On the accession to power of the Liberal party, a new policy was adopted for the construction of the trans-continental railway. It was proposed to lessen the cost of construction by utilizing the water stretches along the route, while, on the ground that the contract made was impossible of fulfilment, the period of completion was postponed indefinitely. Meanwhile the surveys and construction were carried forward not by a company, but as a government work. Under this arrangement British Columbia became exceedingly restive, holding the Dominion to the engagement by which it had been induced to enter the union. A representative of the government, Mr (later Sir James) Edgar, sent out to conciliate the province by some new agreement, failed to accomplish his object, and all the influence of the governor-general, Lord Dufferin, who paid a visit at this time to the Pacific coast, was required to quiet the public excitement, which had shown itself in a resolution passed by the legislature for separation from the Dominion unless the terms of union were fulfilled.
Meanwhile a policy destined to affect profoundly the future of the Dominion had, along with that of the construction of the Canadian Pacific railway, become a subject of burning political discussion and party division. Economic “national policy.” During the period of Mr Mackenzie’s administration a profound business depression affected the whole continent of America. The Dominion revenue showed a series of deficits for several years in succession. The factories of the United States, unduly developed by an extreme system of protection, sought in Canada a slaughter market for their surplus products, to the detriment or destruction of Canadian industries. Meanwhile the republic, which had for many years drained Canada of hundreds of thousands of artisans to work its factories, steadily declined to consider any suggestion for improving trade relations between the two countries. In these circumstances Sir J. Macdonald brought forward a proposal to adopt what was called a “national policy,” or, in other words, a system of protection for Canadian industries. Mr Mackenzie and his chief followers, whose inclinations were towards free trade, pinned their political fortunes to the maintenance of a tariff for revenue only. After some years of fierce discussion in parliament and throughout the country the question was brought to an issue in 1878, when, with a large majority of followers pledged to carry out protection, Sir John Macdonald was restored to power. The new system was laid before parliament in 1879 by the finance minister, Sir Leonard Tilley; and the tariff then agreed upon, although it received considerable modification from time to time, remained, under both Conservative and Liberal administrations, the basis of Canadian finance, and, as Canadians generally believed, the bulwark of their industry. It had almost immediately the effect of lessening the exodus of artisans to the United States, and of improving the revenue and so restoring the national credit.
In October 1878 Lord Dufferin’s term of office expired, and his place as governor-general was taken by the marquess of Lorne, whose welcome to the Dominion was accentuated by the fact that he was the son-in-law of the queen, and that his viceroyalty was shared by the princess Louise. The election of 1878 marked the beginning of a long period of Conservative rule—the premiership of Sir J. Macdonald continuing from that time without a break until his death in 1891, while his party remained in power till 1896. This long-continued Conservative supremacy was apparently due to the policy of bold and rapid development which it had adopted, and which appealed to a young and ambitious country more strongly than the more cautious proposals of the Liberal leaders. As soon as the government had redeemed its pledge to establish a system of protection a vigorous Completion of the Canadian Pacific Railway. railway policy was inaugurated. A contract was made with a new company to complete the Canadian Pacific railway within ten years, on condition of receiving a grant of $25,000,000 and 25,000,000 acres of land, together with those parts of the line already finished under government direction. After fierce debate in parliament these terms were ratified in the session of 1881. The financial difficulties encountered by the company in carrying out their gigantic task were very great, and in 1884 they were compelled to obtain from the Dominion government a loan of $20,000,000 secured on the company’s property. This loan was repaid by 1887. Meanwhile the work was carried forward with so much energy that, five years before the stipulated period of completion, on the 7th of November 1886, the last spike was driven by Mr Donald A. Smith (Lord Strathcona), whose fortune had been largely pledged to the undertaking, along with those of other prominent Canadian business men, especially Mr George Stephen (Lord Mountstephen), Mr Duncan McIntyre, and Mr R.B. Angus. Under the energetic management of Mr (later Sir) W.C. Van Home, who was appointed president of the company in 1888, the new railway soon became the most prominent feature in the development of the country; lines of steamships were established on the great lakes and the Pacific; a stream of immigration began to flow into the prairie region; and the increasing prosperity of the railway had a poverful influence in improving the public credit.
