Wage and Price Controls

As inflation eroded purchasing power in the 1970s, Canadian unions and professional groups sought higher wages and salaries. Rising costs, especially for social programs, led Pierre Trudeau’s government to pass its Anti-Inflation Act in 1975. The Anti-Inflation Board, which existed from 1975 to 1979, did not directly examine health care costs, but its recommendation that governments and the private sector limit wage and salary increases to approximately 6 per cent per year resulted in declining incomes for doctors and prompted public-sector strikes by nurses and other health care workers. To recoup some of the missing income, doctors in Alberta and Ontario began to opt out of the provincial health insurance plans and bill their patients directly, or to extra-bill their patients for the difference between provincial fee schedules and the payments received from the provincial plan. In Prince Edward Island in 1979, the Minister of Health offered doctors a 9 per cent pay increase if they would agree to end extra-billing, which 70 per cent of them had been doing since the end of the Anti-Inflation Board in January, but this threat to their independence led 50 of the province’s 118 doctors to opt out of the provincial plan.