Spent on Unemployment

During the last two years unemployment relief has cost Canada $243,000 a day

GRANT DEXTER August 15 1932

Spent on Unemployment

During the last two years unemployment relief has cost Canada $243,000 a day

GRANT DEXTER August 15 1932

Spent on Unemployment

During the last two years unemployment relief has cost Canada $243,000 a day



NEARLY $250,000 per day!

Over a period of two years this has been Canada’s answer to the cry of the unemployed; the cry for work, food, clothes, shelter.

With steadily mounting numbers of unemployed, with ceaseless demands for charity, citizens of this country may ask—what have our governments done? What are they now doing to meet the problem of unemployment? The answer is found in the sum total of expenditures authorized by the Unemployment Relief Branch of the Federal Department of Labor.

Eighty millions spent in 1930-31. Ninety-six millions spent in 1931-32. Lumping both together, $177,645,178 or $243,000 per day.

How has this tremendous sum been expended? What manner of organization controls and supervises relief work? How do our governments propose to cope with unemployment in the winter season soon to begin?

With root causes of unemployment—trade, taxation, tariffs, reparations, war debts—this article is not concerned. Nor is it concerned with present trends, future possibilities. All that is proposed here is to give a complete, authoritativ ; fictura of relief policies in Canada trom 193«} to the present time, to show where the noney cam : from, where it went, what we now have to show far it.

To get the true perspective you must recall hard times in bygone years. When thousands of Canadians were unemployed, starving, in the ’forties, there is no record of state relief. Again, in the “hungry eighties” there was acute suffering, but no mention of governmental assistance. We had the problem of unemployment in 1913-14, when an Ontario Royal Commission showed a shrinkage in factory payrolls of twenty-five per cent, but no Federal aid followed. Then, in postwar years unemployment among returned soldiers brought Federal assistance to the amount of $5,000,000. Later on the Federal Government agreed to share the cost of direct relief with provinces and municipalities. But the cash outlay of the Dominion, aside from returned men, was only a little more than $1,000,000.

Not until 1930 did Canadians as a nation grapple with unemployment; attempt, by digging down as taxpayers into their pockets, to bring a measure of comfort to the workless.

In September, 1930, at an emergency session of

Parliament, twenty millions were voted to the Bennett Government, newly elected, and the task of devising a national relief policy was immediately taken in hand.

Relief Policy of 1930

nTIAT POLICY, which prevailed two years and only recently was abandoned, was based upon these constitutional principles. Primary responsibility for unemployment remained with the municipalities. Secondary responsibility rested upon the provinces. The Dominion only entered the picture when the problem became national. In September, 1930, the Bennett Government conceded that a national emergency existed, prepared to come to the assistance of the weaker governments.

The provinces were requested to draw up, in co-operation with the municipalities, programmes of public works, to submit these programmes to Ottawa for approval. Upon approval Ottawa agreed to pay:

1. Twenty-live ¡xr cent of the cost of municipal works, the balance to be divided between the provinces and the municipalities.

2. Fifty per cent of all purely provincial relief works, excepting provincial highways.

3. Forty per cent of the cost of provincial highways.

4. Fifty ¡XT cent of the coat of new links In the TransCanada highway.

With regard to direct relief, the Dominion agreed to pay ¡XT cent of the cost, the balance to be divided between the provinces and the municipalities. In addition, the Federal Government, out (if the twenty millions, contributed .$500,ÜÍX) to the grade crossing fund, administered by the Railway Commission, used to help municipalities build subways and other grade separation works. The railways were encouraged to proceed with capital exjxnditures in advance of actual requirements, the Federal Government to pay five ¡xr cent interest on such expenditures, up to $26,(XX).(XX), for eighteen months. And Nova Scotia collieries were ¡xrmitted to bank coal in advance of orders, the Dominion paying excess cost, not exceeding $50,000. involved in doing so. And, finally, the Dominion drew up a Federal programme of relief works in National Parks.

This was the relief policy of 1930-31. Ii. worked out in this way: Total cost of relief works -still an estimate though the margin of error is now very small -was $70,472,832, of which the Dominion paid $14.742,962, the provinces $14,357,111, the municipalities $14,671,330. The railways spent $25,000,000 and the contribution to the grade crossing fund resulted in an additional exauditure of nearly $2,0(X),000. This outlay brought employment to 336,939 individuals, who worked 7,460,698 man days.

In addition, direct relief in 1930-31 cost $10,363,803, of which the Dominion paid $3,620,390, the provinces $3,718,077, the municipalities $3,125,335. Direct relief was given to 121,012 families, to 73.588 single persons. In all, more tlian 500,000 people received casual lodging, and over 2,500,000 free meals were given.

The 1931 Programme

TN AUGUST, 1931, the old relief act was * replaced by a new statute. A new programme was formulated. In broad outline it followed the 1530 policy except that neither the railways nor the coal operators came in. This new programme got under way in September, and the total estimated cost of relief works— many of the works are not yet completed—is $81,520,957. Of this sum the Dominion is committed to pay $35,635,575, and the balance will be divided between the provinces and the municipalities. At mid-June the Dominion had

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paid $18,959,580, the provinces $14,624,019, the municipalities $6,587,993. How much work this expenditure will provide will not be known until the programme is completed. But during last winter, when the need was greatest, employment was given to 472,761 persons, who worked 11,557,259 man days. As nearly as may be estimated, more than thirty-two out of the eighty-one millions will go for wages.

