Although Macdonald's System Was Undoubtedly One of Corruption, the Only Excuse Is the Difficulty or Impossibility of Holding This Heterogeneous and Ill-Cemented Mass Together in Any Other Way

If the United States, with its "spoils system," was a couple of decades behind leading European countries in the ethics of government, Canada lagged by about a half-century. All these practices were sanctified by history: the great pre-Confederation achievement of Responsible Government, or self-government, had been mostly about a transfer of patronage from the governor general to local politicians; Confederation itself had been accomplished by money being poured into New Brunswick to defeat an anti-Confederation government.

Patronage in Canada could be justified as necessary to accommodate the differing interests of the various regions, races and religions. In the best study of patronage in Canada, Spoils of Power, political columnist Jeffrey Simpson concluded that "patronage, whatever its costs, has done its bit for national integration and stability." This necessity was well understood. Goldwin Smith wrote that, although Macdonald's system was "undoubtedly one of corruption . . . the only excuse is the difficulty, if not to say the impossibility, of holding this heterogeneous and ill-cemented mass together in any other way." The journal The Week pointed out that Macdonald "did not come up through a trap door" but rather "he and his system are mainly the offspring of a necessity . . . among the members of Confederation [,] who can be held together only by such means."

--Richard Gwyn, Nation Maker: Sir John A. Macdonald; His Life, Our Times, 1867-1891 (Toronto: Vintage Canada, 2012), 207-208.

The Fight for Responsible Government Would Really Be a Contest between the Governor General and Canadian Politicians over Who Should Get to Dish out Patronage

When Macdonald first entered the legislature, though, relatively little patronage was available for politicians to distribute. Purity wasn't the cause: impotence was. In the early 1840s, patronage was allocated almost entirely by the governor general. The fight through the decade for Responsible Government, or for the transfer from London to Canadians of responsibility over almost all internal or domestic matters, would really be a contest between the governor general and Canadian politicians over who should get to dish out patronage. . . .

One key example would be the role of political patronage in Canadian politics. Except on rare occasions, our two mainstream parties have either no ideology at all or only fragments of it. Their distinguishing difference is not in their titles, Liberal and Conservative, but in the fact that, at any one time, one party is in and the other is out. Without patronage, it would be just about impossible for either organization to function as a national party. . . . the prospect of good, high-status jobs matters as critically--in effect, no patronage, no national political parties.

--Richard Gwyn, John A: The Man Who Made Us; The Life and Times of John A. Macdonald, 1815-1867 (Toronto: Vintage Canada, 2008), 69, 90.

The Existing Constitutional Model Justified Patronage in terms of the Crown Prerogative, Making Patronage More Than Just a Synonym of Corruption; It Was a Constitutionally Legitimate Form of Executive Action

While political parties were obviously self-interested when it came to the issue of patronage appointment, the practice did have some legitimacy, making it more difficult to abandon. During much of this period, the prevailing view was that appointment to the public service was a legitimate part of the Crown prerogative. With the advent of responsible government in 1848, Canada's political elite and much of the administrative elite had comfortably accepted the idea that staffing the public service through the practice of ministerial nomination was simply part of a comprehensive theory of the sovereignty of the Crown. In fact, the idea of an independent CSC [Civil Service Commission] was seen by many within government as something that would be constitutionally illegitimate and a violation of the tenets of responsible government. The practice was described in an 1882 royal commission on the civil service in the following manner:

In the spirit and practice of the English constitution, the Crown is the fountain of all appointments, and among the duties and responsibilities of its advisers stand the proper and responsible selection of servants of the State. If it be, at times, expedient for Constitutional Government to institute Commissions to investigate,  it is repugnant to them to devolve on such bodies, the duties of governing and administering, for which appointment and promotions form an essential part.

This simple statement captures in essence the problems confronted by those who were advocating the creation of an independent CSC. The existing constitutional model justified patronage in terms of the Crown prerogative, making patronage more than just a synonym of corruption. It was a constitutionally legitimate form of action for the executive to engage in. This interpretation of Crown privilege was used to keep the idea of an independent CSC illegitimate. An independent organization would violate both the Crown prerogative as well as the conventions surrounding ministerial responsibility, including the need for ministers to be able to report to Parliament on the conduct of the affairs of their departments, specifically in regard to the manner in which individuals were appointed.

--Luc Juillet and Ken Rasmussen, Defending a Contested Ideal: Merit and the PSC of Canada, 1908-2008, Governance Series 19 (Ottawa: University of Ottawa Press, 2008), 21-22.

