Canadas tenth province was proclaimed on March 31, 1949. The process that ended on that day began in 1864 and was marked by misunderstanding and disinterest on both sides; eventually, however, it was finally realized that confederation was inevitable and in the end would benefit all concerned. Newfoundland had been invited to the Charlottetown Conference in 1864 to discuss the terms of confederation. The Newfoundland colonial government found the terms wanting and rejected the many pleas that continued until 1867. Negotiations began again in 1894, but once again talks broke down over the financial terms of union. The island gained Dominion status after World War I and continued with representative government until the Depression of the 1930s. The financial crisis that developed during the early years of the Depression almost completely destroyed Newfoundlands fragile economy. The government was rescued by Great Britain when Dominion status was suspended and a Commission Government established in 1934.
The Commission Government lasted from 1934 to 1949. The United Kingdom was to carry the burden of Newfoundlands accumulated debt, and to investigate the means by which Newfoundlands economy and political life could be improved. Corruption and waste had been rampant and there was little in the growth of a professional civil service. The Commission Government, along with conducting the daily government business, was to address these concerns. Though many Newfoundlanders mourned the loss of responsible government, the majority also felt relieved that a major financial collapse had been averted.
During the tenure of the Commission Government and before the start of World War II, the issue of confederation with Canada resurfaced. Prime Minister Bennett was in favour of the idea and attempted to convince his cabinet and other leading Canadians, but was unable to come up with the financial conditions that would enable a union. Canada during the Depression did not have the financial means to even begin serious negotiations with the island. There was, in addition, a lack of interest on the part of Canadians in the idea of confederation. Many believed that the serious financial situation in which both Canada and Newfoundland found themselves precluded any serious negotiations. Canadians maintained and even strengthened social, political and economic ties with Newfoundland during this time period, but the financial constraints inhibited any serious negotiations.
The future of Newfoundland was drastically altered by the effect of World War II. Newfoundlands economic situation improved as Canadian and American bases were established and the province was the recipient, because of its strategic importance, of foreign dollars, mainly from American and British sources. The economic prosperity of the period was characterized by full employment, an end to the governments huge deficit, and an overall improvement in social conditions. The war also altered Newfoundlanders view of the potential of the province and rekindled their desire for political power. It was during this time that criticism of the Commission Government increased and new alternatives were sought.