How Did Canada's Economy Change In The Early 1900s?
Ontario and Quebec constitute Central Canada, a region that accounts for over 58 per cent of Canada'due south gross domestic product (GDP). The economic history of the region begins with the hunting, farming and trading societies of the Indigenous peoples. Following the arrival of Europeans in the 16th century, the economy has undergone a series of seismic shifts, marked by the transcontinental fur trade, then rapid urbanization, industrialization and technological modify.
Ontario and Quebec constitute Central Canada, a region that accounts for over 58 per cent of Canada's gdp (Gdp). The economic history of the region begins with the hunting, farming and trading societies of the Indigenous peoples. Following the arrival of Europeans in the 16th century, the economy has undergone a series of seismic shifts, marked past the transcontinental fur trade, then rapid urbanization, industrialization and technological change.
This entry is ane of iii survey entries on the economic history of Canada. ( See also Economic History of Atlantic Canadaand Economical History of Western Canada.)
Early Economy
Most of the Indigenous peoples of what is now Central Canada lived past hunting and gathering; though, agronomics was established in many nations, especially among Iroquoian-speaking nations such as the Huron, Haudenosaunee, Petun, Neutral. Fur-bearing animals were trapped to provide wearable, and silver and copper were used to brand ornaments. Trading amidst Indigenous nations for a broad variety of items was common, only there does not seem to have been whatsoever specialized merchant class. In the 16th century, French and British traders began to purchase furs, for which they offered iron tools and weapons. The upshot was profound economical and cultural changes amidst Ethnic peoples, who were to play a critical function in the early fur trade.
Permanent European settlers kickoff came to Canada to exploit the fishery and the fur trade (see New France). Until the terminate of the 17th century, because the climate and soil were non encouraging, agricultural progress was slow (run across History of Agriculture). Like the French, English language-speaking merchants engaged in the fur merchandise; after the Conquest (1759–lx) — when many British businessmen began to command a large portion of the fur trade from Montreal — they also speedily extended their interests throughout commerce and finance. The population grew through natural increment and through clearing from Uk.
By the 1820s, the good agricultural land in the St. Lawrence Valley had about all been taken up. After the North W Visitor merged with the Hudson's Bay Company in 1821, the transcontinental fur trade was no longer managed from Montreal. Just by that time, Upper and Lower Canada had developed an immense trade in timber, which went starting time to Britain and then, after mid-century, to the United states of america and to domestic buyers (see Timber Trade History).
Until the 1780s, at that place was no significant European population in nowadays-solar day Ontario, although its waterways were used by the fur traders. Settlement began with the arrival of the United Empire Loyalists, British and American settlers, and British troops and officials. Wood land was gradually cleared, and export trades in wheat, potash and timber developed. A few roads and canals were built, of which the most important were the Welland Culvert and St. Lawrence River canals. By 1867, most good land in the province had been claimed, although not all of it was under cultivation.
Confederation and Industrialization
At the Conquest, present-day Quebec independent 3 towns, Montreal, Quebec City and Trois-Rivières. Ontario contained none. Just new towns soon appeared forth with settlement and with the development of commerce and government. Yet even in 1871, much of Fundamental Canada'due south manufacture, including the two cracking industries, milling and lumbering, was dispersed through the countryside or in small villages. After Confederation, however, rapid industrialization and urbanization occurred in both provinces, so that past 1911 one-half of Ontario's population lived in cities and towns.
From 1870 to 1900, some established industries such as tailoring and shoemaking were condign factory activities, and provincial governments began to regulate working conditions. Minimum wage legislation came much later, with Ontario adopting it partially in the 1920s. Some unions were created in the 1830s. By the 1880s, with the rise and decline of the American-based Knights of Labor, matrimony activity increased. Merely relative to the non-farm workforce, union membership remained small-scale until the 1940s, when federal and provincial protection was extended to unions (see Working-Form History).
Rise of New Industries
Central Canada's industrial advance was particularly rapid between 1896 and 1914, when the nation experienced investment and export booms. After 1900, a few industries such every bit carriage-making and blacksmithing declined. Merely new industries appeared: electrical equipment and chemicals in the 1890s, cars and aluminum after 1900, pulp and paper between 1890 and 1914, radio and domicile appliances in the 1920s and aircraft in the 1940s. Cheap hydroelectric power during this period helped accelerate industrial change, as did both globe wars, and nuclear power in the 1970s (at least in Ontario). In both provinces labour was drawn from natural population increase and clearing.
At that place were cyclical downturns in the mid-1870s, the early 1890s, the early 1920s and particularly betwixt 1929 and 1933, with the Dandy Depression lasting until the start of the Second World State of war. Thereafter, economic expansion connected largely uninterrupted until another cyclical downturn in the early on 1980s ( see Business Cycles).
