CHAPTER 12: SIR JOHN A. MACDONALD AND THE INTRODUCTION OF CANADA’S NATIONAL POLICY

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4 Apr 2012
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CHAPTER 12: SIR JOHN A. MACDONALD AND THE
INTRODUCTION OF CANADA’S NATIONAL POLICY
The System Level: What Choices did Canada Have?
The economic downturn of the 1870’s, in most of the world,
shaped many protectionist policies
Canada had 2 choices: remain open while others closed their
markets to Canadian exports or retaliate
National Policy ! new railroad, settlement in the west, long
lasting, protectionism, tariffs
Self- sufficiency was a clear goal
Domestic Politics: Cleavages on Trade
Relative endowments of factors of production
o Canada has land, but no capital or labour
The new railroad cost more than expected
Stolpher Samuelson Theorem ! landowners to prefer free
trade, industrial interests wanted protectionism
Immigration policy ! more people leaving than entering
Bureaucratic Politics: The tariff and taxes
The liberals and the Tories had different agendas for the
tariffs
Individuals and Ideas: Liberalism loses its appeal
Liberalism had promised that with free trade the economy
would be booming and relationships between countries would
be great
The Liberals Adopt the National Policy
The liberals pursued more active and positive policies on
immigration and land settlement
Encouraged the development of rival rail companies
Average annual government expenditures on immigration
rose dramatically
Immigration policies were recreated to focus on attracting
farmers
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