Canada, Great Depression in

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CANADA, GREAT DEPRESSION IN

Like most of the industrialized world in the 1920s, Canada enjoyed an uneven prosperity during the latter years of that decade. Internal economic growth was based on speculation (in real estate and on the stock market) and a great wave of consumer spending on houses, automobiles, and household appliances, all financed on credit and promoted by a newly-developed advertising industry. When Wall Street led the way in a collapse of stock prices in October 1929, Bay Street in Toronto was only a heartbeat behind. Canadian businessmen did not initially see Black Tuesday as more than a temporary setback, but it was soon associated with a general economic collapse that was more serious and protracted in Canada than in almost any other "advanced" nation of the world.

THE CANADIAN ECONOMY

The Great Depression was hardly a uniquely Canadian phenomenon. It was the downward part of a periodic international economic cycle that affected all nations, although the industrialized suffered more. On the other hand, the Depression was arguably more severe in Canada than in almost any other nation except the United States. Officially recorded unemployment reached almost one-fifth of the labor force in Canada in 1933, but such statistics were only the tip of the iceberg. In Montreal, in 1934, almost 30 percent of the population was living on official assistance, and the figure for French-Canadians was almost 40 percent. The relief allocation in Montreal—$21.88 per month—was well below the estimated cost of a "restricted diet for emergency use."

The government did not count independent farmers as unemployed, although many had negative incomes in the early 1930s. The prairie farm

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community, especially, suffered through drought and bad harvests in these years, which meant that farm families did not always have their own harvests to eat. Omnipresent dust became the symbol for the Depression in western Canada. The government did not count independent fishermen or timberers as unemployed either, and most significantly of all, it did not count women. In the worst years, therefore, fewer than half of those Canadians who wanted a paying job were able to find one.

Two major factors made the Canadian economic situation so serious. One was proximity to and involvement in the American economy because the United States was even more hard-hit by the depression than Canada. The other was the extent of Canadian reliance on the production and sale abroad of raw materials ranging from grain to lumber to minerals. The bottom dropped out of the international market for such goods in 1929, and it did not recover until much later in the 1930s. Canadian manufacturing production also dropped by one-third between 1929 and 1933. But Canada had other problems as well, including political and constitutional arrangements that militated against active policies of social assistance and social insurance to those Canadians who were suffering.

CONSTITUTIONAL PROBLEMS

Canada was a federal state, and sections ninety-one and ninety-two of the British North America Act—the largest part of the Canadian constitution created by act of the British Parliament in 1867—carefully distinguished between the powers of the federal government and the powers of the provinces.

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Provincial powers included almost all of the powers relevant to social conditions. But the provinces were not given commensurate powers of taxation and revenue-raising, largely because the nineteenth-century Fathers of Confederation had never anticipated vast amounts of expenditure on health, welfare, and unemployment. Moreover, the Canadian constitution made absolutely no mention of cities or municipalities, which bore much of the burden for urban unemployment but had little tax base except real property. The municipalities dispensed much-needed relief on a cheeseparing basis that made no effort to maintain the dignity of the recipients.

During the early 1930s, constant political struggle occurred between the federal government and the provincial governments, but also between the provincial governments and the municipalities. The federal government refused to expend money on relieving unemployment because of "constitutional limitations." Not until the 1935 election did the government in power pay much attention to the cries of the destitute. As for the provinces, they blamed their failure to act on the "feds." In the midst of the finger-pointing, a federal Employment and Social Insurance Act of 1935 was declared unconstitutional by the Supreme Court of Canada because it violated provincial authority.

Ideological constraints were probably as important as constitutional limitations in hamstringing federal action during the Depression. R. B. Bennett, the Canadian prime minister from 1930 to 1935, lacked imagination and a willingness to experiment in active government. A typical Conservative, for

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most of his administration he balanced his budget and sought international economic improvement chiefly through a "Canada First" protectionist policy combined with imperial preference. In 1935 he announced a sudden conversion to activism, however, telling a national radio audience, "I am for reform. I nail the flag of progress to the mast. I summon the power of the state to its reform." Most Canadian voters did not believe that Bennett's new policy was anything but opportunism though, and voted instead for Mackenzie King's Liberals, who had promised very little but had the solid backing of the electorate in Quebec. What Bennett's "conversion" did represent, however, was a growing realization by large segments of the Canadian business and professional community that only a stabilized economy could stave off a major political and social upheaval.

