Friday, December 19, 2014

Our Lives: Economic In/Dependence from the United States (10)

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Through the 1960s and 1970s, Canadians began to assert their independence from America politically, economically, and culturally. The degree of foreign control through the 1950s was much too high for comfort. Among other things, nationalists argued that it had resulted in the 'deindustrialization' of Canada. But different arguments had varying degrees of purchase in different parts of the country. Nova Scotia and Saskatchewan had very little industry of which to speak. Alberta's economy was much more dependent on resources extraction. And in Quebec, the question of nationalism concerned the distinctiveness of Francophone culture and the preservation of the French language within Canada, not in distinction from the United States.

It was recognized by Prime Minister William Lyon Mackenzie King, in conversation with the American Secretary of State in 1935, that the role of Canada in the continental system was largely to supply raw materials for American manufacturers. For their part, the Americans saw a certain amount of attraction in maintaining industrial capacity in Canada. The Canadian government was perceived to be less interventionist, and Canadian unions less confrontational, than their American counterparts. A Canadian plant could potentially pick up slack in production during periods of unrest in the United States. By 1970, American interests controlled approximately 58% of manufacturing assets and 35% of all non-financial industries.

Supporters of greater Continental integration pointed out Canada's widely dispersed and comparatively small population, which made it impractical not to pursue close relations with its southern neighbour. These were usually free traders and free enterprisers, for whom state ownership and excessive regulation were problematic.They could point to the fact that American capital, expertise, and technology had also helped the Canadian economy diversify. Opponents of greater integration argued that Canada now possessed a sufficient capital base, far more money was leaving the country than was entering, and most foreign investment was actually the retained earning of American companies already in Canada. They saw the sale of Crown Corporations after WWII as the product of ideological opposition to state ownership, rather than an actual reflection on their actual performance.

The specifics of these economic debates were of little interest to the population at large. Persons who sided with the nationalists were likely to have the impression that Canada was much too subservient to the United States. They thought that this depressed the country's economic potential. Persons who sided with the Continentalists held that breaking ties with the United States would disrupt economic growth. The crux of the ideological issue was the degree to what political and economic power were believed to be intertwined.

The economic reality of the situation was that the United States granted Canada 'special regard' in its rules concerns foreign trade. Prime Minister Lester Pearson argued that what appeared as Canadian dependence was actually the result of Canada's status as a preferred trading partner. It was the only way Canadian industry and research could compete in an competitive American market. However, the 'special regard' cut both ways. In order to retain preferred treatment, the Canadian government had to stifle criticisms it might have of American actions in Vietnam.

In the late 1960s, Pearson struck a committee examining the pros and cons of foreign ownership of corporations in Canada. The committee's report suggested that an agency be established to promote the development of Canadian-controlled corporations and supervise the operation of multi-national corporations in Canada. Prime Minister Pierre Trudeau established the Canada Development Corporation in 1971. It was given a modest budget to establish Canadian firms to finance buying out American firms. American control of Canadian assets declined by 25% between 1970 and 1980.

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Wednesday, December 17, 2014

Our Lives: Canada and the World, 1960s and 1970s (9)

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Canada's support for the Vietnam War was complicated by a burgeoning sense of national identity. The federal government publicly supported the American war effort. Canada supplied arms both to the Americans and the South Vietnamese. Guarded 1965 criticisms of the American bombing campaign by Prime Minister Lester Pearson only earned was the wrath of President Lyndon Johnson. They came to a mutual decision not to publicly criticize each other's foreign policies. On the international scene, as a mediator at the International Criminal Court, Canada projected the image of a staunchly partisan anti-communist power.

The domestic situation presents a rather different story. The country embraced somewhere between 70,000 and 125,000 American draft dodgers. Though contrary to Canadian law, the RCMP was sometimes complicit in remanding dodgers back into American custody. This came to an end when the story of a draft dodger, who had been deported back to the United States, but entered Canada a second time, was told by the NDP in the House of Commons.

Prime Minister Pierre Trudeau asserted Canada's independence from American foreign policy in a number of other significant ways. In 1970, the government declared Canada's right to protect the Arctic environment throughout a 100-mile zone north of the sixtieth parallel. American oil tankers often passed through the waters. The Canadian government claimed jurisdiction on behalf of Arctic Native communities. In the same year, the government also recognized the government of mainland China, two years before the Americans.

