1. Timber, Wheat & Reciprocity
Economic Development in British North America,

2. Emergence of New Staples
Post-1800: new staples replace fur as major exports
Timber & Wheat become valuable colonial exports
Sold in "protected" British markets

3. The Timber Trade
Large demand for timber in Britain - shipbuilding (British Navy)
Britain's supply exhausted by 1800
Britain had relied on 13 Colonies and northern Europe (Russia & Sweden) for timber
American Revolution led to loss of 13 Colonies' timber
Napoleonic Wars ( ) cut off access to European timber

4. Birth of a New Staple
British North American colonies (esp. New Brunswick & Upper Canada) had abundant forests
Colonial timber trade develops after 1800
Colonial timber imported into Britain without duties (preferential trade status)
Duties placed on European timber, making it more expensive

5. Impact of Timber Trade Timber boom in New Brunswick & Upper Canada
Shipbuilding becomes a "secondary" industry in Atlantic colonies (wooden sailing ships)
Nova Scotia experiences "golden age of sail" - era of prosperity based on shipbuilding and trade
Timber ships provide cheap transportation to BNA for immigrants after 1815

6. Decline of Timber Trade
Late 19th c.: Development of iron and steel vessels powered by steam - Nova Scotian prosperity declines
Lower demand for timber creates need for new staples

7. Wheat: An Agricultural Staple
Napoleonic Wars ( ) cut off Britain's access to European grain
Britain seeks a secure wheat and grain supply in British North America
Grain and flour production expands rapidly, esp. in Upper Canada

8. Wheat: An Agricultural Staple
1820: Corn Laws (British law) impose duties on grain products entering Britain from outside the Empire
Colonial grain, like timber, enjoys preferential trade status (imported without duty)

9. Economic Impact of Wheat
Basis of Upper Canada's economy
Significant population growth
Development of new settlements
Improved transportation: roads and canals built to move grain to markets
Secondary industry: flour mills built to process grain

10. End of Preferential Trade Status
Preferential trade status for colonial products makes European staples more expensive
1840s: British industry producing large quantities of manufactured goods
British manufacturers want to sell their products in European markets
Campaign to eliminate preferential trade status for colonial staples

11. End of Preferential Trade Status
1846: British government repeals Corn Laws
End of preferential trade status for colonial staples
Britain adopts policy of "free trade"
Necessary staples imported from Europe in exchange for British manufactured goods

12. Impact on British North America
End of preferential trade status means loss of British markets for colonial wheat and timber
Trans-Atlantic shipping made BNA staples more costly than European staples
Economic depression threatens to destroy colonial economies
1849: Montreal merchants issue Annexation Manifesto, suggesting that Canada join the United States as a solution!

13. Securing A New Market
BNA colonies look to the United States to replace to lost British markets
British Governor-General Lord Elgin opens negotiations with the United States
Result - Reciprocity Treaty (1854)

14. Reciprocity Treaty of 1854
Free trade in natural resources (staples) between BNA and the US
American fishermen given access to North Atlantic fishery
Shared access to Great Lakes & St. Lawrence River
10-year agreement
Could be ended by either party after two years' notice

15. Effects of Reciprocity
Upper Canada exports timber and wheat to US
Atlantic colonies export fish, timber and coal to US
Trade increases during American Civil War ( ) - shortages, greater demand for resources
Result - Economic prosperity returns

16. BNA - US Trade ( )

17. End of Reciprocity (1866)
1864: Americans give notice to end Reciprocity in 1866
Reasons: A) Poor relations with Britain during the American Civil War
B) Some Americans believe ending Reciprocity would force BNA colonies to join the United States
Loss of guaranteed American market creates another economic crisis in BNA

18. An Uncertain Economic Future
How can the BNA colonies best secure their economic future?
Some form of political union (Confederation) becomes one possible solution