Riendeau A Roger E. Brief History of Canada

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A BRIEF HISTORY OF CANADA

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from the CCF appeared to pay off in the federal election of 1945 as the

party won 28 seats, four times more than in the previous election but

not enough to deprive the Liberals of a majority government.

After the election, King convened the Dominion-Provincial Confer-

ence on Reconstruction to plan the reconversion of the national econ-

omy to peacetime conditions. King hoped to convince the provinces to

continue the “temporary wartime expedient” to which they had agreed

four years earlier whereby they were appropriately compensated for

relinquishing to the federal government their authority to levy succes-

sion duties as well as income and corporation taxes. To maintain this

arrangement, the federal government offered to increase grants, to pay

part of the cost of a comprehensive health insurance plan and an old-

age pension scheme, and to expand coverage of unemployment insur-

ance. When Ontario, Quebec, and Alberta objected to the concentration

of ﬁ nancial powers in the hands of the federal government, Ottawa

resorted to making “tax rental” agreements with individual provinces.

Viewing such arrangements as an infringement on provincial auton-

omy, Quebec insisted on operating its own income tax system. Despite

numerous attempts over the next two decades, agreement on a com-

mon federal-provincial revenue-sharing scheme could not be reached.

Canada emerged from World War II a stronger nation in three

respects. First, the nation had survived the worst economic crisis in its

history and had set in motion the public institutions to protect the

social and economic security of its citizens from being so threatened in

the future. Second, Canada once again demonstrated that it was a for-

midable force in the international arena and was prepared to abandon

its prewar isolationism to preserve world peace. Third, despite the

recurring conscription crisis, national unity remained intact at the end

of the war, and Canadians could focus on economic reconstruction and

renewal rather than on political appeasement. Indeed, the stage was set

for the remarkable postwar boom.

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AN EXPANDING NATION IN

THE AGE OF AFFLUENCE

(1945–1958)

fter suffering through a decade and a half of depression and war,

Canada enjoyed a decade and a half of extraordinary economic

and population growth after World War II. Expansion in the level of

industrial production as well as in the exploitation of natural resources

was accompanied by the so-called baby boom and a renewed tide of

immigration that inﬂ uenced virtually every aspect of national life.

Internationally, Canada emerged from another outstanding war effort

as a strategic “middle power” in a disturbingly bipolar world order.

Canada’s diplomatic challenge was to balance its growing prominence

within the diminished yet inﬂ uential British Commonwealth with its

precarious position as a major trading partner and military ally of the

powerful United States. Prosperity and international recognition, how-

ever, could not stem the tide of rampant regionalism as the provinces

endeavored to renegotiate their relationships with the federal govern-

ment with the coming of the welfare state.

The Postwar Boom

While Canada’s economy had expanded and diversiﬁ ed during World

War II, as it had during World War I, the anticipated economic down-

turn in the aftermath did not materialize. Instead of the severe recession

that struck after World War I, Canada enjoyed the continuation of war-

time prosperity after 1945 for two reasons. First, since many of the

important industrial nations lay in ruin with their productive capacities

crippled, Canadian products remained in high demand. Second, after 15

years of austerity resulting from depression and war, Canadians were

ready to spend their hard-earned money to improve their lifestyles.

A BRIEF HISTORY OF CANADA

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Having once again helped to preserve the world for democracy,

Canadians felt entitled to reap the beneﬁ ts for themselves. They wanted

better wages, more leisure, and the full range of material pleasures that

their money could buy. Rising consumerism was manifested in growing

sales of automobiles, television sets, and household appliances. Above

all, Canadians desired to own their own homes, and the mushrooming

suburban communities with their uniform housing subdivisions and

shopping plazas afforded them the opportunity. Indeed, not until after

World War II were urban Canadians transformed from a society of

renters to a society of homeowners. Marriages and families that had

been postponed in troubled times could now proceed. And people from

war-ravaged nations increasingly viewed Canada as a land of opportu-

nity to revitalize and stabilize their lives (Norrie and Owram 2002).

