Maritimes: Encyclopedia II - Maritimes - Economy

Maritimes - Economy

Maritimes - Present status

Unlike the rest of Canada, the Maritime region's population of 1.8 million is geographically distributed throughout the three provinces. Halifax, Saint John, Moncton, Sydney-Glace Bay, Fredericton, and Charlottetown are the largest population centres in the region, with the Halifax, Saint John, Moncton, and Sydney conurbations all having populations exceeding 100,000.

Given the relatively small population of the region (compared with the Central Canadian provinces, or the New England states), the regional economy is a net exporter of natural resources, manufactured goods, and services. The regional economy has long been tied to natural resources such as fishing, logging, farming, and mining activities. Significant industrialisation in second half of the 19th century saw the first steel poured in Canada at Trenton, Nova Scotia, and subsequent creation of a widespread industrial base to take advantage of the region's large underground coal deposits. After Confederation, however, this industrial base withered with technological change and as trading links to Europe and the USA were reduced in favour of those with Ontario and Quebec. In recent years, however, the Maritime regional economy has seen increased contributions from manufacturing again, and the steady transition to a service economy.

Important manufacturing centres in the region, in addition to the previously-mentioned population centres, include Pictou County, Truro, the Annapolis Valley and the South Shore, and the Strait of Canso area in Nova Scotia, as well as Summerside in Prince Edward Island, and the Miramichi area, the North Shore and the upper Saint John River valley of New Brunswick.

Some predominantly coastal areas have become major tourist centres, such as parts of Prince Edward Island, Cape Breton Island, the South Shore of Nova Scotia and the Gulf of St. Lawrence and Bay of Fundy coasts of New Brunswick. Additional service-related industries in information technology, pharmaceuticals, insurance and financial sectors, as well as research-related spin-offs from the region's numerous universities and colleges are significant economic contributors.

Another important contribution to Nova Scotia's provincial economy is through spin-offs and royalties relating to off-shore petroleum exploration and development. Mostly concentrated on the continental shelf of the province's Atlantic coast in the vicinity of Sable Island, exploration activities began in the 1960s and resulted in the first commercial production field for oil beginning in the 1980s. Natural gas was also discovered in the 1980s during exploration work and this is being commercially recovered, beginning in the late 1990s. Initial optimism in Nova Scotia about the potential of off-shore resources appears to have diminished with the lack of new discoveries, although exploration work continues unabated and is moving farther off-shore into waters on the continental margin.

Regional transportation networks have also changed significantly in recent decades with port modernizations, new expressways and ongoing arterial highway construction, the abandonment of various low-capacity railway branchlines (including the entire railway system of Prince Edward Island and southwestern Nova Scotia), the construction of the Canso Causeway and the Confederation Bridge, as well as airport improvements at various centres providing improved connections to markets and destinations in the rest of North America and overseas.

Improvements in infrastructure and the regional economy notwithstanding, the three provinces remain one of the poorer regions of Canada. While urban areas are growing and thriving, economic adjustments have been harsh in rural and resource-dependent communities and out-migration has been an ongoing problem for some parts of the region. Another problem is seen in the lower average wages and family incomes within the region, and depressed property values, resulting in a smaller tax base for these three provinces, particularly when compared with the national average which benefits from central and western Canadian economic growth.

This has been particularly problematic with the growth of the welfare state in Canada since the 1950s, resulting in the need to draw upon equalization payments to provide nationally-mandated social services. Since the 1990s the region has experienced an exceptionally tumultuous period in its regional economy with the collapse of large portions of the ground fishery throughout Atlantic Canada, the closing of coal mines and a steel mill on Cape Breton Island, and the closure of military bases in all three provinces.

Maritimes - Growth

While the relative economic underperformance of the Maritime economy has been long lasting, it has not always been present. The mid-19th century, especially the 1850s and 1860s has long been seen as a "Golden Age" in the Maritimes. Growth was strong and the region had one of British North America's most extensive manufacturing sectors. The question of why the Maritimes fell from being a centre of Canadian manufacturing to being an economic hinterland is thus a central one to the study of the regions pecuniary difficulties. The period in which the decline occurred had a great many potential culprits. 1867 saw Nova Scotia and New Brunswick merged with the Canadas in Confederation with Prince Edward Island joining them six years later in 1873. Canada was formed only a year after free trade in the form of the Reciprocity Agreement had ended with the United States. As a result, the 1870s saw the introduction and implementation of John A. Macdonald's National Policy creating a system of protective tariffs around the new nation. Throughout the period there was also significant technological change both in the production and transportation of goods.

Maritimes - Decline

The cause of economic malaise in the Maritimes is an issue of great debate and controversy among historians, economists, and geographers. The differing opinions can approximately be divided into the "structuralists," who argue that poor policy decisions are to blame, and the others, who argue that unavoidable technological and geographical factors caused the decline.

The exact date that the Maritimes began to fall behind the rest of Canada is difficult to determine. Historian Kris Inwood places the date very early, at least in Nova Scotia, finding clear signs that the Maritimes "Golden Age" of the mid-nineteenth century was over by 1870, before Confederation or the National Policy could have had any significant impact. Richard Caves places the date closer to 1885, however. T.W. Acheson takes a similar view and provides considerable evidence that the early 1880s were in fact a booming period in Nova Scotia and this growth was only undermined towards the end of that decade. David Alexander argues that any earlier declines were simply part of the global Long Depression, and that the Maritimes first fell behind the rest of Canada when the great boom period of the early twentieth century had little effect on the region. E.R. Forbes, however, emphasizes that the precipitous decline did not occur until after the First World War during the 1920s when new railway policies were implemented. Forbes also contends that significant Canadian defence spending during the Second World War favoured powerful political interests in Central Canada such as C.D. Howe, when major Maritime shipyards and factories, as well as Canada's largest steel mill, located in Cape Breton Island, fared poorly.

