The Effect of Canadian Pacific Railway on Economy

Categories: CprEconomy
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The Canadian Pacific Railway as a Catalyst for Political and Social Development in Canada during the 1800’s

The Canadian Pacific Railway was a crucial turning point in Canada’s development because it was a Technological advancement, which forever changed Canada’s position in the world. Although direct causes of the building and operation of the Canadian Pacific Railway would have been a stronger economy, both social and political benefits were generated, which continues to affect Canada until present times.

The Canadian Pacific Railway contributed greatly to Canada’s development as it provided financial support, a higher employment rate and strengthened Canada’s economy for the future.

The CPR was the largest project to date and would cost so much that the government would need a donation from private companies and organizations such as the CPR syndicate. The CPR was estimated to cost $52,000,000¹ to create and millions more to maintain, however John A. McDonald realized that The Canadian Pacific Railway would contribute greatly to Canada as a long term financial investment.

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In short number of years, the CPR was able to generate a profit of 20 million, and with these numbers, Canada was on its way to becoming an economic juggernaut.

Due to the size of the CPR, many job opportunities to build and maintain the railway were becoming available and abundant, most likely because no education for these jobs was needed. Since no training was needed, many families who were living in poverty now could make a great living as they were promised a place to work, eat and live.

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Many families and businesses in the prairies and farther west mainly relied on wheat production and other agriculture; this meant that in the winter they would be faced with extreme poverty and most of the time, many of them suffered from various medical diseases and eventually they would die.

Lastly, the most prominent affect that the CPR had on Canada’s development was that goods which were in high demand and were available in Western Canada and Prairies such as wheat could now be easily distributed to rest of Canada. With the ease of distribution due to the CPR, more profit and then revenue would be generated. In conclusion the Canadian Pacific Railway contributed to Canada’s development as it increased Canadian control in the West which led to Canada becoming a major competitor in the trade industry and equal opportunities for everyone regardless of their financial status.

During the first half of the 19th Century, Canada was going through political and economic turmoil due to the growing power of The United States; Canada could not compete and flourish, economically, politically and socially, until the development of The Canadian Railway, which turned Canada into a social, political and economic juggernaut. The wars of Independence from the British Empire, and with a large amount of Canada’s focus on War, the rate of development was low, at least until the creation of The Canadian Pacific Railway. The Canadian Pacific Railway would guarantee to be a great investment as it would not only generate a great amount of profit in a mere number of years, but also helped expand Canada’s geographical stronghold. Although, the Canadian needed financial support from private businesses, such as the CPR syndicate, the CPR proved greatly profitable as it made 17 million dollars in the first 4 for the CPR syndicate. If profits continued to be as great as they were for the CPR syndicate, Canada was predicted to pass the United States economically.

Although economically Canada was becoming a international juggernaut, politically there were many problems underway all over Canada. The most damaging event was “The Pacific Scandal”, in which the Prime Minister of Canada, (John A. McDonald,) accepted financial funds from Sir Hugh Allen; in exchange for Allen’s syndicate to build the CPR. Although McDonald pleaded that these two deals made were not related, the public was skeptic and critical of McDonald’s decision. Some even went as far to state that McDonald was single handedly responsible for the downfall of the Conservative Administration in the 1800’s, which was true as the party was beaten many times in following elections. Now although, politically, Canada’s image was damaged due to scandals, Socially, Canada was becoming more powerful as time went on.

With the increasing immigration rate into Canada from Asia and the United States, Canada was becoming more and more diverse, which were the first steps to creating a nation as multi-cultural as today. The primary benefit for the immigrants was that with the booming economy, jobs were easy to come buy, compared to that of their home country (for example, China and India). Many immigrants took the opportunity to make a better living for them as they now had a government that had their well-being under consideration; the result was that many were able to become successful businessmen and entrepreneur. In conclusion technological advancements, such as a nation long railroad made it possibly for Canada to become economically powerful, which resulted in a powerful government and once developed, higher population numbers were needed to maintain Canada’s state, which meant an increase in immigration.

The Canadian Railway was a massively important and crucial development in Canada’s history as it was the primary reason for a higher employment rate, higher federal profit and expansion into the West. The CPR was the largest railroad in the world in its time and with a project this large, a massive amount of people were needed. With the high need, came more immigrants, most of who were seeking a better lifestyle in which they could find well-paying jobs and provide better lives for themselves and their families, which was just the thing that the CPR managed to accomplish. Although directly, The Canadian Pacific Railway created many jobs for the people of Canada, there were many positive effects that were not directly caused by the CPR. For example, due to the CPR, the West became more accessible, which meant that the Forest Industry was about to play a major role in determine Canada’s future international status.

Because of Industries like Fur Trade and Forestry, Canada was natural source enriched, which meant that as long as goods were being produced, Canada would continue to rise on the economic ladder. During the late 1800’s, the Fur Trade market was not as powerful mainly due to the fact that now, Canada and the United States had fierce competition between each other for the business of Natives, so the thing that would Canada the edge in this fight would have been, a vaster supply of fur from Natives and lumber, both which would have came from the West.

Although the West proved that it was a worthy investment because of the abundance, it was very important to avoid any conflict with the Americans, as they were also interested in this territory. It was predicted that if America would have established a stronghold in the North West, it was most likely they would try to expand into territory that was already occupied by Canada. Although not directly, The CPR enabled Canada to further expand West, which helped steady a Nation which was once on the brink of falling to continue developing and become one of the world’s most powerful juggernauts.

In Conclusion, the Canadian Pacific Railway was a major development in Canadian history as it allowed a stronger economy to develop which was the base of further advancements that Canada would make during the entire span that it would exist and would help keep the independence that Canada had fought so hard to obtain from the British Empire and The United States.

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The Effect of Canadian Pacific Railway on Economy. (2016, Jul 22). Retrieved from

The Effect of Canadian Pacific Railway on Economy

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