Riendeau A Roger E. Brief History of Canada

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A BRIEF HISTORY OF CANADA

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Company to Canada was completed in 1870, Governor Musgrave

appointed a delegation to negotiate union with Canada. To join Con-

federation, British Columbia demanded that Canada assume the colo-

ny’s $1 million debt, implement responsible government, undertake a

public works program, and complete a road linking the isolated region

to the rest of the country. Negotiating on behalf of the Dominion gov-

ernment, George-Étienne Cartier did not merely agree to these demands

but also gave British Columbia control over Crown land within the

province and promised the construction of a railroad linkage with

Canada to be completed within 10 years. The ambitious promise of a

railroad in particular silenced any talk of annexation, and British

Columbia became Canada’s sixth province on July 20, 1871.

With its transcontinental ambitions realized, Canada could focus

more attention on luring the remaining Atlantic holdouts into Confed-

eration. Despite hosting the original Confederation conference at Char-

lottetown in 1864, Prince Edward Island had rejected union with

Canada because of its dissatisfaction with the proposed ﬁ nancial terms

and its preference for the prospect of economic union with the United

States. Prince Edward Island hoped to negotiate a reciprocity agree-

ment with the United States in return for the continued right of Amer-

ican ﬁ shermen to operate in island waters. Fearing the possible loss of

Prince Edward Island to the Americans, Prime Minister Macdonald in

1869 offered the province more generous ﬁ nancial terms than had been

proposed ﬁ ve years previously, in addition to improved transportation

and communication linkages with the mainland and assistance in buy-

ing out the remaining British absentee landowners who still dominated

the island. Although the offer was not immediately accepted, by the

early 1870s failure to negotiate a free trade agreement with the Ameri-

cans, continued economic stagnation, and the threat of provincial

bankruptcy as a result of overly ambitious railway-building schemes

induced Prince Edward Island to reconsider. Thus, on July 1, 1873,

Prince Edward Island became Canada’s seventh province.

The transcontinental territorial expansion of the Dominion of Can-

ada (excluding Newfoundland) was completed in July 1880 when Brit-

ain, which had claimed ownership of the Arctic archipelago by virtue

of discovery and exploration, transferred the northern region to Canada

(Waite 1971). The scattered colonies of British North America had

evolved into the second-largest nation in the world, and the challenge

ahead for Canada was to unite politically, economically, and socially

this vast domain extending from the Atlantic to the Paciﬁ c and to the

Arctic Oceans.

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The Emergence of National Party Politics

The establishment of a national constitution and territorial expansion

across the continent profoundly changed the nature and scope of poli-

tics in the former British North American colonies. Whereas political

life before Confederation had featured localized factionalism and mini-

mal interaction between colonial administrations, the creation of a

national government in 1867 focused politics on Ottawa and its rela-

tions to the provincial capitals. When chosen by Lord Monck, Canada’s

ﬁ rst governor-general, to serve as interim prime minister until the ﬁ rst

national election could be held in the late summer of 1867, Macdonald

expressed a desire for a truly national government unencumbered by

partisan political division. Accordingly, his ﬁ rst Cabinet was a coalition

of representatives from different regions, cultures, religions, and eco-

nomic interests. Nevertheless, the politically crafty Macdonald could

not resist the temptation to follow the long-standing political tradition

of awarding the more powerful positions in the government and the

federal bureaucracy to his supporters and favorites. So, as differing

concepts of national development began to emerge, various political

factions that existed prior to Confederation soon coalesced into two

major parties—the Conservatives and the Liberals—with representa-

tion and organization throughout the nation.

During the ﬁ rst national election campaign of 1867, the nascent

Conservative Party led by Macdonald was successful in presenting itself

as the architect and defender of a highly centralized federal union

which was essential to fulﬁ ll its ambitious plan of nation-building

“from sea to sea.” The promise to link British Columbia to Canada by

a railway within 10 years reﬂ ected the Conservative devotion to trans-

continental expansion expeditiously and at whatever cost. Macdonald

understood that the key to accomplishing his nation-building goals and

to sustaining Conservative hegemony was to consolidate the political

partnership between the Anglo business community and the French-

Canadian leaders, embodied in his enduring alliance with Cartier that

had been instrumental in the achievement of Confederation. Macdon-

ald continued to rely on Cartier as his chief political lieutenant until his

death in 1873. Afterward, Macdonald turned to Hector Langevin and

then Adolphe Chapleau to help deliver a solid bloc of Quebec seats into

the Conservative fold. The partnership of Macdonald and Cartier began

a political convention that has generally continued to the present: a

prime minister, whether English-speaking or French-speaking, collabo-

rates with a lieutenant who represents the other major linguistic group

in order to ensure broad-based support for the governing party.