Robert Borden Promised Provincehood for the West and Local Control of Lands and Resources and Premier Haultain Dreamed of One Large Western Province to be Called "Buffalo"

This financial need became more acute with the immigration and settlement boom of the late 1890s. Now that the United States had exhausted its homestead land, the great agricultural promise of the Canadian North-West was finally being realized—albeit, almost three decades late—and the territorial government simply did not have enough money to meet the growing service and infrastructure demands. There appeared to be only one solution. In May 1900, the territorial government submitted a petition to the Laurier government reviewing the constitutional evolution of the region and calling for the next logical step—namely, drafting the terms for provincehood. Ottawa turned down the request as premature, a position it repeated twice more in response to similar petitions.

One of the stumbling blocks to finding common ground was Premier Haultain’s dream of one large western province, to be called “Buffalo,” between Manitoba and British Columbia and the 49th and 54th parallels. Some argued that a western super province would upset the balance of Confederation, while others insisted that the territorial provisional districts (created in 1882 for administrative purposes) should be provincial material. Calgary, for example, had ambitions to be a territorial capital—as did Prince Albert. What also made Liberal negotiation with Haultain difficult was his decision to actively campaign on behalf of the federal Conservative party in the 1904 general election. It was a serious lapse in judgement and one that crippled his future political career. From his first days in territorial government, Haultain’s strategy for securing concessions from the federal government was to adopt a non-partisan approach and speak with a single, territorial voice. Unfortunately, he had become so disillusioned with the Liberal government’s intransigence that he cozied up to federal Conservative leader Robert Borden who not only promised provincehood for the West, but local control of lands and resources. These actions turned the autonomy question into a party issue—ironically, something that went against Haultain’s own philosophy of putting territorial interests before political considerations.

--Bill Waiser, "Creating New Provinces: Saskatchewan and Alberta," in Reconsidering Confederation: Canada's Founding Debates, 1864-1999, ed. Daniel Heidt (Calgary, AB: University of Calgary Press, 2018), 226, 228-229.

The Regina Government Lacked Political Independence; by the Late 1880s, a Qu'Appelle Merchant Said the Region Was "Not Prepared to Accept Dictation from Ottawa"

What the language and school controversy demonstrated to westerners was that the Regina government lacked political independence in keeping with the British parliamentary system. In fact, it had reached the point by the late 1880s, in the words of a Qu’Appelle merchant, where the region was “not prepared to accept dictation from Ottawa.” There had been several steps towards responsible government since the 1877 North-West Territories Act. But westerners objected to the glacial pace—and the fact that Ottawa had to be repeatedly prodded. What ultimately brought the campaign for constitutional reform to a successful conclusion was the election of Wilfrid Laurier Liberals in 1896. When responsible government finally took effect the following year (1 October 1897), Frederick Haultain was appointed the territory's first and only premier. He quickly found, though, that having control over government spending did not mean much if the legislature did not have much to spend, especially since any revenue from North-West lands and resources went to the federal treasury.

--Bill Waiser, "Creating New Provinces: Saskatchewan and Alberta," in Reconsidering Confederation: Canada's Founding Debates, 1864-1999, ed. Daniel Heidt (Calgary, AB: University of Calgary Press, 2018), 226.

As Historian Donald Creighton Observed, John A. Macdonald "Was Trying to Keep As Closely As Possible to the Idea of a Crown Colony" over Rupert's Land and the North-Western Territory

In June 1869, Canada passed legislation for the temporary government of Rupert's Land and the North-Western Territory. The Act, which anticipated the transfer, was terse. There was no mention of control over the West's public lands or resources: it was assumed that Ottawa would administer them. The future territory's lieutenant-governor would need Parliamentary approval for any territorial laws, institutions and ordinances. The residents of Rupert's Land and the North-Western Territory simply came with the package. As historian Donald Creighton observed, Prime Minister Sir John A. Macdonald "was trying to keep as closely as possible to the idea of a Crown colony."

--Mary Janigan, Let the Eastern Bastards Freeze in the Dark: The West Versus the Rest Since Confederation (Toronto: Alfred A. Knopf Canada, 2012), Kobo e-book.

