Transcript Canada During the Great Depression

Canada During the
Great Depression
Guiding Questions
• What were the causes of the Great Depression in
Canada?
– Compare and contrast the causes of the Great Depression in
Canada with the US
– To what extent did the economic crisis in the US cause the
downturn in Canada
• Compare and contrast the government’s response to the
Depression in Canada and the US.
• To what extent did the policies of Bennett and King bring
an end to the Great Depression in Canada
• How did the Great Depression change the relationship
between government and business in Canada?
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.
• 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
Canadian Relief Camps
• October 1932, Bennett
establishes a network of relief
camps for unemployed and
homeless men.
• Run by the military.
• In return for bunkhouse
residence, 3 meals a day, work
clothes, medical care and 20
cents a day, the "Royal Twenty
Centers" worked 44-hr weeks
clearing bush, building roads,
planting trees and constructing
public buildings.
Canadian Relief Camps
• Critics argued that the federal
government had established
the camps in lieu of a program
of work and wage increases.
• Conditions in the camps were
abhorrent, not only because of
the low pay, but the lack of
recreational facilities, isolation
from family and friends, poor
quality food, and the use of
military discipline.
• Communist Party leaders saw
a chance to organize strikes in
the camps. Forming the Relief
Camp Worker’s Union
On to Ottawa
• April 1935. After a two-month
protest in Vancouver, B.C.
camp strikers voted to travel
east to Ottawa and take their
grievances to the federal
government.
• Strikers’ demanded:
> Adequate first aid in the
camps
> Extension of the Workmen’s
Compensation Act to camp
workers
> Repeal of Section 98 of the
Criminal Code
> Right for camps workers
to vote in federal elections.
Regina Riots
• Bennett invited trek leader
Slim Evans to talks, on the
condition that the 1600 strikers
remain in Regina. (Where a
encampment of RCMP waited)
• A public meeting in Market
Square announce a
breakdown in talks
• At 8:00 PM a whistle signaled
the beginning of an attack by
police on strikers
• Trekkers in a nearby stadium
where detained in a make-shift
prison camp
Aftermath of Regina
• Discredited the Bennett government, 1935 elections
Conservatives went from 134 seats in Parliament to 39.
• Public sympathy for the Trekkers (strikers) spilled over to
the Communist Party which organized the protest.
• The military camps were dismantled and replaced with
smaller camps managed by provincial governments with
slightly better pay using federal funds
• Public support set the tone for social welfare reforms to
take place after WWII.
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.
William “Bible Bill” Aberhart
• School principal/evangelist. Begins broadcasting his “Back to
the Bible” program to a large audience in 1925.
• 1932 he becomes interested in C.H. Douglass’ Social Credit
Theory. Imbalance between what is produced and what can
be purchased (misdistribution of income)
• Social Credit Theory advocates
> government income subsidies to stimulate economic growth
> tight regulatory control of banks to manage money supply
• Aberhart forms the Social Credit Party of Alberta and wins the
provincial election in 1935.
• Aberhart is never successful in implement Social Credit
because banking and monetary policy are controlled by the
federal government in Canada
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
Rowell-Sirois Report
• Attempts at providing relief during the Depression were
exacerbated by legal issues over the division of power
between the national and provincial governments under the
BNAA.
• Royal Commission on Dominion-Provincial Relations 1937.
1940 recommendations:
– Found that provincial responsibility for health, education,
and welfare had grown beyond the capacity of some
provinces
– Federal government should take over taxation authority
and provide the provincial governments income through
grants
– Federal government should take responsibility for
retirement pensions and unemployment insurance.