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Canadian Economy through War and Peace (1900-1929)

Canadian Economy through War and Peace (1900-1929)

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The process of modernization in the years before the First World War promised a future for Canada. The former colonies which had joined together in 1867 were a product of 17th and 18th century European mercantilism; their individual economies remained fixed in the commercial trading pattern of an earlier time. Anxious to solve the dilemma posed by the need to create a national economy without disturbing the foundations of the various provinces, Prime Minister Macdonald seized on industrialization. The “National Policy” would simulate a modern economy for a modern state. Through a complicated system of protective tariffs, export duties and bonusing, the federal government encouraged the artificially rapid development of industry and manufacturing, with the result that by 1910 the manufacturing and service sectors accounted for nearly two-thirds of Canada's economic activity.

Consequently, while the staple trades remained an active component of Canada’s changing economy, it was developed what was termed as 'the new industrial staples'—hydroelectricity, newsprint, refined petroleum products and non-ferrous metals. Macdonald's strategy was to prove successful: at the outbreak of the Great War Canada's economic base was characteristically modern, controlled by integrated corporate structures and consisting of extensive light manufacturing of consumer goods—bicycles, electrical appliances, sewing machines, and so on—mated with energy, specialized metals and monocrop commercial agriculture, the latter dependent on science and technology to deliver its products to market.

While science and industry might have disturbing implications, their potential for assuring Canada's future was apparent. If industrialization and urbanization created a host of immediate problems, technology could provide practical solutions; meanwhile it created the tools to overcome Canada's contradictions. If modernity destroyed traditional values and patterns, it had the power to create new ones. The Canadian Pacific and the telegraph bridged geographical distance. The expansion of the telegraph and cable network paved the way for the creation of a single wire service, Canadian Press Limited, in 1917. With its monopoly over news, Canadian Press ensured that Canadian papers offered readers a very similar view of themselves and the world they inhabited. The emphasis was on modern progress; the tone was reassuring. Moreover, because Canadian Press was highly centralized and controlled by the Toronto dailies the outlook it reflected was essentially urban.

Nor did the arrival of the new technologies of first, radio and subsequently, television change the message. Partly this was so because broadcasters continued to depend on Canadian Press, and partly because the fundamentals of the news business remained unchanged regardless of the medium: Canada's geography and population dictate uniformity and monopoly. More importantly, proponents of the new media had come to see their potential and consciously promoted them as instruments of consensus, designed for opinion making and education, as well as the school system.

In short, modernity imposed a degree of uniformity on a diverse population. By doing so it solved one of the fundamental threats to Canada's future—the lack of any national consensus. Just as the lack of established structures and institutions opened the door to rapid modernization, Canada's situation exaggerated its effects. The balance sheet of production and distribution for a small scattered population demanded and created a sameness of taste, attitude and outlook. From political values to moral virtues, nails to newspapers, the imperatives of Canadian circumstances generated the commonalities of mass society.

Canada experienced tremendous change as it made the transition to the twentieth century. A greatly expanded nation after Confederation, it reached across the continent by the turn of the century. Its dominant political party had crafted the National Policy to protect its industry, build a transcontinental railway, and bring immigrants to the West. While the first two points of the National Policy were achieved, the last remained an essentially unfulfilled promise by the 1890s. Ever mindful of the burgeoning United States, which was becoming an industrial powerhouse, Canada sought to protect itself and compete as industrial capitalism became the favored economic model for the Western world. As a dominion, and thus technically lacking in the machinery needed to pursue a distinctive foreign policy, Canada struggled to navigate Britain’s imperial schemes in Africa and Asia.

Domestically, political and social issues were underscored by contentious questions of linguistic and cultural duality. Although Quebec had joined Confederation, profound strains between francophones and anglophones dominated federal politics in the era. They shaped discussions of western development, education, immigration, and British imperialism. Beset by a host of challenges, many Canadians nonetheless looked to the future with optimism. Prime Minister Wilfrid Laurier, whose administration bridged the two centuries, captured that spirit when he observed that the new century was to belong to Canada. With the tools of governance firmly in place and the expansive interior appearing ripe for development, Canada seemed poised to become a power. As it struggled with domestic tensions, the horrible drama of World War I, and the mixed blessing of postwar development, Canada in the period from the 1890s to the 1920s incrementally moved away from its European roots to favour a North American orientation.

The Liberals embraced economic and social ideals that theoretically ran counter to the Conservatives’; nonetheless, Laurier’s administration essentially adopted and modestly altered the principles of the National Policy. The new government faced a host of concerns, including domestic divisions, immigration and territorial expansion, international trade, and mounting British and American imperialism. Although it periodically sought a reciprocal trade agreement with the United States, Laurier’s administration continued to protect growing Canadian businesses by instituting a scaled structure that essentially matched the tariffs of its trading partners. The Liberals also strengthened east-west linkages and prairie agricultural development by supporting the construction of two additional transcontinental railroads. The Canadian Northern Railway, chartered in 1899 with generous support of land and government subsidies, built a line that swept northward in the prairies and British Columbia and then terminated in Vancouver. The Grand Trunk Pacific, constructed by 1914, connected eastern lines at Winnipeg to Prince Rupert, British Columbia. These lines soon ran into severe financial difficulties. Still, for a time they boosted the economy and provided thousands of jobs for laborers. Thus, Laurier’s Liberals reinforced two of the three elements of Macdonald’s National Policy. The third component, improved immigration to populate the West, faltered under Conservative leadership. Perhaps ironically, this part of the plan succeeded spectacularly during Laurier’s years in office.

The nationalistic plan to create a generation of new Canadians merged with the need to exploit the agricultural potential of the prairies. Modest immigration occurred in the post-Confederation era—for example, about 15,000 Chinese arrived to work on the Canadian Pacific Railway—yet a grand migration eluded the National Policy’s proponents. Several factors combined to facilitate the fantastic influx that increased Canada’s population in the early twentieth century. Recovery from an international depression in the late 1890s, the expansion of railroads and steamship lines, and improvements in farm machinery and crop strains made Canada an attractive destination for immigrants.