Though Canada had no desire to become a nuclear power, the Trudeau government continued to support the idea of nuclear deterrence. It also made a policy of selling CANDU nuclear reactors internationally, even though the program was operated at a net loss. Nuclear technology was marketed as a boon for global order. When India exploded a nuclear device in 1974, the hollowness of safeguards the government put in place to prevent further nuclear proliferation was exposed.

The Trudeau government also removed government subsidies from corporations dealing with the apartheid regime in South Africa, though refused to implement a complete boycott. The token gesture did little to affect trade between the two countries. The government even allowed that social disparities triggered revolutionary movements in Third World countries. This did not preclude, however, tacit support for American interventions, which had as their goal to protect, not democracy, but free enterprise capitalism.

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Our Lives: Liberal Government, 1975-1979 (8)

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The economic policy of the Liberal government under Prime Minister Pierre Trudeau ticked a couple of degrees to the right after the federal election in 1974. Between the years 1965 and 1969, the unemployment rate in Canada averaged 3.9% The average rate increased to 5.4% between 1970 and 1974, and then to  7.3% between 1975 and 1979. In both of the latter periods, the unemployment rate was at least 3% higher than that in most developed nations.

The Trudeau government began to listen to the 'monetarist' prescriptions for the problem of inflation from economists like Milton Friedman. The 'monetarists' called for shrinking the money supply in order to constrict the drivers of inflation. They also proposed ending the sort of state interventionism that characterized the post-war years. The private sector would take up the functions formerly performed by the state. Such policies, it was admitted, would drive up unemployment rates, but only over the short term. Freeing up capital would produce higher and more stable rates of economic growth, and so, over the long term, employment rates would improve as well. (The monetarists admitted that their policies would permanently increase economic inequality.)

Monetarism fell under the much wider 'neo-conservative' umbrella. It's essential claims were that the welfare state created complacent individuals who had little incentive to be entrepreneurial, or even to work. More market discipline, including a little more unemployment, would increase labour efficiency.

Through the post-war boom years from 1945-1975, Keynesians had the upper hand. They could point out how the state had effectively spent its way out of the Depression and created the necessary conditions for stable economic growth. However, steady inflationary pressures, fueled by the steady round of capital-labour negotiations, undermined the expansionary economy. This build up of tension coincided with the Liberal government souring toward further rounds of federal investment, and, perhaps more importantly, the Arab-Israeli Yom Kippur War (1973), which provoked the Arab members of the OPEC nations to drive up petroleum prices. The rate of inflation in Canada passed the 10% mark. The federal government post larger and larger deficits: roughly $500 million in 1974, $3.8 billion in 1975, and $10.9 billion in 1978, while federal spending only rose 0.2% over the same period of time. Monetarists continued to argue that high government spending was to blame.

The Trudeau government's single-minded focus on inflation did not lead to a complete Liberal embrace of neo-conservatism, though it did dethrone the Keynesian paradigm. The government had pursued talks with the provinces about implementing a guaranteed annual income (GIA) as a way of dealing with poverty in the early 1970s. There had even been an agreement in principle in 1975 on a two-tiered GIA program. However, the province of Ontario balked, inflation rose, and the federal government shelved the project. A child tax credit for low-income parents instead was added in 1979, one of the few accomplishments for poverty action groups in the 1970s. The net effect of Liberal policy was to reduce the responsibility of the federal government for the well-being of Canadians.

Poor economic performance hurt the Liberals in the 1979 election. They were replaced by the minority Conservative government of Joe Clark, who immediately made plans to sell Petro-Canada, implement tax-credits for home-owners, and download a federal subsidy for Alberta oil production directly onto users. This would bring Canadian oil prices, which had been kept artificially low, in line with international prices. It would also put more money in the hands of Alberta oil companies, who had long chaffed under policies that favored Ontario and Quebec. After it tabled its budget, the Conservative government quickly lost the confidence of the House of Commons. Pierre Trudeau, who had briefly stepped down as the Liberal party leader, swept back into power in 1980.

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Monday, December 15, 2014

Our Lives: Liberal Governments, 1963-1974 (7)

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The generation that grew up during the Depression was mainly interested in achieving economic security in the decade that followed WWII. They had no interest in challenging the values of their parents and their grandparents. The 'baby boomers' who came of age during the 1960s and 1970s, however, tended not to have any experience of wanting the basic necessities of life. They found conventional notions of respectability stultifying, suburban lifestyles alienating, and  religious understandings increasingly empty. The availability of the Pill after 1960, the use of soft drugs, and rock and roll music were emblematic of the demographic. The baby boom of the 1950s was followed quickly by a baby bust in the 1960s and 1970s. Children were producing at below the replacement rate (2.1 children per family). The Canadian population still managed to grow from 18.2 million to 22.9 million persons between 1961 and 1976. This was accomplished largely on the immigrants, which increasingly came from non-European backgrounds.