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Meanwhile, the opposition Liberal Party was emerging out of a

loosely knit collection of discontented provincial reform remnants ral-

lying around George Brown, who had left the Great Coalition with

Macdonald and Cartier once Confederation became a certainty. Brown’s

narrow defeat in the wake of dubious Conservative election tactics in

1867 resulted in his resignation as Liberal leader and his eventual

replacement by Alexander Mackenzie. Mackenzie lacked the dynamism

of Brown or Macdonald to unite his party; moreover, the Liberals

remained only tenuously connected to one another by a common

antipathy toward the Conservatives and their nation-building strategy,

rather than by a common philosophy or policy platform. Besides

launching persistent attacks on alleged government corruption and

waste, Mackenzie’s Liberals came to stand for a more gradual and ﬁ s-

cally conservative course of transcontinental expansion and support for

more provincial rights. Indeed, the narrow Liberal defeat at the hands

of the Conservatives in the second general election in 1872 reﬂ ected

the ambivalence and uncertainty of the Canadian people regarding the

appropriate course of national development.

Macdonald’s Conservatives were reelected on the promise to build

a railway to the Paciﬁ c. Since the estimated $100 million cost of the

railway link to the Paciﬁ c was considered beyond the resources of

public enterprise, the Canadian government offered a subsidy of $30

million and 50 million acres of primarily western land to any private

company that could undertake this ambitious project. In the ensuing

competition for the railway-building charter, the Montreal-based

Canadian Paciﬁ c Railway Company emerged victorious over Toronto

interests, which not only accused the government of regional favorit-

ism but also charged that its bidding rival was ﬁ nancially controlled

by the Northern Paciﬁ c Railway Company in the United States. Even

more serious allegations emerged in 1873 that the favored Montreal

group, headed by steamship magnate Sir Hugh Allan, had contributed

over $300,000 to the Conservative Party’s reelection campaign of the

previous year, with Macdonald and Cartier being the chief beneﬁ cia-

ries. As the incriminating evidence of ﬁ nancial kickbacks mounted

and Conservative support in Parliament wavered, Macdonald and his

Cabinet resigned rather than risk defeat by a motion of nonconﬁ dence

in the government. In accordance with parliamentary convention, the

governor-general called upon Mackenzie as leader of the opposition

to form a new government, the ﬁ rst Liberal administration in the

young nation’s history. Capitalizing on the public outrage over the

so-called Paciﬁ c Scandal, Prime Minister Mackenzie dissolved Parlia-

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ment and led his Liberal Party to a decisive victory in the election of

1874.

From the outset, the Mackenzie government was plagued by continu-

ing internal party dissension and a coinciding worldwide economic

depression. Even in power, the Liberals functioned more like a coalition

of factions upholding regional interests than like a national political

party with a transcontinental vision. Emphasizing the ﬁ nancial hard-

ships arising from the depression of 1873, Mackenzie postponed the

contracted railway to the Paciﬁ c in favor of building the line in sections

to link with major Canadian waterways and American tracks. Whereas

the Conservative strategy was to collaborate with the business commu-

nity to build a complete east-west line in advance of settlement, the

more cautious and economy-minded Liberals approached railway con-

struction as a public enterprise to be undertaken only where settlement

warranted. Thus, the Intercolonial Railway was completed to Halifax in

1876, while short lines were built running eastward from Winnipeg and

westward from Lake Superior, connected in between by the Dawson

Road and water routes that required some 70 portages. Responding to

British Columbia’s secession threats, the Mackenzie government imme-

diately built a section of railway linking the Paciﬁ c Coast to the interior

mountains and linked the province to eastern Canada by a telegraph line

and a wagon road. This policy was particularly appealing to Ontario,

which was far more interested in expansion into the North-West Terri-

tories than into the more remote Paciﬁ c region (Waite 1971).

Liberal economic hopes also rested on a renewal of the Reciprocity

Treaty of 1854, allowing the free trade of natural products between the

United States and Canada. Having attacked Macdonald for his failure to

secure reciprocity, the Liberal government sent Senator George Brown

to Washington to negotiate a trade agreement in 1874. However, strong

protectionist sentiment in the U.S. Senate rejected reciprocity, leaving

the Liberals without a viable commercial policy. In the face of mount-

ing ﬁ nancial difﬁ culties, the free trade Liberals resorted to cutting gov-

ernment expenses and raising tariffs in order to generate sufﬁ cient

revenue (Masters 1983).

