The Great Depression in Canada

Causes of the Great Depression

• Overproduction and underconsumption of goods led to a surplus of products and a subsequent drop in prices, making it difficult for businesses to stay afloat.

Economic Dependence in Canada

• Canada's economy was heavily reliant on international trade, particularly with the United States, making it vulnerable to global economic downturns.
• The country's dependence on a few staple industries, such as agriculture and mining, left it exposed to market fluctuations.

Impact of Overproduction and Falling Prices

• Canadian businesses suffered greatly due to the oversupply of goods and the resulting decline in prices, leading to reduced profits and widespread bankruptcies.

Protectionist Measures

• Many countries, including the United States, implemented protectionist policies, such as tariffs and trade barriers, to shield their own businesses from international competition.
• These measures, however, ultimately worsened the global economic situation by reducing international trade and deepening the depression.

Stock Market Crash and Consumer Behavior

• The stock market crash of 1929 led to a sudden and severe loss of wealth for many individuals, causing a sharp decline in consumer spending and confidence.
• As a result, people became cautious and hesitant to make purchases, further exacerbating the economic downturn.