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The most important determinant of the Canadian expansion after 1900 seems to lie in technological improvements in methods of cultivation which finally permitted a profitable harvest from the Prairie Provinces. If summer fallow and dry farming techniques had been used extensively earlier, if Marquis wheat had been adopted or developed sooner, it seems probable that yields would have been sufficiently sizable and quality sufficiently good to compensate for the higher railroad and transportation rates. The roller method of flour milling, which made spring wheat better suited to grinding than winter wheat, was perfected in 1881, and the chilled steel plough capable of turning the prairie sod was available in 1870. Without these other techniques of cultivation, however, the distance of the prairies from open water transport and the relatively high Canadian railroad rates in the 1890s would have delayed the opening of the West.

Events outside the country also shaped the movement of peoples. Political, religious, and economic pressures, particularly in Eastern and Southern Europe, induced millions to leave their homelands. Canada capitalized on the dramatic announcement in the United States that its frontier was essentially closed for further settlement. Finally, populating the West became a priority of Laurier’s government. Clifford Sifton, the interior minister, accepted the main responsibility for the endeavor. Aggressive advertising in Europe and the United States, touting the prairies as the “last best West,” fancifully portrayed Canada as a flawless land of opportunity. As Sifton famously observed, he wanted hardy European “peasants in sheepskin coats” so that they would be prepared to endure the rigors of life on the land.

From 1896 to 1914 more than one million immigrants came to Canada’s West. At the same time, Canadians migrated to the United States in large numbers, including tens of thousands of Quebecers who moved to New England in search of employment. Although many settled in cities, the bulk of the migrants from Europe and the United States rode the newly constructed rails to the West. Immigrants came from Britain, seeking economic opportunity while still secure in the empire’s fold. Scandinavians, Germans, Russians, and Eastern Europeans arrived. All left indelible imprints of their culture, language, and architecture. Ukrainians, for example, constructed bloc settlements

and Orthodox Catholic churches with distinctive onion-domed spires. Religious groups included European Mennonites, American Mormons, and the fiercely independent Russian Doukhobors. As a reflection of population growth, the provinces of Saskatchewan and Alberta entered the dominion in 1905. Echoing Manitoba’s saga, a controversy over the nature of education and control of resources and public lands engendered bitter feelings. Nonetheless, by the eve of World War I, the Canadian prairies had become home to a tremendous variety of immigrants and two new provinces.


On many levels, this government-assisted migration was a phenomenal success. Immigrants provided muscle for industry and agriculture. They raised families, built communities, worshiped the religions of their forebears, established newspapers in their native languages, and attempted to keep elements of their culture intact. Over time, they also adopted and helped to fashion a Canadian outlook. This mosaic of peoples would later become one of the celebrated features of Canadian identity. Yet many Canadians viewed the rapid influx of non-English speaking peoples as a threat; they preferred Protestant immigrants from Northern and Western Europe. Nativist organizations, opposed to foreign influences, emerged in the late nineteenth century. The government instituted a head tax in 1885 to curtail Chinese immigrants. With the advent of a new minister of the interior in 1905, the government introduced more restrictive policies toward immigrants from Eastern and Southern Europe and limited the rights of Native peoples. In 1907 a riot broke out in Vancouver between Asiatic Exclusion League members and Japanese and Chinese residents. Concerned Canadians increasingly counted on strict laws to block certain immigrants and the educational system to play a key role in assimilation.

Britain rapidly abandoned its ambivalence toward colonies in the late nineteenth century, thereby touching off a spirited debate among Canadians about their country’s role in the empire. In competition with other industrial and military powers, Britain aggressively sought possessions in Asia, the Pacific, the Middle East, and Africa. Canadian groups, consisting primarily of educated and professional anglophones, formed to support British imperial endeavors. The Imperial Federation League, for example, championed Canada’s connection to the empire after 1884. A substantial number of politicians, including members of Parliament, joined these organizations. Although the empire had its tireless proponents, imperialism drew sharp criticism from other Canadians. One of the most eloquent empire opponents was Henri Bourassa, a member of Parliament from Quebec and editor of Le Devoir, an influential French-language newspaper. Bourassa and his supporters maintained that Canadians should not assist in the subjugation of Asian and African peoples. The heated debate between imperialists and anti-imperialists framed a larger question of Canada’s future. Bourassa’s Canada was North American in focus, and francophone rights were seen as analogous to those of other oppressed peoples in the world.

According to the usual measures of over-all economic growth, Canada appears to have grown faster between 1900 and the outbreak of World War I than in any other period since the Act of Confederation in 1867. This statement can be substantiated in terms of the rates of increase of real national product, population, labor force, occupied farm acreage and such. Moreover, in this period the rate of net immigration was at its peak and the inflow of foreign capital into Canada was larger, in proportion to national product, than at any other time since Confederation.

In view of the sustained growth that had preceded the post-1900 expansion, one cannot avoid the question, "Why did not the boom occur earlier?" The question becomes even more compelling when one recalls the social milieu of the late nineteenth century and the goal of Canadian policy so vigorously pursued in those years. The mobility of European peoples during the nineteenth century is well known. Large waves, not only of labor, but also of capital, left Europe, and especially Great Britain, throughout the century for other underdeveloped countries like Canada. Especially after 1870, both Australia and Argentina (countries like Canada, possessed of rich natural resources but acutely lacking in labor and capital), experienced a decade of rapid expansion marked by a great influx of people and foreign capital, the opening of new lands for the production of food and materials which found a profitable market in Europe, and a rapid increase of total output.

Canada and the United States at the beginning of 20th century

While questions of British imperialism loomed large, the United States continued to have a considerable impact on Canadian national development in the late nineteenth and early twentieth centuries. Tensions in the fisheries along both the Atlantic and Pacific coasts flared up periodically. At the same time, some Canadians, including English-born educator and journalist Goldwin Smith, maintained that Canada’s destiny should be intertwined with that of its southern neighbor. The continental movement attracted few to its cause; still, the idea that the country’s focus should be North American rather than European underscored much of the political and social debate in the period.

