Published by Senator Art Eggleton on 08 December 2008
As the economic crisis deepens, and many Canadians are worried about their jobs, retirement and standard of living, it is often useful to look back at similar times in Canadian history. By doing so, we can find many lessons from past generations that can guide us.
The last great economic crisis of the magnitude Canadians are facing today was the Great Depression. On October 29, 1929, now known as Black Tuesday, the New York Stock Exchange crashed. Investors lost millions. People’s life savings were wiped out in an instant. The Toronto Stock Exchange followed, as banks went under and creditors were ruined. Overall, income in Canada fell by almost 50 percent and the jobless rate went from 4 percent to a staggering 27 percent. More than one in four Canadians were unemployed.
The Canadian government’s response was slow and unproductive. In 1930, the government was led by Prime Minister Richard Bennett. Bennett, a self-made millionaire, was an unapologetic conservative and anti-interventionist in his economic outlook. Bennett’s response was to establish Unemployment Relief Camps to get unemployed men working again.
Run by the Dept of Defence, the camps paid the men 20 cents a day for construction work in the bush. Although men were working, the wage was low even by Depression era standards and did little to stimulate the Canadian economy. The wage was insufficient to provide the men enough disposable income to consume at an adequate rate, which hurt the recovery of Canadian business. Three years after the camps opened protests against working conditions culminated in the Regina Riot - the most violent episode of the 1930s, in which one policeman was killed, dozens of men were injured and 130 arrested.
By 1935, Bennett changed his outlook on government intervention. In his radio address to the nation on the January 2nd, 1935, he said “Reform means government intervention…it means the end to laissez faire.” But by that time Canadians had had enough and Bennett lost the 1935 election to Mackenzie King.
There are many lessons we can take from this time in Canadian history. We must have strong and decisive federal and provincial government responses in times of severe economic crisis. That government does have a place in protecting Canadians, to protect Canadian jobs and keep them employed while earning a living wage. It also demonstrated that we should have a strong social safety net to protect the unemployed during times of transition, to ensure that they can provide for their families and contribute to the Canadian economy.
Let's learn the from the past and not make the same mistakes again.
Art Eggleton is a Liberal Senator from Toronto. He is a member of The Standing Committee on National Finance and is Chair of The Standing Committee on Social Affairs, Science and Technology.