Canadian Financial Distress Constituted the "Secret History of Confederation," and the Revenues of Nova Scotia Would Go to Canada's Creditors

Joseph Howe saw identical causes operating to impoverish the workingman and the region. Canadian financial distress constituted the "secret history of Confederation," and the revenues of Nova Scotia would go to Canada's creditors. . . . This was not traditional British rule but something very different, Howe argued in a letter. The imperial metropolis, though it had controlled some casual revenues, rarely interfered with inferior patronage and "could levy no new taxes." The new "Downing Street at Ottawa will appoint our Governors, Councillors, and Judges--will have unlimited powers of external and internal taxation--At the start, will control and dispense a surplus revenue, drawn from Nova Scotia alone, of £234,000 or nearly twenty times the highest amount that the Colonial Secretary ever dispensed. And besides Downing Street never took a pound out of the country. If sometimes lavishly expended, the Casual revenue was all spent in the Country which raised it, but the Finance Minister of Canada may, annually, draw out of Nova Scotia an enormous sum and spend it where he likes. That our nineteen members will afford us any protection it is in vain to hope."

--E.A. Heaman, Tax, Order, and Good Government: A New Political History of Canada, 1867-1917, Carleton Library Series 240 (Montreal: McGill-Queen's University Press, 2017), 68-69.

The True Story of Confederation Cannot Be Properly Understood Unless the Language of Outraged Taxpayers Is Given Prominent Place; Much Like the USA in 1787, Canada Needed a New Constitution Because It Needed a New Tax Deal

Modern Canada, like the three countries that shaped it, France, Britain, and the United States, began with a tax revolt. However, where they had successful, transformative "country" revolutions against high-spending "court" governments, Canada's founding tax revolt actually consolidated the "court" party's hold on power, and for that reason it has passed largely unnoticed in the writings of historians. But the true story of Confederation cannot be properly understood unless the language of outraged taxpayers is given prominent place. Tax protests can be an efficient way to organize political dissent and demand accountability. But for mid-century Canadian reformers, it was axiomatic that politics was about the money. Much like the United States in 1787, Canada needed a new constitution because it needed a new tax deal. This chapter outlines the causes, negotiations, and effects of that deal, focusing on the view from the "United Province of Canada," the colony that would become Ontario and Quebec.

--E.A. Heaman, Tax, Order, and Good Government: A New Political History of Canada, 1867-1917, Carleton Library Series 240 (Montreal: McGill-Queen's University Press, 2017), 21.

The United Province of Canada Was Created in 1841 in order to Rescue Upper Canada from Bankruptcy; the Tight Interface of Government and Business Led Directly to a Total Compromise of the Public Finances

William Hamilton Merritt's scheme for the Welland Canal was initially sold to the government of Upper Canada in 1824 with the assurance that the total cost of the project would not exceed $42,000 and that it would not cost the government a cent! Several million dollars later, in 1840, and with a total public investment of over one million dollars, some major rethinking of the finances of the colony was called for, as bankruptcy appeared imminent.

The Welland Canal episode illustrates many of the critical problems faced by colonial financiers and merchants of the period, and it set a number of important precedents for the future. Its tight interface of government and business was an often-repeated pattern in later years, and led directly to a total compromise of the public finances. The province was bankrupted by the drain on its resources imposed by the canal company. . . .

Despite increasing raids on the provincial treasury, the canal swallowed up capital in ever increasing amounts and other expediencies were tried. An effort to float a big loan with some unspecified "European" banking house foundered after William Lyon Mackenzie, the leader of the Reform party of the province, unveiled a long string of charges of corruption against the company. . . . The Assembly of the sister province, Lower Canada, was also under the control of a Reform movement unsympathetic to the machinations of the governing and mercantile cliques of the colonies: it would invest little to begin with, and nothing further as time went by. . . . increasing demands on the state were made until the outbreak of rebellion in 1837 and 1838 caused a complete collapse of provincial credit in Britain. . . .

The result was the Act of Union of 1841, whereby the two provinces were united in the expectation that spreading the burden of repayment of the bankrupt upper province's debts over the population of the almost debtless lower province would both reassure existing British debenture holders and widen the revenue base for future issues. In conjunction with an imperial guarantee of the interest of a new issue, the credit of the United Province was established in Britain and the path opened for Canadian finance to cultivate an inflow of British portfolio capital in the future.

--R. T. Naylor, The Banks and Finance Capital, vol. 1 of The History of Canadian Business, 1867-1914 (Montreal: McGill-Queen's University Press, 2006), 21-22.

Stephen Harper Made Mincemeat of Stéphane Dion's Proposed Federal Carbon Tax Comparing It to the National Energy Program and Warning that It Would "Screw Everybody"

It was a sultry day in late June when Stéphane Dion marched into the boardroom of the Globe and Mail to explain his proposal for a federal carbon tax. The Liberal leader was idealistic and fervent. He was also impatient and implacable. His tax—which would particularly affect oil and natural gas producers—would raise more money in the West than it would in other regions. Much of the cash would be earmarked for the fight against national child poverty. When asked how Westerners would react to this federal cash grab, the former political science professor was dismissive: it would be “good for them.” Good for them? They would be forced to diversify their economy, came the response.

