Canada’s Great Depression

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When there is talk of The Great Depression, the United States and its Dust Bowl often takes centre stage but there were many other places impacted by the depression, and few were affected as severely as Canada.

In this episode, I am going to look at how Canada was impacted by The Great Depression. This is a large topic, so I am going to be taking more of a broad view of how the country was impacted as a whole, with looks at the provinces as well.

As with the United States, the start of The Great Depression for Canada is generally considered to be the 1929 Wall Street Stock Market Crash, but of course there is much more to it than that including drops in commodity prices, declines in economic demand, increased debt and consistent droughts in the West.

Throughout Canada, the crash was front page news, but most headlines gave optimism it was only a temporary setback. The Ottawa Journal would state in its large headline, quote:

“Market rally follows opening decline in prices.”

The following day would see more optimism, with the Ottawa Journal stating quote:

“Stock market prices close around high levels of day. Wealthiest financial groups supply the necessary buying support to end price decline.”

Little did anyone know; things would get much worse for the country.

At the time when The Depression hit, William Lyon Mackenzie King was serving as the Prime Minister of Canada, a role he had almost uninterrupted since 1921.

In his diaries from Oct. 29, 1929, to Oct. 31, 1929, King makes no mention of the Crash, nor does he say anything for some time about it. While most people did not expect it to be a catalyst for The Great Depression, this sort of attitude would play into King’s eventual loss in the 1930 federal election.

King was very slow to react to The Great Depression and was reluctant to even acknowledge that there was any sort of crisis.

The Dominion Bureau of Statistics did not begin to register a drop in employment until 1930, giving a delayed response and view to the entire situation for King.

That being said, unemployment was becoming a major news item by January of 1930. On Jan. 31, 1930, a western delegation went to Ottawa in order to seek an end to the unemployment difficulties in their provinces. They would call on the government to create an unemployment insurance and ask that the Dominion government bear part of the share of the cost of unemployment relief. The western delegation would also blame the unemployment problem on the immigration policy of the government. Mayor Ralph Webb of Winnipeg would state quote:

“If the government of the day would get together the Dominion and provincial and industrial leaders, the employers of labour and the labour organizations, and form a real policy to back up immigration, you would see the country go ahead so fast you would wonder what had been the matter the last eight or ten years.”

The Windsor Star would echo this on Aug. 7, 1934, when it stated quote:

“We agree that there should be discrimination in the admission of would-be citizens, not as to race but as to individuals. We want healthy newcomers and people blessed with a desire to make progress, to carve out for themselves and their families a reasonable living, even a fortune in a new land.”

When provinces began to ask for aid to help their citizens, he simply stated that it was a Conservative conspiracy, and he would make one of the rare political blunders of his career. Called the Five Cent Speech, he stated on April 3, 1930, that the Canadian government should not give unemployment benefits to provincial governments that had Conservative leaders.

He would state in the House of Commons, quote:

“With respect to giving money out of the federal treasury to any Tory government in this country for these unemployment purposes, with those governments situated as they are today with policies diametrically opposed to those of this government, I would not give them a five-cent piece.”

The next day, he would write that his speech received a thunderous ovation from the Liberals, but he also noted that he had made a mistake. He would write, quote:

“It was a fighting speech and in except in two particulars was what was needed. I made a slip I think in saying I would not give a cent to a Tory government on Earth. It was a slip in that it can be read apart from the context, and it is capable of much misrepresentation as applied to unemployment.”

On April 4, the day after the speech, King saw that it was now spreading around the country, he would write, quote:

“The slip I made yesterday. I am persuaded it was such, was in not seeing the single remark would be taken out of its context and misrepresented and the rest of the speech would go by the boards. I am sorry for this. Also, as Prime Minister, speaking in House of Commons, I went perhaps too far.”

For the Conservatives, this was a gift, and they would run with it through the election. They would portray King as someone who was incapable of running the Canadian government.

In the July 28, 1930, election, the Liberals lost 27 seats, becoming the Official Opposition with 89 seats. The Conservatives in contrast soared ahead with a gain of 44 seats, finishing with a majority of 135.

