Great Depression, Canada
   HOME

TheInfoList



OR:

The worldwide
Great Depression The Great Depression was a severe global economic downturn from 1929 to 1939. The period was characterized by high rates of unemployment and poverty, drastic reductions in industrial production and international trade, and widespread bank and ...
of the early 1930s was a social and economic shock that left millions of Canadians unemployed, hungry and often homeless. Few countries were affected as severely as
Canada Canada is a country in North America. Its Provinces and territories of Canada, ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, making it the world's List of coun ...
during what became known as the "Dirty Thirties", due to Canada's heavy dependence on exports which declined sharply in quantity and price, together with a crippling
Prairies Prairies are ecosystems considered part of the temperate grasslands, savannas, and shrublands biome by ecologists, based on similar temperate climates, moderate rainfall, and a composition of grasses, herbs, and shrubs, rather than trees, as the ...
drought known as the
Dust Bowl The Dust Bowl was a period of severe dust storms that greatly damaged the ecology and agriculture of the American and Canadian prairies during the 1930s. The phenomenon was caused by a combination of natural factors (severe drought) and hum ...
. Widespread losses of jobs and savings ultimately transformed the country by triggering the birth of
social welfare Welfare spending is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specifically to social insurance p ...
, a variety of
populist Populism is a contested concept used to refer to a variety of political stances that emphasize the idea of the " common people" and often position this group in opposition to a perceived elite. It is frequently associated with anti-establis ...
political movements, and a more activist role for government in the economy. In 1930-1931 the Canadian government responded to the Great Depression by applying severe restrictions to entry into Canada. New rules limited immigration to British and American subjects or agriculturalists with money, certain classes of workers, and immediate family of the Canadian residents. About 25,000 unemployed immigrants were also deported.


Economic results

By 1930, 30% of the labour force was out of work, and one fifth of the population became dependent on government assistance. Wages fell, as did prices.
Gross National Expenditure A variety of measures of national income and output are used in economics to estimate total economic activity in a country or region, including gross domestic product (GDP), Gross national income (GNI), net national income (NNI), and adjusted nati ...
had declined 42% from the 1929 levels. In some areas, the decline was far worse. In the rural areas of the prairies, two thirds of the population were on relief. Further damage was the reduction of investment: both large companies and individuals were unwilling and unable to invest in new ventures. In 1932, industrial production was only at 58% of the 1929 level, the second lowest level in the world after the United States, and well behind nations such as Britain, which only saw it fall to 83% of the 1929 level. Total national income fell to 55% of the 1929 level, again worse than any nation other than the U.S.


Impact

Canada's economy at the time was just starting to shift from primary industry (farming, fishing, mining and logging) to manufacturing. Exports of raw materials plunged, and employment, prices and profits fell in every sector. Canada was the worst-hit because of its economic position. It was further affected as its main trading partners were Britain and the U.S., both of which were badly affected by the worldwide depression. One of the areas not affected was
bush flying Bush flying refers to aircraft operations carried out in the bush. Bush flying involves operations in rough terrain where there are often no prepared landing strips or runways, frequently necessitating that bush planes be equipped with abnormal ...
, which, thanks to a mining and exploration boom, continued to thrive throughout this period. Even so, most bush flying companies lost money, impacted by the government's cancellation of airmail contracts in 1931-2.


Unemployment

Urban unemployment nationwide was 19%; Toronto's rate was 17%, according to the census of 1931. Farmers who stayed on their farms were not considered unemployed. By 1933, 30% of the labour force was out of work, and one-fifth of the population became dependent on government assistance. Wages fell as did prices. In some areas, such as mining and lumbering areas, the decline was far worse.