 Stephen Harper would make mincemeat of Dion. The prime minister would compare his opponent’s scheme to the National Energy Program of the early 1980s, dismiss it as “insane,” and warn that it would “screw everybody.”

--Mary Janigan, preface to Let the Eastern Bastards Freeze in the Dark: The West Versus the Rest Since Confederation (Toronto: Alfred A. Knopf Canada, 2012), e-book.

The Portrayal of Ontario as Imperialist and Insensitive Has Become a Common Feature in Studies of the Development of the Canadian West

In the mid-nineteenth century, the pioneer province of Upper Canada was being transformed “by technology, by the railway, by the telegraph and the stationary engine, by decimal currency and the Toronto Stock Exchange.” A vibrant and self-confident community, soon to be renamed Ontario, was reaching out to the north and west into regions about which it knew little and assumed much. Lack of knowledge is apt to produce over-generalizations and simplistic judgments, and the portrayal of Ontario as imperialist and insensitive has become a common feature in studies of the development of the Canadian west. But a sense of alienation can be all the more poignant among those who believe themselves forgotten by the province in which they live. Caught within the political framework of Ontario, the region north and west of Lake Superior was to feel the full weight of southern numbers and southern assumptions.

--Elizabeth Arthur, "Beyond Superior: Ontario's New-Found Land," in Patterns of the Past: Interpreting Ontario's History, ed. Roger Hall, William Westfall, and Laurel Sefton MacDowell (Toronto: Dundurn Press, 1988), e-book.

The Economic Fortunes of the Maritimes, British Columbia, and the Prairies Were, Henceforth, to be Welded to those of the Central Canadian Provinces by Central Government Action

These commercial empires frequently competed with their expanding southern neighbour for migrants and the trade of the continental interior. Unlike the Mississippi, the St Lawrence was not an easy river to navigate. Improvements were required to remain competitive, first canal-building in the 1830s and 1840s, and then, in the 1850s, the Grand Trunk Railway from Montreal to Toronto – which enjoyed support from the recently united Province of Canada, and attracted British capital. Until the 1840s the Laurentine system had been assisted by preferences in the British market on Canadian timber and wheat. Britain’s adoption of free trade ended this advantage. The railway programme of the 1850s was, in part, a response to the ending of the British preference. A further response came in the 1854 ‘reciprocity treaty’ conceding freer entry to Canadian produce into the United States.

The abrogation of this treaty in 1865 ushered in a new era in British North American political economy which was to last until 1914. The perceived need for a new market to make up for the supposedly lost trade was one force driving the formation of the Dominion of Canada in 1867. The economic fortunes of the Maritimes, British Columbia, and the prairies were, henceforth, to be welded to those of the central Canadian provinces by central government action. This project in transcontinental national-building had a number of elements. Firstly, a measure of protection had been adopted by the old province of Canada in 1859, and the new federal government extended this to the new Dominion. Tariff barriers were further increased by prime minister John A. Macdonald in 1878 as a major component of a ‘national policy’ which came to be seen as a means to secure a separate economic and political fate on the North American continent. Secondly, from 1872, a federal land act allowed settlers access to land on easy terms in the west, which had to be populated if it was to provide a market for central Canadian industry, and if the projected nation was to become a reality. Finally, a national economy required unifying transport links. As a result railway construction formed a further plank of the national policy. In the 1870s a state-owned line linked central Canada and the Maritimes (its route was heavily influenced by strategic considerations, and it rarely generated profits as a result). A second line was to cross the prairies to British Columbia. In the early-1870s the proposal was mired in controversy, but in 1881 it was begun by a syndicate of Canadians and Americans. Completed in 1885 (and drawing heavily on British capital), the Canadian Pacific Railway (CPR) relied heavily on state support, receiving 250 million acres of land, $25 million in cash, and 700 miles of already completed lines.

--Andrew Dilley, Finance, Politics, and Imperialism: Australia, Canada, and the City of London, c.1896-1914, Cambridge Imperial and Post-Colonial Studies (Houndmills, UK: Palgrave Macmillan, 2012), 30-31.

