C. The Canadian Industrial Boom

From HCO Jr

Part 8. The Changing Nation → A. Our Struggle for Rights → B. Industry & Labour → C. The Canadian Industrial Boom → D. Gold & Imperial Adventure → E. The Immigration Boom 1895-1914 → F. The New West 1885-1905

The half-century after Confederation were years of momentous change in Canada. The land area grew more than seven times, most notably with the purchase of Rupert's Land in 1869. The number of provinces went from four in 1867 to nine, five years after the turn of the century. The population of the country similarly rose at a startling rate by doubling from under the four million figure at the time of Confederation to over eight million thirty years later.

Much of that growth occurred due to a huge surge of immigration during the Laurier "Golden Years" (1896-1911) The economy prospered, due to Macdonald's high-tariff National Policy that became the economic rule, and to the new industries that served the growing population.

The last quarter of the nineteenth century also saw a growing demand for social change. Urban reformers emerged to combat the ills of growing cities. Prohibitionists railed against the evils of alcohol. Many people joined anti-immigrant leagues as the tide of xenophobia was on the rise. Women's groups actively championed the cause of greater equality. Reformers targeted many other areas as well, including the condition of the workingman, education, and religion.

Blacksmith Shop

One of the most subtle and yet profound changes was the pace and rhythm and pace of life. For decades, people had experienced a very natural tempo to their lives. Their daily lives were dictated by nature. They would get up when the sun rose and would go to bed when the sun went down. The seasons determined when they planted, irrigated, and harvested. On the farm, their lives were very much set by nature, by seasons of planting and harvesting and by the care of animals. The tractor had not yet replaced the horse.

Ploughing, 1895

However, the days of the rural, pioneer, agrarian society were rapidly giving way to something much more complex and fast-paced. The industrial revolution, based on large-scale manufacturing and new sources of power, was transforming the landscape. As the factory system developed, the lure of jobs drew prospective workers to the newly emerging towns and cities like a magnet. The natural rhythm gave way to the clock and a much more artificial system. The modern industrial state brought innumerable and far-reaching changes. Some were positive, while some far less so.

Power Dam at Shawinigan, 1914

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Movement to the Cities

The statistics tell a story of great demographic change. In 1851, 80% of Canada's population lived in rural areas. Forty years later, in 1891, that figure had declined to 65%. Or to view it another way, in 1871, four years after Confederation, one out of every six Canadians lived in a town or city. By the turn of the century, fully one out of every three Canadians was an urban dweller. In 1881, 77% of Canada's 4.3 million people lived in the countryside. Only forty years later, in 1921, just slightly more than 50% of Canada's 8.8 million people did so.

The principal cities that emerged were large. By the end of World War One, 20% of the population lived in cities of more than 100 000. The main cities were Toronto and Montreal in central Canada, Saint John and Halifax in the Maritimes, and Winnipeg, Edmonton, Calgary, and Vancouver in the West.

All the cities had witnessed tremendous growth. Montreal's population more than tripled from 115 000 in 1871 to more than 380 000 in 1901. The same was true for Toronto which mushroomed from 59 000 in 1871 to 210 000 in 1901. However, as great as was the growth of the two leading cities, it was eclipsed by the dramatic growth rate of western cities. Winnipeg, for instance, went from a mere 240 people in 1871 to 42 000 only thirty years later.

Railway Workers

A number of factors, over and above the lure of jobs, lay behind the tremendous urban growth. Emerging cities offered more in the way of amenities, such as schools, stores, and services. The increasing numbers of immigrants also fed the boom. Many came from urban Europe, and were looking for work. Others were attracted to western Canada by the Homestead Act, which provided 160 acres for $10.00. Some farm families arrived in eastern cities fully intent on homesteading out west, but thousands had to remain where they arrived because they did not have the financial means to travel further.

Another factor behind the urban growth was the transportation boom. Much of the greatest growth, particularly in western Canada, occurred in the places favoured by being located on at first the railway line and later on a provincial highway.

Montreal Slum Housing

Given very limited resources coupled with massive - and increasing - demands, the newly emerging cities had great difficulty in building the necessary infrastructure - adequate housing, police and fire protection, sewage, and recreation. As a result, late nineteenth century cities were crowded, squalid, and filthy for the great majority of their inhabitants.

