To begin to understand how the Great Depression came about, it is essential to examine the causes of the depression in the United States as well as in Canada.

        A great deal of what caused the Depression in the United States also caused Canada’s depression though there were some minor differences. Canadian companies began to expand their industries so they could generate more profits, but economic activity shrank and companies were left exposed with heavier debt and lack of cash flow. Just like the Americans, Canadians bought too much on lease and credit which included stocks. Therefore when the stock market crashed, Canadians were in debt and faced a difficult time as they attempted to gain any money. The population of Canada started to panic when they saw their stocks decrease in value and quickly went to the bank to get their money, but the bank had no money left to give such as what happened in the United States. The Canadian government also raised exporting tariffs and like the United States it backfired due to competition from other countries and Canada’s lack of variety of exports. One difference between the U.S. and Canadian Depressions are Canada’s dependence on few primary products; the decreased demand for natural resources created a significant drop in Canadian sales leading to an economic depression. Also, Canada’s dependence on the U.S. helped to usher the depression to the country. The biggest difference between the two depressions was Canada’s wheat drought; wheat had been one Canada’s major cash crops and when storms swept across the prairies in 1928, it was impossible for farmers to grow the crop thus making numerous famers go bankrupt.

        The Great Depression affected various people and areas in both countries with the same results. In the United States, 9,000 banks were closed between 1930 and 1931 due to the loss of money in the stock market. Because of the lack in money, a large amount of people became unemployed. People began to lack adequate food, shelter, and clothing and soon became homeless. The psychological blow to the people was also large; during the prosperous twenties, many Americans believed success went to those who deserved it. Given that attitude, the unemployment brought by the depression made people blame themselves and the self-doubt became epidemic; it was humiliating for numerous. The effects of the depression on children were radically different from their parents; many children took on greater responsibilities at an earlier age and some teenagers found jobs when parents could not, reversing normal roles of provider and dependent. The depression’s impact was less dramatic, but ultimately more damaging for minorities in America. By 1932, 50% of black workers in the nation were unemployed; what is worse is blacks were frequently forced out of jobs in order to give them to unemployed whites.

        Canada on the other hand, had more economic impacts on the country than social impacts. By 1933, 30% of the labor in Canada was unemployed and one fifth of the population became dependent on government assistance. The four western provinces of Canada, which depended almost exclusively on exports, were the most affected. Because of reduction of investment, both large and individual companies were unwilling and unable to invest in ventures resulting in the extermination of numerous companies. Canada was the worst hit of any of the countries in the world during this time period with the national income at 55% (the U.S was at 58%). Just like in the U.S., numerous people were affected by the Depression; families had to pull kids from school to work on the farms to bring in as much goods as possible while university students had to drop out because they could not pay for tuition.

        The United States and Canada were able to recovery from the Great Depression through new government programs and regulations. With the election of Franklin Delano Roosevelt as president, the United States began to clean up the situation. Roosevelt introduced this “New Deal” plan to help improve the economy. First, Roosevelt tried to fix the banking industry; he declared a national banking holiday to help re-stimulate it. Next, Roosevelt reduced in federal spending and balanced the budget.