The leader of the Conservative Party, R.B. Bennett, promised sweeping changes to deal with the crisis.

He would campaign heavily on his business knowledge and putting in aggressive measures to combat The Great Depression. He would state on June 9, 1930, during the campaign, quote:

“I propose that any government of which I am the head will at the first session of Parliament, initiate whatever action is necessary to that end, or perish in the attempt.”

Population growth in the country slowed to its lowest point since the 1880s, while the number of immigrants coming to Canada fell from 169,000 in 1929 to 12,000 by 1935. Deportations also increased in Canada, rising from 2,000 in 1929 to 7,600 in 1932, while 30,000 immigrants were returned to their countries of origin.

Many Roman Catholic women defied Church teachings by using contraception to postpone births because it was too hard to feed large families.

From 1929 to 1933, the Gross National Expenditure, which is public and private spending, fell by an astounding 42 per cent.

Once 1933 rolled around, 30 per cent of the labour force had no work and 20 per cent of all Canadians needed government relief to survive. In Toronto, the unemployment rate was 17 per cent, but in rural areas it was likely higher but any farmer who stayed on their farm was not considered to be unemployed. That being said, 250,000 prairie homesteaders, due to drought and poor crop prices, abandoned their farms and moved to different provinces. Most fled from Saskatchewan, with the majority going to British Columbia.

Almost a century earlier, the Palliser Expedition had come through the southern Prairies and found that it was an area good for ranching but bad for crops. Called the Palliser’s Triangle, it was identified as the northern tip of the Great American Desert. When the Canadian government wanted to get settlers to move out there with the building of the railroad, they ignored the Palliser Expedition reports and instead focused on another expedition that came through during a wet period, when the ground was lush. For the farmers who settled there and their descendants, it would prove disastrous during The Great Depression. By the time the 1930s rolled around, the cyclical nature of the triangle had swung from its wet period to a dry period, with a drought beginning in 1930. Due to heavy use and poor distribution of the land, along with farming practices that reduced the integrity of the land, the entire area of southern Saskatchewan and Alberta was prime for a terrible drought.

By August 1930, the west was dealing with a strong drought, with corn losses being at about 300 million bushels. Potato crops and gardens were also ruined during this drought that began the decade. Only three days after the news story of the drought was printed, other news reports stated that the drought would soon end. This, as hindsight shows, was not the case.

By 1931, Saskatchewan’s spring wheat harvest was at its lowest level since records began in 1909. The Dominion Bureau of Statistics would report quote:

“The poorest prospects are in the main wheat producing province of Saskatchewan, where the condition is even lower than after the disastrous frost of May 1917. The Alberta wheat crop shows the lowest condition since the spring of 1910 when drought and frost took a severe toll. In Saskatchewan, grain crops in the driest areas are damaged beyond recovery.”

With the drought came the dust storms and while they were not as prolific as was seen in the United States, they still did happen.

Anne Bailey would write in her diary quote:

“My son came running into the house greatly excited. Come quick Mom, there’s a big black cloud coming in the sky. He ran out ahead of me and pointed to the western sky where sure enough there was the blackest most terrifying cloud I have ever seen on the horizon. It was moving very quickly and the edge of it was rolling along.”

Dust storms were a common appearance on the Canadian Prairies by 1933. On March 31, 1933, the Regina Leader reported the first dust storm of the season, stating quote:

“A dust storm in March is somewhat unusual and though it is not a record for the drought areas, farmers do not like the idea of the storms starting so early.”

That same year, Calgary would experience a dust storm in January. The Edmonton Journal would report quote:

“Calgary’s first dust storm of the year built a thick cloud of gray, whirling dust over the whole city late Monday and left its mucky mark on city buildings, homes and throughout the whole foothills area. Traffic was impaired but only minor accidents occurred. Vision was curtailed and pedestrians fought whirling gusts of dust.”

Even as far out as the Niagara Peninsula in Ontario, dust was falling. On Nov. 13, 1933, the Windsor Star reported quote:

“A dust storm is coming from the northwest over this section of the Niagara Peninsula. Crossing Lake Erie directly to Buffalo it has resulted in several telephone calls as to the phenomena at this time of year. Cars arriving at Fort Erie from nearby rural points are covered with dust.”

