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Macdonald campaigned on the policy in the 1878 election and handily beat the Liberals, who were believers in free trade.

The causes of the National Policy are numerous. Macdonald hoped that by creating a strong manufacturing base in Canada the nation would become far more secure and less reliant on the United States. He was also closely linked to the Montreal and Toronto business interests that would benefit from such a policy, and they did play an important role in keeping the Tories in office until 1896.

A protectionist policy was not the first choice of Canadian manufacturers. The ideal for them would have been a unified North American market where they could freely compete with American manufacturers. Despite a brief experiment with free trade in the Canadian-American Reciprocity TreatyThe Canadian-American Reciprocity Treaty was a trade treaty between the colonies of British North America and the United States. It covered raw materials and was in effect from 1855 to 1866. Origins After Britain moved to free trade and repealed the Corn before ConfederationCanadian Confederation or the Confederation of Canada was the process that ultimately brought together a union among the provinces, colonies and territories of British North America to form a Dominion of the British Empire, which today is a federal nation the Americans were intent on pursuing a strongly protectionist policy, with tariffs far higher than Canada even had under the national policy.

With such high American tariffs Canadian firms could not compete in the United States, but American firms could enter Canada. Especially problematic was the problem of dumpingDumping in terms of anti-competitive behaviour has two definitions: Classically, dumping is a subset of what is known as predatory pricing. Dumping in this sense is the act of selling a product at a loss now in order to drive competitors out of business, surplus goods at below cost on the Canadian market, so as not to lower prices in the United States.

The policy was introduced in the budget on March 14March 14 is the 73rd day of the year in the Gregorian Calendar (74th in Leap years). There are 292 days remaining. Events 1489 The Queen of Cyprus, Catherine Cornaro, sells her kingdom to Venice. 1492 Queen Isabella of Castille ordered her 150 000 Jewish, 1879, and it created high tariffs on the import of most manufacturing goods. At the same time the tariffs on raw materials were lowered to also help manufacturers. The tariff was not as high as that in the United States, however. The Canadian government was dependent upon revenue from customs and too high a tariff would have cut off almost all imports, thus depriving the government of revenue.

The policy quickly became one of the most central aspects of Canadian politics and it played an important role in keeping the Tories in power until 1896, when Wilfrid LaurierWilfrid Laurier Rank 7th ( 1896- 1911) Date of Birth November 20, 1841 Place of Birth St-Lin, Quebec Spouse Zoe Lafontaine Profession lawyer Political Party Liberal Party of Canada Laurier re-directs here. For the Canadian federal electoral district see L and the Liberals campaigned on a promise to keep the National Policy in place. While many Liberals still supported free trade, the National Policy was too popular in OntarioOntario ( In Detail) ( In Detail) Motto: Ut Incepit Fidelis Sic Permanet (Loyal she began, loyal she remains Capital Toronto Largest City Toronto Area Total % fresh water 4th largest(2nd lgst prov. 1 076 395 km² 14. 7% Population Total (2001) Density Rank and QuebecQuebec ( In Detail) ( In Detail) National Motto: Je me souviens (I remember CapitalLargest city Quebec City Montreal Area Total % fresh water 2nd largest(1st lgst prov. 1 542 056 km² 11,5% Population Total (2004) Density Ranked 2nd 7 509 928 5,43/km² Admi to do away with. When in the 1911 election the Liberals campaigned on free trade they lost the election.

While the policy was popular in central Canada, in the west it was extremely unpopular. The policy forced farmers to buy Canadian agricultural equipment at far higher prices, but they also had to compete on the international market for grain. This opposition to the National Policy played an important role in the rise of the Progressive Party of Canada in the 1920s. Their platform was entitled the New National Policy and it advocated free trade.

The National Policy was slowly dismantled under the many years of Liberal rule under William Lyon Mackenzie King and Louis St. Laurent. At the same time the United States was lowering its tariffs. Complete free trade was not achieved until 1988 with the Canadian-American Free Trade Agreement brought in by Brian Mulroney's government.

The assessment of the National Policy is mixed. In general economists see it as a bad thing that increased prices and lowered Canada's standard of living for many years. They also see it as creating an inefficient economy that had too many monopolistic firms. Historians, however, tend to see it in a more positive light viewing it as a necessary expense to create a unified nation with its own manufacturing base. They also see the policy as increasing Canada's population and encouraging the development of cities and urbanization.

The years right after the policy was introduced saw a great boom in the Canadian economy, which the Tories pointed to as justification for the policy, but the boom occurred internationally.