Wage Controls

Anti-wage control demonstration in the rotunda of the Saskatchewan Legislative Building, October 14, 1976.
Richard Gustin (Saskatchewan Archives Board) R-B11501

On October 13, 1975, the federal Liberal government of Pierre Trudeau introduced a program which it described as an attack on inflation. A key section of the Anti-Inflation Act dealt with a prices-and-incomes policy, and established guidelines for what was described as “responsible social behaviour in determining prices and incomes of groups, together with machinery for administering the guidelines.” The legislation applied to both the public sector and private companies with 500 or more employees, and was administered by the Anti-Inflation Board (AIB), chaired by Jean-Luc Pépin. Farmers, fishermen and regulated industries were exempt from the price controls.

Ostensibly, the legislation was supposed to control both spiraling prices as well as wages, but the prices of all necessities of life except clothing were excluded from the price control side and subject only to price control guidelines. Under the guidelines, price increases were to reflect only increases in the cost of production; the core of the program was thus reduced to wage controls. Workers were to be restricted to maximum wage increases of 10% in the first year of the anti-inflation program, 8% in the second year, and 6% in the third year—regardless of increases in the cost of living. Wage settlements had to be submitted to the AIB, which had the power to roll back increases in accordance with the guidelines established by the legislation. Understandably, trade union leaders saw the legislation as the end of free collective bargaining, with unions bargaining, not with their employers (be they private or public), but with the AIB in Ottawa. They insisted that free collective bargaining could not exist with a legislated ceiling imposed on wage gains, and vowed to both defy and fight controls in any way possible.

Provincially, the NDP government of Allan Blakeney stated in the Throne Speech of 1976 that “in seeking contract settlements with employees in the public sector, the government will be guided by the federal proposals subject to appropriate adjustments designed to maintain fair rates of pay for various classes of employees in relation to their counterparts in other prairie provinces.” On March 2, 1976, the NDP government introduced its own version of the federal wage control program, the Saskatchewan Public Sector Prices and Compensation Board. However, the provincial government did not pass legislation or even an Order-in-Council making the program law. It simply issued a document couched in legal language, printed by the Queen’s Printer, in a format that looked like legislation but was called “Terms of Reference.” The Terms of Reference stated clearly that rulings on prices and wages made by the Saskatchewan Board “shall be made in accordance with the national guidelines.” The Board was composed of three individuals: Everett Wood, retired NDP MLA; Jim Maher, businessman and former Liberal MLA; and Ernie Boychuk, Chief Judge of the Provincial Magistrate’s Court. The Board had no power to roll back prices, fees, or wages—only to make recommendations to the Minister of Finance.

The imposition of wage controls federally and provincially provoked an immediate and militant response from organized labour. Unions in Saskatchewan and across Canada rallied to a call by the Canadian Labour Congress and staged a mammoth work stoppage on October 14, 1976. It was estimated that over one million workers walked off the job that day to demonstrate their opposition to wage controls. Rallies were held in every major city, and in Saskatchewan almost 28,000 people participated in the voluntary work stoppage. While many groups were affected by controls, the federal government itself states that “some 4.2 million working Canadians had their wage increases limited. Unions were severely restricted in their ability to bargain for higher pay.” Wage and price controls were phased out in 1978, and the AIB was dissolved the following year. Saskatchewan withdrew from the program on September 30, 1977.

Patricia Gallagher