Grasshoppers were also a problem, eating crops, gardens, even clothes that were on the line. John Gray, a reporter with the Regina Leader would write quote:

“Anybody who lived in Regina that summer and could not get over being squeamish about walking on wall-to-wall grasshoppers stayed indoors. Clouds of the insects obscured the sun.”

The grasshopper menace was so bad that seagulls from the coast of British Columbia were migrating into Saskatchewan to feed on the great swarms.

With the collapse of international trade, Canada was especially hit hard because 30 per cent of Canada’s Gross National Income came from exports.

Canada had an extremely stable banking system, which prevented any bank failures in the country during the entire Great Depression, compared to 9,000 small bank failures in the United States.

Where Canada was hurt was when it came to debt. During the 1910s and 1920s, the federal government took over several bankrupt railroads. The debt was about $2 billion, or about $32 billion today. During the better days of the economy that debt was seen as manageable but by the 1930s, it was crushing the country. With a decrease in trade, the Canadian National Railway began to lose huge amounts of money and that meant it had to be bailed out even further by the federal government, adding to the debt load.

For the western provinces of British Columbia, Alberta, Saskatchewan and Manitoba, whose entire economies were based on product exports, especially crops, The Great Depression was even more severe.

In the Prairie Provinces, the low prices for their crops were one thing, but the years of droughts, storms and grasshopper plagues they had to deal with were something else entirely.

Saskatchewan would lose 90 per cent of its income in only two years, and 66 per cent of the rural population of these provinces needed some sort of relief. In many ways, Saskatchewan became almost a third world country. In 1928, farming brought in $363 million but by 1933, it was bringing in only $11 million. By 1937, 66 per cent of the population was destitute. In Winnipeg, local girl guide and boy scout organizations collected clothing to send to Saskatchewan, while carloads of cheese and codfish was shipped from the east coast by rail. Canned goods came from Ontario, and carloads of canned milk, apples, turnips and more came from the Maritimes. It got to the point that the federal government ordered 100 rail cars to ship loaded with fruit from the Annapolis Valley to Saskatchewan. Halifax alone sent 35 train car loads of fish.

Ontario and Quebec were not immune. Their economies were fueled by industry and manufacturing and with less trade, which hurt the provinces income but not to the degree of the Prairies. Both provinces had diverse industries that would help weather some of the storm.

Throughout the country, regardless of where you lived, if you were working class or poor, you bore the brunt of The Great Depression. Farmers, young adults and anyone with a small business was hurt far more than the wealthier members of society.

At the time, Canada did not have a system for giving welfare to the unemployed in the country. Even though there were unemployed across the country, the federal government refused to provide work for the unemployed, stating that it was a provincial or even a local responsibility.

Prime Minister R.B. Bennett would announce in April 1931 that there would be a move to create unemployment insurance but only after gathering more information, stating that not getting as much information as possible would be a disaster. He would state quote:

“It would bring suffering, not happiness, to those concerned.”

Mackenzie King would write in his diary on April 1, 1930, quote:

“Today was taken up in the House of Commons with discussion of unemployment. It is a desultory sort of business, academic mostly regarding whether federal government should institute an unemployment insurance scheme.”

It would not be until 1935 that the Employment and Social Insurance Act would be passed by the federal government.

By the time the government did provide some sort of relief to citizens, it was small to say the least and it depended on where a person lived. A family of five would receive $60 per month, about $1,200 today, in Calgary but in Halifax they would receive $19 per month, or $377 today. It should come as no surprise that cases of scurvy and dietary deficiency diseases became much more common during The Great Depression. To survive, families at the cheapest cuts of meat, often horse meat, and they would recycle their Sunday roast through the week.

Throughout the country, school budgets were slashed and teachers in small one-room schools were often paid far below what they would have made in the 1920s, if they were paid at all. Many were simply given notes that they would receive their pay when more money was coming in.

