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employment while at the same introducing an unemployment insurance system
for the bad times to come. Both programs were part of a strategy to overcome
the resistance expected from the provinces against Ottawa's withdrawal from
unemployment relief. The strategy, again, backfired as it actually alienated
provinces and eliminated the possibility of any such agreement. The proximity
of the elections led Bennett to present his own “New Deal” in a series of radio
speeches to the nation outlining a number of initiatives to overcome the coun-
try's social and economic crisis. These included a national minimum wage,
working-hours legislation, a more progressive tax system and, among other
things, a contributory old age pension and health and unemployment insurance.
The liberals highlighted that most of these initiatives would require a reallo-
cation of political capacities from the provinces to Ottawa but did not oppose
the Employment and Social Insurance Act, passed in March 1935. Inspired
by the 1911 British System, the proposal for unemployment insurance had
stricter benefits, in accordance with the 'less eligibility' doctrine, and very lim-
ited coverage (the agricultural sector was excluded, dealt with only through
relief). Moreover, the government would only cover one fifth of the total cost
of the program and neither sickness nor transitional benefits were considered.
In general, federal involvement would remain at a minimum in that Unemploy-
ment Insurance would be neither financed nor administered by the dominion.
Bennett's proposal, remarkably attached to the status quo, was never imple-
mented. The Supreme Court (1936) and the British Privy Council in London
(1937) declared it ultra vires , restating the need to amend the BNA if Ottawa
was to develop any unemployment insurance program.
In addition to this major political backlash, the transients issue reemerged
forcefully with strikes in the relief camps of British Columbia, the organization
of the On to Ottawa Trek and the Regina riots. Social unrest kept increasing
while financial relations between the provinces and the dominion were broken
(the four Western provinces owed Ottawa $117 million). Not surprisingly, in
the 1935 elections Bennett was defeated by a large margin and, with him, “the
idea that the care of the unemployed was a local responsibility” (Struthers
1983 : 137). The Liberals, led by Mackenzie King, regained office.
King's moves were cautious and continuist at first. The approval of the
Unemployment Insurance Act (1941) required a major constitutional amend-
ment that spanned from 1936, the year the provisions of the Bennett's New
Deal (1935) regarding unemployment were declared unconstitutional by the
Supreme Court of Canada, and 1940, the year the Federal Government and
provinces agreed to reform the British North America Act so that the for-
mer could, among other things, take full control of the emerging national
program of unemployment insurance. Indeed, King became tighter on pub-
lic finances, demanding from provinces a balanced budget and aiming at a
progressive reduction in the federal share of relief expenditures (mainly via a
program of progressive decrease in grants in aid to the provinces). However,
he also pursued new avenues by appointing a National Employment Commis-
sion (NEC) to study alternative courses of action on unemployment. The NEC
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