At the end of the 1970s, there was an economic downturn and a rise in unemployment rate because a second oil crisis appeared in Iran, who is the oil producer. As oil prices rise, factories need oil for transportation, so they also increased the prices of goods which caused inflation in Quebec. Some factories were relocated because they were attracted by the low labour costs in other countries, so they closed their businesses in Quebec, so many workers were laid off which made people’s purchasing power decrease as their wages rose less than the prices of the goods. This caused tax losses for the government because they need taxes to fund social programs, so Quebec and Ottawa must raise taxes which led to debts. I don’t understand how the governments raise taxes because weren’t people not able to pay taxes…? I need clarification to this part! :)) Thank you for helping me!
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