The West Cashes In

In 1869 Canada paid $1,500,000 for the “barren” Northwest. This year the three prairie provinces are taking over natural resources worth many billions of dollars

GRANT DEXTER June 15 1930

The West Cashes In

In 1869 Canada paid $1,500,000 for the “barren” Northwest. This year the three prairie provinces are taking over natural resources worth many billions of dollars

GRANT DEXTER June 15 1930

The West Cashes In

In 1869 Canada paid $1,500,000 for the “barren” Northwest. This year the three prairie provinces are taking over natural resources worth many billions of dollars


IN 1869, when Canada bought the Northwest from the Hudson’s Bay Company, there was an outburst of public indignation.

The price, 300,000 pounds sterling, was deemed outrageous. Many believed the Government had made a bad bargain: the Northwest wasn’t worth half as much.

Sixty-one years later, in 1930, the three provinces, carved out of the territory purchased from the Gentlemen Adventurers, have attained their majority and have inherited complete ownership of their public domain. These provinces, Manitoba, Saskatchewan and Alberta, have become owners of land, forests, fisheries, water powers, minerals, worth, at a conservative valuation, billions of dollars. They now take their place as full fledged provinces on an equality with the older provinces of the Dominion. They have attained full status. The scheme of Confederation has been completed.

Between 1869 and 1930 lie sixty-one paradoxical years of inspiration and discouragement. Like a bewildering tapestry, these years unfold the story of little Canadianism, of narrow outlook: a maddening tendency upon the part of many long since dead and buried to doubt the future, to belittle their heritage. And intertwined and inextricably confused with it are glorious achievements of other Canadians—men of vision, molders of their own destiny—men who bent Nature to their will; scientists who made the Northwest the granary of the world; visionaries who flung ribbons of steel across a “barren” wilderness; nation builders who magnetized the Last Great West so that land hungry pioneers from the ends of the world felt the irresistible impulse to come.

An End to “Little Canadianism”

TODAY the resources are in process of return to provincial control. More than that. A controversy which threatened to disrupt Confederation has been stilled for ever. A final, crushing blow has been dealt to “little” Canadianism.

For the record of the “resources” controversy—the sixty-one years—proves Canada to be rich in wealth beyond the power of man to compute and that there are no discernible bounds to the future development of this Dominion.

Little significance now attaches to the long negotiations which finally brought about these agreements. To the people of eastern Canada who do not follow such matters closely, the story of the struggle of the prairie provinces for equality of status is not of interest; it is now ended.

The “resources” issue was born in 1870 when the Province of Manitoba was created. In the preceding year the Dominion had purchased the Northwest. The question arose: Should the Dominion hand over this domain, newly purchased, to provinces as and when created; or should the ownership of the West remain

The signing, in the Privy Council Chambers at Ottawa, of the agreement whereby Manitoba received control of her natural resources from the Dominion.

Seated, left to right: Hon. Robert Forke, Hon. Charles Stewart, Premier W. L. Mackenzie King, Premier John Bracken, of Manitoba, and Hon. D. G. McKenzie.

Standing, left to right: Mowat Biggar, Hon. J. C. Elliott, Hon. J. H. King, Hon. James Malcolm and Hon. J. L. Ralston.

When Premiers Brownlee, Alberta, and Bracken, Manitoba, last December 14, walked into the Privy Council chamber in the “East” block on Parliament Hill, met Premier Mackenzie King, and together sat down at the great circular council table to sign the “resources” agreements, there was in the air a consciousness that an event of great historic importance was being enacted. The “agreements” were signed. On March 20, the Saskatchewan “agreement” was signed. All three have been ratified by statute in the Legislatures and the Canadian Parliament.

vested in the Federal government? All the older provinces had become, automatically, the owners of their public domain at the moment of Confederation. British Columbia received complete ownership of resources immediately the province was created.

The position in regard to the Northwest was different. The land of older Canada and British Columbia had not been purchased. It had passed from the control of the British Parliament to the citizens of the various colonies, in conformity with the long established principle of British constitutional law: that as soon as a colony achieved responsible government it received the resources. In the Northwest, however, the land had not been acquired by conquest or discovery but by purchase. The Dominion had bought and paid for it, and the final decision of 1870 was that the Dominion would retain the ownership, administering the domain for the general advantage of Canada rather than for the particular advantage of prairie citizens.

