On July 1, 1867, the denizens of the new Dominion of Canada launched themselves on the uncharted waters of federalism. Implementing this new system involved numerous challenges, in addition to the old ones that had brought the union into being. It was not entirely clear that federalism was a panacea for these problems, but it did offer a new way forward. The next thirty years would see the Dominion address most of these challenges, but not without undergoing a series of crises that threatened and then defined the new super-colony.
Confederation was implemented in very different ways in central Canada and the Maritimes. All the governments of Nova Scotia and New Brunswick had to do was ignore the responsibilities that the BNA Act assigned to the new central government and continue exercising those left to them. Both governments reduced the number of MLAs, ministers, and civil servants. The people were now citizens of the new Dominion, but for many years their prime loyalties would remain with their own provinces and the British Empire. In central Canada, the old government was completely abolished and its responsibilities divided between a new central government in Ottawa and the two new provincial governments of Ontario and Quebec. The central government inherited the magnificent Parliament buildings that had just been built, plus the vast majority of politicians and civil servants of the old province.
New Governments for the Dominion, Ontario, and Quebec
One of the first orders of business was electing assemblies for the new provinces of Ontario and Quebec, for the new Dominion, and for the old Maritime provinces. Britain wanted to make sure that the new system would be successful so, in effect, it rigged the first elections in Ontario, Quebec, and the Dominion. Two months before Confederation, Governor General Monck dissolved the Grand Coalition and called on John A. Macdonald to form a government. Technically, that was still the government of the old Province of Canada, but the plan was to ensure its re-election so it would become the government of the new Dominion. To reinforce his prestige and indicate its blessings, Britain made Macdonald “Sir John,” a reward that annoyed his colleagues. The appointment gave him and the pro-federalists control of the government, the election machinery, and patronage, the latter being the ability to offer jobs immediately and make credible promises of jobs in the future. The “new” government was the old Bleu-Conservative coalition, plus a few Reformers, now calling itself the Liberal Conservative party. Most of the Reformers returned to their role as opposition and gradually merged with the Rouges and anti-confederates in the Maritimes to form the federal Liberal party. Macdonald’s party allied itself with pro-confederates in Nova Scotia and New Brunswick such as Tupper and Tilley, and the Conservatives coasted to victory largely on the strength of Cartier’s Bleus in Quebec. The cabinet was expanded to include three Maritimers and got on with the task of implementing Confederation.
Confederation required the creation of an entirely new government for Ontario. John A. Macdonald, his supporters, Britain, and Governor General Monck wanted to ensure that federalists dominated this government so, in effect, they also rigged the first Ontario election. Before the province was created, Macdonald appointed its first lieutenant governor and asked him to appoint John Sandfield Macdonald as interim premier. The provincial election was held at the same time as the federal one with the two Macdonalds dispensing patronage and promises, co-operating in the selection of candidates, and campaigning together. Sandfield won fifty out of the eighty-two provincial seats, while John A. won forty-nine of the eighty-two federal ones. The two Macdonalds then set out to govern Canada and Ontario as they thought they should be governed—with a strong central government and a weaker provincial one. Sandfield Macdonald adopted a subordinate position, even sending John A. drafts of Ontario legislation for his approval, comment, or amendment.
In spite of Ottawa’s involvement, Ontario’s provincial status worked as George Brown and the Reformers hoped it would. French-Catholic MPs and ministers in Ottawa no longer had influence on policies in the new Ontario, and the problems of administrative paralysis and instability disappeared. Sandfield Macdonald’s regime forged ahead with a series of reforms in education, put the taxation of timber-cutting rights on a sound basis, and encouraged immigration from Britain. Government spending jumped 50 per cent in four years, but could not consume the huge federal subsidies Ontario received from the Confederation agreements.
Sandfield Macdonald’s alliance with Ottawa was not successful. John A. Macdonald’s majority rested heavily on Quebec, and he had to make a number of decisions that seemed to favour French Catholics especially in the case of rights granted to them in the new province of Manitoba, which infuriated English-Protestant extremists in Ontario. Sandfield had to support John A. and was seen as his lackey. Sandfield almost lost his majority in the 1871 election. Old, sick, and dispirited, he met the Assembly, lost several votes, and resigned. The Liberals took power, and their relations with Ottawa would be very different.
