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Economy and Development

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Ms. Bartolone

on 10 June 2015

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Transcript of Economy and Development

Economy and Development
First Occupants (1500-1608)
Present-day Quebec was occupied by
, and
Way of life determined by their
geographical location

Used available resources to sustain themselves
Location determined type of production needed for
development of community
French Regime
British Regime

Trade Networks

Before arrival of Europeans, natives participated in trading system based on
(trade of good for good)
Did this to make up for lack within their climate zone
Trading centers often where two rivers meet
Ex. Confluence of Ottawa and St. Lawrence Rivers
More than an economic system, trade was a political and cultural because it ensured diplomatic ties between tribes
Early Contact
Natives settled near rivers in the summer for easy access to fish and trading with other communities
St. Lawrence was also where natives and Europeans first came into contact
Basques (Spain) and Bretons (France) came ashore to dry the fish they caught and met the natives
What economic activity first brought Europeans to North America?
Forging Connections

Europeans developed commercial connections through trade
: fur
: metal tools, jewelery, mirrors
Fisherman soon realize fur is more profitable than fishing
Fur in high demand in Europe
Felt hats in fashion


: Territorial and commercial expansion in a foreign territory
: Domination of a territory by a foreign state
Early trading posts for fur built by merchants and shipowners
Increased trade/political/military relations between natives and Europeans
Ex. Montagnais and French
Alliances led to imbalances among tribes and wars
Contemporary Period
Economy of New France
mother country
(France) obtained resources from the
(New France)
Mercantilism: Economic policy to become wealthy
In New France, the
became the basis of the economy
The Fur Trade
Originally set up as
trading post colony
, but did not bring in enough revenue
Company of 100 Associates
brought in and given
on condition they populate land
Trading posts
Territory Expanded (39)
Settlement Slow
Wars between tribes

Royal Government!
Changes to Fur Trade
wiped out by 1650
Coureurs de bois
become middlemen
French Merchants
activity for a long time
Increased population led to increased agriculture and

Economic activity with largest number of people involved
Wheat was biggest crop
More land is cultivated
Mills and markets established
Economic Diversification
promotes cultivation of flax, hemp, use of weaving looms and raising livestock
: ship-building (QC City) and ironworks (Mauricie)

These measures are
not successful
lack of capital
scarcity of specialized labor
not as profitable as fur trade
not supported by France (does not fit with mercantilism)
Craft Activities
Craftspeople start to settle in cities in the 17th century
Wigmakers, goldsmiths, silversmiths
Development of carpentry, masonry, hat-making
Leads to growth of cities, boutiques, and workshops

Doc. 57
Three Sisters: corn, beans, and squash
1) Met needs
2) Established Alliances
Economic Activities
Native groups practiced different economic activities depending on their location:
Economic activities had an effect on the organization of society and activities

After the Conquest...
continues under British rule
Establish a policy of
In play until mid-19th Century
Economic policy established by the state to protect the economy of a country from foreign competition
Favor purchasing goods from within empire
Colony is still main supplier of raw materials and goods
Preferential Tariffs
Preferential Tariffs
Lower custom duties on products imported from the colonies
1815 Corn Laws
guaranteed preferential tariffs on the British market to the colonies' grain merchants
Grain imported from the colonies will be less expensive than grain imported from other countries
After the Conquest...
Many French merchants returned to France
Majority of colony's merchants continued to be
New British business class emerges (
British Party
) who want to make everything British
The Fur Trade
Fur trade is transferred to British companies
still doing most of the work since they knew territory and had trade relations with natives