Although its economic policies were a failure, the Liberal administra-

tion took advantage of public reaction to the Paciﬁ c Scandal to achieve

political and constitutional reforms that advanced Canadian democracy

and nationhood. In order to minimize corruption and voting irregulari-

ties, the secret ballot was introduced, election dates and procedures

were standardized across the country, candidates were required to

record election expenses, and taverns were closed on election day.

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Other efforts at democratization included the elimination of dual rep-

resentation, which had hitherto allowed a politician to represent simul-

taneously a federal and a provincial parliamentary seat; and the extension

of the franchise effectively to all males (except for Native peoples),

whether they held property or not. In 1875, Minister of Justice Edward

Blake established the Supreme Court of Canada to review Canadian laws

and to reduce appeals from the Canadian courts to the Judicial Commit-

tee of the Privy Council in Britain. The Judicial Committee continued to

be the court of ﬁ nal appeal for nearly three-quarters of a century. Fur-

thermore, Blake engineered the withdrawal of the governor-general’s

power to disallow legislation without consulting the Canadian Parlia-

ment, thereby reducing him to an executive ﬁ gurehead before the prime

minister and the Cabinet. Although the Liberal reforms expanded Can-

ada’s powers of self-government, they were overshadowed by economic

policies that failed to unite and strengthen the nation.

The National Policy

Widespread disenchantment with the Liberals renewed Conservative

prospects for returning to power. But Macdonald realized that he would

have to offer voters an appealing alternative to secure victory in the

election of 1878. Macdonald succeeded in capturing the public imagi-

nation with the Conservative Party platform—called the National

Policy, consisting of a protective tariff to stimulate Canadian industry,

the completion of a transcontinental railway network, and the settle-

ment of the West. Although the three strategic objectives of the

National Policy originated prior to Confederation, Macdonald seized

the opportunity to package them into an integrated nation-building

scheme with a patriotic name. Indeed, the National Policy would

remain the fundamental strategy of Canadian economic development

for more than half a century (Fawke 1957; Brown 1964).

Macdonald reasoned that if the United States would not agree to

reciprocity of trade, then Canada would counter with “reciprocity of

tariffs.” Accordingly, the National Policy was ofﬁ cially inaugurated in

1879 when the Macdonald government raised customs duties on a wide

range of manufactured and agricultural imports to unprecedented lev-

els in a deliberate effort to encourage Canadians to buy domestic over

foreign products. By increasing the cost of imports by as much as 35

percent, higher tariffs enabled Canadian manufacturers, mostly con-

centrated in the emerging industrial centers around Montreal and

Toronto, to become more competitive with their much larger counter-

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parts in the United States and Britain. Besides boosting infant domestic

industry, higher tariffs encouraged foreign capital investment, espe-

cially by inducing American companies to establish branch plants in

Canada in order to surmount the tariff barrier. Whereas future genera-

tions would lament Canada’s precarious dependence on foreign invest-

ment, Canadians in the late 19th century welcomed American branch

plants as a source of tax revenue for government and factory jobs for

people who were increasingly opting for or considering immigration to

the United States.

However, higher tariffs also made the cost of buying manufactured

goods in Canada more expensive, particularly for farmers who exported

most of their products and thus could not beneﬁ t from the higher prices

in the Canadian market. Adding to the suffering of farmers was the ten-

dency for their exports to be undermined in foreign markets by retalia-

tory tariffs. For the most part, farmers found little consolation in the

claim that protecting domestic industry would eventually expand the

market for their products in Canada and would enable them to enjoy the

beneﬁ ts of the nation’s greater wealth and prosperity. The National

Policy would remain a source of agrarian discontent in Canada.

With the passing of the cyclical depression and the revival of world

trade in the late 1870s, the most immediate impact of the higher cus-

toms duties was to increase government revenue, which had hitherto

been the primary purpose of Canadian tariff policy. While Alexander

Galt’s tariffs of 1858–59 were responsive to the demands of embryonic

Canadian industry, his policy was more urgently motivated by the need

to raise revenue to bail out government-supported railway enterprises.

Two decades later, the link between tariffs and railways was renewed

with greater emphasis in Macdonald’s National Policy. The building of

a transcontinental railway was essential to unite the country physically,

to fulﬁ ll the promise made to British Columbia, to mobilize military

forces to defend Canadian territory, and to develop an independent and

interdependent national economy based on an exchange of western

agriculture and eastern industry.