The resources question, therefore, arose naturally and inevitably when the Province of Manitoba was born. The early provincial Governments at once raised the issue, and came to Ottawa seeking equality with the older provinces. Attempts were made from time to time to quiet the province and stop complaining by granting

Continued on page 42

Continued from page 5

small subsidies in lieu of resources, but nothing definite was done until 1905 when Alberta and Saskatchewan were born.

The Laurier government then conceded the claims of the provinces either to their resources or a subsidy in lieu thereof. A system of subsidies was worked out and applied later on to Manitoba, whereby the Dominion retained ownership of the domain but paid sums of money annually to the provinces as compensation. These sums were calculated on a per capita basis and incieased as the provinces grew. This subsidy arrangement continued in force without revision. Today Manitoba and Alberta j receive $562,500 per annum; SaskatchI ewan, with a greater population, $750,000, I As the population increases the subsidies

will rise to a maximum of $1,125,000 per annum.

During the sixty-one years of ownership the Dominion was disposing of the western resources. Land was being given away under homestead and pre-emption policies. The call to fill the “Last Great West” was being trumpeted throughout Europe and the United States. The prairie provinces resented the prodigality with which their land resources were being exploited, but in the negotiations for their return to provincial control, which were constantly in progress, agreement could not be reached. The Dominion was willing to return the unalienated resources and stop paying the subsidy: the provinces could not afford to lose the subsidy and wanted both lands and subsidy. They contended that the subsidy

should be continued in perpetuity as compensation for lands already alienated.

A Chronic Cause of Friction

UNDOUBTEDLY Dominion governments for the past twenty years would have liked to have ended the controversy on this basis. The “resources” issue had become a chronic source of friction, threatening the very structure of Confederation. But the obstacles to such a settlement were all but insurmountable. Had the western domain fallen into the possession of Canada in the ordinary course of occupation, all would have been well. But it had been bought and the older provinces had helped to pay for it. They had some right, therefore, to be consulted in settlement and they would not agree to the turning back of the resources unless the subsidies ceased.

And so this vexatious problem was referred to the Dominion-Provincial conference held at Ottawa in 1927. This was, indeed, a post-Confederation conference. To the assembled representatives of all the provinces the Dominion government submitted the question and asked if the older provinces would agree to a more generous settlement. It was a great moment in the history of Canada when Premiers Ferguson, Taschereau, Baxter, Rhodes, Saunders and MacLean arose, one after the other, and agreed that a better offer should be made to the prairie provinces.

Thus authorized, negotiations were renewed, and after two years final settlements have been achieved. The end of this long controversy has been reached.

The terms of the agreements may be summarized briefly, as follows:

Manitoba will receive the unalienated resources: the subsidy in lieu of resources, with statutory increases according to population, in perpetuity. In addition the province will be paid a lump sum of $4,500,000 in compensation for the period 1870-1908, when no subsidies worthy of mention were paid.

Saskatchewan and Alberta will receive the unalienated resources and the subsidy with statutory increases in perpetuity. In the case of Alberta a Royal Commission has been appointed to decide what further sums, if any, the province may be entitled to receive in order to be placed in a position of equality with the older provinces. The Saskatchewan agreement differs slightly. The machinery for such a commission is provided, but there is to be a constitutional appeal to the courts before the enquiry takes place. In both cases the Dominion concedes that the commissions should take under review the alienations since 1905 when the provinces were created. The provinces, however, believe they may be entitled to compensation as from the date of purchase from the Hudson’s Bay company. They contend that the Dominion ~nd Imperial statutes by which the ownership of western lands were vested in the Dominion are unconstitutional. The courts will be asked to decide this point and when the decision is obtained the commissions will begin. In the general settlements this case is not of importance. Under the agreements, the commissions will function and the final settlement will be reached, whether the enquiry is to go back to 1905 or to a more remote date.

None so Blind . . .

"pROM a practical point of view the most important consideration in these agreements is the return of the unalienated resources. For sixty-one years the Dominion has been disposing of the western domain. It may be asked: Is there anything of value left to be returned?

