Politics During Canada’s Great Depression

Tuesday, October 29^th, 1929 was the day of the stock market crash in the United States. Stock prices plummeted, affecting economies worldwide. Countries everywhere, rich and poor, sank into an economic recession known as the Great Depression. Canada was hit particularly hard. Between 1929 and 1933, Canada’s Gross National Expenditure declined by 42%. By 1933, 30% of the labour force was unemployed and one in five Canadians depended on government relief.

The severity of the Depression was exacerbated by poor government policy. At the time of the stock market crash, the federal administration was led by Liberal Mackenzie King. He was quickly defeated by the Conservative Richard Bennett. However, Bennett also largely failed to improve the economic conditions, and the public lost faith in the mainstream Conservative and Liberal parties, leading to the formation of new radical political parties, including the Social Credit party, the Cooperative Commonwealth Federation (CCF), the Communist party, and the Union Nationale.

The Liberal party post-1935 had some of the best policies, and was one of the few governments that actually succeeded in implementing any policies of use.

The Social Credit party was a right-winged party led by evangelist William Aberhart. It was based on the belief that the total wages paid to individuals who produced goods would always be less than the total cost of production. Therefore, without social credit (which was the distribution of money, in the form of a dividend paid to all citizens) there would never be enough money in the community for the purchase of all of the goods and services provided. 

Aberhart promised to give $25 of social credit to every adult in Alberta monthly, which made him instantly popular with all of the farmers in dire poverty, to whom $25 seemed a large sum of money. This idea could have potentially been very beneficial to the state of the Depression, because the main problem that continued to deepen the recession was the lack of money in the system. People could not pay for goods, so the factory owners could not afford to pay their employees, and as a result, people had even less money.

Giving more money to consumers would give them more purchasing power and thus provide more money to factory owners, who could then hire more workers. Therefore Aberhart’s idea of social credit might have been extremely constructive – if he had the power to implement such a policy. As a provincial leader, it was not within his jurisdiction to give out social credit. He did not have many other ideas that would improve the conditions of the farmers of Alberta and instead focused on balancing the provincial budget, increasing taxes, and giving nothing to the poor and unemployed.

The Cooperative Commonwealth Federation was a democratic socialist party led by J. S. Woodsworth and formed several labor groups and farmers. The CCF wanted to end the suffering caused by the Depression through economic and social reforms.

Each word in the name of the party represented something significant about the party: “cooperative” means the farmers’ belief in joint action, “commonwealth” meant the hope of a new social order in which the wealth was shared equally, and “federation” indicated that the party was made up of a connection of various economic and social groups.

In 1933 the party set out its policies in a document called the Regina Manifesto, which called for the public ownership of banks and major services such as transportation and electric power. It also demanded improved health and social welfare service, and more government support of agriculture and conservation.

The CCF had several extremely beneficial and valid ideas that were later adopted by the mainstream (Liberal/Conservative) parties, such as welfare insurance, family allowances, unemployment insurance, and compensation for injured workers. However, some of their policies were simply too extreme to ever be adopted by the mainstream, such as their ideas of full public ownership of industries, especially in the political climate of the time which was very anti-communist. Members of the CCF were often accused of being communists by their opponents.

The communist party itself was subject to a great deal of harassment from the Royal Canadian Mounted Police. The RCMP broke up the communist party’s meetings, raided its offices, confiscated its literature, and arrested many of its officers. The party followed the teachings of Vladimir Lenin, seeking better workers’ rights (such as full employment and increased minimum wage).

They also wanted to expand health care and other social programs, and poverty reduction. The communist party organized several unions for workers’ rights. They were also instrumental in organizing the On-to-Ottawa trek, which was a journey of thousands of men protesting the conditions in federal relief camps, intent on bringing their grievances to the federal offices in Ottawa. The communist party organized several protest movements, such as marches, demonstrations, and campaigns, for workers’ unions.

