Canada and the First World War

Introduction

There are reasons for many countries to go into the First World War; indeed, some of the protagonists were protecting their very existence and as such, did not have a choice but to take up arms. In these countries, an outcome that came as a fall out of the war could be justified as being worth it for the sake of retaining a sovereign state.

Little can be said about the reason that Canada went into the war since she became a protagonist by default (rather than active decision). This was because, by the time of the outbreak of the war, the country was still a dominion of the British Empire and as such was obliged to go to war on behalf of Great Britain.

The war had many outcomes; some of them are responsible for what we know Canada as today and can be considered as positive. For example, the Canadians developed a sense of nationalism separate and distinct from the British Empire and set the country well on its way to the attainment of full independence and sovereignty. The war also resulted in the deaths of 67,000 Canadians and the wounding of 173,000 others¹.

Entry of Canada Into the War

When, therefore, Britain declared war on Germany on August 5^th, 1914, all the colonies of the empire were also involved as a matter of automatic obligation. As such, Great Britain did not even presume that it had to consult the Canadian society in order to get a consensus in regards to the involvement of the country in the conflict; and on the fifth of the same month, the General Governor of Canada went ahead to singularly declare war on Germany².

On the ground, however, there was no consensus regarding the recruitment of Canadians to fight in a war whose only outcome would benefit Britain; the French-Canadians, in particular, did not feel that they owed the British Empire any allegiance so as they would be obliged to fight in the war. On the other hand, Canadians of English descent were of total support of the war and were of the view the Canadian involvement was necessary if not unavoidable³. At this juncture, the then Canadian Prime Minister Robert Borden had an opportunity to exercise democracy (through which he was elected) to determine whether his country went to war or not; he however squandered this chance by offering help to Britain which was quickly snapped up.

Preparedness for the War

The First World War was essentially a European war; as such, the protagonists had spent years building up to the war through provocative stances and minor conflicts that resulted in the ballooning of tensions that exploded into a cataclysmic crash. A such, these protagonists had seen the war coming and had responded accordingly by raising mighty armies, arming themselves, and generally reorienting their industries to power a major conflict.

On the other hand, Canada, on the other side of the planet did not have any direct interests in the power struggle across the ocean; thus compared to the European powers that fought in the war, Canada was at the very least ill-prepared to enter into a conflict the scale of a world war.

For starters, the Canadian military was not very advanced; the standing army had a total of 3,110 and the navy was only in its formative stages; while these, together with the Canadian militia, were sufficient in maintaining the security status of the country at the tie, they were not sufficient enough for the war ⁴.

However, and again through the action of Robert Borden who gave orders to the then minister of militia Sam Hughes to raise an army for the war, and within two months of the declaration of war, Canada had an army of over 32,000 men. A racial slant was however adopted during recruitment as Canadian blacks were initially allowed to join the army⁵.

Apart from the investment of men both immediately at the onset of the war and in the course of the conflict Canada also invested a lot of resources to run the war; this includes a reorientation of the industry to produce military equipment both as armament and supporting gear for the soldiers.

While these investments would have been partially justifiable in a country where the economy was healthy, the same could not be said for Canada; in the period preceding the onset of the war, the country was already experiencing poor performance due to various reasons. For starters, a severe drought had caused a drastic reduction in the production of wheat in the country in 1914; for a country heavily dependent on agriculture, this came as a major blow as the economy was deprived of the crucial foreign exchange it gained from exporting wheat.

In the same and the following year, over 50,000 jobs were lost in the railway sector as the industry buckled under the weight of massive debt. Additionally, other sectors, such as construction and real estate also suffered from an acute shortage of capital. In a modern economy, these would have been sufficient disincentives for preventing a country from entering into an avoidable conflict.

Canada undisputedly had a significant effect on the outcome of the First World War; some of their escapades earned them respect as being among the most effective during the war, and they were pivotal in several significant victories during the war^{6 7}. Additionally, by fighting in a major conflict as a country, Canada was well on its way to earning complete emancipation from the British Empire. This however was a pyrrhic victory given the dent created in the economy both in terms of direct expenditures, misappropriation of energy, and missed economic opportunity.

War and the Economy

As with any major conflict, the short-term effect on the economy is that of increased activity; some of the peacetime realities in any free economy such as unemployment virtually disappear. The same can be said for Canada; with the entry into the war, there was an increase in the demand for manpower both to fight in the waterfront and to support the war in various means such as nurses; and to work in factories producing military material. The drought that had previously ravaged the agricultural sector resolved to allow a return to maximum productivity; as a result, the country regained its international wheat market and went ahead to export large volumes of wheat particularly to Britain.

In a bid to channel more resources to the war, Prime Minister Borden moved the War Measures Act; this legislation gave the government sweeping powers to determine how the resources of the country would be used in a war situation to aid in the victory; apart from this, the act also gave the government discretion to do many other things some of which were grossly abused; such as arbitrary arresting and incarceration of persons regarded as being of enemy predisposition as perceived from their ethnic or national origin; this affected immigrants from the countries involved in the conflict as adversaries to Britain and Canada, particularly Austrians and Hungarians.

A good example of the redistribution of national resources is the Imperial Munitions Board; for a body that was virtually non-existent before the outbreak of the war in 1914, it must have taken massive investments to result in it being the largest single employer in Canada with 250,000 workers in 1916, barely two years later. Created to provide munitions for the allied forces, IMB supplied approximately 1 million rounds a very month, accounting for about 30% of the shells spent by the British army on the western front⁸.

In addition to these, Canada was in full swing producing ships, submarines, and planes for the conflict; at the peak of the war, there were over 100 industrial plants in the country. As a result, the workforce of Canada was gradually depleted resulting in a 0% unemployment rate; indeed, even housewives were recruited into the workforce to plug the labor shortage.

