Friday, May 13, 2011

Canada and the First World War—Changes in the Economy

The First World War changed the Canadian economy significantly. Since during the war there were large demands for food, Canada’s farmers had to produce a lot more wheat and other agricultural products to supply the army, and as a result Canada saw an agricultural growth with a 300% increase in agricultural output. The farmers also purchased more advanced machineries to help them with farming, and this allowed the farming industry to be more efficient and increased the agricultural capacity of the country.

The country saw an even larger increase in the industrial output. During the war the manufacturing of ammunition was very much needed, and hundreds of new factories were built to increase the amount of ammunition that the country could manufacture. As a result, Canada saw a 500% increase in the industrial output! Even though the demand for ammunition was only temporary, and the industrial output would soon decline after the end of the war, the industrial capacity of Canada was increased significantly and Canada turned from a more agricultural-based country to a more industrialized one.

Furthermore, to raise money for the war, the government introduced many new taxes, such as the income tax, business tax, and taxes on products like tea, tobacco and alcohol. Although some of these taxes were intended as temporary measures for the war, all the taxes remained in the society until today. These taxes were the foundation of our taxation system today and they had a huge impact on the lives of Canadians.

Overall, the First World War had a tremendous impact on the Canadian economy. It significantly increased the Canadian productive capacity, and it set the foundation of our taxation system. It revamped Canada economically.