British expand fur trade to the northwest
Great Lakes Region
Hudson Bay Region
Competing Companies
2 rival companies compete for control of trade and fur industry
Competition led to increased trading posts
Also increased battles
Founded in 1670
Radisson & de Groseilliers explored Hudson Bay for England
England claimed land as Rupert's Land and set up trading posts
Competition develops between HBC and French Traders
Hudson Bay Company
Northwest Company
Established in 1779
Based in Montreal
Dominates area around Great Lakes and West
British merchants hire
to work as
Decline of the Fur Trade
There is a decline in the fur trade by the early 19th century:
Exhaustion of the resource
Trading territories becoming increasingly remote
Increased operating costs
Demand for fur in Europe decreasing
Growth of timber trade reduced hunting grounds
Effects of the decline of the fur trade:
HBC and NWC merge in 1821 to form he HBC we know today
Hudson's Bay takes over from Montreal as main place of export
Aboriginals now only have single buyer for fur and single supplier of products
In the early 1800s, timber became the new economic staple as it replaced fur as Canada's main export
1. Napoleon imposed embargo, forcing Britain to look elsewhere
2. Booming due to preferential tariffs
3. Commercial and military needs (shipyards--warships, barrels, potash, pearlash)
The Timber Trade
Primary sector: Extraction of natural resources
Secondary sector: Turning natural resources into manufactured goods
Many secondary economic activities emerged as a result of timber trade
ie. sawmills, naval/building construction
Helped develop secondary sector in colony

Main trades:
log driver
Workers were mostly French Canadians and Irish immigrants
Most timber would be sent to Britain from the Port of Quebec in the forms of beams or construction lumber
Effects of the Timber Trade
On the population:
New jobs
Farmers work on farms in summer and timber camps in winter to increase their income
Timber merchants prosper, leading to a need for banks--
Bank of Montreal
1817 (p.188)
Investing and lending money; new social relationships
Aboriginals see their land and way of life threatened by forest industry

On the territory:
Cleared forests to open up new areas of settlement (Mauricie, Saguenay)
Some native homelands are destroyed
New settlements close to waterways, which is essential for transport and hydraulic energy (for sawmills, steam engines)
Settled the region and built roads, mills, wells, etc.

In the early 19th century, agriculture is still the main occupation of the colony's population
was the main agricultural crop (Corn Laws)
p.183 doc. 70
by the 1830s, wheat production started to decline
the decline?
Poor harvests from unfavorable climate
Overpopulation of agricultural land
Soil exhaustion
of the decline:
Diversification of crops
Animal husbandry
Emigration to new areas of colonization
Emigration to the USA
First Phase of Industrialization & Transportation
New products led to increased change within colony and between villages and urban markets
In the second half of the 19th century, industrialization accelerated the colony's economic development (new tools and techniques)
New machines and concentration of large labor force leads to establishment of big factories
New transportation infrastructures were developed to meet the new trade needs:
1. Canals (merchandise by water; first canal in 1825 [Lachine Canal])
2. Railway Network (merchandise year round and territorial expansion) p.192
A New Economic Policy: Free Trade
Free trade
: an economic system in which customs duties on trading are partially or entirely abolished between participating countries
In in the late 1840s, protectionist trading practices (preferential tariffs are abolished)
Britain can now import goods from other countries
British North America had to deal with international competition
Diversify markets
New trading partners
1854-66 Reciprocity Treaty
(p.187 doc.77)
There were 2 types of manufacturing activities:
1. Craft Production
-Products made for local markets (tinsmith, boilermakers)
2. Processing resources to manufactured goods
-Primary to secondary sector
Canals and railways led to increased urbanization due to growth of industrial and commercial centers at the heart of the transportation infrastructure
Economic Situation in the mid 19th century
: In the 1850s, Britain ends its preferential tariffs for Canadian goods
-Canada has to find a
new market
for its goods!
: USA and Canada signed a
Reciprocity Treaty
-From 1854-1866 there was free trade across their borders
Effects on Quebec's Economy
1) Job losses in some sectors
2) Increased exports

: In 1866, the USA cancels the Reciprocity Treaty
-Canada must find
new markets
for its goods again!
: Canadian colonies unite, making their markets more accessible (transportation made this possible)

Confederation (BNA Act of 1867)
Dominion of Canada
p.195 doc.92
(write some of these down)
Problems in the New Country
By 1873, Canada faces a
characterized by:
-Banks having problems

