The National Policy What policy was formulated by the federal government to solve Canada’s economic problems?
The federal government of the new Dominion of Canada had to try an unify the people of its different provinces. Several economic crises made this more difficult. Smaller markets for Canadian products in Europe and the U.S. resulted in lower prices and more unemployment in Canada.
Results Workers were laid off and wages fell. The government got less revenue from taxes and customs duties. The economy slowed down and a recession occurred. Canada experienced several recessions in 1873-79, 1882-85, 1888-91 and 1894-96.
The National Policy was formulated by Sir John • Macdonald's Conservative Party in 1878. It was designed to promote national unity and improve economic prosperity. The National Policy had 3 main “planks” or proposals:
First Proposal Increase customs duties protect Canadian industries from foreign competition. These protective tariffs would also encourage new industries to open in Canada. The extra duties and taxes would give the government more revenue to use to finance the growth of country.
Second Proposal Build railways, especially the Canadian Pacific Railway, across the country to reach the west coast. This would allow settlers to move to the empty lands in the west. It would increase access to markets throughout the country.
Third Proposal Encourage immigration, especially to Western Canada to prevent an American takeover of thinly populated territory. An increased population would form a larger market for Canadian products. In the period 1871- 1901 some 1 500 000 immigrants were attracted to Canada.
NP Results The National Policy had certain results. It resulted in higher prices and lower salaries in Canada. It favoured Ontario the most, and Quebec to a lesser extent. New Textile, shoe, machinery and manufacturing industries were established. Western Canada developed more rapidly. Railway construction ate up capital needed to expand other sectors of the economy. People continued to emigrate to the U.S.