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As in the early 2020s, Canada experienced an inflationary surge in the 1970s which prompted the federal government to control wages and prices.


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The inflationary surge episode and demand for price controls is not new in Canada. In the 1970s, as we see by looking at these few Radio-Canada archives, the rise in inflation accelerated and the Government of Canada tried to curb the phenomenon.

You know, it's very expensive to live in Montreal now. Let's say in Canada in general.

There should be a price control as there should be wage control.

A quote from Two men interviewed during a sidewalk microphone

Sidewalk microphone with host Simon Durivage on the rise in inflation in 1974

These opinions expressed to the host Simon Durivage of the showConsumer Savvyhas not been recorded in recent weeks.

This sidewalk microphone on the cost of living and the rise in inflation was presented during the episode of Consumers in the know of September 4, 1974.

It should be remembered that, during the 1970s, there was an episode of inflationary outbreak.

In 1972, the inflation rate in Canada was 5%.

In 1973 and 1974, this rate increased to 7.5% and then to 10.7%.

It is hardly surprising in this context that the people interviewed by Simon Durivage are sorry about the cost of food or hotel rooms.

The strength of inflation is leading the union movement to demand substantial pay increases.

Many, particularly in the business world, are opposed to these demands which could further fuel the inflationary surge.

In certain sectors of the population, there are demands for price and wage controls.

In Ottawa, the federal government, led by Pierre Elliott Trudeau, does not seem to want to intervene.

During the election campaign in the summer of 1974, the leader of the Liberal Party of Canada even spoke out against a proposal from his counterpart -vis the Progressive Conservative Party of Canada, Robert Stanfield, to adopt wage and price control measures.

On July 8, 1974, the Liberal Party of Canada and Pierre Elliott Trudeau obtained a majority government in part because they had promised not to control wages and prices.

Announcement made by Prime Minister Pierre Elliott Trudeau on the anti-inflation bill.

But as we see in this extract from a televised statement on October 13, 1975, Prime Minister Trudeau changed his mind.

Pierre Elliott Trudeau announces to the nation that he will pass an anti-inflation bill in the Parliament of Canada that will control both wages and prices.

The bill does not, however, attempt to control either the prices of food products or the price of housing.

All components of the Canadian government will have to comply, as well as the 1,500 largest companies in Canada, lawyers, accountants, engineers and doctors.

Salary increases are limited to 10%.

Budget cuts are announced for the federal government and a commission, headed by former federal minister Jean-Luc Pépin, will ensure the application of the law.

Trudeau also asked the prime ministers of the governments of the 10 Canadian provinces to join this anti-inflation attack.

The surprise effect is quite great, especially since the measure decided by the Prime Minister comes into force the same evening at midnight.

< p class="StyledImageCaptionLegend-sc-57496c44-2 sbxsP">Sidewalk microphone recorded the day after Prime Minister Pierre Elliott Trudeau announced an anti-inflation law.

The next day, October 14, 1975, a sidewalk microphone prepared by the Radio-Canada news service showed that the population was quite divided on the anti-inflation law decreed by the federal government.

For some, this measure will be ineffective, others find it too restrictive, still others believe that it comes too late.

< p class="StyledImageCaptionLegend-sc-57496c44-2 sbxsP">Report by journalist René Mailhot on the results of the anti-inflation law one year after its adoption

On October 12, 1976, the program Le 60 presented a report by journalist René Mailhot who proposed to analyze the impact of Prime Minister Pierre Elliott Trudeau's anti-inflation law one year after its adoption.

The show Le 60 is hosted by André Payette.

The vast majority of stakeholders interviewed by journalist René Mailhot are skeptical about the effectiveness of the measure taken by Ottawa.

Certainly, the rate of inflation has decreased, but analysts observe that the international context has greatly contributed to this change in trend and that the law imposed by the federal government has contributed little.

Some also criticize the scope of the law and the harmful influence that it has on the performance of Canadian companies and on foreign investment in the Canada.

The unions are outraged by the salary limit set at 10%.

Can this attempt to control inflation in the 1970s shed light on how to combat the current inflationary surge at the start of the 2020s?

In 1976, the inflation rate fell to around 7.5%, but rose again in 1977 to reach a record 12 .5% in 1981.

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