Class Notes (1,100,000)
CA (650,000)
Western (60,000)
HIS (2,000)
Lecture 10

History 2125F/G Lecture Notes - Lecture 10: Irving Oil, Stelco, The Affluent Society


Department
History
Course Code
HIS 2125F/G
Professor
Peter Krats
Lecture
10

This preview shows pages 1-3. to view the full 10 pages of the document.
BIGGER GOVERNMENT & BUSINESS
IN POST WAR CANADA
OVERALL CONTEXT: A "POSITIVE ECONOMIC" CYCLE FEATURING THREE
PARALLEL THEMES
1. Bigger and more interventionist Governments
2. Bigger and bigger business
Bigger, if relatively less so, Organized Labour
POST WAR SETTINGS: 1945-57
GOVERNMENT HERE, THERE & EVERYWHERE : INFRASTRUCTURE SPENDING
Canada did not return to the "free marketplace" [which as we have seen had not meant
that government was uninvolved]. Among the directions taken:
1. "Pump priming" via accelerated depreciation postwar tax breaks
2. Maintaining some Crown Corporations
3. Cold War inspired Defence spending remained fairly high -- at well over $ 1
billion annually, created considerable direct and spinoff economic expansion
4. Government infrastructure -- St. Lawrence Seaway, Trans-Canada Highway;
Trans-Canada Pipeline; microwave transmission towers; monies for CBC TV; and
CMHC funds for housing
Federal Power in Peacetime : Federal-provincial relations after war:
Thus the "large" hand of the Federal government did not disappear -- it sought to
maintain the bigger role in peacetime through constitutional reworking -- Ottawa
suggested post-war maintenance of wartime "tax rentals" (1947). According to
these Federal proposals (the so-called "Green Book proposals"):
1. Ottawa should continue to levy all income taxes in return for increased grants.
2. the Federal government would also pay part of costs of new and/or improved
schemes for health insurance, old age pensions and unemployment insurance.
"Have not" provinces that would have gained by the 'Green Book' proposals were
positive -- but not Ontario or Quebec: Premiers Drew and Duplessis blocked the
agreement.

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

Protracted negotiations eventually saw all provinces aboard (to varying degrees)
by about 1954 -- overall, the immediate post-war period featured a dominant role
for Ottawa: federal spending commitments grew steadily:
Government Spending
1948
1952
Federal
$ 1.8 billion
$ 4.0 billion
Provincial
1.5 billion
2.3 billion
KEY FEDERAL "SOCIAL" PROGRAMMES
1. a universal Old Age Pension
2. Equalization Grants
3. The Hospital Insurance And Diagnostic Services Act Of 1957 (Saskatchewan
model)
4. Education -- increased federal monies
These programmes marked much bigger Federal spending on social programmes
but not deficit spending -- indeed, Ottawa slowly reduced its wartime debts even
as its income tax rates declined and spending rose into the billions of dollars.
Such expansionary government spending / activity was possible because the
Canadian economy (and thus government revenues via taxes, customs and the
like) performed strongly after the Second World War came to an end. The driving
forces included:
1. Strong government spending (public sector spending generates wealth)
2. Strong Resource markets
a) Strong postwar European markets
b) Strong American Cold War markets
3. Strong Domestic markets
"WHY WERE THESE GOOD TIMES" ?
Resources
1. war-devastated Europe -- needed lots of Canadian resources
2. The Americans, determined to win the new Cold War, sought out raw materials

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

Mining: 'Mega-projects" include:
iron mining along the Labrador-Quebec border
copper -- Murdochville (in the Gaspé) by the Noranda copper interests
nickel -- Thompson, Manitoba by the International Nickel Company
uranium -- first at Uranium City, Saskatchewan; then at Elliot Lake, Ontario -- the
best modern Canadian model of a "boom & bust" community.
Petroleum
after Leduc oil field in Alberta (1947), surged -- dominated by outside actors --
last integrated Canadian firm -- Canadian Oil [White Rose] sold to Shell in 1962.
Ironically, the consolidation of outside control occurred at the same time that
Canadian energy consumption shifted from 55 % coal based (1946) to 55 % oil
(1961). Natural gas was also making inroads (from 3 to 15 %). (The percentages
are based on BTU measurement.)
Joint petroleum / mineral value soared: $225 m. (1946) to $1.55 billion (1961).
Electricity:
Notwithstanding the gains of non-renewable resources, Canada witnessed a
continuing exploitation of hydro-electricity. Postwar electrical development would
be pointed (like other resource areas) toward mega-projects -- perhaps Kitimat,
British Columbia aluminum smelter best example -- there because electricity so
abundant and inexpensive.
More Traditional Resources:
Areas of Strength :
1. the timber industry of British Columbia drew unprecedented attention
2. Pulp & paper also expanded significantly as demand for paper grew
Relative Weakness in Some STAPLES:
1. the wheat sector -- notwithstanding new Government subsidies and price
guarantees, agriculture hard pressed to keep up with the broader economy --
overall Farm incomes rose only from about $500 m. (1941) to $ 900 m. in 1961.
1. The fisheries -- constrained by limited capital, East Coast fishermen could not
compete with European and American "factory trawlers". And many of those still
working in the sector had shifted from self-employed to wage labourers. (When
these fishermen became eligible for Unemployment Insurance (1956) a sort of
You're Reading a Preview

Unlock to view full version