In Nova Scotia the chief local development was the opening in 1869 of a road through the Annapolis Valley, the Windsor and Annapolis. This formed an extension of the government road from Halifax to Windsor, but the province preferred to entrust it to a private company, giving a liberal bonus. In New Brunswick there was much activity, all by private companies. The western section of the European and North American, from St John to the Maine boundary, was completed in 1869, though it was not until 1871 that the road was opened through to Portland—by a more circuitous route than Poor had originally planned. From Fredericton a branch was built to meet this road, and a line to Woodstock, which in turn was connected with the old New Brunswick and Canada, still pushing slowly north. In the meantime Prince Edward Island was building a narrow-gauge railway nearly two hundred miles long; in 1873 she was forced into Confederation to find aid in paying for it.
All this varied activity was made possible by a revival of the policy of provincial and municipal assistance. Whether from reasoned conviction as to the indirect benefits of more roads, or because of the log-rolling activities of rival towns and wily promoters, a systematic and generous policy of aid was adopted. This aid came chiefly from the provinces and municipalities, the Dominion as yet confining itself to works of inter-provincial concern. Outright gifts for the most part took the place of loans, since experience had proved that direct returns upon the money invested were not to be looked for. Curiously meandering were the routes which promoters mapped out in the endeavour to follow the shortest line between two bonuses.[[1]]
Governments could help to build roads, but could not ensure for them traffic. It took very few years to show that the interests of the public were not best served by scores of petty isolated roads, and that the interests of shareholders were not secured by the cut-throat competition which prevailed in certain areas. This competition was keenest between the roads which were intimately connected with the lines in the United States and dependent upon through traffic. The Grand Trunk had cut into the territory of the Great Western by acquiring the Buffalo and Lake Huron line, and the Canada Southern and the Great Western were disputing for every ton of freight between the Niagara and the Detroit. All were involved in the rate wars which marked this period in the United States. In 1867 the Grand Trunk and the Great Western agreed to maintain rates, pool certain traffic receipts, refrain from competitive building, and co-operate in service. The agreement broke down; another was made in 1876, only to fail in turn. More effective measures had to be adopted.
The outstanding achievement of the period, however, was the building of the Intercolonial. It had been projected largely in order to make closer union between the provinces possible, but, as it turned out, it was Confederation that brought the Intercolonial, not the Intercolonial that brought Confederation.
After the breakdown of the negotiations in London in 1852, each province had turned to its own tasks. But each in building its own roads had provided possible links in the future Intercolonial chain. In Canada the Grand Trunk ran to a point 120 miles east of Quebec; in New Brunswick, St John was connected with both the east and west boundaries of the province; in Nova Scotia, a road ran north from Halifax as far as Truro. A gap of nearly five hundred miles between Rivière du Loup and Truro remained. To bridge this wilderness seemed beyond the private or public resources of the divided provinces. Unanimous on one point only, they once more turned to the British government. In 1857 and 1858 dispatches and deputations sought aid, but sought it in vain. When the Civil War broke out in the United States, official British sympathy was given to the South, and the Trent affair showed how near Britain and the North were to war, a war which would at once have exposed the isolated colonies to American attack. The military argument for closer connection then took on new weight with the British government, and it proposed, to a joint delegation in 1861, to revert to its offer of ten years earlier—to guarantee a colonial loan for a railway by an approved route. The colonies opposed the demand for a sinking fund, and again agreement was postponed. In 1863 Canada suggested that, as the British government had made an approved route an essential condition, a definite survey and selection should be undertaken forthwith. It was agreed that a commission of three engineers should be selected, one nominated by Canada, one by New Brunswick and Nova Scotia, and one by Great Britain. Canada nominated Sandford Fleming, a distinguished Scottish-Canadian engineer, who had been connected with the Northern and other Upper Canada enterprises. The other authorities paid him the compliment of naming him as their representative also, to facilitate the work. During the progress of the survey negotiations for the union of the provinces had begun, and when Confederation came about in 1867, the building of the Intercolonial at the common expense of the Dominion, with an imperial guarantee to the extent of £3,000,000, was one of the conditions of union. The old difficulty as to the route through New Brunswick was still to be settled. Again western and southern New Brunswick struggled against the north and against far east Quebec; again Halifax and St John found plausible arguments to uphold their respective interests. Finally, the views of Sir George Cartier and Peter Mitchell triumphed in the Cabinet councils, and in March 1868 the engineer-in-chief advised the selection of the roundabout Bay of Chaleurs route—roughly 'Major Robinson's line'—ostensibly because safer from American attack, nearer possible steamship connection with Europe, and no worse, if no better, than the other routes in potentialities of local traffic.
The construction was entrusted in December 1868 to a commission of four; six years later the minister of Public Works took over direct control. Sandford Fleming remained engineer-in-chief for the building as well as for the survey. Tenders were submitted for the construction of the whole road, but the government decided to award the contract in small sections. The road was not completed as speedily as had been expected. Difficulties arose, expected and unexpected—cuttings in heavy rock, sliding clay banks, extensive swamps, lack of rock bottom for heavy bridges. Contractor after contractor found that he had underestimated the task, and went bankrupt or threw up the contract. Sometimes the contract was relet, sometimes the government completed it by day work. At last, on July 1, 1876, nine years after Confederation, the five hundred miles between Truro and Rivière du Loup were opened for traffic throughout. In the meantime the Dominion had taken over the Nova Scotia, New Brunswick, and Prince Edward Island government roads. In 1876 there were in all 950 miles of railway under the control of the Dominion government, as against 4268 miles of private lines.
[[1]] Ontario in 1871 offered subsidies ranging from two to four thousand dollars a mile for colonization roads to the north; Quebec in 1869 offered money and later land; New Brunswick in 1864 gave $10,000 a mile to various roads, besides taking $300,000 in stock in the European; while Nova Scotia aided the Annapolis extension. Municipal aid was even more lavish in proportion: Toronto gave $350,000 to the Toronto, Grey and Bruce, $150,000 to the Nipissing road, $100,000 to the Northern, and $350,000 to the Credit Valley. Hamilton backed the Hamilton and North-Western by $200,000, London gave the London, Huron and Bruce $150,000, and generous Kingston gave to the Kingston and Pembroke over $300,000. Counties like Elgin and Simcoe, Grey, and Frontenac offered from $150,000 to $300,000, while from townships alone the Wellington, Grey and Bruce received $680,000. Montreal and Quebec each helped the North Shore by a gift of a million dollars; Ottawa county's $200,000 and the parish of Canrobert's $1000 were equally sought; while to a lesser degree the Maritime Provinces showed the same tendency.