The Macdonald-Cartier Government Fell in May 1862; the Most Fascinating Factor Concerns that Government's Too Close Public Relationship to Certain Imperial Interests

In these matters, Edward Watkin, appointed by the Grand Trunk as its supervising manager in the summer of 1861, became Newcastle’s chief intermediary between the city of London and the Colonial Office. An indefatigable promoter and an experienced railway manager, Watkin believed that Intercolonial construction and westward expansion were absolutely necessary to resuscitate the Grand Trunk. In addition to lobbying in London to effect the ends shared by Newcastle and himself, Watkin also attempted to create a favourable structure in British North America. While this, the second component for the resolution of the Grand Trunk’s financial troubles, required intense arm-twisting in the Maritime provinces, Watkin’s main activity focused on Upper Canada. He initiated negotiations for the fusion of the Grand Trunk with the Great Western and the Buffalo and Lake Huron railways in order to cut competitive costs, rationalize administration and create a unified road to join with the projected Intercolonial in the east. After hiring the Great Western’s general manager and following tense discussions with the Great Western’s London board, he approached the John A. Macdonald-G.-E. Cartier government with an omnibus bill for the refinancing and reorganizing of Upper Canada’s railway system.

Imperial interests pressured the Macdonald-Cartier government throughout the spring 1862 parliamentary session. As Watkin informed Baring: “Keep poking every one up. It is absolutely necessary.” And so they did. Baring and Glyn wrote individual letters to Cartier and Galt urging them to see to the passage of the railway measure. Newcastle, through the governor general, Lord Monck, stressed the importance of lowering tariffs and passing a satisfactory militia bill if Canada desired any future substantial imperial aid. Imperial hopes rested on the effective co-operation of loyal colonial collaborators. “But, after all,” Watkin wrote, “all depends upon the Ministry. If they will stand true—really true—to what they have promised we shall, I hope, succeed. . . .”

The government did permit the Grand Trunk fusion bill to be introduced—albeit by a private member little schooled in the complexities of the issue—and narrowly missed being defeated on second reading. Galt did bring down a budget which promised some movement in the direction of lower customs and the introduction of an alternative revenue-raising method, the stamp tax. But the House never voted on it. Before it could, the government was defeated on its Militia Bill, introduced by the co-leader, John A. Macdonald, and defended by him despite his, according to Lord Monck, continual state of “drunkenness.”

The Macdonald-Cartier government fell in May 1862 for a number of reasons. From the perspective of this paper, however, the most fascinating factor concerns that government’s too close public relationship to certain imperial interests. Even the Bank of Upper Canada waged a strong campaign against the fusion bill because it provided imperial financiers with guarantees for Grand Trunk payments ranking ahead of those granted the beleaguered bank. As spokesmen and apologists for the Grand Trunk, and by extension for private British capitalists led by the government’s official London financial agents, Glyn and Baring, the Macdonald-Cartier ministry had in the eyes of many Canadian politicians and government critics lost all ability to act independently. “The unpopularity and prejudice [towards the Grand Trunk] I wrote to you about before, have in no way abated,” Rose privately informed Baring. “The old men [of the defeated government] were both powerless, and suspected by reason of their antecedents.”

--Peter Baskerville, "Imperial Agendas and 'Disloyal' Collaborators: Decolonization and the John Sandfield Macdonald Ministries, 1862-1864," in Old Ontario: Essays in Honour of J.M.S. Careless, ed. David Keane and Colin Read (Toronto: Dundurn Press, 1990), 240-241.

Macdonald and His Montreal-Based Supporters Subscribed to the Old Commercial Empire of the St. Lawrence; George Brown Wanted to Settle the North-West to Satisfy Toronto's Economic Ambitions

One of Macdonald’s most-quoted statements about Canadian acquisition of the North-West region was made in a letter to Sir Edward Watkin in March 1865. Watkin, as president of the Grand Trunk Railway, wanted to extend the rail line from the Atlantic to the Pacific and hence pushed for some form of British North American confederation. Macdonald was not as initially enthusiastic about the idea of a transcontinental nation. “I would be quite willing, personally,” he observed on the eve of a trip to London to discuss the confederation agreement, “to leave that whole country a wilderness for the next half-century, but I fear if Englishmen do not go there, Yankees will.” These words nicely captured Macdonald’s quandary — how he was essentially bound by political necessity, and not personal enthusiasm, to Canadian acquisition of the North-West. He and his largely Montreal-based supporters subscribed to the old commercial empire of the St. Lawrence, while the drive to settle the British North-West was a Reform plan, spearheaded by George Brown, to satisfy Toronto’s economic ambitions. But if the Great Coalition of 1864 was to bring about constitutional renewal in place of deadlock, then territorial expansion into the western prairies had to be a planned feature of the Confederation deal (section 146 of the BNA Act). Even then, Macdonald was reluctant to assume control of such a large parcel of land. As Richard Gywn has observed in the first volume of his Macdonald biography, the Conservative leader was preoccupied, if not overwhelmed, with the problems of the United Province of Canada, and his interest in territorial expansion “varied from negligible to non-existent.” His response, in Gywn’s words, was “cautious to a degree.”

