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Published online by Cambridge University Press: 07 November 2014
The economic sphere of influence of the St. Lawrence region contracted after 1821 owing to the pressure of competition in the fur trade from Hudson Bay. Withdrawal from the light, highly valuable staple, fur, was accompanied by increasing concentration on a staple of a bulky character, namely, timber. Settlement emerged with the timber trade especially in Upper Canada. Settlement and wheat exports were stimulated by the steamship and necessitated improvement of the St. Lawrence by canals and railways. The opening of the Erie Canal in 1825 increased the urgency for improved navigation on the St. Lawrence, if Montreal were to compete effectively with New York. The pressure of geography, a small population, a lack of capital, and competition from the United States involved governmental support. Economic development was, therefore, inextricably linked to political growth to achieve this objective. Government construction of canals was handicapped by the division of the provinces, and contributed to the demands for union. The Act of Union of 1840 as a broader political base for expansion of public debt involved control of taxation, and responsible government. Disintegration of the old Colonial System in the abolition of the Corn Laws in 1846 and the Navigation Acts in 1849 was accompanied by the emergence of control over tariffs as an essential device for acquiring revenue. The tariff became vital to the improvement of the St. Lawrence and the introduction of capital on a large scale by the government. The privilege of determining the course of economic development was accompanied by the problem of meeting the costs involved.
1 The direct tax on furs in the French régime under Company control became relatively less important with establishment of control by the French government after 1663 and the addition of taxes on imports of merchandise. The 10 per cent import tax imposed in 1666 was replaced by a tax on wines, brandy, and tobacco in 1670. An elaborate tariff was imposed in 1703 ( Innis, H. A., ed., Select Documents in Canadian Economic History, 1407-1783, Toronto, 1929, pp. 336–40 and 342–3).Google Scholar After the conquest the British Colonial System was introduced and gradually remoulded in the face of expansion in the United States.
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34 Cf. the implications for the Maritime region ( Province of Nova Scotia, Report of the Royal Commission Provincial Economic Inquiry, Halifax, 1934).Google Scholar
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37 Ibid., p. 283.
38 See Waines, “Problems of the Drought Area in Western Canada”.