What Conservative MPs Said About Inflation and the Liberal-New Democratic Entente


“We can’t see it. But we’re all trapped inside these strange, repeating loops.” – The Matrix Resurrections  

I recently stumbled upon what some backbench Conservative MPs said on inflation and the Liberal-New Democratic Entente. They denounced the Trudeau government for its inaction and refusal to combat inflation or treat it as something serious at all.

“The cost of living rose by 1.3 per cent in one month, the highest monthly increase since […]. This is damning evidence of the results of the government’s do-nothing policy; and I place equal blame on its partner in what I call this clandestine coalition that governs Canada, the New Democratic Party. […] The patchwork of temporary relief measures will have virtually no effect on the increase in the cost of living. The Trudeau government, coalesced with and kept in power by the NDP, is providing no leadership to Canadians in the fight against inflation.”[1]

So said the Conservative MP from Frontenac—Lennox and Addington.

One of his colleagues went further.

“The consumer price index figures released this morning and the unemployment figures released on Tuesday, combined with the ever-increasing inflation we are experiencing, indicate that not only is the economy of this country being mismanaged but it is being mismanaged by a group of incompetent politicians. The feelings of the people of Canada would indeed be truly felt if a general election were called today, tomorrow or perhaps a week hence. We all know that the ‘Liberal-Democrat’ party is afraid to face the electorate at this time. They know that the smaller portion of the coalition will disappear and that the larger part will be virtually thrown out of office.

No longer can we be content to accept the government’s wait-and-see philosophy. No longer can Canadians be expected to be hypnotized with meaningless assurances by the Minister of Finance […]. We need action rather than part-time remedies or temporary measures. It is not the effect that needs to be cured-which is what the government in its blindness is attempting-but it is the cause. The cost of living figures released by Statistics Canada this morning show what Canadians have known for months: inflation is getting out of hand and we are being thrown back into the dark days of the twenties and the thirties.

God help us, especially since this situation could have been prevented. We have experienced the biggest monthly increase in the cost of living for 22 years, yet the government indicates that because this is a world-wide phenomenon there is not too much they can do. It is as bad as the Prime Minister (Mr. Trudeau) saying; ‘As the world turns, so does the universe unfold.’ It all means one thing-that the government is powerless to do anything and is quite prepared to sit and try to weather out the storm, holding hands with its partner in coalition. The patchwork of temporary relief measures introduced by the government will have virtually no effect on the increase in the cost of living.”[2]

These Conservative MPs of course made these comments about high inflation and the cooperation between the Liberals and New Democrats in September 1973.

I was struck by the similarities in the debates between the 29th Parliament (1972-1974) and the 44th Parliament (2021-present). In both parliaments, a man named Trudeau led a single-party Liberal minority government supported to varying extends by the New Democrats to yield a functional majority. Both eras also saw sharp increases in inflation.

In September 1973, Ministers spoke repeatedly of “temporary” measures to combat inflation, which, by definition, means that Trudeau and Turner viewed higher inflation as a temporary problem requiring temporary solutions.[3] And these debates happened fully one month before the First Oil Crisis, which hit in October 1973 as OPEC embargoed oil exports to the West as punishment for supporting Israel in the Yom Kippur War and only increased inflation yet further. But no one in September 1973 could have known that inflation would remain at least 10% per year until 1983 and that the Bank of Canada would not succeed in constraining the rate of inflation to around 2% per year until 1992. Inflation reached 9.38% in 1973 and 12.65% in 1974. It dipped to “only” 9.42% in 1975 and 5.63% in 1976, but the leaped back up to 9.4% in 1977, to 8.6% in 1978, 9.76% in 1979. After the Second Oil Shock, inflation shot up yet further to 11.06% in 1980 and 12.12% in 1981. It then started to drop in 1982 at 9.27%, 4.59% in 1983, and 3.72% in 1984.[4]

