Macdonald was sworn in as Premier of Nova Scotia on September 5, 1933. He was 43 years old and had never held a seat in the legislature. Historian
J. Murray Beck writes that Macdonald's cabinet was "probably Nova Scotia's strongest". Biographer Stephen Henderson points out that the "ministers were fresh, motivated and knowledgeable about their portfolios", although Macdonald himself had no experience in finance. Biographer John Hawkins characterizes the Liberal party of 1933 as "a party of thinkers and reformers". During the 1930s, Macdonald's Liberals took credit for leading the province out of the depths of the
Great Depression. As journalist Harry Flemming wrote many years later, Macdonald became "God himself", the premier who "paved the roads and put the power into every home from
Cape North to
Cape Sable".
Pensions and relief programs On his first day in office, Macdonald kept a key Liberal promise by bringing in
old age pensions for elderly people in need. Cheques were mailed out to 6,000 pensioners by the end of March 1934. It was a popular move even though monthly pension payments in Nova Scotia were substantially below the national average. The economic conditions facing the new government were dismal. Tens of thousands of Nova Scotians were impoverished and unemployed. The government expected that 75,000 Nova Scotians would need assistance during the coming winter. Biographer Stephen Henderson writes that Macdonald sympathized with the poor, but he worried that direct government relief payments would undermine their pride and self-respect. Even though direct relief might be cheaper, the Macdonald government preferred to hire the unemployed for public works projects such as paving roads. Henderson reports that in 1933, there were only of paved roads in the province. By 1937, that figure had risen to 605. The government financed such public works by selling low-interest bonds and raising gasoline taxes from six to eight cents a gallon. Macdonald also urged the federal Conservative government of
R. B. Bennett to increase financial support to poorer provinces. At the time, there was no national system of unemployment insurance and the Bennett Conservatives insisted that the unemployed were mainly the responsibility of the provinces and municipalities. Although the federal government did provide relief during the Depression, Nova Scotia and the two other Maritime provinces were hampered by the federal system of matching grants for relief programs. Under that system, provinces received federal money only if they were willing to contribute a percentage of their own revenues. Thus, the poorest provinces received less federal aid than the richer ones because they couldn't afford to match the federal grants. Historian E. R. Forbes points out for example, that from January to May 1935, all three levels of government spent an average of $2.84 for each relief recipient in the Maritimes, an amount less than half the $6.18 spent in the other six provinces.
Jones Commission Macdonald tried to deal with the financial imbalances in Confederation by appointing a
Royal Commission. He asked it to recommend economic policies the province should follow to lessen the effects of the Depression and to lay out a framework for negotiations with the federal government. The three-man Jones Commission included
Harold Innis, a prominent economic historian who had studied disparities between highly developed manufacturing regions and marginal ones that depended primarily on exploiting natural resources. After touring the province and hearing from more than 200 witnesses, the Commission issued its report in December 1934. Macdonald could take satisfaction in its finding that high tariffs had sheltered central Canadian manufacturing at Nova Scotia's expense and that federal subsidies to the province were "seriously inadequate". The Commission recommended that the federal government assume responsibility for financing social programs such as old-age pensions and unemployment insurance. It also argued that Ottawa should establish equity among provinces and that redistribution of federal tax revenues should be based on need, an idea that became central to Macdonald's thinking about federal-provincial relations. Among other things, the Commission called on the Macdonald government to continue paving roads; to undertake a program of
rural electrification to keep young people on family farms; and, to establish a professional civil service that would defend Nova Scotia's interests against federal bureaucrats in Ottawa.
Tourism and Nova Scotian identity . The rocky spit on the right hand side is Presqu'Île and part of Jerome Mountain can be seen on the left. The Macdonald government took practical steps to promote tourism as a way of bringing money into the province. It improved conditions for tourists by granting small loans to hotel, motel and cottage owners to upgrade their facilities. It also offered cooking classes to restaurant and hotel employees. The government's extensive road building program made it easier for tourists to travel. But biographer Stephen Henderson writes that Macdonald went well beyond these practical steps to promote Nova Scotia as a beautiful and rustic place peopled by colourful Scots,
Acadians, Germans and
Mi'kmaq. Government advertising portrayed the province "as a place where urban, middle-class families could go to 'step back in time'". Gradually, Henderson maintains, the tourism campaigns created a new identity for Nova Scotians. "They witnessed the provincial state constructing an elaborate network of modern roads; they read books and brochures extolling the beauty of the province, and they heard their premier waxing romantically about the pure, simple nobility of their ancestors." Macdonald was especially enthusiastic about "the romanticized culture of the Highland Scots". Macdonald also helped assemble more than a quarter of a million acres (4,000 km2) for the
Cape Breton Highlands National Park complete with a fancy resort hotel and world-class golf course. "Macdonald believed", Henderson writes, "he had created a piece of Scotland for tourists in the New World".
Trade Union Act The Nova Scotia legislature recognized the growing power of
industrial unions in the 1930s by passing what historian Stephen Henderson calls "Canada's first piece of modern labour legislation". Although Macdonald's governing Liberals and the opposition Conservatives agreed on the need to protect union rights, the parties vied with each other to take credit for the Trade Union Act. In January 1937, Premier Macdonald carried a bottle of bootleg rum to a meeting with union officials in Sydney, Cape Breton where they gave him a draft bill based on the American
National Labor Relations Act. Before the Macdonald government could introduce the bill in the legislature, the Conservatives presented a similar one of their own. The legislation faced opposition from the Canadian Manufacturers' Association during public hearings, but Liberals and Conservatives combined to pass it unanimously. The new Trade Union Act required employers to bargain with any union chosen by a majority of their employees. It also prohibited employers from firing workers for organizing a union. In his comprehensive history of Canadian patronage, journalist Jeffrey Simpson writes that the Liberals used road improvements to win votes, with highway crews "especially busy before and during election campaigns." Biographer Stephen Henderson argues that Macdonald himself did not relish the traditional practice of filling government jobs with party supporters. Nevertheless, the "wave of partisan hirings and firings" continued as committees in each riding "scrutinized employees for inappropriate political activity and rated prospective candidates based on what they or their families had done for the Liberal party". ==Second term as premier, 1937–40==