Editing Pierre Trudeau (section)

== First premiership (1968–1979) ==
{{Main|Premierships of Pierre Trudeau#First premiership (1968–1979)}}
=== Swearing-in and subsequent election ===
As the new leader of the governing Liberals, Trudeau was sworn in as prime minister on April 20. Although the term of the Parliament was not due to expire until November 1970, Pearson's government had almost fallen before the leadership contest could even take place after a tax bill was voted down in Parliament, leading to much confusion over whether this counted as a [[Matter of Confidence|matter of confidence]] in the government. [[Governor General of Canada|Governor General]] [[Roland Michener]] ultimately ruled that it did not, and the government subsequently won an actual confidence motion, but the incident made it clear that the minority government Trudeau had inherited would not realistically last the full parliamentary term, and that he would soon need to call an early election in order to win a parliamentary majority.<ref>Robertson, Gordon; ''Memoirs of a Very Civil Servant''; pp. 299–301</ref> Trudeau eventually called this election for June 25, 1968.

Trudeau's campaign benefited from an unprecedented wave of personal popularity called "[[Trudeaumania]]",<ref name="Collison">{{cite news |last=Collison |first=Robert |title=New books put Trudeaumania in fresh perspective |url=https://www.thestar.com/entertainment/books/2016/11/20/new-books-put-trudeaumania-in-fresh-perspective.html |url-status=dead |newspaper=[[Toronto Star]] |date=November 20, 2016 |access-date=August 7, 2017 |archive-url=https://web.archive.org/web/20170807152104/https://www.thestar.com/entertainment/books/2016/11/20/new-books-put-trudeaumania-in-fresh-perspective.html |archive-date=August 7, 2017}}</ref>{{sfn|Zink (1972)|p=Backcover}}{{sfn|Canada.com}} which saw him mobbed by throngs of youths. His main national opponents were [[Progressive Conservative Party of Canada|PC]] leader [[Robert Stanfield]] and [[New Democratic Party of Canada|NDP]] leader [[Tommy Douglas]], both popular figures who had been premiers of [[Premier of Nova Scotia|Nova Scotia]] and [[Premier of Saskatchewan|Saskatchewan]] respectively  (albeit in Trudeau's native Quebec, the main competition to the Liberals was from the [[Ralliement créditiste]], led by [[Réal Caouette]]). As a candidate, Trudeau espoused [[participatory democracy]] as a means of making Canada a "[[Just Society]]". He vigorously defended the newly implemented [[universal health care]] and [[regional development]] programs, as well as the recent reforms found in the Omnibus bill.

On the eve of the election, during the annual [[Saint-Jean-Baptiste Day]] parade in Montreal, rioting [[Quebec separatism|Quebec sovereigntists]] threw rocks and bottles at the grandstand where Trudeau was seated, chanting "Trudeau au poteau!" ("Trudeau to the stake!"). Rejecting the pleas of aides that he take cover, Trudeau stayed in his seat, facing the rioters, without any sign of fear. The image of the defiant Prime Minister impressed the public. The next day, Trudeau handily won the [[1968 Canadian federal election|1968 election]] with a strong [[majority government]]; this was the Liberals' first majority since [[1953 Canadian federal election|1953]].{{sfn|CBC News (1968-06-24)}}{{sfn|Maclean's Magazine (1998-04-06)}}

=== Social policy ===
==== Bilingualism and multiculturalism ====
Trudeau's first major legislative push was implementing the majority of recommendations from Pearson's [[Royal Commission on Bilingualism and Biculturalism]] via the ''[[Official Languages Act (Canada)|Official Languages Act]]'', which made French and English the co-equal official languages of the federal government.<ref>{{cite web |title=Official Languages Act – 1985, c. 31 (4th Supp.) |url=http://laws.justice.gc.ca/eng/O-3.01/page-1.html |url-status=dead |work=Act current to July 11th, 2010 |publisher=Department of Justice |access-date=August 15, 2010 |archive-url=https://web.archive.org/web/20110105194649/http://laws.justice.gc.ca/eng/O-3.01/page-1.html |archive-date=January 5, 2011 }}</ref> More controversial than the declaration (which was backed by the NDP and, with some opposition in caucus, the PCs) was the implementation of the Act's principles: between 1966 and 1976, the francophone proportion of the civil service and military doubled, causing alarm in some sections of anglophone Canada who felt they were being disadvantaged.{{sfn|English (2009)|p=141}}

Trudeau's Cabinet fulfilled Part IV of the Royal Commission's report by announcing a "[[Multiculturalism]] Policy" on October 8, 1971. It was the first of its kind in the world,{{sfn|English (2009)|p=142}} subsequently being emulated by several provinces such as Alberta, Saskatchewan, and Manitoba; even other countries, most notably Australia, which has had a similar history and immigration pattern, emulated the policy. Beyond the specifics of the policy itself, this action signalled an openness to the world and coincided with a more open immigration policy that Pearson had brought in. The policy recognized that while Canada was a country of two official languages, it recognized a plurality of cultures &ndash; "a multicultural policy within a bilingual framework".{{sfn|English (2009)|p=145}} This annoyed public opinion in Quebec, which believed that it challenged Quebec's claim of Canada being a country of two nations.{{sfn|English (2009)|p=146}}

==== Immigration ====
Following the [[Vietnam War]], a refugee crisis was caused by the flight of the [[Vietnamese boat people|boat people]] from Vietnam, as thousands of people, mostly ethnic Chinese, fled the country in makeshift boats across the [[South China Sea]], usually to the [[British Hong Kong|British colony of Hong Kong]]. The Trudeau government was generous in granting asylum to the refugees.{{sfn|Granatstein|Bothwell|1991|p=218}} By 1980, Canada had accepted about 44,000 boat people, making it one of the top destinations for them.{{sfn|Granatstein|Bothwell|1991|p=219}}

==== Indigenous issues ====
{{further|The Canadian Crown and Indigenous peoples of Canada}}
In 1969, Trudeau, along with his then-[[Minister of Crown–Indigenous Relations|Minister of Indian Affairs]] [[Jean Chrétien]], proposed the [[1969 White Paper]] (officially entitled "Statement of the Government of Canada on Indian policy"). The Paper proposed the general assimilation of First Nations into the Canadian body politic through the elimination of the ''[[Indian Act]]'' and Indian status, the parcelling of reserve land to private owners, and the elimination of the [[Crown–Indigenous Relations and Northern Affairs Canada|Department of Indian and Northern Affairs]]. The White Paper was widely seen as racist and an attack on Canada's indigenous peoples, and prompted the first major national mobilization of indigenous activists against the federal government's proposal, leading Trudeau to set aside the legislation.<ref>{{cite journal |last=Kerr |first=Elisabetta |title=Pierre Trudeau's White Paper and the Struggle for Aboriginal Rights in Canada |url=https://scholar.uwindsor.ca/cgi/viewcontent.cgi?article=1060&context=gljuh |journal=The Great Lakes Journal of Undergraduate History |date=September 2017 |access-date=May 15, 2022 |archive-date=March 26, 2022 |archive-url=https://web.archive.org/web/20220326233148/https://scholar.uwindsor.ca/cgi/viewcontent.cgi?article=1060&context=gljuh |url-status=live }}</ref><ref>{{cite web |title=White Paper, Red Paper |url=https://www.facinghistory.org/stolen-lives-indigenous-peoples-canada-and-indian-residential-schools/chapter-8/white-paper-red-paper |website=Facing History and Ourselves |access-date=July 31, 2019 |archive-date=March 22, 2019 |archive-url=https://web.archive.org/web/20190322183823/https://www.facinghistory.org/stolen-lives-indigenous-peoples-canada-and-indian-residential-schools/chapter-8/white-paper-red-paper |url-status=live }}</ref>