More favorable economic conditions encouraged a private syndicate

of investors led by George Stephen, president of the Bank of Montreal;

Donald Smith, governor of the Hudson’s Bay Company; and J. J. Hill,

an American railway promoter, to reconstitute the Canadian Paciﬁ c

Railway Company (CPR) in 1880. Because British investors were reluc-

tant to risk their capital in this ambitious railway project that reminded

them of the losses of the Grand Trunk Railway, the CPR became for the

most part a Canadian enterprise centered on Montreal. In a sense, the

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building of a transcontinental railway offered Montreal the prospect of

renewing its links with the vast fur-trading domain of the North West

Company, and thereby reviving the old commercial empire of the St.

Lawrence. The CPR also intensiﬁ ed the rivalry between Montreal and

Toronto, which were vying for metropolitan dominance in Canada

(Innis 1971; Berton 1970, 1974).

In return for building a railway from central Canada to the Paciﬁ c

Coast within 10 years, the Canadian government granted the CPR the

sections of line already completed (nearly 750 miles of track worth an

estimated $31 million), a subsidy of $25 million, and 25 million acres

of prime western land (which was eventually sold for more than $100

million). In addition, the CPR was granted a tax exemption on its con-

struction materials and railway property, along with a 20-year monop-

oly of trafﬁ c in western Canada. This monopoly meant that no

competing line could be built to the border to link up with American

systems until the CPR’s east-west trafﬁ c was well-established. The Lib-

eral opposition vehemently attacked the Conservatives for this “act of

insane recklessness” and for their unparalleled extravagance in award-

ing the CPR contract.

Certainly, the challenge of completing the longest railway line then

existing in the world, spanning over 3,000 miles through such treach-

erous terrain as the rugged Canadian Shield and the towering Paciﬁ c

mountain ranges, severely strained the ﬁ nancial and human resources

of a nation of little more than 4 million people. By comparison, the

United States had had a population of 40 million when it had com-

pleted its ﬁ rst transcontinental line two decades earlier. Nonetheless,

the CPR project proceeded vigorously under the management of Amer-

ican engineer William Van Horne, who demonstrated his reputation for

driving his construction crew as mercilessly as he drove himself. Van

Horne was determined to build a superior quality railroad that would

endure and to complete it at a mercurial pace in order to satisfy the

demands of the investors and to ward off the competition of the North

Paciﬁ c Railway, the American transcontinental line under construction

to the south. Furthermore, the progress of construction was plagued by

what Van Horne called “engineering impossibilities,” including laying

tracks along the sides of mountains, blasting tunnels through rocks,

and bridging swift mountain rivers. Consequently, construction costs

escalated well beyond the original estimates. When Stephen could not

raise sufﬁ cient money from the sale of stock and from private capital,

the CPR turned to the Canadian government for an additional $38.5

million in subsidies and $35 million in loans. CPR requests for more

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government support triggered such stormy debates in Parliament that

by March 1885 even Prime Minister Macdonald despaired that his

“national dream” had become a ﬁ nancial nightmare.

With the most difﬁ cult section through the Paciﬁ c mountains still to

be completed and the CPR syndicate hovering on the brink of bank-

ruptcy with little hope for further government assistance, Louis Riel

ironically came to the rescue. In response to the outbreak of the North-

West Rebellion, a military expedition was transported by the CPR from

Ottawa to Winnipeg in six days, certainly a profound contrast to the

three-month journey that the Wolseley expedition had to endure to

quell the ﬁ rst Riel uprising in 1870. This spectacular demonstration of

the value of the railway convinced the Canadian Parliament to allocate

funds to complete the transcontinental line. On November 7, 1885,

Donald Smith drove in the last spike of the transcontinental railway at

the village of Craigellachie in the Selkirk Mountains of British Colum-

bia to make Macdonald’s national dream a reality. Nine days later,

Macdonald’s nemesis, Riel, was hanged in a Regina jail, likely unaware

of the paradox that his act of treason in leading the North-West Rebel-

lion had helped to unite the nation against which he fought.

With the completion of the CPR in 1885, following the implementa-

tion of the protective tariff policy in 1879, Macdonald’s National Policy

appeared to be taking shape as planned. The protective tariff was stim-

ulating eastern industry, which not only could supply manufactured

goods for western farmers but also could employ a growing urban

population that would constantly need their agricultural produce. The

railway could transport settlers and manufactures to the West and prai-

rie agricultural products to eastern markets. But the realization of such

an integrated national economy from coast to coast depended upon

settlement of the West, the third strategic objective of the National

Policy. Without a populated West, there would be limited east-west

trade and thus insufﬁ cient trafﬁ c to sustain the CPR in which the Cana-

dian government had invested so heavily.