The postwar boom was sustained and characterized by the remark-

able growth of population from 11.5 million in 1941 to 18.2 million in

1961. The national annual growth rate, which had declined to less than

1 percent during the 1930s and early 1940s, approached 3 percent dur-

ing the so-called baby boom from the late 1940s to the early 1960s, a

growth rate comparable to that achieved during the country’s wheat

boom prior to World War I. The most notable feature of this population

growth was an approximately 30 percent rise in the annual birthrate

(number of live births per 1,000 population), which resulted in an

annual increase in the number of births from fewer than 250,000 in the

late 1930s to nearly 500,000 by the end of the 1950s. Equally signiﬁ -

cant, however, was an almost 25 percent decline in the death rate,

highlighted by a more than 50 percent drop in the infant mortality rate,

both of which resulted from improved medical sciences and services as

well as better nutritional levels, personal hygiene, and housing.

The Canadian population was also bolstered by the arrival of approx-

imately 2 million immigrants in the 15 years after World War II. By

contrast to a net loss of nearly 100,000 immigrants during the 1930s

when more people left the country than entered it, Canada recorded a

net gain of more than 1 million immigrants during the 1950s, the high-

est level for any decade in Canadian history. The postwar peak was

reached in 1957 when 282,000 immigrants arrived in Canada. That

only about one-third of the postwar immigrants were of British origin

and that most of the remainder came from continental Europe was a

concern to the majority of Canadians and to their government. Prime

Minister King outlined a new federal immigration policy, which

acknowledged “that the people of Canada do not wish, as a result of

mass immigration, to make a fundamental alteration in the character of

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our population.” Although the new policy repealed the blatantly dis-

criminatory Chinese Immigration Act of 1923, King rationalized that

restrictions must continue because “immigration from the Orient

would change the fundamental composition of the Canadian popula-

tion” and “might lead to serious difﬁ culties in the ﬁ eld of international

relations” (Palmer 1975, 61).

Regarding the less worrisome but still controversial immigration

from continental Europe, King stipulated that government policy

would focus “on the admission of the relatives of persons who are

already in Canada, and on assisting in the resettlement of displaced

persons and refugees” (Palmer 1975, 59). Accordingly, about 165,000

displaced persons escaping the tyranny of Nazi Germany, fascist Italy,

and the communist regimes of Eastern Europe were admitted into

Canada during the decade after World War II, while another 35,000

refugees of the Hungarian Revolution arrived in 1956.

Most Europeans came to Canada to escape the austerity of their post-

war existence or to ﬁ nd new prospects in a rapidly expanding Canadian

economy. Mindful of the economic instability of the prewar era, King

assured Canadians in 1947 that immigration would be related to “our

absorptive capacity . . . in response to economic conditions” (Palmer

1975, 60). As it turned out, a widespread shortage of labor caused by

the booming economy enabled Canada to accommodate far more immi-

grants than anticipated.

Post-World War II European immigrants were no longer “the stal-

wart peasants in their sheepskin coats” seeking a western homestead,

as their early-20th century counterparts had tended to be. While some

immigrants were directed or lured to the expanding northern and west-

ern resource frontiers, the vast majority ﬂ ocked to the rapidly growing

cities, where factory and construction jobs beckoned. Prominent

among the newcomers were Dutch, Germans, Greeks, Italians, Poles,

and Portuguese, who took advantage of the government preference for

immigrants sponsored by relatives already living in Canada. Indeed,

family “chain migration” was so extensive that by 1958 Italy surpassed

Britain as the leading source of immigrants. The tendency for these

immigrants to settle in large, closely knit cultural communities within

major urban centers—notably Toronto and Montreal—added a more

cosmopolitan quality to Canadian life. These new Canadians not only

brought with them valuable knowledge, skills, and capital but also sus-

tained the vigorous consumer demand for domestic products.

The concentration of population in urban centers and suburban

communities was a major catalyst of the postwar boom. The proportion

AN EXPANDING NATION IN THE AGE OF AFFLUENCE

A BRIEF HISTORY OF CANADA

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of Canadians living in urban centers rose from slightly more than 55

percent in 1941 to nearly 70 percent in 1961. Nearly half of the popula-

tion lived in cities having more than 100,000 inhabitants by 1961, as

compared to about one-quarter in 1941. Montreal and Toronto contin-

ued to lead the way with populations exceeding 2.1 million and 1.8

million, respectively, accounting for well over one-ﬁ fth of the total,

while Vancouver was approaching 800,000. Postwar urbanization in

the downtown core of the major cities featured the centralization of

service functions, the proliferation of high-rise apartment complexes

and ofﬁ ce towers, and the building of public transit systems and

expressways to alleviate trafﬁ c congestion.

