Coping with the crisis

Coping with the 1929 crisis

Few countries were affected as severely as Canada by the worldwide Depression of the 1930s. It is estimated that between 1929 and 1933 Gross National Expenditure declined by 42%, by the latter year 30% of workforce was unemployed, and 1 in 5 Canadians became dependent upon government relief for survival. Until World War II, the unemployment rate never declined below 12%.

In western Canada, farmland was devastated by prolonged drought and years of poor soil conservation techniques. When the price of a bushel of wheat plummeted from $1.60 in 1929 to 38 cents in 1932, thousands of farmers abandoned their lands and moved to other regions or into the cities. Although Ontario and Quebec, too, experienced heavy unemployment, they were less severely afflicted because of their more diversified industrial economies. The Maritimes had entered into severe economic decline in the 1920s and things got even worse in the 1930s.

Quebec economy suffered as the demand for manufactured goods and clothes decreased because neither people nor companies were able to spend money freely. The port activities in Quebec were stalled because less wheat was shipped. Thousands of workers lost their jobs as factories closed. As a response to hardships, a back-to-the land movement unrolled in Quebec as unemployed city dwellers moved to sparsely populated regions such as Abitibi-Temiscamingue and the North of Quebec.

In 1930, the legendary singer La Bolduc (Mary Travers) becomes famous with her song Ça va v’nir, ça va v’nir, mais decourageons-nous pas (It will come, it will come, let’s not give up hope) as a message of hope to the impoverished people of Quebec. Her music appealed to everyone speaking out against poverty and unemployment and demanding more freedoms for women.

Governments and private relief agencies struggled to cope with the thousands of jobless. Then Prime Minister William L. Mackenzie King refused to release federal funds to the provinces to combat unemployment and send relief. King’s Liberal government lost the 1930 election, and the Conservatives, under Richard Bedford Bennett, took power with an absolute majority in the House of Commons.

Bennett faced severe economic and social problems as the depression deepened. 1931, his government undertook a number of measures to improve the situation: work camps for unemployed men; federal relief money for the provinces; the Prairie Farm Rehabilitation Act to alleviate the burden of the severe drought conditions; the Canadian Wheat Board to stabilize wheat prices; and various other measures to help farmers. In early 1935, Bennett announced a series of important social reforms, Bennett’s “New Deal”, most of which, however, was later declared unconstitutional by the courts.

Bennett opened foreign markets to Canadian products. At the Imperial Economic Conference of 1932, held in Ottawa, he secured a series of preferential tariffs, the Ottawa Agreements, among the Commonwealth countries. When the Ottawa Agreements failed to produce the desired results, he turned to the United States to negotiate a reciprocal trade treaty, eventually signed in 1935 after Bennett had left office.

Paradoxically, during the 1930s, mining industry developed extensively in northern Ontario and northwestern Quebec, particularly in newly opened goldfields. Revenues in those regions thus stayed relatively high, enabling the federal government to support the poorer provinces.

To combat the economic downfall, Quebec government launched the public works program. On 11 December 1930, Quebec adopted la Loi d’aide aux chomeurs (unemployment benefits law) allocating funds to the municipalities to finance public works: people, paid a dollar a day, constructed numerous buildings, roads, and bridges. Result of public works, the Botanical Garden opened its gates in 1936. Many families survived thanks to the program.

In October 1935, after the new King’s Liberal government signed the reciprocity agreement with the United States, U.S.-Canadian trade grew dramatically, but in the short term the depression continued. King’s government reorganized and strengthened the government-owned radio network (the Canadian Broadcasting Corporation), assumed control of the Bank of Canada, and dismantled the work camps.

In 1940, on the principle that all provinces should have the means to maintain a minimum level of governmental and social services, the Royal Commission on Dominion-Provincial Relations (the Rowell-Sirois Commission) recommended the assumption by the federal government of provincial debts, federal unemployment insurance, and a reallocation of revenues between the two levels of government. The first two measures were adopted, relieving the debt burden of the provinces and strengthening the federal government, but on the latter there was no agreement, as both Ontario and Quebec strongly resisted redistribution.

The burden of the Depression caused dramatic demographic changes. Population growth reached the lowest point since the 1880s due to plummeting immigration and birthrate. The number of immigrants accepted into Canada dropped from 169,000 in 1929 to fewer than 12,000 by 1935 and never rose above 17,000 for the remainder of the decade. The number of deported immigrants rose from fewer than 2,000 in 1929 to more than 7,600 just 3 years later. Almost 30,000 immigrants were forcibly returned to their countries of origin over the course of the decade, primarily because of illness or unemployment.