DOSSIER 4 – THE EFFECTS OF ECONOMIC DEVELOPMENT SINCE 1867

Mr. Wilson - History 404

Industrialization and the West

What happened In 1867?

Confederation New Brunswick and Nova Scotia joined

the Canadian Confederation based on the promise of being connected to Ontario and Quebec’s railroad.

The railroad was an extremely important economic factor in the early years of Confederation – leading to creation of the Western Provinces.

What is PROTECTIONISM?

PROTECTIONSIM is an economic policy that protects local business from outside competition. Usually through the use of tariffs, customs and duties.

What is the opposite of PROTECTIONSIM? Free Trade

England had adopted a Free Trade policy just before confederation, which forced Canada into the 10 year Reciprocity Treaty with the U.S. in 1854.

This meant that the neither of us had to pay tariffs or duties on goods going back and forth.

Economic Development

Until the 19th century, Canada’s economy was largely based on the Primary Sector: Fishing, lumber and agriculture.

After 1850 and the introduction of INDUSTRIALIZATION, Canada started to expand into the Secondary and Tertiary Sectors.

The Primary Sector

In the 19th Century Canada was barely ably to feed its population.

But with the introduction of industrialization and mechanized agriculture – we started to have a surplus.

The next major change was ELECTRICITY.

The Primary Sector

After WWII (1939-1945) electricity became a common necessity for every household.

This had an impact on agriculture, specifically in that the number of farms decreased while the production increased.Number of

people needed to run a farm

The overall production of each farm

The Primary Sector

Although agriculture was changing, other sectors opened up.

Forestry still offered plenty of employment. At the end of the 19th century several

mines started to open: Nickel, Gold, Silver, Copper in Abitibi-

Temiscamingue Asbestos in the Eastern Townships Iron in Cote-Nord Copper in Gaspesie

The Secondary Sector

At first industrialization in the 19th century only effected the industries producing everyday necessities: shoes, clothing, tobacco, milk, butter, cheese, sugar, beer, etc.

But by the 20th century, more export-oriented light industries were being developed:

Pulp and paper, newsprint Ore processing Chemical products Transportation materials (mostly for railroads)

The Secondary Sector

Since the 1970’s however, the proportion of secondary sector industries has decreased.

This is largely due to the competition being generated in other countries where labour is cheaper.

Basically, or high Standard of Living is working against us.

Hydroelectricity

The Development of hydroelectricity in Quebec gave Quebec an advantage for the development of new industries.

Because of Quebec’s POTENTIAL for such stations, the first hydroelectric stations were built in the 19th century

At first stations were privately owned and operated for individual projects and industries – selling their power at whatever price.

Hydroelectricity

Hyrdo Quebec was nationalized in 1963 in order to control the price of electricity which was considered a necessity (like education or Medicare.)

By the 1970’s Quebec was the world leader in the construction of hydroelectric stations.

All this cheap energy makes Quebec an extremely attractive place to set up industries – especially in the secondary sector.

However, such stations have large environmental ramifications.

Manic-Outardes Complexes

La Grande Complex

The Tertiary Sector

Throughout the 20th century as the Tertiary Sector started to grow, a new kind of job was created – THE OFFICE WORKER.

Industrialization led to more consumption, which led to more jobs and so on.

As the population grew, so did the need for SOCIAL SERVICES, which in turn created even more office jobs.

However, jobs in the tertiary sector did not necessarily pay better – so at first office workers were generally women.

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Concentration of Capital

By the end of the 19th century, most of the major industries were owned and operated by a few privileged Anglophones.

The best example for this were the original banks. The banks loaned out capital for the creation and

expansion of companies. Therefore they were an integral part of the economic development.

But there were only a few banks and a few Anglophones therefore controlled most of the capital – this problem was only rectified after WWI.

Economic Cycles

All economies go through a periods of growth and recession (see figure 2.35 on page 85)

The main periods of growth are as follows:

1867 – 1929 Growth 1929 - 1939 The Great Depression 1945 – 1973 The Baby Boom 1973 The Energy Crisis 1981 and some other short recessions

Early Industrialization

Economic Prosperity = the Roaring 20’s

The Great Depression

World War II

The 1950’s and the1960’s

The Energy Crisis 1973

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Economic Policies

Before the Great Depression, the Canadian government rarely interfered with economics.

In 1934, the Bank of Canada was created to control credit and therefore INLFATION – in the hopes of steadying the economy.

The Federal government also implemented programs such as Unemployment Insurance (or EI)

The idea was to insure the minimum welfare of our citizens.

This welfare state is supported by things like Income Taxes.

Economic Policies

In Quebec, certain agencies were also created to help out:

L’Office du Credit Agricole 1936 – made small loans for the creation of farms.

Regie des Rentes du Quebec 1965 – for retirement pensions and family allowances.

Caisse de Depot et de Placement du Quebec 1965 – for managing the investments of the Quebec goevrnment.

Foreign Trade Policies

Besides the Reciprocity Treaty of 1873 with the United States, the other major foreign trade policy was the National Free Trade Agreement [NAFTA] in 1993.

Although Canadian exports increased, a lot of manufacturing jobs were re-located to Mexico where the labour is cheaper.

Work Relations

Industrialization created a new social class = THE WORKING CLASS.

The tough conditions in the factories led workers to create UNIONS, which were illegal until 1872.

Quebec created the first legislation in 1885 that insured the minimum age of workers (14) and the maximum number of hours (60 for women, 72.5 for men).

It was called the Provincial Manufacturing Law

Work Relations

The 1940’s saw many strikes as unionized worker fought for better working conditions: better wages, vacation pay, pensions and social benefits.

But not all groups were treaty equally, men and women for example, as well as those closer to urban areas and so on…

By the end of the 20th century the expansion of the Tertiary Sector and technology made education an essential condition for employment.

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