Canadian War-Time Price Controls, 1941-6

Abstract

In a number of important aspects Canadian war-time price controls were a pioneering venture and for this reason have aroused considerable interest both at home and abroad. It is too soon to present a considered appraisal of these policies and procedures—indeed the operation has not yet been concluded—but it is perhaps not too soon to record in a broad way what was done and why.When war broke out in September, 1939 Canada, in common with most other countries, was emerging uncertainly from a decade of economic depression. Prices were low, unemployment was high, and the costs of relief were still a heavy charge on federal, provincial, and municipal budgets. The general index of wholesale prices was 28 per cent below 1926 and only 9 points above the low point of the depression in 1933. The iron and steel industry was operating at 20 per cent below 1928-9, and probably not in excess of 50 per cent of capacity. Recorded unemployed formed 12 per cent of the normal working force, and under-employment affected a further large percentage. Nearly a million persons were on direct relief and the fully employable persons on direct urban relief numbered nearly 200,000. In brief we entered the war with a high proportion of idle and underemployed resources.We also entered the war with a sound and reasonably well thought out conception of overall war-time economic policy, but, excepting foreign exchange control which had been carefully prepared in detail well in advance, with very little organization for carrying it out and no very clear notion of what kind of a war it would be and along what lines our major contributions would, lie. The Defence Purchasing Board, predecessor of the Department of Munitions and Supply, began operations in July, 1939, but the organization of price and supply controls received detailed consideration only a few weeks before hostilities broke out. The Wartime Prices and Trade Board was created on September 3, 1939, and within a few weeks was actively involved in half a dozen commodity fields.