Montreal Mansion of Sir Herbert Holt

Many urban dwellers lived in crushing poverty. The number of people living below the poverty line more than tripled in the fifty years from mid-century, to a point where half of the urban population was classified as poor. Their abject poverty was in sharp contrast to the displays of great wealth and consumption of the few wealthy families, such as the Molsons and Van Hornes of Montreal. Their favoured location in Montreal was central Sherbrooke Street while in Toronto, the rich tended to concentrate along Jarvis and Sherbourne Streets.

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Finance and Banking

The year 1900 saw several stock exchanges in action. A Montreal Stock Exchange seat sold for $10,250, a a Toronto Stock Exchange seat for $12,000. Toronto became the centre of mining speculation, with two exchanges - the Mining and Industrial Exchange and Standard Mining Exchanges. In 1901, they amalgamated as the Toronto Mining Exchange, and financed a new gold & silver boom. Also in the year, George Cox of Central Canada Savings & Loan founded Dominion Securities, now part of the Royal Bank of Canada.

Also in 1900, in Lévis, Québec, parliamentary reporter Alphonse Desjardins and his wife Dorimène founded the first Caisse populaire, or people's bank, after studying European co-op models. It was the credit union in North America. Their goals were to fight usury, improve the living conditions of workers, let French Canadians build savings and slow the exodus to US mill towns. With support from the Roman Catholic Church, he expanded the concept through Quebec and French Canada, founding 205 branches before he was forced to retire due to ill health in 1916; in 1913, the institutions were renamed 'les Caisses populaires Desjardins'. Today Desjardins is a power in Quebec, and increasingly in the world.

1901 also saw the founding of the Canadian Bankers Association.

Cora Hind

Cora Hind 1861-1942

Winnipeg developed a busting grain exchange, and Cora Hind became the first woman agricultural reporter for the Winnipeg Free Press; she was a brilliant market analyst and grain exchanges waited nervously for her reports on the size of the crop yield. Prices on the international market rose or fell on her predictions.

Born in Toronto in 1861, Hind moved with her aunt to Winnipeg in 1882. She wanted to become a journalist, but the male dominated profession rejected her. So she trained as a legal legal secretary, then founded her own business in 1893, becoming the province's first public stenographer or "typewriter."

In 1901, J.W. Dafoe, the new editor of the Free Press, hired her as a regular reporter and his Commercial and Agricultural Editor. Hind gained an international reputation for the accuracy of her analyses of crop yields, livestock breeding and food production and marketing. She worked hard at her job - in 1924, she reported travelling over 10,000 km on her field inspection tour.

Hind was also dedicated to social reform, and the promotion of women's rights. She was an active worker in the Women's Christian Temperance Union, and was a founding member of the Manitoba Equal Franchise Club, a group formed to lobby for the vote in 1894. In the 1890s she worked with Dr. Ameila Yeomans for factory and prison reform, and with Lillian Beynon Thomas and Nellie McClung in the promotion of Women's Institutes in Saskatchewan and Manitoba. In 1912, she was a founding member of the Political Equality League, which played a central role in the campaign which led to the granting of full female suffrage in Manitoba in 1916.

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Petrolia in 1886

The Birth of Canada's Oil Industry

The oil industry in Canada began in southwestern Ontario, where for centuries First Nations people had used gummy oil deposits for medicine and to waterproof their canoes. It was there in the summer of 1858 that carriage maker James Miller Williams drilled the first commercial oil well in North America, in a tar pit at Oil Springs in Lambton County.

Three years later, in July, 1861, another driller named Hugh Nixon Shaw reached limestone at 15 metres down. He started drilling further into the rock, but was nearly broke and ready to give up at 48 metres when suddenly, on Jan. 16 1862, there was a loud crack, and then a roar as a black fountain of oil shot out of the well up to tree top level, splintering his drilling rig and blackening the grass all around. For 50 days the well gushed out of control, spewing 2,000 barrels a day until Shaw got it under control by extending the pipe 6 metres above the well and stuffing a weighted leather bag down the bore hole.

Gusher at Petrolia, 1902

Canadian Oil Refining Co., Petrolia Ontario, 1901

About 10 million barrels of oil have been removed from Lambton County since the 1850s. One of the companies still operating in Oil Springs, Oliver Fairbank Oil Properties Ltd. is the oldest petroleum company in the world. One of the founders, John Henry Fairbank, invented the famous jerker rod system of pumping oil over 130 years ago. His descendants continue to pump oil to this day, and over 25,000 barrels of oil a year are still being extracted.

