Probably no period in human history has witnessed such a concentrated attempt to plan and shape the national and international economy as the years after 1944. In the middle of a devastating World War, Western, Allied governments met at Bretton Woods in New Hampshire to identify the tools necessary to rebuild the liberal democratic and capitalist order, assuming they could beat the Axis Powers. The World Bank and the International Monetary Fund (IMF) were two institutions that emerged from Bretton Woods and, along with the Marshall Plan (aka the European Recovery Plan or ERP) in 1947, they were geared to restoring Europe’s economic health so to avoid the kind of post-war turmoil that followed the Treaty of Versailles in 1919. As Soviet interest in participating in the ERP waned, these instruments of investment and recovery became imbued with a stronger ideological hue that reflected the sentiments of the emerging Cold War (see Section 9.4). They were about providing legitimacy for capitalism and turning off the appeal of revolutionary movements in the post-war world.

Cold War Capitalism

These measures were important to Canada for several reasons. First, although Canada was one of the very few strong economies left standing at the end of the war, it depended on exports to survive. The United States could absorb only so much, so Western European markets were essential to a Canadian transition to peacetime prosperity. Canada engaged directly in recovery efforts in Europe for this reason, while establishing a role in the North Atlantic Treaty Organization (NATO) as an instrument for economic regeneration. The Canadian establishment also understood that the appeal of communism in Canada was enhanced in the 1940s by the alliance with Stalin’s USSR, the appearance of several new communist regimes in Eastern Europe and, in 1949, the People’s Republic of China. The most effective case against hard-left dissent was high levels of employment, good wages, and overall prosperity at home. Capitalism had to appear as though it was working. To that end, Canada had to strike a balance between sending resources abroad to rebuild markets on the one hand, and investing in jobs at home on the other. Thse two goals weren’t necessarily at odds: Canada sold billions of dollars’ worth of materials to the Marshall Plan in the late 1940s, which was a stimulant to economic growth. Almost simultaneously, from 1949 to 1953, tensions and then war in the Korean Peninsula proved to be a fillip to both the Canadian economy and anti-communist rhetoric (see Section 9.4).

More generally, Ottawa and the provinces began to intervene more actively in the economy. New infrastructural projects appeared in these years as the shift to an automobile economy was more fully underway and the demand for cheap electricity grew. Highways and hydroelectric dams were to the post-war era what railways had been to the pre-1914 Dominion. These were the elements of the command-led practices of the past that survived, although Canadian economic planners laid greater emphasis on demand-led (consumer-led) growth. Critical pieces of the puzzle involved stabilizing industrial relations (considered by Peter McInnis in Section 8.12) and encouraging the growth of a working-class with disposable income. Economists had observed the benefits of consumerism in the 1920s and, conversely, what the loss of spending power meant in the Depression. Investing public money to create jobs — a Keynesian approach — worked during the war, and this strategy would be applied during the following three decades.

As we’ll see in Chapter 9, much of this economic growth took place in the suburbs of the nation’s largest cities. The engine that would drive forward a post-war Canadian economy included house construction, the development of services (sewer, electricity, telephone lines), the sale of automobiles for commuters (and gasoline, of course), and the furnishing of every home with appliances and televisions (starting in the 1950s). As Katharine Rollwagen describes below, this process enlisted people at an early age, consciously fashioning generations of consumers.

By the mid-1950s, the Canadian economy was well into a new industrial revolution during which consumer durables intersected with popular culture. It was also when success was, for the first time since 1867, measured less against the benchmark of the United States (although that persisted as well) and more against Cold War enemies in the Soviet Bloc. The fact that this was political as well as economic is evident in the uneven division of spoils across Canada in the post-War years. Economic growth took place principally in Ontario and Quebec, Alberta, and British Columbia; the Prairie economies of Manitoba and Saskatchewan struggled, as did those of Atlantic Canada (the subject of Section 8.13). These have-not provinces benefited from equalization payments but continued to lag behind for decades. The fact that the post-war prosperity was not universally shared is further underlined by the experiences of Aboriginal peoples (see Chapter 11).

Long Descriptions

Figure 8.17 long description: Picture of a red two-door Frontenac station wagon. A family of five is inside, three children in the back, father driving. The trunk is packed. The advertisement proclaims the vehicle is a “sensible size” with “amazing economy.” Across the bottom of the advertisement, there is a maple leaf before the word “Frontenac” in large letters.

There are two smaller photos in the advertisement. One shows a rear view of the car. Two people inside the car look over their shoulders out the rear window. The caption says “Tailgate has outside window control. With optional power assist, windows can be operated from driver’s seat. You lower tailgate floor-flat with one hand.”

The other smaller photo shows the open trunk from the rear. The trunk is packed with camping supplies, including a sleeping bag, a cooler, a blanket, and some luggage. The caption says “Half ton load capacity for bulky cargo. Stows items as long as 8½ feet without overhang. Tailgate opening is fully 4 feet wide, only 23 inches off ground.” [Return to Figure 8.17]