The defeat of Sandfield Macdonald’s government in 1873 terminated one of the tactics John A. had devised in his plan to dominate the provinces. Under the new arrangements, it was possible for a politician to be elected to both the House of Commons and the Ontario or Quebec assemblies and nineteen politicians were elected to two assemblies in 1867. John A. Macdonald intended to use them to help dominate the two provincial governments. The Reform/Liberal Party of Ontario believed that the provincial and federal assemblies had to be completely separate. The new premier, Edward Blake, abolished the duel mandate system, saying that the Ontario government had to “be absolutely independent of the other in the management of its own affairs” and that all “interference in Ontario’s business would be protested . . .”
In July 1867, French Canadians elected their first government ever. George-Étienne Cartier’s Conservatives, or Bleus, easily won fifty of the sixty-five seats in the new provincial assembly and forty-five of the sixty-five federal ones. Cartier selected the first Quebec premier, Pierre Chauveau, who deliberately included English-speaking politicians in his cabinet. Since Quebeckers were generally satisfied with the deal, the Liberal/Rouge opposition grudgingly accepted it and the constitution ceased to be an important political issue. The new government began creating departments, a bureaucracy, and offices in Quebec City. A new assembly building emerged just west of the crumbling walls of the old city. The government had the support of most Catholic clergy, the Protestant minority, businessmen, and its powerful political partner, the federal government. The new provincial government’s responsibilities were limited, and of those, the churches would continue to administer some of the most important. Relations with Ottawa were relatively smooth for the next half-century.
One of this government’s first priorities was implementing the clauses in the BNA Act that gave Quebec responsibility for education while protecting the rights of Protestants. The government replaced the Council of Public Instruction with two separate organizations, one run by the Catholic Church, the other by representatives of the Anglican, Presbyterian, and Methodist Churches. The Protestant minority had full control of its education, which was confirmed in 1875 when Quebec abolished the Department of Education so that schools would be free from political interference. Health and welfare also continued to be administered by churches, so Protestants were in control of almost everything that touched their personal lives. Canadiens were now maîtres chez nous in Canada, and the English-speaking Quebeckers were essentially maîtres chez nous in Quebec, the best of both worlds for both groups.
Nova Scotia, the Reluctant Province
The first post-Confederation election in Nova Scotia was very different from those in central Canada. Confederation was generally met with anger or indifference. Charles Tupper and other pro-Confederation politicians were burnt in effigy, editorials bemoaned the death of their separate colony, and gloomy predictions were made for the future. For decades, Nova Scotia refused to make July 1 a holiday. Tupper’s government implemented the administrative changes required by the BNA Act and reduced the size of the Assembly from fifty-five to thirty-eight members, and the size of the cabinet from five to four. On July 4, Tupper was replaced by a new premier, Hiram Blanchard, but Tupper ensured that the federal and provincial elections in Nova Scotia were postponed until the federal election had been held in Ontario, Quebec, and New Brunswick. The pro-confederates won in those three provinces so when Nova Scotians went to the polls on September 18, Confederation was a fait accompli constitutionally, legally, and politically.
The Antis who opposed Confederation contested all thirty-eight provincial and nineteen federal seats. Their leaders were Joseph Howe at the federal level and William Annand in the provincial wing. Their main goal was to convince Britain to allow the province to withdraw from the arrangement. The pro-Confederation side—Conservatives or Unionists—entered the 1867 election saddled with the blame for the terms of the agreement and for the way they had been forced on the province. They were accused of bribing their opponents, lying to London, abusing the lieutenant governor’s powers, and mismanaging finances. The results took even the Antis by surprise. Tupper was the only pro-confederate to win a federal seat, and the Antis won thirty-six of the thirty-eight provincial seats. It was stunning proof that Nova Scotians were overwhelmingly opposed to Confederation and that Tupper had been wise not to seek any form of approval for the plan.
The new anti-Confederation MPs decided to take their seats in Parliament so they could argue the province’s case, a move that implied recognizing the Confederation deal, and in Halifax the anti-Confederation MLAs formed a government with William Annand as premier. The Antis sent a delegation to London under Howe and Annand to convince the British government that Nova Scotia had been forced into Confederation against its will. In London, the colonial secretary refused to meet them: he was, after all, the one who had forced the colony into Confederation. Howe and Annand discovered that the British politicians and elites had no intention of seeing Confederation unravel.
It was soon evident that the criticisms of the Confederation scheme were correct. Nova Scotia’s most serious grievance concerned the financial situation. After cutting the roads budget from $240,000 to $100,000, the province still had a deficit of $100,000. Its tariffs had been 10 per cent, compared to the former Canadian one of 15 per cent. Ottawa applied the old Canadian rate, imposed it on more items, and added taxes that were new to Nova Scotia, effectively raising the tax rate by over 50 per cent, with all the money flowing to Ottawa. Ottawa took over the branch rail lines that would be amalgamated into the Intercolonial Railway and then raised the fares. The harsher criminal code of the old Province of Canada was implemented. The few civil servants who retired from the old Canadian bureaucracy received pensions; those who retired from the Nova Scotian administration did not. Despite being home to one-tenth of the Dominion’s population, Nova Scotians obtained only two of the five hundred jobs in the new federal administration.