Prairie Provinces

The Prairie Provinces and
Western Canada Western Canada, also referred to as the Western provinces, Canadian West, or Western provinces of Canada, and commonly known within Canada as the West, is a list of regions of Canada, Canadian region that includes the four western provinces and t ...
were the hardest-hit. In the rural areas of the prairies, two thirds of the population were on relief. The region fully recovered after 1939. The fall of wheat prices drove many farmers to the towns and cities, such as
Calgary, Alberta Calgary () is a major city in the Provinces and territories of Canada, Canadian province of Alberta. As of 2021, the city proper had a population of 1,306,784 and a Metropolitan area, metropolitan population of 1,481,806 making it the List of ...
;
Regina, Saskatchewan Regina ( ) is the capital city of the Provinces and territories of Canada, Canadian province of Saskatchewan. The city is the second-largest in the province, and is a commercial centre for southern Saskatchewan. As of the 2021 Canadian census, ...
; and
Brandon, Manitoba Brandon () is the second-largest city in the province of Manitoba, Canada. It is located in the southwestern corner of the province on the banks of the Assiniboine River, approximately west of the provincial capital, Winnipeg, and east of the ...
. Population in the prairie provinces fell below natural replacement level. There was also migration from the southern prairies affected by
Dust Bowl The Dust Bowl was a period of severe dust storms that greatly damaged the ecology and agriculture of the American and Canadian prairies during the 1930s. The phenomenon was caused by a combination of natural factors (severe drought) and hum ...
conditions such as the
Palliser's Triangle Palliser's Triangle (), or the Palliser Triangle, is a semi-arid steppe occupying a substantial portion of the Western Canadian Canadian Prairies, Saskatchewan, Alberta and Manitoba, within the Great Plains region. While initially determined to be ...
to
aspen parkland Aspen parkland refers to a very large area of ecotone, transitional biome between prairie and boreal forest in two sections, namely the Peace River Country of northwestern Alberta crossing the border into British Columbia, and a much larger area ...
in the north. During the depression, there was a rise of working class militancy organized by the Communist Party. The labour unions largely retreated in response to the ravages of the depression at the same time that significant portions of the working class, including the unemployed, clamoured for collective action. Numerous strikes and protests were led by the Communists, many of which culminated in violent clashes with the police. Some notable ones include a coal miners strike that resulted in the Estevan Riot in
Estevan, Saskatchewan Estevan is the eleventh-largest city in Saskatchewan, Canada. It is approximately north of the Canada–United States border. The Souris River runs by the city. This city is surrounded by the Rural Municipality of Estevan No. 5. History T ...
where four miners were killed by the RCMP in 1931, a waterfront strike in
Vancouver Vancouver is a major city in Western Canada, located in the Lower Mainland region of British Columbia. As the List of cities in British Columbia, most populous city in the province, the 2021 Canadian census recorded 662,248 people in the cit ...
that culminated with the "
Battle of Ballantyne Pier The Battle of Ballantyne Pier occurred in Ballantyne Pier during a docker's strike in Vancouver, British Columbia, in June 1935. The strike can be traced back to 1912 when the International Longshoremen's Association (ILA), began organizing t ...
" in 1935, and numerous unemployed demonstrations up to and including the
On-to-Ottawa Trek The On-to-Ottawa Trek was a mass protest movement in Canada in 1935 sparked by unrest among unemployed single men in federal relief camps principally in Western Canada. The trek started in Vancouver and, picking up reinforcements along the way, ...
that left one Regina police constable and one protester dead in the "Regina Riot". Although the actual number of Communist Party militants remained small, their impact was far disproportionate to their numbers, in large part because of the anticommunist reaction of the government, especially the policies of Prime Minister R. B. Bennett who vowed to crush Communism in Canada with an "iron heel of ruthlessness". These conflicts diminished after 1935, when the Communist Party shifted strategies and Bennett's Conservatives were defeated. Agitation and unrest nonetheless persisted throughout the depression, marked by periodic clashes, such as a sit-down strike in Vancouver that ended with "
Bloody Sunday Bloody Sunday may refer to: Historical events Canada * Bloody Sunday (1923), a day of police violence during a steelworkers' strike for union recognition in Sydney, Cape Breton Island, Nova Scotia * Bloody Sunday (1938), police violence agai ...
". These developments had far-reaching consequences in shaping the postwar environment, including the domestic cold war climate, the rise of the
welfare state A welfare state is a form of government in which the State (polity), state (or a well-established network of social institutions) protects and promotes the economic and social well-being of its citizens, based upon the principles of equal oppor ...
, and the implementation of an institutional framework for industrial relations.


Women

Women's primary role were as housewives; without a steady flow of family income, their work became much harder in dealing with food and clothing and medical care. The birthrates fell everywhere, as children were postponed until families could financially support them. The average birthrate for 14 major countries fell 12% from 19.3 births per thousand population in 1930, to 17.0 in 1935. In Canada, half of Roman Catholic women defied Church teachings and used contraception to postpone births. Among the few women in the labor force, layoffs were less common in the white-collar jobs and they were typically found in light manufacturing work. However, there was a widespread demand to limit families to one paid job, so that wives might lose employment if their husband was employed. Housewives updated strategies their mothers used when they were growing up in poor families. Cheap foods were used, such as soups, beans and noodles. They purchased the cheapest cuts of meat—sometimes even horse meat—and recycled the
Sunday roast A Sunday roast or roast dinner is a British dish traditionally eaten on Sunday. It consists of roast meat, roast or mash potatoes, and accompaniments such as Yorkshire pudding, gravy, and may include condiments such as apple sauce, ...
into sandwiches and soups. They sewed and patched clothing, traded with their neighbors for outgrown items, and made do with colder homes. New furniture and appliances were postponed until better days. These strategies show that women's domestic labor—cooking, cleaning, budgeting, shopping, childcare—was essential to the economic maintenance of the family and offered room for economies. Many women also worked outside the home, or took boarders, did laundry for trade or cash, and did sewing for neighbors in exchange for something they could offer. Extended families used mutual aid—extra food, spare rooms, repair-work, cash loans—to help cousins and in-laws. Women held 25-30% of the jobs in the cities. Few women were employed in heavy industry, railways or construction. Many were household workers or were employed in restaurants and family-owned shops. Women factory workers typically handled clothing and food. Educated women had a narrow range of jobs, such as clerical work and teaching. It was expected that a woman give up a good job when she married. Srigley emphasizes the wide range of background factors and family circumstances, arguing that gender itself was typically less important than race, ethnicity, or class.