Several communist ideas were extremely constructive, but the fundamental communist concept had simply no chance of being adopted since the climate at the time was so anti-communist. The party was even banned at one time, but it still continued under various other names such as the Workers’ Unity League, the Relief Camp Workers’ Union, and the National Unemployed Workers Association.

The Union Nationale was a conservative, nationalist party from Quebec, led by Maurice Duplessis. In the 1920’s and 30’s, most of Quebec’s natural resources, industries and finances were held by English-speaking business owners.

Duplessis said that the English-speaking minority and the federal government were the cause of Quebec’s economic and social problems. He vowed to defend the French language and culture, as well as the Roman Catholic religion against Anglophones, the federal government, and communists.

He wanted more provincial power for Quebec so that he could carry out his economic policies. The Union Nationale did not have many good policies that would help end the Depression. Their main goal was to protect the status quo. For example, the Catholic clergy was given government money in order to provide public education, health care, and other social services.

The Union Nationale did not have really any new ideas that would help to pull Quebec out of its economic hardship, but was elected widely in Quebec for two reasons: one being the exposition of former Liberal leader Alexandre Taschereau’s corrupt practices, and the other being Duplessis’ effective and persuasive rhetoric against the English-speaking minority and communists, who were easy scapegoats.

The Liberal party was led by Mackenzie King. The Liberals were in power when the Depression hit, and King believed that the economic crisis would soon pass. He stated that unemployment, social insurance, and other social problems were provincial and municipal responsibility.

He also said that he “would not give any Tory government a five-cent piece”, which shows that he strongly believed that the crisis was not a large problem and that federal involvement was not necessary at that point. Naturally, this made him extremely unpopular with voters, who were in dire need of federal help. He lost the 1930 election to Richard Bennett, a Conservative.

The Conservative party had plans to raise tariffs on imported goods in order to maintain Canadian industries, and also to raise government spending with “make-work programs”, welfare, and other assistance. It was on these promises that they were elected. However, when the tariffs were introduced, they did not help the Canadian economy in the least.

The consumer market in Canada was not large enough to buy all of the Canadian products that were being produced, and exports were made more difficult and expensive. The increased federal spending might have helped if it were continued, but soon after it was implemented the government fell into a federal deficit and Bennett cut back, deepening the recession as people who had been employed under the make-work programs were laid off.

As such, none of the Conservative ideas were actually positive or beneficial to the general public. In 1935, Bennett recognized that his efforts to help the Depression were not working and he introduced a New Deal, based on the American New Deal proposed by Franklin Roosevelt. Bennett’s New Deal called for a minimum wage, unemployment insurance, and other social programs. Again, the Conservative’s ideas proved to be infeasible: the provinces challenged the rights of the federal government to manage such programs, and voters viewed Bennett’s New Deal as simply a last-ditch attempt to buy votes.

In 1935, the Liberal party was re-elected, still under the leadership of Mackenzie King. Essentially, the Liberals only won the election because the Conservatives had failed; they ran under the slogan, “King or Chaos”. King had little enthusiasm for Bennett’s New Deal and never advocated extreme government action to alleviate the Depression.

However, King promised – and successfully implemented – a trade treaty with the United States, the 1935 Reciprocal Trade Agreement, which was virtually the only government program that actually helped increase trade. It did so dramatically, increasing exports of Canadian goods by a great deal. He also introduced subsidies to the housing market, tax cuts, and programs to help the unemployed, all of which were extremely valuable to the average person struggling through the Great Depression.

As such, the post-1935 Liberals had the most successful and best policies to help alleviate the Great Depression, because they increased trade successfully and implemented a number of social welfare programs. It took a severe economic crisis to make politicians realize that the former fashion of governing a country (viewing social issues such as poverty, retirement, unemployment etc as an obligation for family or church groups, not a federal responsibility) was not sufficient.

After the Great Depression, there was an expansion of state responsibility for the economy and social welfare. As well, various programs that are still in place today were created in order to prevent unemployment and economic collapse, such as employment insurance, social welfare programs, etc. The Depression caused great suffering, but out of it also arose a plethora of new political ideas and numerous practical, viable programs that we view today as essential.