Two episodes illustrated Canada’s ambiguity in its interactions with the United States. The boundary between Alaska’s panhandle and Canada was a vaguely defined space. Following the Klondike gold strikes in the Yukon in 1896 that brought large numbers of people into the region, calls for an international tribunal to determine the boundary clearly intensified. When an arbitration commission met in 1903, the crux of the issue concerned the panhandle’s width. Canada wanted water access through inlets from British Columbia to the Pacific. The United States envisioned a thicker panhandle that effectively landlocked northern British Columbia. In a classic example of his “big stick” foreign policy, President Theodore Roosevelt threatened force and charged the tribunal’s three American members, including the secretary of war, to render a favourable decision. Two Canadian jurists and the British chief justice, Lord Alverstone, rounded out the commission. Alverstone sided with the Americans, thereby reinforcing bitter perceptions that Canada’s interests were routinely sacrificed to improve Anglo-American relations. The Alaska boundary decision fuelled Canada’s drive to establish the machinery to pursue a more independent foreign policy. Coupled with the South African War, it led to the creation of the External Affairs department in 1909.

Trade issues pointed to another side of Canada’s relationship with the United States, and they ultimately contributed to Laurier’s defeat. The protective tariffs of the National Policy had helped manufacturers, but a growing number of Canadians wanted to reinstate a reciprocal trade agreement with the United States. Consumers, especially in the growing West, resented paying higher prices for tariff-protected products from Ontario and Quebec. Farmers also wanted a freer marketplace to export their goods. They dramatized their concerns by peacefully marching on Ottawa in 1910. The Americans, now under William Howard Taft’s leadership, were in the midst of the Progressive era. Taft and some congressmen anticipated that a reciprocal trade agreement would be an important step toward Canada’s annexation through economic means. The two countries hammered out terms that each planned to implement through legislation. The agreement covered many natural products, as well as some manufactured goods that farmers required. Congress promptly passed the appropriate legislation and waited for the Canadians to follow suit.

During the election of 1911, one of the most important in Canadian history, intense debate swirled around the reciprocity issue. Opponents to the trade plans targeted both economic and nationalistic themes. Many pointed out that the National Policy’s tariffs had successfully created a favorable economic climate for industrial growth. Equally important, critics seized the moment to argue that reciprocity would lead directly to Canada’s demise. Also shaping the election was the controversial Naval Service Act passed by the Liberals the year before. Under pressure from Britain, then in the throes of a grim competition with other nations to construct powerful naval fleets, Laurier’s government created a small navy. Antiimperialists deplored the initiative. Conservatives, on the other hand, belittled the fledgling “tin-pot navy.” Under the leadership of Robert Laird Borden, they also mounted a withering attack by claiming that the passage of reciprocity would weaken Canada’s ability to survive. Conversely, Laurier and reciprocity supporters asserted during the campaign that the agreement would strengthen Canada’s economy and offer a greater chance to compete in international markets. Borden’s nationalistic arguments carried the day. Following the Liberal electoral defeat, the reciprocity legislation did not pass in Parliament, so the agreement with the Americans collapsed. As the Conservatives settled in, however, domestic issues were rapidly overshadowed by the outbreak of Europe’s “war to end all wars.”

Canada and the Great War

Between 1896 and 1914, Canada experienced rapid economic growth associated with an expanding population, the settlement of the Canadian prairies, the development of mining especially in British Columbia and Ontario, and the construction of railways.

The tragic events of 1914 to 1918 fundamentally altered Canada’s relationship with Britain, deeply affected its political structure and economy, and widened the divide between francophones and Anglophones on the issues of imperialism and conscription (compulsory military service). In fact, a considerable number of historians maintain that World War I was the most important event in modern Canadian history. Although this viewpoint might be disputed, there is little doubt that Canada in the 1920s was a radically different country from the one that Laurier governed in the opening years of the century.

Canada was essentially unprepared for hostilities. Borden’s failed attempt to raise millions for the construction of British battleships indicated that citizens were still divided on the issue of imperial support. Two years later, the swiftly moving events that unfolded in the wake of the assassination of the heir apparent to the Austro-Hungarian throne led to widespread European hostilities. Britain allied with the French and Russians against the Central Powers of Germany, Austria-Hungary, and the Ottoman Empire. Britain’s declaration of war implicitly involved its extended empire. Lacking a distinct foreign policy and linked constitutionally to Britain, Canadians found themselves involved in a war that was not of their making.

Nonetheless, an emotional outpouring greeted the war news in Canada. Parades and political addresses illustrated a general enthusiasm for supporting Britain and France. The House of Commons gave its overwhelming and largely symbolic approval to the war and in the flush of the moment passed the War Measures Act in 1914. Broadly worded to encompass “war, invasion, or insurrection, real or apprehended,” this statute gave Borden’s cabinet extraordinary powers. During the Great War, it was used to direct the economy, steer men and women into jobs that the government deemed critical for the war effort, oversee the conscription of men into service, and detain and incarcerate people who by virtue of their ethnicity or ideas were considered threats to the state.

With patriotic fervour, the ranks of the originally minuscule military of several thousand rapidly swelled. Troops flocked to unfinished camps, which were overseen by a zealous but incompetent minister of militia named Sam Hughes. These soldiers became the backbone of the Canadian Expeditionary Force.

During the war it was necessary for Canada to maintain agricultural production, and to man factories engaged in the manufacture ofmunitions, equipment for the troops, and general war supplies. By 1916, war production had ended unemployment, and factories and farms competed with the military for recruits. Women were hired to labour in factories, fields, department stores, and banks. Like the male workers they joined and in most of the cases replaced, albeit at lower wages, women confronted wartime inflation and a soaring cost of living. Canada’s War Labour Policy, which was proclaimed in 1918, prohibited strikes, lockouts, and discrimination against union members. It affirmed the right to organize and called for fair wages and equal pay for equal work, but ultimately it was largely ineffective. The inequities which were already largely spread within the society contributed to union expansion, rising level of strike activity and radical protests. Many unions collapsed soon after the war, when a recession started and the munitions contracts dried up.

