Question

9. Since Great Depression, Canada experienced double-digit unemployment rates several times. Explain the Canadian experiences of double-digit rate of unemployment. Why unemployment was so high for those periods?

Answer 1

After depression Canada experienced double digit unemployment rates and its economy was hart hit by the Great Depression. Unemployment rates were remain above 12% until the start of the second world war of 1939.

Canada's unemployment rate after Great Depression peaked 19.3%.

By 1933, 30% of the labour force was out of work and one in five Canadians had become dependent upon government relief/benefits for survival.

Reason for double digit unemployment in Canada was sharp decrease in world commodity prices and stock market crash which started from Black Tuesday of October 29, 1929 and resultantly stock market crash in Canada.

Why unemployment was so high after great depression:

1 Condition who created the conditions for Great Depression in Canada- Over production and export of raw material and heavy dependence on exports and especially heavy dependence on export to Canada.

2 Purchase of shares/stocks on margin which created stock inflation and after Great Depression Canadian stock market crashed and investors lost their money in stock market and this has contributed into an increase in unemployment.

3 Before depression a third of Gross National Income of Canada were coming from exports and after depression world demand and specially demand from US were decreased and due to that unemployment was increased in Canada.

4 Dust Bawl: After great depression Canada was hart hit by several dust storms during 1930's which has has caused fertile land to dry and prairies suffered and one more ready for dry land was that land was over plowed and not taken care of due to new farm equipments which were brought in 1920's and this has increased the unemployment.