Between the end of the First World War and the economic boom that followed the Second World War, Native peoples' economic and social position in Canada continued to decline. Although this period is part of what historians sometimes call the age of Aboriginal peoples' irrelevance,
The First World War affected Native communities in much the same way it did non-Native communities. Approximately 35 per cent of Native men eligible for service enlisted, with the commensurate casualty rate that resulted from the carnage in the European trenches. Approximately 4,000 Natives served in the Canadian Expeditionary Force, many finding enlistment an appropriate expression of the warrior spirit of their forefathers. While serving, Natives benefited from all of the privileges of Canadian citizenship, including voting rights, but after returning home found that these rights were once again unavailable to them. Many veterans also found reserve lands substantially reduced, if only temporarily, as the government expropriated considerable farm acreage to enhance production to aid the war effort. Several bands raised substantial funds for the Red Cross, in spite of having band money used to purchase equipment for the "Greater Production" farms carved out of Prairie reserve lands.
When Canada declared war on 10 September 1939, Canadian Natives responded with a patriotic fervour that equalled and, in some cases, exceeded that of non-Native Canadians. Indians who "joined up" amounted to a greater proportion of the population than any other group, and totalled some 6,000. The war and Native participation in it brought a number of issues to the surface. Many volunteers were initially rejected for reason of poor health or inadequate education, a revealing statement on the conditions in which they lived. The compulsory enfranchisement regulations that had been implemented following the First World War and had been particularly directed at veterans led some to fear that participation might lead to a loss of status or rights. Some Natives, particularly the Mohawks, reiterated their independent national status and protested being treated like Canadian nationals. Such concerns did not impede the Native war effort, as individual Natives and Native organizations saw no contradiction between recruiting and fundraising on the one hand and asserting and guarding treaty and other rights on the other. In 1944, the government relented on the issue of whether treaty promises had guaranteed that Natives would not be called to fight Canadian battles, and signatories of Treaties 3, 6, 8, and 11 were, if they so chose, exempted from serving overseas. Native veterans were frequently refused benefits, most notably land distributed by the Veterans Land Administration.
For Aboriginal peoples, the maintenance of their limited participation in the Canadian economy became, in many respects, even more difficult in the 1920s and 1930s. In some regions, such as the Prairies, ill-advised federal government policies mainly caused their problems. Late nineteenth-century Department of Indian Affairs programs often frustrated reserve farmers, and the failure of agriculture then became a justification for the seizure of reserve lands and their transfer to non-Natives. The government used a variety of methods to reclaim this land. For example, it sponsored dubious surrenders and specific projects such as the Greater Production Scheme of the First World War or the Soldier Settlement program of the immediate post-war period. The Greater Production Scheme allowed Indian Affairs to take over reserve lands to promote agricultural production for wartime. The Soldier Settlement program, which aimed at providing farmlands for returning veterans, sometimes obtained the land it needed from the reserve land base. The result of these developments in the Prairies was that reserve populations were almost universally non-participants in the large-scale, commercial production of wheat and other grains that dominated the region. Native males, and occasionally females as well, filled the niches in this agricultural economy, serving as casual, seasonal labour at critical points in the annual cycle such as seeding and harvesting. The jobs were poorly paid, unreliable, and ultimately doomed. After the Second World War, Prairie agriculture moved towards extensive mechanization, and the farming economy consolidated into large farm units that had less reliance on semi-skilled, seasonal labour. Consequently, by the 1950s and 1960s, reserve farmers were shunted out of even the limited role they had traditionally played in commercial farming on the Prairies.
Inaugurated in 1917, and expanded in 1919, the Soldiers' Settlement Act was an effort to accommodate returning war veterans by offering either grants or loans for agricultural lands. Where Native veterans were concerned, the department preferred they receive such lands from existing reserve property, rather than from other Crown or Crown-acquired lands that were the source for non-Native veterans. The Act had other repercussions for Native rights. Under one section of the legislation, the deputy superintendent general acquired the power to grant location tickets to Native war veterans. The distribution of such tickets, previously an exclusive band council prerogative, now had passed in part to a government official, a move that weakened band autonomy and local government. The Act also allowed for surrendered reserve lands to be distributed to non-Native veterans. Between 1919 and 1922, some 68,000 acres of Prairie reserve lands were surrendered and sold to non-Natives, resulting in an erosion of reserves.
