Wartime Prices and the Trade Board
The War Economy and Controls: Wage and Price Controls
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Prime Minister Mackenzie King was determined to avoid the problems of greed and inflation which had plagued the Canadian political landscape during the First World War. On September 3, 1939 he used the War Measures Act to establish the Wartime Prices and Trade Board. He did so with aims of stopping prices and wages from spiraling out of control.
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Initially, the Board did relatively little, placing partial limits on rent, coal, sugar, timber, steel, milk and other goods. However, in 1941 the cost of living began to rise sharply. In a radio broadcast, King announced a freeze on prices and also fixed wages and salaries. Donald Gordon, the chairman of the Wartime Prices and Trade Board, became one of the most recognizable and powerful figures in wartime Canada. He used the radio to send his blunt message to Canadians: Canadians must accept tight controls so that the country can collectively impede the devaluation of the Canadian dollar.
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The Wartime Prices and Trade Board was composed of 13 regional offices and 100 local offices. The controls it had placed on selected market products resulted in a shortage of various goods and services. However, while the controls were not popular among many Canadians, the Board was extremely successful in curbing inflation, particularly in the housing market. In 1939 for example, the cost of living skyrocketed by 17.8%. However, As a result of price controls imposed by the Board, inflation was minimal during the war years. Inflation increased by only 2.8% between 1941 and 1945. This was the most successful record amongst all other major nations involved in the War.
Wartime Economic Stabilization:
Decreasing Living Costs in Canada
(adapted from pamphlet issued by the Government of Canada, September 1944)
WE MUST HOLD THE LINE!
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- On the home front the battle against inflation is now the most critical of all
- Winning this battle will contribute to winning the War
- It will contribute more than all else towards the solution of post-war problems
- For example, to win the battle against unemployment in the post-war period, we must first win the battle against inflation
- The purpose of Price Controls is to prevent inflation and to maintain a basic standard of living
- Higher incomes will not be of any advantage if prices continue to increase. Our money will buy less and less
- Salaries and wages are a large element, often the largest, in the cost of all we buy
- If the Price Ceiling breaks down, in the long run all stand to lose
- We must hold the line against inflation to assure victory in War
- We must hold the line to provide a solid foundation on which, after the war, to build a better Canada
W. L. Mackenzie King
Prime Minister of Canada
Ottawa, Dec 13, 1943
Price Control Defeats Inflation
(adapted from Canada at War, Nov-Dec, 1944)
One of Canada’s greatest wartime achievements has been in the field of price controls. Canadians today are paying the same price for flour, bread, sugar and rolled oats as they did three years ago when the price ceiling was imposed. For example, Canadians are paying 14% less for milk, food has increased only by 5% and, prices for rent, clothing and furnished goods have increased only by 1%. Moreover, fuel and electricity are less expensive today than they were before the price ceiling was imposed. Overall, the Wartime Prices and Trade Board has been successful in curbing inflation.
Women’s Regional Advisory Committees and the Price Ceiling
“Be assured that in carrying on your home duties and meeting worries cheerfully, you are giving real service to the country. You are taking your part in keeping the Home Front, which will have dangers of its own, stable and strong.”
“Your opportunity to do a war job is right here. Comply with the Wartime Prices and Trade Board yourself, and educate others to do likewise. It is your patriotic duty - your job on the Home Front”
From Her Majesty the Queen’s address
to the Women of Canada
on Armistice Day 1939.
Canadian women were asked to record their purchases in a booklet entitled My Price Ceiling Record. The booklet was essentially a check on store owners. Women (the gender who made most of the grocery purchases at this time) were to record prices every time they went to a store. Because the Wartime Prices and Trade Board input a price ceiling, between September-October 1941 store owners could only charge a relatively low price (called the 'basic' price). When asked to pay a price above the basic price, women were entitled to question the storekeeper. If left unsatisfied with the price, they could contact and register their complaints with the Women’s Regional Advisory Committee – an organization representing women’s concerns.
Did Controls Work?
(adapted from Looking Ahead, Canadian Post-War Affairs: Discussion Manual No. 1 June,1945)
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From the perspective of the Wartime Prices and Trade Board, price controls have served the country well. Because of price controls, the Canadian dollar as well as Canadian foreign bonds have fallen only slightly in comparison to their pre-war value. Returning soldiers in the previous world war were not so lucky - to return to a stable and recovering economy. As there was no price ceilings imposed in those days, by 1920 inflation had caused a 100% increase in prices relative to 1914 levels. This time, the Board learned to do much better.
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