<P> The Stock Market crash in New York led people to hoard their money ; as consumption fell , the American economy steadily contracted , 1929 - 32 . Given the close economic links between the two countries , the collapse quickly affected Canada . Added to the woes of the prairies were those of Ontario and Quebec , whose manufacturing industries were now victims of overproduction . Massive lay - offs occurred and other companies collapsed into bankruptcy . This collapse was not as sharp as that in the United States , but was the second sharpest collapse in the world . </P>
how did the great depression start in canada
Stock Market crash in New York