Economic History of Canada - Railways

Railways

See Grand Trunk Railway of Canada

The national government strongly supported railway construction for political goals. First, it wanted to knit the far-flung provinces together. Second, it wanted to maximize trade within Canada and minimize trade with the United States to avoid becoming an economic satellite. The Grand Trunk Railway of Canada linked Toronto and Montreal in 1853. Lines to Portland in Maine (which was ice-free), Michigan and Chicago, were subsequently opened. By 1870 it was the longest railway in the world.

The Intercolonial Railway, finished in 1876, linked the Maritimes to Quebec and Ontario, tying them to the new Confederation. Entrepreneurs in Montreal sought direct lines into the U.S. and shunned connections with the Maritimes, with a goal of competing with American railroad lines heading west to the Pacific. Joseph Howe, Charles Tupper, and other Nova Scotia leaders used the rhetoric of a "civilizing mission" centered on their British heritage, because Atlantic-centered railway projects promised to make Halifax the eastern terminus of an intercolonial railway system tied to London. Leonard Tilley, New Brunswick's most ardent railway promoter, championed the cause of "economic progress," stressing that Atlantic Canadians needed to pursue the most cost-effective transportation connections possible if they wanted to expand their influence beyond local markets. Advocating an intercolonial connection to Canada, and a western extension into larger American markets in Maine and beyond, New Brunswick entrepreneurs promoted ties to the United States first, connections with Halifax second, and routes into central Canada last. Thus metropolitan rivalries between Montreal, Halifax, and Saint John led Canada to build more railway lines per capita than any other industrializing nation, even though it lacked capital resources, and had too little freight and passenger traffic to allow the systems to turn a profit.

Saint John was cut off by the Confederation promise of an Intercolonial Railway. E B Chandler of New Brunswick's north shore, saw to it that the railine went from ice bound Montreal along the St. Lawrence and down the North Shore of New Brunswick bringing New Brunswick no benefit except at Moncton. From there the distance to Halifax and Saint John were about equal. So even though Saint John was half as far from Montreal as Halifax, the new Federal policy helped Halifax out pace Saint John as the winter port for Canada. When the St. Lawerence opended in the 1950s, yet another Federal government policy killed the port of Saint John. Eventually a rail line was built from Saint John through Maine USA to Montreal. However, Montreal business men preferred Portland USA even though the Saint John River Valley, with no rail line, was a shorter route from Quebec. So Canadian Prairie Wheat was shipped four months of the year through the port of Portland, Maine, USA. Saint John has dwindled from being the fifth largest city in Canada at Confederation to the fourth largest city in Atlantic Canada now and 32nd largest city in Canada.

Den Otter (1997) challenges popular assumptions that Canada built transcontinental railways because it feared the annexationist schemes of aggressive Americans. Instead Canada overbuilt railroads because it hoped to compete with, even overtake Americans in the race for continental riches. It downplayed the more realistic Maritimes-based London-oriented connections and turned to utopian prospects for the farmlands and minerals of the west. The result was closer ties between north and south, symbolized by the Grand Trunk's expansion into the American Midwest. These economic links promoted trade, commerce, and the flow of ideas between the two countries, integrating Canada into a North American economy and culture by 1880. About 700,000 Canadians migrated to the U.S. in the late 19th century. The Canadian Pacific, paralleling the American border, opened a vital link to British Canada, and stimulated settlement of the Prairies. The CP was affiliated with James J. Hill's American railways, and opened even more connections to the South. The connections were two-way, as thousands of American moved to the Prairies after their own frontier had closed.

Two additional transcontinental lines were built to the west coast—three in all—but that was far more than the traffic would bear, making the system simply too expensive. One after another, the federal government was forced to take over the lines and cover their deficits. In 1923 the government merged the Grand Trunk, Grand Trunk Pacific, Canadian Northern and National Transcontinental lines into the new Canadian National Railways system. Since most of the equipment was imported from Britain or the U.S., and most of the products carried were from farms, mines or forests, there was little stimulation to domestic manufacturing. On the other hand, the railways were essential to the growth of the wheat regions in the Prairies, and to the expansion of coal mining, lumbering, and paper making. Improvements to the St. Lawrence waterway system continued apace, and many short lines were built to river ports.