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Chapter 2 Aboriginals knew the land, could easily find subsistence subsistence: set of activities practiced by a group to ensure survival and basic needs tribes not self-sufficient, relied on trading to get what they needed late 15th c. European fishers/explorers made North America part of European economics ◦ caused major, long-term, consequences for both the territory and the Native people Algonquian, Iroquoian, and Inuit people lived in Quebec Tools for survival adapted to their different living conditions Used available resources to build dwellings, and feed and clothe themselves Their territory thus determined their production for subsistence and development Resources: means available to ensure subsistence of a person/community Production: action of processing resources with tools to achieve efficient output ◦ Group of resources used and services offered in a territory or an environment Settled in a sub-arctic climate zone Economy based on exploitation of resources: hunting, gathering, and fishing Availability of resources changed according to seasons Had to remain confident Settled in humid continental zone Agriculture possible, hunting, fishing, and gathering still activities Inherited knowledge from other people, eventually started growing corn between 1000 BCE to 900 CE, depending on area Agriculture influenced their way of life: villages created, wilderness cleared ◦ used slash and burn technique: burning vegetation in part of a territory to prepare the soil for cultivation When soil was depleted they moved (10-20 years) Men: did agricultural chores ( cleared trees with hatchets, pulled stumps, prepared mounds for seeds), hunted Women: looked after fields, managed household and village Settled in Arctic climate zone Hunted and fished to feed and cloth themselves and make objects Nomads Near sea: hunted marine mammals; whale, seal, walrus, beluga Inland: hunted caribou Used caribou hides to make clothes, tents Recycled bones to make needles, tools, etc Used animal fat: turned into oil for light and heat Resources distributed unevenly around North America People had to rely on each other to get what they needed, this made trade networks appear 1500: barter system used to trade goods Iroquoian traded excess agricultural products for caribou hides, pelts, meat of Algonquian hunters Trade allowed Aboriginals to have access to products they wouldn’t otherwise have People who lived in St. Lawrence Lowlands had shells from the Gulf of Mexico and Atlantic coast, copper from north, and projectiles from Labrador No desire to accumulate wealth or profit, just wanted to share goods ◦ gift giving a large part of their society Demonstrate prestige by showing generosity in trading Trade essential for diplomatic ties Pay war tributes, formalize meetings, facilitate peace negotiations Around 1500: many communities settled along mouths of rivers or banks on St. Lawrence ◦ allowed for fishing and trading 10th c. Scandinavians arrive looking for refuge 15th c. European states looking for precious metals and trade with Asia 1492: Christopher Columbus arrives in North America, financed by Spain 1497: John Cabot ( Italian financed by Great Britain) reached North America 1501: Corte Real Brothers arrive, sent by Portugal 1524: Giovanni da Verrazano ( sponsored by France) explored coast explorers notices fish, fish in Europe in high demand HERITAGE MINUTE – John Cabot Basque: people of Basque country, located on border of France and Spain Breton: people of the Duchy of Brittany, northwest France Basques and Bretons one of the first Europeans to regularly fish and hunt whale of the coast of North America 16th c. Late 16th c. Basque fishers spent summers in St. Lawrence Valley 2 types of preserving cod: green fish and dried fish ◦ Green fish: fresh fish, preserved in salt ◦ Dried fish: wooden structures built on shore, fish put on it, sun and wind dried the fish Met Aboriginals when they went on the shore Europeans used Aboriginal trade networks to develop commercial connections Objects made in Europe traded with Natives, in return Europeans got furs If they failed to make commercial ties relation would be strained North America’s economic potential fuelled the European states’ expansionism colonialist plans Expansionism: a state’s policy of territorial and commercial expansion in a foreign territory Colonialism: a policy of domination of a territory by a foreign state Capital: assets (goods or money) that a person of business can invest with the aim of making a profit 1534: Cartier sent to take possession of North America by King Francis I Explored St. Lawrence Took Gaspe peninsula in the name of King Francis I Failed to find resource of European value Relations between European and Iroquoian strained HERITAGE MINUTE – Jacques Cartier Late 16th c. French realized that beaver pelts had a high value in Europe Fur trade seen as way to get rich French state allowed French merchants and