The Liberal Party, first under Lester Pearson (1963-9) and then under Pierre Trudeau (1968-1979, 1980-1984), who very was briefly leader of the Official Opposition (1979-80) during the Conservative government of Joe Clark, led the country for almost 20 consecutive years.

The political ethos of the times favoured reform-minded forces. When the Liberal party took power in 1963, it had yet to find a common aim. By 1965, even the Canadian Chamber of Commerce had accepted that social programs like a Canada Pension Plan was an inevitability. And if business interests capitulated to popular demand, the federal parties could hardly hope to resist. All the remained was to persuade the provinces. Quebec and Ontario, due to their unique statures, proved a little more difficult than others to bring on board.

Prime Minister John Diefenbaker commissioned a Royal Commission on the feasibility of a national program of medicare before his government was replaced by Pearson's Liberals. Led by a Conservative Justice from Saskatchewan, it was expected that the finished report would oppose compulsory medicare. When the report came out in 1964, it made the surprising recommendation to the Liberal government to implement a sweeping program along the same lines of the National Health Service in Britain. Given the prohibitive costs, they also suggested the program should be phased in over a period of time. The provinces, with the exception of Saskatchewan and Newfoundland, were decidedly hostile. In the event, the federal government conceded the rights of provinces to govern their own programs, which would be matched with federal funding. The minority Liberal government, at the urging of the NDP, whose support was needed to retain power, introduced the Canada Pension Plan, the Canada Assistance Plan, a national student loans plan, and a national health care program.

When Pierre Trudeau came to office in 1969, Canada was experiencing exceptional economic growth, due in large part to American economic policies and military spending during the Vietnam War. A period of low unemployment, companies often conceded to union demands, passed the new often onto consumers, who were quite often union members, who would, in turn, take advantage of the next round of collective bargaining. Along the increasing wartime expenditures, this helped to create the conditions were rising inflation. The Pearson government took modest step to reign in inflation, including slowing growth in the money supply and pegging the Canadian dollar to 92.5 cents American.Trudeau resolved to be much more aggressive. He  made large spending cuts, unpegged the dollar, introduced monetary policies, and struck a commission on tax reform. Trudeau quickly lost his allure as a reformer.

When an approach recommended by the commission on tax reform was first ignored and then altered in significant ways that ignored its original egalitarian spirit, the electorate's response was quick in the 1972 election. Trudeau returned at the head of a minority government, again needing the NDP support. The new collaboration saw the establishment of Petro-Canada and the hiking of social benefits.

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Sunday, December 14, 2014

Our Lives: Canada on the International Scene (6)

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Canada had been the junior partner in the American-British-Canadian partnership to develop a nuclear bomb during WWII. Canadian uranium and its heavy water pile at Chalk River, Ontario, which converted uranium and plutonium, contributed significantly to the overall war effort. The Mackenzie King government decided that Canada itself would not join the nuclear club, but its contributory role earned it a place at the table at the Atomic Energy Commission.

Canada was also a founding member of the North Atlantic Treaty Organization (NATO), which was originally the brain-child of the British. The hope for the organization was, at least in part, to force the Americans to consult their allies. Since it was the United States that was the major provider of staffing and funding, this was hopeful at best. Canada supported NATO's decision to make nuclear armament a key component of Western defense against the Soviet Union, per the plan outlined by the American secretary of state, John Foster Dulles. Canadian air defenses were integrated in a Continental system. Three Arctic monitoring lines were constructed from 1951-5 to screen incoming Soviet bombers. Canada joined North American Air Defense Treaty in 1957, following the American lead in most, if not all, things. The appearance of deference to foreign directions created a great deal of controversy during the Conservative government of John Diefenbaker.

Canada joined a UN commission on Korea in 1947, which was supposed to work for the unification of North and South--communist and democratic capitalist--Korea. By 1950, the Americans appeared to have lost interest in Korea. The North Korean leader Kim Il Sung took the appearance of indifference to mean there would be little objection to an invasion of the South. The United States supplied 88% of the troops to the defense of the South. Canada participated in the Korean War (1950-3) by sending a total 22000 troops. Wartime spending again boosted the Canadian economy.

