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The Great Depression was a global phenomenon, and struck both Canada and the U.S. with mostly similar results.
Both countries began suffering the effects in 1929 following periods of great economic growth. Both countries saw their gross national product (an index that rates the value of all goods and service produced in the country) drop by more than a third. In Canada the drop was slightly more than the U.S. In Canada, unemployment reached 27% while in the U.S. the number was 23%. Canadian industrial output fell to about 58% of what it was, the second worst decline in the world after the U.S.
Both countries began “New Deal” type social welfare programs to support those who were out of work. In the U.S., Roosevelt used the power of the federal government to create a flurry of federal agencies that created jobs, improved public lands, offered financial support and helped farms damaged in the Dust Bowl recover. In Canada, the approach was similar, except that unlike the U.S., the Canadian provinces resisted stiffly to these federal programs.
One major difference between the two was that while U.S. industrial output recovered quickly, the labor force remained small throughout the 1930’s. The reverse was true in Canada, where rural work projects allowed the labor pool to surge back to pre-depression levels while industrial output recovered slowly.
Both countries recovered full only after demand in Europe for war materials boosted economic strength.
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