By Robin Neill
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Additional resources for A History of Canadian Economic Thought (Routledge History of Economic Thought Series)
When Nova Scotia acquired the right to declare free ports at its own discretion, pressure to do so in particular cases became irresistible. The result was over-investment in view of the amount of trade to be shared around. In the 1850s trade between Canada and the West Indies began to bypass the Nova Scotian ports. Whether as a last move in the way of freeing trade, or as a first move to counteract the imminent loss of markets, Nova Scotians agitated for intercolonial free trade, and for reciprocal free trade with the United States.
Unfortunately, the expansion of their community and its characteristic activities was blocked by large land holdings, forest reserves, and the setting aside of lands for ‘freehold’ tenants. The anglophone government did not help, and, in fact, showed no interest in agriculture in the seigneuries. The merchants who came to control the government treated the colony as a source of raw materials for England, and a market for its manufactured goods. Following the brief prosperity of the War of 1812, agriculture fell into depression, and then into crisis, exacerbating the political situation, and leading to the Rebellion of 1837.
The Maritimes had fish, coal and iron. Canada had agriculture. Building the larger economic union would require capital. Gesner suggested a system of land grants to finance the railroads, an Imperial loan guarantee and an issue of paper money. There had been a protectionist faction in the Maritimes all through the period in which the opening of free ports and the upswing in commerce was achieving free trade in North America. Free trade was an Imperial policy, supported only by those whose interests coincided with the Empire’s.