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The National Policy
 

Origins of the National Policy

A decade before confederation, John A. MACDONALD had favoured a particular strategy for economic development that included tariffs, population growth, and projects such as a transcontinental railway. His biographers note:

“...this business-oriented government adopted a wide range of measures to stimulate economic growth. These included not only continued support of the Grand Trunk Railway but also, in the budget brought in by Inspector General William Cayley in 1857 and seen through the legislature by Alexander Tilloch Galt the following year, the first tariff system of ‘incidental protection’ for Canadian industry. This system, foreshadowing the National Policy of the 1870s, was responsible for ‘numerous manufactories of every description which have sprung up in both sections of the province,’ according to Macdonald in 1861.”

 

Alexander MACKENZIE’s Liberals won the federal election of 1874 just as Canada was beginning to experience an economic downturn. When they failed to raise the tariff in their 1876 budget, Macdonald’s Conservatives campaigned on a platform of tariffs and expenditures called the National Policy. It became government policy with the Conservative return to power in 1878; it would remain the basis of Canadian economic development for another century. These measures proved crucial for businessmen such as William Eli SANFORD:

“A long-time member of the Reform (Liberal) party, Sanford had served as president of the local association. When the Liberals decided in 1876 to stand by existing tariffs, he, like George Elias Tuckett, a Hamilton manufacturer of tobacco, threw his support to the Conservatives and Sir John A. Macdonald’s evolving National Policy. Two years after the Conservatives returned to power in 1878, Sanford’s sales doubled, as did the number of his employees (from 1,000 to 2,000).

“Under the protection of the National Policy, Sanford in 1881 opened in Hamilton and Toronto the first of his chain of retail clothing outlets, called Oak Hall, a name which quickly became synonymous with clothes of good quality and moderate price.”


In an effort to protect Canadian manufacturers from foreign competition, the Macdonald government levied high tariffs on imported materials and finished goods. This approach was supported by former Minister of Agriculture John Henry POPE:

“In 1876 he endorsed Macdonald’s and Tupper’s views of what would become the National Policy: if the Americans were determined to keep Canadian products out of American markets, then Canada should restrict American access to Canadian markets.”


Among the Canadian farmers who agreed with this position was Edward COCHRANE:

“[He] vigorously supported the administration of Sir John A. Macdonald*. For example, in 1886 he pointed out to the commons the benefits of the National Policy for the agrarian community while loyally ignoring the design’s shortcomings.”


Macdonald’s Conservative Party maintained that the National Policy, along with the British connection and resistance to cultural and economic pressures from the United States, were the keys to Canada’s survival. These issues would remain important to Macdonald through to his last federal election in 1891.

For more information on Macdonald’s National Policy, please consult the following biographies.

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