1. The National Policy

2. Pacific Scandal, 1873
The Conservative administration of Sir John A. Macdonald had accepted campaign funds from Sir Hugh Allan in return for a promise to award Allan's syndicate the contract to build the Canadian Pacific Railway
The government, including Macdonald, was forced to resign in 1873 because of the scandal, and the Conservative party was badly defeated in the ensuing elections

3. Depression, 1874 – 1878
Canadian economy suffers from the effects of a worldwide depression resulting in high unemployment, widespread business failure, and loss of confidence in financial institutions
Macdonald’s Conservatives benefit politically from this crisis as many Canadian businesses felt Alexander Mackenzie’s Liberals did not protect their economic interests, who favoured low tariffs

4. Federal Election, 1878 I’m Back Baby!
Macdonald attacked Liberal’s low tariff policy – higher tariffs would prompt Canadians to buy products made in Canada
Transcontinental railway not completed by the Liberal government leaving the West venerable to American annexation
British Columbia was being lured by the Americans to join their union
The Red River Colony in the West was trading exclusively with the Americans

5. Elements of the National Policy
Macdonald’s new National Policy consisted of three initiatives:
Protective tariffs against foreign goods and revenue tariffs applied to goods not manufactured in Canada
Completion of a Transcontinental railway
Greater immigration and settlement of the West

6. Elements of the National Policy
Duties of over 40% levied on products coming into the country
Canadians believed economy to dependent on staple industries; spending during depression years decreased resulting in exports falling 20%
Economy diversified as a result; secondary manufacturing industries developed in the new Canadian Heartland of Ontario and Quebec
Protective tariffs: taxes imposed on imported products to encourage people to buy domestic products
These tariffs allowed struggling Canadian businesses to get back on their feet
The east and west would now provide a supply base for a strong central manufacturing base in central Canada

7. Effects of National Policy
Railway from Sea to Sea
Completion of the CPR represented the backbone of the new national economy
Concessions of money, land, and no competition agreement with CPR granted by federal government
Most dangerous tasks, such as planting explosives, given to Chinese workers – 600 died during construction
CPR completed in 1885

8. Effects of National Policy
Creation of Industrial Heartland
Nation’s primary manufacturers centered in Toronto and Montreal
Central Canadian firms grew stronger as tariffs protected Canadian entrepreneurs from American competition, with money and people moving in to build up the growing markets.
CPR allowed central Canada to have easy access to markets in the east and west

9. Effects of National Policy
Impact in the Maritimes
As nation’s hinterland, railway promised new trade possibilities for Atlantic Canada
Increase commerce because of Halifax’s ice free harbour and access to tariff protected markets – boomtowns along rail route
Consolidation and absorption of Maritime businesses and financial institutions by central Canadian and international industries led to Maritime economic decline
Coal industry thrived in Maritimes until it was until no longer protected by tariffs

10. Effects of National Policy
Impact in the West
Industrial centers could not develop to rival those in Montreal and Toronto – distance from central Canada hindered growth
Settlement slowed due to lower demand for wheat during economic downturn and availability of land in American west
Wheat and grain-growing potential eventually realized as west took advantage of federal subsidized shipping
Métis and First Nations impacted as settlers encroached on reserve lands forcing them to move west disrupting way of life – North West Rebellion in 1885

11. Impact of Industrialization
Working Conditions
Industrialization took hold of Central Canada creating harsh working environments – long hours, disease and injury common, exposure to dangerous chemicals, and failure to meet exacting demands of employers led to loss of wages or physical punishment
Exploitation of women and children by industries, sweatshops, piecework, and lack of a social safety net.

12. Impact of Industrialization
Working Conditions
Sweatshops – places in which people labour for long hours under harsh working conditions, for little wages
Social safety net – government programs and services that provide aid for citizens in need
Piecework – work that is paid on the basis of the amount done, not on the time it takes

13. Impact of Industrialization
Standard of Living
Married couples who both worked made a modest living – families with children often lived in poverty forcing children to work
Working families often lived in slums with no running water, sewers, or electricity – high rent forced families to live together
Malnutrition and high death rates – particularly infant mortality rates

14. Social Response to Industrialization
Response of Middle Class
Progressive movement took initiatives to help poor – working hours regulated, Lord’s Day Act, and subsidized housing to eliminate slums
Temperance movement led to the prohibition of alcohol – other morality laws passed aimed at gambling and prostitution
Improvements to public health a priority – new hospitals and clinics built and school vaccinations adopted

15. Social Response to Industrialization
Response of the Workers
Workers responded in one of two ways:
Trade unionists fought for a share of benefits of industrial prosperity, such as higher wages, shorter working hours, and better working conditions by taking strike actions and lobbying governments
More radical industrial workers called for all workers to unite in order to restructure the capitalist system – many were skilled craftsmen displaced by factory machines