Canadian Income Policy and Society, Term Paper Example

Introduction

The need to retain economic standards of development for a developed country like Canada is a key towards retaining its reputation in the society. It could be analyzed that somehow, developed countries are hardly hit in times when global inflation occurs. The reason behind this is the fact that being the primary players in the industry putting much risk in the system, they are also most hardly hit when instances of international pricing irregularities occur. This is the reason why financial officers of countries like Canada take a careful stand in responding towards such specific accounts of economic commotion.

This particular aspect of financial-management approach that Canada uses has already been seen to have been applied in history. The effects that such occasion leave remains strongly evident in the course of living that the Canadian society follows today. Relatively, it could be noted that from this path of history, Canadian leaders learned so much with regards the proper consideration over the need to properly allocate resources, including monetary assets, to support the needs and the demands of the society for economic stability. Along with this, learning that some constraints in the system provides much assistance in creating practical ways of managing the financial resources of the country hence strengthening the manner by which it handles international economic pressure.

In the discussion that follows, a definition on the Canadian Economic Policy shall be better presented. Based upon the desire of establishing a source of confidence among the people living in the country, the Canadian income policy’s impact on people and groups of investors in the country shall be given particular attention to. In the aim of creating a respective definition of the policy, this discussion shall provide a correlative definition of the elements that establishes its strength while also providing a clearer view on how such elements of financial management actually affect the being of the people living in the communities included within the Canadian national territory.

Understanding the Meaning and Clauses of the Canadian Income Policy

Income policies used around the globe are noted for the system that each program imposes when it comes to the control that the government has over the prices of commodities as well as wages of people in line with the desire of controlling how inflation rates affect the overall economy of the country. These income policies worked properly in history during the times when specific war issues arise in the international scene. It could be understood that somehow, these policies are considered as safety nets that the nations depend upon as they manage the allocation of their monetary resources especially when it comes to the process of distribution that the said resources are to pass through in the economic system that embraces the society.

In the idea of curbing the effects of international inflation, government officials try the best they could to make extensive conditions by which they are able to control the cash flow in the country hence allowing supposedly proper and balanced distribution of resources among the residents of the country including towards that of the investors of the nation.

In Canada, the existence of such policy has been introduced in 1974 to especially respond to the oil crisis that happened during the said year. Headed by Robert Standfield, market prices as well as worker wages have been regulated and controlled by the government in a centralized approach. The people of Canada did not completely accept the implication of such policy freely as it did involve the right of the government to have a “say” on the earning procedures that the people would be able to experience whether or not they are working on either private or public institutions. This means that the effect on pricing development would be handled centrally hence affecting all the members of the society in an overall context regardless of their economic stability and status in the community. In a way, there were several groups who did not accept the matter fully. The Canadian Liberal Party somehow did not completely accept the clauses of this particular policy. However, when they were elected in position in 1975, they decided to introduce the new Anti-Inflation Act that involved price and wage controls on certain aspects of the economy. Later on however, the board that handled the regulation of the rules under the said law was dissolved in 1979. True to its sense, the establishment of OPEC operations in the 1960’s strongly affected the international scene of trade and financial management among developed countries such as that of Canada. Oil regulating procedures have largely affected the prices of basic commodities hence directly impacting the course of positioning that the people took especially when it comes to handling their basic spending conditions. As the inflation increased, the Canadian government was not able to completely control economic domestic affairs in the country hence making the microeconomic system of the nation affect its macroeconomic stance [basically pointing out how the reduced spending of the common people affected the overall GDP of the nation]. With 10.9% of inflation in 1974, Trudeau and his administration imposed the Anti-Inflation act hence making it easier for the government to have an overall control especially on the aspects of the economy that would directly impact the nations ending GDP rating.

The Winners and the Losers

The Canadian Income Policy affected the creation of national law in three particular aspects, namely the control of government expenditures, the creation of tighter monetary regulations and the establishment of restrictions on the creation of government policies on fiscal spending and financial management. As a result of this, employees [especially those affiliated with government and publicly owned companies] ought to accept only 10% wage increase during the beginning of the implementation of the program and later on reduces down to 6% in the coming years. This would impose that the employees cannot in anyway ask for higher rate of wage increase in the coming years. The control on such element of earning among the common people proved to be a source of conflict among workers and their employers. Relatively in this scenario, the winners stand to be the employers, who seem to have been protected by this particular clause of the policy. On the other hand, the losers stand to be the workers who for some reason would not be able to ask for any increase of wages even in the face of price inflation in the market in connection with the basic commodities sold in the market.

The acceptance of such policy was however short lived. The society failed to see the long term benefit that the program is supposed to provide the nation with. As a result, pursing counteracting laws to the matter has been provided in line with the course of defining the capacity of the people to spend and save. In the course of changing the process of economic policy applications in the country in 1978, it has been realized that there were indeed some problems that the Canadian income policy did resolve and that when it has been dissolved, such problems of economic imbalance recurred again, which affected the lower-edge of the economy further. In this course, the supposed inefficiency of the program to help the people realize short term goals have been seen to have provided a sense of balance in the economy had it been implemented properly and had the people cooperate patiently in line with waiting for the bigger and more advantageous returns of the program.

Conclusion

The government is of course held responsible for most of the aspects of development that the nation incurs. In a way, facing course of different challenges in the society including financial instability is a part of such responsibility. The Canadian government in the 1970’s knew that they were facing a national crisis when the OPEC agreement has been established. Facing the situation through creating a policy that would supposedly bridge the gap between the investors and their employees, the nation came up with e centralized regulation of monetary management to be implemented within the country. Nevertheless, even though it was supposed to provide extensive support to the different members of the society, its long term advantages valued less compared to its short term inconveniences have been seen to affect the decision of the community in accepting what the program provides therefore deciding to abolish the said aspect of economic development. This experience of the Canadian society should teach about the most important aspect of financial management, seeing the long term outlay of results that basically create a value to current programs hence pushing people to cooperate towards the implementation of such rules.

References

Frum, David (2000). How We Got Here: The ’70s. New York, New York: Basic Books. p. 292.

Laforest, Guy.  (1995). Trudeau and the end of a Canadian dream. Montreal: McGill-Queen’s University Press.

Peterson, Roy. (1994). Drawn & quartered: the Trudeau years. Toronto: Key Porter Books.

Cohen, Andrew, J. L. Granatstein, eds. (1999). Trudeau’s Shadow: the life and legacy of Pierre Elliott Trudeau. Toronto: Vintage Canada.