The National Policy Social Studies 10 The National Policy

The National Dream Macd had promised a RR to BC upon BC’s entry into Confederation in 1871 He had a dream of a BNA nation rivalling that of the US. His two problems were Financial backing Possible assimilation by the US To realize his dream, Macd realized that a RR was necessary The RR would provide the necessary transportation and communication link The National Policy

Background – The Pacific Scandal On BC’s entry into Confederation, Macd. Was obligated to begin RR construction The contract was given to Hugh Allan (backed by American Jay Cooke – Cooke was aware of the potential of Canada as an eco market) Word leaked out of the deal between the Conservatives and Allan for large sums of money to be paid to the Conservatives Macd., re-elected in 1872, is forced to resign and election is called in 1873 The National Policy

After The Pacific Scandal Mackenzie and his Liberals form the government in 1873 Canada is hit by an economic depression in the mid-1870s Liberals refuse to increase tariffs and fail to negotiate reciprocity with the US Economic problems leave a government open to dissatisfaction by the electors Mackenzie was uninterested in the “Damned Railway” – the survey cont’d by little building was done. Led to BC protests and threat of secession The National Policy

Macdonald’s Return Macd had, to a large extent, disappeared from the political scene but he was not gone In 1876 he developed the National Policy An election scheme, but also A formula for nation building The NP Remained an essential part of Cdn Gov’t policy into the 20th century Strengthened Canada’s economy and restored Cdn confidence in the development of their country Was focused on benefits to the central provinces The National Policy

The National Policy Three main issues formed the basis of the NP Protective Tariffs Western Settlement The CPR The Cdn economy was being damaged by US policies (dumping) US could produce goods more cheaply (economy of scale) Dumping increased profits for American companies Tarriffs were intended to protect Cdn manufacturing, mining and agriculture Duties were also increased on imports of manufactured goods – reduced on raw materials for manufacturers The National Policy

The National Policy Western Settlement Eastern politicians saw the West as a vast, potential market Prairies were suitable for agri. but needed settlers Farmers could produce agri products for export (west coast connection) Farmers income could be used to purchase manufactured goods produced in the east (no manufacturing in the West) West would be a captive market for the East Would encourage development and use of the RR The National Policy

The National Policy The Canadian Pacific Railway The CPR was the cornerstone of the NP Was necessary to move settlers to the West and agri goods to the East and for export Construction of the CPR became a top gov’t priority Attempt in 1879 to get British backing – failed Pressure from BC for failure to meet Confed promise The Cdn Gov’t would have to undertake construction The National Policy

The Canadian Pacific Railway Macd committed the gov’t to building a line west of L. Superior linking Port Arthur and Winnipeg Onderdonk (Amer) was given contracts to build the Fraser R. section By 1881 only 400 km of track was laid and money was running out In the fall of 1880 a syndicate was formed to finance construction (George Stephen and Donald Smith) The National Policy

The Canadian Pacific Railway The ‘Deal’ $25 million in subsidies 25 million acres (good land – alternating sections) All existing public lines were turned over to CPR No lines south of the CPR within 25 km of the border for 20 years No taxes on land received until sold or for 20 years No taxes on imported RR materials (track) (see tariff policy) No property taxes on RR yards and buildings The National Policy

The Canadian Pacific Railway General Manager William Cornelius van Horne Strong, forceful, dynamic, capable Problems The physical changes in the prairies (opposition) The survey (The Battle of the Routes) Money ($20 million was very little overall) The Northwest Rebellion The National Policy

National Policy – Success? There are issues that need to be looked at as we move ahead in the course You will need to examine each part of the NP to determine if it was a success and how it fit into the development of Canada You will need to consider whether there was an immediate success or not for each component of the NP The National Policy