SOCIAL CONDITIONS

Given the extent of unemployment, especially in the resource sector of the economy, and the limited forms of social assistance, life was extremely hard for large numbers of Canadians during the Depression. In many regions, particularly those outside Ontario and Quebec, virtually the entire population was on the dole or thrown entirely on their own resources. Conditions were particularly hard on women, upon whose shoulders as housewives and mothers was thrown the burden of maintaining the coherence and integrity of the family in the midst of economic crisis. Perhaps the most publicized wife and mother was Elzire Dionne, who gave birth to identical quintuplets in May of 1934. The Dionnes were classic examples of impoverished farmers, living in a northern Ontario home without plumbing and electricity. The province of

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Ontario swiftly removed the photogenic quints from the control of their parents, declaring them wards of the Crown, on the grounds that the Dionnes could not possibly bring them up appropriately.

For the half of the population that had employment, life during the thirties was often quite a pleasant experience. Food, housing, and consumer goods were relatively cheap, and servants and services were readily available at bargain rates. In Montreal, laundresses who washed and ironed by hand in their own homes earned $2 per day. Economic conditions certainly improved dramatically in the late part of the decade, especially in the urban areas of Ontario and Quebec.

For Canada's First Nations, especially the Métis, there was a general sharing in the drought conditions on the Prairies and the overall Depression markets and employment opportunities. At the same time, the Department of Indian Affairs experienced administrative cutbacks leading to much inactivity and confusion, and the 1930s actually saw a considerable growth of organization among aboriginal peoples. The Métis organized l'Association des Métis d'Alberta in 1930, while on the West Coast the Native Brotherhood of British Columbia was founded in 1931, and the Pacific Coast Native Fisherman's Association in 1936.

One of the major social effects of the Depression was to widen the gap in Canada between the nation's poor—like the Dionnes—and a well-to-do and well-educated elite. Contrary to predictions, universities maintained or even added to their enrollments

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during the decade, increasing the proportion of females among their student bodies in the process. Despite administrative belt-tightening, for students and faculty alike, life within the ivory tower was good. Canadians who spent the Depression on the wrong side of the economic divide would be understandably extremely eager, after the end of World War II, to ensure that they were allowed to participate in the postwar era of prosperity.

MOVEMENTS OF POLITICAL PROTEST

Organized parties of protest and radical reform abounded in the "Dirty Thirties." During the early years of the Depression, however, only the Communist Party of Canada offered a national voice for Canadian popular discontent, creating in 1930 a National Unemployed Workers' Association that within a year had 22,000 members across the country. The Communists could be charged with following the commands of the Communist International, and were quickly repressed by section 98 of the Criminal Code, introduced in 1919 during the earlier "red scare" to outlaw the advocacy of revolutionary agitation. Eight Communist leaders were arrested in August 1931, and although they were subsequently released, the party had lost its momentum and never recovered it. A few Fascists were to be found over the decade, but they were never taken seriously.

The League for Social Reconstruction (LSR), which held its first convention in Toronto in January 1932, sought a "planned and socialized economy." The LSR was proudly non-Marxist and non-revolutionary, and considered itself merely an elitist educational organization. Not until 1933 did the LSR participate in the formation of a new political party, formed by representatives of farmers' and labor organizations at Regina, Saskatchewan. The Co-operative Commonwealth Federation (or CCF, as it was usually called), emphasized economic planning and a series of universal welfare measures that would be introduced after necessary amendments had been made to the British North America Act. The CCF attracted over 300,000 votes in the 1933 British Columbia provincial election, and won 8.9 percent of the popular vote nationally (seven parliamentary seats). The new MPs were led into the House of Commons by J. S. Woodsworth and T. C. Douglas. But the CCF would subsequently enjoy strong support in only a few provinces (notably British Columbia and Saskatchewan) and would make no inroads east of Ontario.