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Among farmers there was grave concern over the depletion of the supply of labour. Many factories began to be embarrassed by the free enlistment of mechanics.

Up to 1916 recruiting hasbeen unorganized and unsystematic. There was no authority to which the workman, the manufacturer or the farmer could appeal. Thus workmen necessary to the satisfactory operation of industries were enlisted, and young farmers whose services were needed in agriculture joined the county regiments.

By the time the guns fell silent in November 1918, over 600,000 Canadians had served in the army. An additional 9,000 had enlisted in the Royal Canadian Navy, mostly for dangerous convoy duty protecting the steady stream of ships that plied the North Atlantic with men and war materiel. In addition, Canadian pilots comprised about one-quarter of Britain’s Royal Flying Corps. Although some Canadian soldiers served in the Mediterranean and in Russia, the overwhelming majority fought in the trenches along the Western Front that extended from the Swiss border to the North Sea. In the dreadful battles along these lines, where generals continued to use antiquated tactics of having troops rush at one another to gain a victory, the casualties on both sides were staggering. Machine guns, artillery, and poison gas took a devastating toll. The Canadian Corps, under the command of British officers, performed admirably during the war and rapidly earned a reputation on both sides of the trenches as fierce fighters. Canadian soldiers were among the first troops to be victims of German mustard gas at Ypres in 1915 and suffered huge losses, yet they held their ground without protective equipment.

They fought with distinction in the ill-conceived Somme offensive in 1916, which yielded more than one million casualties for a paltry gain of land. In April 1917 Canadian forces received international attention after they took Vimy Ridge in France, one of the most significant Allied victories of the war. Due to their performance in battle, the Canadian Corps finally received a Canadian commander later that year, General Arthur Currie. The country also received great attention due to the bold exploits of its pilots who served in the Royal Flying Corps. Ontario’s Billy Bishop, for example, became one of the Allies’ greatest aces, although the number of his victories may have been inflated in the interest of promoting the war effort.

Given its relative population size, Canada’s losses were extraordinarily high. One soldier in ten who put on a uniform died during the hostilities. Canada’s position in the British Empire and its international stature escalated considerably after 1914, changes wrought largely by the commitment of its fighting forces. Numerous monuments to the soldiers who served in World War I, dotted throughout the country, serve as a poignant reminder of the conflict’s role in shaping Canadian nationalism.

The War at Home

The war’s impact on the home front was equally important for shaping the country’s history, for it touched all Canadians at some level. Women served as nurses, in various voluntary organizations such as the Imperial Order Daughters of the Empire, and in government-funded social services. Thousands of women entered the heavy workforce, including dangerous occupations such as manufacturing munitions. Eager to help in the war effort, women also wanted to break the long-standing obstacles to their presence in vocations outside of education, clerical work, and light factory employment.

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Government lacked professional civil servants capable of equitably managing an economy suddenly on a war footing. As a result, Ottawa was critically dependent on the expertise and good will of business people like Joseph Flavelle, general manager of the William Davies Packing Company, who became chair of the Imperial Munitions Board. Companies, especially those producing munitions, but also suppliers of food, clothing, and military goods of all types, recorded huge profits. Criticism of such heavy profits and charges of corruption in the awarding of military contracts made Canadians increasingly sceptical about businesses’ patriotic claims, all the more so when they compared the prosperity of those like Flavelle to the deprivation suffered by the servicemen’s families who relied on the charity of the Canadian Patriotic Fund.

The country’s economy expanded dramatically as it gained a major role in providing war materiel and foodstuffs for the Allied effort. Canadian factories churned out goods that ranged from clothing to ships. The war effort considerably boosted grain production and increased the market for minerals and timber products.

The federal government expanded its power during the war to orchestrate economic production. By 1918 it actively regulated everything from crop distribution to the right of laborers to strike. Under the leadership of the successful businessman Joseph Flavelle, for example, the Imperial Munitions Board became a model of efficiency. The war’s legacy for Canada’s economy was in fact two edged. The furious expansion of its productive might, particularly in the East, edged the country closer to an industrial-oriented economy. There was little question that war was good for business and massive employment. Detracting from the glow provided by a flush economy was an increase in inflation, the institution of income and business profits taxes, and a rationing of goods and foodstuffs. Although a series of Victory Bond drives raised millions of dollars—over eighty percent of the total cost of the war effort—they ultimately placed the country in tremendous debt. The government also moved during the war to take control of the vast railroad networks that had been constructed in a bout of enthusiasm at the turn of the century.

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There were some problems immediately after the end of the war: firstly, about 150,000 men were in the situation to find new employment in some other occupation than that of making munitions; secondly, two or three hundred thousand men, returned from abroad, had to be reabsorbed in the norma1 activities of the country; and, thirdly, aconsiderable new immigration amounting to perhaps 150,000people had to be dealt with. In the total, about 500,000 people had to find occupation.

With western expansion peaking before the war, the Canadian Northern and the Grand Trunk Pacific soon faced bankruptcy. The government’s absorption of these and other troubled railroads led to the creation of the Canadian National Railways by the early 1920s. The war exacted its most severe domestic toll on Halifax, which served as a staging ground for convoys of merchant ships before they headed across the Atlantic. In December 1917 two ships collided in the city’s harbor. In a devastating moment, the explosion of a French ship packed with munitions flattened a great portion of the city, created a tidal wave, and set off fires that ravaged the surrounding area. More than 1,600 perished, and thousands were wounded. The Halifax tragedy stands in history as the largest man-made explosion before the United States dropped an atomic bomb on Hiroshima in August 1945.

