The Wheat Boom Era Of Canada's Economic Development

The Wheat Boom Era that took place in the western prairies is often associated with Canada’s ascension to modern economic growth. This era of rapid and diversifying economic development took place just before the beginning of the twentieth century, and ended prior to World War I. During this decade and a half, the nation witnessed the “most rapid growth of real output that the Canadian economy ever experienced” (McInnis, 1). With the advancement in technology, growth in immigration and increase of foreign investment, it was imminent that this period would be a great structural transformation (McInnis, 1). Additionally, the plethora of natural resources that expanded with the recent completion of the Canadian Pacific Railway lead to further

As exemplified by Harold Innis and his example of fish in the Atlantic, a “staples economy” revolves around the extraction of a natural resource (Innis, 16). In order for this to sustain economic development, the resource must be bountiful, and easy to extract. Contextually, wheat in the Western Prairies certainly meets this criteria. The “wheat boom was [accordingly] regarded as the most convincing demonstration of the usefulness of the staple theory in Canadian economic history” (Bertram, 545). An expansion to this theory developed by M.H. Watkins considers the linkages between the staple and other sectors. As stated by Watkins, a staple can induce “backward linkages”, which are “investments in the home-production of inputs” (Watkins, 145). Watkins furthers mention that the “most important example of a backward linkage is the building of transport systems for collection of the staple” (Watkins, 145). Although the Canadian Pacific Railway was not built for the sole purpose of extracting resources, it still does perform a crucial role in transporting wheat from the prairies to more accessible markets. Essentially, the Staples Theory focuses merely on the significance of a single resource and its influence on building related industries. Therefore, it would not be out of place to acknowledge that

As mentioned above, the impact of the Wheat Boom acts as a prime example of the “take off” stage outlined in Rostow’s Growth Model. Rostow states that “one can approximately allocate the take off” for Canada around “the quarter century or so preceding 1914” (Rostow, 9). Those dates almost perfectly align with the dates of the Wheat Boom as previously mentioned as the beginning of the twentieth century to World War I. According to Rostow, there are three conditions that must be met in order for the “take off” stage to be successful: the first, is a rise in the savings rate from 5% to 10% of the national income; the second, is the development of industries and expansion into new industries; while the third and final condition, is a transformation of “social and political structures in such a way that a steady rate of growth can be regularly sustained” (Rostow, 9). It is safe to assume that Canada’s take off stage was successful, as the Canadian economy remained prosperous until the onset of the Great Depression in the 1930’s. Therefore, Canada must have satisfied the three criteria set by Rostow. Regarding the first condition, Canada saw a substantial rise in it’s savings rate from “12% in 1896, to a peak of 34% in 1912, then