Riendeau A Roger E. Brief History of Canada

Подождите немного. Документ загружается.

A BRIEF HISTORY OF CANADA

280

With the growing expression and recognition of a distinct national

culture along with the unrelenting movement of people from the

countryside to the city, the basic character of modern Canada was tak-

ing shape by 1930. The National Policy had fulﬁ lled its objective of

transforming Canada into an industrial nation. The seeds of multicul-

turalism had been sown amid the prevailing bicultural landscape.

Canada had made an auspicious debut on the world stage, and its

national stature was conﬁ rmed by the Statute of Westminster in 1931.

In essence, the nation was ready to advance beyond its adolescent stage

of development. But before it could continue its expansive course,

Canada would have to endure a decade and a half of national economic

crisis followed by international upheaval.

281

THE PERILS OF

DEPRESSION AND WAR

(1930–1945)

he almost continuous growth and prosperity of the ﬁ rst three

decades of the 20th century not only ensured Canada’s survival as

a nation but also transformed it into a modern urban and industrial

society and an active participant in international affairs. Henceforth,

Canada would be able to exert greater inﬂ uence on the course of world

development, and conversely, world events would have a more pro-

found impact on the nation’s destiny. The troublesome consequences of

this reality became strikingly evident during the 1930s, when Canada

and most of the Western world suffered through a severe and sustained

economic crisis that has become known as the Great Depression.

Then, during the ﬁ rst half of the 1940s, much of the world was again

mobilized for a second great war that, like its forerunner a quarter of

a century earlier, challenged Canadians and their government to make

the most effective use of their ﬁ ghting and productive capacities. In

Canada, as in most countries, the Great Depression and World War II

together caused a degree of political, social, and economic upheaval

that dramatically altered the role of government in the lives of its citi-

zens, and thus set the stage for the rise of the welfare state.

Economic Crisis and Social Distress

The spectacular crash of the New York stock market that ﬁ nancially

wiped out thousands of stock speculators in October 1929 signaled the

start of an economic crisis of unprecedented magnitude and duration

for North America. Unlike most European nations, which struggled in

the wake of the social and economic dislocation caused by World War

I, Canada and the United States were unprepared for the abrupt end to

A BRIEF HISTORY OF CANADA

282

the boom and the optimism that they had enjoyed throughout much of

the 1920s. Political and economic leaders in both countries correctly

assumed that the great crash on Wall Street was symptomatic of declin-

ing business conﬁ dence. But they proved to be mistaken in their belief

that this “cyclical” slump in the economy would be as short-lived as

others had typically been over the past three decades or more. A mis-

understanding of the multifaceted causes of the Great Depression led to

ineffective government responses that only served to aggravate the eco-

nomic and social distress of the numerous people who suffered or

feared the loss of their jobs.

Indeed, the causes of the Great Depression were related to factors that

were mostly beyond the control of the Canadian government and which

revealed the extreme vulnerability of the Canadian economy to world

market conditions (Safarian 1970; Norrie and Owram 2002). Because

one-third of its gross national income was derived from exports, Canada

suffered from a substantial decline in the demand for and the price of

such primary products as grain, ﬁ sh, newsprint, lumber, and mineral

resources (with the exception of gold and nickel) in the markets of the

United States and Europe. Prices for primary commodities dropped not

only because of domestic overproduction and overcapacity but also

because of the lower demand resulting from the rise of economic nation-

alism. The United States, Canada’s largest customer, attempted to pro-

tect its own workers and farmers from foreign competition and to

stimulate its domestic market by raising tariffs to historically high levels

in 1930. European countries retaliated by raising their tariffs and further

restricting imports, much to Canada’s detriment.

The fall in wheat exports was particularly dramatic because of difﬁ -

culties in selling the record-breaking 1928 and 1929 crops; stiff compe-

tition from Argentina, Australia, and Russia; and reduced purchases by

European countries attempting to revive their own production through

restrictions on food imports. By 1932 the price and volume of Canadian

wheat exports had dropped to less than one-quarter of their predepres-

sion levels. The meager incomes of Prairie wheat farmers were further

diminished by natural disasters, as drought in 1934 and again in 1937

parched the Prairie soil and scorching wind turned the landscape into

a veritable desert. Some areas of southwestern Saskatchewan and

southeastern Alberta experienced drought conditions throughout the

decade, while grasshoppers and wheat rust further contributed to crop

failures. Prairie wheat production plunged to a historic low in terms of

yield per acre in 1937, when the total crop yield was less than one-third

of the peak levels achieved in 1928. Agricultural incomes in the Prairies

283

declined by as much as 75 percent, and numerous communities,

including farmers, businesses, and governments, faced the threat of

bankruptcy.