Considering so many of the newer industries were concentrated in Ontario, during the 1920s Quebec's economical accelerate was less spectacular; although it shared fully in the development of lurid, paper and nonferrous metals, information technology took no part in the automotive manufacture, and little part in the electrical apparatus industries. Too, because a higher proportion of Quebec industries were depression-productivity activities that could not pay loftier wages, Ontario workers earned more on boilerplate than Quebec workers. After 1945, and particularly later on the 1960s, these gaps closed. Both federal and provincial authorities spent lavishly to attract factories into Quebec; indeed, the Quebec government endemic plants in such industries as steel-making and auto assembly. Quebec'due south birth rate also became the lowest in Canada, and average real wages rose.
Although the national fiscal heart had shifted from Montreal to Toronto by the beginning of the Second Earth War, Quebec's financial system became more sophisticated and more francophone in its attitudes. In the 1970s and early 1980s, as anglophone business organisation and professional people left a province in which they no longer felt at domicile, at that place was increasing scope for francophone expertise. Much more serious than the political dubiousness amid investors in Quebec were the troubles of its established textile and clothing industries, increasingly threatened by cheaper goods from developing nations. The federal government provided advice, new kinds of protectionism and adjustment finance. Cheers to the presence of Northern Telecom and Bombardier, for example, Quebec became an of import player in the loftier-tech and aerospace fields.
Farming
Agriculture in Central Canada began as a boxing against forest and climate. The industry so passed through an consign phase, and past 1900 it depended chiefly on the local urban markets, which information technology was non able to supply fully.
Around 1800, the farmers of the lower St. Lawrence produced an exportable grain surplus, simply for most of the 19th century Quebec residents depended on grain from Ontario. In plow, for most of the century Ontario regularly exported grain non only to Quebec, but overseas. However, afterwards 1880, equally Ontario's population rose while its wheat acreage declined, the province gradually imported more than wheat from western Canada while increasing its output of oats and other forage crops. Betwixt 1871 and 1914, both Ontario and Quebec specialized increasingly in meat and dairy products. From the 1860s until the 20th century, much cheese, butter and Ontario bacon were sold away (meet Pig Farming); thereafter, more of these goods were consumed within Central Canada. After the First Earth War, with the turn down of the horse and the resulting fall in oats acreage, the shift to other fodder crops became even more pronounced and some land began to autumn out of cultivation. Meanwhile, city growth encroached on farmland.
From Confederation to 1929, spasmodic efforts were made to extend the frontier of agricultural settlement in Ontario and Quebec. These efforts were not very successful, merely by 1929 there were pockets of farmland effectually Lac Saint-Jean, the Ontario Dirt Belt, Rainy River and Thunder Bay. More of import for northern development were mining, and pulp and paper. These activities scattered small communities throughout northern Ontario and Quebec between 1886 (when the Sudbury nickel deposits were first exploited) and 1929.
Growth of Cities
Past 1867, the great cities of Primal Canada were Montreal and Toronto. The former began as a port and commercial heart. By mid-19th century, it was a place of industry, and by 1900 it was producing large amounts of clothing and textile products, electric equipment, railway rolling stock and many light industrial products. Information technology was also an of import financial centre. Toronto, afterwards a tedious and inauspicious beginning, developed after 1867 on similar lines, much of its early prosperity being based on Great Lakes shipping. By 1900, both cities had energetic banks and insurance companies and active stock exchanges (run across Toronto Stock Commutation). Both cities had begun to attract immigrants from central Europe and Italy. But it was largely natural increase and immigration from U.k. that built the cities of Central Canada between Confederation and 1939. Indeed, earlier 1900 many Quebecers and Ontarians migrated to the United states, where prospects were improve; Canada was not managing to retain the natural increase of its ain population. However, betwixt 1900 and 1929, and once again afterward 1939, economical prospects were and then much better that emigration was no longer a problem. Really large-scale immigration from Italy and primal Europe occurred but subsequently the Second Earth War.
In Quebec and Ontario, equally elsewhere in Canada, urbanization and industrialization were assisted by the austerity and diligence of the population, whose members were also willing to borrow funds and skills from away and, at least until the 1970s, to receive immigrants during times of prosperity. Educational arrangements helped, first by providing for general literacy; side by side, past arranging for higher liberal and professional education; and then, starting in the 1970s, by offering various sorts of specialized secondary and tertiary technological studies in, for instance, engineering and agriculture.
