Canada enters a new era characterized by economic uncertainty and growing globalization
"Newspapers were saying that there would be jobs elsewhere, but people working twenty years in a factory with a grade nine education didn�t think they were going to get those jobs." - Mike Hersh, Toronto factory worker |  | |
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During the 1970s, Canada's economy still grew and there were clear signs of prosperity. But dark clouds were gathering as Canada's unemployment and inflation rates increased dramatically during the decade.
Jobs were increasingly lost to mechanization in industry and many workers were not trained for the emerging job markets including the service industry and computer fields.
The Canadian dollar became less valuable when the United States decided to let its dollar float rather than be tied into the value of gold. By 1979, the Canadian dollar was worth 85 cents U.S., increasing the price of American imports.
Another cause of inflation was the massive increase in oil prices during the decade. In the early 1970s, the Organization of Petroleum Exporting Countries (OPEC) established export quotas that inflated world prices. By the end of the decade, the price of oil was almost $40 a barrel - compared to $3 a barrel at the start of the decade - as OPEC maintained its quotas and Iran, a major oil exporter, erupted in civil war.
Increased oil and gas prices hit Canadians hard, although one province flourished as a result of the world oil crisis. During the 1970s, Alberta boomed as its oil industry created more multi-millionaires than anytime before in Canadian history.
But the frenzied greed of the Alberta oil boom would take its toll. By the early 1980s, too rapid expansion and a worldwide economic recession hit the industry hard. Alberta's boom was over.
Meanwhile Canada was well into a new economic era. During the 1980s, the world was becoming a global village, especially on the economic front. Far Eastern countries, including Japan and Hong Kong underwent dramatic growth, challenging the hegemony of North American and Western European economies.
Many companies expanded throughout the world - creating a massive multinational network. To compete internationally, Canadian businesses "down-sized" their work forces to become more efficient.
By the mid-1980s, Canada was on its way to developing a free trade deal with the United States. The move was prompted by mounting U.S. protectionism, pressure from the business community and the recommendations of the Macdonald Commission on the economy.
Supporters saw it as ticket to a brighter future. It was the country�s best chance of succeeding in the increasingly competitive global market. Opponents argued that Canadian manufacturers who relied on tariff protection would be decimated by free trade. And American branch plants would move back to the United States and take advantage of cheaper, non-union labour.
Although Canadians remained divided on the issue, the free trade deal came into effect January 1, 1989.