The answer is emphatically in the, affirmative. The provinces are being enriched by billions of dollars. To the sceptical, that may seem an extraordinarily loose and indefinite valuation. It

would, perhaps, be gratifying if one could estimate the value of these resources at a specific sum. But to do so would be to repeat the folly of the past. For the past sixty years there have been plenty of outstanding men who were ready to tell the people of Canada exactly what their country was worth. The task of defining the future possibilities, of enumerating the iron-clad limitations, was simple to them.

Our grandfathers were told that Montreal could never be an ocean port. A great British naval engineer came out, made a detailed survey and said so. If an authority of equal eminence had so pronounced against Fort Churchill two years ago, the Hudson Bay Railway might well have been abandoned.

Consider the record of the Northwest. The Dominion government bought it in 1869 for 300,000 pounds, an amount slightly larger than the value of the annual catch of fish from Lake Winnipeg. The government did not buy because it was thought to be an empire of incredible richness. The Northwest was bought to make possible a united British North America, stretching from ocean to ocean. The government was roundly abused for paying an extravagant, unjustifiable price.

In those days there was no doubt whatever as to the future possibilities of the Northwest. Truth, an English publication of some standing, voiced the common view of that day when it stated that the western prairies were “suitable” only for the production of “icebergs.” The report continued:

“The much touted Manitoba settlement cannot hold out many years. The people who have gone there cannot stand the coldness of the winter. Men and cattle are frozen to death in numbers that would rather astonish the intending settler if he knew; and those who are not killed outright are often maimed for life by frost bites . . . To keep themselves alive during the long winter, they have to imitate the habits of the Esquimaux.”

Nor was this the view only of outlanders who had never seen the Northwest. When Sir John A. Macdonald created the Province of Manitoba, the Liberal opposition treated the measure as a huge joke. Hon. William Mackenzie rose in the Commons and said that the Manitoba Act was a magnificent piece of foolery. To think of there ever being a great province in the Northwest! Dean Swift, he suggested, might have been proud to have written the Manitoba act as a sort of sequel to Gulliver’s Travels.

Even a decade after the birth of Manitoba, the opinion of many prominent easterners had not changed. Hon. Edward Blake proclaimed in the “Eighties” that the Canadian Pacific Railway through the Northwest would never earn enough to pay for axle grease. Hansard in the “Seventies” and “Eighties” abounds in statements by responsible members of parliament, that the Northwest was a barren wilderness. It was pointed out, for example, that the phrase, “barren lands” was coined not to describe the subarctic tundra but the prairies west of Winnipeg.

Scores of quotations could be cited. Senator Christie, speaking in the Senate in 1871, said:

“In the whole Red river country there are some 60,000,000 acres of fertile soil. West of this to the Pacific, the country is almost worthless. Take British Columbia. Only small portions of this area can be made available for agricultural purposes.

In the small interstitial valleys there is fertile land, but the quantity is inconsiderable and the valleys are liable to inundation from torrents. The uplands are poor and rocky.”

Continued on page 45

Continued from page 43

Or listen to L. F. R. Masson, M. P. for Terrebonne, Quebec:

“I have always been opposed to the acquisition of the Northwest and have had good reason for that opposition. After all, there are only some 50,000,000 acres of habitable land in the whole territory.”

An Immense Heritage

"DUT all the public men of that day were not blind to the truth. The Macdonald government pressed forward with a policy of development in the Northwest. Hugh John Macdonald, son of the great Tory chieftain and a member of parliament from the west, rose in the commons and said :

“We have in our western country a land fit to be the home of millions and I expect that long before those now present in this house pass away from the earth, they will see that country perhaps not the home of millions but of hundreds of thousands.”

When Sir Hugh John, as he later came to be known, died last year at Winnipeg, his prophecy had been fulfilled. There were nearly 2,000,000 people on the prairies alone. Yet Hansard records that when the prophecy was made, he had to pause until the laughter subsided.

While many scoffed at the potential value of the Northwest, others saw the vision and worked for its fulfillment. Dr. Charles E. Saunders, at the Experimental Farm at Ottawa, discovered Marquis wheat, clipped ten days off the growing season, and made western Canada the granary of the Empire. Successors have produced Reward wheat, clipping another week off the season and rolling the frontier of wheat production fifty miles northward. Today wheat is grown successfully on the northern stretches of the Hudson Bay Railway and at Fort Vermilion, far to the north of the Peace River Valley. Tens of millions of acres which only a decade ago were considered waste lands are today being opened up for settlement.