==== Death penalty ====
On July 14, 1976, after a long and emotional debate, Bill C-84 was passed by the House of Commons by a vote of 130 to 124, abolishing the [[Capital punishment in Canada|death penalty]] completely and instituting a life sentence without parole for 25 years for first-degree murder.<ref name="Radio Canada">{{cite web |title = Le grandes etapes de l'abolition |url = http://www.radio-canada.ca/nouvelles/Dossiers/peinedemort/contenu_bas_03a.asp |publisher = [[Ici Radio-Canada Télé|Radio Canada]] |language = fr |access-date = November 19, 2013 |archive-date = February 22, 2013 |archive-url = https://web.archive.org/web/20130222072734/http://www.radio-canada.ca/nouvelles/dossiers/peinedemort/contenu_bas_03a.asp |url-status = dead }}</ref>

=== Quebec ===
==== October Crisis ====
Trudeau's first serious test as Prime Minister came during the [[October Crisis]] of 1970, when a Marxist-influenced Quebec separatist group, the [[Front de libération du Québec]] (FLQ), kidnapped British Trade Consul [[James Cross]] at his residence on October 5. Five days later, the group also kidnapped Quebec Labour Minister [[Pierre Laporte]]. Trudeau, with the acquiescence of Quebec Premier [[Robert Bourassa]], responded by invoking the ''[[War Measures Act]]'', which gave the government sweeping powers of arrest and detention without trial. Trudeau presented a determined public stance during the crisis; when questioned by [[CBC Television]] journalist [[Tim Ralfe]] regarding how far he would go to stop the violence, Trudeau answered, "[[Just watch me]]". Laporte was found dead on October 17 in the trunk of a car. Five of the FLQ members were flown to [[Cuba]] in 1970 as part of a deal in exchange for James Cross' life, although they eventually returned to Canada years later, where they served time in prison.{{sfn|Munroe (2012)}}

Although Trudeau's response is still controversial and was opposed at the time as excessive by parliamentarians like Tommy Douglas and [[David Lewis (Canadian politician)|David Lewis]], it was met with only limited objections from the public.{{sfn|Janigan (1975-11-01)|p=3}}

==== Quebec provincial affairs ====
After consultations with the provincial premiers, Trudeau agreed to attend a conference called by [[Premier of British Columbia|British Columbia Premier]] [[W. A. C. Bennett]] to attempt to finally [[patriation|patriate]] the [[Constitution of Canada|Canadian constitution]].{{sfn|English (2009)|p=135}} Negotiations between the provinces and Justice Minister [[John Turner]] created a draft agreement, known as the [[Victoria Charter]], that entrenched a charter of rights, bilingualism, and a guarantee of a veto of constitutional amendments for Ontario and Quebec, as well as regional vetoes for [[Western Canada]] and [[Atlantic Canada]], within the new constitution.{{sfn|English (2009)|p=135}} The agreement was acceptable to the nine predominantly-English speaking provinces, but Quebec's premier Robert Bourassa requested two weeks to consult with his cabinet.{{sfn|English (2009)|p=135}} After a strong backlash of popular opinion against the agreement in Quebec, Bourassa stated that Quebec would not accept it.{{sfn|English (2009)|p=136}}

Trudeau faced increasing challenges in Quebec, starting with bitter relations with Bourassa and his [[Quebec Liberal Party|Quebec Liberal]] government. Following a rise in the polls after the rejection of the Victoria Charter, the Quebec Liberals had taken a more confrontational approach with the federal government on the constitution, [[Bill 22|French language laws]], and the language of [[air traffic control]] in Quebec.{{sfn|English (2009)|pp=302–306}} Trudeau responded with increasing anger at what he saw as nationalist provocations against Ottawa's bilingualism and constitutional initiatives, at times expressing his personal contempt for Bourassa.{{sfn|English (2009)|pp=302–306}}

Partially in an attempt to shore up his support, Bourassa called a [[1976 Quebec general election|surprise election in 1976]] that resulted in [[René Lévesque]] and the sovereigntist [[Parti Québécois]] (PQ) winning a majority government. The PQ had chiefly campaigned on a "good government" platform, but promised a referendum on independence to be held within their first mandate. Trudeau and Lévesque had been personal rivals, with Trudeau's intellectualism contrasting with Lévesque's more working-class image. While Trudeau claimed to welcome the "clarity" provided by the PQ victory, the unexpected rise of the [[Quebec sovereignty movement]] became, in his view, his biggest challenge.{{sfn|English (2009)|p=308}}

As the PQ began to take power, Trudeau faced the prolonged breakdown of his marriage, which the English-language press covered in lurid detail on a day-by-day basis. Trudeau's reserve was seen as dignified by contemporaries, and his poll numbers actually rose during the height of coverage,{{sfn|English (2009)|p=329}} but aides felt the personal tensions left him uncharacteristically emotional and prone to outbursts.{{sfn|English (2009)|pp=327–328}}

===Economic policy===
Trudeau's first government implemented many procedural reforms to make Parliament and the Liberal caucus meetings run more efficiently, significantly expanded the size and role of the Prime Minister's office,{{sfn|Trudeau|1993|pp=22–24}} and substantially expanded social-welfare programs.{{sfn|Lyon|Van Die|2000|pp=137–144}}{{sfn|Laxer|Laxer|1977|pp=22–24}}{{sfn|Moscovitch|2012}}<ref>{{cite book |title=Towards A Just Society: The Trudeau Years |editor-first1=Thomas S. |editor-last1=Axworthy |editor-first2=Pierre Elliott |editor-last2=Trudeau}}</ref>

====Deficit spending====
Trudeau's government ran large budget [[Deficit spending|deficits]] throughout its time in office.<ref>{{cite encyclopedia |last1=Whitaker |first1=Reg |title=Pierre Elliott Trudeau |url=https://www.thecanadianencyclopedia.ca/en/article/pierre-elliott-trudeau |encyclopedia=The Canadian Encyclopedia |access-date=December 14, 2021 |date=July 11, 2013 |quote="...and large federal deficits cut into his popular support."}}</ref> The government's [[1968 Canadian federal budget|first budget in 1968]] produced a deficit of $667 million, while the [[1969 Canadian federal budget|1969 budget]] produced a surplus of $140 million. However, the [[1970 Canadian federal budget|1970 budget]] (which produced a deficit of over $1 billion) marked the start of consecutive budget deficits run by the Trudeau government; the budget would not be [[balanced budget|balanced]] until [[1997 Canadian federal budget|1997]]. By the time Trudeau's first tenure ended in 1979, the deficit grew to $12 billion.<ref name=":CBCgraph">{{cite web|title=Canada's deficits and surpluses, 1963-2014|url=http://www.cbc.ca/news2/interactives/canada-deficit/|website=CBC News |publisher=Canadian Broadcasting Corporation |access-date=May 27, 2023}}</ref>

{| class="wikitable"
|+ List of budgets passed by the Pierre Trudeau government from 1968 to 1979 
<br />'''''$ represent [[Canadian dollar|Canadian]] billions of [[Real versus nominal value (economics)|unadjusted]] dollars'''''
|-
! Budget !! [[1968 Canadian federal budget|1968]] !! [[1969 Canadian federal budget|1969]] !! [[1970 Canadian federal budget|1970]] !! [[1971 Canadian federal budget|1971]] !! [[1972 Canadian federal budget|1972]] !! [[1973 Canadian federal budget|1973]] !! [[November 1974 Canadian federal budget|1974]] !!  [[1975 Canadian federal budget|1975]] !! [[1976 Canadian federal budget|1976]] !! [[1977 Canadian federal budget|1977]] !! [[April 1978 Canadian federal budget|Apr. 1978]] !! [[November 1978 Canadian federal budget|Nov. 1978]]
|-
| '''Surplus''' || || $0.14 || || || || || || || || || ||
|-
| '''Deficit''' || $0.667 || || $1.016 || $1.786 || $1.901 || $2.211 || $2.225 || $6.204 || $6.897 || $10.879 || $13.029 || $11.967 
|}

