The Maritimes did not get a ‘fair deal’ by joining Confederation

Written By Amiel Pion, Posted on January 8, 2020

Policies that have protected the political and economic interests of Central Canada have and continue to hinder provincial sovereignty. Not only in the West, but in the Maritimes too. 

In the late-1870s, Prime Minister Sir John A. MacDonald put in place an economic and political strategy: The National Policy, where Canada “levied high tariffs on foreign imported goods, to shield Canadian manufacturers from American competition.”

The National Policy relied on expensive domestic goods (i.e. commercial goods, food and farming equipment), which deterred economic growth across Canada, preventing immigrants from homesteading in the West until the 1890s.

However, MacDonald’s policies hit the Maritimes hardest; its economic productivity led to a prolonged economic and population decline, where they were unable to sustain their manufacturing industry and prowess in exporting goods.

From the onset, Atlantic Canada was reluctant to join Confederation for fear of losing its autonomy, prior to the National Policy. They remained firm on free-trade with the United States, which contrasted the protectionism of Central Canada.

The sentiment was out of devotion to the British Empire, which manifested through protectionist economics towards American manufacturing goods.

The culprits were amongst the political, academic and business classes located in metropolitan Ontario and Quebec. They weld “the ‘power of the metropolis’… [to influence] decisions of national importance” that ultimately furthered the “discrepancy between the centre and the margin.”

The exploitation of the Maritimes is best described by the Metropolitan-hinterland thesis, where metropolitanism is the “ultimate expression […] of “one individual sitting in a small room” to […] impose unequal terms of exchange.”

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“In the 19th century the locus of metropolitan dominance was based across the Atlantic in Britain. Now it rests in central Canada.”

The extent of the Maritimes’ economic decline

In metropolitan markets, “manufacturing is emphasized because [of] the core’s accessibility to national markets … [which makes] possible the manufacture of a wide range of primary, consumer, and producer goods … far more efficiently and economically.”

“[Particularly] in the 1890s and early 1900s, Montreal replaced Halifax and Saint John as the dominating metropolitan influence in the Maritimes. But this leadership was soon challenged by Toronto during the 1910s and 1920s.”

Though Atlantic Canada exported goods, including fish, lumber, coal, and some grain amongst others, that wasn’t enough to sustain the optimism of the pre-Confederation era.

“In 1901, Toronto firms had located only nine branches in the region; by 1931 the total was 228, just one less than Montreal. No other urban centres were nearly as competitive, not even American or British cities, and Halifax and Saint John by this time offered only limited competition.”

“The force of the metropolis in manufacturing was exerted most dramatically in the 1890s and early 1900s through the takeovers and subsequent dismantling of key manufacturing industries, including cotton textiles, rope and cordage, sugar, glass, and paint — almost all by corporations headquartered in Montreal.”

“Between 1901 and 1921 […] they more than doubled from 416 to 950.”

“When the economy of the Maritimes went into serious decline in the 1920’s, forcing a net loss of about 1,100 businesses, branch businesses managed to hold firm, and in so doing gained a greater share of all business activities.” 

“In 1931 […] more than 90 per cent of the branch businesses headquartered outside of the region were backed by companies holding assets of more than $1,000,000. At the same date, less than two per cent of regional firms, including those managing branch businesses, were similarly financed.”  

“One of the inherent features of metropolitanism is the extension into the hinterland of economic activities headquartered in the metropolis.” Effectively, “[branch] businesses […] [became] the emissaries of the metropolis, advancing its economic interests and consolidating its empire throughout the hinterland.”

Central Canada exploited the Maritimes

The rising costs of importing and exporting products reverberated negatively on Maritime businessmen, where the mass distribution of goods was increasingly lost to the conglomerates of Central Canada.

Amongst those sympathetic to their claims was journalist and gifted orator Joseph Howe, leader of the Anti-Confederation Party and ardent free-trader who opposed the Laurentian establishment.

As the father of responsible government, he championed the “no taxation without representation” mantra that was consistent with the tenets of the American Revolution. 

Howe states: 

“…the scheme [of confederation] would, if adopted, deprive the people [of Nova Scotia] of the inestimable privilege of self-government, and their rights, liberty and independence, rob them of their revenue, take from them the regulation of trade and taxation, expose them to arbitrary taxation by a legislature over which they have no control, and in which they would possess but a nominal and entirely ineffective representation; deprive them of their invaluable fisheries, railways, and other property, and reduce this hitherto free, happy, and self-governed province to a degraded condition of a servile dependency of Canada.”

Hostilities towards Confederation led to a separatist movement that elected 36 of 38 Anti-Confederation MPs in the Maritimes. However, the movement subsided shortly thereafter, upon immense pressure from Britain.

The separatist movement of the Maritimes is a largely forgotten part of Canadian history. But, its importance to contemporary politics reigns true in the alienation of Western Canada.

Upon joining Confederation, the Maritimes lost much of their political bargaining power, and were unable to achieve lasting economic growth. 

While there were other reasons for the subpar economic performance of the Maritimes, primarily their inability to diversify within its means (i.e. shipbuilding used steel instead of wood), importing manufacturing goods became more expensive because of the higher tariffs, while expensive domestic products of mediocre quality were prioritized from Central Canada.

Through the metropolitan-hinterland relationship, Central Canada’s interests were prioritized at the expense of the Maritimes. 

Population decline led to further erosion of their political influence towards the Canadian Parliament, while the Senate seats failed to defend their regional interests against the might of the House of Commons. 

Now, dependence on provincial deficits and federal transfer payments have the Atlantic provinces amongst the recipients of federal transfer and equalization payments.

Ultimately, decisions that benefited one region were to the detriment of another.

Amiel Pion

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