By 1987, both economies had become very urbanized, and "service" industries and occupations were much more of import than manufacturing, which in turn was more than important than agriculture, forestry or mining. The earnings from service industries helped to balance Central Canada's accounts with the remainder of the country, a process to which the auction of manufacturers also contributed. This pattern of regional specialization had established itself between Confederation and 1900. While some may argue that federal trade policy (meet National Policy) helped Fundamental Canada at the expense of sure regions, the industrialization of Ontario and Quebec in itself was not created at the expense of others. Near of the 2 provinces' markets accept e'er been in Central Canada because that is where near Canadians live. As well, since the 19th century there have been export markets for many Quebec and Ontario manufactures — cheese, sawn lumber, cars, agricultural implements, pulp and paper, refined nickel and aluminum.
Developments elsewhere in Canada, particularly in the West, helped accelerate Central Canada'southward industrialization, simply they did not cause it. Economic evolution had been similar on the southern side of the Great Lakes, where at that place is a similar pool of raw materials, capital, labour and skills. Indeed, because on the Canadian side there was more hydroelectric potential, plus nickel, gilt, silvery, uranium and enough of pulpwood, in some respects circumstances were more favourable. Since 1878–79 Canada's tariff has protected manufacturing industries, but locational advantages, non the tariff itself, ensured that nearly of that protected manufacturing would locate in Central Canada.
Decline in Manufacturing
Canada finished the 20th century with a low-valued currency in relation to the US dollar, because article prices remained depressed (see Exchange Rates). Simply the dawn of the 21st century meant a new chapter for the Canadian economy, specially in Ontario. The Canadian dollar hit a low of United states$0.64 in 2001. Just as article prices recovered, the dollar began a climb to hit par with the US currency in 2002 (run into Commodity Trading). The Canadian dollar has remained near or higher up par since. This turnabout prompted many Canadians to believe their economy had contracted so-called Dutch disease, in which a sudden increase in the value of a land'south natural resources forces upwards its currency — while forcing down exports and thereby hurting the manufacturing sector. The statement over Dutch disease prompted Mark Carney, Governor of the Bank of Canada, to quip in a 2012 speech: "Some regard Canada'south wealth of natural resources as a blessing. Others see it every bit a curse." Indeed, article increases and the steady ascension of the Canadian currency was accompanied by a autumn in manufacturing activity. The sector's share of Canadian gross domestic product (GDP) fell from 18 per cent in 2000 to 10 per cent by 2016.
Carney and most leading economists, however, believed commodity prices were fabricated a scapegoat for what they called structural change in the Canadian economic system. While a stiff currency may be partially responsible for the manufacturing troubles, they said the sector's decline was part of a tendency across the advanced world. Equally Carney noted in the same spoken language, Canada'due south manufacturing-to-GDP ratio was six percentage points below the boilerplate of members of the Organisation for Economic Co-operation and Development (OECD) in 1970. In 2012, it was 3 pct points behind the OECD boilerplate.
The US experienced an even more than drastic downturn in its manufacturing sector at the same fourth dimension, even though it is a cyberspace commodity importer while Canada is a internet exporter. The The states dollar began a steady depreciation in 2002 as the Canadian currency appreciated. In the same period, currencies of 2 other article importers, Japan and the euro surface area rose along with the Canadian dollar.
Nowhere in Canada was the structural modify in the economy in the 21st century more apparent than in Ontario, where factory employment in 2012 had faded to 11.8 per cent of full provincial employment from 23 per cent in 1976. In a report commissioned by the Ontario government, economist Don Drummond said Ontario residents had withal to grasp how the erosion of the manufacturing base was tearing away at the province's traditional economical advantage. He said a stiff Canadian dollar and the uneven functioning of the American economy were to blame.
In another blow, in 2012 Ontario lost the distinction of producing more than cars than the country of Michigan, the birthplace of the Due north American car industry. Ontario had been the leading car producer amidst all provinces and Usa states since 2004. Michigan produced 1.6 one thousand thousand vehicles in 2012, compared to 1.5 million for Ontario despite record Canadian motorcar sales. Both Michigan and Ontario have been facing stiff competition from United mexican states, which has benefited from increased investment by the world'due south auto companies because of its cheaper labour costs. In fact, Mexico had been producing more vehicles than either jurisdiction for a decade.
Ring of Fire
A new appreciation of Ontario'south abundant natural resources developed in the first decade of the 21st century, particularly in the province's northern regions. The provincial regime and financial markets became fixated with the giant Ring of Fire mineral field, 500 km north of Thunder Bay. Dubbed "Ontario'southward oil sands," the region is rich in reserves of chromite, nickel and gold worth more than $60 billion. Just the region needs a massive corporeality of infrastructure such as roads and railway tracks to get the ore to the refinery stage. A major private-sector investor walked away from a Ring of Fire development considering of authorities delays in blessing funds to build the needed infrastructure. Meanwhile the Ontario and federal governments were locked in discussions about who should pay for what.
