7.3 Political Responses and the Rise of New Parties

The Great Depression hit Canada hard, sparking new political movements. Traditional parties struggled to address the crisis, leading to the rise of alternative voices like the CCF and Social Credit Party.

These new parties offered radical solutions to economic woes, challenging the status quo. Their emergence reshaped Canadian politics, reflecting growing discontent with established policies and a desire for change during tough times.

Government Responses to the Great Depression

R.B. Bennett's Policies

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• R.B. Bennett, Conservative Prime Minister from 1930-1935, initially responded to the Great Depression with traditional laissez-faire economic policies and limited government intervention
• Bennett's government provided some relief through public works projects and direct aid to provinces, but these measures were insufficient to address the scale of the crisis
• In 1935, Bennett introduced a "New Deal" platform, which included proposals for unemployment insurance, minimum wages, and other social welfare measures, but it was too late to save his political career
• Bennett's policies were criticized for being too little, too late, and he was defeated in the 1935 election by the Liberals under Mackenzie King

Mackenzie King's Approach

• Mackenzie King, Liberal Prime Minister from 1935-1948, took a more interventionist approach to the Great Depression than his predecessor
• King's government introduced the National Housing Act (1938) to stimulate the construction industry and provide affordable housing
• The Prairie Farm Rehabilitation Administration (1935) was established to assist farmers in the drought-stricken Prairies through soil conservation, irrigation projects, and financial aid
• King's government also created the Bank of Canada (1934) to regulate the country's monetary policy and provide stability to the financial system
• Despite these measures, King was criticized for not doing enough to address the root causes of the Depression and for maintaining a balanced budget at the expense of social welfare

Fiscal and Monetary Policies

• The Canadian government initially responded to the Great Depression with a tight monetary policy, maintaining the gold standard and high interest rates, which exacerbated the economic downturn
• In 1931, Canada abandoned the gold standard, allowing the Canadian dollar to depreciate and providing some relief to exporters
• The government also implemented protectionist trade policies, such as the 1930 Smoot-Hawley Tariff in the United States, which raised tariffs on imported goods and led to a decline in international trade
• Fiscal policy during the Depression was generally characterized by government austerity and attempts to balance the budget, despite the need for increased spending to stimulate the economy
• The Bank of Canada, established in 1934, helped to regulate the money supply and maintain low interest rates, but its effectiveness was limited by the government's fiscal conservatism

Impact on Canadian Society

• The Great Depression had a profound impact on Canadian society, with widespread unemployment, poverty, and social unrest
• Many Canadians were forced to rely on government relief or private charity to survive, and the economic hardship led to increased social and political tensions
• The Depression also had a significant impact on Canadian agriculture, with falling commodity prices, drought, and soil erosion leading to the abandonment of many farms and the migration of farmers to urban areas
• The term "Bennett Buggy" was coined to describe the horse-drawn carts used by many unemployed Canadians during the Depression, as they could not afford to maintain their cars or purchase gasoline
• The social and economic upheaval of the Great Depression led to a growing demand for political change and the rise of new political movements in Canada

Rise of New Political Parties

Co-operative Commonwealth Federation (CCF)

• The Co-operative Commonwealth Federation (CCF) was founded in 1932 as a socialist political party, advocating for public ownership of key industries, social welfare programs, and economic planning
• The CCF's founding document, the Regina Manifesto (1933), called for a "complete transformation of our economic and political institutions" to address the failures of capitalism and the hardships of the Great Depression
• The party gained support among farmers, labor unions, and intellectuals, particularly in Western Canada and Ontario
• In the 1935 federal election, the CCF won seven seats in Parliament, marking the beginning of its rise as a significant force in Canadian politics
• The CCF's success in the 1930s laid the groundwork for the eventual formation of the New Democratic Party (NDP) in 1961

Social Credit Party

• The Social Credit Party was founded in 1935, based on the economic theories of British engineer C.H. Douglas, who advocated for the distribution of "social credit" to citizens as a means of boosting purchasing power and stimulating the economy
• The party gained popularity in Alberta, where it won the 1935 provincial election under the leadership of William Aberhart, and formed the government until 1971
• Social Credit also had some success in British Columbia, forming the government from 1952 to 1972 under the leadership of W.A.C. Bennett
• At the federal level, the Social Credit Party won 17 seats in the 1935 election, but its influence remained largely confined to Western Canada
• The party's popularity declined in the post-war years, as economic conditions improved and its economic theories lost credibility

Communist Party of Canada

• The Communist Party of Canada, founded in 1921, experienced a resurgence of support during the Great Depression, as many Canadians became disillusioned with capitalism and sought radical alternatives
• The party played a significant role in organizing the unemployed and supporting labor strikes, such as the 1931 Estevan coal miners' strike in Saskatchewan and the 1935 On-to-Ottawa Trek of unemployed workers
• Despite its activism and growing membership, the Communist Party faced significant opposition from the government and the public, particularly due to its ties to the Soviet Union and its revolutionary ideology
• In 1931, several Communist Party leaders were arrested and convicted under Section 98 of the Criminal Code, which banned organizations advocating for the overthrow of the government
• The party's influence declined in the late 1930s, as the Canadian government became increasingly hostile towards communism and the public's attention shifted towards the growing threat of fascism in Europe

Regional Impacts

Provincial Responses to the Great Depression

• The Great Depression had varying impacts on different regions of Canada, and provincial governments responded to the crisis in diverse ways
• In Western Canada, particularly the Prairie provinces, the Depression was exacerbated by severe drought and falling agricultural prices, leading to widespread poverty and the abandonment of many farms
• The Alberta government, under the Social Credit Party, attempted to implement a system of "prosperity certificates" to provide relief to citizens, but the scheme ultimately failed
• In Ontario and Quebec, the industrial heartland of Canada, the Depression led to massive layoffs and factory closures, as well as labor unrest and strikes
• The Ontario government, under Conservative Premier George Henry, implemented a program of public works and direct relief, but also engaged in strict budget-cutting measures and the suppression of labor activism
• In Quebec, the Liberal government of Louis-Alexandre Taschereau maintained a balanced budget and resisted calls for increased government intervention, leading to growing social and political unrest
• The Maritime provinces, already struggling with economic stagnation and outmigration before the Depression, were hit hard by the downturn in global trade and the collapse of the region's primary industries, such as fishing and coal mining
• Provincial governments in the Maritimes provided limited relief and public works programs, but the region remained mired in poverty and underdevelopment throughout the 1930s
• The varying regional impacts and responses to the Great Depression highlighted the economic and political disparities within Canada and the need for a more coordinated and comprehensive national approach to the crisis