====Social programs and spending====
In 1971, Trudeau's government greatly expanded [[unemployment insurance]], making coverage nearly universal as coverage for the Canadian labour force jumped to 96 percent from 75 percent. The system was sometimes called the 8/42, because one had to work for eight weeks (with at least 20 hours per week), and wait two weeks, to get benefits for the other 42 weeks of the year. This expansion also opened the UI program up to maternity, sickness, and retirement benefits, covered seasonal workers for the first time, and allowed mothers to receive up to 15 weeks of benefits if they had 20 or more insurable weeks. The reforms increased the maximum benefit period to 50 weeks, though the benefit duration was calculated using a complex formula depending on labour force participation and the regional and national unemployment rates.<ref>{{cite web |last1=Marshall |first1=Katherine |title=Benefiting from extended parental leave |url=https://www150.statcan.gc.ca/n1/pub/75-001-x/00303/6490-eng.html |publisher=Statistics Canada |access-date=April 17, 2023}}</ref><ref>{{cite web |last1=Courchene |first1=Thomas |last2=Allan |first2=John |title=A short history of EI, and a look at the road ahead |url=https://policyoptions.irpp.org/magazines/employment-insurance/a-short-history-of-ei-and-a-look-at-the-road-ahead/ |website=Policy options |access-date=April 17, 2023 |date=September 1, 2009}}</ref><ref name="CanadianLabourUI">{{cite web |last1= |first1= |title=Passage of the unemployment insurance act |url=https://canadianlabour.ca/passage-of-the-unemployment-insurance-act/#:~:text=1971%20%E2%80%93%20Prime%20Minister%20Pierre%20Trudeau,of%2020%20hours%20per%20week. |website=Canadian Labour Congress |date= August 5, 2018|access-date=April 22, 2023}}</ref><ref name="WelfareCanadianEncyclopedia">{{cite web |last1=Moscovitch |first1=Allan |title=Welfare State |url=https://www.thecanadianencyclopedia.ca/en/article/welfare-state |website=Canadian Encyclopedia |access-date=November 13, 2022 |date=February 7, 2006}}</ref> In 1977, the government simplified the benefit duration formula but introduced a variable entrance requirement dependent on the unemployment rate in the applicant's region; the changes also mandated that workers in areas with low unemployment regions work twice as long to be eligible for benefits as workers in high unemployment regions.<ref name="CanadianLabourUI" />

In 1973, Trudeau's government amended the ''[[National Housing Act (Canada)|National Housing Act]]'' to provide financial assistance for [[First-time home buyer grant|new home buying]], loans for [[co-operative housing]], and low interest loans for municipal and private non-profit housing.<ref name=":2">{{citation |last=Begin |first=Patricia |date=January 1999 |url=https://publications.gc.ca/Collection-R/LoPBdP/modules/prb99-1-homelessness/housing-e.htm |title=Housing and Parliamentary Action |publisher=Parliamentary Research Branch |access-date=22 April 2025}}</ref> The amendments saw the introduction the Rental Rehabilitation Assistance Program, which established that homeowners and occupants in low-income neighbourhoods could qualify for small grants to be used for home repair. Also introduced was the Assisted Home Ownership Program which allowed the [[Canada Mortgage and Housing Corporation]] (CMHC) to start providing grants and subsidized interest rates to low income families (though in 1978 an amendment discontinued the provision of grant money to these families, which led to a high incidence of defaults, and in turn, necessitated that the federal government provide financial assistance to the CMHC). The amendments saw the passage of the ''Rent Supplement Act'', which enabled the CMHC to partner with private landlords, cooperatives, and not-for-profit associations to provide affordable housing; in addition, the act saw the CMHC agree to fund the difference between market rental prices and rent prices geared to the specific occupant's income. Lastly, the Canada Rental Supply Program was introduced to provide interest-free loans for 15 years to developers who agreed to allocate a proportion of units toward social housing initiatives. In order to ensure that loans contributed to the provision of low income housing, the CMHC was restricted to giving loans amounting to $7,500 or less per unit.<ref name=":1">{{Cite journal|last1=Goldberg |first1=M. A. |last2=Mark |first2=J. H.|year=1986|title=The roles of government in housing policy: A Canadian perspective and overview|journal=Journal of the American Planning Association|volume=51 |issue=1|pages=34–42|doi=10.1080/01944368508976798}}</ref><ref name=":7">{{Cite book|title=Keeping to the marketplace: the evolution of Canadian housing policy|last=Bacher |first=J. C.|publisher=McGill-Queen's University Press|year=1993|location=Montréal, Quebec|pages=164–267}}</ref>

Legislation passed in November 1968 widened eligibility for farm credit,<ref>{{cite book |url=https://babel.hathitrust.org/cgi/pt?id=mdp.39015033597769&seq=1312 |title=Canada Year Book |date=1969 |publisher=Statistics Canada |location=Ottawa, Ontario |p=1272 |via=HathiTrust}}</ref> and in 1970 legislation was introduced aimed at improving compensation for merchant seamen and also to establish a right to maternity leave.<ref>{{cite book |url=https://babel.hathitrust.org/cgi/pt?id=mdp.39015033598049&seq=1400 |title=Canada Year Book |date=1972 |publisher=Statistics Canada |location=Ottawa, Ontario |p=1358 |via=HathiTrust}}</ref> In 1972, an Act was passed providing for the indexation of various pensions and allowances to the consumer price index. Certain eligibility requirements for receiving training allowances were also removed.<ref>{{cite book |url=https://babel.hathitrust.org/cgi/pt?id=mdp.39015033598031&seq=916 |title=Canada Year Book |date=1973 |publisher=Statistics Canada |location=Ottawa, Ontario |p=900 |via=HathiTrust}}</ref> One-pensioner couples benefited from a new Spouse's Allowance,<ref>{{cite news |url=https://books.google.co.uk/books?id=hNZgAAAAIBAJ&pg=PA7&dq=A+decade+ago,+the+Trudeau+government+established+the+Spouse%27s+Allowance&article_id=5338,1931183&hl=en&sa=X&ved=2ahUKEwiQwKq4vreMAxW3YEEAHQFkE78Q6AF6BAgGEAM#v=onepage&q=A%20decade%20ago%2C%20the%20Trudeau%20government%20established%20the%20Spouse's%20Allowance&f=false |newspaper=Saskatoon Star-Phoenix |p=A5 |date=8 March 1985 |title=New absurdity replaces old |first=Leonard |last=Shifrin |via=Google News Archive}}</ref> while various improvements in superannuation arrangements<ref>{{cite web |url=https://www.canada.ca/en/treasury-board-secretariat/services/pension-plan/plan-information/public-service-pension-plan-history.html |title=Public Service Pension Plan History |publisher=Government of Canada |access-date=22 April 2025}}</ref> and in family allowances were also carried out.<ref>{{cite book |url=https://babel.hathitrust.org/cgi/pt?id=mdp.39015033598023&seq=975 |title=Canada Year Book |date=1974 |publisher=Statistics Canada |location=Ottawa, Ontario |p=857 |via=HathiTrust}}</ref><ref>{{cite book |url=https://www.google.co.uk/books/edition/Canadian_Family_Policies/eWF56_J-6aEC?hl=en&gbpv=1&dq=In+1973,+the+Family+Allowance+Act+was+amended,+and+the+new+act+was+implemented+in+1974&pg=PA128&printsec=frontcover |title=Canadian Family Policies: Cross-National Comparisons |first=Maureen |last=Baker |publisher=University of Toronto Press |location=Toronto |date=1995 |pp=128–129 |isbn=0-8020-7786-2}}</ref> 