ship owners to invest money into building a network of fur trading posts Competition led to merchants demanding a monopoly Ship-owners: owner of one of many ships used for commercial purpose Monopoly: exclusive exploitation of a resources or market by an individual or company Tadoussac already a crossroads for trading Pierre de Chauvin, Sieur de Tonnetuit set up first permanent trading post in 1600 Abundance of European products in trading networks favoured some nations and not others European goods caused a political imbalance Issue of control and distribution of goods intensified rivalries, may of contributed to wars Aboriginals contracted various diseases due to this trading HERITAGE MINUTE - Sugar Furs profitable for both Aboriginals and French Fur trade leads to permanent settlement by the French (1608) Also what made some tribes except the Europeans During the French regime the fur trade was the main motor for the economy 1663: French state took over administration of the territory 17th and 18th c.: mother country adopted measures to increase population and diversity of economy France wanted to create a local market Mercantilism: economic theory that bases a nation’s prosperity on the accumulation of gold and silver competed with each other to build a colonial empire colonized states should export the greatest possible quantity of goods in order to become wealthy from their profits generated by the exports mother countries relied on their colonies for raw goods mother country also sold their goods to the colonies ◦ This attitude continued well into the 20th c. Pierre de Tonnetuit de Chavin held the trade monopoly in 1600 and built a trading post in Tadoussac 1604: settlement started in Acadia by Pierre Du Gua de Monts ◦ after devastating winter moved to Port-Royal 1608: Samuel de Champlain founded a settlement in Quebec ◦ meant to explore banks of St. Lawrence River and make contacts with Native ◦ take inventory of territory’s riches 1618: Champlain writes report describing economic potential to King Louis XIII 1601-1627: monopolies followed one after another ◦ few settled in New France faced with this the state made it a law that holders of a monopoly must populate the colony 1627: Company of 100 Associates was created ◦ association of 100 stakeholders ◦ held monopoly of fur trade ◦ had to populate and manage territory ◦ could trade with Aboriginals and resell to Europe 1627: France and England at War ◦ England intercepted a ship carrying 400 colonists and provisions for the colony ◦ heavy financial loses for company 1645: Company ceded monopoly to Communaute des Habitants ◦ Communaute gave 1000 pounds of beaver pelts each year to the Company ◦ in theory everyone could participate in the fur trade now, but few actually did 1661: Louis XIV began his reign ◦ dissolved Company of One Hundred Associates two years later ◦ set up companies that were loyal to him to gain control 1664: Dutch West India Company set up, loyal to the King ◦ responsibility of taking French possession of Africa and North America ◦ lasted a short time ◦ more interested in the French Antilles (Caribbean: the two overseas departments of Guadeloupe and Martinique, plus the two overseas collectivities of Saint Martin and Saint-Barthélemy.) ◦ dissolved in 1674 built trading posts and forts ◦ served as warehouses, trading sites, and military bases Intendant Jean Talon in favor of expansion ◦ way to maintain dominance of fur trade 1673: Louis Jolliet and Jacques Marquette explored the Mississippi Rivers (HERITAGE MINUTE - Jolliet) ◦ led to creation of Louisiana ( French colony) 1680s: Rene-Robert Cavelied de La Salle reached Gulf of Mexico ◦ took possession of Mississippi River Basin and called in Louisiana after King Louis XIV 1699: first French establishment built where Biloxi is now ◦ colony expanded due to agricultural plantations ( tobacco, indigo, etc) used slaves from Africa fur trade built by French and Aboriginals collaborating, traded not only furs but goods and military assistance as well people hurried to establish alliances with Algonquians French had rivals in North America: Dutch and English Dutch and English arrived in early 17th c, and set up colonies on eastern coast of North America supplied arms to Iroquois Confederacy, who wanted to destroy the Hurons ( allies with French) Hurons decimated by illnesses and division between 1648 and 1650 Algonquians also quarreled with Iroquois Coureures de Bois travelled to Great Lakes during peace with Iroquois ( 1667-1680s) to find less expensive furs mid 17th c.: still didn’t explore territories northwest of the Great Lakes Medard Chouart Des Groseillier and Pierre-Espriti Radisson travelled to Lake Superior brought back detailed information and high quality furs French wouldn’t go further in, so they went to the English ◦ maritime expedition to Hudson Bay in 1668 ◦ Groseillier and Radisson responsible for HBC- Hudson Bay Company French now had to deal with the English also trading furs 