In most of the liberal democracies of the West, 1970s represented a prime turning point in terms of economic policies and in political ideology. The decade witnessing the transition from the post-war Keynesian welfare state era to the rationale of free market neoliberalism was characterised by a “crisis of democracy”. The entry into the political arena during 1960s and 1970s had created excess of democracy, thus burdening the country with heavy bureaucracy, too much emphasis on protecting the workers and welfare provisions. This can be understood as an inability on the part of the government in addressing the demands and needs of the citizens. The government needs to ensure that resources are redistributed radically in order to overcome the crisis of democracy.
It was certain that Canada was not completely immune to the pressures created due to the crisis of democracy during this period. The new Democratic Party after the federal election in 1972, David Lewis came into leadership. The leadership of Lewis mobilized significant support in terms of ending corporate welfare, thus holding the balance of power. Further, the corporate community of Canada fuelled the distrust of public through the oil crisis of 1973. People of Canada were burdened with plummeting oil prices along with the shortage of fuel supply as the condemnation of giant corporations of oil grew. The policy makers also argued that since oil companies were recording huge profits, the public confidence in big business was eroded. This anger also casted doubts and concerns in the system of free market capitalism. The rising oil prices had also lead to an increase in the general price level (inflation). In 1975, the Trudeau government initiated the control on prices and wages in order to stabilize inflation.