All these developments involved expenditures of amounts of money; as such, it is estimated that by the year 1915, the money spent by the military to fight the war was equal to the budget of the entire Canadian government in the year 1913. Additionally, in 1918, it was estimated that the military spent $2.5 million every day on the war. Such astronomic expenditures could not go unfelt by the already struggling Canadian economy.

One of the areas to be affected first was the financing of the government; for example, compared to the budget deficit of 10% in 1913, the deficits of 15% during the period of involvement were an alarming development. With the demand for more money far outstripping the supply from the traditional sources of government revenue, that is tariffs imposed on goods brought into the country, the government resulted in other tactics to plug this gap.

Such include the issuance of ‘Victory bonds’; these, together with other similar bonds were responsible for the collection of approximately $2 billion from the public (that is in addition to paying their normal taxes) during the period of conflict. The government also moved to increase the amount of tax imposed on some select items such as tobacco and alcohol to raise more revenue.

All these measures were, however, not sufficient in satisfying the demand for the revenue; and the government had to find even more sources of revenue. Through the instrument of legislation, the government was able to fulfill, albeit in part, some of its goals. The 1917 Income War Tax Act serves as a good example⁹.

The Economic Fallout of the War

As mentioned before, a significant amount of the funds used to finance the war were obtained in form of debt both to individuals in form of bonds; and to corporations. As at the end of the war, the federal government was in debt amounting to approximately $164 million. On the other hand, the government had also employed a large number of Canadians as soldiers for the war; as such, the country was also burdened with paying pensions for the soldiers amounting to $76 million every year. Combined, these two expenditures amounted to the total annual budget of the federal government before the war; consequently, some of the ‘temporary’ imposed during the war became more-or-less permanent; a good example is the income tax¹⁰.

The manufacturing sector buoyed by the war also suffered a setback after the end of the war; with no demand for their good, many plants started to shut down; the more affected were the steel and the chemical industries. The level of unemployment rose drastically as a result of this¹¹.

War; The Wrong Economic Decision

While many arguments can be made regarding the legitimacy of Canadian involvement in the First World War, the economic angle of the debate leaves little room for discussion. The enormous amount of resources spent in the war could have been invested elsewhere for the benefit of the Canadians.

While the involvement of Canada in the war was a matter of automatic declaration by the then governor-general, the prime minister could have taken steps if not to prevent the involvement, at least to make such involvement be of a lesser scale or even nominal. Such a decision would have been justified by the grim economic outlook that had already engulfed the country before the war. Such efforts would have saved the Canadian economy all the years it spent recovering from the negative effects of the war; and who knows where the economy would have been today?

Bibliography

Aitken, W.M. Canadian War Records Office: Report Submitted by the Officer in Charge.  1917, p. 2, RG 9, series III-D-I, vol. 4746.

Buckner, Philip, ed. Canada and the British World: Culture, Migration, and Identity. p1. Vancouver, BC: UBC Press. 2006.

Cook, Tim. Shock troops: Canadians fighting the Great War, 1917-1918. 2008. Toronto: Viking.

Desmond Morton. When Your Number is Up: The Canadian Soldier in the First World War Toronto: Vintage Canada, 1994.

Finkel, Alvin, and Margaret Conrad. History of the Canadian Peoples: 1867 to the Present. 2nd ed. Vol. II. Toronto: Copp Clark, 1998.

Horn, Michiel. Dirty thirties: Canadians in the Great Depression. Toronto: Copp Clark, 1972.

LaFranchi, Howard. “World Events.” World Events 91. EBSCO support. 1998. Web.

“1914–1918 – Effects of World War I on the Canadian Economy.” Canadian economy online. Ed. Government of Canada. Government of Canada. Web.

“One of Canada’s last WWI veterans dies.” CBC.ca – Canadian News Sports Entertainment Kids Docs Radio TV. 2007. Web.

Welcome to the Library and Archives Canada website | Bienvenue au site Web Biblioth..Que Et Archives Canada. Ed. Library and Archives Canada. 2009. Web.

Footnotes

1. Finkel, Alvin, and Margaret Conrad. History of the Canadian Peoples: 1867 to the Present. 2nd ed. Vol. II. Toronto: Copp Clark, 1998.
2. LaFranchi, Howard. “World Events.” World Events 91. EBSCO support. 1998. EBSCO support Group. 2009.
3. Buckner, Philip, ed. Canada and the British World: Culture, Migration, and Identity. p1. Vancouver, BC: UBC Press. 2006.
4. Cook, Tim. Shock troops: Canadians Fighting the Great War, 1917-1918. 2008. Toronto: Viking.
5. Finkel, Alvin, and Margaret Conrad. History of the Canadian Peoples: 1867 to the Present. 2nd ed. Vol. II. Toronto: Copp Clark, 1998.
6. Cook, Tim. Shock troops: Canadians Fighting the Great War, 1917-1918. 2008. Toronto: Viking.
7. Desmond Morton, When Your Number is Up: The Canadian Soldier in the First World War (Toronto: Vintage Canada, 1994).
8. “1914–1918 – Effects of World War I on the Canadian Economy.” Canadian economy online. Ed. Government of Canada. Government of Canada.
9. “1914–1918 – Effects of World War I on the Canadian Economy.” Canadian economy online. Ed. Government of Canada. Government of Canada.
10. “1914–1918 – Effects of World War I on the Canadian Economy.” Canadian economy online. Ed. Government of Canada. Government of Canada.
11. Horn, Michiel. Dirty thirties: Canadians in the Great Depression. Toronto: Copp Clark, 1972.