Trends in Canadas Economy in the 19th20th Centuries

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Trends in Canadas Economy in the 19th-20th
Centuries
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Canada Reciprocity

• Whether or not Canadians should extend free trade
  to America was debated throughout the 20th
  Century.
• Several federal elections centered around the
  issue (1891, 1911, and 1988)

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• At times, even the Liberals joined the opposition
  to free trade, such as during the 1896-1911
  Laurier Era. The Liberals eventually fell when
  they tried to remove tariff protection.

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• For most of the late 19th and 20th Centuries,
  protectionist views won out, especially when
  political differences between Canada and the US
  flared.
• In the 1980s, Canada entered into discussions
  with the US. Free Trade became the focal point
  of the 1988 election. PM Mulroneys
  Conservatives won an enormous majority, and
  Canada entered into the modern free trade era.

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War Depression

• For the first half of the century, Canadians rode
  the wave of economic boom during times of war,
  and suffered during the period of the Great
  Depression (often called boom and bust)

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• Military spending during WW1 created wealth and
  raised the income level of workers. However,
  increased spending by governments led to
  inflation (rising cost of goods).

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• The prosperous times continued on into the 1920s
  as people saw an increase in their standard of
  living, and many began to invest.
• Because many invested using credit and not money
  they actually had, the prosperity of the 1920s
  was built upon a house of cards.

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• The Great Depression brought much of the
  developed worlds industrial economy to a
  screeching halt on October 29th, 1929.
• BLACK TUESDAY

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• At its peak, over ¼ of Canadians were
  unemployed, with unemployment rates being much
  higher in areas with resource based economies.
• Successive governments debated a laissez-faire
  approach with a Keynesian approach.

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• Laissez-faire things will work themselves out.
• Keynesian Economics government intervention in
  the economy
• Initially, governments chose laissez-faire, but
  as things got worse, they were forced to act.
  This began a permanent shift in government
  economic policy.

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Keynesian Examples

• CBC
• St. Lawrence Seaway
• Bank of Canada
• Auto Pact (1965)
• NS Power
• Petro Canada