Even before the Canadian Pacific railway was fully completed, it proved of great service in a national emergency which suddenly arose in the north-west. With the organization of Manitoba and the opening of improved communication immigrants began to move rapidly westward, and government surveyors were soon busy laying off lands in the Saskatchewan valley. The numbers of the half-breed settlers of this district had been increased by the migration of many of those who had taken part in the first uprising at Fort Garry. Influenced by somewhat similar motives, Riel’s rebellion. fearing from the advance of civilization the destruction of the buffalo, on which they chiefly depended for food, with some real grievances and others imaginary, the discontented population sent for Riel, who had been living, since his flight from Fort Garry, in the United States. He returned to put himself at the head of a second rebellion. At first he seemed inclined to act with moderation and on lines of constitutional agitation, but soon, carried away by fanaticism, ambition and vanity, he turned to armed organization against the government. To half-breed rebellion was added the imminent danger of an Indian uprising, to which Riel looked for support. The authorities at Ottawa were at first careless or sceptical in regard to the danger, the reality of which was only brought home to them when a body of mounted police, advancing to regain a small post at Duck Lake, of which the rebels had taken possession, was attacked and twelve of their number killed. Volunteers and militia were at once called out in all the old provinces of Canada, and were quickly conveyed by the newly constructed line of railway to the neighbourhood of the point of disturbance. Major-general Middleton, of the imperial army, who was then in command of the Canadian militia, led the expedition. Several minor engagements with half-breeds or Indians preceded the final struggle at Batoche, where Gabriel Dumont, Riel’s military lieutenant, had skilfully entrenched his forces. After a cautious advance the eagerness of the troops finally overcame the hesitation of the commander in exposing his men, the rifle pits were carried with a rush, and the rebellion crushed at a single stroke. Dumont succeeded in escaping across the United States boundary; Riel was captured, imprisoned, and in due course tried for treason. This second rebellion carried on under his leadership had lasted about three months, had cost the country many valuable lives, and in money about five millions of dollars. Clear as was his guilt, Riel’s trial, condemnation and execution on the 16th of November 1885, provoked a violent political storm which at one time threatened to overthrow the Conservative government. The balance of power between parties in parliament was held by the province of Quebec, and there racial and religious feeling evoked no slight sympathy for Riel. But while a section of Quebec was eager to secure the rebel’s pardon, Ontario was equally bent on the execution of justice, so that in the final vote on the question in parliament the defection of French Conservatives was compensated for by the support of Ontario Liberals. In the end 25 out of 53 French members voted in justification of Kiel’s punishment. With him were executed several Indian chiefs who had been concerned in a massacre of whites. Painful as were the circumstances connected with this rebellion, it is certain that the united action of the different provinces in suppressing it tended to consolidate Canadian sentiment, and the short military campaign had the effect of fixing public attention upon the immense fertile territory then being opened up.
The general election of 1882 turned chiefly upon endorsement of the national policy of protection; in that of 1887 the electoral test was again applied to the same issue, while Sir John Macdonald also asked for approval of the government’s Macdonald’s fiscal policy. action in exacting from Riel the full penalty of his guilt. On both issues the Conservative policy was upheld by the electors, and Macdonald was continued in power with a large parliamentary majority. From the election of 1887 the Riel agitation ceased to seriously influence politics, but the fiscal controversy continued under new forms. Between 1887 and 1891 a vigorous agitation was kept up under Liberal auspices in favour of closer trade relations with the United States, at first under the name of Commercial Union and later under that of Unrestricted Reciprocity. The object in both cases was to break down tariff barriers between the United States and Canada, even though that should be at the expense of discrimination against Great Britain. The Conservative party took the position that commercial union, involving as it would a common protective tariff against all other countries, including the motherland, would inevitably lead to political unification with the United States. The question after long and vehement discussion was brought to a final issue in the election of 1891, and Sir John Macdonald’s government was again sustained. From that time protection became the settled policy of the country. On their accession to power in 1896 it was adopted by the Liberals, who joined to it a preference for the products of the mother country. Under the protective policy thus repeatedly confirmed, Canada gradually became more independent of the American market than in earlier times, and enjoyed great commercial prosperity. Soon after the election of 1891 Sir John Macdonald (q.v.) died, after an active political career of more than forty years. Under his direction the great lines of policy which have governed the development of Canada as a confederated state within the empire were inaugurated and carried forward with great success, so that his name has become indissolubly connected with the history of the Dominion at its most critical stage.