18th c.: lively competition in North America for fur trade fishing constituted an essential economic activity ◦ provided animal protein ◦ Whale and Seal oil also significant portion of exports to Europe Temporary fishing posts in Newfoundland and Labrador coasts and Banks of St. Lawrence in order to supply the colonists , fishers would obtain concessions for the best fishing sites Concessions: contract that gives an individual or company the exclusive right to exploit a resources in a territory belonging to the state Drew the French to permanently settle in New France Increase demand for furs in Europe in 17th c. 1663: Royal Government established ◦ all colonists could participate in fur trade ◦ many coureurs de bois travelled far inland 1681: French Minister of the Marine introduced the conge system ( trade permits) ◦ maximum 25 permits granted each year voyageurs- holders of these permits authorities limited the amount of furs allowed to go to market 1680s: furs piling up, rotting, and eaten by vermin ◦ reaction of market: lower prices ◦ lots of money lost, known as the beaver crisis 1697: response to crisis: reduce size of territory being developed, close most forts and trading posts criticized by many merchants and officers ◦ though of the forts as ways to keep peace with Natives, and counter British After 1715: colony’s economy picked up ◦ diversification of exported pelts (sable, otter, lynx) late 17th c.: peasants’ surpluses large enough to feed cities and contributed to exports soldiers sent to fight Iroquois settled and grew crops 1663-1763: population increased from 3 400 to 74 000 thanks to Filles du Roi, soldiers, and engages farmers grew: wheat ( more than 2/3 of the crops), oats, peas, beans, carrots, cabbage, corn, onions, squash, apples, pears. agriculture: the sector of the economy that the largest portion of colonists participated in Hectare: unit of land measure equal to 10 000 square meters Arpent: old unit of land measure that was equivalent to about 3400 square meters in Canada all peasants had to pay taxes to church and seigneur, and set aside seeds for the next year little surplus sent to France, but to other colonies 1665: Jean Talon arrives ◦ encouraged inhabitants to diversify their agricultural production ◦ increased seigneuries ◦ distributed weaving looms, so fabric could be made 1732: Maurepas, Minister of Marine, allowed Gilles Hocquart to establish a royal navy shipyard on Riviere Saint-Charles ◦ mission: build ships and transport foods to French Antilles 1738: shipyard established in Quebec ◦ build warships led to created of other industries to do with boats: tar, rope, barrels, etc Availability of iron in Trois-Rivieres region ◦ 1738-1883: Saint-Maurice ironworks established also made wood stoves, cooking pots, ploughshares, and other ploughing materials according to mercantilism: colony had to import their products of consumption from the mother country consumption: use of goods and services in order to meet a need ◦ traded resources with Antilles, gave raw materials to France to get goods Triangular trade: trips between two colonies before returning to France (see p. 172) ◦ colonies trade almost always in deficit ◦ expenditures covered colonies deficit Franco-British rivalries in Europe and North America harmed economy of New France British conquest in 1760 following the Conquest and the Treaty of Paris in 1763 British takes possession of the French colonies in North America economic policies of new Mother Country effected the colonies economic development sectors relating to exploitation of natural resources continued to be the main basis of merchant activity in the colonial economy agriculture monopolize a large proportion of the labour force and the lives of the majority of the families agricultural production experienced a growth at first 19th c.: changes in agricultural productions free-trade policy and industrialization made colonies adapt 1763: Royal Proclamation redefined the colony’s borders, creating the Province of Quebec new constitution had effects on the colony’s political and legal organization immediately few short-term changes of the lives and economy of inhabitants British mother country had control over its colonies’ foreign trade colonies used for raw materials mid 19th c. policy of protectionism ◦ economic policy established by a state of government in order to protect the economy of the country or empire from foreign competition ◦ favoured purchasing resources from within the Empire ◦ ex: Corn Laws (1815):preferential tariffs on the British market to the colonies grain merchants preferential tariffs: imposition of lower customs duties on products imported from the colonies adoption of preferential tariffs on wheat, corn, and wood related to mercantilist conception 1840s: policy profoundly modified by the adoption of more liberal economic measures ◦ abolition of preferential tariffs 1760: British merchants establish themselves in the colony most French merchants