Teachers

School budgets were cut a lot across the country, although enrollments went up and up because dropouts could not find jobs. To save money the districts consolidated nearby schools, dropped staff lines, postponed new construction, and increased class size. Middle-class well-educated teachers were squeezed by the financial crisis facing their employers. In Ontario, new teachers were not hired so the average age and experience increased. However, their salaries fell and men who otherwise would have taken higher status business jobs increasingly competed against women. Married women were not hired on the grounds it was unfair for one family to have two scarce jobs that breadwinners needed. Women teachers, who had made major gains in the 1910-20 era, saw themselves discriminated against. The teacher's unions were practically helpless in the crisis, even in Ontario where they were strongest. After prosperity returned in the 1940s, however, money was available again, there was a shortage of teachers, and the unions proved more effective. For example, in Quebec, the Corporation Général des Instituteurs et des Institutrices Catholics (CIC) was founded in 1946 (it became the Centrale de l'Enseignement du Québec (CEQ) in 1967). It sought higher pensions and salaries and better working conditions, while insisting the teachers were full-fledged professionals. In remote rural areas professionalization was uncommon; local school boards tightly controlled the one-room schools, typically hiring local women with a high school education or a year at university as teachers, so their meagre salaries would remain in the community.


Labour policy

Case studies of four Canadian textile firms—two cotton and two hosiery and knitting—demonstrate the range business response to the economic crisis. Each faced a different array of conditions, and each devised the appropriate restructuring strategies. The large corporations responded by investing in more expensive machinery and automation, hiring less skilled workers to tend the automated equipment, and tweaking their product lines to changing consumer tastes. However the smaller hosiery and knitting firms lacked the capital to invest or the research needed to monitor consumer tastes. They used time-tested "Taylorized" scientific management or made piecemeal changes. Power shifted upward to management, as strikes were too risky in the early 1930s and the opportunity to find a better job had drastically narrowed. By 1935, however, the influence of militant American unions spilled over the border and Canadian unions became more forceful and harmonious. The activity was most notable in Ontario's automobile factories, beginning in Windsor in late 1936, where the new Automobile Workers of America (UAW) chartered its first Canadian local at the Kelsey-Hayes factory.


World trade

The Stock Market crash in New York led people to hoard their money; as consumption fell, the American economy steadily contracted, 1929-32. Given the close economic links between the two countries, the collapse quickly affected Canada. Added to the woes of the prairies were those of
Ontario Ontario is the southernmost Provinces and territories of Canada, province of Canada. Located in Central Canada, Ontario is the Population of Canada by province and territory, country's most populous province. As of the 2021 Canadian census, it ...
and
Quebec Quebec is Canada's List of Canadian provinces and territories by area, largest province by area. Located in Central Canada, the province shares borders with the provinces of Ontario to the west, Newfoundland and Labrador to the northeast, ...
, whose manufacturing industries were now victims of overproduction. Massive lay-offs occurred and other companies collapsed into bankruptcy. This collapse was not as sharp as that in the United States, but was the second sharpest collapse in the world. Canada did have some advantages over other countries, especially its extremely stable banking system that had no failures during the entire depression, compared to over 9,000 small banks that collapsed in the United States. Canada was hurt badly because of its reliance on base commodities, whose prices fell by over 50%, and because of the importance of international trade. In the 1920s about 25% of the Canadian Gross National Product was derived from exports. The first reaction of the U.S. was to raise tariffs via the '' Smoot-Hawley Tariff Act'', passed into law June 17, 1930. This hurt the Canadian economy more than most other countries in the world, and Canada retaliated by raising its own rates on American exports and by switching business to the Empire. In an angry response to Smoot–Hawley, Canada welcomed the British introduction of trade protectionism and a system of Commonwealth preference during the winter of 1931-32. It helped Canada avoid external default on their public debt during the Great Depression. Canada had a high degree of exposure to the international economy, which left Canada susceptible to any international economic downturn. The onset of the depression created critical balance of payment deficits, and it was largely the extension of imperial protection by Britain that gave Canada the opportunity to increase their exports to the British market. By 1938 Britain was importing more than twice the 1929 volume of products from Australia, while the value of products shipped from Canada more than doubled, despite the dramatic drop in prices. Thus, the British market played a vital role in helping Canada and Australia stabilize their balance of payments in the immensely difficult economic conditions of the 1930s.