During the years which succeeded the death of Sir John Macdonald a succession of losses weakened the position of the Conservative party which had held power so long. The Hon. J.C.C. Abbott, leader of the party in the Macdonald’s successors. Senate, became prime minister on Macdonald’s death in 1891, but in 1892 was compelled by ill-health to resign, and in 1893 he died. His successor, Sir John Thompson, after a successful leadership of about two years, died suddenly of heart disease at Windsor Castle, immediately after being sworn of the imperial privy council. Charges of corruption in the administration of the department of public works, which led to the expulsion of one member of parliament, involved also the resignation from the cabinet of Sir Hector Langevin, leader of the French Conservatives, against whom carelessness at least in administration had been established. The brief premiership of Sir Mackenzie Bowell, between 1894 and 1896, was marked by much dissension in the Conservative ranks, ending finally in a reconstruction of the government in 1896 under Sir Charles Tupper. Breaks had been made in the Liberal ranks also by the death in 1892 of the Hon. Alexander Mackenzie and the withdrawal of the Hon. Edward Blake from Canadian politics to accept a seat in the British parliament as a member of the Home Rule party. But the appeal made to the electors in 1896 resulted in a decisive victory for the Liberal party, and marked the beginning of a long period of Liberal rule.
Sir Wilfrid Laurier (q.v.) became prime minister, and strengthened the cabinet which he formed by drawing into it from provincial politics the premiers of Ontario, New Brunswick and Nova Scotia. The administration Laurier. thus established underwent many changes, but after winning three general elections it was still in power in 1909. The period of Sir Wilfrid Laurier’s rule was one of striking progress in material growth, and a marked development of national feeling. While the federation of the provinces favoured the growth of a strong sentiment of Canadian individuality, the result of unification had been to strengthen decidedly the ties that bind the country to the empire. This was as true under Liberal as under Conservative auspices—as Canadians understood the meaning of these party names. The outbreak of the South African war in 1899 furnished an occasion for a practical display of Canadian loyalty to imperial interests. Three contingents of troops were despatched to the seat of war and took an active part in the events which finally secured the triumph of the British arms. These forces were supplemented by a regiment of Canadian horse raised and equipped at the sole expense of Lord Strathcona, the high commissioner of the Dominion in London. The same spirit was illustrated in other ways. In bringing about a system of penny postage throughout the empire; in forwarding the construction of the Pacific cable to secure close and safe imperial telegraphic connexion; in creating rapid and efficient lines of steamship communication with the motherland and all the colonies; in granting tariff preference to British goods and in striving for preferential treatment of inter-imperial trade; in assuming responsibility for imperial defence at the two important stations of Halifax and Esquimalt,—Canada, under the guidance of Sir Wilfrid Laurier and his party, took a leading part and showed a truly national spirit.