and administrators decide to return to France people who lived in New France for generations adapted to the new mother country British gradually strengthened their hold on the economy new business class emerged (British Party) ◦ demanded that British lads and institutions be put in place ◦ opposed Governor Murray and Governor Carleton policies of compromise 1777: instructions form London allowed the British to introduce certain rules of English law (common law) 1763: Royal Proclamation: defined borders of the Province of Quebec ◦ Great Lakes land and as far south as the Mississippi was Aboriginal land ◦ had to have crowns permission to get furs from there 1774: Quebec Act: territory expanded to Great Lakes region ◦ coveted trading territory made merchants, from Montreal, expanded practices -1779: few merchants from Montreal formed the Northwest Company ( NWC) - lasting partnership in 1783 1760: HBC founded ◦ English, Scottish, and Canadien merchants working together ◦ aim to impede progress of HBC (Hudson Bay Company) ◦ around Hudson bay, but created more inland trading posts to increase production growing number of posts in the West required more winter employees ◦ better paid and willing to stay a year or two in the distant territories more voyages between urban areas and trading points ◦ rivalry between two companies benefited the NWC the most ◦ dominated trade in Great Lakes region, not on Rupert’s land early 19th c.: HBC allows the Earl of Selkirk to establish a colony on the banks of the Red River to counter NWC ◦ blocked area between Metis and NWC ◦ many battles occurred between the two companies until the Mother Country intervened and made them work it out 1821: two companies told to fuse into one, under the HBC’s name fur trade in decline timber trade diminishing hunting grounds fusion had negative effects on relationship between traders and First Nations now only one source turn of 19th c.: wood now important in the economy 1806: Great Britain at war with France ◦ Napoleon imposed a continental embargo to stop Britain from getting supplies ◦ Great Britain turned to North America to get wood preferential tariffs made timber a booming trade commercial and military needs of mother country made shipping industry big ◦ increasingly bigger imports of wood for construction of barrels wood used for production of potash and pearlash ◦ potash: processing of burned wood ask and used as a whitening agent ◦ Pearlash: potash byproduct used in the textile industry as a whitening agent which helped in the textile industry timber: pieces of sawed wood, intended for use in construction timber industry was a bunch on activities that consisted of everything from preparing forest resources to exporting other industries popped up due to the Timber Industry ◦ sawmills, naval construction, building construction ◦ work for large pools of labour ◦ secondary sector of the economy profitable for seigneurs- wood on their land Outaouais, Maurice and Saguenay regions had a lot of appeal (mid 19th C.) ◦ crosses of major waterways ◦ hydraulic energy: energy obtained form the force of water, used for mills, etc wood cutting cleared land making settlement easier agroforestry economies: often led by entrepreneurs who went to settle in these lands ◦ invested in setting up infrastructures ( roads, mills, wells, etc) early 19th c.: agriculture main activity of the colony’s population family farm the base unit ◦ meet their basic needs, then produced a surplus to sell Corn law: preferential tariffs on wheat from the Empire ◦ stimulated agriculture more agriculture due to more efficient tools and clear lands being created products distributed around the colony and exported to other colonies and the mother country trade between cities and the countryside expanding ◦ needed transportation infrastructures ( roads, bridges, boats, etc) local and regional markets established Free Trade Doctrine: an economic system in which customs duties on trading are partially or entirely abolished between participating countries some supporters of the Free Trade Doctrine pressured the British parliament in the first half of the 19th c. to end protectionist trading practices 1846: Corn Laws abolished 1849: Navigation Acts abolished: all merchant ships have access to British ports abolishment of these laws to do with mercantilism, but many consequences for British North America ◦ now had to compete with other countries for the British market, not just colonies drove colonies to diversify their markets/ find new trading partners USA has strong growth during this period 1854: colonies signed the Reciprocity Treaty ◦ raw materials and primary manufacturing products could be traded between the two partners without paying custom duties ◦ gave rise to an increase in investment of American capital ◦ ended 1866 commercial transactions in the colonies increased [18th c.