Canada During the Great Depression

1
Canada During theGreat Depression
2
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 governments 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?

3
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 Canadas largest buyers of timber and
  minerals. Also, US corporations were buying
  shares of Canadian industries, linking the stock
  markets of the two.

4
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.

5
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 Kings 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.

6
Black Tuesday

• Canadas 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 Kings 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

7
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

8
Blaming it on Bennett
9
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.

10
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
  Workers Union

11
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 gt Adequate first aid in the
  campsgt Extension of the Workmens
  Compensation Act to camp workersgt Repeal of
  Section 98 of the Criminal Codegt Right for
  camps workers to vote in federal elections.

12
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 800 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

13
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.

14
Bennetts 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
  interventiongt minimum wage, maximum work week
  laws, gt unemployment insurance gt retirement
  pensions, health insurancegt 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)
• Bennetts reform effort was seen as too little,
  too late by voters who elected McKenzie King in
  October 1935

15
McKenzie King Returns

• Prime Minister (Liberal Party) of Canada from
  1935 to 1948.
• Introduces relief programsgt National Housing
  Actgt National Employment Commission
• Nationalizesgt Canadian Broadcast Corporation
  1936gt Trans-Canada Airlines (Air-Canada) 1937gt
  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.

16
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 gt government
  income subsidies to stimulate economic growthgt
  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

17
C.C.F.

• Co-Operative Commonwealth Federation (CCF)
  Socialist political party established in Calgary,
  Alberta in 1932.
• Platformgt Concentration of wealth in the hands
  of a few threatened democracy.gt 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

18
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

19
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.