The Eastern and Western Football Conferences, which had carried on as separate and autonomous entities since the founding of the CFL in 1958, agreed to a full merger prior to the start of the 1981 season.
With the merger, the Eastern and Western Football Conferences were dissolved and renamed as the East and West Divisions.
After the 1980 season, after owning the team for over ten years, Montreal Alouettes owner Sam Berger retired and sold the team to Nelson Skalbania, who brought in high priced NFL talent who did not adapt to the Canadian game, bringing a terrible losing season to Montreal (they did, however, make the playoffs due to the weak division that year), and with it, a loss of fan support, and he lost money and because of the high priced talent he bankrupted the team.
Ottawa nevertheless upset the Hamilton Tiger-Cats and qualified for the Grey Cup despite winning only five games in the regular season finishing seventh overall.
The Eskimos' Neil Lumsden (RB) was named Grey Cup's Most Valuable Canadian.