--Bill Waiser, "Macdonald's Appetite for Canadian Expansion: Main Course or Leftovers?" in Macdonald at 200: New Reflections and Legacies, ed. Patrice Dutil and Roger Hall (Toronto: Dundurn, 2014), 342-343.

Great Britain’s Repeal of Its “Corn Laws” and Adoption of Free Trade in the 1840s Panicked Canadian Farmers, Dairy Producers, and Some Manufacturers Who Feared for Their Livelihood

Canada’s quest for reciprocity or freer trade with the United States predated the living memory of most of those people involved in the 1911 election. Great Britain’s repeal of its “corn laws” and adoption of free trade in the 1840s panicked Canadian farmers, dairy producers, and some manufacturers who feared for their livelihood with the loss of British North America’s preferential status in the British market. Feelings were so strong that a group of Anglo-Montreal businessmen came out in support of annexation by the United States as a way of dealing with their economic distress. The annexation movement was short-lived but survived long enough to publish a manifesto and burn down the parliament buildings in Montreal in 1849.

To placate the Canadians, the British government initiated trade negotiations with the Americans to find new outlets for Canadian products to offset what might be lost in the British market. Years of negotiation led to the signing, in 1854, of the Reciprocity Treaty, which allowed free entry of Canadian natural and some processed goods into the American market and the reduction of duties on a number of other products. In addition to reduced tariffs, the Americans were granted access to the inshore fisheries in the Maritime colonies. Ironically, in 1911 much would be made of the connection between reciprocity and annexation, with the argument that the one (reciprocity) would inevitably lead to the other (annexation), even though, in 1854, reciprocity was seen by the British government as a way of preventing annexation.

--Patrice Dutil and David MacKenzie, Canada 1911: The Decisive Election That Shaped the Country (Toronto: Dundurn, 2011), e-book.

Brown's "Globe" (Today's Globe and Mail Newspaper) Stood Unshakably for the British Cobdenite Principles of Free Trade and Economic Liberalism

But outside its walls there seemed little contentment to be found in Canada, what with depression, unemployment, labour unrest, ever-falling public revenues, and clamour for protection. Brown’s Globe still stood unshakably for the British Cobdenite principles of free trade and economic liberalism. Trade would right itself, it confidently proclaimed. The harvest had been good; the world- wide slump was a necessary purge after speculation and over-indulgence that would bring a return to economic health; and Canada was suffering far less than other countries. Above all, the Grit organ denounced the Conservative proposal to import the American high-cost protective system, which certainly had not saved the United States from deep depression. It constantly argued that this “cure” would prove a far more permanent disaster than the present commercial malaise in a country inevitably committed to the production of low-cost goods for the world market.

--J.M.S. Careless, Statesman of Confederation, 1860-1880, vol. 2 of Brown of the Globe (Toronto: Dundurn Press, 1989), 352.

We Have Complained that Immense Sums of Public Money Have Been Taken from the Public Chest for Local Purposes of Lower Canada (Quebec), but Upper Canada (Ontario) Is Forced to Contribute 75% of the Cash

George Brown (Upper Canada or Canada West, Legislative Assembly, February 8, 1865): We have also complained that immense sums of public money have been systematically taken from the public chest for local purposes of Lower Canada, in which the people of Upper Canada had no interest whatever, though compelled to contribute three-fourths of the cash. Well, sir, this scheme remedies that. All local matters are to be banished from the general legislature; local governments are to have control over local affairs, and if our friends in Lower Canada choose to be extravagant, they will have to bear the burden of it themselves. (Hear, hear.)

--Janet Ajzenstat et al., eds., Canada's Founding Debates (Toronto: University of Toronto Press, 2003), 288.