The repercussions of the decline in wheat exports were felt through-

out the national economy. Railway revenues were drastically cut;

industry suffered from the slumping sales of farm machinery and lower

farm-purchasing power in general; and construction activity was cur-

tailed, as was the demand for consumer products. The gross national

product fell by 40 percent from 1929 to 1932. But the most tangible

indicator of the severity of the depression was the rise of unemploy-

ment to a historic high of 32 percent of the national labor force in May

1933. Thereafter, the unemployment rate declined gradually but was

still at 10 percent in 1939; only in 1941, as the Canadian war effort

escalated, did unemployment return to its predepression levels. The

unemployment problem was critical not only because of its magnitude

and duration but also because of its largely urban context. When Can-

ada had been predominantly rural and agrarian in nature, access to land

to provide a subsistence living offered greater ﬂ exibility in times of

economic distress. But with more than half of the population living in

urban areas, the responsibility to deal with the consequences of unem-

ployment and the accompanying social and economic distress shifted

Drought conditions for much of the 1930s turned parts of the western prairies into a

“dust bowl,” as scorching winds blew the topsoil away and forced farmers to abandon their

unproductive land. This typical dust storm was photographed at Pearce Airport, west of

Lethbridge, Alberta, in 1942.

(Glenbow Archives, Calgary NA-1831-1)

THE PERILS OF DEPRESSION AND WAR

A BRIEF HISTORY OF CANADA

284

from the individual to community organizations, and ultimately to the

government.

The initial government response to the economic crisis was mis-

guided and inadequate. Prime Minister King resorted to the customary

refrain of politicians everywhere—that prosperity was “just around the

corner.” Still wedded to the laissez-faire doctrines of 19th-century liber-

alism, most politicians and economists believed that a government’s best

course of action in difﬁ cult economic times was to do little more than

balance the budget, maintain a sound currency, and adjust tariff poli-

cies. King continued to insist that relief for the unemployed was a local

or provincial responsibility, although he reluctantly considered the pos-

sibility of federal assistance to the provinces. During a debate on the

issue in the House of Commons, Prime Minister King responded angrily

to criticism of his government’s failure to provide sufﬁ cient unemploy-

ment relief by insisting that he would not give a “ﬁ ve cent piece” to

provinces under Conservative administration. The statement would

come back to haunt him in the election of 1930 (Thompson 1985).

Conservative leader R. B. Bennett, a millionaire Calgary lawyer, not

only exploited King’s unfortunate statement but also promised to aid

the provinces, to put the unemployed back to work, and to end the

depression. In particular, he promised to “blast a way into world mar-

kets” by raising tariffs to protect Canadian industry, and he attacked

the Liberals for their ineffective retaliation against the high tariff policy

that the United States had recently adopted on Canadian imports. The

voters found Bennett’s rhetoric appealing and elected the Conservatives

by a substantial majority.

The Bennett administration immediately embarked upon the most

extensive revision of the Canadian tariff system since the inauguration

of the National Policy. The general tariff level was raised by almost 50

percent as most agricultural and industrial products were given added

protection from foreign competition. Britain’s abandonment of free

trade in 1932 opened the way for negotiation of the imperial preference

agreement that Laurier had proposed earlier. Although a trade accord

was reached involving Canada, Britain, and the Commonwealth, the

participants tended to allow tariff reductions only on those products

that did not adversely affect their own economy. The success of this

effort to revive the declining imperial market was limited, and worse

still, the United States was incited to retaliate by further raising duties

on Canadian imports. Canada’s foreign trade dropped by two-thirds

from 1929 to 1933, thereby discrediting Bennett’s policy of economic

nationalism as a way out of the depression (Wilbur 1969).

285

On the whole, no coherent government plans emerged for dealing

with rural distress or chronic urban unemployment. In addition to pro-

viding loans and grants to western provinces on the verge of bank-

ruptcy, the Bennett government attempted to keep wheat prices from

falling further by purchasing more than 200 million bushels before

reestablishing the Wheat Board in 1935 to market grain abroad and to

assure farmers a minimum price for their crops. The Bennett govern-

ment also inaugurated a program to assume an increasing share of the

ﬁ nancial burden of unemployment relief. From 1930 to 1937, the fed-

eral government spent more than $400 million (about 40 percent of the

total cost) to assist the provinces and municipalities to fulﬁ ll their

responsibility for providing unemployment relief. But little more than

one-quarter of this federal relief outlay came during the downswing of

the depression (1930–33) when unemployment was soaring and the

need for assistance was critical. The bulk of this relief assistance con-

sisted of direct payments to the unemployed, commonly referred to as

“the dole,” because public works programs were deemed too costly to

administer. The Department of National Defence brieﬂ y operated relief

camps (or “slave camps,” as they became known), which provided

work for some 20,000 unmarried unemployed men who were paid a

wage of 20 cents per day. This experiment was abandoned in the wake

of the so-called Regina Riot in 1935 when several hundred discon-

tented camp workers participating in the “On to Ottawa Trek” to pro-

test their inhumane treatment by the government clashed with a

contingent of Royal Canadian Mounted Police. Government ofﬁ cials

constantly feared that the unemployed masses might be inﬂ uenced by

communist propaganda.

