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The Canadian Economy
The Society of Canada

Since the creation of Canada, the issue of how different it is from the US has been a recurring topic. The Canadian economy and the Canadian society have been the subjects of heated controversies to define what precise features distinguish the Canadian model from that of its great neighbour.

 

In 1930, in his seminal work The Fur Trade in Canada, Harold Innis emphasized the Canadian tradition of state intervention in the economy as a feature that clearly distinguished Canada from the US. He traced it back to the French regime, when Intendant Jean Talon, following instructions from Colbert, tried to turn New France into an agricultural colony. This centralized, state-controlled structure reappeared in the National Policy of Sir John A. Macdonald that laid the basis for the economic structure of the new Dominion in the 1870s.

 

“The relation of the government of Canada to general economic growth has been unique. The heavy expenditure on transport improvements, including railways and canals, have involved governments grants, subsidies, and guarantees to an exceptional degree. [...] The unique character of this development has been largely a result of the sudden transfer of large areas tributary to the fur trade to the new industrialism. The British North America Act, like the Act of Union, has provided for a strong central government. The Prairie Provinces as producers of wheat were controlled from Montreal and Ottawa as they were controlled in the earlier periods as producers of fur under the North West Company. (…) No such tendency towards unity of structure in institutions and toward centralized control as found in Canada can be observed in the United States. The Canadian government has a closer relation to economic activities than most governments.”

Harold Innis, The Fur Trade in Canada, University of Toronto Press, Toronto, 2e éd., 1956 [1930], p. 400-401.

 

As a result, Canada built a social and economic system which combined capitalism and a tradition of state intervention. This system aimed at building and nurturing a Canadian economy based on a commercial system that flowed from west to east, towards the markets of Europe, rather than from north to south, towards the markets of the US. The system was centralized and protectionist, with more than a hint of anti-Americanism; it meant to harness the power of the state to maintain the economic independence of Canada.