The [[registered home ownership savings plan]] (RHOSP) was introduced in the government's [[November 1974 Canadian federal budget|November 1974 budget]]. Similar to [[Registered retirement savings plan|RRSPs]], proceeds from the RHOSP could be received tax-free for either.<ref name=BG574>{{citation |url=https://budget.gc.ca/pdfarch/1974-MA-sd-eng.pdf |url-status=dead |title= Budget Speech |last=Turner |first=John N. |publisher=[[Department of Finance (Canada)|Department of Finance]] |date=6 May 1974 |archive-url=https://web.archive.org/web/20221103220557/https://www.budget.gc.ca/pdfarch/1974-MA-sd-eng.pdf |archive-date=3 November 2022 |p=20}}</ref> a down payment for the acquisition of an owner-occupied dwelling or to buy furnitures for the dwelling (or the spouse's dwelling).<ref>{{harvnb|Income Tax Act|loc=s 146.2(6)(a)(i)}} as amended by {{harvnb|S.C. 1974-75, ch. 26|loc=s 100}}</ref> Individuals who already owned a home (either owner-occupied or rented to another person) could not deduct RHOSP contributions.<ref>{{citation |url=https://www.budget.gc.ca/pdfarch/1974-MA-wmam-eng.pdf |url-status=dead |title=Notice of Ways and Means Motions |publisher=[[Department of Finance (Canada)|Department of Finance]] |date=6 May 1974 |archive-url=https://web.archive.org/web/20221103220606/https://www.budget.gc.ca/pdfarch/1974-MA-wmam-eng.pdf |archive-date=3 November 2022 | p=5}}</ref><ref>{{harvnb|Income Tax Act|loc=s 146.2(5)}} as amended by {{harvnb|S.C. 1974-75, ch. 26|loc=s 100}}</ref> In 1976, Trudeau's government allowed for transfers of funds between the RHOSP (for instance to select a plan with better returns).<ref>{{citation |url=https://www.budget.gc.ca/pdfarch/1976-pap-eng.pdf |url-status=dead |title=Budget Papers |publisher=[[Department of Finance (Canada)|Department of Finance]] |archive-url=https://web.archive.org/web/20221103220736/https://www.budget.gc.ca/pdfarch/1976-pap-eng.pdf |archive-date=3 November 2022 |date=25 May 1976 |p=3}}</ref>{{sfn|S.C. 1976-77, ch. 4|loc=s 57}} In 1977, the government tightened the rules of the RHOSP (the reforms removed the purchase of furnitures from the list of usage allowed for tax-free use of RHOSP proceeds starting in 1978;{{sfn|S.C. 1977, ch. 1|loc=s 73(3), 73(14)}} disallowed deductible contributions for a taxpayer whose spouse owned a home;{{sfn|S.C. 1977, ch. 1|loc=s 73(1)}} suspended tax-free rollover of RHSOP funds to an RRSP; and capped the lifetime of the RHOSP at 20 years).{{sfn|S.C. 1977, ch. 1|loc=s 73(5)}}

In 1977, Trudeau's government established the financial program [[Established Programs Financing]] to help finance the [[provinces of Canada|provincially]]-run [[healthcare in Canada|healthcare]] and post-secondary education system, through [[transfer payments]], by [[cash]] and [[tax]] [[Basis point|points]]. This system lasted until 1995.<ref name="WelfareCanadianEncyclopedia" /><ref>{{cite web|url=http://dsp-psd.pwgsc.gc.ca/Collection-R/LoPBdP/BP/bp264-e.htm|title=Established Programs Financing for Health Care |last=Madore |first=Odette |publisher=[[Government of Canada]] Depository Services Program|date=August 1991|access-date=December 18, 2022}}</ref><ref name="DF94">{{cite book |publisher=Department of Finance |title=Federal transfers to provinces |date=April 1994 |location=Ottawa |page=23 |url=http://publications.gc.ca/collections/collection_2016/fin/F1-51-1994-eng.pdf |access-date=December 18, 2022}}</ref>

In 1979, Trudeau's government restructured [[Family Allowance Act|family allowances]] by increasing the role of the tax system in child support and decreasing the role of family allowances. The government established an annual Refundable Child Tax Credit of $200 for families with incomes of $18,000 or less. As incomes increased above this level, benefits would be taxed away to disappear completely at $26,000. Since the median income for families during this time was $19,500, the majority of families received some benefit from the new program.<ref>{{cite encyclopedia |last1=Guest |first1=Dennis |title=Family Allowance |url=https://www.thecanadianencyclopedia.ca/en/article/family-allowance#:~:text=The%20Family%20Allowance%20began%20in,Canada%27s%20first%20universal%20welfare%20program. |encyclopedia=The Canadian Encyclopedia |access-date=November 16, 2022 |date=February 7, 2006}}</ref>

====Taxation====
In 1969, Trudeau's first [[Minister of Finance (Canada)|finance minister]], [[Edgar Benson]], introduced a white paper on tax reform which included [[tax deduction]]s for [[child care]] and advocated shifting the tax burden from the poor to the wealthy. Measures to fulfill the latter proposal included a [[capital gains tax]], which was severely criticized by corporate Canada and the business community (notably [[Israel Asper]]). The bill was debated in Parliament for over a year, with its more radical proposals being removed in parliamentary committee. The reforms managed to be passed through the use of [[cloture|closure]], with the capital gains tax (that had an inclusion rate of 50 percent) coming into effect on January 1, 1972, as prescribed by the [[1971 Canadian federal budget|1971 budget]].<ref name ="Bensonglobeandmail">{{cite web |last1=Hustak |first1=Alan |title=Unflappable finance minister rewrote Canada's tax rules |website=The Globe and Mail |access-date=May 27, 2023 |url=http://www.v1.theglobeandmail.com/servlet/story/LAC.20110913.OBBENSONATL/BDAStory/BDA/deaths |date=September 13, 2011 |archive-date=March 3, 2018 |archive-url=https://web.archive.org/web/20180303222855/http://www.v1.theglobeandmail.com/servlet/story/LAC.20110913.OBBENSONATL/BDAStory/BDA/deaths |url-status=dead }}</ref><ref>{{cite web |last1= |first1= |title=A primer on capital gains taxes in Canada |url=https://www.cbc.ca/news/business/a-primer-on-capital-gains-taxes-in-canada-1.231145 |website=CBC News |access-date=May 27, 2023 |date=October 18, 2000}}</ref><ref name=":LeaderPost">{{Cite news |date= June 19, 1971 |title=Benson Reduces Taxes, Will Hit Capital Gains |agency=The Canadian Press |newspaper=The Leader-Post|url=https://news.google.com/newspapers?nid=w9EjUEod0xMC&dat=19710619&printsec=frontpage&hl=fr|access-date=June 17, 2020 |via=Google News Archive}}</ref> Also implemented in 1972 was the child care expense deduction which allowed for a deduction of up to $500 per child.<ref>{{cite journal |last1= Heidinger|first1= Loanna|last2= Findlay|first2= Leanne C.|last3= Guèvremont|first3= Anne|title=Uptake of the child care expense deduction: exploring factors associated with the use of the child care expense deduction among families with a child under 12 years |journal=International Journal of Child Care and Education Policy |date=September 11, 2020|volume= 14|doi= 10.1186/s40723-020-00076-0|s2cid= 256428463|doi-access= free}}</ref> As Benson had now become a political liability, Trudeau replaced him with [[John Turner]] (who was seen as a "[[Blue Grit|Business Liberal]]") in 1972.<ref name ="Bensonglobeandmail" /><ref>{{cite web |last1=Tuns |first1=Paul |title=30 years of Liberal infighting |url=https://ottawacitizen.com/news/politics/paul-tuns-30-years-of-liberal-infighting |website=Ottawa Citizen |access-date=May 27, 2023 |date=June 16, 2014}}</ref>

