“From Mobilization to Continentalism: The Canadian Economy in the Post-Depression Period”
In the 1930 depression hit Canada and brought down international trade and investment. In the end of the decade depression didn’t seem to be going away and with the war starting new policies were needed to prepare Canadian economy for it. Even though war economic policies prime purpose was to help win the war, Canada experienced great growth in this period. During war years the real GNP went up by 80%. Unemployment dropped from 20% in the worst years of depression to 11% in 1939 and an impressive 1.4% during the war years. Real investment during the war was almost 70% more then in the 5 preceding years.
Manufacturing sector grew rapidly during the war. Many new industries were created such as aircraft, synthetic rubber, and electrical instruments. Federal Government during the war greatly increased in size along with its expenditures. This was because under war policy the federal government operated on a much larger scale. One problem that was faced was the need to increase rapidly the supply of everything need for the war effort. This included cloth, food, fuel, etc. Instead of ordering from private manufacturers, factories were built to satisfy the demand.
Department of Munitions and Supply (DMS) were in charge of the war economy. The Wartime Industries Control Board was a branch of DMS that had controllers who made sure firms produced adequate supplies and stimulated more production. The Production Board, another branch of DMS, took whatever actions necessary to ensure that the required items were forthcoming. It is worth mentioning that Crown corporations still controlled these departments.
The role of the government during the Second World War was to stimulate economy growth. They did that by increasing investment dramatically by using government funds in direct investments. Public investment, which includes all...