The Economic BOOM!
of the 1920s
But before life got better, it wasn’t great.
A look at Canada’s economy before the boom.
Post-War Problems
#1: Prohibition
 Ban on Alcohol.
 Seen as the root of many other problems
#2: Labour Unrest
 When WW1 ends, many munitions factories
closed down
 Women were under pressure to return to
household duties
 Thousands of returning soldiers were looking
for work
Labour Unrest
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Even people who did have jobs were not
much better off: why?
Rapid Inflation: prices of basic items (food,
clothing) had increased greatly, but wages
had not increased at all!
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The cost of living had more than doubled from
1914 to 1919!
Soldiers, and other workers, wanted to create
unions who would fight with/for them for
better job conditions
The Country Strikes
In 1919, workers across the country staged
strikes
 Miners, steelworkers  Cape Breton
 Machinists  Toronto
 Loggers  West Coast
 Streetcar drivers  Windsor
 None of these strikes were so big as the
Winnipeg General Strike of 1919
The Winnipeg General Strike
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May 1919-June 1919
Building and metal trade
workers voted to strike
To show their support, 30 000
other workers in Winnipeg
walked off the job!
“general strike”: almost all
industries and key services
were shut down

Streetcar operators, garbage
collectors, postal workers,
telephone operators,
firefighters, and hydro workers
all refused to work
The Winnipeg General Strike
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Ottawa sends Mounties to
Winnipeg to put down the
strike
Bloody Saturday: June 21
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Violence erupts!
Mounties charge a parade
(demonstration)
Shots are fired
One striker is killed
Strike leaders are arrested
and sentenced to jail terms
The Winnipeg General Strike
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Together, government, factory owners, and
the Mounties had defeated the strikers.
Strikers are forced to go back to work
Some are forced to promise not to become a
union member or be involved in union
activities
Others were not welcomed back to their job
The Results of the Strike
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Draws attention to the social and economic
conditions faced by many working people
A royal commission is appointed to
investigate the causes of the strike
The commission comes up with 3 reasons:
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High cost of living
Poor working conditions
Low wages
Labour leaders turn to politics  they want
their voices heard!
The BOOM!
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Gradually, life started to
get better for most
Canadians, especially by
the mid-1920s
Business picked up
because foreign investors
gained confidence in
Canada
In regions across Canada,
industries were growing!
Industry #1: Wheat on the Prairies
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From 1925 to 1928, the
prairies enjoyed huge
wheat crops
War-torn Europe – which
had previously made its
own – was struggling and
wanted Canadian wheat
The world price for wheat
also moved up steadily
Farmers traded their
horses for tractors, adding
more and more machinery
Co-Operatives
Co-operatives are businesses owned by
farmers.
 Why is this beneficial?
 Their goal was to loan money to other
farmers at lower interest rates than eastern
Canada bankers charged
 Wanted to sell seed, grains, cattle, and dairy
products so that they could skip the middle
man and make more profit
Industry #2: Pulp and Paper
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1920s: production of
newsprint became Canada’s
largest industry after
agriculture
Forests of softwood were
used to make newsprint
Most of the American sources
had been used up = giant
market for Canadian
pulpwood
Results: lots of money, but
Canada’s forests are being
destroyed
PROBLEM!

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Canada’s economy is
become more and more
dependent on the
export of raw materials.
Why is this a problem?
Industry #3: Hydroelectric Power

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Quebec and Ontario are big
producers
Niagara Falls had been
used for power since 1895
Rivers were now developed
as resources for water
power
Industries were turning to
hydroelectric power instead
of coal
People wanted electricity for
their homes
Canada’s output for
hydroelectricity became
second in the world
Industry #4: Oil and Gas
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Nicknamed the “Oil Age”
More Canadians are driving automobiles, so
the demand for gasoline and oil soars
Oil and gas are always being used for
heating and cooking
October 1924: oil speculators in Alberta
struck it rich

Produced a million barrels of oil and large
quantities of natural gas
Problem!
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What was used for
energy before oil and
before hydroelectricity?
Coal!
Where was that being
produced in Canada?
The Maritimes!
To whom were they
now selling their coal?
They weren’t…
Industry #5: Mining
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Large deposits of copper were
found in the Canadian Shield
along the Ontario-Quebec
border and in northern
Manitoba
Sudbury, ON: producing almost
80% of the world’s nickel
BC was a top producer for lead
and zinc
Many of these rich mining
deposits were developed with
American financing
Foreign Investment in Canada
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At the beginning of the 20th century,
Canada’s biggest foreign investor was…?
Britain!
Bankers from Britain had invested in
Canadian government bonds and railroads.
They did not invest in industries much
because they didn’t think they’d make any
money.
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WW1: British
investment slows down
Someone else steps in,
though…
The U.S.!
Americans wanted to
invest in the rapidly
expanding areas of the
Canadian economy –
the industries
Difference in Investors
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British investors usually left Canadian business
people to run the businesses in their own way
American investors took greater control over the
industries
They introduced the Branch Plant System
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Branch industries are copies of the American parent
company
Produce the same product as the parent, but they get to
have a special stamp: “Made in Canada”
Parent company then does not have to pay such high taxes
Branch Plant System
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Good thing:
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Essential to develop
industries
Provides jobs
Help Canada develop into
a powerful nation
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Bad thing:
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“Americanization”
Important decisions made
in the US instead of
Canada
Top management jobs =
Americans
Profits sent back to the US
Complete economic
takeover?
Branch Plant System – a Diagram
U.S. Parent Company
Management
Jobs
Profits
Important
Decisions
Foreign
Investment
Money
Canadian
Branch
Company
Jobs
Taxes CDN Products
Research &
Development
Questions
Why did Americans invest in Canada in the
1920s?
Correctly use the following terms in a
sentence:
1.
2.
1.
2.
3.
3.
Branch plant
Taxes
Parent company
Complete a pros and cons chart for
American Investment in Canada based on
your opinion.