On October 14, 1976, over one million workers, unionized and non-unionized, walked off the job for a one-day strike. The reason was not poor working conditions, nor a lack of benefits. In fact, the strike was not even to protest against management. The intent of the strike was to demonstrate the widespread opposition of labour toward the government’s anti-inflation policy, specifically wage controls. The day of protest on October 14, 1976 marked the anniversary of the federal government’s adoption of Bill C-73, which established a board to monitor and control wages and prices with the intent of lowering inflation. Unfortunately, from October 1975 to 1976, the Anti-Inflationary Board appeared to be controlling only wages, leaving prices at the discretion of large corporations. The Day of Protest on October 14, 1976 was an expression of labour’s solidarity throughout Canada and of the capability of the average Canadian worker to demand change for the greater good even at his or her own personal detriment.
The Liberal Government under Prime Minister Pierre Elliott Trudeau was elected in the 1974 Canadian election. In a time of high inflation, they campaigned under a mandate opposing wage controls. Prime Minister Trudeau is quoted in a speech given on February 28, 1974 as saying, "Income controls risk hurting the small and the poor more than they do the big and the rich; and while that might be of minor concern to the more conservative governments and political parties, it is of fundamental concern to this government."
The Prime Minister continued to campaign along this mandate, even going so far as to criticize the leaders of other parties who had stated that they would impose wage and price controls to counter inflation. On October 13, 1975, Bill C-73 was passed through Parliament. This bill, initiated by the Federal Liberal Government, was designed to curb inflation within Canada by imposing controls on wages and prices in order to slow the level at which prices were rising in Canada. It outlined the creation of an Anti-Inflation Board, comprised of some two hundred members, whose mandate was to monitor and control wages and prices. In effect, the Trudeau government passed legislation that was in direct conflict with their campaign promises only sixteen months into their mandate.
The early nineteen seventies were a period of high inflation for most industrialized countries. The two official reasons for high inflation rates were domestic and external problems. According to Statistics Canada, between 1973 and the end of 1975, consumer prices on an annual basis increased 32.2 percent. In that same period, the cost of living increased by 34.6 percent while wages and salaries rose by 32 percent. Prices were rising at alarming rates and the government realized that something needed to be done to curb this rise. The causes could be traced back to the 111 percent increase in pre-tax corporate profits and the 26.8 percent rise in earnings per worker. Anti-inflation legislation sought to control wages, which would in turn lower costs, thereby lowering prices if corporations operated at the same profit levels. Controlling the prices that corporations could charge would thereby lower prices and the price level. Externally, the Canadian economy was suffering as exports dropped due to the economic depressions occurring in our largest trading partners. The faltering economies in the United States, Japan, and the United Kingdom caused them to curb domestic and foreign spending, thereby dramatically lowering Canada’s exports. The government had two options at this point. They could wait for the inflation rate to slow down due to the natural reaction of the market economy or they could choose to try to stop one of the above problems. The Canadian government chose to do the latter.
The Anti-Inflation Program was announced shortly after the passage of Bill C-73 in the fall of 1975. Prime Minister Trudeau stated at the time, " The basic cause of inflation in Canada is the attempt by too many people and too many groups to increase their money incomes at rates faster than the increase in the nation’s wealth.":
While this assessment is partially true, as it is a very basic definition of inflation, Canadian workers felt that this was an unfair criticism directed at them. While workers wages were in fact rising, profits of large corporations were rising at an even faster rate. Workers realized from the outset that it is relatively easy to control wages, especially those negotiated by unions because the agreements are generally well publicized and involve a large number of workers. They also realized that it is difficult to control prices as businesses are numerous and monitoring all of their prices is nearly impossible. The other issue that was a difficulty for workers was the slackness of controls on profits. Bill C-73 allowed businesses to maintain their profits at 95 percent of their previous level while wages were held at a low percentage increase.
"A firm will be regarded as having acted in accordance with the program…’ if they are the beneficiaries of…’unusual productivity gains resulting from the efforts of the firm, or of favourable cost developments which could not reasonably have been anticipated."
Workers saw this statement as a loophole for firms to be able to make as many profits as it wishes without control from the Anti-Inflation Law. Some corporations had also found ways to circumvent the controls outlined by the bill. One example outlined in many union publications is a Loblaws store in Toronto who closed and then reopened with higher prices as a Ziggy’s store, which is a subsidiary of Loblaws. Workers, both unionized and non-unionized, were enraged by this bill, which was seen to be a direct attack on working Canadians.