The groundwork for western settlement was laid in the Manitoba Act

of 1870, which stipulated that all ungranted land within the new prov-

ince (as well as the remaining North-West Territories) was retained by

the federal government to be administered “for the purposes of the

Dominion.” Following practices in the American West in order to

appeal to prospective immigrants from there, the Canadian government

divided land into townships of six square miles, and each township was

further subdivided into 36 sections of one square mile or 640 acres.

Once it had fulﬁ lled its land grant commitments to the Hudson’s Bay

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Company and the Canadian Paciﬁ c Railway Company, the government

sought to encourage settlement by passing the Dominion Lands Act in

1872. The act provided each family or 21-year-old male a free grant of

one quarter section (160 acres) in return for payment of a $10 registra-

tion fee, residence on the land for three years, cultivation of 30 acres,

and the erection of a permanent dwelling. A settler who met these obli-

gations qualiﬁ ed to purchase an adjoining quarter section at a reason-

able price. The government was optimistic that its policy of free land

grants would attract a multitude of western settlers whose presence

would stimulate widespread commercial and industrial development.

To maintain law and order in the West, the Macdonald government

on the eve of the Paciﬁ c Scandal organized the North-West Mounted

Police (later the Royal North-West Mounted Police and now the Royal

Canadian Mounted Police, or RCMP). Modeled after the Royal Irish

Constabulary and the American cavalry, this federal police force of 300

men arrived in 1874 to establish a network of posts, including Fort

Macleod, Fort Edmonton, Fort Calgary, and other strategic points

throughout the North-West Territories. Dressed in their distinct bright

scarlet tunics that reminded the Native peoples of the British redcoats

whom they had long ago learned to trust, the Mounties patrolled an

area the size of western Europe. They drove out American whiskey

traders who had been exploiting the Natives, discouraged the tribes

from ﬁ ghting among themselves, and helped to preserve peaceful rela-

tions not only between Natives and settlers but also between ranchers

and homesteaders. The Mounties were also instrumental generally in

preparing the Native peoples for the dramatic changes in their lives

resulting from the coming of white settlement and especially in assist-

ing with the peaceful movement of various tribes onto the reservations

(Macleod 1978).

The more orderly settlement of the Canadian West, in contrast to the

violence and warfare that plagued the American western frontier, can

also be attributed to a series of seven “Indian treaties” negotiated from

1871 to 1877. Adhering to the Royal Proclamation of 1763, which pro-

hibited settlers from occupying territory that the Native peoples had

not surrendered to the Crown, the Canadian government recognized

that it had to negotiate treaties before settlement could proceed. The

underlying objective of government policy was to relocate Natives on

segregated reserves, to encourage them to adopt an agricultural way of

life, and to convert them to Christianity in the hope that they would be

assimilated into Canadian society. In accordance with these treaties,

the federal government acquired legal control of Native ancestral land

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in northwestern Ontario and the western prairies in return for annui-

ties, reserves, and freedom to hunt on Crown lands. Although both

parties negotiated in good faith, differences in language, culture, and

customs inevitably led to confusion over the nature and meaning of the

treaties. Whereas the government maintained that it had purchased the

land once and for all time, some Native leaders with no concept of

property ownership believed that they had agreed to accept gifts in

return for the temporary and mutual use of the land. Amid such funda-

mental misinterpretations and misunderstandings, aboriginal rights

would emerge as a controversial issue in 20th-century Canadian poli-

tics (Miller 1997).

To facilitate the assimilation of the Native peoples through the

reserve system, the federal government passed the ﬁ rst Indian Act in

1876. The act and its subsequent amendments not only controlled all

aspects of Native life but also viewed Native peoples as special wards of

the state without the privileges of full citizenship. During the treaty

negotiations, the government neglected to inform Native leaders of the

degree to which this legislation would govern the lives of their people.

In 1880 the federal government also established the Department of

The greatest challenge in the construction of the Canadian Paciﬁ c Railroad in the 1880s was

cutting through the massive Canadian Shield and the Western Cordilleras, as illustrated by

the Selkirk Mountain range in British Columbia.

(S. J. Thompson, Library and Archives Canada/

PA-051352)

NATION-BUILDING ASPIRATIONS AND STRATEGIES