Government reaction

At the Depression, the provincial and municipal governments were already in debt after an expansion of infrastructure and education during the 1920s. It thus fell to the federal government to try to improve the economy. When the Depression began
Mackenzie King William Lyon Mackenzie King (December 17, 1874 – July 22, 1950) was a Canadian statesman and politician who was the tenth prime minister of Canada for three non-consecutive terms from 1921 to 1926, 1926 to 1930, and 1935 to 1948. A Liberal ...
was
Prime Minister A prime minister or chief of cabinet is the head of the cabinet and the leader of the ministers in the executive branch of government, often in a parliamentary or semi-presidential system. A prime minister is not the head of state, but r ...
. He believed that the crisis would pass, refused to provide federal aid to the provinces, and only introduced moderate relief efforts. The government's reaction to The Great Depression is the focus of the 2013 documentary Catch The Westbound Train from Prairie Coast Films.


New Deal

The Bennett Government, which defeated Mackenzie King in the 1930 election, initially refused to offer large-scale aid or relief to the provinces, much to the anger of provincial premiers, but it eventually gave in and started a Canadian "New Deal" type of relief by 1935. By 1937, the worst of the Depression had passed, but it left its mark on the country's economic landscape.
Atlantic Canada Atlantic Canada, also called the Atlantic provinces (), is the list of regions of Canada, region of Eastern Canada comprising four provinces: New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island. As of 2021, the landma ...
was especially hard hit.
Newfoundland Newfoundland and Labrador is the easternmost province of Canada, in the country's Atlantic region. The province comprises the island of Newfoundland and the continental region of Labrador, having a total size of . As of 2025 the population ...
(an independent dominion at the time) was bankrupt economically and politically and gave up responsible government by reverting to direct British control. First World War veterans built on a history of postwar political activism to play an important role in the expansion of state-sponsored social welfare in Canada. Arguing that their wartime sacrifices had not been properly rewarded, veterans claimed that they were entitled to state protection from poverty and unemployment on the home front. The rhetoric of patriotism, courage, sacrifice, and duty created powerful demands for jobs, relief, and adequate pensions that should, veterans argued, be administered as a right of
social citizenship Social citizenship was a term first coined by T. H. Marshall, who argued that the ideal citizenship experience entails access to political, civil and social rights in a state.Rummery, Kirstein. (2002). "Disability, Citizenship and Community Ca ...
and not a form of charity. At the local, provincial, and national political levels, veterans fought for compensation and recognition for their war service, and made their demands for jobs and social security a central part of emerging social policy. The
Liberal Party The Liberal Party is any of many political parties around the world. The meaning of ''liberal'' varies around the world, ranging from liberal conservatism on the right to social liberalism on the left. For example, while the political systems ...
lost the 1930 election to the Conservative Party, led by
R.B. Bennett Richard Bedford Bennett, 1st Viscount Bennett (July 3, 1870 – June 26, 1947) was a Canadian lawyer, businessman, philanthropist, and politician who served as the 11th prime minister of Canada from 1930 to 1935. Bennett was born in Ho ...
. Bennett, a successful western businessman, campaigned on high tariffs and large-scale spending.
Make-work A make-work job is a job that is created and maintained at a cost not offset by the job’s fulfilment. Usually having little or no immediate financial benefit, such roles can be said to exist for other economic or social-political reasons, for ex ...
programs were begun, and
welfare Welfare may refer to: Philosophy *Well-being (happiness, prosperity, or flourishing) of a person or group * Utility in utilitarianism * Value in value theory Economics * Utility, a general term for individual well-being in economics and decision ...
and other assistance programs became vastly larger. This led to a large federal deficit, however. Bennett became wary of the budget shortfalls by 1932, and cut back severely on federal spending. This only deepened the depression as government employees were put out of work and public works projects were cancelled. One of the greatest burdens on the government was the
Canadian National Railway The Canadian National Railway Company () is a Canadian Class I freight railway headquartered in Montreal, Quebec, which serves Canada and the Midwestern and Southern United States. CN is Canada's largest railway, in terms of both revenue a ...
(CNR). The federal government had taken over a number of defunct and bankrupt railways during the First World War and the 1920s. The debt the government assumed was over $2 billion, a massive sum at the time, but during the boom years it seemed payable. The Depression turned this debt into a crushing burden. Due to the decrease in trade, the CNR also began to lose substantial amounts of money during the Depression, and had to be further bailed out by the government. With falling support and the depression only getting worse, Bennett attempted to introduce policies based on the
New Deal The New Deal was a series of wide-reaching economic, social, and political reforms enacted by President Franklin D. Roosevelt in the United States between 1933 and 1938, in response to the Great Depression in the United States, Great Depressi ...
