1. The National Policy
Social Studies 10
The National Policy

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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