For two years after the Anti-Inflation Bill was passed, unemployment continued to rise. Union leaders blamed this rise on the Anti-Inflation Program, which was partly justified. Wages of Canadian workers were rising more slowly than the cost of living. Therefore, workers were making less in real terms than they were in previous years. Inflation was causing businesses to close and wage controls were causing poverty among workers. It was a vicious cycle and the unemployment rate climbed to 7.1 percent in 1975.
Pierre Elliott Trudeau had a vision of a "New Society" for Canada. Within this vision, he is quoted by the Saskatoon Star Phoenix, among other publications, as saying, "We can’t destroy the big unions and we can’t destroy the multinationals. Instead, the government must take a large role in running them both." Trudeau later refers to this as "extreme authoritarianism." Unionized workers felt that this statement was extremely unfair. Among workers it was felt that unions did not have anywhere near the power of a large multinational. However, this was only the first problem. The major problem in the above statement is that it justifies government interference in all aspects of labour. Organized labour fought for many years for the power it had in 1975. There were many hard won battles that gave unions the right to collective bargaining and the right to strike without interference from the government. Bill C-73 took these powers away from the unions. The bill put a control on wage increases of 8 percent for the first year, 6 percent for the second year, and 4 percent for the third year. Any collective agreements negotiated after October 14, 1975 exceeding these limits could be rolled back so they abide by the wage controls. This is exactly what happened.
The Anti-Inflation Board, which was established through Bill C-73, took contracts that were freely negotiated between employer and employee and changed them to fit within the guidelines. In some cases, when employees had already been paid the higher amount; they were forced to repay it when their wage increase was rolled back. Theoretically, the Anti-Inflation Board had an appeal process. However, according to pro-labour publications, the results of the appeal were usually worse for the worker than the original settlement. Workers and unions were both frustrated by their lack of power. The legal rights of unions in Canada were being supplanted by what seemed to be a government arbitrarily determining collective agreements. Workers no longer had the freedom to negotiate. The labour movement took a giant step back with the advent of Bill C-73 and the Anti-Inflation Program came to be known by workers as the Anti-Labour Program.
The federal government’s position on this issue was that only union leaders were opposed to the Anti-Inflationary program and not the workers themselves. In Saskatchewan, this view was shown to be wrong by a province wide rally of over 4,000 people on February 2, 1976 opposing the Anti-Inflation Program. The Canadian Labour Congress and divisions of the Canadian Union of Public Employees in every province agreed at their provincial conventions in 1975 and 1976 to oppose the wage controls and to encourage their members to go out on a one-day strike on October 14, 1976. This day of protest was designed to demonstrate to the federal and provincial governments that Canadian workers would not accept this invasion of their freedoms as workers to negotiate their own agreements. All supporters of Canadian workers were encouraged to join the day of protest.
Across Canada over one million people participated in the day of protest. Rallies were held in every major city. In Saskatchewan, 27 779 people participated in the demonstrations. Due to the strength of their beliefs, protesters accepted a one-day cut in pay in order to participate in the voluntary strike. Senior citizens, pre-schoolers, students, and families all participated to show their support of workers and their opposition to government policy of the day. Day of Protest October 14, 1976 was an example of the solidarity of workers and of the Canadian people’s willingness to support their beliefs even though it may be detrimental to them financially. The strike was not in essence a strike of unionized workers; it was a day when workers banded together despite their differences to fight oppression and financial hardship from the government.
Unfortunately the federal and provincial governments continued to impose wage controls for more than a year following the day of protest. The Saskatchewan Federation of Labour was calling for another demonstration in Regina on October 14, 1977 to mark the anniversary of the day of protest and to launch Fight Back Year III. Saskatchewan Finance Minister Walter Smishek announced in his budget speech that the Saskatchewan NDP Government would withdraw from the federal wage control program by September 30, 1977. Employees under the Saskatchewan Federation of Labour met this announcement with scepticism. This reaction was an indication of the damage that wage controls had done to the employment relationship.
Day of Protest October 14, 1976 did not force the government to change its policies. The Trudeau government did not immediately cancel Bill C-73, nor did it apologize to the workers that it had harmed. Instead, the day of protest gave the government a clear indication of the solidarity of workers and of the expectation that the Canadian public has that the government be accountable for its policy. Canadian workers and their supporters gave up a day of wages in order to demonstrate to the government that they will not support bad policy in order for corporations to continue to grow. On October 14, 1976, Canadians showed their strength in numbers and their will in their determination to support their beliefs.