The War and New Opportunities
In fact, the Mackenzie King government was in an unusual position from 1939 to 1945. All Canadians wanted to see a full-scale effort to defeat the Axis Powers and so, with the implementation of the War Measures Act, they were willing to suspend their civil liberties and freedom of movement. Provincial governments even surrendered their tax-raising powers in return for annual subsidies to run their governments. But most importantly, the Department of Finance agreed to implement Keynesian economic theory and to use deficit financing to cover the cost of the war. In its simplest form, this theory postulates that governments prime the economy by purchasing goods and services during economic downturns or national emergencies and then repay the debt by raising taxes during boom periods. The Second World War thus became a testing ground for national economic planning. But one key question was the role that the government would play in developing and funding social policies. How did they contribute to or detract from full employment, the ultimate goal of economic planning? Was it the government’s duty to provide “security” for its citizens?
“The story I’m going to tell happened in October 1943. Our daughter was badly burned by a bonfire that a storekeeper, burning trash, had built. She was rushed to hospital by a car we stopped in the street. They wouldn’t admit her till we paid $35. We didn’t have the money. Had to go to the old Civic Office and get a paper saying we would pay later. She was in hospital for fourteen months. We had a wonderful doctor who saved her, Dr. Charlie Burns. He lowered his fees to half. It took us years to pay off the hospital and the doctor bills.”
— Mrs. Melnyk, Winnipeg, Manitoba, in Life Before Medicare: Canadian Experiences (Toronto: Ontario Coalition of Senior Citizens’ Organizations, 1995), p. 42.