Direct relief from September 1, 1931, to June 5, 1932, cost $13,287,586, of which the Dominion paid $4,680,917, the provinces $4,680,617, the municipalities $3,926,051. For the full “relief” year, the total cost may run $2,000,000 higher, but it will be late in the autumn before final figures are available. This relief was given to 213,053 families, 111,851 single persons, or to 1,206,167 individuals in all. In addition, casual lodging was provided for 1,917,945 persons and 7,434,288 meals were given free.

This, in bare outline, is the achievement of two years state unemployment relief. Putting the figures together, $151,993,789 has been or will be spent on relief works; $23,651,389 on direct relief. The latter figure will be somewhat higher—probably $2,000,000 higher—when final totals are in.

This is what the citizens of Canada have done for the unemployed. Some of the money came out of current taxation, but the most of it was raised by loans and is now part of Dominion, provincial and municipal debt.

Result of The Old Policies

ALMOST from the inception of the relief works policy, the basic principle of attempting to meet unemployment by providing state work rather than a dole has been under fire. It has been alleged that this policy has been wasteful, inefficient, financially ruinous. Indeed, the fact that it has now been abandoned is accepted as proof that our governments erred in adopting it. Some of the criticisms have been very wide of the mark, much misinformation has been broadcast. The elemental facts, however, are easily ascertainable and from them the public may judge for itself.

Although it is commonly done, no good purpose can be served by analyzing the 1931-32 relief works policy. This is true for the reason that, while Ottawa knows what the final expenditure will be, much of the money remains to be spent, many of the works are not completed, no one can estimate the amount of work that will result. The returns of the 1930-31 programme, however, are fairly complete and can be analyzed with profit.

A total of $70,472,832 was spent, and work was given 336,939 persons for 7,460,698 man days. It is discernible at once that the cost of giving one man a day’s work was slightly more than $9. The Unemployment Relief Branch at Ottawa, however, points out that some of the works are only now being completed and that final figures will disclose a substantial increase in labor provided. A reasonably close estimate is that cost per day will be about $7.

Take it another way. The 336,939 men worked 7,460,698 days. This is an average of twenty-two days work per man. The total expenditure, on this basis, would have given steady employment to only 26,000 men for the full year. This, of course, was but a fraction of the total unemployed at

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that time. (The total given Parliament in September, 1930, was 117,000 and returns of June 1931 showed 286,000). Since the purpose of the policy was to provide relief rather than normal employment, it is clear that the 1930-31 programme would have cared for at least 60,000 persons, perhaps more. While direct relief expenditures cannot be analyzed in this way, it may be said that the cost of maintaining an average family per year does not exceed $600. Thus, 26,000 persons were kept in steady employment for one year at a cost of $70,000,000. They could have been maintained by direct relief at a fraction of this expenditure.

This is the sort of criticism directed against the relief works policy. While substantially true, there are two or three factors that must be borne in mind. First, the relief works programme was not, essentially, an unemployment relief policy at all. While it was drawn up and carried through for the purpose of providing work, the main objective was to get on with necessary public works—municipal, provincial and Federal. And while it may have cost seven dollars per day to keep one man at work, the public now has the capital assets created. The money was spent on sewers, paving highways, buildings, bridges, subways, etc., and all of them were needed, though the need may not have been urgent. Moreover, the money spent on materials going into these works gave employment to our factories, machine shops, lumber mills, etc., thereby preventing the total of unemployed reaching higher levels than it did. Too, the money spent directly on wages was used by the workers to purchase goods, the making of which represented additional labor.

The relief works policy was abandoned in the summer of 1932, not because the various governments were convinced that it was unsound, but because the need of public works had been met and our governments were not in a position, financially, to proceed with projects which might or might not be needed in the future.

Plans For The Future

'T'HE new policy, agreed to last April at a conference of the Dominion and the provincial governments, differs radically from the old, brings this country definitely nearer to the dole. Greater emphasis will be placed this winter upon direct relief. The Dominion and the provinces will contribute, as in the past, to the cost, but primary responsibility will continue to rest upon the municipalities. In addition, a number of projects which lend themselves to mass employment will be carried on. These will consist, chiefly, of highways such as the Trans-Canada highway. The provinces will establish construction camps along the proposed routes and will concentrate thousands of unemployed in these camps. The men will be given food, clothing, shelter and a small cash payment for work done. The policy of paying wages, followed in preceding years, will be abandoned.

In this way, cost of unemployment relief in 1932-33 will be materially reduced. Instead of running to approximately $100,000,000, it will not likely exceed $25,000,000.

In addition, a back to the land movement, sponsored by the Dominion and the provinces, will be pressed forward vigorously. The basis of this movement is that unemployed will be placed upon small farms, will be given a cash stake equal to the sum that would be spent upon them if they remained in cities and drew direct relief. The total outlay in each case will not exceed $600.

This is the story of Unemployment Relief in Canada from 1930 to the present time. It has cost $175,000,000, and this year’s expenditure will swell the total to $200,000,000. Despite this outlay, the number of unemployed has grown steadily. Relief policies have not been equal to the need, have not solved the problem. But they 1

have lessened the suffering of tens of thousands of Canadians, have proved, at least, a palliative, if not a cure.

In one respect Unemployment Relief has been a model of efficiency. The administration of the Dominion expenditures, including general supervision of all work, has cost less than $130,000. or about one fourteenth of one per cent. From the^utset, the Ottawa Unemployment Relief Office has been under the direction of Harry Hereford, formerly of Winnipeg but in recent years a

resident of Ottawa engaged in private business. Mr. Hereford’s appointment was distinctly non-political, and in getting together an administration staff he did not draw upon the Civil Service but upon the unemployed. Not once has there been a breath of suspicion in regard to the adminis tration of this vast sum of money. There has been no charge of political favoritism or interference. Every dollar given by the people for unemployment relief has been spent for that purpose.