CANADA HISTORY

The Economy Booms

At the end of the First World War, Canada faced the immense challenge of transitioning from a war-based economy, characterized by the production of munitions, ships, and other military supplies, to a peacetime economy. The abrupt shift away from wartime production created a short-term economic slump, but this period of adjustment was temporary as Canada, like many other industrial nations, found itself navigating the post-war world. The changes that occurred during this period of economic realignment laid the groundwork for the dramatic societal, political, and economic shifts that would define the 1920s. The decade saw both unprecedented prosperity and underlying inequalities, particularly as different regions and sectors of the economy experienced growth at varying rates. Additionally, the promises made during the war regarding democracy, fair wages, and social justice came to the forefront of Canadian society, inspiring significant changes in labor and agricultural movements.

Post-War Economic Transition and Recovery

The economic boom that followed the war was preceded by a brief period of instability and readjustment. Canada had been heavily mobilized during the war, with production focused on war-related industries and the economy structured to support the war effort. In the immediate post-war years, factories that had been producing military equipment had to retool for civilian production, while the country faced the challenge of reintegrating thousands of returning soldiers into the labor force. This sudden influx of workers, coupled with decreased demand for war supplies, created a temporary rise in unemployment and a slowdown in economic activity. In many regions, particularly in the Maritimes, this post-war slump was felt more deeply, as the broader economic recovery was uneven across Canada.

However, by the early 1920s, business activity began to pick up once more. Canada’s natural resource-based industries, including mining, forestry, and agriculture, led the way, as demand for raw materials surged both domestically and internationally. Canada's manufacturing sector also began to expand as it shifted towards producing consumer goods such as automobiles, home appliances, and construction materials. Urbanization increased as people left the rural countryside in search of jobs in the growing cities, which were benefiting from the expansion of industry. This shift from a primarily rural to a more urban-based economy marked a significant transition in Canadian society, reflecting the broader global trends of the time.

Uneven Growth and Regional Disparities

While parts of the country, particularly Ontario and Quebec, experienced significant economic growth, other regions, such as the Maritimes and the Prairies, struggled to keep pace. The Maritimes, which had been a hub of shipbuilding and coal mining during the war, saw a decline in demand for their products as the national economy shifted towards industries located in central Canada. Similarly, Western Canada, especially the Prairie provinces, suffered from declining wheat prices as global agricultural markets stabilized post-war, leading to a wheat glut and decreasing farm incomes. Farmers found themselves trapped in a cycle of overproduction and underconsumption, leading to rising debt levels and discontent.

This regional disparity became a defining feature of Canada's post-war economic experience. While the central provinces boomed, other regions felt increasingly marginalized. These regional tensions led to political movements such as the Maritime Rights Movement and the rise of agrarian populism in the Prairies, with farmers forming cooperatives and agricultural organizations to push for greater representation and support from the federal government. The struggle of farmers in Western Canada also gave rise to provincial political parties such as the United Farmers of Alberta (UFA), which advocated for the economic interests of farmers.

Labor Movements and Social Change

One of the most significant legacies of the First World War was the growing power of the labor movement. During the war, Canadian workers had faced long hours, dangerous working conditions, and wage controls, while industrialists and business owners often reaped substantial profits from wartime production. The post-war period was marked by rising expectations among workers who had been promised a "new world" of social justice and economic equality in return for their sacrifices during the war. This sentiment culminated in the growth of labor unions and a wave of strikes across the country, as workers demanded better wages, improved working conditions, and recognition of their right to collective bargaining.

The Winnipeg General Strike of 1919 was the most significant labor action of the period, as it saw over 30,000 workers in Winnipeg walk off the job in solidarity with metalworkers who had been denied the right to organize. The strike was a powerful symbol of the growing tensions between labor and business, and it spread to other cities across Canada. The federal government's harsh response, which included the arrest and deportation of labor leaders and the deployment of troops to suppress the strike, highlighted the deep divisions in Canadian society. While the strike was eventually broken, it laid the groundwork for future labor organizing and the development of political movements that would seek to address the economic inequalities faced by workers.

