Primary industries and Canadian economic development

Abstract

The significance of primary industries in Canadian economic development is examined and the relevance of the staple theory of development to Canadian experience in the years 1840 to 1970 is considered. The evolution of the staple theory and the literature on its relevance and limitations is reviewed. Specific instances of development in Canada, viz. the Timber trade of 1840-1870 and the Alberta oil boom of 1946 to the present are examined in the light of modern staple theory. A brief examination is made of the significance of tariffs for primary industries and for development. It is suggested that the more-limited-versions of the staple theory are strongly relevant to past and possible future development of the Canadian economy. The "succession-of-staples" modification of the theory appears applicable to Canadian in contrast to Australian experience of development. The view that the theory is applicable to "the atypical case of the new country" seems to require modification unless the frontier is always new country: It appears useful to apply the theory to less-developed regions in an aggregate such as Canada. It appears questionable whether the income from the Alberta oil boom of 1946 and since is more than a temporary feature, and whether this income has been used to best effect in preparing for the next staple boom which can generate real development of the Alberta economy. The U.S. tariff is view as likely to be much less a barrier in the future than in the past for Canadian processed materials. The view is offered that tariff and other restrictions in Asia are important in restricting development of Canadian trade and primary manufacturing but have special importance in that they sustain U.S. dominance of Canada's export trade.