- 19th c.] traders and merchants in charge of assessing the value of things/ lending money most merchants also creditors creditors a person who is owed a sum of money access to capital took on more importance around 6 currencies existed within North America main merchants sought to limit the variety of coinage coinage: money, coins, notes, or all legal currency unifying the coinage would lead to better growth in capital - 1817: Bank of Montreal founded banks now where most money was exchanged and lent 1853: colonies adopt a decimal system on which the American dollar is based ◦ allow for a uniform value among notes issued by different banks ◦ now entrepreneurs could increase their capital and reinvest it in new industries -birth of industrial capitalism in the colony ◦ new social relations between those who owned businesses and those who worked in businesses need to transport merchandise and reduce costs of production and distribution government and entrepreneurs invested in the construction of transportation networks Canals: first built in Montreal in 1825 [Lachine Canal] ◦ many made to create a direct route from Montreal to Detroit Railway system: fundamental for the first phase of industrialization ◦ insured efficient distribution of merchandise -creation of new markets ◦ stimulated the development of the metallurgy industry cities near railways became important trading centers 1836: first railway line, the Champlain and StLawrence Railroad, inaugurated ◦ linked Saint-Jean and La Prairie used to compliment the well-established river system 1850s: another railway being worked on 1852: Grand Trunk Railway completed ◦ to make Montreal the hub of the Canadian railway system ◦ linked to the Great Lakes region and the Port of Portland following Confederation the state support of the construction of the railways increased HERITAGE MINUTE (NITRO & CPR YouTube) second half of 19th c.: growth of some industrial centers due to railway construction and important waterways cities attracted manufacturing businesses which focused on processing, due to labour force and availability of capitol more people settled near work, thus creating larger cities working-class neighborhoods created near factories, living conditions hard ◦ most made of wood, no running water working conditions made unskilled workers unit and demand improvements 1867: Dominion of Canada created by the confederation of British Colonies in North America industrialization and expansion allowed for the development of a vast economy 1880s: several sectors that exploit natural resources had their production increase due to the introduction of hydroelectricity ◦ mining and pulp and paper expanded due to foreign capital investment ◦ dairy industry developed in rural areas 1930s: increased intervening by the government during the Great Depression ◦ continued into the 1960s (Quiet Revolution) when the government became involved in economic nationalism events in the 1960s led people to question the role of the state in the economy 1980s: Quebec adapts to a new economic context characterized by liberalization of trade and globalization 1867: Confederation: British Colonies joined together 4 economic reasons led to this uniting: ◦ mid 19th c: Great Britain abandoned its protectionist policies/adopted free trade colonies has to adapt and tread with each other ◦ 1850s: first phase of industrialization strengthened ties due to access to fast transport ◦ 1860s: U.S.A. wanted the territories west of United Canada threat of expansion made people unit 1866: U.S.A. cancelled the signing of the Reciprocity Treaty in 1854 treaty allowed United Canada to trade raw materials without paying custom duties. Not signing it is a reason to develop a common market each level of government could exercise its jurisdiction in economic affairs certain jurisdictions were shared (exploitation of natural resources and raw materials) shared jurisdiction heavily debated political and economic institutions in 1867 encouraged the concentration of capital that would ensure the construction of a railway network railway a cornerstone of the Dominion’s economic development ◦ allowed for settlement of new territories and consolidation of the Canadian presence near the American boarder ◦ enlarged the Dominion’s domestic market (greater efficiency in transportation) 1873: Economic crisis: prices of raw materials collapsed and exports fell 1878: election of Prime Minister John A. Macdonald ◦ tried to fix situation by proposing the policy of industrial development: National Policy 1879: National Policy in effect 3 major objectives: ◦ protect new Canadian industries (protectionist policy) higher custom duties on goods manufactured abroad Expansion of the railway network link provinces and increase trade ◦ Stimulate Immigration ensure settlement in the west Canadian market invaded by goods made in the USA Canadian manufactures couldn’t compete, wanted the government to impose custom duties so Canadians would by local goods. (The Government did this) new regulation to speed up development of Canadian industries positive effects not felt until mid-1890s ◦ introduction of new industries and the creation of thousands of jobs Essential for National Policy’s two other objectives because: ◦ Links provinces ◦ Transports Raw materials from where they were extracted to the industrial centers, accelerated industrialization. ◦ facilitate immigrants access to regions of colonization. 