The extent of Canada's involvement in the Vietnam War (1955-1975) was restricted to its endorsement that it co-signed with India in 1962. The report outlined North Vietnamese violations of the Geneva Accords, but failed to make mention of South Vietnamese and American violations of the same. The American pointed to the report by two apparent neutrals to justify their continuing action in the region.

The proliferation of nuclear arms during the Cold War put Canada in a difficult situation. It had initially supported both NATO's Cold War policies and objectives and NORAD's program for continental defense. Canada's international commitments required that it invest in military hardware, including fighter interceptors in 1959. It became a serious question whether Canada would arm its new weapon systems with nuclear warheads, without which they would be largely useless. In 1963, after a resolution to the Cuban Missile Crisis, Prime Minister John Diefenbaker outlined the government's commitment to the abolition of nuclear weapons. Canada's further contribution would be efforts towards nuclear deterrence. Diefenbaker found himself on the wrong side of public sentiment. Canadians had rallied behind the young American president, John F. Kennedy.

Britain had emerged from WWII deeply in debt to Canada and the United States. Unable to maintain its overseas interests, most of its former colonies attained independence by 1950. The former colonies continued to meet informally as members of the British Commonwealth: the 'white' dominions, including South Africa, out of a sentimental attachments economic interests and newly independent 'third-world' countries for trade and an investments. For Canada specifically, Britain's importance as a trading partner declined rapidly after the war. The monarchy retained its popularity.

Canada's relationship with Britain strained over the issue of the partition of Palestine. A poll taken in 1947 indicated that the population did not want to see more Jewish immigration to Canada, though there was widespread support for unlimited Jewish immigration to Palestine. The Americans quickly took up the cause of Jewish immigration. while Britain tried to limit the number of new refugees landing in Palestine. Canada largely kept silent, but threw their support behind the American position at the UN when the time came. When the State of Israel was declared in 1948, it was immediately recognized the United States. In an apparent change of heart, Canada joined Britain in withholding recognition, at least until after Israel had won the Arab-Israeli War of the same year.

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Our Lives: The Atlantic Region and the West (5)

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The Atlantic region had been in decline relative to the rest of Canada since the 1880s. WWI offered a brief reprieve. The same was the case during WWII. Once war had ended a second time, the provincial government resolved not to loose the economic momentum brought by wartime industry. The federal government was brought on board with the idea of transfer payments, and the provincial governments were encouraged to deploy monies received to attract industry.

The province of Newfoundland joined confederation in 1949. The island had been a self-governing colony within the British Empire until it went bankrupt in 1934. In the years that followed, it agreed to be governed by a British appointed commission. Islanders were given the option of independence of joining Canada when the war came to an end. They narrowly voted to join, a decision helped along by generous promises from the federal government.

The region's post-war economy remained based on the development of natural resource, including mining, forestry, and fisheries. While there was moderate success in Nova Scotia and New Brunswick, nothing the federal government could do was able to stabilize Newfoundland's long-troubled fisheries or to expand its industries. The inherent instability of the labour market, however, was brought to heel by generous federal social programs.

Federal programs was much more successful in the West--the further West the better. British Columbia found new prosperity as American markets opened up for lumber and minerals in the post-war years. Agricultural in the Okanogan Valley responded to new demand for fruit. Similarly, Alberta's modest pre-WWII oil wealth expanded rapidly with a major find at Leduc in 1947. The story was different in the other two prairie provinces. Saskatchewan had difficulty developing its coal and potash resources. Its economy remained focused on the uncertainties of grain prices. More populous than its immediate neighbors in 1940, the fact that it was the least populous in 1961 reflected the changing economic circumstances. The province of Manitoba was marginally more diversified and less dependent on the grain prices than Saskatchewan. But as the railway became less important, the capital city, Winnipeg, was losing its economically beneficial position as the gateway to the West.

The West's economic story of dependence on agriculture and extraction was paralleled by a much more diverse political history. Far from the traditional bases of power of both the Conservative Party and Liberal Party in the original member provinces of Confederation, Alberta was a hotbed of political innovation. In 1932, the province gave birth to the Co-operative Commonwealth Federation (CCF), a coalition of farming, labor, and socialist interests. The CCF would reconstitute itself as the New Democratic Party (NDP) in 1961. Then in 1934 the province brought forth the Western Social Credit League (later the Alberta Social Credit Party), which joined conservative economic policies and Evangelical Christian social values. The party won a surprise majority in provincial elections under its original leader 'Bible Bill' Aberhart in 1935. Social Credit decisively defeated its rival the CCF in the 1944 election, and remained the governing party under the direction of Ernst Manning until 1971.

