The Welfare State in Canada
It was not until the Great Depression of the 1930s that Canada's evolving social organization broke down. Until then neighbours, municipal governments or charitable organizations had managed to help poor or dysfunctional people who lived in their communities (or to get them institutionalized). Or these people could be encouraged to move on to find other opportunities in a developing nation. However, with the breakdown of the world's economic system in the interwar years, Canada could no longer sell its products and thus keep its resource and manufacturing industries afloat. Some townspeople sought refuge back on family farms, young men rode the rails across the country looking for work, and camps were set up for displaced people. Much later than in other countries, Canada's federal government decided that it must act, and in 1935 it tried to bring in a new unemployment relief system. But this intervention was challenged on the grounds that the Canadian Constitution had made social affairs the responsibility of the provincial governments.
The federal government decided that the only alternative was to set up a royal commission to inquire into dominion-provincial relations (Canada 1940), to make known the situation in all the provinces and to seek recommendations for change. This commission did not manage to finish its work until the Second World War had begun, and so action on its proposals for reform had to be postponed. In the meantime, agreement was reached between the provinces to bring in a national unemployment insurance scheme in 1940 and a temporary tax rental (federal-provincial revenue redistribution) scheme was put into place until after the war.
Canada joined Great Britain in the Second World War, 1939-45, as soon as it was declared and began to recruit for the armed forces. This provided more information about the needs of the country for better health, education and social services.