ECO322H1 Lecture Notes - Lecture 9: Central Canada, Hydroelectricity, Structural Change
Economic Growth: 1896-1914:
- traditional explanation: expansion of wheat exports and immigration caused the boom from
1896 to 1913
- critics in the 1950s and 1960s said that growth was actually uniform from 1867-1913
- notably, Queen’s researchers in the 1980s found that it was likely Prairie settlement; but
Marvin McInnis argued that it was actually Central Canada that was the initiator of growth from
1896-1907
Traditional Staple Theory View (Makintosh):
- Canada had good export/import data; there is a sharp increase of exports and imports from 1896
- Prices were falling from Confederation and then started to rise in 1896
- Immigration also started to increase in 1896
- these forces, along with foreign investment, convinced economists that growth was slow from
1867 to 1895, but rapid from 1896 to 1913
- Mackintosh championed the idea that wheat exports were the main staple driving growth with a
sharp increase in 1896 (this was the standard view)
- People shifted to focus to other staples as well since this was not an adequate explanation
before 1900
Denial of acceleration in 1896 and importance of wheat:
OJ Firestone:
- claims that real output and real output per capita were larger from 1867-1895 than from 1896-
1913; However, he never explains how he derived his data
Duncan McDougall (1971):
- he finds that growth from 1870-1890 was 4.6%; 1867-1950 was 4.2%
- he argues that the growth from 1900-1910 was due to stagnant growth in the 1890s
Chambers and Gordon (1966):
- They claimed that land rents in the Prairies only contributed 10% of the growth seen from
1900-1910; approach was dubious because they assumed that the boom had no effect on wages,
profits or the interest rate
Queen’s University Estimates (Urqhart and McInnis):
- compared the consumption of wheat to the net export data to produce GDP data
- they show that the growth in GDP/capita of the 1900s was as large as 1940s, 1960s, 1970s
- Agriculture did not represent the biggest contribution to GNP; most dynamic sector was gross
capital formation
- one could argue this invalidates Makintosh’s theory, but perhaps wheat staple drove capital
investment and capital formation (railways, elevators, factories etc)
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Document Summary
Traditional explanation: expansion of wheat exports and immigration caused the boom from. Critics in the 1950s and 1960s said that growth was actually uniform from 1867-1913. Notably, queen"s researchers in the 1980s found that it was likely prairie settlement; but. Marvin mcinnis argued that it was actually central canada that was the initiator of growth from. Canada had good export/import data; there is a sharp increase of exports and imports from 1896. Prices were falling from confederation and then started to rise in 1896. Immigration also started to increase in 1896. These forces, along with foreign investment, convinced economists that growth was slow from. Mackintosh championed the idea that wheat exports were the main staple driving growth with a sharp increase in 1896 (this was the standard view) People shifted to focus to other staples as well since this was not an adequate explanation before 1900. Denial of acceleration in 1896 and importance of wheat:
