Canada During the Great Depression

Causes of the Depression Over Production and Expansion - Canada's companies expanded their industries so they could meet war demand. As European industry recovered, Canadian industry and agriculture were overproducing causing prices to fall. Dependence on Commodity Exports - Canada's economy was overly dependent on commodity exports. As U.S. and European demand fell it created a significant drop in sales causing an economical depression. Dependence on the United States - The US was one of Canada’s largest buyers of timber and minerals. Also, US corporations were buying shares of Canadian industries, linking the stock markets of the two.

Causes of the Depression High Tariffs – in a effort to prop up Canadian products the national government raised tariffs. The protectionist strategy backfired when other countries imposed retaliatory tariffs in Canadian goods.. Like Smoot-Hawley tariffs made the problem worse. Too Much Credit - Canadians bought too much on lease and credit including stocks. Therefore when the stock market crashed (partly due to the margin buying), Canadians were in debt and faced a trying time as they attempted to sell their personal belongings or were having their half paid-off possessions repossessed.

Other contributing factors The Dust Bowl - The Prairies were hit extremely hard by several years of drought. Dust storms swept across the prairies, making it impossible for farmers to grow wheat. Thus, since the farmers had frequently bought their seed and machinery by using credit, when they couldn't pay off their debts, the farmers were often bankrupted and rural banks failed.

W.L. McKenzie King Prime Minister (Liberal Party) of Canada from 1921 to 1930. First term struggle to work with the Progressive Party and his own Liberal Party, especially on the issue of tariffs (which prairie progressives wanted lowered). McKenzie King’s government presided over a period of unrest among farmers in the Prairies as farm prices declined. He also faced growing dissent from WWI veterans who expected their sacrifices to be compensated during difficult economic times.

Black Tuesday Canada’s stock market (Toronto) was closely linked to the NYSE, thus when the U.S. market crashed so did the CSE 1929-1933: GNP fell 40% (37% US), unemployment rose to 27%, exports in wheat, minerals and timber fell by 50%. Under McKenzie King’s laissez-faire leadership the national government took minimal action to provide relief or encourage economic recovery. Relief programs were the responsibility of ill-equipped provincial governments. Conservatives led by R.B. Bennett won the government in 1930

R.B. Bennett Prime Minister (Conservative Party) of Canada from 1930 to 1935, during the worst of the Great Depression years. Bennett tried to combat the depression by increasing trade within the British Empire and imposing tariffs for imports from outside the Empire. Known as the Imperial Preference Policy Conservative pro-business policies provided little relief for the unemployed

Blaming it on Bennett

Bennett’s New Deal January 1935, Bennett announces in a radio address “I am for reform” and launches his own New Deal. The plan called for federal government intervention: > minimum wage, maximum work week laws, > unemployment insurance > retirement pensions, health insurance > mortgage assistance for farmers Most of the New Deal was seen by the Supreme Court of Canada and the Judicial Committee of the Privy Council as an encroachment on the authority of provincial governments and struck down as violation of Section 92 of the British North America Act (Canada's Constitution) Bennett’s reform effort was seen as too little, too late by voters who elected McKenzie King in October 1935

McKenzie King Returns Prime Minister (Liberal Party) of Canada from 1935 to 1948. Introduces relief programs: > National Housing Act > National Employment Commission Nationalizes: > Canadian Broadcast Corporation 1936 > Trans-Canada Airlines (Air-Canada) 1937 > Bank of Canada 1938 From 1939, an increased demand in Europe for materials, and increased spending by the Canadian government on public works created a boost to the economy. Unemployment declined as men enlisted in the military. By 1939, Canada was experiencing economic prosperity for the first time in a decade.

C.C.F. Co-Operative Commonwealth Federation (CCF) Socialist political party established in Calgary, Alberta in 1932. Platform: > Concentration of wealth in the hands of a few threatened democracy. > New social order calling for production and distribution for the public good not private gain. CCF joined the League for Social Reconstruction (LSR) Regina Manifesto 1933: All industry related to social planning would be nationalized Universal health care, unemployment compensation, and pensions would be provided by amendments to the BNAA The CCF enjoyed modest success in the Western Provinces

Communist Party of Canada Became a legal party in Canada in 1924. Criticized as Un-Canadian because of its allegiance to Communist International (Comintern) operating out of Moscow 1919, Red Scare, Section 98 of the Criminal Code outlaws the Communist Party. Party leaders were imprisoned in 1931. Helped organize the trek to Ottawa. Arthur “Slim” Evans