Meanwhile, the fertile countryside was transformed into sprawling

suburbs in response to the construction of asphalt superhighways and

improved automobile and truck technology. With the resulting decentral-

ization of population, retail commerce, and heavy industry, planned resi-

dential subdivision, commercial-industrial parks, and multiacre shopping

centers became standard features of the expanding suburban frontier. The

complex challenges of managing these emerging urban agglomerations

led to the adoption of new forms of local or regional authority, highlighted

by the creation in 1954 of Metropolitan Toronto as a unique federation of

the city and its 12 suburbs (amalgamated into ﬁ ve boroughs in 1967).

Postwar urban and industrial growth was a boon to organized labor

(Abella 1975). Union membership surpassed the 1-million mark, or

about 30 percent of the workforce, in 1950. As industrial demand out-

paced the labor supply, unions in the manufacturing sector enjoyed

substantial bargaining power and succeeded in negotiating favorable

wages. The growing conﬁ dence of organized labor and a desire to make

up for ground lost during the Great Depression and World War II

resulted in a ﬂ urry of strike activity in the late 1940s and early 1950s. The

most dramatic and bitter industrial conﬂ icts of the era included the Steel

Company of Canada (Stelco) strike in 1946, which featured the use of

airplanes and boats by management to avoid the picket lines and to trans-

port supplies to the strikebreakers inside the plant in Hamilton; the strike

of the Conféderation des travailleurs catholiques du Canada (CTCC) in

Asbestos, Quebec, in 1949, which lasted ﬁ ve months, resulted in police

intervention and government decertiﬁ cation of the union, and contrib-

uted to the nationalist fervor that led to the so-called Quiet Revolution of

the 1960s; the walkout of 130,000 railway workers, which prompted the

federal government to order them back on the job in 1950; and the vio-

lent, seven-month confrontation involving copper workers at Murdoch-

ville, Quebec, which ended in defeat for the union in 1957.

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Labor strength was reﬂ ected not only in growing numbers but in

greater unity. The merger of the American Federation of Labor (AFL)

with the Congress of Industrial Organizations (CIO) in 1955 inspired

the union of the Trades and Labour Congress (TLC) with the Canadian

Congress of Labour (CCL) to form the powerful Canadian Labour Con-

gress (CLC) in 1956. Many of the CLC unions were afﬁ liated with the

AFL-CIO, and Canadian workers employed by American branch plants

were not averse to belonging to American-dominated unions.

Contrasting the impressive growth of urban-industrial centers was

the persistence of rural depopulation, notably in the western Prairie

Provinces where the farm population declined by about 20 percent dur-

ing the 1940s and 1950s. Foreign demand for western grain remained

buoyant until the early 1950s when European agriculture began to

recover and the United States decided to dump its accumulated farm

surplus onto the world market. As prices fell steadily, the wheat econ-

omy could no longer sustain western growth and prosperity. Coinci-

dentally, the discovery of oil and natural gas at Leduc (southwest of

Edmonton) in 1947, followed by other major strikes across Alberta and

to a lesser extent Saskatchewan and Manitoba, triggered a petroleum

boom that strengthened the position of western Canada in the national

economy. Western oil and natural gas became the resource base for an

expanding Canadian petroleum industry through the construction of a

national system of pipelines that transported fuel to markets on the

West Coast and in eastern Canada and the United States.

Canada’s prospects as a rising industrial power were also enhanced by

the continued expansion of the northern resource frontier (Zaslow

1988). The discovery of iron in the Steep Rock Lake district north of Lake

Superior in the early 1940s was followed by the unearthing of even richer

ore deposits in the Ungava Peninsula around the Quebec-Labrador

boundary later in the decade. The opening of the atomic age stimulated

an intensive search for new sources of uranium. The discovery of ura-

nium deposits at Beaverlodge in northern Saskatchewan led to the estab-

lishment of Uranium City in 1951. In northern Ontario, the Algoma ﬁ eld

at Blind River and the Sudbury ﬁ eld at Elliot Lake were also opened up

in the early 1950s. The resource frontier extended into the Northwest

Territories with the discovery of lead and zinc near Great Slave Lake,

tungsten along the Yukon border, uranium and silver near Great Bear

Lake, and oil along the lower Mackenzie River. Oil prospecting was even

reaching into the distant Queen Elizabeth Islands of the Arctic.

