Canada East

                                   Economy

Around 1760 the colonial economy was still dominated by the fur trade and a commercial agriculture based on wheat. The fisheries, the timber trade, shipbuilding and the forges Saint-Maurice were all secondary. The fur trade was still expanding northwards and towards the Pacific: towards the end of the century, 600 000 beaver skins and other furs worth over £400 000 were being exported annually to England.

All this activity, transcontinental and international by its very nature, was largely concentrated in the hands of the bourgeoisie of the North West Company - the Montréal-based company that had triumphed over its American rivals and the Hudson's Bay Company. However, after 1804, growing pressure from these rivals reduced profits to such an extent that in 1821 the NWC had to merge with the HBC.
The wheat trade underwent equally important transformations. After about 1730 wheat farming, the basis for a subsistence agriculture, started to become a commercial activity, thanks to the development of an external market. This market was mainly the West Indies until 1760, and then it expanded until, by the beginning of the 19th century, it included southern Europe and Britain.

Thereafter, production fell off so sharply that around 1832 Canada East had to import over 500 000 minots (about 19.5 million L) of wheat annually from Canada West. The deficit became chronic. Oats, potatoes and animal husbandry occasionally brought profits to some farmers, but most grew these crops for subsistence. The increasing difficulties in agriculture and in the fur trade adversely affected the population's standard of living.

This was the context for the rapid growth of the timber trade after 1806. Increased production and export of forest products occurred during Napoleon's Continental Blockade when England, to guarantee wood supplies for her warships, introduced preferential tariffs that were maintained at about the same level until 1840, despite successive price drops. Again there was abundant seasonal help in Canada East. The forest industry, with Québec City as its nerve centre, was especially active in the Ottawa Valley, the eastern townships and the Québec and Trois-Rivières areas. Squared pine and oak, construction wood, staves, potash and shipbuilding were the industry's mainstays.

Canada East's economy, transformed in the climate of crisis of declining fur and local wheat shipments, was increasingly Québec-centered and yet more dependent for its exports on surplus production in Canada West. This produced an urgent need for credit institutions and for massive investments in road and canal construction.

                            Special Problems in the Economy:

1.Political deadlock is making it impossible to get anything done in the
    government of Canada East and Canada West. Both English-speaking and
    French-speaking people are accusing the other group of always wanting its
    own way.

2. The loss of the preferred markets in Britain means that the colony must look

    elsewhere to sell its industrial and farm products.

3. In any union of colonies, the French-speaking people of Canada East feel they

    will be swamped by an English-speaking majority.