The formation of the LSR was provoked by events such as the Great Depression and the completion of World War One as well as increased industrialization and urbanization.
The league aimed to act as an independent supplementary force influencing public policy reform in Canada during this tumultuous period.
The Canadian economy had boomed during the late 1920s and showed no sign of weakness, but during the 1930s the Great Depression swept across Canada and provoked mass unemployment, and this incited the LSR into action.
Politicians worked closely with businesses, securing interest-free loans, developing tariffs, and managing labor disputes; in short: manipulating markets.
A small group of political businessmen controlled public policy and economic development and guided the centralization of finance and power into private hands.
Public education would take the form of books and lectures, and influence over policy would be achieved through the institutionalization of expert intellectuals.
Even so, the ideals of the LSR found them working closest with one political party, in particular, the avowedly socialist Co-operative Commonwealth Federation (CCF).
Under the British North America Act of 1867 (BNA), the government received most revenue collection powers, and provinces became responsible for social relief, education, and health care.
Liberal Prime Minister William Lyon Mackenzie King refused to attempt relief, claiming it would endanger the national budget.
"[5] In November 1930, the problems of political economy were the focus of discussion for a group of "radically minded [professors]",[6] organized by the University of Toronto historian Frank Underhill.
Underhill proposed the formation of a research organization, styled after the British Fabians, modified to suit Canada.
Religion imbued an indelible morality; war and urbanization prompted sober reflection on suffering and reform, and modern education in the social sciences produced a propensity for rational analysis and a deterministic bent.
Intellectuals felt that they needed to convince Canadians that government should assume an interventionist role; financial and social policies should be implemented at the national level, and stability would flow top downwards.
[17] The initiatives put into place after the conference proved unproductive, and the movement was transmuted into the Royal Commission on Dominion-Provincial Relations.
The Commission was placed under the control of modern social scientists, including LSR member Frank Scott, and was instructed to provide recommendations for securing the economy and the federation.
To solve the Depression, the taxation powers and fiscal responsibilities of the federal and provincial governments required readjustment.
The government should control all unemployment insurance programs, assume all provincial debts, collect all income taxes, and make equalization payments to needy provinces.
After the war, Prime Minister King was eager to preserve the government's new powers, and a separate agreement was reached with the provinces, making the Commission's recommendations into a permanent policy.
Politicians of all stripes were eager to mitigate against the economic and social problems experienced after World War One, and acceded to the implementation of central planning measures.
Reflecting on the Commission, historian Doug Owram noted that the report "was not so much the product of the public hearings as ... of the intellectual network of the 1930s...
"[18] The report itself became a vehicle for sharing data in such a fashion that it supported the conclusions of the intellectuals who wrote it, with an eye towards converting its readers into advocates of centralization.