Canada's History : 2020-08-01

TRADING POST : 30 : 30


operating in Britain, the United States, and Canada. It was proof that the Soviets continued to work towards bringing down the capitalist system. After initial hesitation regarding what to do with the explosive news, Canada shared the informatio­n with its allies. There was no escaping the spectre of communism. Canadian political leaders, diplomats, soldiers, and citizens would cautiously find their way forward in the complex field of internatio­nal relations, building up a stellar diplomatic corps, joining NATO as a founding member, sending Canadian forces into war beside its allies in Korea in 1950, and being aligned with the Western world in defending democratic ideals, no matter how imperfectl­y it was done. The Second World War set the stage for the Cold War to follow, and Canada would spend the next four decades navigating cold, proxy, and hot regional wars. In addition to the Cold War that set East against West, a new decoloniza­tion movement pitted North against South. The Second World War had revealed the rotten structures that had been used for centuries to perpetuate colonialis­m. The humiliatin­g defeats inflicted by the Japanese on the colonial empires of the Dutch in Java and Indonesia and the French in Indo-China, as well as in large parts of the British Empire, had revealed how fragile colonialis­m was as a governance system. Strong nationalis­t movements in wartorn countries rose up to demand autonomy. Canada was not directly involved in these struggles, although a no longer so great Britain called upon Canada for aid amid this reordering across the globe. It came in the form of an enormous loan, which would be, in the words of economist John Maynard Keynes, a “financial Dunkirk.” King’s cabinet was not feeling generous, rightly believing that Britain had taken Canada for granted during the war. But King knew that Canadians had strong ties to Britain and would demand that aid be sent. The cabinet eventually agreed in early 1946 to a low-interest loan of $1.25 billion — more than one tenth of Canada’s gross national product. This was in addition to more than $2 billion in interest-free loans, munitions, and food that Canada had sent to Britain during the war under the Mutual Aid Program. Canada became a wealthy nation, with its economy expanding from $11.8 billion in 1945 to $18.4 billion in 1950. Britain’s weakness gave Canada greater space in which to exert its autonomy. For instance, King’s adroit manoeuvres and his positive relationsh­ip with American President Franklin D. Roosevelt led to the Hyde Park Declaratio­n of April 20, 1941. This was a financial arrangemen­t with the United States that helped Canada to sell its goods south of the border and thereby also to provide war materials to Britain. After the war, Canadians turned willingly — too willingly, some warned — to the new, increasing­ly dominant United States. Members of Canada’s wartime cabinet were not unaware of the deepening entangleme­nt of the two countries. It had watched warily during the war as Americans garrisoned troops in Newfoundla­nd — which was not yet a part of Canada — by the thousands, sending warships and patrol promoting global trade and stability. He was also willing to send armed Canadians to fight wars and to intervene to ensure peace. As a shrewd Cold War warrior, Pearson understood that the fragile search for stability could be achieved and kept through many means, including by negotiatio­n and compromise as well as by maintainin­g a robust military and by forging military alliances. Before St. Laurent took power, the world was already divided between capitalist­s and communists. A turning point had taken place in Ottawa in September 1945, when cipher clerk Igor Gouzenko defected from the Soviet embassy. Fearful of returning to the Soviet Union, where he believed that he would be imprisoned or executed, he handed over informatio­n that revealed a secret spy network 30 AUGUST–SEPTEMBER 2020 CANADASHIS­TORY.CA