Chapter 9. Economic Transformation and Continuity, 1818–1860s

9.3 British North America between the Wars

The war in Europe and the War of 1812 were over in 1815. British North America would not face another external threat to its survival until the American Civil War in the 1860s. It is worth remembering that a generation had been raised in Europe in the shadow of the French Revolution and war, followed by Napoleon’s expansionism. And a generation of British North Americans had found jobs building ships, stitching sails, winding ropes, casting cannons, and supplying food to huge armies and fleets abroad. Suddenly that came to an end. As the armies of Europe demobilized, the economies of the North Atlantic adjusted to peacetime. For the most part, it was a very uncomfortable transition.

What most of British North America had in common was an ample supply of available land. Not all of it was of the same quality. Newfoundland’s agricultural potential was very limited and so it never experienced that “farming frontier” settlement boom found in other colonies. Nova Scotia, too, was limited by thin soil outside of the valleys along the Bay of Fundy. Population poured into Lower Canada’s Eastern Townships but the limits of that territory were reached in a few decades. The big winner was Upper Canada, whose population grew almost entirely on the strength of new farm settlement, rising from 14,000 in 1791 to 95,000 at the end of the War of 1812. By 1824 it had grown again by 50%, and by 1840 there were more than 430,000 people in the colony.[1] Immigration dominated the engines of population growth in the colony and the few thousand Loyalists who founded the colony were quickly and severely outnumbered.

Until the War of 1812, however, the ability of British North American farmers to make much economic headway was limited by landscape. Clearing heavily treed land was difficult work. One estimate reckons that a single farmer (perhaps making use of some extended family labour) could clear 1.5 to 3 acres a year and that a minimum of 3 acres was needed to achieve subsistence.[2]  This produced a colony of subsistence farming right down to the end of the war, by which time the colony began to round a corner.

The Economic Impact of 1812

Several aspects of the economy changed with the War of 1812. First, the war was itself a dissuasive force when it came to continued American immigration into British North America. The Late Loyalists were American migrants who reached the limits of upstate New York and simply crossed into the Niagara Peninsula. After 1812 that traffic slowed significantly. The fall of Tecumseh’s forces opened up lands in the Ohio and farther west for Americans and, of course, the border now meant more than it did before the war. The colonial administration of Upper Canada, feeling insecure and vengeful, cut off land grants to Americans, effectively freezing economic growth in the Niagara for a generation. Immigration sources would have to change. Britain offered up new possibilities: in this new post-war age, however, they would arrive by the boatload and not as individual migrants or families. The population boom of the 18th century — which had seemed at the time like a huge increase in national wealth and power, insofar as it provided an enormous number of troops to fight against France — was now a liability. The British government decided to direct the outflow of population to reduce unemployment and suffering at home and to increase the economic capacity of its colonies abroad. For a decade waves of state-sponsored emigrants departed Britain and wound up in British North America.

Secondly, the British economy was badly beaten up by the conflict in Europe and the North American theatre of combat. Certainly there had been growth sponsored by the war itself and there was already evidence of the coming industrial revolution. But, beginning in 1815, a recession settled in. Unemployment spread throughout the British Isles and demand for British North American exports declined sharply. Recovery was in the near future, but the post-war crash was a foretaste of the kind of economic volatility that the new industrial economy had in store for the whole Atlantic rim.

Key Points

  • The end of the Napoleonic Wars witnessed a significant downturn in the North Atlantic economy.
  • British North America’s agricultural sector was marked by subsistence farming through the War of 1812 and thereafter grew only slowly.
  • British North America’s recovery would depend on Britain’s recovery.

  1. Douglas McCalla, "The 'Loyalist' Economy of Upper Canada," Social History 16, no.32 (November 1983): 285.
  2. Kenneth Norrie and Douglas Owram, A History of the Canadian Economy (Toronto: Harcourt Brace Jovanovich, 1991), 168.


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Canadian History: Pre-Confederation - 2nd Edition Copyright © 2020 by John Douglas Belshaw is licensed under a Creative Commons Attribution 4.0 International License, except where otherwise noted.

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