One of the most important changes, and one that almost certainly had an effect, was the revolution in transportation that occurred at this time. The Maritimes were connected to central Canada by the Intercolonial Railway in the 1870s, removing a longstanding barrier to trade. For the first time this placed the Maritime manufacturers in direct competition with those of Central Canada. Maritime trading patterns shifted considerably from mainly trading with New England, Britain, and the Caribbean, to being focused on commerce with the Canadian interior, enforced by the federal government's tariff policies.

Simultaneously with the construction of railways in the region, the age of the wooden sailing ship began to come to an end, being replaced by larger and faster steel steam ships. The Maritimes had long been a centre for shipbuilding and this industry was hurt by the change. The larger ships were also less likely to call on the smaller population centres such as Saint John and Halifax, preferring to travel to cities like New York and Montreal. Even the Cunard Line, founded by Haligonian Samuel Cunard, stopped making more than a single ceremonial voyage to Halifax each year.

More controversial than the role of technology is the argument over the role of politics in the origins of the region's decline. Confederation and the tariff and railway freight policies that followed have often been blamed for having a deleterious effect on the Maritime economies. Arguments have been made that the Maritimes' poverty was caused by control over policy by Central Canada which used the national structures for its own enrichment. This was the central view of the Maritime Rights movement of the 1920s, which advocated greater local control over the region's finances. T.W. Acheson is one of the main proponents of this theory. He notes the growth that was occurring during the early years of the National Policy in Nova Scotia demonstrates how the effects of railway fares and the tariff structure helped undermine this growth. Capitalists from Central Canada purchased the factories and industries of the Maritimes from their bankrupt local owners and proceeded to close down many of them, consolidating the industry in Central Canada.

The policies in the early years of Confederation were designed by Central Canadian interests, and they reflected the needs of that region. The unified Canadian market and the introduction of railroads created a relative weakness in the Maritime economies. Central to this concept, according to Acheson, was the lack of metropolises in the Maritimes.

Montreal and Toronto were well suited to benefit from the development of large-scale manufacturing and extensive railway systems in Quebec and Ontario, these being the goals of the Macdonald and Laurier governments. In the Maritimes the situation was very different. Today New Brunswick has a number of mid-sized centres in Saint John, Moncton, and Fredericton but no significant population centre. Nova Scotia has a growing metropolitan area surrounding Halifax, but a contracting population in industrial Cape Breton, and several smaller centres in Bridgewater, Kentville, Yarmouth, and Pictou County. Prince Edward Island's only significant population centres are in Charlottetown and Summerside. During the late 19th and early 20th centuries, just the opposite was the case with little to no population concentration in major industrial centres as the predomoniantly- rural resource-dependent Maritime economy continued on the same path as it had since European settlement on the region's shores.

Despite the region's absence of economic growth on the same scale as other parts of the nation, the Maritimes has changed markedly throughout the 20th century, partly as a result of global and national economic trends, and partly as a result of government intervention. Each sub-region within the Maritimes has developed over time to exploit different resources and expertise. Saint John became a centre of the timber trade and shipbuilding, and is currently a centre for oil refining and some manufacturing. The northern New Brunswick communities of Edmundston, Campbellton, Dalhousie, Bathurst, and Miramichi are focused on the pulp and paper industry and some mining activity. Moncton was a centre for railways and has changed its focus to becoming a multi-modal transportation centre with associated manufacturing and retail interests. The Halifax metropolitan area has come to dominate peninsular Nova Scotia as a retail and service centre, but that province's industries were spread out from the coal and steel industries of industrial Cape Breton and Pictou counties, the mixed farming of the North Shore and Annapolis Valley, and the fishing industry was primarily focused on the South Shore and Eastern Shore. Prince Edward Island is largely dominated by farming, fishing, and tourism.

Given the geographic diversity of the various sub-regions with the Maritimes, policies to centralize the population and economy were not initially successful, thus Maritime factories closed while those in Ontario and Quebec prospered.

The traditional Staples Thesis, advocated by scholars such as S.A. Saunders, looks at the resource endowments of the Maritimes and argues that it was the decline of the traditional industries of shipbuilding and fishing that lead to Maritime poverty, since these processes were rooted in geography, and thus all but inevitable. Kris Inwood, has revived the staples approach and looks at a number of geographic weaknesses relative to Central Canada. He repeats Acheson's argument that the region lacks major urban centres, but adds that the Maritimes were also lacking the great rivers that lead to the cheap and abundant hydro-electric power, key to Quebec and Ontario's urban and manufacturing development, that the extraction costs of Maritime resources were relatively higher (particularly in the case of Cape Breton coal), and that the soils of the region were poorer and thus the agricultural sector weaker.

The Maritimes are the only provinces in Canada which entered Confederation in the 19th century and have kept their original colonial boundaries. All three provinces have the smallest land base in the country and have been forced to make do with resources within. By comparison, former colonies such as Canada East, Canada West and the western provinces were dozens of times larger and in some cases were expanded to take in territory formerly held in British Crown grants to companies such as the Hudson's Bay Company. The economic riches of energy and natural resources held within this larger land base was only realized by other provinces during the 20th century.

One comparison made with the wealthier areas of Canada is that of the region's political and/or work culture. Today few academics make such a claim, but it still a common explanation in other circles. Some writers have also alleged that Maritime business people were unwilling to take risks or invest in manufacturing, a thesis Acheson devotes much attention to debunking.

In recent years dependency theory has been used to examine the situation of the Maritimes, and while it rejects most traditional economic models it does correspond with the evidence.

Adapted from the Wikipedia article "Economy", under the G.N U Free Docmentation License. Please also see http://en.wikipedia.org/wiki