The Economic BOOM! of the 1920s But before life got better, it wasn’t great. A look at Canada’s economy before the boom.

Post-War Problems #1: Prohibition There will be a presentation on this. #2: Labour Unrest When WW1 ends, many munitions factories closed down Women were under pressure to return to household duties Thousands of returning soldiers were looking for work

Labour Unrest Even people who did have jobs were not much better off: why? Rapid Inflation: prices of basic items (food, clothing) had increased greatly, but wages had not increased at all!  The cost of living had more than doubled from 1914 to 1919! Soldiers, and other workers, wanted to create unions who would fight with/for them for better job conditions

The Country Strikes In 1919, workers across the country staged strikes Miners, steelworkers  Cape Breton Machinists  Toronto Loggers  West Coast Streetcar drivers  Windsor None of these strikes were so big as the Winnipeg General Strike of 1919

The Winnipeg General Strike May 1919-June 1919 Building and metal trade workers voted to strike To show their support, other workers in Winnipeg walked off the job! “general strike”: almost all industries and key services were shut down  Streetcar operators, garbage collectors, postal workers, telephone operators, firefighters, and hydro workers all refused to work

The Winnipeg General Strike Ottawa sends Mounties to Winnipeg to put down the strike Bloody Saturday: June 21  Violence erupts!  Mounties charge a parade (demonstration)  Shots are fired  One striker is killed  Strike leaders are arrested and sentenced to jail terms

The Winnipeg General Strike Together, government, factory owners, and the Mounties had defeated the strikers. Strikers are forced to go back to work Some are forced to promise not to become a union member or be involved in union activities Others were not welcomed back to their job

The Results of the Strike Draws attention to the social and economic conditions faced by many working people A royal commission is appointed to investigate the causes of the strike The commission comes up with 3 reasons:  High cost of living  Poor working conditions  Low wages Labour leaders turn to politics  they want their voices heard!

The BOOM! Gradually, life started to get better for most Canadians, especially by the mid-1920s Business picked up as we realized how rich we were in natural resources, and that America was willing to invest to develop them In regions across Canada, new industries grew and people had jobs again!

Industry #1: Wheat on the Prairies From 1925 to 1928, the prairies enjoyed huge wheat crops War-torn Europe – which had previously made its own – was struggling and wanted Canadian wheat The world price for wheat also moved up steadily By 1928, almost HALF of the wheat sold in the world came from Canada

Industry #2: Pulp and Paper Especially in Northern Ontario, Quebec, and BC, Canada had a ton of forest These forests were cut down to make pulpwood for US newspapers and magazines By 1925, Canada was the world’s largest supplier of newsprint, and the pulp and paper industry was Canada’s second largest industry after agriculture (i.e. wheat)

PROBLEM! Canada’s economy is become more and more dependent on the export of raw materials. Why is this a problem?

Industry #3: Mining Large deposits of nickel, copper, gold, silver, and lead were found in the Canadian Shield as well as in BC, so big mines were established (many with help from America) A demand for minerals arose with the rise of the automobile and appliance industries Sudbury produced 80% of the world’s nickel

Industry #4: Oil and Gas In 1924, “black gold” was discovered south of Calgary, and soon more was discovered in other places in Alberta More Canadians are driving automobiles, so the demand for gasoline and oil soars Oil and gas are always being used for heating and cooking Soon Alberta was producing 90% of Canada’s oil and gas

Industry #5: Hydroelectric Power Quebec and Ontario are big producers Niagara Falls had been used for power since 1895 Rivers were now developed as resources for water power Industries were turning to hydroelectric power instead of coal for things like mining and smelting People wanted electricity for their homes (lights and appliances) Canada’s output for hydroelectricity became second in the world

Problem! What was used for energy before oil and before hydroelectricity? Coal! Where was that being produced in Canada? The Maritimes! To whom were they now selling their coal? They weren’t…

Another Source of New Wealth During the 20s: The Rise of the Auto Industry During the 1920s, cars became much more affordable in Canada, and so a new industry arose In 1920, 1 in every 22 Canadian owned a car (4.5% of people) while in 1930, it was 1 in every 8.5 people (12% of the people)

Cars revolutionized Canadian society by… Letting people visit each other more easily Enabling trade (farmers could bring crops to market and buy stuff in stores) Started vacations/cottaging Let cities get bigger and spread out from downtowns cache.net/xd/ mp4?v=1&c=IWSAsset&k=2&d=72990B68305E4FDF7203B983680CA9244E7679DD01108BC60D8A D54BE6582EADCAAAB49C0

The Auto Industry brought lots of money and jobs to Canada … By 1929, people had jobs making cars in factories in places like Oshawa, Windsor and Walkerville

Many other Canadians got jobs in spin off industries like: Makers of tires and car parts Makers of materials like rubber, iron, leather, asphalt, lead, gasoline, paint, tin, and glass’ Auto dealerships, gas stations, and repair shops which had to open in every town

Spin Off Industries Continued… Police forces had to expand to deal with accidents Tourism industries like motels and roadside restaurants began Engineers and labourers were needed to make roads Mount Pleasant Road, Toronto, 1928

Foreign Investment in Canada At the beginning of the 20 th century, Canada’s biggest foreign investor was…? Britain! Bankers from Britain had invested in Canadian government bonds and railroads. They did not invest in industries much because they didn’t think they’d make any money.

WW1: Britain was broke after this costly war, so their investment in Canada slows down Someone else steps in, though… The U.S.! Americans wanted to invest in the rapidly expanding areas of the Canadian economy – the industries

Difference in Investors British investors usually left Canadian business people to run the businesses in their own way and just bought bonds (like loans with interest) American investors took greater control over the industries (they bought shares, which equals part ownership in companies) They also introduced the Branch Plant System  Branch industries are copies of the American parent company  Produce the same product as the parent, but they get to have a special stamp: “Made in Canada”  Parent company then does not have to pay such high taxes

Branch Plant System Good thing:  Essential to develop industries  Provides jobs  Provides lower priced goods to buy  Help Canada develop into a stronger nation Bad thing:  “Americanization”  Important decisions made in the US instead of Canada  Top management jobs = Americans  Profits sent back to the US  Complete economic takeover?

Branch Plant System – a Diagram U.S. Parent Company Canadian Branch Company Profits Important Decisions Management Jobs Foreign Investment Money Research & Development JobsTaxesCDN Products

Question What do you think? Was American investment in the Canadian economy in the 1920s a good thing or not?