Canadian anti-inflation drive mostly voluntary -- for now
Ottawa — Many workers, civil servants, and executives in Canada will see their wages and salaries increase only 6 percent in the next year. But consumer prices may rise by close to 10 percent.
This situation is the result of a major drive by the government of Prime Minister Pierre Trudeau to revive Canada's hard-hit economy through an extensive anti-inflationary strategy.
The Liberal government hopes to relieve inflationary pressures by limiting increases both in prices regulated by government and in salaries and wages. Inflation has now pushed the consumer price index to 11 percent on an annual basis.
While something less than mandatory, the Trudeau program is gradually spreading to include much of Canadian society. But if the voluntary approach fails, it appears the Liberals will turn to a full-scale, government-administered freeze on wages and prices.
For the moment, Mr. Trudeau's push for self-imposed wage and price restraint seems to have won the support of many, perhaps most, Canadians. Their approval is closely tied to a widespread conviction that something must be done about the economic emergency now being felt in the form of record high unemployment, crippling interest rates, and other painful economic woes.
The program deserves ''a real trial,'' said Ian Sinclair, head of a group of businessmen advising Mr. Trudeau on this issue. Mr. Sinclair, chairman of Canadian Pacific, one of the country's largest corporations, said he is tired of the ''bad-mouthing'' he has heard recently about Canada's economy.
Such talk, he said, ''gives the impression that everybody has given up on this country, and I'm sure they haven't.''
Opposition has been slow to build so far, but Mr. Trudeau's program could lead to explosive confrontations by autumn. The labor unions particularly have been contending that their members were falling behind inflation even before the Liberal government's voluntary restraint plan.
Mr. Trudeau's policy, first announced in late June, came in response to an economic scene that in many respects is the worst in Canada since World War II. Moreover, it came at a time when anti-Liberal resentment over the economy threatened to deal Mr. Trudeau's party a possibly lasting blow.
At the heart of the Liberal program is the argument that wage and salary increases should be held to 6 percent in the next 12 months and to 5 percent in 1983-84.
The Liberals have made the guidelines mandatory for 500,000 civil servants and are lobbying for ''six and five,'' as the program is known, to be accepted by all employees across the country.
Buoyed by a positive response to their proposals, the Liberals have gradually widened the net of wage and price restraint in recent weeks, eliciting support through whatever clout the government could muster.
In a major step, Mr. Trudeau said ''six and five'' ceilings on price increases must be met by the hundreds of government-owned corporations such as the telephone company, Bell Canada, and Air Canada, one of the nation's two major airlines.
In doing so, Mr. Trudeau is risking potentially damaging feuds between Ottawa and some major publicly owned corporations, as well as with farmers and others who must live with prices set by government boards.
Mr. Trudeau said the hundreds of Canadian companies that receive grants, loans, or other help from Ottawa will also be told they must keep their prices within the ceiling.
He said he favored a situation in which ''every grant and contract and subsidy that the government pays out of the taxpayers' money would be negotiated with this in mind and that it would be used as leverage.''
Most recently, the Liberals sought to extend the 6 percent guideline to prices and wages set by Canada's 10 provincial governments. It was a move that risked stiff and controversial resistance from this country's powerful provincial leaders. But most of the provinces, with the important exceptions of Alberta and Ontario, have already taken such moves as slapping wage restraints on provincial civil servants.
Mr. Trudeau's economic strategy has won considerable support, but warnings are beginning to be heard about the potentially devastating backlash that could emerge if the wage restraint program fails to accomplish its goal of trimming prices.