1878: MacDonald made the completion of the Canadian Pacific Railway a priority Canadian Government paid many subsidies to companies in charge of the railway. 1885: Railway was completed, in spite of difficulties ( labour shortage, uneven terrain, disputes with first nations and metis communities.) Railway became essential for the colonization of the west. Quebec also started construction of a series of railway lines (At the end of the 1860’s) Quebec railway opened up new regions for colonization in decades that followed (Laurentians, Saguenay, Beauce, Eastern Townships and Gaspesie areas) Also facilitated access to natural resources. Dominion Lands Act (1872) provided immigrants settling in the west with farmland, but had conditions; (Had to be at least 21 years old, Pay a fee of 10$, and occupy the land for at least 3 years) By encouraging colonization of the west, the Nation Policy structured the federal governments in immigration affairs. MacDonald government organized campaign promoting Canada abroad to encourage arrival of immigrants (mostly British) Hoped it would create a increase in labour force and create a new market for products manufactured in Canada. Despite these efforts the population grew slowly. Wasn’t until the turn of the twentieth century that Canada saw several successful waves of immigration, meeting the labour needs ( under the liberal government of Wilfred Laurier.) industries experienced a second phase of industrialization at turn of century 1900-1929: second phase, characterized by rapid expansion of industrial sectors ◦ hydroelectricity and oil Canadian industries success depended on their ability to compete against American and British companies businesses established themselves near energy sources to lower their costs, therefore lowering their prices railways also contributed to limiting production costs 3 conditions allowed the Dominion to accumulate capital Wheat ◦ turn of 20th c.: wheat cultivation in the west expanding quickly, ◦ helped Canada recover from the economic crisis ◦ cheaper transportation, availability of fertile land, growth of population(immigration) lead to recovery ◦ wheat primary export product ◦ led to industrial regions in Eastern Canada Foreign Investment ◦ early 20th c: government attracts foreign investors ◦ anyone who invests in natural resources enjoyed privileges ◦ led to modernization of industrial infrastructures and creation of jobs The First World War ◦ 1914-1918 the European Powers fought each other in a world war ◦ Canada’s participation in the war effort stimulated the economy ◦ subsides granted to business ( by government) contributed to industries mining, iron, steel, clothing, etc ◦ war production led to modernization of factories ◦ agriculture benefitted: demand for wheat and pork for soldiers second phase of industrialization: hydroelectricity leads to emergence of industrial sector Quebec ideal place to develop hydroelectricity because of many waterways Pulp and Paper ◦ American demand for newsprint, large amounts of wood needed ◦ early 20th c.: Canada supplied more than 80% of North American consumption ◦ Quebec top supplier ◦ pulp mills located where they could set up their own hydroelectric installations Mining ◦ rapid growth in second phase of industrialization ◦ mineral resources of Quebec attracted foreign investors ◦ production of aluminum: a lot of electricity required several factories in Quebec, due to waterways Northern Aluminum Company ( subsidiary of Aluminum Company of America) in Shawinigan in 1902, Alcan as of 1945 ◦ iron and steel sector grew rapidly, increase in production of transport equipment addressed the population’s growing demand for various devices Electricity in the Cities ◦ ◦ ◦ ◦ ◦ electricity powered the streetcars urban transportation becoming more accessible no longer needed to live near work cities slowly growing to the agricultural lands allowed for great comfort for those who can afford appliances subsistence agriculture increasingly lost ground to highly specialized production increased yields due to more efficient agricultural tools farmers gradually integrated into commercial networks farmers tried to satisfy markets in Britain and America for many things including dairy products and the slaughter of animals dairy production had the greatest progress after 1880 farmers also created the dairy products ( cheese, butter, etc). ◦ 80% of cheese production in 1890 was intended for export, while butter was mainly for local markets government encouraged specialized schools to aid in the growth of the dairy industry expanding sectors needed more workers working-class