Canada: THE DOMINION: The Size of the Bill

The bill for labor’s newly won pay increases was totted up for Canadians last week by Price Boss Donald Gordon. A diehard hold-the-liner, Gordon euphemistically called the next stage “a period of orderly price readjustments.” In plain words, this meant price rises on items of every kind, to absorb the pay raises.

The Government’s cost-of-living index is now 125.5 (against the prewar norm of 100). With the upcoming price boosts, Governm.ent experts expect it to hit 130 before long. Industries where pay has been boosted have not yet knocked on Gordon’s door for price boosts. But he feels that they will come.

Can Canada halt the index at 130?

(It may actually be higher, as Government figures usually lag behind day-to-day living costs.) If she does, she would be doing a great deal better than the U.S. But with Canada’s economy geared as closely as it is to the U.S., chances were that the Canadian price line would take plenty of holding—if the U.S. index continued to rise.

Off-&-On Control. Nor did the Ottawa Government’s long-range plans offer much encouragement. The government indircated that wage control, which organized labor had riddled fore & aft, would be dropped in two or three months’ time. But price control would be maintained for at least another year.

In plumping for a plan to control prices without controlling wages, Canada was ignoring the experience of her neighbor. The U.S. had found that when wage stabilization had been killed by raises in almost every industry, then price control had been done to death too.

In Canada, as in the U.S., there was too much money and too little goods. The real cure for inflation was production and more production. Only an outpouring of goods could smother soaring prices and bring them tumbling down. But the goods had to be made first. That was Canada’s No.1 job on the home front. Cried Gordon longingly last week: “Give me full production from the U.S. and Canada for the next ten or twelve months, and goddammit I’m not a bit afraid.”