Due to its expenditure on war
materiel, Britain lacked
gold reserves and
U.S. dollars[3] to pay for existing and future orders with Canadian industry. At the same time, following expansion, Canadian industry was dependent on British contracts and before the war had had a positive
balance of trade with the UK, but with the establishment of
Lend-Lease, the UK secured future orders with the US. The Billion Dollar Gift was given to the UK in January 1942, coupled with a
C$700 million non-interest bearing loan, both anticipated to last just over a year. It did not last until the end of 1942. It was replaced in May 1943 with the "War Appropriation (United Nations Mutual Aid) Act, 1943", which provided aid to the UK and the other
Allies and lasted until the end of the war. The magnitude of these contributions made them one of Canada's greatest contributions to the war. The two grants totaled over C$3 billion.
Moreover, the Billion Dollar Gift triggered a strong negative reaction amongst Canadians, particularly in
Quebec.[4] The rate at which the money was used was a key reason for the backlash, as was the lack of funding that was provided to the other nations in the Commonwealth.[5] The aftermath of the Gift led Canada's future funding to assist the Allies with an alternative approach - one that focused on loaning material goods instead of money.[4] A further consequence led to a change in the
British Commonwealth Air Training Plan and this enabled another Canadian loan of just over $1 billion for Britain, Canada, Australia and New Zealand to share.[5]
^
abMackenzie, Hector (2012-05-02). "Transatlantic Generosity: Canada's 'Billion Dollar Gift' to the United Kingdom in the Second World War". The International History Review. 34 (2): 294–297.
doi:
10.1080/07075332.2011.626578.
S2CID154505663.
^
abBryce, Robert Broughton (2005). Bellamy, Matthew J. (ed.). Canada and the Cost of World War II: The International Operations of Canada's Department of Finance 1939-1947. McGill Queen's University Press. p. 84.
^
abMilner, Marc. North Atlantic Run: The Royal Canadian Navy And the Battle for the Convoys. (Annapolis, Maryland. : Naval Institute Press, 1985)
^
abZimmerman, David. The Great Naval Battle of Ottawa (Toronto: University of Toronto Press, 1989.
^Roberts, Leslie. C.D.: The Life and Times of Clarence Decatur Howe. (Toronto: Clarke, Irwin, and Company Limited, 1957). p 119-120
Bryce. Robert B., & Bellamy, Matthew J. Canada And The Cost Of World War II: The International Operations Of Canada's Department Of Finance, 1939-1947. McGill-Queen's Press, 2005. ch 7
Granatstein, J.L. Canada's War: The Politics of the Mackenzie King Government, 1939-1945 (1990) pp 311–16
Mackenzie, Hector. "Transatlantic Generosity: Canada's 'Billion Dollar Gift'to the United Kingdom in the Second World War." International History Review 34.2 (2012): 293-314.
online
Mackenzie, Hector. "Sinews of War and Peace: The Politics of Economic Aid to Britain, 1939-1945," International Journal (1999) 54#4 pp. 648–670
in JSTOR
Mackenzie, Hector M. "The Path to Temptation: The Negotiation of Canada's Reconstruction Loan to Britain In 1946," Historical Papers (1982), pp 196–220
online