The country needs a
new economic plan

Fortunately, John A. MacDonald had a VISION for the future of Canada....
The National Policy!
National Policy (1879)
: Create a bigger domestic (home) market for Canadian goods (ie. buy Canadian)
1) High Protective Tariffs (custom duties)
2) Settle the West via immigration
3) Railway Construction (links & transport)
Phases of Industrialization
First Phase of Industrialization (1867-1900)
Industrialization had begun prior to the National Policy (urbanization), but the National Policy
it. Characterized by factories replacing workshops and mechanization.
p. 190-193
Second Phase of Industrialization (1900-1929)
Primarily characterized by expansion of industrial sectors (hydroelectricity and oil)
Living in an Industrialized World
LABOUR in the late 19th Century
-Bad working conditions (p.204)
_________ days per week
____ to ____ hours per week
Women and children are paid less than men
To combat bad conditions, the first unions are created!
-First unions established are branches of American unions
-Catholic Church finally founds a union in 1921 (CTCC)
Union demands
-Prohibition of child labour
-Reduction in working hours
-Laws are passed that improve conditions
Favorable conditions for industrialization
1) Wheat
2) Foreign Investment
3) WWI (1914-1918)
The Great Depression
Industrialization led to a period of increased prosperity, which would become known as the
Roaring Twenties
Flappers and prohibition key elements of 1920s
Reconstruction after WWI pumped money into the world economy
New purchasing power of consumers was not able to absorb all that was produced
Companies slowed production and layed off workers
This created a climate of fear and investors stopped giving money to banks
Without money, banks go bankrupt

Start of
Great Depression
and what becomes known as
Dirty Thirties
1) Overproduction
2) Debt
3) Drought (dustbowl)
4) Government Inaction (no social programs)
Characteristics of the Great Depression
Canada's GDP (Gross Domestic Product) drops 42%
Exports drop by 50% between 1929-1932
Wheat prices crash (bushel of wheat sells for less than it costs to produce-many left their farms)
Unemployment rate rises to 25% by 1933
Prairies hit by dust storms
The unemployed lining up at a soup kitchen

“Hobos” are turned away, as unemployment sweeps the country

Unemployment at its highest level ever in the early 1930s: between 20% and 25%

Dust storms hit the Prairies during the 1930s, driving many from their farms

Government Intervention
Eventually, Prime Minister Bennett takes certain measures to improve situation
1) Public works programs (manual labour, building roads etc…)
2) Direct Aid for unemployed (provide food coupons, clothes, fuel)
*Beginning of Welfare system*
3) Pension Programs
4) Back to the land movement in QC (p209, doc 116)

The Depression forced the gov’t to become much more
involved in the economy (this is called state intervention in the economy!) (p208, doc114)

The Depression finally ends when another world event begins...World War II!

World War II

Canada declares war on Germany in September, 1939
There is a
high demand
for food and military equipment from Europe
Canada’s industries must meet war production needs
Victory Bonds
Unemployment rate declines
Women join the workforce en masse (p. 210, docs 118, 119)
High demand for goods --> increase in production --> unemployment falls (women join the work force) --> consumption picks up...

...Depression is over!!!
Post WWII $PROSPERITY$ (1945-1960)
Post-war reconstruction in Europe
US demand for raw materials and military materials (Cold War)


Increased factory and mineral production (p.214)
Development of petrochemical industry (plastics)

Effects on Society
Employment high, wages high, savings and consumption increase
Increased standard of living
Tertiary sector (service sector) expands
Labour struggles under Maurice Duplessis;
-unions demand better wages, protection against industrial illnesses
-Unions make some gains: workers’ benefits improve (list p213)
Effects on Territory
Cities and suburbs develop
(think baby boom, high immigration, urban sprawl!)

