Suddenly Britain's ranking ally, Canada geared for total war. Recruits continued to flock to the Canadian military; 65,000 volunteers had enlisted in the army by the end of 1939; and another 85,102 enlisted in all services between May and August of 1940. Most volunteers joined to defend Canada, Britain, and freedom; some simply wanted a job after the Great Depression. Canada sent a second Canadian division to Britain in December 1940 and created a separate Canadian Corps under McNaughton's command.
Beyond sending units of infantry, armour, and artillery to Britain, the government accelerated recruitment programs and war production. In June 1940, Parliament also passed the National Resources Mobilization Act, which gave the Canadian government sweeping powers to control industry and manpower. The main purpose was to establish a means of conscripting men for home defence. The measure faced little opposition, even in Quebec. There, King was viewed as having kept his pledge against conscription for overseas service. Men conscripted under the Act could not serve outside the western hemisphere.
Canada's new status in the conflict also brought a deepening involvement of the civilian population in the war effort. The Canadian economy was mobilized almost completely for war production. The processing and manufacture of goods for civilian purposes was severely restricted. Serious shortages of consumer goods resulted, a circumstance that eventually led to rationing. Sugar was the first product to be rationed, but tea, coffee, butter, gasoline, and other products followed. The government also introduced strict wage and price controls in an attempt to counter inflationary pressures. To help pay for the war the government offered Victory Bonds.
Canadians enthusiastically subscribed to the Victory Bonds. They recovered and recycled vital commodities such as glass, rubber, metal, and paper. They collected clothes and other items for distribution overseas. As in the First World War, women joined the paid labour force in large numbers. Canadian businesses also backed the war effort. They supported the government initiatives, and hundreds of business leaders worked in Ottawa for nominal salaries to assist in the organization of the country's wartime economy.
The worsening situation in Europe also helped to create closer co-operation between Canada and the United States, which was not a combatant in the conflict at this time. The United States, however, was deeply concerned about the progress of the war and approached Canada to develop a joint strategic plan about naval power in the North Atlantic. The Ogdensburg Agreement of August 1940 created a Permanent Joint Board on Defence to co-ordinate the defence of North America. The United States also lent Britain 50 destroyers in return for leases on bases in the West Indies and Newfoundland. And it provided Canada with strategic components for war material bound for Britain. Integration of the continental war effort was further heightened with the signing of the Hyde Park Agreement in April 1941. Under the pact, Canada and the United States more and more closely co-ordinated industrial defence production for war. Thanks to such efforts, by 1943, the North American economy was out-producing that of Germany and the Axis countries by 150 per cent.
American-Canadian co-operation also accelerated long-term trends that were seeing Canada move from Britain's orbit into that of the United States. War was once more changing the basic nature of the dominion.