Studies
on the Canadian Constitution and Canadian Federalism
Last
revised:
April 2005 |
The National Policy and
Canadian Federalism
Claude
Bélanger,
Department of History,
Marianopolis College
The National
Policy was introduced by the government of John
A. Macdonald in 1879 and remained, in one form or anothe,r government
policy for a long time. Understood in its broadest sense, the policy contained three
parts: 1) the building of the transcontinental
railway - the CPR; 2) strong immigration policy to fill the West;
3) the protection of the infant Canadian industry with high tariffs.
The plan was a comprehensive one and each of its parts provided an impetus
and a justification for the other parts. The aim of the policy was to
create a true country with a national economy. Macdonald thought that
while a political framework had been created in 1867 the dreamed up
union could only last if it was cemented by the creation of a strong
national economy - one that would run east-west rather than north-south.
The future of Confederation, he thought, hinged upon the development
of the West. Without such development, the Americans would take over
the West, encircle Canada and inevitably bring about its annexation.
Hence, the dream of creating a sepearate, peaceful and orderly society on the northern
half of the continent would die.
Macdonald
perceived the occupation of the vast plains of the West as vital national interest.
The building of the CPR would assure the sovereignty of Canada over the territory
and eastern industry would have access to the resources and the customers of the
West. The immigration policy was designed to maximize the investment in such an
expensive railway and to provide customers to eastern industry. The high tariffs
would ensure the development of a Canadian industry and assure a better standard
of living and jobs for Canadians.
At first
glance, the policy seems a remarkable one but upon closer examination
one has to recognize many difficulties and consequences for the future.
The first thing to note is that the national policy was not a "national" policy in some important respects. In an age of mounting imperialism, it was an imperialist
policy. The heart of Macdonald's country was essentially Ontario and, to a lesser
extent, Quebec where the important Montreal financial interests were
found. The Montreal-Windsor axis was to be the heart of the country,
its pole of development, and the policy was specifically designed to
benefit its population. The Maritimes,
and much of Quebec, would not benefit greatly from the policy. Their contribution
would be largely to export men and resources to the center of Canada
while importing its expensive industrial products. Railways would cross
their territories but they would not be particularly designed to develop
them. They would be called to pay taxes to buy the West and to subsidize
heavily the building of the CPR, but would receive very little benefit
from such undertakings.
It was hoped that immigrants
by the hundreds of thousands would be attracted to the West.
For that purpose, Canada eventually had hundreds of immigration officers,
although nearly all of them were to be found in Great Britain, Ireland
and in the United States. So while thousands
of Québécois and other Canadians (close to one million from Quebec
alone from 1830 to 1930) emigrated
to the United States, Canada hoped to recruit large numbers of British, Irish and American immigrants to fill the West. It was plain for everyone to
see that the federal government did not care sufficiently for the fate
of the Quebecois and made too little effort to repatriate them. Immigration
from Europe was subsidized (each immigrant received free land and, by
the 1920’s, a train ticket for the West; Canadians who wished to
go west had to buy their own tickets).
Macdonald's purpose was
not to develop viable, autonomous communities in the West. This had to be avoided
at all cost: industries were not to locate in the West, they would compete with
eastern ones; railways were not to be established unless they were controlled
by the CPR and they were not to link the West to the USA. Macdonald feared that
Western farmers might buy their products there. Provinces were not to be created
because the federal government would lose control of the whole operation. When
the local indigenous population (Indians and Métis) protested the establishment
of the newcomers on their land, they were pushed aside; the West was not to exist
for its own sake but only as a useful appendage to Central Canada.
Nevertheless,
provinces had to be created eventually and the federal government lost
part of its control over the territory; natural resources were withdrawn
(until 1930) from the control of the provincial governments in the West
and the federal right to reservation and disallowance was used heavily to support the National Policy. As one author has written: "One of the most significant factors which emerges from a study
of disallowance is that the power has been used primarily against the
West... The West has always been Canada's empire. The expansion of Western
Canada provided the life-blood of Eastern commerce, finance, manufacturing,
and transportation. It furnished the market for the goods and services
which, by permitting the economies of large-scale operations, made Eastern
undertakings successful. To put it crudely, as Macdonald did, the Dominion
had purchased the West and was entitled to the profits of its exploitation."