Tupper was rewarded with a cabinet position in Ottawa, plus the job of convincing Howe that the most he could hope for were some improvements, changes which came to be known as “better terms.” Ottawa offered to provide an additional $83,000 per year for ten years, the same amount New Brunswick had obtained in 1866. Macdonald negotiated the deal with Howe and refused to deal with any provincial minister to make the point that MPs, rather than provincial governments, represented the provinces in Ottawa. In December 1868, Howe accepted the offer. He does not seem to have pursued the other grievances, and the financial offer did not eliminate the deficit and would only last a decade. Since it was clear that Howe would enter the federal cabinet, “better terms” were in effect agreed between the prime minister and his new minister-in-waiting. Annand’s government had no choice but to swallow its pride and accept the deal. One by one, the anti-Confederation MPs abandoned the cause or were bought off with positions or influence.
Macdonald’s deal with Nova Scotia raised a serious issue regarding federalism. The BNA Act had been negotiated by delegates from the five colonies. In giving better terms to Nova Scotia, Ottawa was unilaterally changing Section 118, which identified the subsidies for all the provinces. Edward Blake, Leader of the Opposition in the House of Commons, argued that the terms of the BNA Act could not be changed without the approval of the provinces. That challenge was ignored, but it was the opening shot in the battle over how to amend the constitution, a battle that lasted for more than a century. It also demonstrated how easy it was for the federal government to change the terms of the constitution without formally amending the wording. Significantly, the British government said nothing about this change to its own legislation, and an important precedent was set by Ottawa and London. Most changes to the BNA Act from then on were made by unilateral action or bilateral agreements, not by formal amendments to the wording of the Act.
The “better terms” of $83,000 annually came to an end on July 1, 1877. When Premier Phillip Hill asked for an extension, Ottawa refused. In 1876, Ottawa finally had completed the Intercolonial Railway, fulfilling the promise that had been written into the BNA Act. It then refused to provide any more support for railways, its efforts now being concentrated on a railway to the Pacific, which would be paid for in part by Nova Scotians. Hill’s successors carried on the battle with Ottawa throughout the rest of the century. They even threatened to separate, but their pleas went unheard. It was clear that the province’s delegates to the various Confederation conferences should never have accepted the eighty-cent per-capita subsidy because it was, indeed, seriously inadequate for the responsibilities left to the provinces. The result was that demands for federal funds have been a staple of Nova Scotian politics throughout the 150 years of Confederation.
New Brunswick: Resigned to Confederation
In New Brunswick, people greeted Canada’s first Dominion Day with resignation. Tilley and most of the politicians who had supported Confederation went off to their rewards in the new federal government. A number of minor politicians replaced them, A.R. Wetmore becoming the first premier of the Canadian province of New Brunswick. The Confederation debate had grouped most politicians into two loose coalitions, the Antis and the pro-confederates. The latter won the 1866 election, and remnants of that group remained in power after Confederation, tending to support the federal Conservatives. The losers from the Confederation debates were mostly Reformers or Liberals, and tended to support the federal Liberal party. Many of the MLAs had switched sides during the debates, and three of the first four premiers had in fact opposed Confederation. One of them, Premier Wetmore, commented that at least he had been right half the time.
As Wetmore and his new cabinet got on with the job of administering the diminished role left to the province, they discovered that the critics had been right about the inadequacy of the federal subsidy. A delegation sent to Ottawa to request a recalculation ran into the stark realities of Confederation about which the Antis had warned. Central Canadians had effective control of the levers of power, New Brunswick had few MPs and only one cabinet minister, and those politicians seemed to have more loyalty to the new federation than to their home province. The delegation returned to Fredericton empty handed. Five years later, Premier George King negotiated an increase in New Brunswick’s subsidies plus a grant in lieu of the loss of export tariffs on American timber shipped down the St. John River. These arrangements temporarily eased the financial problem, but in 1877, the increase in subsidies came to an end and the province continued to suffer from serious financial constraints. Overall, New Brunswick went into relative decline after 1867 and Confederation was blamed for it, an accusation that had some merit.
