During the first four years of the 1920s Winnipeg suffered from a recession which settled over most of the allied nations. In the Canadian west an important factor was the collapse of grain prices, once the government supported grain marketing of the war years ceased. The number of farms declined as farmers walked away from their land and joined the unemployed in Winnipeg. The city had a large population of returned soldiers and many had difficulty finding work. The city and province provided a relief system, but it was limited both as to the amount paid and the length of time it was available.
Some men did not rejoin their families when they returned from the war. Deserted mothers were often left to support their children alone. Divorce increased greatly after 1918 due to a change in the law. Divorce had required the passage of an act of parliament but after 1918 local courts in the western provinces could grant a divorce. The number of divorces in Manitoba rose from one or two a year to around 100.
The 1920s saw the growth of consumer culture. Industry began to concentrate on such things as appliances for the home and family cars. Henry Ford paid men who worked in his factories $5 a day so they could afford to buy Model Ts. General Motors introduced constantly changing models to encourage consumers to update their cars.
The number of cars in Winnipeg grew during the 1920s and measures were taken to deal with the increased volume of traffic. The Cross Town Highway was developed, starting in St. Vital and terminating in the North End. Part of the highway was built from Broadway to Portage Avenue and is now Osborne Street.
People began to borrow to buy consumer goods, creating a growing personal debt load. Advertising targeted women, encouraging them to buy beauty products. Movies and their stars exercised a great influence, teaching movie fans how to smoke and kiss, and helped define standards of femininity and masculinity.
Prohibition had been adopted during the war but in the 1920s it was slowly dismantled. In 1921 the Manitoba Moderation League was established. It argued that moderation in drinking could be achieved without strict prohibition. After a sizable majority voted to eliminate prohibition in a 1923 referendum, the Manitoba Liquor Commission was established.
As a result of the 1919 General Strike, the Labour Movement was gaining steam. The Liberal government of T.C. Norris was reduced to a minority in the election of 1920. In 1921, strike organizer J.S. Woodsworth was elected as a Independent Labour MP, and was repeatedly reelected. He would go on to become leader of the Co-operative Commonwealth Federation, the precurser to the New Democratic Party.
Two more Manitoba elections in 1922 and 1927 reduced the Liberals to seven seats and established John Bracken and his party with a comfortable majority. Bracken departed from the old party system and led a progressive government that eventually absorbed the Liberal Party.
The recession ended in 1924, and in 1925 development resumed. The stock market crash of 1929 and the subsequent Great Depression were just over the horizon, but to Winnipeggers the future looked bright.