What was the Great Depression in Canada?

The Great Depression in Canada was an economic depression from 1929 to about 1939 that saw GDP fall by about 40 per cent (from about 6.7 billion dollars in 1929 to about 4.0 billion dollars in 1933 in nominal terms), unemployment rise to about 30 per cent of the non-agricultural labour force at the worst (about 826,000 people in 1933), and prairie farm income collapse due to drought and falling wheat prices. The Depression was Canada's worst economic catastrophe of the 20th century and lasted longer in Canada than in many comparable countries.

The Depression began with the New York Stock Exchange crash of October 24 to 29, 1929. Canada's small open economy was particularly vulnerable. About 40 per cent of Canadian GDP came from exports (mostly wheat, lumber, pulp and paper, minerals, and fish), and global commodity prices collapsed. The 1930 US Smoot-Hawley Tariff Act (raising US tariffs to historic levels) particularly damaged Canadian exports. Wheat prices fell from 1.36 dollars per bushel in 1929 to 0.34 dollars in 1932. Canadian banks did not fail (unlike thousands of US banks), but the broader economy contracted sharply.

The prairie provinces were particularly devastated by a combination of economic collapse and prolonged drought. The Palliser Triangle (the dry south-central area of Saskatchewan and Alberta) experienced severe drought from 1929 through 1937, with massive dust storms, the destruction of topsoil, and the loss of about 14,000 prairie farms by 1936. Saskatchewan was the hardest hit: provincial per capita income fell from 478 dollars in 1928 to 135 dollars in 1933. About 250,000 prairie residents emigrated, mostly to British Columbia, the United States, or central Canada.

Federal responses included the Bennett Conservative government's federal relief camps (established 1932 to 1936, employing about 170,000 single unemployed men in remote work camps at 20 cents per day), the Canadian Wheat Board (created 1935 as a federal agency to stabilise wheat prices), the Bank of Canada (created March 11, 1935 by the Bank of Canada Act), the Canadian Broadcasting Corporation (1936), and Bennett's New Deal of January to March 1935. Provincial responses included the Co-operative Commonwealth Federation (CCF) founded in Calgary in 1932, the Social Credit movement that won the 1935 Alberta election under William Aberhart, and Quebec's Union nationale under Maurice Duplessis (first elected 1936). The Depression eased only with rearmament and Second World War mobilisation from 1939; full employment was not regained until 1943.