By the war’s close, the lives of Canadians from all age groups, regions, and ethnic backgrounds had been irrevocably altered. Apart from the Canadian soldiers who died on the battlefield, there were innumerable mentally wounded, or “shell shocked”, and they returned to a society that was ill-prepared for such casualties. While a soldier whose wounds put him in a wheelchair received a government pension and the sympathy of other Canadians, there was little comfort for the many returnees who seemed unfit to resume their family or work life, and who stared vacantly into space or sought comfort in the bottle.

Many Canadians in those times had no real idea what the war was about. Some never doubted the justice of the British cause and believed that the sacrifices Canada had made demonstrated its right to a larger share in imperial decision making.

Peace and the Framework for a New World

The Great War highlighted contradictory impulses in Canada. Many historians have argued, for example, that the war acted as a bonding agent to give Canadians a sense of national purpose. Others maintain that Canadian national unity, both political and social, was damaged by the event. Various crosscurrents cleaved the country along ethnic, language, ideological, and class lines. Another paradox concerned the country’s role in the empire. Undoubtedly Canada’s military and domestic war efforts underscored its commitment to Britain. At the same time, the Canadian government consciously used the crisis as a platform to gain more autonomy in the postwar era.

A test for this approach came with the protracted peace talks that concluded the Great War and established a new world body, the League of Nations. Both British Prime Minister David Lloyd George and American President Woodrow Wilson originally opposed the idea that Canada and the other dominions should attend the negotiations as separate nations. Borden and the other dominion leaders, pointing to their casualties and America’s belated entry into the war, prevailed in their arguments for separate representation. Consequently Canada attended the treaty meetings as both a separate country and as part of the British Empire’s delegation. Although the actual impact of Canada’s contribution to the peace process was negligible, these events were of utmost significance for two reasons. The principle that Canada deserved its own representation at the negotiations was an important leap forward in the country’s evolution to become an independent nation. Canada also joined the League of Nations, an international body that had been the last of President Woodrow Wilson’s Fourteen Points, which were designed to avoid another global conflict. Canada and over sixty countries joined the organization, although ironically the Americans declined after Wilson lost an acrimonious power struggle with the Senate.

Canadians had reservations with the League’s collective security clause; nonetheless in the 1920s and 1930s, the country participated in its deliberations and committees. Canada’s active relationship with the League of Nations became an important training ground for its developing independence. World War I had thus wrought yet another change for the country by accelerating the political and popular resolve to seek a foreign policy independent of Britain’s.

Canada in the 1920’s: Roaring or Whimpering?

The experiences of Canadians from the end of the Great War through the advent of the Great Depression in 1929 varied substantially. On one level, the country emerged from the war a stronger nation, with a greater industrial base and expanding cities. At the same time, class issues persisted as workers and farmers struggled to achieve rights and gain protection from workplace abuses. Many sectors of the economy flourished during the 1920s; others remained in the doldrums. The two main political parties experienced important leadership changes, while other parties formed to represent the interests of groups that had become disillusioned with the Conservatives and Liberals.

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The economic and social divisions between the regions appeared more sharply defined than during the war. Applying the classic characterization of “roaring” to describe Canada in the 1920s would be misleading. Yet much evidence suggests that the decade was a strong and progressive one for Canadian national development.

A temperance movement that advocated the total or partial abstinence of alcoholic beverages, which had been growing during the nineteenth century, achieved a measure of success during and following World War I. Groups such as the Women’s Christian Temperance Union lobbied to have legislation passed that would control the manufacturing and transportation of alcoholic products. A mixture of factors drove the prohibitionists, including urban problems, religion, and the perception that certain immigrant groups, such as the Irish and the Germans, abused alcoholic beverages. Motivated by patriotic messages that grains should be used for the war effort rather than in creating alcoholic beverages, all of the provinces, with the exception of Quebec, prohibited the sale of alcohol during the war. The federal government prohibited the manufacture, sale, and importation of alcohol in 1918, a measure that barely outlasted the war. By the 1920s the federal government and most of the provinces had abandoned their brief experiment with prohibition. Canada’s production of alcoholic beverages continued apace in the 1920s, driven largely by a booming illegal trade to a United States that was engaged in the “noble experiment” of prohibition. The Bronfman family, for example, parlayed their Seagram Company into the world’s greatest distillers largely by slaking a prodigious American thirst. Although Canada’s prohibition experiment was short-lived, it illustrated a growing belief that government should be used to control the social behavior of individuals.

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Workers and the Economy

Tensions among labourers and farmers had been building in Canada since the nineteenth century. Canadian workers echoed concerns that reached across national boundaries as industrial capitalism became entrenched in the Western world. Factories were typically dangerous and unhealthy places. Employees in the staples industries and manual labourers toiled long hours for low wages without health protections or benefits. Nineteenth-century labour organizations, such as the Knights of Labor, aggressively pursued the ideal of an eight-hour workday, legislation to protect workers’ health and improve work environments, and the termination of child labour.

While the Knights of Labor appealed to semiskilled and unskilled labour, various Trades and Labour Congress unions sought the support of more skilled workers. By the early twentieth century, the Trades and Labor organizations had been coupled with the powerful American Federation of Labor (AFL). Through the 1910s various labor organizations, ranging from the more conservative AFL to the radical unionists of the Industrial Workers of the World, known as the Wobblies, strove to draw workers into their ranks. Thousands of strikes erupted before and during the war, yet the federal and provincial governments were reluctant to pass meaningful legislation to protect the rights of workers. Laurier’s government did create the Department of Labour and pass the Industrial Disputes Investigation Act in 1907, yet the statute essentially favoured businesses.

