1. Heartland, Hinterland, and the Staple Trade
The impact of economics on British North America in the 19th century

2. The Staple Thesis The Terms and their Definitions
A staple – raw materials or products that dominate an economies exports - in Canada’s early days this would be fish and fur followed by timber, and wheat
Heartland – a region that is the economic centre of a country or empire
Hinterland – a region that provides the resources needed by the heartland
Expansionism – a policy of territorial or commercial expansion, particularly into foreign territory
Mercantilism – an economic system based on obtaining gold and other natural resources and the exploitation of colonies

3. The Staple Thesis
Harold Innis’s staple thesis argues that European expansionism and colonization were motivated by the desire to export staples to enrich the homeland (i.e. Great Britain, France, Spain).
Staples production shaped both the economic development and the settlement patterns in the colonial hinterland.
According to Innis, a staple-based economy can develop in three possible ways...

4. The Staple Thesis Most Successful staple-based economy
An economy is most successful when it expands beyond staples production into manufacturing that supports staple industries.
For example: building ships out of the timber harvested
In time, the manufacturing sector becomes more important than the staples sector and, eventually, the economy ceases to be a staples producer.

5. The Staple Thesis Moderately Successful staple-based economy
An economy is moderately successful when it is flexible and can shift from the production of one staple to another as dictated by changing demands
Canada, with its multiple resources would be an excellent example of this in its early days

6. The Staple Thesis Least Successful or Unsuccessful staple-based economy
An economy is unsuccessful when it becomes mired in the “staples trade.” It continues to rely on the production of staples even though they are no longer enough to provide adequate income.
Many islands in the Caribbean, such as Haiti, that would rely on one staple from large plantations, such as sugar or coffee, would be an example of this type of economy.

7. The Staple Thesis
The settlement and economic development of North America would provide the perfect example of Innis’s staple thesis

8. Cod “Enough to feed this kingdom until the end of time”
The first European outposts in Canada would be those of the English fishermen in the 1500’s who needed to come to shore to dry and lightly salt their fish before returning home – this was a process called “dry” fishing.
Other European countries had an abundance of salt (something England lacked) and could simply apply generous amounts of salt to the fish directly on their boats – this was a process called “wet” fishing.

9. Fur “The Beaver does everything for us”
As Europeans continued to search for the “Northwest Passage” they began trading with the Aboriginals. At first they believed the animal furs were of little value – within a few years however the true value of the furs, particularly beaver, became apparent.
Small colonies established by men such as Samuel de Champlain were set up to gather as many furs as possible – Europeans were beginning to settle in the lands that would become Canada.

10. Fur “The Beaver does everything for us”

11. Timber “The staple that kept an empire afloat”
As the British relied more and more on its Navy it also relied more and more on the timber harvested in North America
The British employed both French and English colonists in the logging industry and that jobs attracted more Europeans to the new world

12. Timber “The staple that kept an empire afloat”
Logging camps, which required far more people than fur trading outposts, began to spring up in the Canadian wilderness

13. Timber “The staple that kept an empire afloat”
As the industry flourished, competition and deforestation around the river routes pushed the logging companies west.
Success depended on accessible water routes for transport

14. Settlement dictated by Economics
There three commercial exploits greatly influenced the patterns of settlement.
In the Maritimes, populations are still concentrated along the coast.
Along the St. Lawrence in Quebec, populations are still very compact

15. Settlement dictated by Economics
The fur trade followed by the timber trade were influential to the development of the St. Lawrence.
However, it was agricultural development on behalf of French Canadien habitants that accelerated the growth of the first true towns of Canada

16. Settlement dictated by Economics
Agricultural development requires much larger towns to support the industry – equipment to run the farm, markets to sell the produce, domesticated animals, and families to work on the farm.
When farming first began in North America the European populations in the new world increased dramatically – but agricultural development and the subsequent population increase was occurring south of Canada

17. Settlement dictated by Economics
The population of the thirteen colonies increased dramatically because of the focus on agricultural development.
Consistent increases in population meant that urban areas would develop faster, and more private businesses would be established.

19. Politics dictated by Economics
It also meant that political issues would be of greater importance to the colonists, given the need to protect property and other specific interests.
The argument could be made that this is why the thirteen colonies sought independence while the northern colonies enjoyed their dependent relationship with Great Britain

20. Populations dictated by Economics
Unlike farming – logging, fishing, and fur trading do not depend on large populations of people and do not necessitate complex forms of nearby settlements for their survival.
This can account for the significant population differences between Canada and the United States – and confirms Innis’ theory.

21. Agriculture in Canada
Agricultural as well as industrial development accelerated rapidly in Canada in the late 19th century.
Between 1885 and 1905 the population of Canada doubled from seven to fourteen million.
Many of these people settled in the Canadian west

22. The Staple Thesis
Canada began as the least successful type of staple economy, relying on only a handful of resources – as a result the economy and the population of Canada stayed small.
In time Canada would grow into the second stage of the staple thesis as it would tap into the vast resources of the country
For Canada to move into the most successful stage of the staple thesis it would need to begin manufacturing – it would take a visionary leader with a new vision of the country to achieve this – more on the John A. MacDonald and the National Policy later…

23. Preferential Trade Status
After the American Revolutionary War of Independence, Britain could no longer rely on the previously established trade agreements with the thirteen colonies.
But even after tensions died out, the trade with the New England states came to a sudden end due to quick deforestation around the Hudson river.

24. Preferential Trade Status
Britain didn’t always depend on her North American colonies for timber.
The Balkan region of eastern Europe was also rich in this resource, it was closer and the British were determined to sustain any economic activity in this commercially important part of Europe.

25. Preferential Trade Status
This trade relationship caused tension with other countries – tensions that lasted until the outbreak of WWI.
It was decided in the mid 1800s that the trade should cease, to the great misfortune of the British Empire.

26. Preferential Trade Status
The demise of trade with foreign powers and the newly established dependence on the colonies encouraged the British to help the colonies whatever way they could.
Canada East and West were burgeoning new colonies at this time (early 1800s) and Britain wanted to see them thrive. If they could sustain themselves, Britain wouldn't’t have to shell out so much cash to protect them. Thus, Preferential Trade status was granted to the colonies.

27. Preferential Trade Status
The British imposed tariffs on foreign imports, but excused the colonies from these taxes.
This helped the colonial producers, because now Canada’s goods were less expensive and were therefore “preferred” by consumers in Great Britain.

28. Reciprocity
Britain eventually ended Preferential Trade Status with the colonies.
Many in Great Britain saw it as a hindrance to trade relations with other countries and the implementation of free-trade throughout western Europe.

29. Reciprocity
To compensate, the British North American colonies turned to the United States and the Reciprocity agreement was born.
The treaty basically stated that raw staples could travel between our borders tariff free. It was decidedly convenient for the Americans during their civil war in the 1860s.

30. Reciprocity
When the war ended, the demand for agricultural products and timber declined and the Americans scrapped the treaty.
Even though it only lasted ten years, the Reciprocity Treaty asserted our economic independence from Britain and initiated our economic dependence upon the U.S.A.