In 1973, Trudeau's government fully indexed the [[Income tax in Canada|person income tax system]] (both the exemptions and the brackets) to match inflation. The indexation was made effective in 1974; during that year, inflation had jumped from six percent to double digits.<ref>{{cite web |last1=Watson |first1=William |last2=Clemens |first2=Jason |title=The History and Development of Canada's Personal Income Tax |url=https://www.fraserinstitute.org/sites/default/files/history-and-development-of-canadas-personal-income-tax.pdf |date=2017 |publisher=Fraser Institute |access-date=April 3, 2023}}</ref> The government also implemented three personal income tax cuts from 1973 to 1975.{{sfn|Cohen|Granatstein|1998|pp=238-239}}

====Inflation====
While popular with the electorate, Trudeau's promised minor reforms had little effect on the growing rate of inflation, and he struggled with conflicting advice on the crisis.{{sfn|English|2009|p=246}} In September 1975, [[Minister of Finance (Canada)|finance minister]] John Turner resigned over refusing to implement [[wage and price controls]].<ref>{{cite AV media |url=https://www.youtube.com/watch?v=6suF6U71yEQ |title=Beyond Politics - John Turner |publisher=[[CPAC (TV channel)|CPAC]] |date=July 2, 2013 |via=YouTube}}</ref> In December 1975, in an embarrassing about-face, Trudeau and new Finance Minister [[Donald Stovel Macdonald|Donald Macdonald]] introduced wage and price controls by passing the ''[[Anti-Inflation Act]]'', despite campaigning against them in the 1974 election. Amongst its many controls, it limited pay increases for federal government employees and employees in companies with over 500 workers to 10 percent in 1976, 8 percent in 1977, and 6 percent in 1978. The Act also established the anti-inflation board which oversaw the implementation of wage and price controls and had the ability to recommend decreases in prices of goods, wage cuts, and rebates to customers of various services.<ref name="Wageandpricecontrols">{{cite web |last1= |first1= |title=Wage and Price Controls |url=http://www.canadahistory.com/sections/eras/eras.html |website=Canada History |access-date=March 27, 2023 |archive-url=https://web.archive.org/web/20230201224522/https://www.canadahistory.ca/sections/eras/trudeau/Wage%20and%20Price%20Controls.html |archive-date=February 1, 2023 |url-status=dead }}</ref> The breadth of the legislation, which touched on many powers traditionally considered the purview of the provinces, prompted [[Reference re Anti-Inflation Act|a Supreme Court reference]] that only upheld the legislation as an [[Peace, Order, and Good Government|emergency requiring Federal intervention]] under the ''[[British North America Act]]''. During the annual 1975 Christmas interview with [[CTV Television Network|CTV]], Trudeau discussed the economy, citing market failures and stating that more state intervention would be necessary. However, the academic wording and hypothetical solutions posed during the complex discussion led much of the public to believe he had declared capitalism itself a failure, creating a lasting distrust among increasingly [[neoliberalism|neoliberal]] business leaders.{{sfn|English|2009|pp=290-94}} The controls lasted until 1978 and the anti-inflation board was dissolved in 1979.<ref name="Wageandpricecontrols" />

====Energy policy====
On September 4, 1973, Trudeau requested that the [[Western Canadian]] provinces agree to a voluntary freeze on oil prices during [[1973 oil crisis|the ongoing Arab oil embargo]]. Nine days later, the Trudeau government imposed a 40-cent tax on every barrel of [[Petroleum industry in Canada|Canadian oil]] exported to the United States to combat rising inflation and oil prices. The tax was equivalent to the difference between domestic and international oil prices, and the revenues were used to subsidize oil imports for [[Eastern Canada|Eastern]] [[Oil refinery|refiners]]. The [[Premier of Alberta|Premier]] of oil-rich [[Alberta]], [[Peter Lougheed]], called the decision "the most discriminatory action taken by a federal government against a particular province in the entire history of [[Canadian Confederation|Confederation]]." While revenues decreased for Western provinces (particularly Alberta) and for the petroleum industry, Trudeau's government subsidized Eastern consumers, angering Alberta, who successfully fought for control of its natural resources in 1930.<ref>{{cite web |title=Energy Wars |url=http://www.history.alberta.ca/energyheritage/sands/underground-developments/energy-wars/default.aspx |publisher=Government of Alberta |access-date=April 21, 2022}}</ref>

In the early 1970s, the [[petroleum industry]] was largely under foreign (mainly American) control, the recent discovery of oil in [[Alaska]] put corporate pressure on the [[Arctic Archipelago|Canadian Arctic]], and Canada's energy sector increasingly focused on North American rather than domestic needs. Trudeau's government initially rejected the idea of creating a nationalized oil company (which was perceived to secure supplies, improve revenue collection, and give governments better information on the global energy market), arguing it would be costly and inefficient. However, after the [[1973 oil crisis|late 1973 oil crisis]] saw global oil prices quadruple, questions arose about whether Canada should continue importing oil. Though Canada also exported oil at times, the provinces of Quebec and Atlantic Canada were at risk of a cut-off of imports; as a result, Canada was in need of knowing more about its potential to produce energy. In late October 1973, Trudeau's government adopted a motion from the [[New Democratic Party]] (which the Trudeau [[minority government]] relied on for support) to establish a nationalized oil company. The ''Petro-Canada Act'' was passed in 1975 (under a Trudeau [[majority government]]), resulting in the creation of a new [[crown corporations of Canada|crown corporation]], [[Petro-Canada]]. Petro-Canada was mandated to acquire imported oil supplies, take part in energy research and development, and engage in downstream activities such as refining and marketing. The corporation started with an initial $1.5 billion in capital and had preferential access to debt capital as "an agent of Her Majesty". Trudeau's government gave itself authority over Petro-Canada's capital budget and its corporate strategy, making the company its policy arm; the government also wanted the company to be mainly active on the frontiers (the oil sands, the Arctic, and the East Coast offshore areas) rather than Western Canada, where most Canadian oil is extracted. In 1976, Trudeau appointed his friend, [[Maurice Strong]], to become the first chair of the company.<ref>{{cite encyclopedia |last1=Yusufali |first1=Sasha |last2=Pratt |first2=Larry |title=Petro-Canada |url=https://www.thecanadianencyclopedia.ca/en/article/petro-canada |encyclopedia=The Canadian Encyclopedia |access-date=November 6, 2022 |date=November 19, 2009}}</ref>

=== Foreign affairs ===
In foreign affairs, Trudeau kept Canada in the North Atlantic Treaty Organization ([[NATO]]), but often pursued an independent path in international relations.

