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The different nomadic and sedentary Aboriginal communities used the barter system, which means they traded goods. They relied on each other to supply resources they could not find in their own territory or goods they could not produce themselves.
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Due to the increase of fur trade between the Europeans and Aboriginal people, French merchant Pierre de Chauvin established a permanent trading post at Tadoussac. The fur trade drove the colonial economy. Pelts, especially beaver pelts, were exported to France, where they served in the manufacture of goods such as felt hats.
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The companies that had a monopoly in the trading industry were financed by shareholders that shared the profits and the losses in the proportion to their initial investment. Only the could determine the price of the quantity of pelts that could be sent to France.
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Mercantilist policies also hindered the economic development of the colony and is an economic theory that bases a nation's prosperity on the accumulation of gold and silver. France wanted to sell its manufactured goods without competition from its own colonies and export the greatest quantity of goods from the colonies to become wealthy.
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Jean Talon tried to make the colony economically independent through self-production. Talon imported domesticated animals from France and distributed them to the settlers for the development of animal breeding. Agriculture became diversified with the addition of wheat cultivation, and the introduction of cultivation of cereals, vegetables, and hemp. He also founded a naval shipyard near Quebec city. These ships would be used to export the colony’s surplus to other French colonies
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The Triangular trade is to allow France to get rich by taking advantage of the resources of its colonies and by selling manufactured goods to its colonies. The big principles of the Triangular trade were that boats cannot leave a port empty-handed and must be full of products or resource. Boats leaving France for New France or the West Indies must transport manufactured goods.
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The King of France granted François Poulin of Francheville permission to build forges and furnaces to exploit the iron resources in Trois rivières. Also the foundation of a naval shipyard near Quebec City. These ships would be used to export the colonies surplus to other French colonies
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After the Conquest, Scottish, English and American merchants settled in Montreal to practice the fur trade. Since they had a great financial means than the French Canadians, they replace them in the fur trade.
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Great Britain could no longer import timber from the northern Europe because of Napoleon's Continental Blockade. British merchants invested in Lower Canada logging industry to encourage the timber trade.
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The timber trade replaces the fur trade and became the engine of the Canadian economy. This will cause the development of new regions and create new jobs (lumberjacks, sawyer, log driver) and increase the influence of the British merchants class.
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Protectionism is an economic policy established by the state or government in order to protect the economy of the country or empire from foreign competition. Great Britain maintained the protectionism policy that favored the purchasing of resources from within the Empire.
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Both companies competed against each other, spending large amounts of money to build trading posts while the demand for fur declined. There were battles between the two companies. The fur trade was already in decline during this time. Fur was less and less in demand in Europe.
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Great Britain could no longer produce enough food to meet its own needs so it started to buy its wheat from Canada. However, agriculture will experience many difficulties such as Great Britain will slowly stop buying wheat from Lower Canada, poor soil, outdated farming techniques, and poor weather will cause an economic crisis in Lower Canada. Therefore Great Britain will have to buy its wheat from Upper Canada as of 1830.
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The first railroad was inaugurated in 1836 connecting the South Shore of Montreal to St-Jean-sur-le-Richelieu. The new transportation methods helped the economy making it easier, faster and safer to transport goods from one place to another. The railway network stimulated the development of the metallurgy industry with was mainly based on the construction of the railway materials. The railway network also had repercussions for colonial and urban expansion.
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According to this treaty, raw materials or primary manufacturing products could be traded between the two partners without having to pay customs duties.
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This first phase introduce slowly the replacement of artisan workshop by manufactures. Machines now permitted the division of labour and increased productivity. Machines will also make more goods, in less time and at a lesser cost. This effect would happen in the food, shoes, leather, textile, tobacco, mining and lumber industries.
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This policy put in place by Conservative Prime Minister John A. Macdonald imposes custom tariffs on imported manufactured goods, which means for Canadian consumers, local goods will cost less. Therefore, more people will buy “made in Canada” because it cost less. This will stimulate the Canadian economy. The main objectives were to increase in protectionist tariff, the expansion of the railway network and stimulate immigration.
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The second phase was help by the conditions such as Quebec has many natural resources, Many rivers to help with making of Hydroelectric and an abundant workforce. This resulted in the exploitation of natural resources and rapid expansion of industrial sectors. This phase was very big in the 1914 to 1918 due to Canada's participation in the war effort, which stimulated the economy.
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Canada’s participation in the war effort stimulated the economy as the country became one of the major suppliers for the allied troops. They supplied Great Britain with food and with our factories, they supplied objects needed in the war effort such as guns, uniforms, and bombs.
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After a while, surplus accumulated in warehouses. In an effort to help the situation, companies started to produce less and proceeded to fire workers. This sequence of events caused the New York Stock Market to crash. This started the Great Depression.
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The New York Stock Market Crash will affect the economy of most of the countries of the modern world. Banks and factories closed their doors resulting in the number of unemployed workers grow and grow up to 25%. After the crisis the Federal and Provincial government provided assistance to the poor and encouraged agricultural colonization.
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With the war and sending troops to Europe, Canada’s unemployment dropped to virtually nothing. Women started working in factories and goods were rationed. Increase in the production of agricultural products. Rations of certain products such as butter, sugar, and gas.
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The government of Quebec bought out most of the private electricity companies and integrated them into Hydro-Québec in order to nationalize the production and distribution of electricity.
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Major economic fluctuations hit the province. The organization of petroleum exporting countries (OPEC) decided to curb oil production and raise prices, causing an economic slowdown in the western world. This situation caused an economic recession.
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On January 1st, 1989 the Canada-united states free trade agreement (CUSFTA) came into effect, eliminating almost all customs duties between Canada and the united states. The treaty was renegotiated to include Mexico, which agreed to participate in the North American Free Trade Agreement, which came into effect on January 1st, 1994.