Various labour struggles cropped up in the postwar era, thereby illustrating the complex labour-capital issues of the era. General inflation, the favoured treatment of manufacturers, and rising unemployment led to a rash of strikes. During the most dramatic labor action, the Winnipeg General Strike of June 1919, thousands of workers effectively shut down the city’s services for weeks. Alarmed citizens, mindful of recent events that had transpired in Russia, incorrectly branded the general strike a pro-Bolshevik uprising. When the federal government intervened and the strike leaders were

arrested, a violent confrontation broke out between the Royal North-West Mounted Police and protesting workers. The strike’s collapse effectively undermined the recently formed One Big Union, a socialist-inspired movement of workers. Dramatic clashes, particularly in coal-producing regions such as Nova Scotia, continued in the 1920s, a reminder that deep class divisions existed in Canada.

Although their efforts lacked some of the high drama and bloodshed of the labor protests, farmers pursued similar agendas during the postwar era. With the perennial issue of tariffs weighing heavily on their minds and a downturn in the demand for the country’s grain as the war came to an end, Canadian farmers sought relief in the political arena. Farmers’ parties emerged in Ontario and the prairies. The Progressive party also drew heavy support from farmers for its goal of lowering the tariffs. Sectors of the Canadian economy boomed in the 1920s, assisted directly and indirectly by provincial and federal governments that were eager to facilitate the country’s expansion. Wheat production soared as the decade progressed, but competition with other grain producing countries intensified as well.

The paper and pulp industry, dominated by a few giant corporations, led the word in exports by the late 1920s. Spurred by improved hydroelectric production, Canada developed consumer industries and increased its capabilities to extract mineral resources such as nickel. The automobile industry burgeoned, as did the development of roads and services needed to serve an increasingly mobile society. Large chain stores, such as Eaton’s, carried the most modern consumer goods, appliances, and fashions. The reliance on the export market to sustain the country’s economy, particularly in the primary sectors of agricultural, mining, and timber products, would deliver a devastating blow to Canada when the Great Depression hit. But for much of the decade, a robust economy dominated.

Indeed, the country crossed an important statistical threshold in the 1920s when its economy became more industrial than agricultural in total output and production.

Canada and the Triangle in the Postwar Era

Canada’s connections with the United States and Britain altered dramatically in the postwar era. In a milestone barely noticed at the time, the United States surpassed Britain as Canada’s biggest trading partner and greatest investor in the 1920s. Two important events with the United States signalled a relationship that was becoming more bilateral and direct in nature. In 1923 Canada and the United States signed an agreement to regulate Pacific coastal fisheries. From both a global and American frame of reference, the Halibut Treaty was quite modest; nevertheless, it signaled an important step by Canada to formulate its own agreements without British intervention.

The two countries also established formal ministries in each other’s capitals in 1927. The forerunners of embassies, these ministries symbolized the historical linkages between the North American nations. Similar connections closely followed with France and Japan. Canada’s changing relationship with Britain in the postwar era was of equal import. Canadian input was instrumental during several British treaty negotiations involving Japan and other Western powers. When war tensions flared between Britain and Turkey in 1922, King’s government dragged its heels in responding to the British call for support.

Most important, the dominions and Britain formalized a new relationship. Meetings in 1926 between dominion leaders and British representatives yielded a key statement from the conference chairman, Lord Balfour. It recommended the formalization

of “autonomous Communities within the British Empire, equal in status, in no way subordinate one to another in any aspect of their domestic or external affairs, though united by a common allegiance to the Crown, and freely associated as members of the British Commonwealth of Nations.” This report became the basis of the 1931 Statute of Westminster, which created the Commonwealth and effectively gave the dominions, including Canada, the power to act independently in matters of foreign policy.

The bonds to Britain remained durable, however.

By 1931 Canada had carved out a stronger bilateral relationship with United States and entered into a more equal Commonwealth agreement with its former imperial master.

Immigration problem at the end of the First World War:

Although there has always been a fairly continuous movement of British peoples from the metropolitan centre to the outlying areas of the Empire, it was not until the end of the Great War that the encouragement, and if necessary, subsidisation of imperial migration became an accepted objective of both dominion and home governments. Hitherto, with the exception of a few limited schemes, individuals had followed their own economic self-interest, convenience, and sense of adventure; now the imperial government would attempt to direct and regularise the movement.

The expansive phase of empire-building was over by the end of the First World War and now there were hopes to consolidate and strengthen it through various devices, of which assisted emigration was but one. The major impetus for the change came from the dominions, with Canada's shifting public attitudes being particularly striking.

The reasons for this change were twofold. The government at Ottawa, with an uneasy eye on the burgeoning nation to the south, had long regarded population growth as a necessary element of increased national stature. The discovery of the “last, best West” by Americans had resulted in a large influx of Yankees as the United States frontier disappeared; the reaction against this movement was especially strong in the far west where residents of British Columbia feared a kind of de facto annexation: reminders of the Oregon territory “theft” were a popular element in after dinner speeches. On a more sophisticated level, Canadian writers tended to equate American economic expansion with population growth, and argued that only by an equally rapid growth could Canada ward off American penetration and perhaps eventual takeover. To this end Canada had sought out the “sturdy peasant in the sheepskin coat” to people the vast wheat lands of the prairies and to provide the necessary markets for the growing industrial power of the east.

The First World War and the events growing out of it were to have a significant impact on Canadian outlooks, with the result that immigration policy—for a short time, at least—was sharply altered. In the first place, the war brought large numbers of Canadians back into informal contact with their stay-at-home brothers in the mother country. The long fight and hard-won victory increased feelings of Empire solidarity and seemed to show that the Empire could be self-sustaining. Moreover, war-time propaganda had stressed the virtues of British democracy and aroused emotions against the foreign-born. The outbreak of the Russian Revolution raised the spectre of bolshevism, which was widely regarded as a kind of infectious taint carried in the mind of the foreign immigrant and against which the Empire must protect itself. All of this focused attention on the number of foreigners residing in Canada, and raised serious doubts about the desirability of such a large alien presence. Writing on “Racial and National Dilution”, one author pointed to Canada's million foreigners as “poor and uneducated people of peasant stock” who are duped by a “small but diabolically active faction of religion-hating revolutionists” into resisting Canadianisation. “If we wish to weave these people into the warp and woof of our national life,” the author concluded, “we must resort to conscious effort. At present the situation is that a disturbingly large proportion of our total population dilutes our citizenship, adds nothing to the spiritual meaning of Canadian life, and yet is necessary to the mechanical work of production.” (Racial and National Dilution', Roundtable, 43 (1921), p. 659).

