William Lyon Mackenzie King - Prime Minister: Fourth Parliament

Prime Minister: Fourth Parliament

In 1935 the Liberals used the slogan "King or Chaos" to win a landslide in the 1935 election. Promising a much-desired trade treaty with the U.S., the King government passed the 1935 Reciprocal Trade Agreement. It marked the turning point in Canadian-American economic relations, reversing the disastrous trade war of 1930-31, lowering tariffs, and yielding a dramatic increase in trade. More subtly, it revealed to the prime minister and President Roosevelt that they could work together well.

The worst of the Depression had passed by 1935, and King implemented relief programs such as the National Housing Act and National Employment Commission. His government also made the Canadian Broadcasting Corporation a crown corporation in 1936, created Trans-Canada Airlines (the precursor to Air Canada) in 1937, and formed the National Film Board of Canada in 1939. In 1938, he transformed the Bank of Canada from a private entity to a crown corporation.

After 1936 the prime minister lost patience when western Canadians preferred radical alternatives such as the CCF (Co-operative Commonwealth Federation) and Social Credit to his middle-of-the-road liberalism. Indeed, he came close to writing off the region with his comment that the prairie dust bowl was "part of the U.S. desert area. I doubt if it will be of any real use again." Instead he paid more attention to the industrial regions and the needs of Ontario and Quebec, particularly with respect to the proposed St. Lawrence Seaway project with the United States. As for the unemployed, he was hostile to federal relief, and only reluctantly accepted a Keynesian solution that involved federal deficit spending, tax cuts and subsidies to the housing market.