Stelco President Fred Telmer, locked in a nine-week-old strike by the United Steelworkers of America, blamed Bank of Canada Governor John Crow. The ''devastating effect'' of monetary policy on consumer demand has made it harder for the company to meet the union's terms, he said. And labor? ''For once I agree with him,'' says Leo Girard, the steelworkers' leader.

I bet. How much easier life would be if unions could demand, and companies pay, whatever they liked. How rare the need for strikes if any wage increases could be passed on to consumers, courtesy of the always-accommodating Bank of Canada.

Apart from this swerve into tripartitism, the council's annual report is mostly pretty sensible. It is testimony to the shallowness of journalists' understanding of economics and their tendency to seize on buzz words that the report has been presented as an attack on the Bank of Canada's ''high interest rate'' policy. The council is suggesting neither that inflation is not worth fighting, nor that monetary policy should not be the weapon.

Rather, it is concerned with reducing the costs of a counterinflationary campaign, amongst which certainly may be high interest rates and unemployment. But it does not, as so many critics do, say they must be its result, still less that they are the instruments of its effect. Nor does a discussion of the harmfulness of high interest rates, or the desirability of full employment, imply that easing monetary policy is the answer to either.

In the main, its analysis and recommendations mirror those of this newspaper: that the costs of disinflation depend on the flexibility of the supply side of the economy, particularly labor markets; that for markets to adjust smoothly, people must understand what the policy is, and they must believe it will be carried out.

Hence the council's call for the Bank to set more explicit timetables and benchmarks against which to measure progress against inflation. Hence its injunction against acts of government - increases in excise taxes and regulated prices - that add to expectations of inflation and undermine the Bank's credibility. And hence, unfortunately, its flirtation with corporatism as the means of encouraging labor market adjustments.

The problem with sitting business, labor and government down at the table together is the long list of the uninvited. The sectors of ''business'' that will demand a seat, on the basis of their preponderant share of economic output, will tend, by definition, to represent mature industries. But nearly all the jobs and most of the growth in coming decades will come from new firms and industries.

Close to 70% of ''labor'' is nonunion, but it is unions who wear the label. ''Government'' is represented, but the taxpayer is absent. And consumers are never represented, since the purpose of getting the other three together is to find ways around consumer preferences, as expressed through the market.

This bias for the organized few over the disparate many, for those inside the market over those outside, makes corporatism especially unsuited as a full- employment policy. Yes, a single set of negotiations between centralized labor and management groups would cut down on leapfrogging wage claims that jeopardize the jobs of those already employed. But unless the unemployed get their own seat at the table, their interests will never fully be considered.

A true full-employment policy would start by freeing labor markets from measures designed to enhance the incomes of the insiders at the expense of the jobs of the outsiders: closed-shops, mandatory indexed pensions, minimum wages and the like. .

There's nothing wrong with capital and labor merging their interests at the level of the shop floor. As a model for organizing the economy as a whole, however, such ''co-operation'' is subversive of the public interest. As Will Rogers said, if business and labor ever do get together, ''it's good night for the rest of us.''