Billion Dollar Gift, the Canadian government's first comprehensive attempt to help finance Britain's war effort during the Second World War. Canada's war production, and its wartime prosperity, was dependent upon British orders, but Britain lacked gold and dollar reserves. Consequently, Canada gave its ally "munitions of war" worth $1 billion, in an act of unprecedented generosity. The grant, which was announced in January 1942 and accompanied by an interest-free loan of $700 million and other assistance, was expected to last approximately 15 months. Instead, it was depleted before the year ended.
Emphasis on the gift's monetary value, rather than on the goods produced and provided, distorted its image in the public's eyes. The gift was thus politically unpopular, especially in Québec, where it was depicted as tribute to "perfidious Albion." Nonetheless, it dramatically illustrated the importance of Canada's material contribution to the Allied cause. It was succeeded in May 1943 by mutual aid.