From Boom to Bust

Canada Moves Toward Independence

• After the Chanak Crisis King continued to move Canada toward independence.

• King announced that Canada would now sign its own international agreements

• The first was the Halibut treaty of 1923 signed between Canada and the United States

1921-1925: Canadian Politics 1920 Dominion Elections Act allows women to run for election to parliament for the first

time In 1921, Agnes Macphail became the first woman to be elected to the Canadian House of

Commons. A corruption scandal discovered late in his first term damaged Prime Minister William

Lyon Mackenzie King's popularity Early in his second term, another corruption scandal, this time in the Department of

Customs, regarding the smuggling of alcohol was revealed, which led to more support for the Conservatives and Progressives, and the possibility that King would be forced to resign,

King called an election in 1925, in which the Conservatives won the most seats, but not a majority in the House of Commons.

King held onto power with the support of the Progressives, even though he had lost the election and his own seat in the HOC.

In 1926 King advised the Governor General, Lord Byng, to dissolve Parliament and call another election, but Byng refused, the only time in Canadian history that the Governor General has exercised such a power.

Byng called upon the Conservative Party leader, Arthur Meighen, to form a government. Meighen tried, but was unable to obtain a majority in the Commons. So after the shortest term in office of any Canadian PM, Arthur Meighen called an election in 1926.

Election 1925/26 In the Canadian federal election, of 1926, King appealed to the Canadian

public to support the Liberal argument that the Governor General had interfered in politics.

The liberals and King argued that there had been a violation of the Constitution

Although no violation of the Constitution arose, King managed to convince the Progressives the Governor General was wrong to not support the PM.

This disagreement and the subsequent election is known as the King/Byng Crisis.

King and his party won the election of 1926 with a clear majority in the House of Commons.

Burning Questions! Think/ Pair/Share

• Under what circumstances, if any, do you think the Governor General should be allowed to step in and interfere with the policies of the Prime Minister?

• What do you think are some of the problems with minority governments? What are some of the advantages? What do we have now? Explain which is the superior form of government in your opinion.

BoomThe outcome of the 1926 election was due in

large part to prosperityWorkers in factories North and South of the

border were pouring out radios, refrigerators, cars and other consumer products

Grand hotels were being built across the country drawing American tourists

AmericanizationProsperity came from a new

sourceCanada had formerly traded

East and West with Britain and Asia

Britain could no longer afford to invest in Canada following the war.

The United States had made a lot of money from the war and was looking to Canada as a consumer market, and vice versa

Americanization Cont’d…Many American companies created branch plants in

Canada to avoid tariffs. Many highways were built linking Canada to the

United States, and we began driving on the right side of the road

Air travel, radio, and telephone links began to network into the U.S.

Average work week was reduced from 50-60 hours per week to 44-50 hours increasing leisure time substantially

The Roaring 20’s Changing Times

More and more powers being turned over to provincial governments Much of Canada relied on natural resources which fell under provincial

jurisdiction. Women voters demanded pensions for widows, low income mothers, and the

disabled.• Political advocates like James S. Woodsworth argued for a national pension.

When his government won a majority in 1926, Mackenzie King followed up on his promise to introduce legislation that became the Old Age Pensions Act in 1927.

• •The maximum pension was $20 per month or $240 per year.• •It was available to British subjects aged 70 or over who had lived in Canada for

20 years.• •It was restricted to seniors whose income, including the pension benefits, was

less than $365 per year (this was determined by the "means test").• •Status Indians were excluded.

The Roaring 20’sProvincially Quebec, BC, and Ontario were big winners

during the 1920’s because of a new system to redistribute power over resources to the Provinces

In 1929 after five years of good times, the average household income was $1200 dollars.

Canadians read American books and watched American movies. Canadians began to have concerns regarding the “Americanization” of Canadian culture

Canada begins to see the emergence of service clubs such as Kiwanis and Knights of Columbus

American entertainment at it's finest: what we watched in the 1920's.

The Roaring 20’sA nation of 10 million was buying 2 million movie

tickets a week (for mostly American movies)American pro baseball became the big pass time

in North AmericaThe NHL had 6 teams, (2 Canadian)Canadian Artwork began to be recognized and

work such as that by the Group of 7 and Emily Carr became well known.

This was seen as a much needed Canadian expression of Culture.

Red Maple by A.J. Jackson

Roots of DepressionCanada’s prosperity in the 1920’s had two great flaws:Most Canadians could not afford the mass goods being

producedCanada was a resource export economy, dependent on the

export of things like grain and newsprint. This meant that we were heavily dependent on the health of

the world economy.

Signs of SicknessThe wheat market had been dominated by

Canada for much of the 1920’s however many other countries were now exporting wheat on the world market

Drought destroyed much of the 1929 crop in Canada, and world wheat prices were falling quickly from $2 to $1.09 per bushel

This devastated many farmers who had counted on the price of wheat remaining at $2

Black TuesdayEurope had no money to buy Canadian goodsUS raised tariffs to highest ever to protect their own

goodsCanadian factories began to closeShareholders in companies began to sell and prices

fell quicklyOctober 29, 1929 the US stock market crashed

R.B. Bennett RB Bennett was the new Conservative leader in Canada King was convinced that Bennett was trying to blame the depression on him Most people thought the depression would be over in

months. King announced that Ottawa had financial aid for western

farmers, but not even a “five cent piece” for conservative supporters.

The Business Cycle• The business cycle is marked by three stages• 1. The first stage is a period of prosperity where the

economy approaches full employment. This stage is often accompanied by inflation as full employment and high income levels drive up the price of labour and goods.

• 2. In stage two the economy slows down bringing about a recession. Few new jobs are created and some jobs are lost, as companies reduce their production of goods and services. This is known as cyclical unemployment.

• 3. The final stage is a period of economic recovery where production increases in response to increased consumer demand. New jobs are created and the cycle starts over.

A depression occurs when the period of economic decline is prolonged and severe. During a depression prices of goods and services fall dramatically. This is known as deflation. Wages also fall. Generally wages fall faster than prices during a depression

Note how the unemployment always goes up and down, with varying severity.