By the early 1950s, Canada was also emerging as the world’s second-

largest producer of aluminum, with the new smelter at Kitimat, some

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500 miles up the mountainous coast from Vancouver, being the world’s

largest. This development, along with the continued expansion of the

pulp and paper industry, which supplied more than half of the world’s

newsprint, was facilitated by an abundance of cheap hydroelectric

power. The new developments of the era included power stations on

the Columbia River of British Columbia, the Nelson River of Manitoba,

and the Churchill Falls of Labrador.

Because many of the resource developments lay in the heart of the

northern wilderness, transportation improvements became important to

get machinery, workers, and supplies in and to bring the primary prod-

ucts out. Labrador City and Schefferville, for example, were linked by a

350-mile railway line to Sept-Îles on the St. Lawrence River. These new

communities also had to be supplied with housing, schools, churches,

electrical power, passable roads, and sanitation and water facilities,

among other amenities. Their needs gave new opportunities to the con-

struction and manufacturing industries that could service them.

Resource development in particular and national expansion in gen-

eral continued to be facilitated by dynamic transportation and commu-

nication projects. By 1953 the world’s longest oil pipeline ran east from

Edmonton to the petrochemical center of Sarnia nearly 1,800 miles

away to feed the eastern Canadian market, while another pipeline

extended more than 700 miles across the Paciﬁ c mountain ranges to

Vancouver and eventually on into the United States. Despite generating

a storm of political controversy over Canada’s dependence on American

capital, Trans-Canada Pipeline Limited completed a 2,200-mile pipe-

line transporting natural gas from Alberta to Quebec in 1958.

Meanwhile, the St. Lawrence Seaway project effectively revived the

east-west transport route that had been the backbone of Canadian

development from the nation’s beginning (Creighton 1976). Since the

early 20th century, Canada and the United States had been negotiating

to improve the St. Lawrence system to enable ocean-going ships to

travel to the head of the Great Lakes. When negotiations for a joint

construction project broke down, the Canadian government proceeded

independently in 1951. Recognizing that the St. Lawrence Seaway proj-

ect would provide vital hydroelectric power to the bordering states and

would serve as an efﬁ cient avenue for moving iron ore from the Que-

bec-Labrador region to the American steel mills and western grain to

European markets, the United States agreed to participate in 1954, and

the project was completed in 1959.

Recalling the building of the CPR and other transcontinental rail-

ways of the early 20th century wheat boom, the federal and provincial

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governments agreed on joint construction of the Trans-Canada High-

way in 1949. Although the highway was ofﬁ cially opened in 1962, the

billion-dollar project was not completed until 1970. Canadians could

now drive, using ferry services on both coasts, from St. John’s, New-

foundland, to Victoria, British Columbia. Canadians could also com-

municate with each other through the new medium of television as the

Canadian Broadcasting Corporation (CBC), which began transmission

in 1952 and had the capacity to broadcast from coast to coast by 1958.

Certainly, the mid-century transportation and communication improve-

ments further diversiﬁ ed and uniﬁ ed the transcontinental economy and

linked Canadians more closely together from east to west. But these

postwar developments also helped to reinforce Canada’s growing eco-

nomic, diplomatic, and cultural ties with the United States, its powerful

southern neighbor (Thompson and Randall 2002).

Continental Integration and Middle Power Diplomacy

The construction of the St. Lawrence Seaway and a network of pipe-

lines across the country required a volume of private capital that was

beyond Canadian means. Indeed, Canada became increasingly depen-

dent upon foreign capital to ﬁ nance its postwar national expansion.

Foreign investment in Canada tripled during the 1950s as American

multinational corporations endeavored to avert the high Canadian tar-

iffs on imported manufactured goods by establishing branch plants.

Whereas in 1900 some 85 percent of foreign investment in Canada

came from Britain and almost all of the remainder came from the

United States, by the end of the 1950s, the roles were virtually reversed.

Foreign investors controlled nearly three-quarters of the oil industry

and one-half of both mining and manufacturing.

