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Regional Aspects of Canada's Economic Growth, 1890-1929*

Published online by Cambridge University Press:  07 November 2014

Alan G. Green
Alan G. Green*
Affiliation:
Queens University
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Extract

One of the most interesting periods of Canadian economic history is that which encompasses the years 1890 to 1929. During this period, the prairie provinces were largely settled, new staple exports emerged, and regional interdependence increased. Any explanation of national economic growth over these years, then, necessarily involves an examination of the different responses among regions to these new sources of growth. In essence, we are asking the question: what is the relation between the spatial reallocation of economic activity and the growth of the Canadian economy over this period? To answer this question and to look at some of its implications, regional (provincial) gross-value-added estimates for selected years were made.

Regional estimates of gross value added were made for the years 1890, 1910, and 1929. These three years were chosen to satisfy, as closely as possible, the condition that they represent a similar level of economic activity at each point of time. These years were chosen since they are all years of relatively high economic activity. The first two years faced the additional constraint that they had to coincide with census dates. The choice of years of high level economic activity was made in order to avoid biases in the trend rates of growth which would arise if the initial and terminal dates were at different phases of the business cycle. For example, if the initial year coincided with a year of high unemployment and the terminal year low unemployment, then an upward bias in growth rates might have occurred. Initial and terminal dates chosen at the trough of business cycles would also have avoided this potential slope bias.

Entre 1890 et 1929 l'économie canadienne est passée par une période de croissance économique rapide. Comme cette période correspond à celle du peuplement de l'ouest canadien, une étude approfondie de l'interaction des rythmes de croissance régionaux et nationaux s'impose. Pour élucider ces rapports, on a fait des estimations de la valeur ajoutée provinciale pour les années 1890, 1910 et 1929.

Les premiers résultats de l'enquête devaient dégager les grandes lignes de croissance économique nationale entre 1890 et 1929. On distingue nettement deux périodes: une période d'expansion rapide de 1890 à 1910 suivi d'une période de développement plus lent de 1910 à 1929. La différence des taux d'expansion pour les deux périodes apparaît clairement dans les estimations de production globale et de croissance démographique, de même que dans la croissance de production. Cette différence de taux d'expansion est accompagnée par une différence dans la mesure de la réallocation spatiale de la production, de la population, et de la force ouvrière. La première période (celle du peuplement de l’ouest) révèle une réallocation spatiale des fonctions économiques beaucoup plus importante que celle de la deuxième période.

La seconde étape de l'étude concerne les rapports entre les changements en production moyenne réelle pour le pays entier et pour chaque région, afin de voir la mesure de la participation des régions à la croissance nationale. Un index des différences régionales des revenus (c'est à dire la somme globale des déviations pondérées de la production moyenne des régions de la moyenne nationales) révèle une plus grande différence régionale en production moyenne et en production par ouvrier en 1929 qu'en 1890, la divergence étant plus rapide dans la période de 1890 à 1910. Une étude des contributions régionales à cette inégalité révèle que les provinces centrales (l'Ontario et le Québec) ont obtenu les plus grands bénéfices du développement de l'ouest, tandis que les provinces de la prairie se sont développées à peu près au taux national et les provinces maritimes se sont développées à un rythme plus lent que celui de la nation, surtout dans la dernière période. Vers 1929 la répartition régionale du revenu national d'aujourd'hui est déjà établie. Ses origines remontent au moins en 1890, ce qui rend la période située entre ces deux points de repère une époque importante pour les recherches portant sur les problèmes régionaux du Canada.

Type
Articles
Information
Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 33 , Issue 2 , May 1967 , pp. 232 - 245
Copyright
Copyright © Canadian Political Science Association 1967

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Footnotes

*

I wish to thank Professor Simon Kuznets of Harvard University, without whose help and encouragement this work would not have been completed. The author, of course, is responsible for all errors.

The Institute for Economic Research at Queen's University provided financial support for this project during the summer of 1965. An earlier version of this paper was delivered at the Conference on Quantitative Research in Canadian Economic History held at the University of Toronto on October 21-22, 1965.

References

1 Chambers shows a peak in activity in July 1890 and includes 1910 on the expansion phase running from 1908 to 1913. He also indicates that 1929 was the start of the contraction phase which extended from 1929 to 1933. Chambers, Edward J., “Late Nineteenth Century Business Cycles in Canada,” this Journal, XXX (08 1964), 391–412, Tables II and IV.Google Scholar

2 Firestone, O. J., Canada's Economic Development, 1867-1953, Income and Wealth Series VII (London, 1958), 282–97.Google Scholar

3 For example from the relevant issues of the Survey of Production and the Canada Year Book. In some sectors, adjustments to these series were made to permit closer conformity with the earlier estimates.

4 By inserting the “new” total for service industries into Firestone's estimates of gross national product for 1890, but leaving all other sector estimates the same, GNP increased from 803 to 860 million dollars (current prices), an increase of approximately 7 per cent.

5 These increases in labour force participation rates are largely the outcome of heavy immigration into the country over most of this period. This inflow added proportionately more to labour force than to population (compare lines 6 and 12). The difference arises due to the age-sex selectivity of migration-migration, especially here, was composed largely of young males destined to the labour force. These high participation rates can also be used to explain part of the high rates of growth observed in Table II, especially in the first period.

6 For a detailed description of the changing economic events during the period 1890 to 1929, see Easterbrook, W. T. and Aitken, H. G. J., Canadian Economic History (Toronto, 1956), 476–92.Google Scholar

7 Easterlin, Richard A., “Interregional Differences in Per Capita Income, Population and Total Income, 1840-1950,” Trends in the American Economy in the 19th Century, Studies in Income and Wealth 24 (Princeton, 1960), 92–6.Google Scholar

8 Economic Council of Canada, Second Annual Report (Ottawa, 1965), 103.Google Scholar

9 For an excellent description of this growing regional interdependence, see W. A. Mackintosh, The Economic Background of Dominion-Provincial Relations, Appendix III of the Royal Commission Report on Dominion-Provincial Relations. Reprinted in the Carleton Library Series 13 (Toronto, 1964), 49-54.

10 Although the expansion of western demand induced an expansion in industrial production in both Ontario and Quebec, it is interesting to note that the latter province did not, as a result, achieve as high an average level of income as the former. For a fuller discussion of the relation between industrialization and economic growth as it relates to developments in Quebec see Raynauld, André, Croissance et structure économiques de la Province de Québec (Ministère de l'Industrie et du Commerce, Province de Québec, 1961).Google Scholar