of
Franklin Delano Roosevelt Franklin Delano Roosevelt (January 30, 1882April 12, 1945), also known as FDR, was the 32nd president of the United States, serving from 1933 until his death in 1945. He is the longest-serving U.S. president, and the only one to have served ...
in the United States. Bennett thus called for a
minimum wage A minimum wage is the lowest remuneration that employers can legally pay their employees—the price floor below which employees may not sell their labor. List of countries by minimum wage, Most countries had introduced minimum wage legislation b ...
,
unemployment insurance Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is the proportion of people above a specified age (usually 15) not being in paid employment or self-employment but currently available for work du ...
, and other such programs. This effort was largely unsuccessful; the provinces challenged the rights of the federal government to manage these programs. Some of the federal efforts were successful: the ''
Companies' Creditors Arrangement Act The ''Companies' Creditors Arrangement Act'' (CCAA; ) is a statute of the Parliament of Canada that allows insolvent corporations owing their creditors in excess of $5 million to restructure their businesses and financial affairs. The CCAA with ...
'' and '' Farmers' Creditors Arrangement Act'', which provided alternatives to bankruptcy for distressed businesses, were held to be constitutional by the ''
Reference Re Farmers' Creditors Arrangement Act ''Reference Re Farmers' Creditors Arrangement Act'' is a decision of the Judicial Committee of the Privy Council on the constitutionality of the '' Farmers' Creditors Arrangement Act'' as part of the bankruptcy and insolvency jurisdiction of the Pa ...
''. The judicial and political failure of Bennett's New Deal legislation shifted the struggle to reconstitute capitalism to the provincial and municipal levels of the state. Attempts to deal with the dislocations of the Great Depression in Ontario focused on the "sweatshop crisis" that came to dominate political and social discourse after 1934. Ontario's 1935 '' Industrial Standards Act'' (ISA) was designed to bring workers and employers together under the auspices of the state to establish minimum wages and work standards. The establishment of New Deal style industrial codes was premised on the mobilization of organized capital and organized labour to combat unfair competition, stop the spread of relief-subsidized labour, and halt the predations of sweatshop capitalism. Although the ISA did not bring about extensive economic regulation, it excited considerable interest in the possibility of government intervention. Workers in a diverse range of occupations, from asbestos workers to waitresses, attempted to organize around the possibility of the ISA. The importance of the ISA lies in what it reveals about the nature of welfare, wage labour, the union movement, competitive capitalism, business attitudes toward industrial regulation, and the role of the state in managing the collective affairs of capitalism. The history of the ISA also suggests that "regulatory unionism", as described by Colin Gordon in his work on the American New Deal, may have animated key developments in Canadian social, economic, and labour history. The failure to help the economy led to the federal Conservatives' defeat in the 1935 election when the Liberals, still led by Mackenzie King, returned to power. The public at large lost faith in both the
Liberal Party of Canada The Liberal Party of Canada (LPC; , ) is a federal political party in Canada. The party espouses the principles of liberalism,McCall, Christina; Stephen Clarkson"Liberal Party". ''The Canadian Encyclopedia''. and generally sits at the Centrism, ...
and the
Conservative Party of Canada The Conservative Party of Canada (CPC; , ), sometimes referred to as the Tories, is a Government of Canada, federal List of political parties in Canada, political party in Canada. It was formed in 2003 by the merger of the two main Right-wing ...
. This caused the rise of a
third party Third party may refer to: Business * Third-party source, a supplier company not owned by the buyer or seller * Third-party beneficiary, a person who could sue on a contract, despite not being an active party * Third-party insurance, such as a veh ...
: the
Cooperative Commonwealth Federation The Co-operative Commonwealth Federation (CCF; , FCC) was a federal democratic socialistThe following sources describe the CCF as a democratic socialist political party: * * * * * * and social-democraticThese sources describe the CCF as ...
(a socialist party that achieved some success before joining the
Canadian Labour Congress The Canadian Labour Congress, or CLC ( or ), is a national trade union centre, the central labour body in Canada to which most Canadian trade union, labour unions are affiliated. History Formation The CLC was founded on April 23, 1956, thro ...
in 1961, becoming the
New Democratic Party The New Democratic Party (NDP; , ) is a federal political party in Canada. Widely described as social democratic,The party is widely described as social democratic: * * * * * * * * * * * * * The Editors of ''Encyclopædia Britann ...
). With the worst of the Depression over, the government implemented some relief programs such as the '' National Housing Act'' and National Employment Commission, and it established Trans-Canada Airlines (1937, the predecessor to
Air Canada Air Canada is the flag carrier and the largest airline of Canada, by size and passengers carried. Air Canada is headquartered in the borough of Saint-Laurent in the city of Montreal. The airline, founded in 1937, provides scheduled and cha ...
). However, it took until 1939 and the outbreak of war for the Canadian economy to return to 1929 levels.