St Lawrence Seaway completed (links Atlantic to interior of continent- see p215)

Expansion of road network (more car owners, more movement of goods)

Quiet Revolution 1960-66
Reaction to traditionalism of Duplessis years:
Quebecers want to take back control of province's economy from foreign investors:
Characteristics of the Quiet Revolution:

Major govt intervention in the economy in the 1960’s
State management of social programs (ie health, education)
Stock Savings Plan
Quebec becomes a WELFARE state (see p216, doc 131)
Construction of infrastructure (roads, metros, dams)
Govt encourages Qc investors
Qc small and medium sized businesses develop with help from govt corporations (SGF)
Govt control of natural resources (Crown Corporations)
Nationalization of hydro in 1962
Huge hydroelectric dams built (Manic 5, la Grande)

Effects of Economic Developments on Society
Tertiary sector expands due to new social programs and govt corporations (workforce needed)
- More workers join unions
-Working conditions improve (vacations, pensions, etc)
Regional disparities still exist
-urban centers still economic hubs, resource centers not as developed
New Francophone elite emerges
new business class

Maurice Duplessis was Quebec’s Premier from 1936 to 1939 and again from 1944 to 1959)
Duplessis was conservative and a traditionalist
-He prized the role of the Church
-Strongly anti-union
BUT modernization also marked his time in power
Ex: Rural electrification program

The Duplessis Era (still post-WWII)
Effects of Economic Development on Territory
Development of industrial zones
Development of transportation infrastructure (ie roads, metro)
Increase in residential construction
Construction of suburban shopping centres

Worker's Demands
1970s: Unionization is easier due to the Quebec Labour Code
Union memberships increase (= rate of unionization)
1970s is the height of the union movement:
Common Front

-->3 biggest unions in Quebec go on strike
of union movement
-->Demand changes to labour laws, measures to combat social inequality
By the 1980s, workers’ demands have changed:
-Protection against inflation
-Parental leave
-Improved pension plans
-Flexible work schedules

How have union demands changed since the early 20th century?

Major economic fluctuations persist: periods of expansion and contraction (p220 doc 139)

: production increases, exports increase, unemployment drops

: production decreases, exports decrease, unemployment increases

Ex of contraction:

-Eg 1980s recession caused by increase in oil prices (snowball explaining how), consequence of 1980s recession: mines and mining towns close (p 220)
-As a result, government tried help by making the state more efficient and reducing costs (more involvement in certain sectors)
Industry and Agriculture in the 1980s and 1990s
High technology sector develops
Aeronautics (Bombardier expands)

Further reduction in cultivated land area (fewer farms since 1960)
Fertilizers & pesticides used (intro’d in 1960s)
BUT organic movement begins

Impact of Economic Fluctuations in 1980s-1990s

-Inflation: when prices rapidly increase, but salaries remain the same
-Stagflation: stagnation and inflation (unemployment and rising prices)
-Deficit: when a country spends more money than it has

-Debt: when a country borrows money to pay interest on their deficit

Brian Mulroney’s Conservative Party cuts services to try and make the country more efficient, and decrease the deficit

of some public corporations (social spending=costly)
-What was once a state-owned company is transferred to a private company
-Petro-Canada Oil

Current Economic Policy
Free trade agreement with USA introduced 1989
Con: (p 222)

Mexico joins in 1994 (Agreement now called

balance of trade
still positive (the value of our exports exceeds the value of our imports – a good thing!) Draw this.

Globalization intensifies
-access to larger markets (yay!)
-threat of loss of jobs (boo)

Tertiary sector most important
-Research and development, services
-Decline of primary and secondary sectors (p225, doc 149)

: the development of an increasingly integrated global economy marked especially by free trade, free flow of capital, and the tapping of cheaper foreign labor markets

Quebec's Economy Today
Primary Sector
Extraction of natural resources
2.5% of Quebec's workers
Secondary Sector
Transforming raw materials into goods
-Manufacturing steel into cars or cars into clothing
20.4% of Quebec workers
Tertiary Sector
The service sector
-Real Estate
77.1% of Quebec's workers
Main natural resources
Main export products
Aluminum and alloys
Newsprint paper
Copper and alloys
Main import products
Precious metals
Full transcript