Trudeau was the first world leader to meet [[John Lennon]] and his wife [[Yoko Ono]] on their 1969 "tour for [[world peace]]". Lennon said, after talking with Trudeau for 50 minutes, that Trudeau was "a beautiful person" and that "if all politicians were like Pierre Trudeau, there would be world peace".{{sfn|Canadian Press (1969-12-24)}} The diplomat [[John G. H. Halstead]] who worked as a close adviser to Trudeau for a time described him as a man who never read any of the policy papers submitted by the External Affairs department, instead preferring short briefings on the issues before meeting other leaders and that Trudeau usually tried to "wing" his way through international meetings by being witty.{{sfn|Bothwell|Granatstein|2017|p=109}} Halstead stated that Trudeau viewed foreign policy as "only for dabbing", saying he much preferred domestic affairs.{{sfn|Bothwell|Granatstein|2017|p=108}}

==== NATO ====
In August 1968, the Trudeau government expressed disapproval of the [[Warsaw Pact invasion of Czechoslovakia]], having the Canadian delegation at the United Nations vote for a resolution condemning the invasion, which failed to pass owing to a Soviet veto.{{sfn|Granatstein|Bothwell|1991|p=191}} However, Trudeau made it clear that he did not want an intensified Cold War as a result of the invasion, and worked to avoid a rupture with Moscow.{{sfn|Granatstein|Bothwell|1991|p=191}} In a speech in December 1968, Trudeau asked: "Can we assume Russia wants war because it invaded Czechoslovakia?".{{sfn|Granatstein|Bothwell|1991|p=18}}

In 1968–1969, Trudeau wanted to pull Canada out of NATO, arguing that the principle of [[mutual assured destruction]] (MAD) caused by a Soviet-American nuclear exchange made it highly unlikely that the Soviet Union would ever invade [[West Germany]], thereby making NATO into an expensive irrelevance in his view.{{sfn|Granatstein|Bothwell|1991|pp=17-18}} In March 1969, Trudeau visited Washington to meet President [[Richard Nixon]]. Although the meeting was very civil, Nixon came to intensely dislike Trudeau over time, referring to the Prime Minister in 1971 as "that asshole Trudeau".{{sfn|Granatstein|Bothwell|1991|pp=50-51}} Nixon made it clear to Trudeau that a Canada that remained in NATO would be taken more seriously in Washington than a Canada that left NATO.{{sfn|Granatstein|Bothwell|1991|p=51}} Trudeau himself noted during a speech given before the [[National Press Club]] during the same visit that the United States was by far Canada's largest trading partner, saying: "Living next to you is in some way like sleeping with an elephant; no matter how friendly and even-tempered the beast, one is affected by every twitch and grunt".{{sfn|Granatstein|Bothwell|1991|p=51}}

The NATO question sharply divided the Cabinet. Diplomat [[Marcel Cadieux]] accused Trudeau of "not seeming to believe in the Soviet danger".{{sfn|Granatstein|Bothwell|1991|p=18}} As a diplomat, the devout Catholic Cadieux had served on the [[International Control Commission]] in 1954–55, where his experiences of witnessing the exodus of two million Vietnamese Catholics from [[North Vietnam]] to [[South Vietnam]] made him into a very firm anti-Communist.{{sfn|Granatstein|Bothwell|1991|p=16}} In late March 1969, Trudeau's cabinet was torn by debate as ministers divided into pro-NATO and anti-NATO camps, and Trudeau's own feelings were with the latter.{{sfn|Granatstein|Bothwell|1991|pp=22-25}} Defence Minister [[Léo Cadieux]] threatened to resign in protest if Canada left NATO, leading Trudeau, who wanted to keep a French-Canadian in a high-profile portfolio such as the Department of National Defence, to meet Cadieux on April 2 to discuss a possible compromise.{{sfn|Granatstein|Bothwell|1991|p=25}} Trudeau and Cadieux agreed that Canada would stay in NATO, but drastically cut back its contributions, despite warnings from [[Ross Campbell (diplomat)|Ross Campbell]], the Canadian member of the NATO Council, that the scale of the cuts envisioned would break Canada's treaty commitments.{{sfn|Granatstein|Bothwell|1991|p=25}} Ultimately, the fact the United States would be more favourably disposed to a Canada in NATO and the need to maintain Cabinet unity led Trudeau to decide, despite his own inclinations, to stay in NATO. After much discussion within the cabinet, Trudeau finally declared that Canada would stay within NATO after all on April 3, but he would cut back Canada's forces within Europe by 50%.{{sfn|Granatstein|Bothwell|1991|pp=24-25}} The way that Canada cut its NATO contributions by 50% caused tensions with other NATO allies, with the British government of Prime Minister [[Harold Wilson]] publicly protesting the cuts.{{sfn|Granatstein|Bothwell|1991|p=338}}

==== United States ====
[[File:President Richard Nixon and Prime Minister of Canada Pierre Trudeau at the Parliament Building in Ottawa.jpg|thumb|Trudeau in his office in Ottawa with U.S. President [[Richard Nixon]] on April 14, 1972]]
[[File:President Jimmy Carter with Canadian Prime Minister Pierre Trudeau.jpg|right|thumb|Trudeau with U.S. President [[Jimmy Carter]] in the [[Oval Office]] on September 9, 1977]]
Relations with the United States deteriorated on many points during the [[Presidency of Richard Nixon|Nixon presidency]] (1969–74), including trade disputes, defence agreements, energy, fishing, the environment, cultural imperialism, and foreign policy. On January 4, 1973, Trudeau voted for a resolution in the House of Commons that condemned the American [[Operation Linebacker II|Christmas bombings]] against North Vietnam between December 18 and 29, 1972.{{sfn|Hilliker|Halloran|Donaghy|2017|p=135}} As a consequence, Canadian-American relations, already under stress because of the mutual contempt between Nixon and Trudeau, reached a post-war nadir.{{sfn|Hilliker|Halloran|Donaghy|2017|p=144}} Nixon was infuriated by the resolution and refused to see Marcel Cadieux, now the Canadian ambassador in Washington, in protest for the rest of 1973.{{sfn|Hilliker|Halloran|Donaghy|2017|p=144}} Nixon was only prevented from lashing out more by his desire to have Canada continue as the pro-Western member on the International Control Commission for Vietnam.{{sfn|Hilliker|Halloran|Donaghy|2017|p=144}} Prompted by Halstead, who was known as a proponent of economic "rebalancing" by seeking closer economic ties with the EEC, Trudeau made a visit to Brussels in October 1973 to see [[François-Xavier Ortoli]], the president of the [[European Commission]], to ask for a Canadian-EEC free trade agreement.{{sfn|Hilliker|Halloran|Donaghy|2017|p=214}} Halstead used Nixon's displeasure with Canada as an argument that it was finally time for "economic rebalancing" by seeking closer ties with the EEC, a thesis that Halstead had been advocating ever since the early 1960s. Ortoli refused Trudeau's request for a free trade agreement with the EEC, saying that was out of the question, but did agree to open talks on lowering tariffs between Canada and the EEC.{{sfn|Hilliker|Halloran|Donaghy|2017|p=214}}

Trudeau continued his attempts at increasing Canada's international profile, including joining the [[G7]] group of major economic powers in 1976 at the behest of U.S. President [[Gerald Ford]].{{sfn|Trudeau (1993)|p=?}} American-Canadian relations changed for the better when Trudeau found a better rapport with Ford's successor, [[Jimmy Carter]]. The late 1970s saw a more sympathetic American attitude toward Canadian political and economic needs, the pardoning of draft evaders who had moved to Canada, and the passing of old sore points such as Watergate and the Vietnam War. Canada more than ever welcomed American investments during the "[[stagflation]]" (high inflation and high unemployment at the same time) that hurt both nations in the 1970s.<ref>{{cite journal |first=Lily |last=Gardner Feldman |title=Canada and the United States in the 1970s: Rift and Reconciliation |journal=The World Today |volume=34 |issue=12 |date=1978 |pp=484–492 |jstor=40395029}}</ref>