The CCF fared better in British Columbia, where support for unions was stronger. However, it was in Saskatchewan that it had its most impressive victories. Under the direction of Tommy Douglas, the CCF established automobile insurance, hospital insurance, and finally, in 1962, the very first public health insurance program in North America. The accomplishments of the CCF were all the more impressive considering the Saskatchewan's relative economic weaknesses compared to other provinces. Like Aberhart, Douglas was a Christian pastor, but he was from the Baptist 'social gospel' tradition. Rather than a social conservative emphasis on individual self-reliance, social gospel saw a role for the state in the establishment of God's kingdom on earth.

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Saturday, December 13, 2014

Our Lives: Quebec and Ontario (4)

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In September, 1959, the Union Nationale Premier Maurice Duplessis died. His tenure in office included a short three-year stint prior to WWII from 1936 to 1939 and a lengthy rule from 1944 to 1959. His death allowed the provincial Liberals to capitalize on the 'Quiet Revolution,' a cultural movement which marched in step with the gradual secularization of education, health care and social services.

Still, Quebec remained a religiously observant society into the 1960s. In the City of Montreal, 60% of the population were regular attendees at weekly services. Rates were even higher in rural areas. A large part of the reason was the near ubiquity of the Church in Quebec society. Public presence, however should not be confused with direct political influence. The rest of Canada might believe that Premier Duplessis marched in lock-step with the Church. The reality of the situation was not quite so straight-forward. Duplessis held the purse-strings, and if clergy dared to criticize the government's policy, he was not above cutting funding to their different projects. At one time, the Church had opposed compulsory education for children. By the 1940s, it recognized that compulsory education was necessary for Francophones to keep up with their Anglophone counterparts. Duplessis' own stance on the issue was nowhere near as clear. He publicly supported a parent's right to choose just how much education their children received. Behind the scenes, he resisted federal assistance. His own rural networks of patronage, however, enabled him to take certain steps in the direction of regularizing the educational programs. The job market was increasingly demanding an educated work-force.

The education of girls lagged in the province, by comparison with the rest of Canada. Though parents increasingly demanded a college education for both their sons and daughters, the Church implemented programs focused on domestic training for girls. The Church regarded the social limitations on women and girls as divinely ordained, and loudly opposed the establishment of day-programs for working mothers. The provincial government set up a few day-cares during WWII to alleviate the labour shortage. These were immediately closed at the war's end.

In the 1950s, a new class of intellectual, who would become especially influential during the Quiet Revolution, worked to formulate an alternate vision of Quebec. The English-language CBC was fairly conformist at the time, but the French-language network, operating out of Montreal, was a forum for revolutionary thoughts. The future Prime Minister Pierre Trudeau, editor of the Cite Libre, was a vigorous opponent of the Duplessis regime. He worried that secular Quebec nationalism, like its pastoral Catholic counterpart, was a danger to individual freedoms and to the development of a dynamic Quebecois society open to external influences.

The province of Ontario was a very different matter. Its success during the post-war economic boom was the envy of the rest of the country. Toronto pulled ahead of Montreal as the country's financial center. Within a radius of 400 km from Toronto could be found 50% of Canada's industrial output. The automobile was key to economic success, fueling the production of rubber, glass, plastics, and steel. Most of the plants were branches of American operations. Though they did not employ design experts or research scientists, they did have a well-paid unionized workforce. The cost of letting machines run idle was incentive to corporations to give favorable terms of settlement to unions. Fordism had come to Canada. It brought with it high-paying jobs for a broad portion of the population, usually with little more than a high-school degree, with the virtual guarantee of a life-time job.

Not everyone, of course, participated in the new-found prosperity. Those workers without union representation tended to move from job to job without the security of an old-age pension. Ontario could afford to look after its poor better than other provinces, but largely choose not to do so. Social assistance for widows, deserted wives, and unmarried mothers was well below calculated poverty levels. Though daycare centers opened during the war were not closed down, fees were raised to the point of being useless to middle-class women and no new centers were opened through the 1950s. Little money was spent on mental health care. The old and feeble found themselves consigned in poorly run institutions.

Neither the government nor business leaders wanted to hear about the poor. Social workers were divided over the proper course of action. Some feared leftist radicalism, while others believed that social workers must join with labor and other progressive forces working for structural changes. But social work was women's work, and so hardly a profession at all. Their concerns were not heard in the male echelons of power. In the words of one historian, 'Quite simply, in postwar Ontario the poor went hungry to pay the rent.'

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Our Lives: Post-War Canadian Life (3)

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At the beginning of WWII, roughly 2/3s of Canadians living in urban centers were tenets. An Advisory Committee on Reconstruction determined that a large majority were poorly housed, 10% of all dwellings needed to be replaced, an additional 25% needed significant repairs, and at least 1 in 5 were overcrowded. Economists also determined that 1/3 were paying too much in rent, by comparison to monies spent on other basic needs like food and clothing. The housing supply needed to be increased by another 1/3 to meet the demand.

After the war, the Canadian government resolved to make the nation one of homeowners. Government policy converted the middle class and an increasingly large segment of blue collar workers to the suburban ideal: a house to call their own on a quiet boulevard far from the hustle and bustle of city life. The Canadian Mortgage and Housing Corporation began to guarantee entire mortgages for approved lenders. Low-interest loans were given to veterans. The pace of new housing increased in newly planned suburbs like that of North York, which grew more than 916% by 1960. These changed the very patterns of life, especially for wives. In the city core, women met family and friends on the street, in local stores, or the marketplace. By contrast, suburban life required that they make an effort and join clubs or volunteer organizations, or suffer the isolation of an anonymous life .

The suburbs, it was thought, were nonetheless an ideal to which all Canadians hoped to attain. These included 1.76 million immigrants, who were drawn mostly from desirable white European places of origins. Keeping Canada white had been the goal of governments since Confederation. The otherwise progressive policies of a Prime Minister like William Lyon Mackenzie King were not different from his predecessors, in this respect. Even though he repealed legislation banning immigration from China, to satisfy the high calling of the newly formed United Nations, administrative practices assured that the same end were achieved.

Non-Anglo immigrants typically headed for the Prairies or British Columbia until 1945. They also headed to Montreal, where the Quebecois noted with concern that most choose to learn English. After 1945, immigrants communities settled into larger numbers in urban centers. There they encountered exploitive employers, hostile Anglo-Canadians, and an unconcerned government, which forced them to fall back on their resources. Minority communities responded by strengthening community ties, which had the consequence of turning larger urban centers into a patchwork of ethnic enclaves.

The elderly were disproportionately represented among the ranks of the poor. Depressed economic conditions during their best working years meant low wages and difficulties saving for retirement. The situation was hard for elderly men. But for elderly women, especially those who were single or widowed, the situation was almost impossible, unless children or other family members were willing to pay for their upkeep. The Progressive Conservative government of John Diefenbaker government raised the old-age pension from $46 to $55 per month early in the 1960s, but even this was barely enough to rent an apartment.

By comparison, prospects for men of working age were improving in important ways. Men enjoyed a limited amount of social mobility. University education provided a decisive advantage in the workforce. And there was ample work to be done as well. Oral histories from the period reveal that a near universal regret expressed by men was not to have spent more time with their children. Whether this was within their power to change at the time is another question. The structure of work kept many out of the home.

On the other hand, women of all classes enjoyed much less freedom than their husbands. The domestic ideal held that husbands went out to work, and wives stayed home and keep house. Popular magazines in both English and French Canada condemned mothers who went out to work as a disgrace to their sex. Editorials berated the working mother for depriving their children of nurture. Female salespersons were almost universally frowned upon, since they were thought to deprive the married man of gainful employment to support his family.

Trade unions played a large role in bringing about an overall improved economic situation. Trade union membership doubled during the war. In the years 1946 and 1947 alone there were than 400 strikes. Anxious to settle strikes and cash in on the war effort, corporations readily conceded wage raises. Between the years 1945 and 1948, hourly wages rose from 69.4 cents to 91.3 cents, while the average work week fell from more than 44 to 42 hours.

Gains made by unions in Qu├ębec were a foreshadow of things to come. The Catholic Church established a Catholic union to counter 'godless' communistic and socialist unions back in 1921. Its founding philosophy was of cooperation to mutual humility between capital and labor in accordance with God's rule, not man's rule of violence. But the union quickly realized that Catholic workers wanted results as much as any other group of workers, and they would have to behave much like any other union to get them. The union pulled further away from the Church, until it formerly severed ties in 1960.

