Trudeau was a new kind of leader for Canadians:  He was relaxed and had a sense of humour  He drove sports cars and dressed in t-shirts  He dated celebrities  He captured the imaginations of young Canadians who treated him like a rock star!  This phenomenon was known as Trudeaumania.Trudeaumania

What kind of Canada did Trudeau want?  He wanted to create a “Just Society”.  He believed that government had a duty to  Protect the rights and freedoms of people  Foster their economic and social well being (guide and protect them)  He supported the idea of individual freedom.

Unfortunately for Trudeau, during his era Canada faced a number of difficult challenges:  The Economy :  During the 1970’s, Canada’s economy went into recession.  Cause : The 1973 OPEC Oil Embargo – This meant that the countries of the Middle East were not selling any oil to us.  Result : Oil prices jumped 400% within a few days!  Consequences : High cost of oil resulted in high cost for manufactured goods – inflation.

Consequences of Inflation in the 1970s:  As products became more expensive, people were not able to afford them.  Result : Businesses failed  Result : Increasing unemployment  Result : Less buying power for families  Consequence : Women had to go back into the workforce and dual-income families became much more common.

Economic problems also resulted in a second, very important problem:  Regionalism:  When Canada’s economy went into recession, Ontario and Quebec did not suffer as much as the other provinces.  At the same time, fishing collapsed in the Atlantic Provinces and mining, fishing and forestry also collapsed in BC.  This is known as regional disparity.

Result of Regional Disparity:  People in hard-hit provinces resented Quebec and Ontario and felt as though they were being ignored by the Canadian government.  In Western Canada, this feeling of being ignored by Ottawa became known as Western Alienation.  This was a feeling that our government favoured Ontario and Quebec at the expense of the western provinces.

Western Alienation was caused by the Oil Crisis:  When the price of oil went up 400%, one province stood to make a huge profit: Alberta.  Trudeau thought that he needed to use Alberta’s oil to make life easier for all Canadians.  Result : He froze the price of oil produced in Canada, and he put a tax on all the oil that was exported from Canada.  The money from this tax was then used to provide more cheap oil for the factories of Ontario and Quebec.

How did people in Western Canada and especially Alberta feel about this?  They were FURIOUS!

How did Trudeau deal with unemployment and regional disparity?  He increased transfer payments to the provinces for social services (welfare, unemployment...).  He spent millions for work creation projects in poor regions.  Result: All this spending helped people deal with inflation and unemployment, but it also led to a new problem...

Government Debt: A Growing Problem  Because of the recession, the government was collecting less tax money, but it was spending more money on social programs.  Result: It was spending more than it was earning. This is called a deficit.  As the deficit grew every year, so did the debt of the federal government.  By the time Trudeau left office in 1984, the debt had frown to $160 billion!

Other Important Trudeau Economic Policies:  NEP (National Energy Policy)  FIRA (Foreign Investment Review Agency)