In order to help the unemployed, the government created relief camps, established between 1932 and 1936. These were run by the Department of Defence, and the men were paid 20 cents per day to work in the bush, amounting to a terrible $4 per day.

Women also dealt with poor working conditions and low pay. For those that worked in mills in Ontario and Quebec, they were often working 11 hours a day for $8 a week, $2 below minimum wage, with no breaks in a factory that was reaching over 30 degrees. Even a company like Eatons profited off of the work of the poor. Annie Wells would state she was paid 9.5 cents to make a dress that Eatons would then sell for $1.69.

Wells would state quote:

“You were told to work and work and work so hard at these cheaper rates and you were threatened that if you didn’t, you would be fired. You had to sit at your machine from quarter to eight until 20 minutes to one and go as hard as you could.”

Irene Duhamel would write of working in one factory quote:

“It was so strict that one employee had her baby in the factory bathroom to avoid missing a day of work.”

Due to the pay and the working conditions, a group of men would launch the On to Ottawa Trek, which involved traveling by train from Vancouver to Ottawa to meet with Prime Minister R.B. Bennett. The protest would only reach Regina where it was stopped by the RCMP and Canadian Government, culminating in the deadly Regina Riot in 1935. I am not going to talk much about this as I covered it in its own episode last year and you can find it on my website. I will include a link in the transcript of this episode (https://canadaehx.com/2020/06/06/the-on-to-ottawa-trek/)

In the riot, which was the most violent confrontation of the Great Depression, one police officer was killed, and dozens of men were injured, and another 130 were arrested.

While the Regina Riot was the most famous of the riots, it was not the only one.

In Estevan, local miners went on strike for better wages and working conditions. In a later commission on the riot that would occur on Sept 29, 1931, one woman would state that families lived in one bedroom, two beds in there, with a dining room, a kitchen with a bed in it, and 11 people sharing the home. Rain would come into the homes and in the morning in the winter, snow would be on the floor. The strikers wanted the mining company to improve the homes and end the company store monopoly as well. With the strike beginning on Sept. 7, Annie Buller, working with the Workers’ Unity League, spoke in Estevan in support of the strikers. Buller was a well-known union organizer and also the co-founder of the Communist Party of Canada. On Sept. 29, miners began to parade through the city and were confronted by the RCMP who blocked the parade. Violence broke out and the RCMP fired on the strikers, killing three and injuring several others. The next morning, 90 RCMP officers raided the homes of the miners an arrested 13, including Annie Buller who was sentenced to one year of hard labour. The RCMP involved in the killing of the miners were never charged. A total of 20 miners were charged with various offences.  On Oct. 6, after meeting with a Royal Commission Counsel, the strike ended with the company agreeing to a $4 minimum wage, an eight-hour working day, reduced rent and an end to the company store monopoly. Today, the event is still controversial in Estevan. The three headstones for the miners still have “murdered by the RCMP” inscribed, which is sometimes erased and then restored by locals.

In Vancouver on June 18, 1935, 1,000 protesters, mostly striking longshoremen and their supporters, marched towards Ballantyne Pier where strikebreakers were unloading ships. The protesters were soon attacked with clubs by the police guarding the pier and before long, British Columbia Provincial Police, who had been hiding in box cars, joined the fight, as did the RCMP. The riot continued for three hours, leaving 60 injured, including 28 seriously, and 24 arrested. Mayor Gerry McGeer stated that the longshoremen would no longer be eligible for relief payments for themselves or their families because of the riot.

Throughout Canada, political reform movements sprang up that would reshape Canadian politics, and this mostly happened at the provincial level. The Social Credit Party rose in Alberta under Premier William Aberhart. Founded in 1934, the party won a majority government in 1935 and would hold onto power until 1971 in one of the longest unbroken runs in government at the provincial level in Canadian history. The Union Nationale in Quebec was formed in 1935 and it would rule from 1936 to 1939, then 1944 to 1960 and from 1966 to 1970.