International Free Trade
Another victim of the change in centuries — at least initially — was Canada's trade residuum. Canada entered the 21st century with a string of robust trade surpluses fuelled by a low-valued currency. But a suddenly muscular Canadian dollar had led to consistent trade deficits by the second decade, prompting the government of Prime Minister Stephen Harper to order its overseas diplomats to focus on improving Canada's economical interests around the earth. Past 2013, one in v Canadian jobs was linked to exports. Equally a result, the shift in foreign policy was hoped to create 40,000 new export-related jobs over 5 years. Trade Minister Ed Fast, who played a key office in negotiating a long-sought free trade deal with Europe in 2013, said another key objective over the 5 years was to double the 11,000 small and medium-size companies doing business in emerging markets such equally China, Bharat or Brazil.
The new focus on back up for Canadian commerce overseas was a follow-up to the Harper government's announcement in 2007 of aggressive pursuit of new costless merchandise agreements. This was a continuation of policies by the former governments of Brian Mulroney of the Progressive Conservative Party and Jean Chrétien of the Liberals in the 1980s and 1990s respectively. The Mulroney regime implemented the Canada-U.S. Gratis Trade Agreement in Jan 1989 and quickly began work on an expanded agreement to include Mexico in a North American trade brotherhood, which would eventually exist implemented by the succeeding Chrétien authorities in January 1994, the N American Free Merchandise Understanding, or NAFTA, superseded the Canada-U.S. trade pact.
The Chrétien government followed up with two new gratis trade agreements in 1997 — ane with Israel, the other with Chile. In 2002, the same government implemented a free trade agreement with Costa Rica. After 2007, the Harper authorities continued the momentum with free trade agreements with Jordan, European Free Merchandise Association (Switzerland, Iceland, Kingdom of norway and Liechtenstein), Peru, all in 2009, Panama in 2010, as well as Honduras and Colombia in 2011.
The signing of the two N American agreements was expected to set the Canadian economic system off to a new era. Still, one constant remained — Canada'south dependence on the United states of america market, which accounted for 86 per cent of Canada'south exports in the first years nether NAFTA. This dependence prompted the Harper government to aim for more diversification from trade with the U.s.a., merely every bit the government of Pierre Trudeau did under the Third Option initiative in 1972. However, the Harper authorities succeeded where other governments had failed. In 2013, it reached an agreement in principle with the European Union to implement the Comprehensive Economical Trade Understanding (CETA), which came into strength in September 2017. In early on 2018, the Liberal government of Justin Trudeau reached a deal on the Trans-Pacific Partnership, a trade agreement between Australia, Brunei, Chile, Nippon, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The agreement will come into force once it has been ratified by all member states.
Regional Economic science — Summary
In 2016, Quebec accounted for $394.8 billion or nigh 20 per cent of Canada'south GDP. Quebec, which once held the coveted economic condition Ontario at present holds, has declined in relative terms during the past half century. Three developments played major roles in this tendency. The first was the completion of the St. Lawrence Seawayin the early 1950s, which enabled ships to featherbed Montreal and thus drastically reduced its importance as a major port.
This was exacerbated by political instability (encounter October Crunch, Quebec Referendum 1980 and Quebec Referendum 1995) and French-merely language legislation which together, since the 1960s, significantly reduced the incentive of international businesses to locate at that place. The faster pace of evolution in some other Canadian regions likewise influenced Quebec's relative pass up. Despite these factors, Quebec'south manufacturing and agricultural sectors have benefited heavily from freer trade with the Us. Montreal remains Canada's second largest metropolis and its second business organization centre.
In 2016, Ontario accounted for $794.8 billion or 39 per cent of Canada'due south Gross domestic product. Much of Canada'due south manufacturing sector — notably industries such as auto-making, food and beverage, made metals and others — is full-bodied in Ontario. (And inside Ontario, manufacturing is largely concentrated in the south, between Windsor and Oshawa.) However, the province has increasingly shifted to a service economy. Service industries now make up 77.5 per cent of Ontario'southward GDP, with manufacturing accounting for only 11.9 per cent.
Much of Ontario's success relates to its fundamental geographic position in Canada, its proximity to the Usa marketplace and admission to waterways, which ease the import of raw materials and the shipment of finished goods to other Canadian ports and international markets. Two Ontario cities — Ottawa, the nation's capital, with strong public sector employment, and Toronto, which has emerged as a global financial capital — have also been key motors to the province's development.
(See also Regional Economic science.)
Source: https://www.thecanadianencyclopedia.ca/en/article/economic-history-of-central-canada
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