From past to present: What lessons can be taken from Canada's response to the great depression, to help survive the COVID-19 pandemic?
Photo Credit: (The Vintage News / Google Images)
Written by: Aru Kaul
The Canadian economy lost a record high of almost two million jobs last month, due to the closure of non-essential businesses. The 1,993,800 jobs lost in April tops the one million jobs lost in March, with a soaring unemployment rate.
The unemployment rate rose by almost five per cent from March to April, according to Statistics Canada. This was the second highest unemployment rate yet, as job losses spread beyond the service sector, including construction and manufacturing.
“Canadians should be confident that we will do whatever we can to ensure that their jobs are safe as we continue to fight the global COVID-19 outbreak,” a trio of federal cabinet ministers said in a joint statement this week.
“As provinces and territories begin to lift restrictions and our government continues to take steps towards economic recovery, we will be there for Canadians.”
The unemployment rate would have been almost 18 per cent, including the 1.1 million people who stopped looking for work due to the limited job opportunities from the COVID-19 economic shutdown.
Labour force going through an “under-utilization rate”
More than one third of the labour force was not working or was working with reduced hours in April. The rate of under-utilization was more than three times higher than it was in February, before the pandemic hit.
Workers who tend to have part-time or temporary work, or low-paying jobs have been especially vulnerable and particularly impacted with heavy job losses. From the start, the harder hit sections are retail, hotels, restaurants and bars, which continued to see economic loss in April.
Small companies which are defined as companies with less than 20 employees, have let almost 40 per cent of their workers go. Medium sized companies have let almost 25 percent of workers go and large companies have let almost 12 per cent of workers go, Statistics Canada says.
Comparison to The Great Depression
The Great Depression was a worldwide social and economic shock. Few countries were affected on the same level as Canada. Millions of Canadians were left unemployed, hungry and very often, homeless. Canada saw widespread job losses, heavy reliance on farm exports and a drought in the Prairies. The Depression gave rise to social welfare and populist political movements and prompted the government to take an activist role in the economy.
Canada’s economic response to the coronavirus can be compared to the response to The Great Depression. The Depression was the result of sudden and widespread drops in world commodity prices and declines in economic demand. This caused a quick decline in global trade and a rise in unemployment.
Canada saw many changes. From 1929 to 1933, the country’s overall private and public funding fell by 42 per cent. 30 per cent of the work force was unemployed by 1933 and one in five Canadians became dependent on government relief. The unemployment rate remained a problem until 1939, the start of World War II.
Rise of CCF during The Great Depression
Canada’s social welfare system has its roots in a political party known as Cooperative Commonwealth Federation or CCF. This party formed during The Great Depression, amid times of economic crisis.
CCF was Canada’s first socialist party with a mandate to promote universal cooperation for the common good. The members believed that capitalism led to greed and wanted to hold governments responsible for social and economic affairs.
The leader of CCF was James Shaver Woodsworth. He stated that the system is to blame for unemployment, not the individual. He believed that the burden of The Great Depression should be on the government, not the unemployed.
The CCF became the New Democratic Party (NDP) in 1961. The policies posed by the party were adopted and put in place by many federal governments over the years. Some of the initiatives are unemployment insurance, family allowance, medical care and universal old age pensions.
These initiatives are being implemented during the COVID-19 crisis with the government aid and worker support programs. Initiatives such as the Canada Emergency Response Benefit (CERB), Canada Emergency Student Benefit (CESB), and Employment Insurance (EI) have been put forth. CERB and EI are employment benefits for workers who lost work due to the coronavirus. CESB is for post secondary and graduating high school students who are unable to work due to the coronavirus.
Ontario and Quebec: Then vs Now
While they weren’t as affected due to their industrial economies, Ontario and Quebec also saw heavy job losses.
One of the solutions at the time of The Great Depression was to set up work camps across Northern Ontario. This idea was pushed by Major-General McNaughton. Ontario had 37 camps and the men who lived there did many tasks. They worked on improving highways, airfields and the military. A lot of this work became Canada’s National Airline and was done by relief workers.
In 1930, Montreal underwent a period of disruption lasting 15 years. The Great Depression put a sudden end to what the next decade had in store. This put the city in an economic crisis, followed by World War II. Quebec created an unemployment commission to distribute government help to workers. Public work programs were also created that hired several thousand unemployed workers.
Presently, Ontario’s government has been working to educate people during the pandemic. Ontarians can easily access information online which will help them understand if they have or are at risk of coronavirus and they can access lab results. More importantly, there are constant updates on the reopening of businesses, services and public spaces and proper safety measures. There has also been an ongoing effort in reporting statistics on case numbers, down to every detail. Quebec’s government has been providing assistance in both French and English. Quebecers can access the same information stated above and can remain informed. They also have access to several numbers if at risk of coronavirus.
The harder hit provinces
Ontario and Quebec are both the harder hit provinces due to coronavirus. As of yesterday, there were 329 new cases in Ontario and 40 deaths and 706 new cases in Quebec and 89 deaths.
Public Health Ontario says that there were 3607 healthcare workers infected with coronavirus. Health care workers now make up almost 17 per cent of Ontario’s cases as of May 13. Ontario Health Coalition estimates that 1057 seniors died as of May 5.
As of April 21, half of Quebec’s deaths from coronavirus took place in senior homes. An ailing woman was taken to Montreal General Hospital where the staff was overworked, supplies were lacking and she had to share her room with two men that had dementia. This occured before the COVID-19 pandemic, and shows how Quebec’s medical system was already lacking, not leaving much to deal with the pandemic.
“We got into this crisis poorly shaped,” Premier François Legault said.
To the Present
It is commonly believed that The Great Depression was ended by the start of the second world war. However, the war only made the standard of living caused by the depression worse. What ended The Great Depression was the sharp reduction in spending, taxes and regulation, which only occurred after the war. Another key factor was help from the government, which is something that has translated to the present, through initiatives like CERB, CESB and EI.
These government aids were part of a $25 billion package to help Canadians combat the COVID-19 pandemic. Comparatively, financial measures were also taken during The Great Depression for the unemployed.
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