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3 Wisemen | Trudeaumania
| October Crisis |
Bilingualism |
Petro Canada |
72 Super Series |
Wage & Price Controls
| 1976 Olympics |
PQ come to Power |
Interlude |
Western Alienation
| 1980 Referendum |
The Constitution |
Changing of the
Guard During
the 1974 Federal election the Conservative leader,
Robert Stanfield proposed that a wage and price freeze
should be imposed on the Canadian economy in order
to fight the quickly accelerating inflation rate. The
Trudeau government opposed this policy and fought the
election against wage and price controls.
The early 70's had brought political
instability on the international scene and with the
formation of OPEC in the early 60's (Organization of
Petroleum Exporting Nations) the scene was set. OPEC
began to raise the price of crude oil which in
conjunction with American hyper spending over the
previous 10 years began to drive up inflation rates.
Unions responded to arising prices by striking and
demanding equivalent wage increases while businesses
passed on the increase in production costs to the
consumer in the form of higher prices for products. Due
to the impact of increasing inflation in most other
developed countries, Canada found it difficult to
control affairs in the domestic economy.
The Liberals won the
election but by 1975 the inflation rate which had been
10.7% in 1974 had climbed to 10.9% and showed no sign of
abating. Trudeau was forced to rethink all of the
options and when he introduced the Anti-Inflation Act in
Parliament it contained wage and price controls for
various segments of the economy.
The legislation was only one part of a
program that also imposed limits on Federal government
expenditures, tighter monetary policies and government
restrictions on fiscal policy.
Wage increase were to be restricted to
10% during the first year of the program, and then 8%
and 6% during the following two years. These
restrictions applied to all Federal government employees
and employees of companies that employed over 500 works.
The implementation of these policies was overseen by the
anti-inflation board which had the ability to recommend
the reduction in prices of consumer goods, wage
rollbacks and rebates to customers of various services.
By 1978 the
effects of the wage and price controls, all though not
definitive, were viewed as a failure and were phased
out. Within a year the anti-inflation board was
dissolved. The program was generally disliked by
Canadians and the government intrusion into the free
market economy had many unforeseen results which created
more difficulties then were solved by the program.
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