CANADA'S EFFORT
By GRANT DEXTER
Ottawa, October. THE war-effort of Canada is now entering the, phase of full production and by the spring of 1942 about 5o per cent. of our national income will be going directly into war. The odd thing about this is that few people in Canada have -any real conception of . the size of Canada's war-programme and that the people of Great Britain are profoundly unaware of the im- portance of the part Canada is playing. Canadians recently returned from Britain have gathered the impression that the average citizen there inclines to think that Canada is taking the war rather easily.
There are two explanations of this lack of appreciation at home
and in Britain. Strict secrecy has been observed with respect to much of Canada's industrial war-programme. The public has never been told how many tanks, guns, shells, armoured cars, and so on are being turned out. It is known that we are pro- ducing about boo motor-transport vehicles per day but the output of, say, Bren guns is a closely held secret. The second reason is that Canada's war-effort is two-sided. We are spending $1,450 millions this year on our own fighting services. This figure is fairly well known, but what is not so well known is that we are spending an additional $950 millions on Britain's account. The full war effort, therefore, is some $2,400 millions out of a total national income of $6,000 millions.
Much is heard of Lease-and-Lend aid by the United States to Great Britain. Officials at Washington have announced that up to August 31st last, Britain got some $170 millions of war- materials from the United States under lease and lend. Canada, on the other hand, supplied Britain with war-materials to the sum of $795 millions in 194o-41 (year ending March 31st) over and above Canada's own war-effort, which cost $875 millions. And in the current year the direct aid to Britain will be about $95o millions. Thus in the two years Canada will find about $i,800 millions for Britain, over and above all payments Britain is able to make in Canadian funds.
Compared with Canada's direct assistance, the war-materials hitherto supplied to Britain under Lease and Lend are but a trickle. It will be two years or more before the United States draws level with Canada, and, in addition to aid to Britain, this Dominion is sustaining her own war-effort. In case it may be pointed out that Canada is merely lending this money to Britain,. it may be worth noting that the writer has yet to meet any responsible public man who has the slightest intention of trying to collect the British war-debt to Canada. Out of a national income of $6,000 millions, Canada this year is spending $1,450 millions on her own war-account and another $950 millions on aid to Britain or, in all, 4o per cent. for war. Hitherto, the rapid growth of war-output and the fighting services has not cut deeply into the standard of living, because there was much slack in the economy to be taken up. The national income has risen from $3,80o millions in 1939 so that even in this second year of war there are almost as many civilian goods available as in peace-time.
But as full employment was reached and the demands for war continued to expand, the pressure on prices became almost irresistible. Since last May there has been a steady increase in prices, which has been reflected in the cost of living. Failing Government action it was evident that the inflationary spiral would develop rapidly. Canada, for reasons which are obvious, would have been hard hit. War-spending inevitably has been confined largely to the industrialised provinces of Ontario, Quebec and British Columbia. The three prairie provinces, dependent on agriculture and particularly on wheat, have benefited only slightly from war-expenditures, and no conceivable inflationary movement could affect the price of wheat. The surplus is much too great. To avoid these dangers, the .Government, in mid- October, adopted a policy of freezing prices and wages. This is much the most drastic measure hitherto attempted in any democratic country. On and after November 17th, all prices of goods and services and all rentals are not to exceed the highest price charged by the seller or vendor in the four-week period ending October 11th. Every seller and vendor must be his own policeman. He may be required at any. time to prove that his prices are lawful.
Price-control would be impossible unless wages were also frozen. The policy here is that basic-wages are to be fixed at the average of 1926-29, which was a period of great prosperity in Canada. There are severe penalties for paying less and no employer may pay more without the approval of the national wages board. On top of this ceiling, workers are to be paid a flat-rate bonus in compensation . for the increase in the cost of living since the outbreak of war. The bonus is at the rate of 25 cents (one shilling) for each point of rise in the cost-of-living index. It is assumed, of course, that after the price ceiling becomes effective there will be no more increases in the cost of living and therefore wages will be effectively pegged at the ceiling level.
So far as agriculture is concerned, there will be special bonuses to maintain the industry. Wheat-growers, no doubt, are not as badly needed in this war as the last one, but it is recognised that Canada's huge wheat-surplus is a priceless war-asset and that the wheat-industry will be required later on. There will also be special prices for farm-products like cheese, eggs and butter, which are urgently needed by Britain.
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