No Union between this Colony (British Columbia) and Canada Can Permanently Exist Unless It Be to the Material and Pecuniary (Money) Advantage of this Colony to Remain in the Union

J.S. Helmcken (British Columbia, Legislative Council, March 9, 1870): No union between this colony and Canada can permanently exist unless it be to the material and pecuniary advantage of this colony to remain in the union. The sum of the interests of the inhabitants is the interest of the colony. The people of this colony have, generally speaking, no love for Canada; they care, as a rule, little or nothing about the creation of another empire, kingdom, or republic; they have but little sentimentality, and care little about the distinctions between the form of government of Canada and the United States. Therefore, no union on account of love need be looked for. The only bond of union outside of force looked for--and force the dominion has not--will be the material advantage of the country and the pecuniary benefit of the inhabitants.

Love for Canada has to be acquired by the prosperity of the country and [by] our children.

--Janet Ajzenstat et al., eds., Canada's Founding Debates (Toronto: University of Toronto Press, 2003), 250-251.

The Very Fact that the Premiers Thought They Could Have Canada's Constitution Changed without the Federal Government's Participation Indicated the Growing Strength of the "Compact Theory" of Confederation

Although none of the constitutional changes called for by the Inter-Provincial Conference materialized in constitutional amendments, its resolutions showed which way the winds of constitutional change were blowing. The very fact that the premiers thought they could have Canada's Constitution changed without the federal government's participation indicated the growing strength of the "compact theory" of Confederation. That theory, which had long been an underlying premise of many Quebec leaders, was worked into a full-blown theoretical statement by Quebec judge Thomas-Jean-Jacques Loranger just before Mercier's election as premier. Its central argument was that Confederation resulted from a compact entered into by the provinces, which had delegated certain powers to the new central government. It followed that the provinces, far from being subordinate to the federal government, were equal to it.

--Peter H. Russell, Canada's Odyssey: A Country Based on Incomplete Conquests (Toronto: University of Toronto Press, 2017), 223-224.

Direct Taxation Was a (Classical) Liberal Project of Governance Producing Small Government and Engaged Tax Payers Who Closely Scrutinized Government Spending

Fiscal restraint was one way of reining in local governments, in keeping with Macdonald's larger scheme for centralizing as much power as he could. Taxpayers did not feel indirect taxation so intimately and so governments that taxed indirectly could extract more and rationalize less. Direct taxation was a liberal project of governance: it tended to produce small government and vigilant, engaged tax payers who closely scrutinized government spending. English Liberal leader William Gladstone embraced direct taxation and so did George Brown in the Globe, which regularly asserted, in the words of a public meeting at Glenmorris, South Dumfries, in 1867, "Protective duties are unjust in principle and mischievous in practice." In British Columbia, John Sebastian Helmecken opposed Confederation and favoured direct taxation. And, as Andrew Smith has observed, opponents of Confederation across British North America recognized that the scheme was likely to lead to inflated federal taxes and it would not only perpetuate, but expand Macdonald's high-spending ways.

--E.A. Heaman, "Macdonald and Fiscal Realpolitik," in Macdonald at 200: New Reflections and Legacies, ed. Patrice Dutil and Roger Hall (Toronto: Dundurn, 2014), 198.

The Dominion Government Would Construct a Pan-Canadian Identity; the Invisible Hand of the Marketplace Offered the Best Model for Reconciling the Irreconcilable Differences between Canadians

Confederation's advocates envisioned a new civic nationality based on economic self-interest. The Dominion government would construct a pan-Canadian identity rooted in political economy because the invisible hand of the marketplace offered the best model for reconciling the otherwise irreconcilable differences between Canadians. The federal government would govern wealth, not identity and, in the process, create a new kind of virtuous citizen, one who looked to rational marketplace activity to advance his self-interests.

--E.A. Heaman, Tax, Order, and Good Government: A New Political History of Canada, 1867-1917, Carleton Library Series 240 (Montreal: McGill-Queen's University Press, 2017), 46.

The City of London Rallied Around Macdonaldian Canada, but the (Classical) Liberals John Bright and Richard Cobden Advocated a "Little England" Position to Challenge State Cronyism and the Military Expenses of Colonies

Investment capital poured into the colony because it was British enough to seem as safe as Britain itself for investors but with the higher returns commonly found outside Britain. But the more that the City of London rallied around Macdonaldian Canada, the more the City's British enemies gravitated to the attack. Liberals John Bright and Richard Cobden advocated an anti-imperial "Little England" position because colonies augmented military expenses and state cronyism. For British fiscal hawks, Macdonaldian governance did not just exemplify the problem; it exacerbated it in Britain.