While this writer sought increased efforts towards assimilation, others had a more direct solution. “Why not attract good stock?” asked the popular magazine Canadian Opinion in an argument for attracting Anglo-Saxons; “We don't want the scum of Europe… mongrel races with their inferior minds, morals and bodies' who cannot mix with us socially. (Canadian Opinion, 4 Dec. 1920, p. 5.) Even the influential Manitoba Free Press suggested that Canada should strive to fill the country with men of that “bull-dog breed” [i.e., British], not with off-scourings of the Lower Rhine”; only with British immigrants could Canada build a marvellous nation. (Manitoba Free Press, 15 Aug. 1918. For a resume of Canadian Press comment on the alien question see Maclean's Magazine, 15 March 1919, p. 34.)

This sentiment took several forms. At one level it was clearly the result of war-time feelings of solidarity and patriotism. More usually writers dwelt on the peculiar conditions in the dominions—in Canada's case, the harsh winter—and on the benefits of frontier life that produced a superior manhood which was the heart of the true imperial race. Nor was this altogether a simple efflorescence of Canadian nationalism.

This kind of popular eugenics had been in vogue in 1920s Canada, and, given new impetus by the emergent Canadian nationalism and xenophobia of the immediate post-war years, it prompted Canada to look to Britain as a source of immigrants of the right stock to dilute the foreign population she had absorbed in the early part of the 20th century. In addition, substantial immigration from the United Kingdom would act as a counterweight to American penetration and strengthen imperial ties.

But the early spurt of immigration—which reached almost 75,000 in 1921-2—fell off sharply the following year to less than 40,000 and British papers reluctantly informed their readers that only the “railway and steamship interests, who want the business of conveying troops of immigrants over sea and land, certain employers who desire abundant supplies of cheap and defenceless labour, and real-estate speculators yearn for another immigration rush.” Partly as a consequence of this sort of reporting, only 167 British settlers took advantage of the Empire Settlement Act of 1922, and of these 130 were young boys who went out under an Ontario government scheme.

In the same tine there were charges from such groups as the Imperial Veterans that Canadian government officials were misrepresenting conditions in order to induce settlement in western Canada, and a resolution of the Trades and Labour Congress that protested the wholesale importation of men, mainly from England, suggested that those who came were unfit for Canadian conditions. This last complaint was an especially unsettling one to those who, like the Fellowship of the Maple Leaf, saw Canada as “the great future home of the Anglo-Saxon race”; they were now forced to answer charges that the Englishman did not come up to Canadian standards, since “Canada is a land for a superior and conquering type, the picked, strong, diamond-edged kind of man that you saw in the war”. While such charges appeared only rarely in the early 1920s and disappeared for a time, they were an uncomfortable foretaste of things to come. In any case, the conflicting reports, the occasional anti-British note, and especially the half-hearted response of the King government combined to raise doubts in the mother country about the attitude of the dominion towards assisted immigration in general and British immigration in particular.

A few discouraged farmers continued to oppose all immigration projects, but their numbers had declined sharply. The drain of population southward in the lean years across the United States border was also a factor. Western interests were becoming aware that improved freight rates and other services depended upon an increasing population to bear the burden of costs and give farm areas greater weight with Ottawa. Moreover, passage of the Dillingham Law—as the United States quota system was popularly known—worried many Canadians: by allowing entry of native Canadians and excluding foreigners, the new legislation threatened to leave Canada with an undesirable residue of recent arrivals. By early 1924, Herbert Greenfield, the premier of Alberta, was advocating the expansion of population in already settled areas through a system of farm loans to attract a more adventurous class of British people. Greenfield's announcement was particularly noteworthy since he was the official leader of the Alberta Progressives, among whom, a year earlier, there had been strong opposition to all expenditure for immigration.

Under the pressure of this criticism, the Canadian government took steps in the autumn of 1923 to co-operate with the British government under the Empire Settlement Act and announced its intention to use the machinery of the Soldiers Settlement Board to recruit the right sort of British immigrants for the Canadian prairies. In making public the new policy, the minister of immigration, J. A. Robb, also attempted to meet earlier suspicions about the fitness of British emigrants by noting that what Canada needed was not quantity but quality. The changing attitude in Canada received wide reportage in the British press, and a renewed interest led to a 100% increase in emigration during 1923-4.

Emboldened by the success of the first year, the Canadians added to the incentive by arranging a twenty per cent preference for British immigrants on the Atlantic passage as part of a stated policy of obtaining, so far as possible, a preponderantly British type of immigrant. The result was disappointing: while assisted immigration rose slightly, total British immigration declined by about 38%, a drop which the Overseas Settlement Committee blamed on the over-zealous adherence of Canadian officials to rigid standards of height and weight. Other observers pointed to the dole and its debilitating effect on national morale, as well as to the earlier hard-luck stories which tended to discourage new immigration.

