Français | Contact Us | Help | Search | Canada Site | |||||||
Home | Site Map | A to Z Index |
|
1929–1939 – The Great DepressionThe Roaring Twenties saw boom times in Canada. Unemployment was low;
earnings for individuals and companies were high. But prosperity came
to a halt with the stock market collapse in New York, Toronto, Montréal
and around the world in October 1929. (See 1929Stock
Market Crash.) The crash set off a chain of events that plunged Canada
and the world into a decade-long depression. It was the beginning of the
Dirty Thirties. The Great Depression caused Canadian workers and companies great
hardship. Prices deflated rapidly and deeply. Business activity fell sharply.
There was massive unemployment27% at the height of the Depression
in 1933. Many businesses were wiped out: in Canada, corporate profits
of $396 million in 1929 became corporate losses of $98 million in 1933.
Between 1929 and that year, the gross national product dropped 43%. Families
saw most or all of their assets disappear. Governments around the world,
including Canadas, put up high tariffs to protect their domestic
manufacturers and businesses, but that only created weaker demand and
made the Depression worse. Canadian exports shrank by 50% from 1929 to
1933. While all of Canada suffered greatly, the regions and communities
hit hardest were those dependent on primary industries such as farming,
mining and logging, because commodity prices plummeted around the globe.
Thus, the three Prairie provinces, where the wheat economy collapsed,
and the municipalities where mining and logging were a mainstay saw the
greatest decrease in per capita income between 1928 and 1933. The economy began to recover, slowly, after 1933. However, the
Depression did not end until 1939, when the outbreak of the Second World
War created demand for war materials. Many factors are believed to have caused the Great Depression.
Speculation on the stock markets drove share prices to inflated levels,
and the bubble burst when stock markets collapsed in the autumn of 1929.
Consumer spending dropped, even though prices had been falling. Canada
was suffering a trade deficit. Nature was also working against many Canadian
farmers, as a devastating drought on the Prairies wiped out wheat crops.
The Great Depression was a turning point for Canada. Before 1930,
the government intervened as little as possible, believing the free market
would take care of the economy, and that churches and charities would
take care of society. But in the 1930s a growing demand arose for the
government to step in and create a social safety net with minimum hourly
wages, a standard work week, and programs such as medicare and unemployment
insurance. (See 1941Unemployment Insurance
Act.) The Depression also led governments to be more present in the
economy. It brought about the creation in 1934 of the Bank of Canada,
a central bank to manage the money supply and bring stability to the countrys
financial system. (See 1934Bank
of Canada.) As well, the worlds severely restrictive trading
policies during the Depression were opened up by international treaties
such as the General Agreement on Tariffs and Trade (GATT).
The Depression Years
|
Updated: 2007-05-04 |