Part three of the Report of the task force on labour relations "focuses on the difficulty Canada has had in attempting to achieve full employment and stable prices simultaneously, and on the relationship of collective bargaining to that problem".With respect to the first question, the Report does not adequately emphasize the overwhelming importance of external factors in the movement of Canadian prices. In an open economy under fixed exchange rates, the trade-off is not really between full employment and price stability, but more likely between full employment and balance of payments equilibrium. Given this externally determined constraint, one of the most valid courses of action for Canadian economic policy is to seek to alleviate the discriminatory effects of inflation on individuals.The Report does not reach definite conclusions regarding the relationship between collective bargaining and the double objective of full employment and price stability. In that respect, it is merely a reflection of the state of economic knowledge. The authors could however be criticized for not having set out the various questions raised within the framework of an analytical model. While accurate measurement of policy effects is always hard to obtain, Phillips' curves, or better for Canada, trade-off curves between balance of payments surpluses and unemployment rates could have been relied upon as an appropriate framework for assessing the effects of alternative policies.Also evident in the report is the tendency to adopt the commentary approach at the expense of the more useful approach of economic analysis. A case in point is the discussion of wage parity between Canada and the U.S.A. : not even elementary analytical tools are brought in.