[Alan Wilson, "Disallowance: The Threat to Western Canada," in Saskatchewan Law Review, Vol. 39 (1974-75):180-181].
What
makes an examination of the operation of the National Policy so important
and vital for the study of Canadian Constitutional history is the fact
that it became a permanent factor in Canada's development. Could post-Macdonald
governments deny the reality of the policy and undermine its economic
objectives (as objectionable as they might have been in some respects)
when it seemed that the economic well-being of Eastern Canada - jobs,
profits, standard of living - came to be dependent on high tariff industries
and the exploitation of entire regions of Canada (West, Maritimes and
Eastern Quebec)? Political considerations must not be discounted either:
the exploited regions were also the politically powerless ones while
the benefiting regions actually controlled the majority of seats in
the House of Commons. So the policy was maintained by successive administrations.
Maritimers lost their natural New England market and sank economically into oblivion.
For a long time, in fact until the development of the oil and gas industry, the West was condemned to virtual economic stagnation and its farmers
were forced to buy expensive eastern products, thus lowering their standard
of living (an author estimated, in 1934, that the tariff in effect subsidized
each person in Ontario by $15.15 a year and in Quebec by $11.03 but
cost each person in the other seven provinces as much as $11.67 in Nova
Scotia or $28.16 in Saskatchewan - the average personal income of a
Canadian at the time was around $300.00 a year). Montrealers benefited
from the policy but the rest of the province of Quebec stagnated; rural
depopulation was the result. Only Ontarians were fully satisfied with
the policy as 68% of the most highly protected industries were located
there (24% were located in Quebec).
So
the country developed unequally under the National Policy and it gave
rise to all sorts of regional problems: Westerners became alienated
and have complained of unfairness since. They turned to new political
parties and ideologies (United Farmers, Progressives, CCF, Social
Credit, Reform and Alliance, etc.). Maritimers lost their traditional prosperity and with it their
proud heritage of vigorous and autonomous government. Too poor to afford
the social services to which we have all become accustomed, they have
had to support centralization of powers in Ottawa in order to receive
some of the benefits of Confederation. For them, economic development
has been replaced by social welfare. Separatists in Quebec have argued
the necessity of the break-up of Confederation on grounds that the
system (National policy) profited Ontario at the expense of Quebec.
From all of the neglected regions, there have been perpetual demands,
since the XIXth century, for "better terms"
in Confederation.
In the
past seventy-five years there has been recognition of the problem: Royal Commissions
were established (Duncan Report, 1926; White Report, 1935; Rowell-Sirois
Report, 1940) that considered the economic problems of Canada or
some of its regions and provinces and which pointed to the National
Policy as partly the root-cause. Federal equalization
grants were instituted in the late 1950's to, at least, lessen the
tax burden which inevitably befell the citizens of low growth regions
in Canada. In 1969, the federal government created the Department of
Regional Economic Expansion (DREE) that distributes grants to overcome
regional economic disparities. But, by and large, such policies are
much too timid: they do not fundamentally seek to solve problems by
creating regional growth centers but, rather, aim at lessening the most
obnoxious effects of the National Policy. Many experts see the solution
to the problem of regional economic disparity in massive federal involvement
but this can only be done, ultimately, at the expense of weakening provincial
control over local economies and societies - in other words by undermining
even further Canadian federalism.
Canadians
will need to invent imaginative solutions that would take into account
all of the factors involved: Canada must take more into consideration
regional disparities, encourage such growth as each region desires while
respecting their local autonomy and environment. Only free and self-reliant people can
happily accept to collaborate and live in harmony with other people.
See:
Corn
Laws
Free
trade
Imperial
Preference
National
Policy
Reciprocity
Tariffs
©
2005 Claude Bélanger, Marianopolis College
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