districts began to appear in the cities as work was available living and working conditions appalling ◦ wages low, workdays long ◦ workers who were sick or injured often fired and quickly replaced 1885: Manufacturers Act: included clauses which provided for the protection of the health and security of workers ◦ established a minimum age of workers -limited work hours ◦ did not allow for a paid leave 1886: establishment of the Royal Commission on the Relations on Labour and Capital ◦ published report in 1889 ◦ report recommended improvements, proved difficult to implement workers often powerless against employers end of 19th c.: creation of labour organizations Knight of Labour and the unions affiliated with the American Federation of Labour were influential 1921: Catholic church supports the establishment of the CCTC ( Confederation des Travailleurs Catholiques du Canada) ◦ to counter foreign unions labour unions had a hard time getting their claims heard, they had no legal status electricity and the development of industrial production was a major factor in the economic growth at the turn of the 20th c. 1920s: crisis which forced governments to change their roles in the economy 1920s: Canadian and Quebec economies experienced a period of prosperity Europe recovering from war which pumped money into the world economy people not able to consume all that was produced which led to surpluses companies curbed the rate of production to fix this issue, lowering their stock value climate of insecurity among investors, stopped putting money into banks banks went bankrupt events culminated in the Crash of 1929 when stock prices in NY exchange collapsed beginning of serious economic crisis throughout the world Canadien economy in a recession ◦ Recession: A slowdown of economic activities, which can be measured by the decline of employment and the GDP effects felt for almost a decade 1933 Great Depression at its worst: 1/4 of the population unemployed municipalities asked the government for assistance government instituted a protectionist trading policy tried to foster the development of a domestic market ◦ only worsened the problem, slowdown of industrial input people started to question capitalism in the 1930s: capitalism linked with serious problems free enterprise and speculation led to fluctuations: uncontrolled phases of growth and depression speculation: financial activity that consists of profiting from economic fluctuations governments gradually implemented social and economic measures ◦ aim to support the economy and provide relief for those hit hard by the crisis economic crisis quickly faded after Canada joined WWII on September 10, 1939 allies relied on Canadian industries, located far from the war supplied the Allied forces with foodstuffs and military equipment demands intensified and stimulated war production transformed postwar economy and society 1940: federal government enacts the National Resources Mobilization Act ◦ allowed the government to take all available resources established the Departments of Munitions and Supply ◦ in charge of managing the production of munitions ◦ regulated the supply of certain productions and raised taxes federal government introduced Victory Bond Loans ◦ consumers would earn profits on their savings while lending the government money, used for the war effort growth of almost all industrial sectors and boosted employment rapid production of textiles, food processing, iron, steel and extraction and processing of natural resources within Quebec new period of prosperity ◦ unemployment rate declined, standard of living rose ◦ average wage grew federal government worried that the end of the war would be bad for the economy they acted quickly ◦ implemented subsidized programs to help industries change to peace times economic prosperity continued after WWII 1945-1960: vast production and consumption movement within the population tertiary sector developed, employed more of the population global demand for raw materials stimulated activities related to the exploitation of Quebec’s natural resources The Growth of the Tertiary Sector Mass Consumption ◦ introduction of social programs drove the government to build public and administrative infrastructures ◦ workers growing and needed specialized training which created more jobs ◦ specialized workers formed unions during the war ◦ tertiary sector workers started to unionize post war ◦ workers now could have: 1-2 weeks of paid vacation 40 hour work week overtime pay health insurance plan option to pay towards a pension fund ◦ saving from Victory Loan Bonds increased Quebecer’s purchasing power ◦ mass media disseminating many advertisements The opening of resource territories ◦ U.S.A. importing large amounts of natural resources ◦ Cold War pushed USA to make a military arsenal, pulling resources from Quebec ◦ Large American companies paid to develop land were resources were plentiful ◦ mining production increased ◦ provinces economy highly dependent