Anti-Inflation Act

The Anti-Inflation Act was a Canadian Act of Parliament that was passed in 1975 by Pierre Trudeau's government in order to slow down the rapidly increasing price and wage inflation.^[1] Among its many controls, it limited pay increases for federal public employees and those in companies with more than 500 employees to 10% in the first year, 8% the next, and 6% thereafter.^[2] The price and wage controls were enforced until 1978 and the Act was repealed in 1979. A similar program aimed at the public sector only was introduced in 1982, known as the six and five.

Prior to 1975, the Bank of Canada had warned the government about the dangers of the current inflation which was roughly 10% a year. In response to this, the government brought in the Act which created the Anti-Inflation Board to set wages and prices.

The Act proved highly contentious, and there was much debate over whether the federal government had overstepped its powers in enacting the law. Consequently, the government put a reference question to the Supreme Court of Canada, and in 1976, the Court passed down its opinion in the Anti-Inflation Reference where they said that the law was constitutional.

See also

• Incomes policy

References