Manitoba, an Unlikely Province
While the federal system was taking hold in the original four provinces, other colonies were edging closer to joining. Indeed, rounding out the Dominion would be one of Macdonald’s greatest achievements. BC and PEI should have been next, since the blueprint definitely called for their inclusion. Instead, a number of developments and miscalculations propelled a tiny piece of the prairies to provincial status, and Manitoba became Canada’s fifth province. Its conception was an accident, its birth premature by at least a decade, and the strange circumstances of its arrival on the scene created federal-provincial problems that endured for over half a century.
The Confederation scheme called for the purchase of Rupert’s Land from the Hudson’s Bay Company. Ottawa planned to administer it, develop it, and exploit it into the indefinite future or until its population was so large that parts of it could become provinces. This plan might have succeeded had it been properly implemented. Instead, numerous mistakes by the federal government led to a rebellion, which in turn led to the grant of provincial status. The first mistake was the failure to inform the roughly ten thousand inhabitants of the Red River Valley of Ottawa’s plans. It was clear at Red River that the status of the prairies was about to change dramatically; it was not clear at all what those changes would be and how they would affect the local inhabitants.
A majority of the population was Catholic, mainly Métis, the offspring of French fur traders and First Nations women. But settlers were arriving from Ontario, British Protestants who acted as though they were going to dominate the new federal territory. Given the history of religious and racial animosity in Ontario, the Métis saw this as a clear threat, and events soon proved them correct. Unease was magnified when Canada sent expeditions to evaluate resources and conditions on the prairies. The new settlers questioned the validity of the land titles that had been issued by Lord Selkirk and by the Hudson’s Bay Company, HBC, and the Métis had no legal titles to the homes and farms they had occupied for years. Ottawa then sent a survey team to mark out the land and to do so in square miles. That violated the existing pattern of land occupation with lots running back from rivers so that every farmer had access to water transportation. A young Métis by the name of Louis Riel stopped the survey team. That was not an act of rebellion against Ottawa since the HBC still owned the territory, but it was an unmistakable challenge.
The challenge should not have come as a surprise. In the summer of 1869, William McTavish, the HBC governor at Red River, visited Ottawa to warn the government of the growing tension. So did the main religious leader, Bishop Taché of St. Boniface, who wanted to obtain guarantees of rights for the French language and Catholic religion. Anglican Bishop Robert Machray sent warnings, and Joseph Howe, now a federal minister, visited Red River that October. The head of the survey party also conveyed his concerns to Ottawa. The federal government ignored all these warnings.
Instead, Ottawa exacerbated the situation by sending a lieutenant governor-elect to take control of the region. The appointment was not auspicious, as William McDougall was impulsive and inflexible, and, as Minister of Public Works, was the one who had sent the survey team and ignored warnings about the effects that would have. The timing was not auspicious either, as Canada had not yet assumed title to the territory. The authority of the HBC had virtually ceased to exist, and the inhabitants had created a provisional government to fill the vacuum. One of its first acts was to stop McDougall at the American border on November 2. He issued proclamations declaring, incorrectly, that title had been transferred and calling for the raising of troops. The latter was repudiated by Ottawa, and McDougall was ordered to say no more. The threat of troops and the confusion over the title only served to increase anxiety in the colony.
In the absence of governance by the HBC, London, or Ottawa, with no experience in governing, and in very confused and tense circumstances, the provisional government carried on quite well. An assembly of French- and English-speaking members was elected and draft terms were prepared for negotiations with Ottawa. The inhabitants wanted title to lands already occupied, provincial status, control of public lands, better communications with central Canada, and money for public works. Riel was elected president, the HBC governor recognized the new government, and three delegates were nominated to negotiate with Ottawa. The fact that Ottawa agreed to negotiate with them implied that it too recognized the provisional government.
Before the delegates arrived in Ottawa, the situation in Red River changed dramatically. A group of Canadians who had never accepted rule by the Métis majority launched a revolt against the provisional government. It failed and sixty-five men were imprisoned. In February 1870, another attempt to overthrow the provisional government failed. One of the more extreme leaders, Thomas Scott, continued to promote jail breaks, to urge rebellion, and to insult the guards. He was tried and executed in March. That ended the turmoil in Red River, but it inflamed Orange Protestant opinion in Ontario where people demanded revenge and the suppression of Red River by force. French Catholics in Quebec had never paid much attention to the West, but now they became sympathetic to the plight of the Métis. This was the beginning of a very important trend. Prior to Confederation, French Canadians in Lower Canada had not regarded French Catholics in other colonies as being part of their nation; by 1900, they viewed French Canadians everywhere in Canada as part of the same nation. With the Dominion becoming seriously divided on religious and racial lines, the federal government’s weak ability to deal with the situation grew weaker.
