What are the structures, practices, procedures, institutions, and players that produce and sustain food insecurity? Follow the money.
Rich, but unequal, city
Even though Toronto is a rich city, the distribution of economic success over the last two decades has been uneven, and Thorncliffe Park and Flemingdon Park have not benefited nearly as much as other Toronto neighbourhoods. In the figure below, the neighbourhoods of Toronto are shaded according to their 2018 income. Thorncliffe and Flemingdon, like much of North Toronto and Scarborough, are relatively low income (thus light shading) compared to central Toronto, south Etobicoke and the Downtown. Furthermore, the arrows indicate inflation-adjusted income growth from 2001 to 2018, with black arrows indicating an increase and red arrows indicating a decrease, and the arrow length indicating the magnitude of growth. Almost all income growth in Toronto from 2001 to 2018 was concentrated in the downtown of Toronto, and Thorncliffe and Flemingdon have seen very little growth.
Big Profits for Big Business,
Increasing Prices for Families
Economists report that increased profits across major industries – not worker wages, as is often argued – are driving inflation. For example, a report by economist Jim Stanford noted, “New data from Statistics Canada confirm that corporate profits in Canada have increased dramatically since the COVID pandemic, reaching in 2022 the largest share of GDP in Canadian history“ (Stanford, 2022, p. 1). (See the full study here.). Addressing the causes of growing profits, Stanford writes, “Not coincidentally, the sectors recording the strongest increases in profits were also the source of the fastest price increases experienced in Canada since 2021. Products like gasoline, groceries, mortgage interest, home energy products, and building materials have led to the acceleration of inflation – and those higher prices flow directly into the record profits recorded in those 15 sectors.” These corporate sectors posted huge increases in profits, and this profit growth is paid, at least in part, by consumers. Specifically, we note that grocery store chains reported a 120% growth in profits between 2019 and 2022.
Inflation
Stanford writes, “Since unprecedented and concentrated increases in corporate profits are so clearly associated with the main drivers of higher inflation, policy-makers should consider other ways to reduce inflationary pressure – rather than subjecting the entire economy to a ‘cold bath’ of employment-reducing monetary tightening” (Stanford, 2022, p. 9). As a result of this method of slowing the economy, the ability for workers to negotiate their wages, working conditions, and so on, is undermined.
In Thorncliffe Park, most of the rental housing is private and for-profit, and a large proportion of this housing is owned by two corporate owners: Morguard and Starlight Investments. Public Sector Pension (PSP) Investments, which is the Crown corporation that invests funds for the federal public service and other public services, is a major investor in Starlight. Roughly half of Starlight’s portfolio is in the GTA. See here. Starlight is the owner of the buildings at 71, 75 and 79 Thorncliffe Park Drive. They implemented two above-guideline rent increases in the past two years. PSP Investments – and indirectly, the Federal government – owns $31 billion in real estate, and in 2022 posted returns of 25% (see: https://twitter.com/renovictions/status/1625525019643203585).
While social services and public infrastructure remain underfunded and inadequately resourced, Morguard, the second major owner of rental housing in Thorncliffe Park, received some of the biggest Covid bailouts available in Ontario, despite being an almost $20 billion company with good revenue. (See: These companies got Ontario taxpayer money for tourism losses during pandemic | CBC News).
CCPA Economist Ricardo Tranjan explained, “We have a housing system that is set up to generate profits and provide returns on investments. More and more, the expectation is that margins of profit will be really high, and investments will be quick and also quite high. And then, we spend day after day worrying, and discussing the fact that we don’t have housing security or housing affordability. Well, we can’t have it both ways. We can’t set up a housing system to generate profits and high margins of return and expect it to generate housing security and housing affordability. That’s not what markets do.... We tend to think about the housing question as a crisis. We need to challenge that framing. What we’re seeing is not a crisis. We have a market that is set up to generate profits and to generate high returns on investment, and it does that extremely well. The market is working on its own goals and the outcomes that it delivers. It’s working really well. What it’s not delivering is housing security. What it’s not delivering is housing affordability. We need to put pressure to change the market” (CBC Radio, Metro Morning, August 31, 2023). He calls for redirecting subsidies to developers to meaningful investment in non-market housing, and more tenant protections for those who are renting in the private sector.
