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Lecture 4

Lecture 4--The Canadian Economy to 1890.doc
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Department
Management
Course
MGMT 1030
Professor
Frank Miller
Semester
Fall

Description
The Staples Economy and the First Industrial Revolution in Canada MGMT 1030 Schulich School of Business Staples and the Early Economy of Canada 1) The Staples Thesis - Need to know linkages for exam :D  Originated by W.A. Mackintosh in 1923  Developed by Harold Adams Innis  The Fur Trade in Canada (1930)  The Cod Fisheries (1942)  Canadian economic history dominated by exploitation of natural resources in an export-driven economy  Fish, furs, timber, wheat  Economic growth dependent on demand for staples abroad  Long-term effect of staples dependent on linkages  Backward, forward, lateral, final demand 2) Timeline of Pre-Confederation Canadian History o John Cabot (England) explores Atlantic Coast (1497) o Attraction of money and establish a business, explains why Europeans arrive, stay and expand in Canada o Italians are holding English and French from going into China o Cabot is experienced Italian navigator o European countries had enormous demand for fish; Cabot opens British eyes showing them that there is a lot of fish off the coast of Newfoundland o Jacques Cartier (France) explores Gulf of St. Lawrence (1530s and 1540s) o Sales west until he finds China o Sailed into Chaleur Bay, Cartier wanted to restock; sees natives so sets camp for a bit o Natives need metals that Europeans possess; do anything to get it o Both trade lots of fur and metal (knives, hatchets, trinkets, pots) together but Cartier does not want fur: fur not big commodity in Europe o On his next trip, arrives in Quebec city, then Montreal; finds people with quartz o Directed him to go towards La Chine Rapids “Chinese Rapids” o A lot of his sailors died of scurvy o Cartier kidnaps 2 sons of the chief, as a proof of discovering this new land o If you had something that looked good but was worthless, it was a Canadian Diamond o New France founded by Samuel de Champlain (1608) o He was a mercenary and a soldier o Major supporter and fighter in Henry the 4ths’s war o Gets a monopoly on fur trade in new France; although kind had given it to one company, no one cared who sold the fur as long as price was low o Killed rivals in New France to develop monopoly o Built military alliance against Iriqois with the Hueron o After Henry the 4 assassination, no more protection o Champlain gets married to a 12 year old daughter, established contract for the marriage o After she was 16 she went to Quebec, people there had not seen any European women o New France conquered by England (1759) o American Revolution (1775-1783) o Upper and Lower Canada formed (1791) o Confederation of the Canadian British colonies (1867) Staples and the Early Economy of Canada 3) Cod and Newfoundland - Grand banks is the richest fishing area imaginable  Two types of fishery  Offshore on the Grand Banks  Inshore along the coast th  All European powers fished the Grand Banks in 16 century  England and France dominated the cod fishery by 1600  Highly seasonal and migratory industry  Gradual settlement on Newfoundland  1200 permanent residents by 1700  12,000 permanent residents by 1775  Cod fishery eventually became a residential activity  1730—residents accounted for 20% of catch  1830—residents accounted for 90% of catch  Massive increase in catch  100,000 quintals in 1750  800,000 quintals in 1830  1.5 million quintals in 1914  Cod the dominant economic activity in Newfoundland  89% of labour force in fishery in 1858 Staples and the Early Economy of Canada 4) The Fur Trade in New France and the Northwest  Demand and supply of furs unstable  Fur trade dispersed over a wide geographic area  New France became a royal colony in 1663  Furs accounted for 90% of the value of exports from New France well into the eighteenth century  Output of furs increased from 40,000 kg in 1675 to 135,000 kg in 1700  Conquest of New France in 1759 witnessed the diversification of the economy  Fur trade disappeared from the St. Lawrence valley by 1821  Hudson’s Bay Company formed in 1670  Three forts on Hudson Bay relied on Cree and Assiniboine to bring furs  Competition with North West Company forced HBC to move inland  HBC and North West merged in 1821  Beaver and buffalo supplies largely exhausted by the 1870s - Mercantilism: limited amount of money/resource, the more of that you can keep in your closed system, the better for you - Closed system that happens through Britain, all of the value-added is created and kept within Britain, they have the items that others want - New France has very small population; they needed diversified economy, needed other economies made by France o France had a lot of trees, so wanted to make ships: needed skilled-labour o Not a lot of highly skilled people wanted to go to New France; threat of being killed or being out in nowhere o Those low skilled ship-makers that did decide to go did not build efficient ships and see that their neighbors are making money off fur trade so become interest - Frontenac is a wealthy aristocrat in France, wanted to be governor of New France, thereby giving him right to use government office to make himself rich o Had very rich/money eating habits; borrowed a lot of money so wanted to escape to New France hoping his creditors would not chase him across the ocean - North West Company and HBC had gunfight capitalistic competition Staples and the Early Economy of Canada 5)Wheat in Upper Canada  Upper Canada sparsely populated after the American Revolution  Distance to export markets prevented the early growth of a wheat economy  Population increased to 80,000 by 1817  Two factors spurred growth of wheat in Upper Canada  Demand in British market and in Lower Canada  Transportation improvements such as the Welland Canal  Large increase in exports of wheat  219,000 bushels exported in 1817  5.7 million bushels exported in 1847  11.1 million bushels exported in 1860  Ontario wheat economy declined in 1880s as farmers diver
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