On arrival in Ottawa, two of the delegates were arrested for the murder of Scott. They were soon released, and agreement was quickly reached on the terms by which Manitoba would become a province. It was granted provincial status, with a government and dualistic educational system like Quebec’s, and recognition of existing claims to land. It was allotted two senators and four MPs, which was vastly more than its population warranted. George Brown’s great achievement of a central government based on the democratic principle of rep by pop had survived a brief three years, and Manitoba’s overrepresentation was an important example of Ottawa making federalism asymmetrical for political reasons. While Ottawa conceded the necessity of provincial status, it had no intention of creating a province like the original four. Manitoba’s area was limited to a small square around Winnipeg, about 150 kilometres on each side, roughly 4 per cent of the present province, a fraction of 1 per cent of the North-West Territories. These restricted boundaries were soon to become a major problem in federal-provincial relations, an irritant not solved until 1912.
More seriously, Ottawa retained control of natural resources in contrast to the situation of the original four provinces and that of BC and PEI, both of which joined Confederation after Manitoba. This made Manitoba a second-class province and the Dominion more asymmetrically federal. It meant that, when BC and PEI joined, the resources of six provinces could be exploited primarily for the benefit of their citizens, but the resources of Manitoba belonged to all Canadians. That was an act of discrimination that was not resolved until 1930, and it created an attitude of distrust towards Ottawa that has never died.
The federal government argued that it had to control natural resources in Manitoba in order to populate the prairies and to build a transcontinental railway. Neither argument was credible. The “postage-stamp” province was rapidly being occupied by settlers from Ontario, people with capital, experience in farming and government, and no need of government assistance. No province needed railways more than land-locked Manitoba, and Ottawa had built the CPR and the Intercolonial through provinces that controlled their own land. Besides, Ottawa had the rest of the prairies with which to subsidize the railway. In short, Ottawa bought Rupert’s Land in order to have a colony, and while forced to cede provincial status, it had no intention of giving up ownership and control of land and resources. The Manitoba Act was approved on May 12, 1870, and Manitoba became Canada’s fifth province on July 15.
Passing legislation was one thing, creating a viable province quite another. For years, the lieutenant governor wielded considerable power while political parties and leaders were gaining experience. The province immediately faced the question of an amnesty for the Métis leaders, an amnesty Bishop Taché of St. Boniface believed he had been promised. Instead, several leaders were arrested and found guilty of murder. Fortunately, a wise governor general commuted their sentences, and Riel fled to the United States. Though peace reigned at Red River, Ottawa did not recall the military force that had been raised in Ontario to deal with the insurrection. This expedition, numbering a tenth the size of the entire population at Red River, was bent on revenge for the execution of Scott. It did more damage in nine days than had occurred in nine months of Riel’s provisional government. Thus did Manitoba become a province.
BC and Dominion from Sea to Sea
On the west coast, the British colony of Vancouver Island had existed since 1849, a lonely outpost of empire with a few hundred colonists engaged in agriculture and supplying the British navy. The gold rush of 1858 produced a flood of immigration to the mainland so on August 2, 1858, Britain created the separate colony of British Columbia, a name designed to make clear that the northern half of the Columbia River basin was British and not American. Worried that the gold seekers might venture into the Peace River country, Britain included that region in BC. The eastern border of the colony was fixed along the Rockies from the US border to the 120th meridian and then north to the 60th degree of latitude. Thus the colony of BC obtained a corner of both the prairies and of the Arctic tundra to add to its geographic variety, and it was larger than either Quebec or Ontario.
Britain could not afford two administrations on the west coast, and on November 19, 1866, it united the two under the name British Columbia. A number of immigrants from Canada and the Maritimes began to suggest that BC should join the super-colony that was being created on the east coast. Their motives were personal, financial, and even social. They had been shut out of government jobs and high society by the dominant English and HBC elite. They assumed they would replace that elite if BC became a Canadian province. They were also businessmen who hoped that Confederation would bring access to markets and an end to economic stagnation. Leaders soon emerged, such as Bill Smith, who had changed his name to Amor de Cosmos, “Lover of the Universe.” The majority of white British Columbians were opposed to Confederation, and the vast majority of inhabitants, the First Nations, had no voice at all. Canada was many thousands of kilometres away, and it was extremely difficult to travel over land to Ontario. The English and HBC elites were fearful that Confederation would do what the Canadian faction wanted, namely, transfer power to them.
Prime Minister Macdonald arranged for Britain to appoint a pro-Confederation governor, Anthony Musgrave. He was thoroughly familiar with Confederation and his mandate was to bring about BC’s entry into the union. Musgrave advanced the cause by helping to draft a very favourable set of conditions that Ottawa might accept in order to entice the reluctant colony to join. It was a negotiating position, so it asked as much as the politicians dared, much more than they expected. Accordingly, the federal government was to assume the colony’s huge debt, give it an annual per-capita subsidy based on a population estimate larger than its ten thousand inhabitants, build public works including a wagon trail and telegraph connecting the colony to Lake Superior, and start building a railway within three years. Musgrave selected the delegates who met in Ottawa with George-Étienne Cartier, Macdonald being incapacitated, probably due to excessive drinking.
To the amazement of the delegates, Cartier accepted almost all of BC’s demands and offered even more. Ottawa promised a huge annual subsidy and agreed to pay the annual interest on the cost of building a dry dock at Esquimalt. The population was said to be 120,000, more than ten times the actual figure, which would yield far greater per-capita grants than other provinces received, plus six MPs and three senators. Once more, rep by pop, the great achievement of George Brown, was being compromised. To their further amazement, Cartier promised a railway that was to be started in two years and completed in ten. To facilitate the building of the railway, BC was to give the federal government a strip of land twenty miles wide on both sides of the proposed railway in return for an annual grant of $100,000 in perpetuity.
The delegates returned to Victoria with terms that far exceeded their wildest dreams. Musgrave took advantage of the euphoria to call an election for the nine elected members of the Council. Not surprisingly, pro-Confederation candidates easily won every seat and, also not surprisingly, the Council unanimously agreed to the terms. But while BC celebrated, cooler heads in Ottawa wondered why Cartier had promised to build a railway that Canada could not afford. Conservative MPs sensed that the offer was financially impossible and perhaps political suicide. Fortunately, one of the BC delegates, Joseph Trutch, happened to be back in Ottawa. Without any authority from the BC government or Council, he assured the Conservative MPs that BC did not expect Canada to bankrupt itself honouring the terms it had just offered. Cartier promised the House of Commons that taxes would not be raised to pay for the railway, a promise that could not likely be honoured. Parliament approved BC’s admission, and it became Canada’s sixth province on July 20, 1871.
Macdonald found a good candidate for the province’s first lieutenant governor, namely Joseph Trutch, the delegate who had said that Ottawa could violate its promises. He called elections for twenty-five MLAs and selected one of them, John Foster McCreight, to be the province’s first premier. His government immediately went to work setting up Canada’s newest province. Its tariffs and excise taxes were adjusted to the Canadian rates; the British civil service was replaced by British Columbians; a regular judiciary was established; municipalities were mapped out; and a free, universal, non-sectarian education system was created. In many ways, BC borrowed the best of the political and administrative systems from eastern Canada, a tradition that has been followed ever since.
Ottawa had bought BC, but it had not yet paid for it. The main form of payment was a transcontinental railway, to be started in 1873 and completed by 1881. When no surveyors appeared, those who were skeptical about Ottawa’s overly generous terms began to think that the new province had been duped. Newspapers argued that if Ottawa did not honour its terms, then the province did not have to honour its part of the agreement, and it could and should secede. The demand that Ottawa honour its promises dominated provincial politics for a decade and became enmeshed in a series of related issues connecting federal and provincial politics, economics, finances, business, geography, and even surveying.
Before surveying could begin for the railway, a decision had to be made on what route to follow. People on Vancouver Island demanded that the railway start in Victoria, cross Georgia Strait on a series of bridges, traverse the Chilcotin Plateau, and continue on to the Rockies. People on the mainland demanded that it start at Burrard Inlet and follow the Fraser River to the Rockies. Macdonald’s government made little effort to begin the survey and, in 1873, the Liberals, who had strongly opposed the railway, came to power in Ottawa. The main issue in the election was a financial scandal resulting from gifts to the Conservative Party from the consortium that was planning to build the Canadian Pacific Railway. Macdonald was thus the first prime minister to be defeated over the mishandling of matters relating to relations with the provinces.
The arrival of the Liberals coincided with the beginning of an economic depression, which doubly reinforced their intention to delay the railway. The new prime minister, Alexander Mackenzie, asked BC to renegotiate the contract and accept a carriageway and a telegraph line in the immediate future, plus a railway sometime later. This time it was Ottawa that was asking a province for “better terms” and doing so just months after giving PEI “still better terms” than ones previously offered. Federalism was becoming quite confused, with every province obtaining different financial and other terms and different per capita representation in the Senate and Commons.