The Union Nationale government of Marcel Duplessis, supportive of the authority of the Church over social services and education, and in many ways more authoritarian than the clergy, was prone to see Communists in every corner. Relations between the provincial government and union progressively soured through the 1950s, as Duplessis was more than willing to arrest strikers, in the 100s if necessary. The election of the Liberals, who brought Quebec labor laws in line with Ontario laws would help to usher in the Quiet Revolution. Quebec nationalism and Catholicism, which had walked hand and hand to this point in time, would go their separate ways.

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Friday, December 12, 2014

Our Lives: Canada after 1945 (2012) by Alvin Finkel

The following offers a summary of Alvin Finkel's Our Lives: Canada after 1945 (2012). I wanted to learn the recent history of Canada, to augment my fragmentary knowledge of persons and events. I ended up retelling Finkel's version of that story to myself.

I will append new sections to the Table of Contents as I draft them.

Table of Contents

PART ONE: In the Shadow of the Giant: 1945-1963

Chapter 1: Brave New World

Chapter 2: A Home Fit For Heroes

3. Post-War Canadian Life

Chapter 3: The Regions and the Provinces

4. Quebec and Ontario

5. The Atlantic Region and the West

Chapter 4: The Politics of a "Middle Power"

6. Canada on the International Scene

PART TWO: Traditions and Invented Identities, 1963-1980

Chapter 5: The Search for Political Identity

7. Liberal Governments, 1963-1974

8. Liberal Government, 1974-1979

9. Canada and the World, 1960s and 1970s

Chapter 6: English Canadian Nationalism

10. Economic In/Dependence from the United States

Our Lives: The American Colossus (2)

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Canadian industry became more integrated into a North American system in the course of WWII. Reciprocity was established in the Hyde Park Declaration in 1941 with the American defense industry. The bulk of Canada's industrial output, including the production of military vehicles, was produced by at Canadian branches of American manufacturers. The effects of economic integration were dramatic. Imports from the United States tripled by the war's end, while imports from Britain remained static. The Canadian economy had made a hard pivot away from protected trading relationships within the British Empire towards its neighbor to the south. The size of the American economy made the pivot an inevitability, while financial stresses in post-War Britain sped the process along.

In the process of Continental integration, the political and economic elite were converted to a moderate version of Keynesianism. Mantras of 'sound finance' that dominated the Depression years were no longer heard; and would not be heard again until the 1970s, under the new name 'monetarism.' This does not mean that successive Canadian governments lost faith in the efficacy of the system of private enterprise. The Minister for Reconstruction, C.D. Howe, while accepting the need for some social reforms, steered the Canada into an ever-closer economic relationship with the United States.

Many of the Crown Corporations formed during the war were sold off to American interests at what seemed to critics as fire-sale prices. Canada tended to export natural resources and import manufactured goods, so the trade balance between the two countries naturally favored the Americans. A workable solution came in the form of Marshall Plan aid money, first made available in 1947, which was used to purchase both American and Canadian products. Canada joined the General Agreement on Tariffs and Trade (GATT), which significantly lowered trade barriers between signatory members. The issue of trade would not become an issue again until the 1980s.

Canada's economic entanglement with the United States accelerated further as the world became mired in the ideological conflict of the Cold War. Ostensibly the new non-war pitted democratic freedoms against the communist tyranny. In reality, the free world was motivated as much, and perhaps much more, by demands for new markets, and intervened in Latin and South American, especially, to prevent the spread of communism. By and large, Canada followed where the United States led, though in the early 1950s, it still held out hope for good relations with the Soviet Union.

On the home front, the government used the Cold War as a pretext to intervene in Canadian society. Liberal governments suppressed dissenters in the universities and professions. The Cold War also provided ideological cover for government intervention in labor disputes. Communist organizations, trade unions and other 'progressive' organization were infiltrated for the purpose of gathering information. Canadian McCarthyism was comparatively juvenile by comparison to its American counterpart. The population largely acquiesced to the government's direction. The broad ethos of 1950s conformism allowed the label of Communist to be attached to most any 'progressive' policy, including such things as feminist support for day-care. To tolerate Communists was to concede the enemy's viewpoint; to criticize the capitalist system, abetting the 'commies.'