We do not necessarily face the same prospect today of one or two decades of continuous high inflation, especially in light of the agreement on inflation control that the Bank of Canada struck with the Department of Finance in 1991.[5] Only at that stage, after nearly two decades of high inflation, did the Bank of Canada finally agree to use interest rates, or monetary policy, to control inflation and limit it to around 2% per year — which I find baffling.[6] But we should take inflation seriously because it diminishes our purchasing power and increases our cost of living, and because it can remain high for longer than we like. It would be foolish to think otherwise, yet I have recently encountered strange examples of this wishful thinking and denialism from septuagenarians who lived through the persistent high inflation of the 1970s and 1980s and who should therefore know better from their own experience.

Inflation has a way of creeping up on us and then entrenching itself for longer than we would like. And on 22 April 2022, CBC News reported that inflation hit 6.7%. [7].

Notes

[1] Douglas Alkenbrack (Conservative MP for Frontenac—Lennox and Addington), “Motion to Adjourn under S.O. 26: The Canadian Economy – Increases in the Cost of Living and Interest Rates,” in House of Commons Debates, 29th Parliament, 1st Session, Volume 6, 13 September 1973, at page 6545.

[2] John Wise (Conservative MP for Elgin), “Motion to Adjourn under S.O. 26: The Canadian Economy – Increases in the Cost of Living and Interest Rates,” in House of Commons Debates, 29th Parliament, 1st Session, Volume 6, 13 September 1973, at page 6561.

[3] Pierre Elliot Trudeau (Prime Minister of Canada), “The Canadian Economy: Statement by Prime Minister on Measures to Deal with the Cost of Living” in House of Commons Debates, 29th Parliament, 1st Session, Volume 6, 4 September 1973, at page 6182. Trudeau here spoke of “temporary export controls on beef and pork.” Marc Lalonde (Minister of National Health and Welfare), “Family Allowances Act and Youth Allowances Act,” in House of Commons Debates, 29th Parliament, 1st Session, Volume 6, 7 September 1973, at page 6352. Lalonde said, “This bill brings a temporary solution to the problems of such people.” John Turner (Minister of Finance), “Motion to Adjourn under S.O. 26: The Canadian Economy – Increases in the Cost of Living and Interest Rates,” in House of Commons Debates, 29th Parliament, 1st Session, Volume 6, 13 September 1973, at page 6513. “We reduced tariffs in a temporary way. […] We imposed temporary export controls on cattle, hogs, beef, pork and number of feed grains to prevent world-wide export demand causing shortages and shar rises in prices in Canada. We proposed an increase in family allowances to $20 a month beginning in 1974, and we have just instituted on a temporary basis for three months, non-taxable interim payments of $12 per child.”

[4] Inflation Tool, “Canada Historical Inflation Rates,” accessed 19 April 2022. Unfortunately, Statistics Canada does not make its historical data on the “consumer price index” (its euphemism for inflation) easy to find or decipher for anything before 1990. Statistics Canada, “Historical (Real-Time) Releases of Consumer Price Index (CPI): Statistics, Measures of Core Inflation – Bank of Canada Definitions,” accessed 19 April 2022. The Bank of Canada only goes back to 1993. Bank of Canada, “Inflation: Definitions, Graphs and Data,” accessed 19 April 2022.

[5] Bank of Canada, “Inflation: Agreement on the Inflation-Control Target,” accessed 19 April 2022.

[6] Kevin Carmichael, “Roaring Inflation Leaves Bank of Canada Little Choice But to Come on Strong,” Financial Post, 20 April 2022.

[7] Pete Evans, “Canada’s Inflation Rate Jumps to New 31-Year High of 6.7%,” CBC News, 20 April 2022.

About J.W.J. Bowden

My area of academic expertise lies in Canadian political institutions, especially the Crown, political executive, and conventions of Responsible Government; since 2011, I have made a valuable contribution to the scholarship by having been published and cited extensively. I’m also a contributing editor to the Dorchester Review and a member of the editorial board of the Journal of Parliamentary and Political Law.
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