Labor unions were not the only organizations advocating for change. The post-war period also saw the rise of farmers' cooperatives and political movements dedicated to the interests of rural Canadians. These organizations emerged as a response to the perceived domination of Canadian politics and the economy by big business and urban interests, particularly in Ontario and Quebec. The United Farmers of Ontario and the Progressive Party of Canada, for example, were formed to represent the interests of rural Canadians and to push for reforms such as lower tariffs, which would make imported goods cheaper for farmers, and greater government intervention in the economy to support agricultural production. The Rise of Business and "Hands-Off" Government

As the 1920s progressed, Canada’s economy began to follow the trajectory of the United States, marked by rapid industrial expansion, technological innovation, and a consumer-driven boom. The post-war period saw the rise of a more urbanized and industrialized Canada, where cities like Toronto, Montreal, and Vancouver became economic hubs. The automobile industry, in particular, grew significantly during this period, as American companies such as Ford and General Motors established plants in Canada, and the demand for automobiles surged.

The Canadian government’s role in managing the economy during this period was minimal. Both federal and provincial governments largely adopted a laissez-faire approach, believing that free-market capitalism would best serve the country’s interests. Government programs and spending were cut back as wartime projects were wound down, and private business was left to take the lead in guiding the economy forward. This belief that "business knew best" became pervasive, especially as corporate profits soared and stock markets boomed.

However, this hands-off approach meant that many of the promises made during the war—such as fair wages, social justice, and economic equality—went largely unfulfilled for many Canadians. Labor unrest continued throughout the 1920s, and the benefits of economic growth were not evenly distributed across the population. Many workers and farmers remained disillusioned, and regional inequalities deepened as some provinces thrived while others stagnated. The government’s lack of regulation of the financial markets and corporations also laid the groundwork for the stock market crash of 1929 and the ensuing Great Depression, which would devastate the Canadian economy in the following decade.

The post-World War I period in Canada was marked by significant economic and social change. The transition from a war-based economy to a peacetime economy led to short-term instability, but it was followed by a period of economic growth and urbanization. However, this growth was uneven, with regions such as the Maritimes and Prairies lagging behind the more industrialized central provinces. The rise of the labor movement, the formation of farmers' cooperatives, and the growing political power of rural Canadians reflected the deep-seated tensions between different sectors of society.

Despite the optimism of the 1920s, the government’s hands-off approach to economic management allowed for the concentration of wealth and power in the hands of a few, while many Canadians were left behind. This set the stage for the political and economic crises that would follow in the 1930s, as the promises of the Great War were left unfulfilled and Canada was plunged into the Great Depression. The events of this period highlighted the need for greater government intervention in the economy, a lesson that would be taken to heart in the decades to come as Canada moved toward the creation of a welfare state and the establishment of stronger labor protections and social safety nets.



Gross National Product

By 1928 the booming U.S. economy was effecting the growth of Canadian business in a geographic manner. The demand for pulp and minerals was encouraging Canadian workers to move into the Northern forests and onto the Canadian shield which was a major source of nickel, copper, silver, lead, zinc and gold. Almost 300 million dollars worth of metals came out of these Northern mines in 1928 and nearly twice that amount was generated by the pulp and paper product flowing from the great Canadian forests. Oil had not been found or discovered in any appreciable amount but hydroelectric power was beginning it's rapid expansion as a crucial source of power for business and the population. The farms were beginning to use larger and more efficient types of machinery to do the hard labour of planting and harvesting and factories in the cities were starting to grow and multiply. The per-capita income in Canada in 1928 was $500 dollars and in British Columbia it was almost $600 which meant that a family with 2 children had an annual income of over $2000 which provided for a very comfortable living in the 20's. Agriculture boomed on the back of the wheat sector. With Russian chaos under Stalin actually causing starvation in some area of the Soviet Union, Canadian wheat exports exploded. By 1928 Canada harvested 567,000,000 bushels of wheat and sold that crop for about $1.60 a bushel. Canada had become the largest wheat exporter in the world. In 1911 there were no more then 25,000 cars in the country but by 1928 at least 1 of every two families had a car and the infant Canadian car manufacturing industry had been swallowed whole by the big three American companies, General Motors, Ford and Chrysler who were making the cars in Canada and became the fourth largest manufacturing industry in Canada. This boom period was to come to an abrupt end in October of 1929 when the stock markets in Canada, the U.S. and several other countries in the collapse and the Great Depression began.