The inadequate government response resulted in widespread human

suffering, particularly for urban workers and Prairie farmers deprived

of their livelihoods. Since Canada did not have an effective system for

dispensing public welfare, many of the unemployed and destitute had

to rely on private charity and the dole, a humiliating experience in a

society that still believed that poverty was basically the consequence of

personal failure (Struthers 1983; Horn 1984; Guest 1997). By 1934

more than 2 million Canadians (one-ﬁ fth of the national population)

depended on public relief. When confronted with this stark reality,

Bennett was more determined to cut the federal relief budget, com-

plaining that people had become “more or less relief conscious, deter-

mined to get out of Government all they could.” The meager public

assistance that was available was administered in a haphazard manner

and at a substandard level of subsistence by local authorities, which

THE PERILS OF DEPRESSION AND WAR

A BRIEF HISTORY OF CANADA

286

themselves were dependent on federal and provincial grants to meet

their relief obligations. Overwhelmed by the ﬁ nancial burden of unem-

ployment and relief, many cities and towns across Canada went bank-

rupt and became subject to provincial supervision and control. In

essence, municipal governments and their unemployed citizens were

victimized by the failure of the federal and provincial authorities to

recognize that mass unemployment and social welfare in a modern

urban and industrial society required a far greater and more systematic

commitment of state resources and administration.

The personal hardships of the depression decade were also evident

in demographic trends. Canada’s population increased from 10.4 mil-

lion in 1931 to 11.5 million in 1941, the slowest growth rate since the

1880s. Young people were forced to postpone marrying and starting a

family until times improved, with the result that by 1937 the birthrate

had declined by more than 25 percent since the beginning of the

decade. Canada was also a less welcoming place for immigrants during

the depression as the number accepted dropped from 169,000 in 1929

to 12,000 in 1935 and never rose above 17,000 a year for the remainder

of the decade. The prevailing fear was that immigrants would either

take scarce jobs or end up on the relief rolls. With the Immigration Act

Some 1,800 unemployed riding the rails to participate in the “On to Ottawa trek” halted at

Regina in June 1935.

(Library and Archives Canada C-024840)

287

providing for the deportation of immigrants on relief, the federal gov-

ernment returned an unprecedented 30,000 immigrants from 1930 to

1935, and even went so far as to deny refugee status to European Jews

ﬂ eeing Nazi Germany. Not measurable by any statistic was the sense of

economic insecurity that the Great Depression instilled in Canadians

for generations to come.

The Politics of Discontent

The Great Depression dramatically altered the Canadian political land-

scape and perceptions of the role of government in social and economic

life. Disappointed with government responses to their plight, Canadians

were willing to consider political alternatives that emerged at the fed-

eral and provincial levels. When the new political personalities, parties,

and movements proved to be no more capable of remedying depression

conditions, it became necessary to renew the relationship between the

federal and provincial governments as a prelude to the building of the

welfare state (Neatby 1972).

The demand for greater government intervention was most vigor-

ously expressed by the Co-operative Commonwealth Federation (CCF),

a coalition of farmer and labor groups formed in Calgary in 1932 under

the leadership of an avowed socialist, J. S. Woodsworth. On the one

hand, CCF was an extension of

the old Progressive Party in the

sense that it was backed by the

United Farmers of Alberta and

other western farmers’ organiza-

tions. On the other hand, CCF

resembled the British Labour

Party with its belief in the British

parliamentary system and a grad-

ual, peaceful progress toward

socialist goals. Despite embrac-

ing socialism, CCF had little

inclination to associate with the

emerging Canadian Communist

Party led by Tim Buck.

The CCF platform, outlined

in the Regina Manifesto in 1933,

was inﬂ uenced by a group of

university intellectuals based in

Social activist and political reformer James

Shaver Woodsworth (1874–1942) became

the ﬁ rst leader of the socialist Cooperative

Commonwealth Federation (CCF) in

1933.

