Great Depression in Canada

Canada was hit hard by the Great Depression. The worldwide depression that started in the United States in late 1929 quickly reached Canada. Between 1929 and 1939, the gross domestic product dropped 40% (compared to 37% in the US). Unemployment reached 27% at the depth of the Depression in 1933. Many companies closed, as corporate profits of $398 million in 1929 turned into losses of $98 million as prices fell. Farmers in the Prairies were hit especially hard by the collapse of wheat prices. Despite the emergence of numerous radical parties, the government was run by the major parties. The Depression ended in 1939 as World War II began.

By 1930, 30% of the labour force was out of work, and one fifth of the population became dependent on government assistance. Wages fell, as did prices. Gross National Expenditure had declined 42% from the 1929 levels. In some areas, the decline was far worse. In the rural areas of the prairies, two thirds of the population were on relief.

Further damage was the reduction of investment: both large companies and individuals were unwilling and unable to invest in new ventures.

In 1932, industrial production was only at 58% of the 1929 level, the second lowest level in the world after the United States, and well behind nations such as Britain, which only saw it fall to 83% of the 1929 level. Total national income fell to 55% of the 1929 level, again worse than any nation other than the U.S.

Canada's economy at the time was just starting to shift from primary industry (farming, fishing, mining and logging) to manufacturing. Exports of raw materials plunged, and employment, prices and profits fell in every sector. Canada was the worst-hit because of its economic position. It was further affected as its main trading partners were Britain and the U.S., both of which were badly affected by the worldwide depression.

One of the areas not affected was bush flying, which, thanks to a mining and exploration boom, continued to thrive throughout this period. Even so, most bush flying companies lost money, impacted by the government's cancellation of airmail contracts in 1931-2.

Urban unemployment nationwide was 19%; Toronto's rate was 17%, according to the census of 1931. Farmers who stayed on their farms were not considered unemployed. By 1933, 30% of the labour force was out of work, and one fifth of the population became dependent on government assistance. Wages fell as did prices. In some areas, such as mining and lumbering areas, the decline was far worse.

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