The oil and gas industry in western Canada developed slowly. In 1867, Geological Survey of Canada scientist George Dawson reported oil seeps in the Waterton area of Alberta, and in 1883, the first gas was found at Langevin, near Medicine Hat, by CPR water drillers.

Geological Survey of Canada Drilling in Alberta, 1898

Farther north, government geologists surveyed petroleum seepages along the Athabasca River on Sept. 14, 1890. These were first noted in 1778 by fur trader Peter Pond at the confluence of the Clearwater River, where first nations people were using the tar to caulk their canoes. Today they are the centre of one of the world's richest oil reserves - the Athabasca Oil Sands. These deposits are a $1.4-trillion bonanza, based on prices of just $40 (U.S.) a barrel of synthetic crude, and the world's second-largest deposit of oil.

The Geological Survey of Canada at the Tar Sands, 1892

On June 16, 1894, the Edmonton Bulletin suggested boosting a commercial oil industry in the province, and there was a mini boom on the Calgary Stock Exchange. But it was not until 1901 that Canada's first commercial gas field was developed at Medicine Hat. Visiting British author Rudyard Kipling described the town as having "all hell for a basement".

In 1908, an Ontario driller named Eugene Coste spudded the "Old Glory" gas well at Bow Island, Alberta. Four years later, Coste's Canadian Western Natural Gas built Alberta's first gas pipeline 275 km from Bow Island to Calgary, and 12,000 Calgarians gathered to watch Mrs. Coste light the inaugural flare with a roman candle.

Turner Valley, 1914

In the early 1910s, William Stewart Herron, an Okotoks farmer, noticed gas bubbling along the banks of Sheep Creek in the Turner Valley, southwest of Calgary. In 1913, Herron partnered with Archibald W. Dingman to found the Calgary Petroleum Products Company. On May 14, 1914, they struck wet gas at Dingman No. 1 well. This discovery sparked furious financial speculation on the Calgary Stock Exchange, with speculators forming over 500 companies. But the Coste and Herron discoveries failed to attract eastern Canadian investment, and interest waned when World War I began. Ten years later, the Royalite No. 4 would put Turner Valley on the oil and gas map.

Early Turner Valley Rig

By 1921, Standard Oil of New Jersey and its Canadian subsidiary, Imperial Oil (Royalite Ltd.) had signed a profit sharing agreement with the Canadian Pacific Railway (CPR). They struck gas in 1924 near the original Dingman well, and built a pipeline from Turner Valley to Calgary. Exploration uncovered oil beneath the field's gas wells, and Imperial Oil built Alberta's first oil refinery in Calgary in 1923.

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Canals & Railways

On Sept. 190, 1895, the new Sault Ste. Marie canal opened. Capable of carrying wide steamships and some ocean going vessels, it let ocean liners sail as far as Thunder Bay on Lake Superior to link up with the CPR main line and grain trains.

In 1897 the Government signed the Crow's Nest Pass Agreement with the Canadian Pacific Railway. The CPR got a $3.3 million subsidy to extend its lines into the mining and smelting areas of southern BC in return for lower fixed freight rates on Prairie grain eastbound, and westbound rates on 'settlers' effects'.

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First CNoR Train into Edmonton

The Second Transcontinental

On January 13, 1899, Winnipeg contractors William Mackenzie and Donald Mann founded the Canadian Northern Railway, by amalgamating the Winnipeg Great Northern Railway and the Lake Manitoba Railway and Canal Company. They started building the CNoR main line through the fertile belt from Winnipeg via Saskatoon to Edmonton in 1903.

At the same time, Laurier's Minister of the Interior Clifford Sifton was also pressing for a second transcontinental railway line to rival the CPR and destroy their western monopoly. In 1903, the government passed a bill creating the "Grand Trunk Pacific Railway Company."

Last Spike Ceremony in front of New Station

This "Liberal Line" - Canadian Pacific had been a long time supporter of the Conservative Party - was to join and build upon two existing roads - the Grand Trunk Railway in the east with Mackenzie & Mann's Canadian Northern Railway (CNoR) in the west. Grand Trunk were to build a new railroad from Edmonton to Prince Rupert, the Grand Trunk Pacific, and the federal government were to build a government line from Moncton, New Brunswick to Levis, Quebec. The railroad eventually continued through northern Ontario and Quebec to Winnipeg, and via Jasper to Vancouver, providing ice free ports at both ends of the line.