==== United Kingdom and France====

Trudeau attached little importance to [[Canada–United Kingdom relations]]. While he rebuffed a suggestion by one of his ministers to turn Canada into a republic in 1968, he treated the [[Monarchy of Canada|Canadian monarchy]] with a certain bemused contempt.{{sfn|Granatstein|Bothwell|1991|p=337}} Britain's decision to join the [[European Economic Community]] (EEC) in 1973 and Japan's replacement of the UK as Canada's second-largest trading partner confirmed Trudeau's view that Britain was a declining power which had little to offer Canada.{{sfn|Granatstein|Bothwell|1991|pp=337-338}} However, Trudeau was attached to the Commonwealth, believing it was an international body that allowed Canada to project influence on the [[Third World]] as it was one of the few bodies that allowed leaders from the First and Third Worlds to meet on a regular basis.{{sfn|Granatstein|Bothwell|1991|p=291}} Although France was no longer as supportive of Quebec separatism as it had been under President [[Charles de Gaulle]] in the 1960s, repeated expressions of the idea of a special Franco-Quebecois bond as opposed to a Franco-Canadian bond by French politicians throughout the 1970s led to tensions between the two nations.{{sfn|Granatstein|Bothwell|1991|p=345}}

In 1970, the Commonwealth was threatened with a split as a number of African members, supported by India, attempted to block planned British arms sales to South Africa, then under the system of [[apartheid]]. The Zambian government submitted a draft of principles which would have bound Commonwealth member states to give no assistance to nations practising racial discrimination.{{sfn|Granatstein|Bothwell|1991|p=281}} The [[Labour government, 1964–1970|first Wilson ministry]] had imposed an arms embargo on South Africa in 1964, which the [[Heath ministry]] ended in 1970 on the grounds that the South African government was pro-Western and anti-communist. A number of African Commonwealth nations led by Zambia and Tanzania threatened to leave the organization if the arms sales went through. When British Prime Minister [[Edward Heath]] visited Ottawa in December 1970, his meetings with Trudeau went poorly. In what was described as a "no holds-barred" style, Trudeau told Heath that the planned arms sales were threatening the Commonwealth's unity.{{sfn|Granatstein|Bothwell|1991|p=281}} 

At a [[1971 Commonwealth Heads of Government Meeting|Commonwealth summit]] in Singapore in January 1971, Trudeau argued that apartheid was not sustainable in the long run given that Black South Africans vastly outnumbered white South Africans, and any external support for the apartheid government was myopic given that [[majority rule]] was inevitable.{{sfn|Granatstein|Bothwell|1991|p=281}} However, Trudeau worked for a compromise to avoid a split in the Commonwealth, arguing that it needed to do more to pressure South Africa to end apartheid peacefully, and saying that a [[race war]] in South Africa would be the worse possible way to end apartheid.{{sfn|Granatstein|Bothwell|1991|p=281}} The conference ended with a compromise agreement in which Britain would fulfil its existing arms contracts to South Africa but henceforth sell no more weapons to them; ultimately, the British only sold South Africa five attack helicopters.{{sfn|Phythian|2000|p=18}} Singaporean Prime Minister and conference host [[Lee Kuan Yew]] later praised Trudeau for his efforts at the summit to hold the Commonwealth together, despite the passions aroused by the South African issue.{{sfn|Granatstein|Bothwell|1991|p=281}}

==== Germany ====
Trudeau had an especially close friendship with the Social Democratic West German Chancellor [[Helmut Schmidt]], whom he greatly liked both for his left-wing politics and as a practical politician who was more concerned about getting things done rather than with ideological questions.{{sfn|Granatstein|Bothwell|1991|p=253}} Schmidt was sympathetic towards Trudeau's "rebalancing" concept, telling Trudeau that he wanted West Germany to have two North American partners instead of one, and promised at a 1975 meeting to use West German influence within the EEC to grant Canada better trade terms in exchange for Canada spending more on its NATO commitments.{{sfn|Granatstein|Bothwell|1991|pp=253-254}} After meeting Schmidt, Trudeau performed a ''volte-face'' on NATO, speaking at a press conference of how much he valued NATO as an alliance that was established for collective security in Europe.{{sfn|Granatstein|Bothwell|1991|p=254}} To show his approval of Schmidt, Trudeau not only agreed to spend more on NATO, but insisted that the Canadian Army buy the German-built [[Leopard 1|Leopard]] tank, which thereby boosted the West German arms industry, over the opposition of the Finance department, which felt that buying the Leopard tanks was wasteful.{{sfn|Granatstein|Bothwell|1991|pp=254-255}} Schmidt's support was especially welcome as Wilson, once again back as the British prime minister, proved unwilling to lobby for the EEC lowering tariffs on Canadian goods, merely saying that he was willing "to interpret Canadian policy" to the other EEC leaders.{{sfn|Granatstein|Bothwell|1991|p=268}} By contrast, the West German Foreign Minister [[Hans-Dietrich Genscher]] gave Trudeau a firm promise of West German support for an EEC-Canadian economic agreement.{{sfn|Granatstein|Bothwell|1991|p=168}} The major hold-out was France, which was stoutly opposed to an EEC-Canadian agreement, believing that giving EEC market access to Canadian agriculture as a threat to French agriculture.{{sfn|Granatstein|Bothwell|1991|pp=168-169}} In July 1976 a Canadian-EEC Framework Economic Agreement was signed, which came into effect on October 1, 1976.{{sfn|Granatstein|Bothwell|1991|p=158}} Trudeau hoped would be the Framework Agreement would be the first step towards a Canadian-EEC free trade agreement, but the EEC proved to be uninterested in free trade with Canada.{{sfn|Granatstein|Bothwell|1991|p=158}}

==== China ====
Trudeau established Canadian diplomatic relations with the People's Republic of China before the United States did in 1979, and became the first Canadian Prime Minister to make an official visit to [[Beijing]]. On February 10, 1969, the government announced its wish to establish diplomatic relations with the People's Republic, and Trudeau was mortified when the Chinese refused to respond at first, which made him look foolish.{{sfn|Granatstein|Bothwell|1991|p=184}} Unknown to Trudeau, the Chinese diplomatic corps had been so thoroughly purged during the [[Cultural Revolution]] that the Chinese Foreign Ministry barely functioned by early 1969. On February 19, 1969, the Chinese finally responded and agreed to open talks in [[Stockholm]] on establishing diplomatic relations, which began on April 3, 1969.{{sfn|Granatstein|Bothwell|1991|p=184}} Trudeau expected the negotiations to be a mere formality, but relations were not finally established until October 1970.{{sfn|Granatstein|Bothwell|1991|p=184}} The delay was largely because the Chinese insisted that Canada have no relations whatsoever with "the [[Chiang Kai-shek]] gang" as they called the [[Kuomintang]] regime in [[Taiwan]] and agree to support the Chinese position that Taiwan was a part of the People's Republic, a position that caused problems on the Canadian side as it implied Canadian support for China's viewpoint that it had the right to take Taiwan by force into the People's Republic.{{sfn|Granatstein|Bothwell|1991|pp=184-185}} On October 10, 1970, a statement was issued by the External Affairs department in Ottawa saying: "The Chinese government reaffirms that Taiwan is an inalienable part of the territory of the People's Republic of China. The Canadian government takes note of the Chinese position".{{sfn|Granatstein|Bothwell|1991|p=185}} After the statement was issued, China and Canada established diplomatic relations on the same day.{{sfn|Granatstein|Bothwell|1991|p=185}} The so-called "Canadian formula" under which a nation "takes note" of the Chinese viewpoint that Taiwan is part of the People's Republic has been often copied by other nations that have established diplomatic relations with Beijing, most notably the United States in 1979.{{sfn|Granatstein|Bothwell|1991|p=185}} In October 1973, Trudeau visited Beijing to meet [[Chinese Communist Party Chairman]] [[Mao Zedong]] and [[Premier of China|premier]] [[Zhou Enlai]], where Trudeau was hailed as "old friend", a term of high approval in China.{{sfn|Granatstein|Bothwell|1991|pp=187-188}}

