Whether it was 1975 or 2022, the federal government tried to push the cost of inflation onto workers, and CUPE was there to fight back. Then, like now, CUPE argued that workers don’t cause inflation, so they shouldn’t be asked to bear the brunt of the cost.
Inflation went above 10% in 1974 and 1975. This prompted Prime Minister Trudeau (Pierre, that time!) to pass the federal Anti-Inflation Act in 1975, with the goal of controlling the increase of prices and wages. The Liberal government passed the Act despite having campaigned explicitly against such a proposal just a few months before, in the 1974 elections. The Act established an Anti-Inflation Board (AIB) to enforce a three-year cap on wage increases for firms with more than 500 employees and all federal employees. Most provinces signed an agreement with the federal government to apply the wage cap to public sector workers in their jurisdictions.
By the beginning of 1976, workers saw that while their wages were being held back, prices were continuing to increase – especially for necessities, like food and energy. Sound familiar?
Big private sector employers were bragging about how the savings from wage controls were padding their profits. At the same time, executives were able to avoid wage controls by re-writing job descriptions, engineering promotions, and deferring profit sharing. The wage and price controls hit the hardest the workers who could least afford it.
In response, CUPE organized 100 anti-wage control meetings to hear from members. CUPE argued that the Anti-Inflation Board didn’t understand the complexity of collective bargaining, or the equity concerns that might justify larger wage increases for some groups. In October 1976, one million workers, including 100,000 CUPE members, participated in a one-day general strike against the wage and price controls. Within six months, provinces started withdrawing from their agreements with the AIB, and the federal government ended the program 8 months before originally scheduled.
Now, in 2023, we have Bank of Canada governor Tiff Macklem discouraging employers from giving their workers pay increases, and giving ammunition to arbitrators to decide against wage increases on the grounds that it might cause a wage-price spiral.
We’ve seen inflation before. But we continue to affirm that workers should not have to pay the price for bad policy.
Have a look at these excerpts from the special edition of the Journal, published in 1976.