An infuriated Premier George Walkem took BC’s grievances to London, because the new offer clearly violated the terms of union that Britain had helped negotiate. In January 1874, the Assembly unanimously passed a motion threatening to secede. The worried British colonial secretary, Lord Carnarvon, offered to mediate, which angered Ottawa as it believed that relations between the federal and provincial governments were now an internal Canadian matter. Ignoring Ottawa’s view, Carnarvon proposed a new set of terms, and Ottawa made a counter-proposal. BC rejected these terms and threatened again to secede. In Ottawa, Governor General Lord Dufferin attempted to intervene, but Mackenzie rejected his advice.
Ottawa then offered $750,000 dollars annually in lieu of the broken promise. It was a disingenuous offer as it was not clear if it was compensation for past, present, or future delays or for all three. Lord Dufferin disagreed sharply with Mackenzie over it. Mackenzie also made promises that were contradictory, saying that he would build the railway, but not if it meant going into debt. Since building it would definitely mean going into debt, he was both promising to build it and saying he would not. Dufferin felt that the federal government had lost its credibility on the issue and asked London to mediate.
In the meantime, progress was made on selecting a route. It was decided that the terminus would be on Burrard Inlet, which meant that Victoria was doomed to become BC’s second city. The next question was where it would go over the Rockies. The Crowsnest route east of Trail was unacceptable because the grades were too steep. The best route was the Yellowhead, going up the Thompson River from Kamloops, over the Rockies to Jasper, and on to Edmonton. It was surveyed and proven, and the section from Edmonton to Winnipeg would run through the best agricultural land on the prairies. That route was approved by the Mackenzie government shortly before its term expired. Then, the 1878 federal election returned Sir John A. Macdonald’s Conservatives to power with building the transcontinental railway as their top priority. For reasons that are not clear, the route was changed to the Kicking Horse Pass west of Calgary, a mistake that retarded the economic development of the West and added greatly to the cost of the railway.
Ottawa then built the railway as quickly as possible, completing it in 1885. With the railway problem resolved, the federal and provincial governments quickly settled most other outstanding issues. BC gave the federal government 3,500,000 acres in the Peace River country in compensation for land along the CPR mainline that was not suitable for settlement. Ottawa promised again to begin constructing the Esquimalt dry dock. With the province’s capital now definitely sited in Victoria, the main grievances of Vancouver Island had been addressed as much as they could be. For a few years, the relationship with Ottawa would be relatively tranquil.
PEI Spends Itself into Confederation
On the other coast, Prince Edward Island’s absence from Confederation was unacceptable to both Ottawa and London. However, many Islanders saw a trade arrangement with the United States as a better option than Confederation, and talks were held on the possibility of exchanging access to the local fishery for access to the American market. This alarmed Ottawa, and in August 1869 it sent a delegation to Charlottetown to begin discussions for “better terms.” The new premier, Robert Haythorne, informed Ottawa that no proposal would be acceptable without a complete settlement of the problem of absentee ownership of land. Decades earlier, Britain had given most of the province’s Crown lands to speculators, who left their lots undeveloped in hopes of selling them later for large profits. Leaving the land as wilderness seriously retarded PEI’s development, and land was the most important issue the Island wanted dealt with if it joined Confederation. In January 1870, the Canadian government offered “better terms,” including some small improvements over those covered in the Quebec Resolutions of 1866, plus an offer to help obtain a solution to the land question.
To Ottawa’s surprise, “better terms” were rejected and indeed ridiculed by both pro- and anti-Confederation factions in the Assembly. Emotions ran high after decades of frustration with London over the absentee land ownership problem and five years of fruitless negotiations over Confederation. Arguing that under the proposed terms the province would be giving up £200,000 in customs revenue for £25,000 in subsidies, Edward Palmer asked “if there were three people in the Island who can read and write who are such absolute asses as to make such a sacrifice.” There probably were more than three, but an overwhelming proportion of the population was clearly unimpressed with “better terms.”
With Confederation shelved, the Island’s attention turned to other issues, including building a railway. That was one of the worst decisions ever made by an Island government. No farm was far from a sea port and the volume of traffic would be insufficient to cover costs. These facts were clearly outlined in the Assembly, where the opposition argued that the railway would bankrupt the province and force it to join Confederation. Indeed, some saw it as a conspiracy to achieve just that. The government ignored the criticisms, and the railway bill was approved. Construction proceeded, costs ran over estimates, new branch lines were approved, and new governments added to the problems rather than addressing them. Soon the government had no choice but to ask Canada for financial support. Everyone knew what the price would be.