The CNoR construction train reached Edmonton on November 24, 1905, and Alberta Lieutenant Governor G.H.V. Bulyea drove home a silver spike to mark the completion of the Canadian Northern Railway to Edmonton. The first outgoing eastbound scheduled passenger train left Edmonton on November 30, 1905.

CNoR Tracklaying

By 1914, the Grand Trunk Pacific and Mackenzie & Mann's northern transcontinental were complete, and the system had 9,362 miles of track running from Winnipeg, Saskatoon and Edmonton to Vancouver. The CNoR itself was responsible for the creation of over 500 communities in the prairie provinces.

Canada's railway building effort was huge in these years. Total miles of track had soared, from 18,998 in 1903 to 34,882 in 1915, and fixed liabilities from $908 million to $1.9 billion. But the lines overreached themselves, and the financial crisis coming with the outbreak of World War I bankrupted the companies. The CNoR was taken over by the Federal Government in stages around 1916. and in 1917 became the nucleus of the Canadian National Railways (CNR).

After the War, on Dec. 20, 1919, Prime Minister Borden's Cabinet passed an Order in Council creating the government owned Canadian National Railways, to unite and rescue five near-bankrupt railroads: the Grand Trunk, Grand Trunk Pacific, Canadian Northern, Intercolonial and Canadian Government Railways [National Transcontinental]. Canadian National Railways was incorporated on June 6, 1920.

CNR Logos

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Turn of the Century Industry

From 1870 onward, The National Policy of high tariffs, railway building and the settlement of the West, led to growing foreign investment as Canada became more attractive to industrialists. The period also saw the the entry of many American branch plants, who jumped the tariff wall and built factories in Canada, especially in Ontario and Quebec. Two of the biggest were Ford of Canada and General Electric who built a large Canadian factory in Toronto at the turn of the 20th Century.

Industrialization began to falter in the Maritimes, because of US tariff walls and distance from markets, except for Sydney, Nova Scotia where, on Feb. 2, 1901, Dominion Iron and Steel Company started up the first of four new blast furnaces. In BC resource industries dominated. The Prairies, of course, were dominated by agriculture, and when the new Marquis wheat was developed.

Mining and smelting boomed in the period. In 1902, Francis Clergue produced the first steel from Algoma Steel in Sault Ste. Marie, and in the same year Mond founded the International Nickel Company at Sudbury. In Shawinigan, a new process for smelting bauxite ore into aluminium using hydro electricity led to the founding of Alcan Aluminum.

Industrialization on the farm proceeded rapidly with labour-saving machinery like steam tractors and threshers and combine harvesters, made by Massey Harris. There was some opposition to farm machanization. In 1897 The Winnipeg Daily Tribune warned that the combine had been invented to keep the price of grain low.

Commercialized agriculture developed to feed the growing cities, and innovations like cold storage boosted profits and prevented waste. Winnipeg developed a busting grain exchange, and Cora Hinds became the first woman agricultural reporter for the Winnipeg Free Press; she was a brilliant market analyst and her predictions set the price of wheat on the Prairies.

Farmers created cooperatives and pools to help the bargaining position of wheat farmers on the Winnipeg Grain Exchange and in other markets. On Jan. 27, 1899, the Saskatchewan Grain Growers' Grain Company wasorganized in Sintaluta, and three years later, on Dec. 18, 1901, William Richard Motherwell founded the Territorial Grain Growers' Association today United Grain Growers, in Regina.

Government and Business grew closer, and more support for business - bonuses, subsidies and guarantees - led to growth. As well, there was very little government interference in business.

The period also saw major consolidation of businesses and banks in order to compete nationally. From 1880-1920 the number of Canadian banks declined from 48 to 18. Financiers like Max Aitken - the merger king - pulled together large cement, steel and power firms. From 1909-12, a total of 275 Canadian firms consolidated into 52 large enterprises.

New marketing practices also arose, led by Timothy Eaton, whose department store and catalog empire was fouded on posted prices and a motto of "satisfaction guaranteed or your money refunded".