In 1976, Trudeau, succumbing to pressure from the Chinese government, issued an order barring [[Sports in Taiwan|Taiwan]] from participating as China in the [[1976 Montreal Olympics]], although technically it was a matter for the [[IOC]].<ref name="As It Happens" />  His action strained relations with the United States – from [[President Ford]], future President Carter and the press – and subjected Canada to international condemnation and shame.<ref>{{cite journal | title=Trudeau, Taiwan, and the 1976 Montreal Olympics |first1=Donald |last1=Macintosh |first2=Donna |last2=Greenhorn |first3=Michael |last3=Hawes | journal= American Review of Canadian Studies | year=1991 | volume=21 | issue=4 | pages=423–448 | doi=10.1080/02722019109481098}}</ref><ref name="As It Happens">{{cite web | url=http://www.cbc.ca/archives/entry/taiwan-controversy-at-the-1976-montreal-olympics | title=Montreal Olympics: The Taiwan controversy | publisher=[[CBC Radio One]] | work=[[CBC Archives]]: [[As It Happens]] | date=July 16, 1976 | access-date=January 25, 2018 | archive-date=May 16, 2020 | archive-url=https://web.archive.org/web/20200516031346/https://www.cbc.ca/archives/entry/taiwan-controversy-at-the-1976-montreal-olympics | url-status=live }}</ref>

==== Cuba ====
Trudeau was known as a friend of [[Fidel Castro]], the leader of Cuba. In January 1976, Trudeau visited Cuba to meet Castro and shouted to a crowd in [[Havana]] "''Viva Cuba! Viva Castro!''" ("Long Live Cuba! Long Live Castro!").{{sfn|Granatstein|Bothwell|1991|p=274}} In November 1975, [[Cuban intervention in Angola|Cuba had intervened]] in the [[Angolan Civil War]] on the side of the Marxist [[MPLA]] government supported by the Soviet Union which was fighting against the [[UNITA]] and [[National Liberation Front of Angola|FNLA]] guerrilla movements supported by the United States, South Africa and [[Zaire]] (the present-day [[Democratic Republic of the Congo]]).{{sfn|Granatstein|Bothwell|1991|p=274}} Although both Zaire and South Africa had also intervened in Angola, sending in troops to support the FLNA and UNITA respectively, it was the Cuban intervention in Angola that caused controversy in the West. Many people in the West saw the Cuban intervention as aggression and a power play by the Soviet Union to win a sphere of influence in Africa.{{sfn|Granatstein|Bothwell|1991|p=274}} Angola was amply endowed with oil, and many saw the victory of the MPLA/Cuban forces in the first round of the Angolan civil war in 1975–1976 as a major blow to Western interests in Africa. Trudeau's remarks in Havana were widely seen in the West as expressing approval not only of Cuba's Communist government, but also of the Cuban intervention in Angola.{{sfn|Granatstein|Bothwell|1991|p=274}} In fact, Trudeau did press Castro in private to pull his troops out of Angola, only for Castro to insist that Cuba would do so only when South Africa likewise pulled its forces out of not only Angola, but also [[South West Africa]] (modern-day [[Namibia]]).{{sfn|Granatstein|Bothwell|1991|p=275}} Trudeau's embrace of Castro attracted much criticism in the United States, which allowed Trudeau to appear as a leader who was "standing up" to the United States without seriously damaging American-Canadian relations.{{sfn|Granatstein|Bothwell|1991|p=274}}

=== Re-elections ===
==== 1972 election ====
On September 1, 1972, over four years into the Liberals' five-year mandate, Trudeau called [[1972 Canadian federal election|an election for October 30]]. At the start of the campaign, polls showed the Liberals 10 points ahead of the [[Progressive Conservative Party of Canada|Progressive Conservatives]] led by [[Robert Stanfield]], who previously lost to Trudeau in the [[1968 Canadian federal election|1968 election]]. However, the results produced a Liberal [[minority government]], with the Liberals winning 109 seats compared to the PCs' 107; this was one of the closest elections in Canadian history. [[Trudeaumania]] from the 1968 election had worn off, not least because of a slumping economy and rising unemployment. The NDP, led by [[David Lewis (Canadian politician)|David Lewis]], held the [[Balance of power (parliament)|balance of power]].<ref>{{cite web |last1=Bradburn |first1=Jamie |title=How the NDP saved Pierre Trudeau's government |url=https://www.tvo.org/article/how-the-ndp-saved-pierre-trudeaus-government |website=TVO |access-date=April 23, 2022 |date=October 15, 2019 |archive-date=May 21, 2022 |archive-url=https://web.archive.org/web/20220521052509/https://www.tvo.org/article/how-the-ndp-saved-pierre-trudeaus-government |url-status=live }}</ref>

==== 1974 election ====
In May 1974, the House of Commons passed a [[motion of no confidence]] in the Trudeau government, defeating its budget bill after Trudeau intentionally antagonized Stanfield and Lewis.{{sfn|English (2009)|p=233}} The [[1974 Canadian federal election|ensuing election]] focused mainly on the [[1973–75 recession|then-ongoing recession]]. Stanfield proposed the immediate introduction of [[wage and price controls]] to help end the increasing [[inflation]] Canada was facing. Trudeau mocked the proposal, telling a newspaper reporter that it was the equivalent of a magician saying "Zap! You're frozen", and instead promoted a variety of small tax cuts to curb inflation.{{sfn|English (2009)|p=237}} According to Trudeau's biographer John English, NDP supporters scared of wage controls moved toward the Liberals during the campaign.{{sfn|English (2009)|p=238}}

The Liberals were re-elected with a majority government, winning 141 out of 264 seats, prompting Stanfield's retirement. However, the Liberals did not win any seats in Alberta, where Premier [[Peter Lougheed]] was a vociferous opponent of Trudeau's 1974 budget.{{sfn|English (2009)|p=240}}

=== Defeat in 1979 ===
As the 1970s wore on, growing public exhaustion towards Trudeau's personality and the country's constitutional debates caused his poll numbers to fall rapidly in the late 1970s.{{sfn|Gwyn (1980)|p=325}} At the [[1978 G7 summit]], he discussed strategies for the upcoming election with West German Chancellor [[Helmut Schmidt]], who advised him to announce several spending cuts to quell criticism of the large deficits his government was running.<ref>{{cite book |author-link=Lawrence Martin (journalist) |last1=Martin |first1=Lawrence |title=Chrétien: The Will to Win |location=Toronto |publisher=Lester Publishing |date=1995 |pp=262–264}}</ref>

After a series of by-election defeats in 1978, Trudeau waited as long as he could to call a [[1979 Canadian federal election|general election in 1979]]. He finally did so, only two months from the five-year limit provided under the ''[[Constitution Act, 1867|British North America Act]]''.<ref name="NYT_Kaufman_20000929_Eulogy" /> During the election campaign, the Liberals faced declining poll numbers, while the [[Joe Clark]]–led Progressive Conservatives focused on "pocketbook" issues. To contrast Trudeau's image with that of the mild-mannered Clark, Trudeau and his advisors based their campaign on Trudeau's decisive personality and his grasp of the Constitution file, despite the general public's apparent wariness of both. The traditional Liberal rally at [[Maple Leaf Gardens]] saw Trudeau stressing the importance of major constitutional reform to general ennui, and his campaign "photo-ops" were typically surrounded by picket lines and protesters. Though polls portended disaster, Clark's struggles justifying his party's populist platform and a strong Trudeau performance in the election debate helped bring the Liberals to a near statistical ties in [[Opinion polling for the 1979 Canadian federal election|opinion polls]].{{sfn|English (2009)|loc=chpt. 13}}

Although the Liberal Party won the popular vote by four points, its vote was concentrated in Quebec and faltered in industrial Ontario. This allowed the PCs to win a plurality of the seats in the House of Commons and form a minority government.