1878 John A. Macdonald on the Formation of the National Policy
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In 1878, John A. Macdonald introduced the National Policy in the House of Commons, a transformative economic strategy designed to address Canada’s economic struggles and assert its independence. This plan, built on three key pillars—protective tariffs, the construction of the Canadian Pacific Railway, and the promotion of Western settlement—would lay the foundation for Canada’s economic development and territorial expansion. Macdonald's vision for the National Policy was rooted in his desire to foster domestic industry, strengthen Canada’s infrastructure, and ensure its territorial integrity amid pressures from the United States and global economic forces.
At the heart of the National Policy was the introduction of protective tariffs, particularly on manufactured goods. Macdonald believed that without shielding Canadian industry from foreign competition—especially from the industrial juggernaut to the south—Canada’s economy would remain vulnerable and overly dependent on imports. The tariffs would incentivize the growth of Canadian manufacturing, particularly in Ontario and Quebec, creating jobs, boosting domestic production, and fostering a more self-sufficient economy. Macdonald saw this as critical to strengthening Canada’s economic independence and reducing its reliance on U.S. goods.
The second pillar of the National Policy was the construction of the Canadian Pacific Railway (CPR), a project as ambitious in its scope as it was symbolic in its implications. Macdonald believed that a transcontinental railway was essential not only for economic reasons but for national unity. The CPR would tie the vast, disparate regions of Canada together, facilitating trade between the provinces and linking the Atlantic to the Pacific. More than just an economic lifeline, the railway would become the backbone of a young nation, ensuring its sovereignty by linking British Columbia with the rest of Canada, thereby preventing U.S. expansion into the West. The CPR would also open up vast tracts of land for settlement, encouraging immigration and the development of the resource-rich Prairies.
Western expansion was the third crucial component of the National Policy. Macdonald envisioned the settlement of the Prairie provinces as vital to Canada’s economic future. The settlement of these lands would not only provide agricultural output to feed the growing nation but also strengthen Canada's territorial claims against American encroachment. Macdonald promoted immigration to the West, offering land to settlers, encouraging agricultural development, and ensuring that the new territories would become integral parts of the Canadian federation.
The National Policy was not without controversy, however. While it was popular in Ontario and Quebec, where industries benefited from protectionism, it was less welcomed in the Maritime provinces and the West, where residents relied on imported goods and saw the tariffs as increasing the cost of living. Farmers in particular were concerned that the policy benefited manufacturers at their expense. Furthermore, the railway’s massive financial costs led to criticism and political scandals, including the famous Pacific Scandal, which temporarily derailed Macdonald’s political career in the early 1870s.
Despite these challenges, the National Policy had profound implications for Canada’s development. Economically, it fostered the growth of a diversified industrial base, particularly in central Canada. The tariffs provided the protection needed for Canadian businesses to develop and compete, ensuring the long-term viability of domestic manufacturing. Politically, it helped solidify Macdonald’s Conservative Party, which would dominate Canadian politics for much of the late 19th century.
The policy’s emphasis on infrastructure, particularly the Canadian Pacific Railway, had even broader consequences. The completion of the CPR in 1885 was a moment of triumph, symbolized by the driving of the Last Spike at Craigellachie, British Columbia. The railway’s success strengthened Canada’s ability to govern its vast territories and encouraged settlement across the West, which would later become Alberta and Saskatchewan. The influx of settlers—many from Europe—transformed the Prairies into productive agricultural regions, contributing to the growth of the Canadian economy.
The National Policy also shaped Canada’s national identity, embedding within the country a sense of economic independence and unity. The protectionist measures shielded Canadian industry from foreign competition, while the railway and westward settlement underscored Canada’s territorial ambitions. At the same time, the National Policy created regional tensions, as the benefits of industrial growth in the East did not always translate into economic success for the Maritimes or the West, whose economies remained more dependent on resource extraction and trade with other nations.
In conclusion, John A. Macdonald’s National Policy was a defining moment in Canadian history, shaping the country’s economic, political, and geographic landscape for generations to come. Through the introduction of protective tariffs, the construction of the Canadian Pacific Railway, and the settlement of the West, Macdonald not only strengthened Canada’s economy but also ensured its sovereignty and national unity in the face of external threats. The policy’s legacy, while complex and contested, remains a central chapter in the story of Canada’s transformation from a collection of disparate provinces into a unified and economically independent nation.