In an effort to expand Canadian agricultural production in support of the First World War, the government introduced the Greater Production program. When officials realized that reserve farm lands were not producing at their full potential, a 1918 amendment to the Indian Act addressed the problem. It allowed reserve lands to be appropriated or leased for farming purposes without band permission. The program, which involved the creation of three "Greater Production" farms on reserve land encompassing some 62,000 acres, was also paid for out of band funds, again without band permission. Natives gained little if anything from the program, although this part of it operated largely at their expense. Protests were raised, but without effect. The development of ranching on the Blood reserve, in particular, was set back considerably as a result of the program. The Greater Production program did not involve a permanent loss of lands, but it did underline the arbitrary attitude Ottawa took toward Indian reserve land rights.
On the Pacific coast, similar long-term developments squeezed the Aboriginal workers, although a bizarre wartime episode provided respite for some Native fishers. In this region, employment came usually either in the fishing or food-processing industries.
This pattern was typical of the mining industry, which, by the interwar period, was expanding throughout the Central and Northern regions of the country. Most of the exploration, extraction, and refining of precious and base metals was extremely technology— and capital—intensive, meaning that individuals who worked in these industries often had to possess fairly advanced technical skills and that the financial backers who provided the funds for developing mines and refineries required very deep pockets. Not surprisingly, of course, Native people were rarely found among the ranks of either the holders of engineering degrees or individuals whom banks considered creditworthy. Consequently, except for work assisting with exploration and helping to construct mining and refining facilities, this maturing sector of the Canadian economy largely shut out Native workers. The starkest example of this process was found in the Northwest Territories in 1939. In that year, the value of minerals produced in the region exceeded the value of furs harvested, yet not a single person of Native ancestry was employed in the mining sector of the territorial economy.
While conditions were not as severe in the manufacturing and the service industries, these growing sectors of the Canadian economy also proved inhospitable to Native workers in the period after the First World War. Manufacturing was concentrated in the southern tier of the Central provinces, one of the regions in which Native peoples were least represented. Moreover, thanks to inadequate schooling, a phenomenon described elsewhere, Native young people rarely had the educational attainments to allow them past the Personnel Department of a factory. Even if Native applicants possessed such qualifications, however, brute racial prejudice was likely to screen them out of the hiring pool. A particular problem for Native women was the office revolution that dramatically affected Canadian workplaces in the 1920s and beyond. The phrase referred to the growth of female employment in standardized clerical functions that took place throughout the service sector and became a distinguishing feature of the North American economy. Here, as in the manufacturing sector, Natives were especially disadvantaged. Not only did the substandard schooling that was available to female Natives leave them almost totally unequipped for such work, but racial prejudice also worked against them. The significance of these developments was that both female and male Native workers found it difficult to acquire a place in the maturing and increasingly sophisticated economy that Canada, like the entire Western world, was developing after 1919.
By federal legislation in 1930, the Prairie provinces gained jurisdiction over Crown lands within their borders, a privilege reserved to the federal government since the acquisition of Rupert's Land in 1870. In establishing the Natural Resources Transfer Act, the federal government required the provinces to honour treaties guaranteeing Native fishing, hunting, and trapping rights in all seasons on unoccupied Crown lands. However, the terms confirming these rights were augmented by the words "for food," thus implying a limitation of these Native practices in a way not consistent with the original treaties. The provinces subsequently applied a narrow definition to this commitment in an attempt to enforce provincial game and fishing regulations and prosecute Native offenders of these laws.
In other words, whether the economy was dominated by the growth of the later 1920s, the depressed conditions of the 1930s, the war-induced expansion of the early 1940s, or the resource industry growth of the post-war period, Native people were at a disadvantage. This is why Aboriginal people, though often participating as individuals in waged work in primary and secondary industries, collectively found their economic position deteriorating in the twentieth century. A critical turning point was the decade of the Great Depression (1929-1939). The economic effects of the Great Depression bore down savagely on Native peoples, particularly in the Prairie region. Conditions during the 1930s in the Prairies were so severe that some Indian families asked to have their children taken into the residential school. By now, most First Nations communities intensely disliked these institutions, but they felt the schools would at least provide food and shelter at a time when regular meals could not be guaranteed at home. Viewed from a social or demographic perspective, the 1930s were also a critically important decade. The period marked the point at which the population of First Nations stopped their steady decline. For reasons that are unclear, the population trend reversed at this time, and Native populations in general started a steady climb upward. Like other segments of the Canadian population, Native communities participated in the baby boom of the mid- and later-1940s, but, in Native communities, the boom did not fade by the late 1950s. Native birth rates remained high from the 1940s to the end of the twentieth century. When these elevated birth rates combined with improved health care, at least for status Indians, that the government of Canada accepted as its constitutional responsibility in the later 1950s and beyond, the makings of a demographic revolution were under way. By the middle of the twentieth century, Native peoples were expanding in numbers, although economically they continued to languish near the bottom of the population.