of the provinces trade relations with USA ◦ American companies invest in Cote-Nord region due to iron deposits ◦ many move to mining towns for work ◦ control by foreign players on Quebec’s national resources fuelled economic nationalism in Quebec governments increasingly intervening in economy, since the Great Depression ◦ introduced social programs, stabilized economic fluctuations major social, political, cultural, and economic changes in Quebec during the 1960s ◦ Quiet Revolution state in charge of social programs due to the baby boom ( Welfare State) money invested in new institutions and public infrastructures 1960s/70s: Quebecers starting to realize that foreign companies controlled part of the economy ◦ American imperialism natural resources first to be targeted by the new economic nationalism ◦ economic nationalism: an interventionist policy whose goal it is to strengthen a state’s hold on its economy 1962: Quebec’s government bought most electricity companies and integrated them into Hydro-Quebec 1962: Societe generale de financement (SGF) public corporation ◦ mandate: stimulate Quebec’s economy by financing companies seeking to develop and modernize 1665: Caisse de Depot et Placement created ◦ managed funds of several public corporations due to these investments standard of living in Quebec improved new francophone elite starting to develop new elite active in public service, union movements, public corporations and business 1967: World Fair: offered Quebec companies to showcase their expertise shift in the countries economic center from Montreal to Toronto 1960s: state establishes the Ministere de l’Education established a public sector of secondary schools, CEGEPs, and subsidized some universities hoped to contribute to the improvement of Quebecer’s socio-economic status and the the emergence of a labour force 1960s/70s: the tertiary sector continues to expand, passing the primary and secondary sectors economic development not the same for all the areas of Quebec government tried to reduce the disparities by intervening in regional economic development 1961: Jean Lesage’s Liberal government set up the Quebec Economic Advisory Council 1963: Eastern Quebec Development Bureau ( BAEQ) 1970s: major economic fluctuations put breaks on Quebec’s prosperity 1973/1979: Organization of Petroleum Exporting Countries (OPEC) curb oil production and raise prices rise in transportation costs raises all prices 1980s/1990s: new economic context characterized by the expansion of commercial networks 1980s/90s: major economic fluctuations inflation rapidly increase, GDP experience a major drop ◦ Inflation: economic phenomenon that characterized by a general rise in prices increase in prices means loss of purchasing power, meaning companies had to curb production and lay off workers = rise of unemployment rate stagflation: simultaneous rise of consumer prices and unemployment rates funding of social programs contributes to the creation of a deficit during an economic recessions 1980s/90s: federal and provincial governments restricted their expenditures 1984: Brian Mulroney Progressive Conservative Party starts this trend government reduced the number of civil servants and cut funding ◦ undertook privatization of certain public corporations Privatization: act of transferring to the private sector Quebec suffering similar problems 1996: Lucien Bouchard became Premier of Quebec ◦ aimed for a zero deficit, based on strategy called ‘shift to ambulatory care economists said that Canada’s market not large enough to sustain true economic growth to enlarge markets it increased trade with the USA 1986: Mulroney’s government began negotiations aimed at ratifying a free trade policy ◦ opinions divided on this issue January 1, 1989: Canada-United States Free Trade Agreement ( CUSFTA) came into effect, for 10 years renegotiated prior to expiry in order to include Mexico ( NAFTA- North American Free Trade Agreement) ◦ ended 1994 liberalization of trade intensified after the 1980s computer science and communications increased mobility of products and information globalization opened Quebec market to global competition globalization of trade ensures growth of certain industries and keeps consumers supplied Quebec entrepreneurs benefit from business delocalization ◦ business delocalization: a change of geographic location of a company’s activities, particularly to reduce production costs 1950s: Quebec moves to be post-industrial The Growth of the Tertiary Sector ◦ creation of wealth accelerated in the 1980s ◦ due to technological advances ◦ tertiary sector jobs required more education, but don’t offer the same benefits ◦ increase in this sector contributed to intensification of regional disparities The Decline of Primary and Secondary Sectors ◦ less humans needed for these sectors with advancements in technologies ◦ number of jobs in secondary sector declined ◦ modernization leads to reduction of personal ◦ leads to business delocalization
