Canada During theGreat Depression

Canada During theGreat Depression

Guiding QuestionsGuiding 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 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 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 KingW.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 TuesdayBlack 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. BennettR.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 BennettBlaming it on Bennett

Canadian Relief CampsCanadian 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 CampsCanadian 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 OttawaOn 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 RiotsRegina 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 ReginaAftermath 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 DealBennett’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 ReturnsMcKenzie 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” AberhartWilliam “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.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 CanadaCommunist 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 ReportRowell-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.