Trade and tariffs have been prominently featured in the news recently. These issues have long been major concerns in Canada and particularly in Western Canada.
The Canadian prairies are an agricultural heartland.
Prairie farmers and ranchers produce far more than can be absorbed in national markets. Much the same applies to the various natural resources which are found in great abundance across the country. Hence, exports to international markets are crucial to the economic well-being of the region and nation.
Since the United States is Canada’s immediate neighbour to the south and possesses one of the largest economies in the world, trading relations with that nation are among Canada’s greatest economic concerns.
In 1910, Sir Wilfrid Laurier, the Prime Minister, undertook a two-month long tour of Western Canada. Laurier was keenly aware of the growing importance of the west to the growth and prosperity of the nation. He wanted to see the region for himself and to hear the issues and concerns of the residents in person.
During the tour, Laurier made a multi-day stop at Red Deer (Aug. 10th to 12th, 1910). One of the reasons that Red Deer was of particular importance to Laurier was the fact that it was the home of James Bower, the powerful president of the United Farmers of Alberta and thereby a prominent leader in the Canadian farm movement.
James Bower made the most of the opportunity to address the Prime Minister directly on the concerns and viewpoints of western farmers.
In fact, the speech was so important that although Bower started to have a heart attack just before he took the podium, he refused to be taken to the hospital until he had finished his remarks to Laurier.
Laurier listened carefully to what he was told in Red Deer and elsewhere in Western Canada.
Since free trade with the United States was one of the key proposals made, Laurier and his government subsequently negotiated a free trade agreement with the U.S. dubbed ‘Reciprocity’ that agreement became the paramount issue in the 1911 federal election.
Unfortunately for Laurier and his western farm supporters, although the Liberal party swept all but one Alberta seat (with a similar result in Saskatchewan), the Laurier government was defeated nationally by Sir Robert Borden’s Conservatives. Free trade, as a national economic policy, was dead for many years to come.
Ironically, the outbreak of the First World War in 1914 brought great economic prosperity to Western Canadian farmers. Foodstuffs were in enormous demand to support the War effort. Moreover, the 1915 crop was one of the very best in history.
However, the economy – across Western Canada, in the rest of the country and around the world – collapsed in the aftermath of the War.
The economic crisis was heightened by the fact that a multi-year drought set in across much of Western North America.
Not surprisingly, the new Republican administration in the United States, headed by the new president, Warren Harding, began adopting a number of strong measures to protect American farmers and industry. In 1922, the steep Fordney-McCumber Tariff, which targeted agricultural imports from Canada, was adopted.
The Western Canadian economy was devastated by the tariffs and other protectionist measures.
Farm prices plunged. Cattle prices dropped so low that some farmers got a bill after they shipped their animals to market – the animals sold for less than the freight bills.
