The Billion Dollar Gift and Mutual Aid were financial incentives instituted by the

Canadian Canadians (french: Canadiens) are people identified with the country of Canada. This connection may be residential, legal, historical or cultural. For most Canadians, many (or all) of these connections exist and are collectively the source of ...

minister C. D. Howe during

World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the World War II by country, vast majority of the world's countries—including all of the great power ...

Background

Due to its expenditure on war

materiel Materiel (; ) refers to supplies, equipment, and weapons in military supply-chain management, and typically supplies and equipment in a commercial supply chain context. In a military context, the term ''materiel'' refers either to the spec ...

, Britain lacked

gold reserve A gold reserve is the gold held by a national central bank, intended mainly as a guarantee to redeem promises to pay depositors, note holders (e.g. paper money), or trading peers, during the eras of the gold standard, and also as a store ...

s and

U.S. dollar The United States dollar ( symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the official ...

s, to pay for existing and future orders with Canadian industry. At the same time, following expansion, Canadian industry was dependent on British contracts and before the war had had a positive

balance of trade The balance of trade, commercial balance, or net exports (sometimes symbolized as NX), is the difference between the monetary value of a nation's exports and imports over a certain time period. Sometimes a distinction is made between a balance ...

with the UK but with the establishment of

Lend-Lease Lend-Lease, formally the Lend-Lease Act and introduced as An Act to Promote the Defense of the United States (), was a policy under which the United States supplied the United Kingdom, the Soviet Union and other Allied nations with food, oil, ...

the UK placed future orders with the US. The Billion Dollar Gift was given in January 1942, coupled with a C$700 million non-interest bearing loan, both anticipated to last just over a year. It did not last until the end of 1942. It was replaced in May 1943 with the "War Appropriation (United Nations Mutual Aid) Act, 1943" which provided for aid to the UK and the other

Allies An alliance is a relationship among people, groups, or states that have joined together for mutual benefit or to achieve some common purpose, whether or not explicit agreement has been worked out among them. Members of an alliance are called ...

and lasted until the end of the war. The magnitude of these contributions made them one of Canada's greatest contributions to the war effort. The two grants totaled over C$3 billion. Moreover, the Billion Dollar Gift triggered a strong unpopular reaction amongst Canadians, which was demonstrated particularly in

Quebec Quebec ( ; )According to the Canadian government, ''Québec'' (with the acute accent) is the official name in Canadian French and ''Quebec'' (without the accent) is the province's official name in Canadian English is one of the thirte ...

. The rate at which the money was used was a key reason in creating this unpopular view, as well as the lack of funding that was provided to the other nations in the Commonwealth. The aftermath of the Gift led Canada's future funding to assist the Allies with an alternative approach; one that focused on loaning material goods instead of money. A further consequence led to a change in the

British Commonwealth Air Training Plan The British Commonwealth Air Training Plan (BCATP), or Empire Air Training Scheme (EATS) often referred to as simply "The Plan", was a massive, joint military aircrew training program created by the United Kingdom, Canada, Australia and New ...

and this enabled another Canadian loan of just over $1 billion for Britain, Canada, Australia and New Zealand to share. In addition, Canada provided materiel and services, including things like food, ammunition, and raw materials, as well as things like

corvette A corvette is a small warship. It is traditionally the smallest class of vessel considered to be a proper (or " rated") warship. The warship class above the corvette is that of the frigate, while the class below was historically that of the slo ...

Park ship Park ships were merchant steamships constructed for Canada’s Merchant Navy during the Second World War. Park ships and Fort ships (built in Canada for operation by the British) were the Canadian equivalent of the American Liberty ships. Al ...

s, and

radar Radar is a detection system that uses radio waves to determine the distance (''ranging''), angle, and radial velocity of objects relative to the site. It can be used to detect aircraft, Marine radar, ships, spacecraft, guided missiles, motor v ...

sets, Milner, Marc. ''North Atlantic Run: The Royal Canadian Navy And the Battle for the Convoys''. (Annapolis, Maryland. : Naval Institute Press, 1985)Zimmerman, David. ''The Great Naval Battle of Ottawa'' (Toronto: University of Toronto Press, 1989. most of which went to the

Commonwealth A commonwealth is a traditional English term for a political community founded for the common good. Historically, it has been synonymous with "republic". The noun "commonwealth", meaning "public welfare, general good or advantage", dates from the ...

; some, like radars, also went to the U.S. In 1943, Canada had the fourth-highest industrial production among the

, led by the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...

, the

Soviet Union The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen nationa ...

and the

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and ...

.Roberts, Leslie. ''C.D.: The Life and Times of Clarence Decatur Howe''. (Toronto: Clarke, Irwin, and Company Limited, 1957). p 119-120 Canada also loaned $1.2 billion on a long-term basis to Britain immediately after the war; these loans were fully repaid in late 2006."Britain makes final WW2 lend-lease payment."
''Inthenews.co.uk.'' Retrieved: 8 December 2010.

References

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External links

* ttps://web.archive.org/web/20130511130037/http://www.info.dfat.gov.au/info/historical/HistDocs.nsf/%28LookupVolNoNumber%29/7~68 68 Australia-Canada Mutual Aid Agreement Canada in World War II Economic aid during World War II Government of Canada

Background

See also

References

Further reading

External links