The First Phase of Industrialization in United Canada (1850-1896)

The 1850s witnessed the first phase of industrialization to occur in United Canada. Most of the first industries were located near waterways and big cities, including Montreal and Quebec City in Lower Canada, as well as Toronto in Upper Canada. Setting up industries near waterways enabled the different resources and products to be transported by boat.

The development of new machinery greatly increased the speed of production, so workers could make more products in less time. In addition, workers were no longer required to be particularly skilled; as long as they understood how the machine worked, they could perform the task. This is called the mechanization of production.

A new economic system called industrial capitalism developed during this phase of industrialization. Investors needed capital to build factories, pay workers and buy machines so they could start production. These investors were either British or Canadian in origin and belonged to the middle class, who had made their money from the timber trade.

In an industrial capitalism system, investors control production and sell products to turn a profit. They then take this profit, reinvest it by building new factories or buying new machinery to earn more profit. The main aim of investors is to always earn more revenue than the amount they initially invested. In industrial capitalism, only the owners benefit from how profitable an industry is, while workers earn a very low wage in return for their work. Working conditions were generally miserable. The workday was very long and workplace accidents were common.

Many banks were created during the 1850s and 1860s to lend money to investors. The Montreal Stock Exchange was also created at this time, bringing in new capital for industries.

In heavy industry, on the other hand, specialized workers were paid higher wages. Iron and steel were the main raw materials used to make carriages, rails and locomotives, which were in high demand due to the development of rail networks. In heavy industry, products were intended for companies and governments, not individuals.

However, this project could not be achieved by just anybody, since it would be very expensive. The Grand Trunk Railway Company had the necessary capital, so it took on the task. The Great Lakes and Rivière-du-Loup were connected by a railroad that went through Montreal, allowing the industries in Toronto and Montreal to grow even more quickly. By the end of the 1870s, Nova Scotia and New Brunswick had joined the large Grand Trunk transport network, forming the Intercolonial Railway.

With the rail network built, raw materials could be quickly transported to industries. Products were then made in factories and transported to the markets where they were sold.

Along with improvements to the navigation system and the construction of railroads, many roads and bridges were built to connect various regions to cities. These projects were particularly beneficial for forested regions.