Yes. We did see an unprecedented surge in corporate profits in Canada, which was particularly marked in 2022. Net corporate operating surpluses that year reached 17% of GDP, which is the highest in history, which is in itself striking. Canadians are trying to grapple with a health emergency and an economic emergency, yet for corporate profits, it was the best year ever.
That increase in profits was not spread evenly across the entire economy. In our research, we identified some key strategic sectors where companies had a combination of leverage in the overall supply chain, usually reinforced by a high degree of concentration in that sector, that allowed them to take advantage of the disruptions of the pandemic and the adjustments afterward to increase margins, markups and their final profits.
The encouraging side of this is that the same relationship has held on the way down as well as on the way up. We have seen a moderation in corporate profits in the period since 2022. That was confirmed again in this week's latest GDP data for the first quarter of 2024: Corporate profits fell again a little bit, as did inflation. In fact, measured by the Statistics Canada consumption deflator, which is equivalent to the CPI in terms of what it covers, inflation is now back to the 2% Bank of Canada target.
We've seen a normalization of factor income shares, in part because the initial conditions that allowed companies to increase prices so much have dissipated for the most part, so we are seeing, I think, a return to somewhat normal pricing behaviour. As a result, inflation has come down. It had nothing to do with our labour market or our wages.