4 - Domestic savings, international capital flows, and the evolution of domestic capital markets: The Canadian experience

Summary

Introduction

Patterns of growth, 1867–1914

In 1841 the heretofore separate provinces of Upper and Lower Canada were brought together in a legislative union creating what might be termed the first Canadian confederation. In 1848 the citizens of Nova Scotia were granted responsible government. That status was confirmed to Canadian residents (residents of what had been Upper and Lower Canada) a year later, and in the ensuing years it was introduced into New Brunswick, Prince Edward Island, and Newfoundland. In 1867 Nova Scotia, New Brunswick, and the now linked colonies of Upper and Lower Canada (taking the provincial names of Ontario and Quebec) joined together in a far more extensive federal union. The new commonwealth comprised 384,598 square miles; within a half dozen years it was augmented by the vast territories of the Hudson's Bay Company, British Columbia, and Prince Edward Island, the whole amounting to 3,357,348 square miles, an area almost nine times as large as was contained in the original Confederation.

The act of the British Parliament that created the Confederation was a constitutional document. Among its other features, it distributed powers and tax sources among the federal, provincial, and local governments, and, in order to open the domestic market, forbade interprovincial tariffs. The chief responsibility of the federal government was to promote peace, order, and good government; and a series of Canadian politicians have taken these goals to include policies that promote economic growth.