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Also to be taken into account were the improved economic conditions within Britain herself. The apparent response to this downturn in migration was a marked increase in publicity about the need for British emigration, stressing the preference of Canadians generally for British settlers and appealing to imperial sentiment with the familiar warnings about Canada's drifting into America's grasp. The Daily Telegraph, for example, reported that a growing number of loyal Canadians feared that Canada would soon be faced with agitation for secession, and saw in the dilution of British stock with mixed European races the first weakening of their power. The Evening Standard ran a similar story under the head: '”British Stock Needed to Stay Foreign Menace”. Despite this publicity, the insistence of the Canadian government on assisting only farm labourers and domestics, added to the rigid health examinations both in England and at the port of arrival, effectively cancelled out more positive efforts. The supply of experienced agricultural workers in Britain was a dwindling one: the great potential source of immigrants lay in the growing numbers of unemployed in the cities. However, the Canadian officials had strong reservations about the suitability of city dwellers as landed settlers, and, in fact, suspected that the Colonial Office was eager to deal with unemployment in the United Kingdom by transporting the problem to Toronto or Winnipeg. Partly because of these doubts, the Canadians demanded stringent physical examination of all prospective immigrants, double-checking the certificates of British physicians upon arrival. For one reason or another many who had been passed in the United Kingdom were refused entry at Montreal or Halifax and forced to return, often under conditions of extreme hardship. In their efforts to ensure a supply of the “right kind of stock” the examiners were particularly chary of potential insanity and feeblemindedness, and were apparently capable of detecting it even in very young children and infants. The numerous reports of such cases must have discouraged at least some intending emigrants, especially when reinforced by the new spate of hard-luck stories which the recession of 1924 inevitably produced.

The end of 1925 was to bring a turn around in Canadian attitudes. Published figures revealed what a number of vitriolic letter writers had long believed—foreign immigration had overtaken British immigration and was increasing at a much faster pace. Some argued that foreigners were doing rough work that the British immigrant refused to do, and that a mixture of British and other European blood might be desirable, but such an argument only touched off an outburst of protest from patriotic societies and stimulated demands for preferential treatment for British immigrants.

Only toward the end of 1920s restrictive provisions which had deterred earlier migrants were now dropped; apart from the insistence that the applicants be British-born, the only stipulation was that they must be of “sound health and character”. But while assisted immigration rose sharply during these years, total British immigration tended to decline, so that the proportion of men of questionable abilities rose. Quickest to recognise this change were the farmers, whose experience with the British harvesters was a disenchanting one. By the close of the period, the United Farmers organisation had reversed themselves again and stood strongly against any form of assisted immigration. The desirable British immigrant, in their view, was one who came at his own initiative and at his own expense.

Many other Canadians did not bother with such distinctions; in Commons debate, one member was sharply critical of the quality of English immigrants who, in her opinion, showed a high average of “duds”. Sharing her feelings was the Council of Social Service of Canada, who reported that the dominion “received from Great Britain an undue proportion of the feeble-minded or diseased.” While the Dominions Office dismissed such reports as the work of “mischievous female busybodies”, it was apparent that they reflected the concern of a substantial part of the populace. The immediate response of the Canadian government was a sharp tightening of medical examinations. This was made even more rigid (at the cost of some strain on Anglo-Canadian relations) by the eventual refusal of the immigration authorities to accept a British physician's health certificate and the demand that potential immigrants undergo a special examination in Britain by Canadian doctors sent for that purpose.

Yet this concern for medical standards was only part of a deeper, more serious conviction. Proponents of British immigration countered the new charges by arguing that it was not physical health per se which was important in developing a superior Canadian race, but the “set of standards, customs, and ideals” embodied in persons of British origin and lacking in the foreign-born.

Temporarily won over to the cause of assisted immigration by fears of a foreign takeover, organised labour was traditionally suspicious of what they regarded in less xenophobic moments as a move by employers to import a pool of cheap labour. They began quietly enough, by condemning the importation of unemployed as unjust to Canadian workers; shortly they were to urge upon the dominion government the necessity of putting into effect a quota law barring entry of all immigrants, British or otherwise.

If the British immigrant carried the pathetic results of the welfare sickness, he was also, in the view of manufacturers, afflicted with the cancer of trade unionism. The economic malaise in England accounted for some of this fear; more important in the post-1917 era was the spectre of the general strike of 1926.

Already staggering under the attacks of growing numbers of critics, the assisted immigration policy was crushed under the tumbling economies of the Great Crash. As a result of this situation, Bennett's new Conservative government in Canada drastically restricted immigration, except from the United States and Great Britain, and all forms of assisted immigration (except that of young boys) was halted.

The period from the late 1890s to the late 1920s brought sweeping changes to Canada. Tremendous physical and demographic expansion had finally created a country that was interconnected coast to coast. The crisis of the Great War had paradoxically forged a new sense of nationalism and combined purpose and simultaneously introduced disagreements about conscription that threatened to rend the national fabric along ethnic and language lines. The country faced traumatic adjustments after the war, yet many Canadians flourished in the expansive economy of the 1920s. Mainstream political parties attempted to build a common interest among Canadians for national development, while newer and issue-focused parties appealed to various regions and classes. Finally, Canada modestly joined the world stage as it reformulated its relationship with its most important partners, Britain and the United States.

In their planning for a modern Canada, the intellectuals and government struggled with two separate challenges. The first was the difficulty of defining Canada as a single society in the face of the division and diversity seemingly inherent in its nature (and entrenched in its constitutional structure). The second turned around the question of what constituted the “good society”, the national progress that was the avowed aim of government intervention. Gradually the two were merged into one, and a single solution presented itself. If materialism was a key element in modernity, then it would serve as the common denominator uniting a modern Canada. In place of the fragmented pursuit by individuals of a good life, Canadians would be united in pursuit of the “goods life”, morality giving place to material satisfaction as the individual and collective goal.

Language, culture, faith and geography would be overarched by a consumer economy supplied by modern industry and managed by modern government. To be Canadian would mean living a life made collectively comfortable by virtue of an urban and industrial material culture.


***, Canada, in “The Round Table”, 6:22, pp. 315-332.

Finkel, Alvin, Conrad, Margaret, Strong-Boag, Veronica, History of the Canadian Peoples, Copp Clark Pitman Ltd., , Toronto, 1993, pp. 294-312.

Hartland, Penelope, Factors in Economic Growth in Canada, Revision of some comments made at the meeting of the Committee on Economic Growth of the Social Science Research Council, New York, April 9-10, 1954.

See, Scott W., The History of Canada (Second Edition), Grey House Publishing, 2011, pp. 113-137.

Stanton, John, Modernism and Postmodernism: Canada's Century Reconsidered, in “The Round Table”, 83:329, pp. 77-87.

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