ECO322H1 Lecture Notes - Lecture 3: Classical Liberalism, Rideau Canal, Corn Laws
Lecture 3 – ECO322
Economic Background of Confederation
- Economic case to be made for Canadian Confederation as opposed to the USA’s glorious
independence
- Two needs/reasons to confederate:
1) Create a national market with a transport system
2) Commercial policy of free trade between provinces
Canals (1824-1848):
- Erie Canal (1826) bypasses the St. Lawrence Rapids (moves commerce from Montreal to New
York); cuts shipping costs dramatically
The First Canal Era (1819-1843):
Lachine Canal: Built to bypass the St. Lawrence rapids, but miserably fails to attract commerce
and is taken over by the government
Welland Canal: Poorly timed and ineffective in drawing cargo due to St. Lawrence problem of
the rapids
Rideau Canal: Dug from Ottawa to Kingston in order to bypass the St. Lawrence rapids; didn’t
build it to the south due to fear of US invasion; failed miserably, too expensive to ship and added
expense to voyage
Cornwall Canal: Borrowed money from London to build canals but almost bankrupted the
colony because it didn’t accommodate sufficient traffic
- Many of these failures resulted in the need for Confederation between Upper Canada and
Lower Canada
Second Canal Era (1843-1848):
- Upper and Lower Canada unite in 1841 as Canada East and West
- Now they could finance better canals as a bigger colony
- But it was too late for Montreal to conquer the markets; New York was the commercial capital
on the East Coast (too little too late)
BNA Railways (1849-1867):
- USA had much more in railways than Canada in 1850
Guarantee Act (1849):
- Government guaranteed investments into railways by promising interest on bonds
- Railways were in financial trouble by the late 1850s due to:
1) British specs for railway made it unsuitable for US rails and frontier society
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Economic case to be made for canadian confederation as opposed to the usa"s glorious independence. Two needs/reasons to confederate: create a national market with a transport system, commercial policy of free trade between provinces. Erie canal (1826) bypasses the st. lawrence rapids (moves commerce from montreal to new. Lachine canal: built to bypass the st. lawrence rapids, but miserably fails to attract commerce and is taken over by the government. Welland canal: poorly timed and ineffective in drawing cargo due to st. lawrence problem of the rapids. Rideau canal: dug from ottawa to kingston in order to bypass the st. lawrence rapids; didn"t build it to the south due to fear of us invasion; failed miserably, too expensive to ship and added expense to voyage. Cornwall canal: borrowed money from london to build canals but almost bankrupted the colony because it didn"t accommodate sufficient traffic. Many of these failures resulted in the need for confederation between upper canada and.
