Trade and the Railway

From about 1780-1840, Britain had given goods and resources coming from British North America preferred treatment. However, by 1840, Britain started to do away with this preferential treatment.

In 1846, Britain repealed the Corn Laws, which had been in effect since 1791. This had a devastating effect on the Province of Canada’s economy. The Corn Laws allowed farmers in the Province of Canada to sell their wheat and flour back to Britain without a high import tax. When Britain removed the Corn Laws, Canadian wheat and flour had to compete with grains from many more countries. Canadian wheat and flour became more expensive, so exports to Britain dropped by over 60 percent.

The Province of Canada’s economy was thrown into a recession. Some Canadians began to believe that they should manufacture their own products and sell them only within the colonies of British North America. The British North American colonies began to look at working with one another as opposed to working only with Britain.

Leaders quickly realized that if trade between the colonies was to be a viable option, an effective system of rail transportation would have to be built to link the East to the West. If a railway was expanded across the prairies and into British Columbia, raw goods could be transported from coast-to-coast.

It was also believed that the building of the railway would help open up new settlement opportunities and establish a stronger British presence in the West. If the railroad system was to expand, the colonies would need to work together.