Liberals return

After 1936 the prime minister lost patience when westerners preferred radical alternatives such as the CCF (Co-operative Commonwealth Federation) and Social Credit to his middle-of-the-road liberalism. Indeed, he came close to writing off the region with his comment that the prairie dust bowl was "part of the U.S. desert area. I doubt if it will be of any real use again." Instead he paid more attention to the industrial regions and the needs of Ontario and Quebec regarding the proposed St. Lawrence Seaway project with the United States. As for the unemployed, he was hostile to federal relief and reluctantly accepted a Keynesian solution that involved federal deficit spending, tax cuts and subsidies to the housing market. Mackenzie King returned as prime minister, serving until his retirement in 1948. During all but the last two years he was also secretary of state for external affairs, taking personal charge of foreign policy.


Social Credit

Social Credit (often called ''SoCred'') was a populist political movement strongest in Alberta and neighbouring
British Columbia British Columbia is the westernmost Provinces and territories of Canada, province of Canada. Situated in the Pacific Northwest between the Pacific Ocean and the Rocky Mountains, the province has a diverse geography, with rugged landscapes that ...
, 1930s-1970s.
Social Credit Social credit is a distributive philosophy of political economy developed in the 1920s and 1930s by C. H. Douglas. Douglas attributed economic downturns to discrepancies between the cost of goods and the compensation of the workers who made t ...
was based on the economic theories of an Englishman,
C. H. Douglas Major (rank), Major Clifford Hugh Douglas, Institution of Mechanical Engineers, MIMechE, Institution of Electrical Engineers, MIEE (20 January 1879 – 29 September 1952), was a British engineer, economist and pioneer of the social credit economi ...
. His theories became very popular across the nation in the early 1930s. A central proposal was the free distribution of dividends (or social credit), called "funny money" by the opposition. During the
Great Depression The Great Depression was a severe global economic downturn from 1929 to 1939. The period was characterized by high rates of unemployment and poverty, drastic reductions in industrial production and international trade, and widespread bank and ...
in Canada the demand for radical action peaked around 1934, after the worst period was over and the economy was recovering. Mortgage debt was significant because farmers could not meet their interest payments. The insecurity of farmers, whose debts were increasing and who had no legal protection against foreclosure, was a potent factor in creating a mood of political desperation. The radical farmers party, UFA was baffled by the depression and Albertans demanded new leadership. Prairie farmers had always believed that they were being exploited by Toronto and Montreal. What they lacked was a prophet who would lead them to the promised land. The Social Credit movement began in Alberta in 1932; it became a political movement in 1935 and suddenly burned like a prairie fire. The prophet and new premier was radio evangelist
William Aberhart William Aberhart (December 30, 1878 – May 23, 1943), also known as "Bible Bill" for his radio sermons about the Bible, was a Canadian politician and the seventh premier of Alberta from 1935 to his death in 1943. He was the founder and first le ...
(1878–1943). The message was biblical prophecy. Aberhart was a fundamentalist, preaching the revealed word of God and quoting the Bible to find a solution for the evils of the modern, materialistic world: the evils of sophisticated academics and their biblical criticism, the cold formality of middle-class congregations, the vices of dancing and movies and drink. "Bible Bill" preached that the capitalist economy was rotten because of its immorality; specifically it produced goods and services but did not provide people with sufficient purchasing power to enjoy them. This could be remedied by the giving out money in the form of "social credit", or $25 a month for every man and woman. This pump priming was guaranteed to restore prosperity, he prophesied to the 1600 Social Credit clubs he formed in the province. Alberta's businessmen, professionals, newspaper editors and the traditional middle-class leaders vehemently protested Aberhart's crack-pot ideas, but they had not solved any problems and spoke not of the promised land ahead. Aberhart's new party in 1935 elected 56 members to the Alberta Assembly, compared to 7 for all the other parties. Alberta's Social Credit Party remained in power for 36 years until 1971. It was re-elected by popular vote no less than 9 times, achieving success by moving from left to the right.


