In 1871, British Columbia entered Confederation. A transcontinental railroad that would link and physically unite the rest of Canada was promised within ten years. The one in charge of this project was the Prime Minister of Canada, John Macdonald. His goal and dream was to create a British North American nation, which would rival with the United States. In order to do this, a transportation and communication link joining all parts of British North America was required.
In return for financial benefits, the government sought after people who would finance the project, and receive benefits after the project was completed. These people were called backers. In order for Canada not to be assimilated by the US, the railway had to be built fast. The autumn of 1871 was the creation of the company of the Canadian Pacific Railway by Hugh Allan. Allan was a major industrialist and had enough money to finance a railway.
In 1872, Macdonald held a general election, in which his Conservatives lost many seats and lacked enough money to solicit support from voters. Macdonald then appealed to Allan, who gave around $350,000 to the Conservative party’s election campaign. In return, Allan was guaranteed a railway contract. This series of events is known as the Pacific Scandal. It eventually became public knowledge, leading Macdonald and his Conservative party to resign in 1873. Because of this, Alexander Mackenzie led the Liberals to power in 1873. However, this was during an economic depression in North America, and as a result, no construction was completed during Mackenzie’s administration. However, the Canadian Pacific Survey was allowed, which was the surveying of all possible routes that the railroad could take.
In return for financial benefits, the government sought after people who would finance the project, and receive benefits after the project was completed. These people were called backers. In order for Canada not to be assimilated by the US, the railway had to be built fast. The autumn of 1871 was the creation of the company of the Canadian Pacific Railway by Hugh Allan. Allan was a major industrialist and had enough money to finance a railway.
In 1872, Macdonald held a general election, in which his Conservatives lost many seats and lacked enough money to solicit support from voters. Macdonald then appealed to Allan, who gave around $350,000 to the Conservative party’s election campaign. In return, Allan was guaranteed a railway contract. This series of events is known as the Pacific Scandal. It eventually became public knowledge, leading Macdonald and his Conservative party to resign in 1873. Because of this, Alexander Mackenzie led the Liberals to power in 1873. However, this was during an economic depression in North America, and as a result, no construction was completed during Mackenzie’s administration. However, the Canadian Pacific Survey was allowed, which was the surveying of all possible routes that the railroad could take.
The national POLICY:
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Still recovering from the Pacific Scandal, Macdonald began planning to come back to power. He firmly believed that the only way Canada would survive is through the CPR. In order to gain a political platform to be heard, he then created the National Policy. The first issue that was dealt with was the damage the Canadian economy suffered due to the policies of the US. Compared to Canada, American companies were producing goods more cheaply, and often sold their goods at a low price in the Canadian market. In order to fix this, Macdonald established tariffs on US goods, which would strengthen Canadian industries. By making US goods too expensive for the Canadian market, Canadian manufacturing, mining, and agriculture would be protected from the US. The second objective was to encourage the settlement of the West by farmers. The prairies were very good for agriculture, and the farmers would produce grain crops mainly for export abroad. The income gained would be used on Canadian manufacturing goods, produced in Eastern Canada. Until goods could be transported in and out of the region, the West would not become the centre for agricultural export. Thus, the government’s main priority between 1878 and 1880 was to search for a group of investors for the construction of the CPR.