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Our Lives: The Promise of Prosperity (1)

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When World War II (1944-49) came to an end, the country of Canada was a very different place than it was when the war's beginning. Out of a total population of 11 million, approximately 1 million had worn a military uniform. A little more than 42,000 of that number perished on foreign battlefields. Many more would live on with visible physical and much less visible emotional scars. The sustained military effort required government intervention into the economic and social lives of Canadians on a massive scale. Nor was it a foregone conclusion that government would, or even could, retreat to a pre-1939 status quo.

The decade or so prior to the war witnessed the Great Depression, a time of economic stagnation, job insecurity, and widespread desire for the implementation of government-sponsored social programs. Very little constructive action, if anything at all, was forthcoming from duly elected officials. It was instead European rearmament in the years immediately prior to the war, drawing heavily on Canadian resources, and domestic wartime planning that put an end to relief lines and the specter of starving children. For many, the lesson seemed obvious. Government had a role to play in regularizing the economic prospects of the population.

Through the war, a total of twenty-eight Crown corporations were set up to oversee or engage in the production of everything from plastics to housing. Polling indicated that 47% of Canadians supported continued government ownership of industry after the war, with another 14% undecided. Socialist and communist parties garnered widespread support, some taking seats in provincial elections. The Liberals and the Conservatives, the traditional parties of federal government, prudently added social insurance programs, labour rights, and job creation to their policy platforms in order to stem the rising tide of socialism. If laissez-faire policies had sunk the countries into the Depression, a carefully managed capitalism was the rising tide that would raise all boats.

The economic and demographic statistics seem to bear this out. Between 1941 and 1960, the population of Canada jumped from 11.5 million to 18.2 million. The unemployment rate averaged 2.5% and industrial production increased by an average of 5.3% in the decade after the war. The GNP increased from $3.2 billion to $11.8 between the years 1945 and 1960. A growing middle class found itself with the economic power to purchase refrigerators, washing machines, televisions sets, automobiles, and larger homes. The federal debt, which had more than tripled during the war, only increased by a 1/3 between the war's end and 1960.

Not everyone, of course, participated in the expanding consumer economy. Statistics Canada revealed that the combination of market economy and social programs had failed to raise 27% of non-farm families, including 1.7 million children, out of poverty. Part of the reason was that economic progress was unevenly spread across the country. Outside Ontario's 'Golden Horseshoe,' the Montreal region, and the naturally gifted regions of Alberta and British Columbia, the new-found prosperity was of little consequence. Another part of the reason was that the labor market was also differently structured according to industry, business size, and access to union representation. A quarter of the Canadian workforce had union membership during WWII. The number increased to about 1/3 by 1960. Unions were able to win respectable wage increases for their members. Still, that left 2/3s of the workforce without the benefit of collective bargaining. The only protection had by 'unskilled' workers was a provincially-mandated  minimum wage, a bare subsistence wage.

During his first tenure in office from 1921-30, the Liberal Prime Minister William Lyon Mackenzie King had ignored his own election promises to establish a welfare state. The Liberals lost the election in 1930, just as the effects of the Depression started to make themselves felt. Mackenzie King was finally spurred into action by the thought that the reforming mantle would pass to the Conservatives during his second tenure in office from 1935 to 1948.

It is a measure of just how far the political elite, in fact, had been won over to the case of social welfare during the war that the Conservative Party renamed itself the Progressive Conservative Party for the election of 1945. Mackenzie King and the Liberals won that election by a very small margin.

Having tamed the most extreme left-leaning socialist elements in the population, economic conservatism was able to reassert itself during the government of Mackenzie King's successor, Louis St. Laurent. Though a nation-wide old age pension plan was implemented in 1951, inflation was allowed to erode its value. The now Progressive Conservative Party of John Diefenbaker won a minority government in 1957, and quickly found a pretext to call another election. The Conservatives swept to power in 1958, winning the largest majority government in Canadian history (208 out of a total 264 seats), in no small part to trenchant criticisms of the Liberal's social welfare record.

The social welfare state that grew up in Canada in the 1960s, including health care programs, child benefits, unemployment insurance, and an old age pension plan, was the result of a confluence of factors. The guilt of CEOs, who wondered if capitalism was indeed responsible, the horror of doctors, who faced starving families unable to pay medical bills, and the political elite's fear of radical leftist politics, all had a part to play. Finally, there was the political competition between Liberals and Conservatives. Both were broadly of a fiscally conservative outlook. Neither would have extended social welfare program on their own. But they fell over each other to win the support of the electorate.

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