Social Credit in office

Once in office in Alberta, Aberhart gave a high priority to balancing the provincial budget. He reduced expenditures and increased the sales tax and the income tax. The poor and unemployed got nothing. The $25 monthly social dividend never arrived, as Aberhart decided nothing could be done until the province's financial system was changed, and 1936 Alberta defaulted on its bonds. He did pass the ''Debt Adjustment Act'' that cancelled all the interest on mortgages since 1932 and limited all interest rates on mortgages to 5%, in line with similar laws passed by other provinces. In 1937 backbenchers passed a radical banking law that was disallowed by the national government (banking was a federal responsibility). Efforts to control the press were also disallowed. The party was authoritarian and tried to exert detailed control over its officeholders; those who rebelled were purged or removed from office by the new device of recall elections. Although Aberhart was hostile to banks and newspapers, he was basically in favour of capitalism and did not support socialist policies as did the
Cooperative Commonwealth Federation The Co-operative Commonwealth Federation (CCF; , FCC) was a federal democratic socialistThe following sources describe the CCF as a democratic socialist political party: * * * * * * and social-democraticThese sources describe the CCF as ...
(CCF) in Saskatchewan. By 1938 the Social Credit government abandoned its notions about the $25 payouts, but its inability to break with UFA policies led to disillusionment and heavy defections from the party. Aberhart's government was re-elected in the 1940 election, carrying 43% of the vote. The prosperity of the Second World War relieved the economic fears and hatreds that had fuelled farmer unrest. Aberhart died in 1943, and was succeeded as Premier by his student at the Prophetic Bible Institute and lifelong close disciple, Ernest C. Manning (1908–1996). The Social Credit party, now firmly on the right, governed Alberta until 1968 under Manning.


Recovery

The Canadian recovery from the Great Depression proceeded slowly. Economists Pedro Amaral and James MacGee find that the Canadian recovery has important differences with the United States.Amaral, Pedro and James C. MacGee "The Great Depression in Canada and the United States: A Neoclassical Perspective" in Kehoe, Prescott (2007) In the U.S. productivity recovered quickly while the labour force remained depressed throughout the decade. In Canada employment quickly recovered but productivity remained well below trend. Amaral and MacGee suggest that this decline is due to the sustained reduction in international trade during the 1930s. In the midst of the Great Depression, the Crown-in-Council attempted to uplift the people, and created two national corporations: the
Canadian Radio Broadcasting Commission The Canadian Radio Broadcasting Commission (CRBC/CCR; ), also referred to as the Canadian Radio Commission (CRC), was Canada's first public broadcaster and the immediate precursor to the Canadian Broadcasting Corporation. Origins The CRBC was est ...
(CRBC), and the
Bank of Canada The Bank of Canada (BoC; ) is a Crown corporations of Canada, Crown corporation and Canada's central bank. Chartered in 1934 under the ''Bank of Canada Act'', it is responsible for formulating Canada's monetary policy,OECD. OECD Economic Surve ...
. The former, established in 1932, was seen as a means to keep the country unified and uplifted in these harsh economic times. Many poor citizens found radio as an escape and used it to restore their own faiths in a brighter future. Broadcasting coast to coast mainly in English, with some French, primarily in Quebec, the CRBC played a vital role in keeping the morale up for Canadians everywhere. The latter was used to regulate currency and credit which had been horribly managed amongst Canadian citizens in the prior years. It was also set up to serve as a private banker’s bank and to assist and advise the Canadian government on its own debts and financial matters. The bank played an important role to help steer government spending in the right direction. The bank's effort took place through the tough years of the depression and on to the prosperity that followed into and after the Second World War. Both of these corporations were seen as positive moves by the Canadian government to help get the economy back on track. 1937 was an important year in the recovery from the Great Depression. The Bank of Canada was nationalized in that year, and the Canadian Radio Broadcasting Commission (CRBC) became the Canadian Broadcasting Corporation (CBC) in that same year. Both corporations were successful aids in the cultural and financial recovery of the Canadian economy during the Great depression. It took the outbreak of
World War II World War II or the Second World War (1 September 1939 – 2 September 1945) was a World war, global conflict between two coalitions: the Allies of World War II, Allies and the Axis powers. World War II by country, Nearly all of the wo ...
to pull Canada out of the depression. From 1939, an increased demand in Europe for materials, and increased spending by the Canadian government created a strong boost for the economy. Unemployed men enlisted in the military. By 1939, Canada was in the first prosperity period in the
business cycle Business cycles are intervals of general expansion followed by recession in economic performance. The changes in economic activity that characterize business cycles have important implications for the welfare of the general population, governmen ...
in a decade. This coincided with the recovery in the American economy, which created a better market for exports and a new inflow of much needed capital.


See also

*
Canada in the World Wars and Interwar Years During the world wars and interwar period, 1914–1947, Canada experienced economic gain, more freedom for women, and new technological advancements. There were severe political tensions over issues of war and ethnicity, and heavy military casu ...
*
Cities in the Great Depression Throughout the industrial world, cities were devastated during the Great Depression, beginning in 1929 and lasting through most of the 1930s. Worst hit were port cities (as world trade fell) and cities that depended on heavy industry, such as ...
*
List of riots and civil unrest in Calgary This is a timeline of the history of Calgary, Alberta, Canada. 18th century *1787 – Cartography, Cartographer David Thompson (explorer), David Thompson spent the winter with a band of Northern Peigan, Peigan encamped along the Bow River. He w ...


