ECO322H1 Lecture Notes - Lecture 12: Unemployment Benefits, Procyclical And Countercyclical
Lecture 12 – ECO322
Dominion-Provincial Relations: 1921-1939:
- Federal government almost always balanced the budget
- the Great Depression made it clear that the provinces had a hard time financing their growing
responsibilities with only direct taxation powers
Provincial Expenditure in the 1920s:
- provincial responsibilities were not so large in the 1920s
Education:
- 20% of the total provincial expenditure
- there was a doubling of attendance at schools from 1867 to 1930 (42 to 86%)
- there was a need for the quintupling of teachers from 1870 to 1930
- spending on education rose 50% in the 1920s to meet increased demand
Highways, Bridges and Ferries:
- before the 1920s, there were mainly dirt roads in the city
- with the advent of motor vehicles, there was a need for paved roads
- spending on these items went from $8m in 1920 to $29m 1930 (3.5x growth)
- Public utilities doubled to $330m in the 1920s (electricity, water, sewage)
Welfare:
- Spending more than doubled from $12m to $26m in the 1920s due to population growth and
urbanization
Resource Development:
- Doubled expenditure on resource development $5m to $12m in the 1920s
Health:
- advancements in medicine, not numbers of doctors per capita
- there was a growing importance of hospitals, whose expenditures tripled from 1926-29
Provincial revenues in the 1920s:
- taxes on liquor, gas, vehicles and other licensing fees provided 67% of government revenues
- these were pro-cyclical revenues that masked the underlying problems of growing expenditures
- municipalities also had pro-cyclical revenues from property taxes; as people moved to the
suburbs, these revenues were threatened
Federal Budget Policy in the 1920s:
- policy shifted from paying for transport and communication to railway debts in the 1920s
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Document Summary
Federal government almost always balanced the budget. The great depression made it clear that the provinces had a hard time financing their growing responsibilities with only direct taxation powers. Provincial responsibilities were not so large in the 1920s. There was a doubling of attendance at schools from 1867 to 1930 (42 to 86%) There was a need for the quintupling of teachers from 1870 to 1930. Spending on education rose 50% in the 1920s to meet increased demand. Before the 1920s, there were mainly dirt roads in the city. With the advent of motor vehicles, there was a need for paved roads. Spending on these items went from m in 1920 to m 1930 (3. 5x growth) Public utilities doubled to m in the 1920s (electricity, water, sewage) Spending more than doubled from m to m in the 1920s due to population growth and urbanization. Doubled expenditure on resource development m to m in the 1920s.
