Causes of the Great Depression: Canada’s Weakening Economy

Economic Recession (1919-1924) Economic Depression (1929-1939) Economic Recovery (1924-1929) Causes: Characteristics: Economic Recession (1919-1924) Economic Depression (1929-1939)

Economic Recession (1919-1924) Causes: Effects of the Great War The huge war debts of most European countries meant that they could not afford to buy Canadian products The United States had placed high tariffs on products, so Canada had lost much of its foreign market Characteristics: High unemployment Increased bankruptcies Many Canadians moved to the United States

Economic Recovery (1924-1929) Causes: Loans from the US to European countries meant that they could once again buy Canadian exports Value of wheat exports climbed Industries such as pulp and paper (demand for newsprint soared), hydro-electricity, and mining were developed and expanded American investments in Canada increased Immigration to Canada increased Growth of the automobile industry Characteristics: Low unemployment People buying new products New technologies being developed Leisure time increased – motion pictures, jazz age, travel, etc

Economic Depression (1929-1939) Causes: Market vale of stocks was inflated Individuals investing in inflated stocks; some were borrowing money to do so As prices of stocks continued to rise, people became nervous and started a massive wave of selling their stocks; panic took over Thousands of investors were wiped out because they were forced to sell their shares at a fraction of what they cost Companies began to shut down; people lost their jobs Demand for goods dropped as unemployment increased Canada and other countries were producing more goods than markets could absorb Decline in international trade due to raised tariffs Characteristics High unemployment Economic downward spiral Wages were far below the standard of living

The stock market crash is not the only cause of the Great Depression The stock market crash is not the only cause of the Great Depression. In fact, it is just one of the symptoms of a weakening economy.

What caused the great depression?

1. Over-Production and Over-Expansion 1920s: Businesses were expanding and production was increasing Stock began to build up in warehouses Production was slowed down, workers were laid off, and the public had less money to spend

2. Canada’s Dependence on a few primary products Primary products in Canada: wheat, fish, minerals, pulp and paper The Depression decreased demand for these products, causing many regions in Canada to fall into trouble Drought in the West caused farmers to lose crops and in turn money (couldn’t pay mortgages)

3. Canadian Dependence on the United States Canada’s economy was becoming linked to the United States’ 65% of Canadian imports were from the USA, and the USA was the largest buyer of Canadian goods When the American economy became sick, the Canadian economy followed suit

4. High Tariffs choked off International Trade Tariffs: an excess tax on imported goods Protective tariffs were increased on foreign imports to protect home industries from foreign competition and therefore choked off international trade

5. Too Much Credit Buying 1920s theme: “Buy now, pay later!” People were buying with money that they didn’t have and as a result ended up in great debt Many items were repossessed during the Great Depression

Canada A people History Hard Times Fill in work sheet http://www.youtube.com/watch?v=P1LW5Srxd4Y