1. The Great Depression in Canada
Mr. Ballantyne

2. The Business Cycle

3. 1. Boom Spending increases This creates more jobs and higher wages
More spending meant more production
As the demand for more production goes up, prices also rise (inflation)
Eventually, prices rise so high that people refuse to pay
Factories end up with too much inventory and lay off workers

4. The Business Cycle
Boom X

5. Recession As fewer jobs are available, wages also fall
Spending falls off, inventories increase even more, and even more workers are laid off
Factories begin to close down

6. The Business Cycle
Boom X
X Recession

7. Depression Sales are extremely low, wages are low, prices are low
Business failures increase
Unemployment is high

8. The Business Cycle
Boom X
X Recession X
Depression

9. Recovery As employment begins to pick up again, sales begin to rise
Production increases, more jobs, higher wages

10. The Business Cycle
Boom X
Recovery X
X Recession X
Depression

11. The Great Depression Post War Boom X WWI Recovery X X Recession X
X WWII X
Depression
(1934)

12. Causes of the Great Depression

13. 1. Over-Production and Over-Expansion
Too much food, minerals, newsprint and manufactured goods being produced
Large stockpiles build up in warehouses

14. Companies panic and cut back production
Lay off workers
Now workers have no money to spend on goods
Sales slow down even more.

15. 2. Canada Depended on Selling a Few Primary Products
We exported staples such as fish, wheat, minerals, pulp and paper.
If the world stopped needing these products we would be in trouble.
Maritimes and the West were the worst hit in the Depression because they were areas where these primary products were grown and made.
In the 1930s drought and competition from other countries slowed down wheat industry

17. 3. Canada’s Dependence on the U.S.
When the crash hit the U.S. they stopped buying our products
40% of our exports went to the U.S.
Problems with U.S. branch plants in Canada. As companies lost money, closing these plants was the quickest way to cut costs.

18. 4. High Taxes on Goods Being Imported (Tariffs)
European countries still in debt from WWI were unable to buy our goods
They put high taxes on goods coming into the country so that people would buy goods bought in Germany, France, etc.
We also put taxes on imported goods so that people would buy Canadian goods, which would always be cheaper
All these protective tariffs made world trade slow down.

19. 5. Too Much Buying of Products on Credit
Especially new furniture, cars, household appliances
Many families ended up hopelessly in debt.

20. 6. Too Much Credit Buying of Stocks
You only needed $100 to buy $1000 worth of stock.