The National Policy

and John A. Macdonald

Chapter 9

By Leah Cheverie

-First Prime Minister of Canadaand served for 19 years-January 11th 1815-June 6th 1891-Born in Scotland-Lawyer-Leader of the Tory Conservative Party-Father-Husband

• The National Policy was a Canadian economic program introduced by John A. Macdonald’s Conservative Party in 1876 and put into action in 1879.

The National Policy consisted of three initiatives:

1. Protective tariffs against foreign goods.

2. A transcontinental railway.

3. Greater immigration and settlement of the West.

Manufactured goods had the highest tariffs. A duty of more than 40 percent was levied on products such as

carriages, agricultural machinery, railway cars, and woollen clothing. These duties were intended to be protective tariffs, they were placed on

products that were being produced by some of Canada’s growing industries but leaving our country to sell to other markets. Macdonald wanted to keep business in Canada to keep our markets healthy.

• The depression of the 1870s led many Canadians to believe that the country’s economy had become overly dependent upon the exploitation of staples products including lumber, coal, steel, fish, and fur.

• Many of the markets for Canadian timber, wheat, and fish were disappearing due to a decrease in spending brought about by a worldwide economic downturn.

• As a result between 1873 and 1879, Canadian exports fell by 20 percent.• Business leaders believed that the economy needed to diversify to include

more secondary manufacturing. Business owners wanted to not only produce primary products, they wanted to manufacture them.

• Business leaders also feared a growing manufacturing sector would not survive American competition, which had the advantage of large-scale production facilities, lower transportation costs, and a transcontinental railway.

• They were convinced that lower-priced American goods had to be kept out of Canada in order to keep Canadian markets strong.

Essential to this economic strategy was the building of the Canadian Pacific Railway (CPR), which Macdonald had promised during his first term in office.

Take out a piece of loose leaf.

Write down something you learn from watching the following video.

Take 5 minutes.

• http://www.youtube.com/watch?v=oqRWQa0rIso&feature=related

10 minutes

Canadian Pacific Railway

There were many immigrants involved in the building of the railway.

• When the Liberals came to power, they made little progress with the railway.

• When Macdonald came back to power in 1878, he wanted to complete the building of the railway as soon as possible because the lands to the west were considered vulnerable to American political and economic expansion.

• Since acquiring the western territories, the Canadian government had been relatively unsuccessful in attracting settlers.

• The railway was needed to move settlers west. • Investors needed assurances that the railway would

eventually pay for itself.

• The National Policy’s blueprint for prosperity was designed: it would establish a strong manufacturing base in central Canada that received its supplies from the rich natural resources of the East and West.

The Effects of the National Policy

• The National Policy’s most immediate and concrete result was the completion of the Canadian Pacific Railway.

• To the federal government, this ambitious project represented the backbone of a new national economy.

• To facilitate it’s construction, the government offered concessions to a new Canadian Pacific Railway Company.

• Among these concessions were $25 million in grants, $25 million acres of land, tax-exempt status, and a 20 year guarantee against competition from other railways.

• These terms were generous, but Macdonald viewed them as the price to be paid to compensate for the risks of building the world’s largest railway.

• Once major investments in the project had been made (ironically, by Americans), construction on the railway began.

• Describe the features of this political cartoon.

• What is the issue (s) being addressed?

• What supporting evidence is there? • What is the opinion or perspective

of the cartoonist? • How do these issues impact

Halifax, Canada, and the world?

• Most of the labourers came from Canada, the United States, and Ireland, but the most dangerous jobs, such as planting explosives, were assigned to Chinese workers, thousands of whom died during construction.

• Heritage Moment

http://www.youtube.com/watch?v=o87MgkGAqeU

• By 1885, the work was done and the visionary CPR was complete.

http://www.youtube.com/watch?v=Gf3uhfANuUk

Do you think appreciation and credit was given to individuals who worked on the railway?

http://www.youtube.com/watch?v=RG4HJCEoXbg&feature=fvwp&NR=1(CPR found in B.C.)

“Wherever it went, the railway quickened the pace of economic life and laid the foundations for a national economy dominated by the banks and businesses in Montreal and Toronto”

-Alvin Finkel and Margaret Conrad, historians.

The Creation of an Industrial Heartland

• Heartland-A region that is the economic centre of a country.

• The National Policy led to the creation of an industrial heartland in central Canada, with the nation’s primary manufacturers centered in Toronto and Montreal.

• Tariff protection provided security for investment capital and allowed Canadian entrepreneurs to establish new industries that were not affected by American competition.