Other newly-organized movements of protest existed on mainly a provincial or regional basis. Most had populist roots. Perhaps the most influential of the new creations was the Social Credit Party of Alberta, which emerged out of the travails of farmers in that province. Social Credit was developed by a Calgary schoolmaster and radio preacher, William Aberhart (1878–1943), who had broadcast for the Prophetic Bible Institute over the West's most powerful radio station, CFCN, since 1924. In 1932, Aberhart was converted to the economic theories of a Scottish engineer named C. H. Douglas, a monetary theorist who believed that capitalism was incapable of distributing purchasing power to the masses of people. Douglas advocated the distribution of money, in the form of "social credit," to enable people to buy the goods and services they produced. Aberhart took over these theories, which he did not fully understand, and converted them into a practical platform overlaid with fundamentalist evangelicalism. He emphasized state intervention in the economy and the issuance of a social dividend (eventually set at $25 per month) to all citizens as part of their cultural heritage. The new party swept to victory at the polls in 1935. Over the next few years, much of its economic program would be disallowed by the federal courts as unconstitutional. But the party remained in power in Alberta until 1972. Versions of Social Credit sprang up all over the western provinces, and a British Columbia variant would govern British Columbia for over twenty years beginning in 1952.

In Quebec, a popular leader with tendencies toward demagoguery emerged in 1933 in the person of Maurice Duplessis (1890–1959). Duplessis rode to power in 1935 on the backs of the Catholic social action movement and a Quebec nationalism associated with the Action Libérale Nationale (ALN). These two movements merged to create a powerful force for attacking the capitalist system. Duplessis insisted that Quebec was owned by foreigners. What was needed was "l'achat chez nous" ["buying at home"] and the destruction of the great financial establishments. When in power, Duplessis quickly abandoned the reform program that brought him into office, retaining mainly only a concern for provincial autonomy, a fervent anti-Communism—the "Padlock Act" of 1937 closed any place suspected of disseminating Communist propaganda—and a paternalist program of grants and handouts for the disadvantaged. Like Social Credit, the program of Duplessis's Union Nationale Party was far different from its campaign promises, but the party remained in power until well after World War II.

Perhaps the most effective movement of Catholic social action occurred in the Maritime region, peopled by farmer-fishers who had no control over marketing and distribution. The Antigonish movement gained its impetus from two Roman Catholic priests at St. Francis Xavier University in Antigonish, Nova Scotia—Father James Tompkins and Father Moses Coady—who advocated that small producers regain power over their own production and consumption through economic cooperation in the forms of cooperative banks, stores, and marketing agencies. The Antigonish ideology, like most populist movements of the Depression in Canada, was a curious mixture of radical rhetoric and conservative attitudes, well designed to appeal to small producers.

From a political and constitutional perspective, the most extreme action of the 1930s occurred not in Canada but in its neighboring Dominion of Newfoundland. The economy of Newfoundland was so dependent on fish and other extractive resources that failed to find markets in the early 1930s that the government was not only forced to declare bankruptcy but to place itself under the tutelage of Great Britain, which administered Newfoundland through appointed trustees. The trusteeship remained until, by a series of contorted steps, Newfoundland finally joined the Canadian Confederation in 1949.

PUBLIC VIOLENCE

The thirties in Canada were periodically punctuated by outbreaks of public discontent that often turned to violence. Some of the violence occurred when spontaneous demonstrations were broken up by authorities apprehensive of the threat to social order. This was the case in both a famous riot in Vancouver in 1935 and in a subsequent riot in Regina that occurred when police armed with baseball bats moved to disperse a group of unemployed Canadians travelling to Ottawa to protest their situation. Much of the violence resulted from confrontations between organized labor and the authorities. On the whole, labor unions did not flourish during the hard times of the 1930s, but many workers fought desperately to maintain their position. Police and even the militia were often called upon in strike situations. Some strikes were gestures of desperation, such as that by coalminers in Saskatchewan in 1931, which ended in a riot in Estevan. Later in the decade, when economic conditions were better and workers attempted to organize industrial unions in the factories, both management and governments desperately opposed such actions. A notable strike occurred in 1937 in a General Motors plant in Oshawa, which resulted in a victory by the newly formed Committee of Industrial Organization (CIO, later called the Congress of Industrial Organizations). What is perhaps the outstanding feature of public discontent in Canada was how seldom it led to violence and how little damage was done to life and property.

RISE OF SOCIAL WELFARE

As in most jurisdictions, the length and intensity of the Depression in Canada dramatized the inadequacy of the existing arrangements for social justice, thus giving a substantial boost to debate over schemes of social protection, especially in the public sector. Contrary to much popular mythology, a fair amount of social insurance was in existence in Canada before the Depression and was extended during the 1930s, almost entirely on a provincial basis. Little reform occurred on a national or federal level, however, leading critics to argue that Canada lagged behind other nations in its social welfare provisions, although by the early 1940s, all national political parties were committed to reform.

