Zurich Citizens News, 1976-10-06, Page 17Page 18 -Citizens News, October 6, 1976
THE ANT1-INFLATION PROGRAM
Where we are
and where we're going.
1.
After one year, the anti-inflation program is
doing what it set out to do.
The most important achievement has been
the drop in 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 power than we had
before the program began.
The goal of the second year of the anti-
inflation program is to bring inflation down even
further, to no more than 6%. This 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
controls are being changed to.make the rules
simpler and to apply restraint more fairly among
different companies. 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.
Government Gouvernement
of Canada du Canada
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 Canadian economy.
This means that every day hard choices must be
made to limit new programs and 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 governments that have to enforce
them. But controls were and are needed, to
bring inflation down and to assure a growing
economy. The program will be terminated by the
end of 1978. Until it is ended, the government 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 -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 improving Canada's well-
being. The success of the anti-inflation program
so far has depended a great deal on the co-
operation of many Canadians. With continued
co-operation, we can all look forward to sharing
a more prosperous and growing economy.
111E ANTI -
'INFLATION v1l-
'IN.AIOw
PROGMA
A'
YEAR ONE