(Library and Archives Canada C-057365)

THE PERILS OF DEPRESSION AND WAR

A BRIEF HISTORY OF CANADA

288

Toronto and Montreal who had already formed the League for Social

Reconstruction to promote political education. The manifesto, which

called for a “new social order,” included such “radical” measures as

centralized government planning, public control of ﬁ nancial institu-

tions, nationalization of key industries, socialized public health ser-

vices, security of land tenure for farmers, and a national labor code that

included provisions for insurance covering illness, accident, old age,

and unemployment. Deeply rooted in Prairie farm politics, especially

those of Saskatchewan, the CCF also gained support among workers in

the ports and mines of British Columbia and the factories of Ontario.

But the party was unable to make any headway in Quebec, where the

powerful Catholic Church vehemently opposed socialism, as it did

communism.

In Alberta, evangelist William Aberhart used his weekly religious

radio broadcasts to launch the Social Credit Party. Aberhart blamed the

depression on international bankers and attributed the plight of Prairie

farmers to “eastern” ﬁ nancial interests. He further believed that the

basic ﬂ aw in the economic system lay in the inadequate distribution of

purchasing power, which could be remedied through the payment of a

“social dividend” amounting to $25 per month to every resident of

Alberta. With this increased purchasing power, the people could buy

the goods that they needed and thus stimulate production and put the

unemployed back to work. The appeal of such a promise to an eco-

nomically desperate population, combined with the religious fervor

generated by the radio broadcasts, resulted in a landslide victory for

Social Credit in the provincial election of 1935. But when the party

attempted to put its theories into practice, its legislation was either

disallowed by the federal government or ruled unconstitutional by the

courts since monetary matters were under federal jurisdiction.

Prime Minister Bennett also faced a revolt within his own party in

1934. Minister of Trade and Commerce Harry H. Stevens chaired the

Royal Commission on Price Spreads, which revealed unfair practices of

big business with regard to corporate proﬁ ts, consumer prices, and

labor wages. When Bennett attempted to suppress his attacks on the

iniquities of big business, Stevens resigned from the Cabinet. As the

federal election of 1935 approached, Stevens formed the Reconstruc-

tion Party with a vague platform promising to “re-establish Canada’s

industrial, economic, and social life for the beneﬁ t of the great major-

ity,” notably the small business community.

Mounting opposition from within his party and from new political

forces demanding decisive government action to deal with the depres-

289

sion prompted Bennett to launch a bold new program of economic and

social reform under state control. Bennett had already demonstrated a

willingness to extend the realm of government intervention by reviving

the Wheat Board, increasing the federal share of the cost of old-age pen-

sions from 50 to 75 percent, and expanding federal relief grants to the

provinces. Furthermore, in 1932 the Canadian Broadcasting Commis-

sion, renamed the Canadian Broadcasting Corporation (CBC) in 1936,

was established to give the federal government regulatory control over

the whole ﬁ eld of radio broadcasting. The Bank of Canada was founded

in 1934 as a federal government agency to regulate monetary policy and

to control private banks. Nevertheless, Canadians were astounded to

hear Bennett proclaim his intention to reform capitalism in a series of

ﬁ ve national radio broadcasts in January 1935.

The style and substance of Bennett’s policy announcements were

reminiscent of the New Deal inaugurated by U.S. president Franklin

Roosevelt two years earlier. The “Bennett New Deal” reforms included

measures to improve farm credit and the marketing of natural products;

legislation providing for a minimum wage, a 48-hour work week,

unemployment insurance, social security, and health insurance; and

laws to enforce fair trade practices, to regulate trusts, and to control

business standards. Despite the merits of these reforms, many of which

were immediately implemented, most Canadians regarded Bennett’s

transformation from a ﬁ scal conservative to an advocate of state pater-

nalism as mere political opportunism (Wilbur 1969).

The New Deal legislation did not prevent voters from blaming Ben-

nett for failing to end the depression as promised, with the result that

the Conservatives were reduced to 39 seats, in the election of 1935,

their worst performance up to that time. The Liberals, promising little

more than the slogan “King or Chaos,” swept back into power with an

unprecedented majority, mainly because the new parties attracted

nearly one-quarter of the voters.

In the wake of depression conditions, the winds of political change

were also blowing through the provinces. As Aberhart was leading

Social Credit to power in Alberta, Maurice Duplessis was leaving the

ranks of Quebec Conservatives to form a new French-Canadian nation-

alist party, Union Nationale. This latest nationalist movement reﬂ ected

the ambivalent reaction to the progress of urbanization and industrial-

ization in Quebec (Jones 1984; Linteau, Durocher, and Robert 1991).

On the one hand, the industrial revolution that Quebec experienced

after World War I curtailed the migration of young French Canadians

to the factory towns of New England. On the other hand, urban and

THE PERILS OF DEPRESSION AND WAR