Likewise, the American market offered Canada the greatest opportu-

nities for expansion of foreign trade. Nearly 60 percent of Canadian

exports went to the United States as compared to about 15 percent to

Britain, while more than 70 percent of Canadian imports were from the

United States as compared to less than 10 percent from Britain. Cana-

dians debated the relative advantages and disadvantages of this situa-

tion. In 1955 the Royal Commission on Canada’s Economic Prospects,

chaired by Walter Gordon, warned of the dangers to Canadian sover-

eignty of increasing economic dependence on the United States and

urged the pursuit of a broader base of international trade as well as

greater controls on foreign investment. On the other hand, C. D. Howe,

minister of trade and commerce in the Liberal government, argued in

AN EXPANDING NATION IN THE AGE OF AFFLUENCE

A BRIEF HISTORY OF CANADA

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1956 that if not for “the enterprise and capital of the United States . . .

our development would have been slower” (Bothwell and Kilbourn

1979, 320).

Howe favored a policy “to sell as much as possible wherever possi-

ble,” and thus argued that closer economic ties with the United States

created more jobs for Canadians and helped the country’s balance of

payments by reducing imports. The formation of the European Com-

mon Market in 1957, which further limited the prospects of overseas

trade, appeared to conﬁ rm that continental integration was the best

prospect for the Canadian economy.

Continental integration also seemed to be an appropriate response

to the new bipolar power structure in the realm of international

relations after World War II. Britain was fading as a world power,

and thus could not be relied on to protect Canadian interests. The

United States had clearly emerged out of its prewar isolationism to

assume the role as the leader of the Western democracies competing

for global dominance against the Soviet Union and its allied commu-

nist regimes. In response to the escalation of the cold war, Canada

proved more willing to extend its international relations beyond

its traditional limits of

defending British impe-

rial interests or assert-

ing North American

isolationism.

Canada was alerted

to the reality of the cold

war in September 1945

when Igor Gouzenko, a

cipher clerk in the Soviet

Embassy in Ottawa, de-

fected and revealed the

C. D. Howe (1886–1960),

minister of munitions and supply

during World War II and minister

of trade and commerce in Louis

St. Laurent’s administration,

perhaps the most inﬂ uential

ﬁ gure of his era, celebrates being

named Time magazine’s Man

of the Year in 1952.

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operation of a Soviet espionage network in Canada (MacKenzie 2001).

The rise of Soviet-controlled communist regimes in Bulgaria, Hungary,

Romania, Poland, East Germany, and Czechoslovakia by 1948, in ad-

dition to revelations of Soviet atomic power, aroused Western democ-

racies to take a stand against communist imperialism, which had

drawn what British Prime Minister Winston Churchill termed an “Iron

Curtain” between East and West. In 1948 Louis St. Laurent, who had

been appointed Canada’s ﬁ rst full-time minister of external affairs two

years earlier, called for “the creation and preservation by nations of the

Free World . . . of an overwhelming preponderance of force” (Canada

1999) that could check Soviet aggression more effectively than the

United Nations (UN) had since its inception in 1945. The UN Security

Council was stymied in its efforts to maintain international peace and

security by the veto power that had been accorded to the so-called

great powers, including the Soviet Union, the United States, Britain,

France, and China.

Accordingly, the free nations of North America and Western Europe

established the North Atlantic Treaty Organization (NATO) in 1949 as

a joint defense against Soviet aggression. While the United States pre-

ferred a purely military alliance principally committed to the contain-

ment of Soviet power, Canada sought to reinforce social and economic

links with Western Europe in order to offset American military domi-

nance. Despite Canadian efforts, rising East-West tensions, heightened

by the outbreak of the Korean War in 1950, turned NATO into an

almost exclusively military alliance. Demonstrating a widening global

interest, Canada fulﬁ lled its military obligations to NATO by stationing

an army brigade in Germany and an air force division in France, in

addition to providing a naval squadron to patrol the North Atlantic.

Canada’s cooperation with the United States in NATO was part of a

joint program for North American continental defense (Eayrs 1972,

1980). As relations between the United States and the Soviet Union

deteriorated, Canada became increasingly concerned about the stark

reality that the shortest air route between the two superpowers was

through its Arctic region. In order to provide warning against air and

missile attack on North America from across the North Pole, chains of

radar bases were strung across the continent during the 1950s, includ-

ing the Pine Tree Line in the vicinity of the Canadian-American border,

the Mid-Canada Line or McGill Fence along the 55th parallel, and the

Distant Early Warning (DEW) Line stretching across the Arctic wilder-

ness. The DEW Line completed in 1959 was built and maintained exclu-

sively by American funds and personnel, and thus aroused controversy

AN EXPANDING NATION IN THE AGE OF AFFLUENCE