The Lucknow Sentinel, 1976-10-06, Page 11Government Gouvernement
' of Canada du Canada
THE L
INFLATION
PROGRAM
A REVIEW
YEAR ONE
WEDNESDAY, OCTOBER 117.4. THE LUCKNOW SENTINEL, LUCKNOW, ONTARIO
PAGE. jtvign
ON FROG
After one' year, the anti-inflation program
dolfig what it set out to do.
The most, important achievement has been
the dropin the inflation rate. A year ago,
consumer prices were rising at a rate of 10.6%.
By August 1976, that rate of increase had :
dropped to 6.2%. This fall some unavoidable
increases in energy costs and municipal taxes
will affect the rate of.inflation. In spite of this, the
first year target of an inflation rate of no more
than 8% will be met:
Increases in all forms of income-Wages,
salaries, .fees, Profits, dividendS-are also being
successfully. restrained. On the average, prices
have gone up less than wages this year. This
'means that most Canadians can cope a bit
better, we have more buying pawer,than we had
before the program began.
: The goal of the second :year
inflatiOn program is to'bringinflation clOrWri.:even •
further, to tio•more than 6%.. Thin can be. achieved.:
only if increases in -everything sloW down together.
In our 'kind of, market economy; prices have
to, .be able to move up and. down to some 'eXtent.
But the anti-inflation program does 'put an. .
effective restraint on prices by controlling profit ,
margins.- In. the'SecOnd, year,' the' price and profit
a controls re being changed -to, make the rules
simpler and to apply restraint more fairly-among'
different cornpaniet. They also include important
incentiVes, to encourage the investments the
country needs to make the economy grow and
Create new jobs for CanadianS.'New investment
credits.Will.make allowances for company profits
re-invested to: boost production and productivity
• In the area of wageS and Salaries, the
second year Guidelines' limit increases to 6% as
a protection against price increases, with 2%
more added as a share of national productivity.
This, Guideline is designed to protect and
improve the real income of Working Canadians,
while bringing down the rate of inflation..,.
All governments .are restraining their
expenditures. The federal 'government is limiting
growth in its own 'spending to keep it in line with
the overall growth of,the Canadicin economy. -
This means that every day hard choices Must be
made to limit, new programsand trim old ones.
These choices are painful. But they, have to be
made if the government is to restrain -its costs
'and avoid contributing to inflation.
Nobody likes controls:Not the people
Whose private deCisions are affected by them.
And not the gc*el•riments that have to enforce
them.- But controls were and are needed, to
bring inflation down. and teassure a growing
economy". The program will be terminated by the'
end Of 1978. Until it is ended, thegovernment is
committed to making sure the controls work hard
.-to bring about a continuing reduction in the rate
of inflation,
Inflation has to be cut down to protect our
personal buying power, our savings and
pensions, and jobs for Canadians. If last year's
spiral of rising prices and incomes had.
continued, Canadian-I-made produCts .would
soon be unable to compete in world Markets.
Imports could easily undercut goods produced
and sold here at home: It's eSpecially important '
for us to keep our prices and costs competitive
'with the United. States, and on both counts the
U.S. is still' doing better than we are. Finally,
inflation also hurts investment. And when
investment goes down; unemployment goes. up.
After a year of controls, inflation has come
down. Progress has been made, in protecting
Canadian jobs and iinproving Canada's well:-
being. The success Of the anti-inflation program
so far has depenCled a great deal on the co-
opercftion of many. Canadians. With continued
co-operation, we can all look forWand to sharing
a more prosperous and growing economy.
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