Railways were built; scientists in their laboratories discovered the secret of making paper from trees; hydro-electric power became a reality. More recently, the airplane cracked open the north, baring the treasure house of the preCambrian shield to the perceptive eyes of prospectors. Mining communities are now being built in areas of the Northwest which in 1870 were believed to be as desolate as the polar ice-cap.

Sixty years exploitation of the resources has hardly scratched the surface. This is what these provinces are now receiving:


Land—123,497,177 acres.

Forests—Saw timber, 1,440,000,000 feet, board measure.

Pulpwood—63,520,000 cords, and 19,000 square miles of young, growing forest from one to six inches in diameter. Minerals—All the mineral resources not alienated. It is impossible to place a valuation upon these resources but they include copper, gold, antimony, cobalt, lead, nickel, iron, molybdenum, platinum, silver, tin, tungsten, zinc, and practically all the non-metallic minerals and structural materials.

Undeveloped water powers—3,309,000 h. p. minimum flow; 5,344,500 h. p. six months flow.

Fisheries—The province will take over an industry now producing to the value of $3,000,000 annually and capable of great expansion. Twelve months will

bring the untold fishery resources of Hudson Bay into production.


Land—102,300,000 acres.

Forests—Saw timber, 7,950,000,000 feet, board measure.

Pulpwood—155,550,000 cords.

Minerals—Present production amounts to $1,536,955 annually, about half of which is coal. There is untold wealth in the pre-Cambrian shield in the north of the province. The Hudson’s Bay Mining Company’s mine straddles the Manitoba-Saskatchewan boundary.

Undeveloped water powers—542,000 h.p., minimum flow; 1,082,000 h.p., six months flow.

Fisheries—The innumerable lakes north J of the Saskatchewan river abound in whitefish, but commercial development has been retarded by lack of rail transportation.


Land—101,000,000 acres.

Forests—Saw timber, 16,000,000,000 feet, board measure.

Pulpwood—270,000,000 cords.

Minerals—The present production includes 7,336,330 tons of coal per annum, but in addition there are unexploited resources of 1,059,000,000,000 tons of coal, or fourteen per cent of the total reserves of the world, in Alberta. Furthermore there are known deposits of gold and silver and many mineralized areas as yet not explored.

Chemicals—Petroleum production last year, 482,047 barrels; natural gas, 15,000,000,000 cubic feet. The oil fields of Alberta are still in the early stages of development, as are the bituminous tar fields.

Undeveloped water powers—390,000 h. p. minimum flow; 1,049,500 h.p., six

months flow.

Fisheries—Annual value of production $596,800, but capable of great expansion.

Off to a New Start

rT"'0 APPRECIATE what has happened in the sixty-one years of the “resources” controversy it is only necessary to glance over the items comprising the domain which now passes to provincial control. Scores of millions of acres of land which was worthless in 1870 have been brought by the skill of plant breeders into the productive area. Canada today boasts of her wheat fields, but they comprise not more than 23,000,000 acres. The pulpwood forests in 1870 were virtually worthless. No one, in that day, ever imagined that paper could be made out of wood. The value of the pulpwood resources being returned to the two provinces may be gauged by the fact that 6,000,000 cords of pulpwood are deemed to be sufficient to maintain a 250 ton per day mill for thirty years, by which time the areas first cut should be ready for re-cutting. Water powers, of course, are an almost modern discovery. To the Canadians of 1870, a waterfall or rapids was but a troublesome impediment to navigation. And so with the other items.

The truth is that sixty years have increased the value of the natural resources of the Northwest more than one hundredfold.

Beginning in 1869 with a payment of 300,000 pounds sterling, the story of the domain known as the Northwest has been one long, unvarying narrative of conquest and achievement. This year, Manitoba, Saskatchewan and Alberta will receive title to their resources. To these provinces 1930 will be but the beginning of a new forward march. Can it be doubted that the sixty years to come will record progress even more spectacular than in the past?