms of actions that businesses are taking to combat inflation, 48% of businesses are reducing costs internally; 45% are passing on costs to customers; and 33% have delayed making investments into their businesses.

Accordingly, the Bank of Canada increased interest rates eight times in ten months to control inflation. However, on March 8, Canada’s central bank told Canadians that monetary policy is doing its job, and inflation is starting to come down.

One day after the Bank of Canada confirmed that it would pause interest rate increases – the Manitoba Chambers of Commerce was honoured to host the central bank’s Senior Deputy Governor, Carolyn Rogers, for a special luncheon event.

In her speech to a packed room of business leaders at Fairmont Winnipeg, the Senior Deputy Governor who was born and raised in Manitoba pointed out that Canada’s current rate of inflation, while still too high, is the second lowest in the G7. Furthermore, Canada’s economic growth has been the strongest among the G7 countries since the beginning of last year.

The International Monetary Fund expects Canada to have the strongest average GDP growth in the G7 over 2023 and 2024. Even so, Rogers acknowledged that there remain many hurdles for the economy to overcome to reach the Bank of Canada’s target inflation rate of two per cent.

The Senior Deputy Governor cautioned that this is a conditional pause, and that if inflation comes down as quickly as forecast, the Bank of Canada should not need to increase interest rates further. In Canada, wage growth will need to accompany productivity growth for us to reach out 2% target – a rate which the central bank believes is stable for Canada.

The Manitoba Chambers of Commerce has an important role to play as a catalyst for meaningful conversations and connections. Events such as this one offer important opportunities for business leaders and members of public office to come together and learn about issues that matter to you.

We are committed to serving members in new and responsive ways, and we believe this represents the very best of what the Manitoba Chambers of Commerce can be: an organization that anticipates, shapes, and embraces change.

Thank you to the Associates of the Asper School of Business for their partnership on this event, and to presenting sponsor, the University of Manitoba, and supporting sponsors, CPA Manitoba and the Manitoba Institute of Trades and Technology.

To learn more about the Mantioba Chambers of Commerce and upcoming events please visit www.jointhechamber.ca