Post-Confederation Slump
In the years after Confederation, the once-buoyant BNA economy soured, an event some blamed on union or government railway policy, but was more likely caused by the Long Depression that was affecting the entire world. Demand for Canadian resources slumped, and protectionist policies in the United States and Europe hurt Canada's trade.
There was little immigration to Canada during this period. Despite efforts to settle the west including the Dominion Lands Act of 1871, few immigrants were willing to settle on Canada's colder and dryer prairies when open land was still plentiful in the States. In the thirty years after Confederation, Canada experienced a net out flow of migrants, as a large number of Canadians relocated to the United States.
In the early part of the nineteenth century, the economies of the Canadian Maritimes were the most industrialized, and prosperous in British North America. The 1850s and 1860s were especially prosperous. By the start of the twentieth century, however, they were far poorer than the rest of the country, and remain so to this day. It has been said that the provinces never emerged from the post-Confederation slump. See Economy of the Maritimes for a full discussion of this issue.
Read more about this topic: Economic History Of Canada