A general old-age pension scheme had been introduced by the federal government in 1927, jointly financed by both levels of government and administered by the provinces. It paid a maximum of $20 per month to British subjects over the age of seventy. Despite other constitutional limitations, the federal government was clearly responsible for veterans, and various health and pension schemes for those who had fought in World War I took up a substantial proportion of the federal budget in the 1930s. Several provinces attempted to introduce public health-care insurance during the Depression, but were opposed by the medical profession. On the other hand, the doctors in some provinces did introduce their own schemes of health-care insurance, which became the basis of Blue Cross coverage. Compulsory national unemployment insurance was introduced in 1940 following a constitutional amendment. However, most national Canadian social insurance schemes were introduced on a piecemeal basis well after the Depression was over.

INTERNATIONAL RELATIONS

Canada had achieved world recognition as an independent nation as a result of World War I, and became a dominion, an autonomous community within the British Empire, as a result of the Westminster Conference of 1930. Throughout the Depression, Canada was an active member of the League of Nations and during the decade developed a small but highly skilled Department of External Affairs, with an extremely limited social view of the world. In 1935 the nation executed a major change of international policy by negotiating a most-favored nation treaty with the United States. This treaty signaled a new emphasis on the Canadian-American relationship, as Canada began to disengage from the British Empire and adopted a continentalist position. Like most of the participants in World War I, Canada was slow to rearm. Indeed, during most of the 1930s it spent less than $1 per capita annually on its military establishment. Canada was for obvious reasons reluctant to come out of its isolationist shell, although events in Europe and elsewhere around the world gradually forced its engagement. The Canadian government fully supported the British policy of "appeasement" in the later 1930s, and was hardly prepared for World War II.

One of the consequences of events in Europe was the emergence of a large number of refugees from Nazi persecution, most of them Jews. Canadian authorities showed little interest in assisting these people, and in 1938 actually began limiting Jewish immigration, despite desperate pleas from its Jewish community, which offered to finance refugees at no cost to the government. A general Canadian suspicion of Jews was even more virulent in Quebec, and the government of William Lyon Mackenzie King was—like previous Canadian governments—obsessed by the need for assimilable newcomers. Canada continued to drag its feet on refugee policy, and never accepted more than a few thousand Jewish refugees. Since the nation was desperately short of scientific, intellectual, and cultural talent, in even the crassest of non-humanitarian terms its refugee policy was a disaster. In moral terms, the Canadian attitude—summed up by one of its mandarins as "None is too many"—was unconscionable, particularly since the country constantly lectured the world from a high moral pedestal.

CANADIAN CULTURE

Perhaps paradoxically, the period of the Depression was in some ways a very positive one for the development of a distinctive Canadian culture, although most popular culture remained dependent on the United States. Many of the unemployed found solace in their local public libraries, and more than one radical political critic and writer first found his or her voice in the library stacks. The federal government, which was publicly responsible for regulating the airwaves, had received a report from a royal commission in 1929 calling for the nationalization of radio, as in Great Britain, instead of allowing private broadcasters, as in the United States. The government eventually decided on a dual system—both public and commercial—establishing by the Broadcasting Act of 1932 the Canadian Radio Broadcasting Commission, which in 1936 became the publicly-operated Canadian Broadcasting Corporation, with extensive English and French language networks. Over the years, the CBC has been the principal patron of Canadian cultural content in the nation, and during the late 1930s it served as the Canadian equivalent of the writers' branch of the Works Progress Administration.

On a less public level, the governor-general of Canada, the Earl of Bessborough, spearheaded the creation of the Dominion Drama Festival in 1932, which served to promote amateur regional theater throughout Canada. The Dominion Drama Festival was able to take advantage of a strong upsurge of interest in the theater during the Depression, which came about partly because so many Canadians had free time on their hands and partly because radical intellectuals found drama, poetry, and art to be ideal mediums for expressing their discontent with the status quo. Much of the most original creative work done in the 1930s in Canada came from the radicals, who were neither part of the university establishment nor of Americanized popular culture.

CONCLUSION

Somehow Canada managed to survive the Depression with its social fabric relatively intact, only to lurch unexpectedly into World War II. Many Canadians were forced to defer their expectations of a better life for nearly an entire generation. They were as a result eager both to participate in the postwar prosperity and to insure through the gradual elaboration of a network of social welfare provisions that the people of Canada would never again experience such privations.