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Lect 7

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Class 11—Canadian Economic History
November 30th 2010
You will recall that the last of the staples was the timber. Timber was looked upon as a good entre into
the British market. Under the mercantilist arrangement, colonies had special privileges with the
mother countries; goods were allowed in England cheaper without tariffs from the colonies, making
Brits more likely to buy colonys goods, as long as tariffs from non colonies were imposed. All
around the great lakes there were American towns and if they could get timber to Montreal they could
send timber to London and receive special privileges too.
England pulled the plug after the industrial revolution. They imposed free trade to fuel factories and
machines. Factories of 200 people which they thought it would be the future. They figured if it was that
cheap they could undercut most other markets like in India where cloth was made by hand. The machine
made british textiles were much cheaper than Indian textiles or other goods. New factories were expensive
as well as the houses in the new factory towns like leeds and Manchester. These factories required large
investments and you must ensure raw materials and labour are readily available and cheap. You must
provide cheap food and cheap housing to ensure cheap labour supply. Britain said they are buying from
the cheapest sources and the colonies must compete the rest of the world. The whole Canadian scheme fell
flat. Canadians felt rejected and despondent, demoralized, depressed. What would they do next since their
dependence on England was keystone of strategy.
This illustrates problem with staples production. Countries that specialize in 1 or 2 raw materials, they
must rely on export markets. Staple export countries are dependent countries. They are in the power of
larger countries that import their staples. This illustrates a dependence of these countries on other
In the 1860s, Britain was sensitive to the notion it caused an upheaval in Canada. It send trouble shooter to
the United States lord Elgin. Concluded that free trade agreement with the United States would help
Canada. Elgin convinced US to adopt free trade agreement, reciprocity treaty. Agreed to have free trade in
resources (staples). When you look back at the results/statistics, it was not clear. If you are in the
American Midwest and you want to shift stuff to New York you must cross Canadian territory. Where they
trading more or just shipping more? It probably didnt. Led to further disappointment. Their were other
political and economic troubles.
In BC, a group of merchants in 1849, (Vancouver merchants who traded with San Francisco) crated a
partition ot join the United States. Trade was also North South in Ontario with New York, and in
Manitoba with states like Minnesota. There was stalement in the politics of Quebec and Ontario. Quebec
and Ontario were made into one political entitiy after the durham report and any legislation had to pass
majority in both houses of parliament. Ontario and Quebec had not much use for each other. Ontario was
keen to developing canal system and was looking for funds to develop business. Quebec looked down on
this, they wanted to be devout and develop religious commitments and wanted to spread society over area
of quebec that hadnt been settled and developed self sufficient agriculture. Ontario and Quebec were tied
together but stuck in a stalemate. Very little got passed. The prime minister at the time was John A
McDonald. He considered father of confederation. He had a realistic sense of why it wasnt working and
what needed to be done. He wanted to get over the stalemate and make sure these territories that were
sparsly inhabited (praries, rockies)he was afraid like other people were that unless Canadians lived
there, Americans would take it over. The republican candidate in 1840 ran his presidential campaign, 54,
4o or fight. This parallel is Alaskan border. Wanted to connect Alaska with Canada. Britain knew that
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