Economy during the Contemporary Period Confederation, The National Policy, The Second Phase of Industrialization and The First World War 1867 to 1920

What do you think the following terms mean? Protectionist Policy Free Trade National Policy Tariff Foreign Competition

Economic factors related to Confederation: In 1867, the British colonies in North America decided to join together to form a confederation. They joined together and formed the Dominion of Canada. Reasons for joining together into a single country included: Britain decided to abandon a Protectionist Policy in favour of free trade. The protection policy allowed the colony of Canada to sell its products in Britain at a good rate. Now with free trade, any country could sell to Britain at the same price and the colonies would no longer have preferential treatment or a protected selling rate. The North American colonies worked together to help each other’s economies so joining together into one country would only strengthen this economic bond. The United States (an independent country) was looking for more land to take over. Creating the country of Canada would allow for better defense against the US.

The Dominion’s Economic Situation Within the Dominion of Canada there would be different levels of government and each would be in charge of certain aspects of the economy. These different aspects were divided according to the jurisdiction. The word ‘jurisdiction’ is used when explaining what each of the different governments is in charge of. Sometimes jurisdictions were shared between different levels of government. This was often the case for such things as the exploitation of natural resources and raw materials.

Different levels of government: Federal (The government in charge of all of Canada) Run by the Prime Minister Provincial (The government in charge of a province) Run by the Premier Municipal (The government in charge of a city/town) Run by the Mayor

Federal Jurisdictions Provincial Jurisdictions Shared Jurisdictions  Money making  Banks  Regulating exports  Helping with trade between Canada and other countries  Taxing people of the province  Developing the economy  Administering land to the people  Exploitation and export of natural resources and raw materials  Agriculture  Immigration

Canada’s National Policy: Sir John A. MacDonald, Prime Minister of Canada in 1879 developed a national policy for all of Canada. The three major objectives he wished to meet with this new policy were: Tariffs: To protect new Canadian made products in factories by applying a protective tariff. This meant higher custom duties for importing products from other countries if Canada already made that product. Immigration: To encourage more settlement of the land of Canada. People were encouraged to come from other countries and live in Canada and contribute to the labour force. Railways: To link the provinces and promote trade between each other a railway would facilitate access to other Canadian provinces.

A Protectionist Tariff Policy: - During this period, the Canadian market was flooded by goods from the United States. - May Canadian manufacturers were unable to compete with the American market. They exerted pressure on the government to impose customs duties on foreign goods. - The introduction of these customs duties encouraged Canadians to buy local products. The new regulation also aimed to speed up the development of Canadian industries.

“Canada for Canadians” was the slogan Sir John A. MacDonald used when trying to get reelected as Prime Minister in **Read document 94 on page 197 in your Panoramas.

Development of Railway Network in the Dominion of Canada: What is the connection between the development of the railway network and the development of the Dominion of Canada? (Consult document 93 on page 196 of Panoramas.)

Expanding the railway network: The expansion of the railway network in Canada allowed for two of the policies of MacDonald’s National Policy to be implemented: Increasing immigration and implementing tariffs was helped by the railway expanding in these ways: - Link the provinces to one another - Transport raw materials from locations where they were extracted to the industrial centers - Facilitates new immigrants’ access to region of colonization (where they can settle) - Encourage the distribution of manufactured goods throughout the country - Develop promising industrial sectors, such as transport equipment, iron and steel

By 1870, Canada extended from ‘coast to coast’. A transcontinental railway was needed to link the country together.

A Second Phase of Industrialization: Canadian industries, experienced a second phase of industrialization at the turn of the 20 th century ( ). – Contributing factors: reinforced by the protectionist tariff policy ( the National Policy) characterized by the rapid expansion of industrial sectors which developed because of new energy sources: hydroelectricity and oil.

Several factors contributed to the development of Canadian and Quebec companies. Their success depended on, among other things, their ability to compete against American and British companies. – To be more competitive, they therefore had to lower their production costs (the amount of money it would cost to produce their product). To achieve this, businesses decided to set up their factories and production centers close to sources of energy. The development of the railways in the late 19 th century (late 1800s) also contributed to limiting production costs, as they facilitated access to resources and accelerated the distribution of manufactured products.

Hydroelectricity and Industrial Development: During the second phase of industrialization, hydroelectricity led to the emergence of industrial sectors. Since Quebec had many waterways, it was an ideal place to develop hydroelectricity, which could then be directed to urban centers where factories were concentrated.

Second Phase of Industrialization: Sectors that Grew Pulp and Paper: newsprint, cardboard. Mining: iron, steel, aluminum. Chemicals: dyes, preservatives. Oil: Cars, plastics. ** See doc 99 page 200

Foreign Investment In the early 1900s investors from Great Britain and the United States were recruited by the government of Canada to invest ($$) in the natural resources sector. The more money that was put in to build factories and exploit resources, the more job opportunities there would be for Canadians. **Look at document 100 on page 201.

The First World War: From 1914 to 1918, the European powers, including Great Britain, fought each other in a world war. Canada’s participation in the war effort stimulated the Canadian economy. Sectors such as mining, iron and steel and clothing developed in this time period. This was due to the fact that Canada was producing goods that would be used for the war efforts. (Tanks, ammunition, uniforms, etc were needed by the Canadian soldiers.)

War production led to the modernization of factories. Factories had to adapt to growing demands and new equipment available. Canada’s role in the First World War was closely attached to Great Britain. When World War I broke out Canada had to go to war because Great Britain went. This was due to the fact that Canada was still a part of the Commonwealth of Britain. Britain was in charge of Canada’s foreign relations. Meaning its relationships with other countries. Many sectors benefited from the war as demand for products increased tremendously.

The Development of the Dairy Industry: In the early 20 th century, agriculture was still one of the main economic activities in Quebec. – Farmers used more efficient agricultural tools, which allowed them to increase their production rate and results. gradually integrated into commercial networks. – transportation network now linked producers to consumers. – Farmers in Canada also tried to satisfy the needs of the British and American markets for, among other things, dairy products and slaughter animals. Dairy production was the agricultural sector that experienced the greatest progress after In addition to milk, farmers produced butter, cheese and cream. – In 1890, more than 80% of cheese production was intended for export, whereas butter was mainly sold in the local market.

Maps of Early Canada deration/ e.html

Question to consider Young Canada implements a National Policy in 1879 to protect the Canadian market against strong/large American companies flooding the Canadian market with goods. Did the implementation of this policy help or hinder the Canadian economy in the decades to come (1880s to 1920s) ?