The opening years of the 20th century were marked by a prolonged period of great prosperity. A steady stream of emigrants from Europe and the United States, sometimes rising in number to 300,000 in a single year, Canadian expansion. began to occupy the vast western prairies. So considerable was the growth of this section of the Dominion that in 1905 it was found necessary to form two new provinces, Alberta and Saskatchewan, from the North-West Territories, the area of each being 275,000 sq. m. Each province has a lieutenant-governor and a single legislative chamber, with a representation of four members in the Senate and five in the House of Commons of the Dominion parliament. The control of the public lands is retained by the general government on the ground that it has been responsible for the development of the country by railway construction and emigration. With the rapid increase of population, production in Canada also greatly increased; exports, imports and revenue constantly expanded, and capital, finding abundant and profitable employment, began to flow freely into the country for further industrial development. New and great railway undertakings were a marked feature of this period. The Canadian Pacific system was extended until it included 12,000 m. of line. The Canadian Northern railway, already constructed from the Great Lakes westward to the neighbourhood of the Rockies, and with water and rail connexions reaching eastward to Quebec, began to transform itself into a complete transcontinental system, with an extension to the Hudson Bay. That this line owed its inception and construction chiefly to the joint enterprise of two private individuals, Messrs Mackenzie and Mann, was a striking proof of the industrial capacities of the country. To a still more ambitious line, the Grand Trunk Pacific, extending from the Atlantic to the Pacific, aiming at extensive steamship connexion on both oceans, and closely associated with the Grand Trunk system of Ontario and Quebec, the government of Canada gave liberal support as a national undertaking. The eastern section of 1875 m., extending from Winnipeg to Moncton, where connexion is secured with the winter ports of Halifax and St John, was, under the act of incorporation, to be built by the government, and then leased for fifty years, under certain conditions, to the Grand Trunk Pacific Company. The western portion, of 1480 m., from Winnipeg to the Pacific, was to be built, owned and operated by the company itself, the government guaranteeing bonds to the extent of 75% of the whole cost of construction. The discovery of large deposits of nickel at Sudbury; of extremely rich gold mines on the head-waters of the Yukon, in a region previously considered well-nigh worthless for human habitation; of extensive areas of gold, copper and silver ores in the mountain regions of British Columbia; of immense coal deposits in the Crow’s Nest Pass of the same province and on the prairies; of veins of silver and cobalt of extraordinary richness in northern Ontario—all deeply affected the industrial condition of the country and illustrated the vastness of its undeveloped resources. The use of wood-pulp in the manufacture of paper gave a greatly enhanced value to many millions of acres of northern forest country. The application of electricity to purposes of manufacture and transportation made the waterfalls and rapids in which the country abounds the source of an almost unlimited supply of energy capable of easy distribution for industrial purposes over wide areas.
Since confederation a series of attempts has been made with varying degrees of success to settle the questions in dispute between the Dominion and the United States, naturally arising from the fact that they divide between them Relations with the United States. the control of nearly the whole of a large continent and its adjoining waters. Considering the vastness of the interests involved, there is much cause for satisfaction in the fact that these differences have been settled by peaceful arbitrament rather than by that recourse to force which has so often marked the delimitation of rights and territory on other continents The Washington Treaty of 1871 has already been referred to. Its clauses dealing with the fisheries and trade lasted for fourteen years, and were then abrogated by the action of the United States. Various proposals on the part of Canada for a renewal of the reciprocity were not entertained. After 1885 Canada was therefore compelled to fall back upon the treaty of 1818 as the guarantee of her fishing rights. It became necessary to enforce the terms of that convention, under which the fishermen of the United States could not pursue their avocations within the three miles’ limit, tranship cargoes of fish in Canadian ports, or enter them except for shelter, water, wood or repairs. On account of infractions of the treaty many vessels were seized and some were condemned. In 1887 a special commission was appointed to deal with the question. On this commission Mr Joseph Chamberlain, Sir Sackville West and Sir Charles Tupper represented British and Canadian interests; Secretary T.F. Bayard, Mr W. le B. Putnam and Mr James B. Angell acted for the United States. The commission succeeded in agreeing to the terms of a treaty, which was recommended to Congress by President Cleveland as supplying “a satisfactory, practical and final adjustment, upon a basis honourable and just to both parties, of the difficult and vexed questions to which it relates.” This agreement, known as the Chamberlain-Bayard treaty, was rejected by the Senate, and as a consequence it became necessary to carry on the fisheries under a modus vivendi renewed annually.
In 1886 a difference about international rights on the high seas arose on the Pacific coast in connexion with the seal fisheries of Bering Sea. In that year several schooners, fitted out in British Columbia for the capture of seals in the North Pacific, were seized by a United States cutter at a distance of 60 m. from the nearest land, the officers were imprisoned and fined, and the vessels themselves subjected to forfeiture. The British government at once protested against this infraction of international right, and through long and troublesome negotiations firmly upheld Canada’s claims in the matter. The dispute was finally referred to a court of arbitration, on which Sir John Thompson, premier of the Dominion, sat as one of the British arbitrators. It was decided that the United States had no jurisdiction in the Bering Sea beyond the three miles’ limit, but the court also made regulations to prevent the wholesale slaughter of fur-bearing seals. The sum of $463,454 was finally awarded as compensation to the Canadian sealers who had been unlawfully seized and punished. This sum was paid by the United States in 1898.