--E.A. Heaman, Tax, Order, and Good Government: A New Political History of Canada, 1867-1917, Carleton Library Series 240 (Montreal: McGill-Queen's University Press, 2017), 24

American Society Is Affected by Government Management and Forced Integration; Accordingly, Social Strife and Racial, Ethnic, and Moral-Cultural Tension and Hostility Have Increased Dramatically

Similarly, the social security systems everywhere are on or near the verge of bankruptcy. Further, the collapse of the Soviet Empire represented not so much a triumph of democracy as the bankruptcy of the idea of socialism, and it therefore also contained an indictment against the American (Western) system of democratic--rather than dictatorial--socialism. Moreover, throughout the Western hemisphere national, ethnic and cultural divisiveness, separatism and secessionism are on the rise. Wilson's multicultural democratic creations, Yugoslavia and Czechoslovakia, have broken apart. In the U.S., less than a century of full-blown democracy has resulted in steadily increasing moral degeneration, family and social disintegration, and cultural decay in the form of continually rising rates of divorce, illegitimacy, abortion, and crime. As a result of an ever-expanding list of nondiscrimination--"affirmative action" --laws and nondiscriminatory, multicultural, egalitarian immigration policies, every nook and cranny of American society is affected by government management and forced integration; accordingly, social strife and racial, ethnic, and moral-cultural tension and hostility have increased dramatically.

--Hans-Hermann Hoppe, introduction to Democracy: The God That Failed; The Economics and Politics of Monarchy, Democracy, and Natural Order (New Brunswick, NJ: Transaction Publishers, 2011), xiii.

All Forms of Socialism--Russian Style, Social-Democratic Style, Conservatism, and Social Engineering--Are Ideological Responses to the Challenge Posed by (Classical) Liberalism

All forms of socialism are ideological responses to the challenge posed by the advance of liberalism; but their stand taken against liberalism and feudalism—the old order that liberalism had helped to destroy—differs considerably. The advance of liberalism had stimulated social change at a pace, to an extent, and in variations unheard of before. The liberalization of society meant that increasingly only those people could keep a given social position once acquired who could do so by producing most efficiently for the most urgent wants of voluntary consumers with as little cost as possible, and by relying exclusively on contractual relationships with respect to the hiring of factors of production and, in particular, of labor. Empires upheld solely by force were crumbling under this pressure. And as consumer demand to which the production structure now increasingly had to adapt (and not vice versa) was changing constantly, and the upspring of new enterprises became increasingly less regulated (insofar as it was the result of original appropriation and/or contract), no one’s relative position in the hierarchy of income and wealth was secure anymore. Instead, upward and downward social mobility increased significantly, for neither particular factor-owners nor owners of particular labor services were any longer immune to respective changes in demand. They were no longer guaranteed stable prices or a stable income.

--Hans-Hermann Hoppe, A Theory of Socialism and Capitalism (Auburn, AL: Ludwig von Mises Institute, 2010), 89.

The Difference between a Private Property Economy and a Socialized One Is Only HOW Whose Will Prevails in Cases of Disagreement Is to be Determined

What does it mean to have such a caretaker economy? What, in particular, does it imply to change from an economy built on the natural theory of property to a socialized one? In passing, two observations should be made, which will already throw some light on the above-mentioned socialist promises of equality and efficiency. Declaring everybody a co-owner of everything solves the problem of differences in ownership only nominally. It does not solve the real underlying problem: differences in the power to control. In an economy based on private ownership, the owner determines what should be done with the means of production. In a socialized economy this can no longer happen, as there is no such owner. Nonetheless, the problem of determining what should be done with the means of production still exists and must be solved somehow, provided there is no prestabilized and presynchronized harmony of interests among all of the people (in which case no problems whatsoever would exist anymore), but rather some degree of disagreement. Only one view as to what should be done can in fact prevail and others must mutatis mutandis be excluded. But then again there must be inequalities between people: someone’s or some groups’ opinion must win over that of others. The difference between a private property economy and a socialized one is only how whose will prevails in cases of disagreement is to be determined. In capitalism there must be somebody who controls, and others who do not, and hence real differences among people exist, but the issue of whose opinion prevails is resolved by original appropriation and contract. In socialism, too, real differences between controllers and noncontrollers must, of necessity, exist; only in the case of socialism, the position of those whose opinion wins is not determined by previous usership or contract, but by political means. This difference is certainly a highly important one, and our discussion will return to it later in this chapter and again in later chapters, but here it suffices to say that—contrary to socialism’s egalitarian promises—it is not a difference between a nonegalitarian and an egalitarian system as regards power of control.

--Hans-Hermann Hoppe, A Theory of Socialism and Capitalism (Auburn, AL: Ludwig von Mises Institute, 2010), 36-37.