In British Columbia, Thomas Dufferin Pattullo, the premier of the province, would take the initiative from the United States and introduce a Little New Deal for the province. In 1937 he was re-elected with the promise of socialized capitalism, a promise he had started in 1934 with the Special Powers Act. That Act allowed the government to institute health insurance, a higher minimum wage, public work projects, money for schools, the poor and the unemployed. Bennett and King were not a fan of Pattullo and referred to him as a dictator, spending much of the 1930s thwarting his requests for economic aid.

On the federal level, the Communist Party of Canada was virtually outlawed for half the decade from 1931 to 1936 and nine of its party leaders were arrested and convicted for being part of an unlawful association. The Co-operative Commonwealth Federation was formed as a federal party in 1932 and would last until 1961 when it reformed itself into the current New Democratic Party of Canada.

By the time 1934 came along, R.B. Bennett, facing an election in 1935 that he would surely lose if things didn’t change, began to work to make some changes to the economy. The Bank of Canada Act would be passed that year, forming the Bank of Canada in 1935. This bank was in charge of regulating monetary policy in the country. The same year that the Bank of Canada was formed, the Canadian Wheat Board was created to help market Canadian wheat and to set a minimum price for it.

Bennett looked to copy on the growing success of The New Deal put forward by President Roosevelt. The Bennett New Deal promised federal intervention to achieve social and economic reform, including old age pensions, unemployment insurance, and amazingly considering his crackdowns on unions, help for labour unions. Bennett would say in a radio speech, quote:

“The old order is gone. If you believe things should be left as they are, and I hold irreconcilable views. I am for reform and in my mind, reform means government intervention. It means the end of laissez-faire.”

Many saw Bennett, who was incredibly rich, as someone who did not care about the plight of the poor in Canada. The truth was that Bennett was rich, but he was not blind to the struggles. He would often spend his evenings in his office, answering mail from Canadians who had lost everything, to which he donated upwards of $2 million of his own money to help.

One such letter came from Arsene Gaudet on Feb. 9, 1934, which stated quote:

“The children complain of hunger and cold. It is impossible for me to adequately provide the things they ask for. It is heartbreaking.”

In the Oct. 14, 1935, election, the Conservatives would have their worst performance until the total collapse of the party in 1993. They would lose an astonishing 95 seats to fall to 39, while the Liberals picked up 83, finishing with a massive majority of 171. At the time, it was the largest majority in Canadian history. The Social Credit Party, a new party, gained 17 seats, as did two other new parties, the CCF that earned seven seats and the Reconstruction Party that won one seat.

With the decade moving into its second half, King would make promises and express sympathy with the unemployed, but he would still reintroduce the relief camps, with some improvements and less isolation. This still caused problems. On May 20, 1938, protestors occupied the Vancouver Art Gallery, the post office and the Hotel Georgia to protest against the issues in the work camps. The RCMP stormed the post office with teargas and clubs, which resulted in a huge protest of 15,000 people who smashed windows throughout the city.

International trade was reduced throughout the decade, which hampered the recovery of Canada. While Canada’s employment numbers improved in the second half of the decade, productivity remained low. This is in contrast to the United States where productivity was high, but the labour force was still depressed through the decade.

Canada would see the move to becoming a welfare state during The Great Depression but something else would happen. In a move to help keep the country unified and uplifted during the harsh times, the Canadian Radio Broadcasting Commission, which today is the CBC, was created. Broadcasting across the country, it played a role in helping to keep up the morale of Canadians. Many poor citizens found radio an escape, and for many it helped to keep them optimistic about the future.

The year 1937 was a very important year in the recovery of Canada. That was the year the Bank of Canada was nationalized and the CRBC became the CBC. Both of these organizations aided in the recovery of the economy.

Finally, the Second World War erupted in 1939 and the increased demand for materials in Europe and increased spending by the Canadian government created a big boost to the Canadian economy.

While the Great Depression is coming up on 100 years ago, many of its after effects are still felt to this very day.

Information from Canadian Encyclopedia, Library and Archives Canada, Wikipedia, Canada’s History, HistoryMuseum.ca, OpenTextBC.ca, British Columbia Legislature, CBC, Edmonton Journal, Windsor Star, University of Saskatchewan,

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