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 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