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Two main points histories of the Second World War in Canada traditionally emphasize are (1) the role of war-related fiscal policy in finally ending the Great Depression and (2) the success of government control over the economy. Potential output estimates show a large output gap still in existence in 1939, with it quickly closing by 1941. The Dominion government's war-related fiscal policy emerges as the factor explaining this rapid recovery. But Dominion fiscal policy was also important to recovery before the war. Canada's participation in bi-lateral trade negotiations, which lowered tariffs, the chief instrument of contemporary Dominion government fiscal policy, in reciprocation for similar concessions, stimulated exports, the chief source of recovery before the war. / The matter of success rests largely on how well the Department of Munitions and Supply achieved the Dominion government's strategic aims during the war. Two strategic aims identified in this thesis are the government's desire to minimize the costs associated with war production and to avoid over-expansion in the iron and steel industry. Examining the production records of the Dominion Steel and Coal Company (Dosco), a primary iron and steel firm, and the Trenton Steel Works, a secondary manufacturing firm, shows how the government allocated production in a least cost manner among Canadian producers, consistent with the first of these two aims. Through its Crown Corporations, the Department also strove to minimize the costs associated with establishing war plant. Concerning the second aim, the government avoided rehabilitating Dosco's steel plate mill until sufficient domestic demand warranted it. With its capacity extraneous to the Canadian industry, the government closed the mill after the war. In contrast to the importance previous research placed on political factors in explaining the government's conduct of the war effort, this thesis argues that considerations production costs and input prices were a vital part of the government's decision making process.