ECO322H1 Lecture Notes - Lecture 7: Scotiabank, Central Canada, The Dominion Bank
Lecture 7 – ECO322
Causes of Maritime Backwardness:
- Moved up to Ontario in terms of income from 1870-1890, fell back down into the 1930s
- Wages in Maritimes are lower than the rest of the country; correlated with low productivity in
the region
- Not enough scale to have more productive workers: did unproductive workers/machines cause
low wages, or did low wages not attract enough productive machines?
- 3 major explanations of Maritime backwardness are:
1) Lack of Resources
2) Loss of local control
3) Lack of demand
Lack of Resources:
- there were no significant natural resources and transportation costs were high due to location
and the shift of supply to the US (favoring central Canada) and not Britain (helping Maritimes)
- argument is weak: there were ample amounts of natural resources (fish, iron deposits), great
access to maritime transportation, and good soil (better than New England)
Maritime relation to Central Canada (Loss of control);
- Basic argument is that by joining Central Canada, there was a loss of central control
Confederation and the National Policy:
- This argument claims that backwardness was caused by Confederation and the National policy
- Maritimes were saddled with a 15% tariff that increased the cost of imported goods from New
England
- Forced the Maritimes to buy from Central Canada which was more expensive
- traded low tariff and cheap ocean-transported goods for high tariff and expensive railway-
transported goods
- Problems with the argument:
- Per Capita incomes increased in the Maritimes following Confederation in 1867
- Maritimes initially benefited from Central Canada as an export market for manufactured
goods
- A disproportionate number of factories built after national policy of 1879 in Maritimes
Loss of local control to Montreal financiers (T. W. Acheson) :
- expansion of Maritime manufacturing happened due to expansion of resources like coal, iron,
wood before 1900
- local investors funded factories as a function of this natural resource development
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Moved up to ontario in terms of income from 1870-1890, fell back down into the 1930s. Wages in maritimes are lower than the rest of the country; correlated with low productivity in the region. 3 major explanations of maritime backwardness are: lack of resources, loss of local control, lack of demand. There were no significant natural resources and transportation costs were high due to location and the shift of supply to the us (favoring central canada) and not britain (helping maritimes) Argument is weak: there were ample amounts of natural resources (fish, iron deposits), great access to maritime transportation, and good soil (better than new england) Maritime relation to central canada (loss of control); Basic argument is that by joining central canada, there was a loss of central control. This argument claims that backwardness was caused by confederation and the national policy. Maritimes were saddled with a 15% tariff that increased the cost of imported goods from new.