Heartland

• The completion of the railway ensured that central Canada had easy access to markets in both the East and the West.

• By 1901, half of the country’s manufacturing was located in Ontario, with an additional one-third located in Quebec.

• Central Canada’s role as the industrial heartland has remained an economic reality for over 100 years.

The National Policy in the Hinterland

• Hinterland-A region that provides the resources needed by the heartland.

• If the National Policy made central Canada the country’s financial and industrial heartland, it made the Maritimes and the West the nation’s hinterland.

• In the beginning the CPR promised to bring new trade possibilities to Atlantic Canada.

• Nova Scotians anticipated an increase in commerce or business through the province’s ports due to the new railways.

• In theory, the ice-free Halifax harbour would be the port of call for ships that could not navigate the St. Lawrence River during the winter.

• Incoming and outgoing goods would pass through Halifax as they connected with the rail links to and from Montreal and Toronto.

• It appeared that the National Policy and the railway did indeed stimulate financial growth in the Maritimes, which saw growth in capital investments in the 1880s and 1890s.

• Recognizing the potential for large markets in central Canada and the West, Maritime entrepreneurs invested the money they had made in the shipping business in a variety of manufacturing ventures.

• Towns located along the Inter-colonial Railway, such as Moncton, Amherst, Truro, New Glasgow, and Sydney, became the hubs of this new industrialization.

• Factories producing everything from iron and steel to textiles and pianos sprung up in these boomtowns.

• Maritime prosperity did not last. • Some historians suggest that the consolidation

of Maritime businesses by central Canada and international business interests led to the economic decline.

• Management decisions were based on profit and loss rather than economic well-being of Maritime communities.

• Central Canadian firms began absorbing Maritime financial institutions and moving them to Toronto and Montreal.

• This loss of important financial institutions was connected with the flight of investment away from the Maritimes.

• Another cause of economic decline in the Maritime provinces centred on the coal industry.

• In the late nineteenth century, the growth of Canadian urban centres increased the demand for coal.

• Once the manufacturing sector declined, the Nova Scotia economy turned to coal mining and other related industries of iron and steel.

• This industry was supported by protective tariffs

• In the early twentieth century, however, these protectionist measures were eliminated, allowing the industrial heartland of central Canada to import virtually all of its coal tariff-free while the domestic coal industry suffered.

• As prosperity in the Maritimes began to lag further behind economic success in other parts of Canada, a growing number of people began to move away from the region.

• Between 1881 and 1931, the Maritimes suffered a steady net migration: more than 500 000 people left in search of better opportunities south of the border in the Boston states also known as New England.

Does this out migration sound familiar?

The Impact in the West

• Like the Maritimes, prairie communities did not develop into industrial centres that could compete with Montreal and Toronto.

• Distance from the large markets of central Canada was a major factor in the growth of competitive industries.

• Also, the immigration thought to follow after the completion of the railway did not happen immediately.

• In fact, there was a net loss of migration.

• The economic depression of the 1870s and 1880s reduced the demand for Canadian wheat in international markets.

• This, along with the easy availability of land in the American West, temporarily slowed settlement on the Canadian prairies.

• It was not until the changing fortunes of the 1890s and 1900s that the potential of the West began to be realized!

• The West did take advantage both of the railway and of federally subsidized shipping rates in order to develop its considerable wheat and grain-growing potential.

• As a hinterland region, its primary role, like the East, was to provide a market for manufactured goods produced in the heartland.

• The building of the railway and western settlement also impacted Aboriginal peoples and the Metis.

• New settlers encroached on the lands that had been reserved for the Metis in the Manitoba Act of 1870, forcing them to move westward from Manitoba to Saskatchewan.

• Accustomed to the way of life associated with following the buffalo,

the Metis and First Nations found it difficult to adjust to farming on the small areas of land reserved for them as permanent settlements.

• These people felt that the completion of the railway and expansion and settlement of the West, violated their treaties.

• Metis family in 1908

A People’s CanadaOcean to Ocean

Episode 10

Scene 13

8 minutes

• Ocean to Ocean 1886• John A. Macdonald brought a _____________ to Crow Foot leader

waiting his arrival.• What does Crow Foot really want? _____________.• The Aboriginal children were forcibly taken to _______________

schools.• How did Crow Foot’s 8 children die? ____________________.• Macdonald is brutally frank about _______________________ in

the West.• How many times did Macdonald visit the West? __________.• What date did Macdonald die? _____________________.

Worksheet for National Policy