References


Further reading

* Robert L. Ascah; ''Politics and Public Debt: The Dominion, the Banks, and Alberta's Social Credit'' University of Alberta Press, 199
online version
* Baillargeon, Denyse. ''Making Do: Women, Family and Home in Montreal during the Great Depression'' (1999). 232 pp. * Berton, Pierre. ''The Great Depression: 1929-1939'' (1990), well-written popular history * Broadfoot, Barry. ''Ten Lost Years: 1929-1939: Memories of Canadians Who Survived the Depression.'' Toronto: Doubleday, 1973. 390 pp. * Campbell, Lara. "'We Who Have Wallowed in the Mud of Flanders': First World War Veterans, Unemployment and the Development of Social Welfare in Canada, 1929-39." ''Journal of the Canadian Historical Association'' (2000) 11: 125-149. Fulltext in Erudit * Cook, Ramsay, ed. ''Politics of Discontent'' (1967), with articles on Aberhart, George McCullagh, Pattullo and the Reconstruction Party. * Fisher, Robin. "The Decline of Reform: British Columbia Politics in the 1930s." ''Journal of Canadian Studies'' 1990 v.25 * Fowke, V. C. ''The National Policy and the Wheat Economy'' (1957) * Gray, James. ''The Winter Years'' (1966) describes life in Winnipeg during the depression * Hoar, Victor, ed., ''The Great Depression'' (1969) includes recollections of the 1930s * Hughes, E. C. ''French Canada in Transition'' (1943), sociological study * Klee, Marcus. "Fighting the Sweatshop in Depression Ontario: Capital, Labour and the Industrial Standards Act." ''Labour'' 2000 (45): 13-51. * Kottman Richard N. "Herbert Hoover and the Smoot-Hawley Tariff: Canada, A Case Study," ''Journal of American History,'' Vol. 62, No. 3 (Dec., 1975), pp. 609–63
in JSTOR
* Lipset, Seymour Martin. ''Agrarian Socialism'' (1950), on CCF *
Dean E. McHenry Dean E. McHenry (18 October 1910 – 17 March 1998) was an American professor of political science, and the founding chancellor of the University of California, Santa Cruz. McHenry was born in Lompoc, California north of Santa Barbara, and receive ...
; ''The Third Force in Canada: The Cooperative Commonwealth Federation, 1932-1948'' (1950
online version
* McLachlan, Elizabeth. ''With Unshakeable Persistence: Rural Teachers of the Depression Era.'' Edmonton: NeWest, 1999. 187 pp. * Neatby, H. Blair; ''The Politics of Chaos: Canada in the Thirties'' Macmillan of Canada
(1972) online version
the standard scholarly survey * Neatby, H. Blair; ''William Lyon Mackenzie King, 1924-1932: The Lonely Heights'' University of Toronto Press, 196
online version
* Neatby, H. Blair; ''William Lyon Mackenzie King: 1932-1939: the Prism of Unity,'' University of Toronto Press, 197
online version
* Reid, Escott (1933-06). "The Effect of the Depression on Canadian Politics, 1929–32". ''American Political Science Review'' 27(3): 455–465. * Rogers, Sean Harris. "Depression and War: Three Essays on the Canadian Economy, 1930-1945." PhD dissertation McGill U. 2000. 245 pp. DAI 2003 63(7): 2644-2645-A. DANQ70191 Fulltext in ProQuest Dissertations & Theses * Rooth, Tim and Taylor, Rebecca. "Exports and External Adjustment During the Slump: the British Market, Australia and Canada During the 1930s." ''Journal of European Economic History'' 2001 30(3): 569-595. * Safarian, A.E. ''The Canadian Economy in the Great Depression'' (1st ed. 1959; 3rd ed. 2009 with new preface); standard economic history; has data on public and private investment in the major sectors of the economy
online
* Srigley, Katrina. ''Breadwinning Daughters: Young Working Women in a Depression-era City, 1929-1939'' (University of Toronto Press, 2010) * Srigley, Katrina. "Clothing stories: consumption, identity, and desire in depression-era Toronto." ''Journal of Women's History'' (2007) 19#1 pp: 82-104

* Srigley, Katrina. "" In case you hadn't noticed!": Race, Ethnicity, and Women's Wage-Earning in a Depression-Era City." ''Labour/Le Travail'' (2005): 69-105
online
* Struthers, James. "Canadian unemployment policy in the 1930s" in R. Douglas Francis and Donald B Smith, eds. ''Readings in Canadian history, Post Confederation'' (2002) pp.347–361
online
* Thompson, John H., and Allan Seager. ''Canada 1922-1939'' (1985). standard scholarly survey


External links



{{DEFAULTSORT:Great Depression In Canada Economic history of Canada Canada in the world wars and interwar period Poverty in Canada