In December 1872, Haythorne’s anti-Confederation Liberal government asked Ottawa for the “better terms” that the Island had rejected in 1870, plus much more, or “still better terms.” In late February 1873, his delegation arrived in Ottawa, where it found the federal government in a generous mood. Ottawa offered to take possession of the railway, and PEI received an annual per-capita allowance of $45,000, plus another $45,000 annually in light of the fact that London had given away all the Crown lands. Canada would provide a loan of $800,000 to buy out the absentee land owners. Representation in the House of Commons was increased to six MPs, the third violation of rep by pop since it was adopted in 1867. As with BC, Ottawa promised something it could not deliver, namely “continuous communications” with the mainland, which were impossible in the winter. The promise was not even necessary, and failure to deliver on it poisoned relations with Ottawa. It is arguable that the promise was not fulfilled until the Confederation Bridge opened in 1997. Nonetheless, the terms were far better than what Nova Scotia and New Brunswick had received, more examples of asymmetrical federalism.
Haythorne returned to Charlottetown with “still better terms” and called an election to seek approval. The pro-Confederation Conservatives of ex-premier James Pope were miffed that the Liberals had negotiated a very favourable deal, so they campaigned on the promise that they could re-open the talks and get even more. Pope won eighteen of thirty seats, and in Ottawa his fellow Conservatives made some insignificant concessions so he could claim that he had won even more than “still better terms.” Confederation was approved in May 1873, by an Assembly vote of 27–2 and the unanimous vote of the Legislative Council. There were no big celebrations when PEI became Canada’s seventh province on July 1, 1873—Dominion Day—nine years after the Charlottetown Conference.
Though PEI had now obtained far better terms than those of the Quebec Resolutions, the critics of those proposals, especially of the federal subsidy, were proven right. As it carried on with the tasks left to provinces, PEI soon found that the subsidy was quite insufficient for its responsibilities. In 1877, the L.H. Davis government introduced poll and property taxes to reduce the deficit and was defeated as a result. The incoming Conservative administration of W.W. Sullivan introduced new taxes, re-imposed four days of compulsory work on the roads for able-bodied men, and looked for ways to cut costs, including abolishing the secret ballot because it cost too much to administer. It used money from the land sales for general expenses instead of paying back the federal loan and tried to reduce the size of government and abolish the Legislative Council. Like the other Maritime provinces, the government of PEI began a long campaign to correct the errors made in the initial calculations of subsidies from Ottawa. While it has won significant financial concessions, the fundamental problem of the imbalance between its responsibilities and its revenue base has never been solved.
Another piece of the federal puzzle was fitted in when the Canadian Supreme Court was established in 1875. It was not in fact “supreme,” because court decisions could be appealed to the Judicial Committee of the Privy Council, the JCPC, in London. The Supreme Court could in theory settle disputes between the two orders of government on matters of jurisdiction, but justices were selected by the federal government, that is, by one of the parties to such disputes. That was seen by the provinces as a conflict of interest, and the Court’s early decisions reinforced that view as most of them favoured Ottawa. In the first three decades of Confederation, the JCPC often overturned decisions of the Supreme Court, which remained a weak institution until appeals to the JCPC ended in 1949.
Thus, within ten short years many of the goals of Confederation had been achieved or were well on their way to completion. The list is extremely impressive, and Canadians ever since have owed a massive debt of thanks to the Fathers of Confederation and the other politicians who put Confederation into practice. The main problem that led to Confederation, political instability in central Canada, was solved. The creation of Quebec and Ontario, with provincial control of education, health, welfare, civil law, and property, ended the problem of English-speaking Protestants dominating French Catholics and vice versa for at least sixty years. The new federation bought a quarter of a continent from the HBC, accepted provincial status for Manitoba, and enticed BC and PEI into joining.
Within a decade, Canadians had established the basis for a trans-continental economy and a genuine Canadian identity. The danger of absorption by the United States disappeared, and Britain withdrew its troops. By 1877, the new federal government and the new provinces of Ontario and Quebec were well established, the Maritime provinces were adjusting to their lesser roles, BC had democratic government, and Manitoba was developing into a properly functioning province. Of enormous significance is the fact that all this was accomplished without wars of conquest, wars against the First Nations, wars against foreign powers, civil war, or even the use of force within the colonies, the small exception being a few deaths and some property damage during the Red River Rebellion. The exact nature of federalism had not been worked out, though, and the next twenty years would witness many struggles to determine whether the new, huge, united colony would be a quasi-federal regime, in which Ottawa dominated the provinces, or a genuine federation, in which both orders of government would be autonomous in their areas of responsibility.