Brown's Small and Virtuous Local Legislature and Macdonald's Large and Spendthrift National Legislature

George Brown's fiscal revolt had a huge flaw. Liberal governments were indeed well positioned to refuse subsidies to local interests. But the Conservative government of John A. Macdonald was well positioned to connive ways of circumventing the fiscal straitjacket and buying off interests with discretionary spending. Macdonald had never taken his eyes off the tariff: someone had to manage it and that someone would have no small revenue to command. Brown could have his small, virtuous local legislature, and Macdonald could have his large, spendthrift national one.

--E.A. Heaman, Tax, Order, and Good Government: A New Political History of Canada, 1867-1917 (Montreal: McGill-Queen's University Press, 2017), 53-54.

John Stuart Mill on Taxation: The Government versus the Community

John Stuart Mill remarked in 1861, in a widely read book on representative government, that "the interest of the government is to tax heavily; that of the community is, to be as little taxed as the necessary expenses of good government permit." Liberals distrusted statist interventions and looked to ratepayer self-interest as the best guarantee of a small state. The state itself was one of the interests lined up in the fight for resources, and fiscal reformers never let the public forget that fact.

--E.A. Heaman, introduction to Tax, Order, and Good Government: A New Political History of Canada, 1867-1917 (Montreal: McGill-Queen's University Press, 2017), 10.

Transfer Wealth from Ontario or Transfer Wealth to Ontario

Confederation made a nationalist of Macdonald. Perennially weak in Ontario, he won a plurality of votes there in 1867, only to lose it again in 1872 as the renewed Liberal complaints of fiscal transfers won back voters. In political exile from 1872 to 1878, Macdonald mused on that lesson. Perhaps he was going about things wrongly. Perhaps, instead of using the state to transfer wealth from Ontario, he should transfer wealth to Ontario.

--E.A. Heaman, Tax, Order, and Good Government: A New Political History of Canada, 1867-1917 (Montreal: McGill-Queen's University Press, 2017), 119.

Macdonald Clashes with the Liberal View of the World

Macdonald's "court" economics and politics became courtlier after 1879 when he introduced a National Policy of tariff protection that affronted laissez-faire economics. Before the 1870s, some influential protectionists existed, but most public men in British North America shared the British view that indirect taxes were regressive in ways that must retard economic growth and discredit any state that defended them on grounds of protection rather than revenue. According to Martin Daunton's description of classic, mid-century economic liberalism, "free trade was a prophylactic against monopoly power and corruption. It was about transparency. In this Liberal view of the world, free trade meant liberty and prosperity, protectionism implied autocracy and poverty." As late as 1876, John A. Macdonald was heard to exclaim: "I'm not a protectionist." But whatever his private beliefs, in public he decisively reoriented Canadian trade policy towards a lasting protectionism.

--E.A. Heaman, Tax, Order, and Good Government: A New Political History of Canada, 1867-1917 (Montreal: McGill-Queen's University Press, 2017), 119.

The Tyranny of Taxation Harms Chinese and Indigenous Peoples in British Columbia

"Taxation is tyranny when the tax is collected with pistols." It was a form of tyranny that Chinese and Indigenous peoples in BC knew all too intimately. Tax collectors kitted themselves out with symbols of violence to underscore their right and power to strip these impoverished peoples of their few belongings. The contact between taxpayer and collector approximated as nearly as possible pure coercion, without the cultural mediations that the liberal state ordinarily uses to conceal violence and without the discretion shown to other taxpayers.

--E.A. Heaman, Tax, Order, and Good Government: A New Political History of Canada, 1867-1917 (Montreal: McGill-Queen's University Press, 2017), 115-116.

Showering Money upon Impecunious Partners: British Columbia Joins Confederation

But eastern payoffs were dwarfed by the massive redistribution project that was the transcontinental railway built as British Columbia's price of admission into Confederation. For Ontario, the Canadian Pacific Railway put the province back where it had been in the 1850s: showering money upon impecunious partners.

--E.A. Heaman, Tax, Order, and Good Government: A New Political History of Canada, 1867-1917 (Montreal: McGill-Queen's University Press, 2017), 93.

Canada: Designed to become an Empire

The Quebec scheme, critics argued, would extract "tribute" from the peripheries and pull power and wealth to the political centre. That's what empires did, and that's what Canada was designed to become. Confederation supporter Thomas D'Arcy McGee had once, as an Irish radical, espoused the "commonplace" view that "monopoly capitalism was the driving force behind the empire." In the 1860s, many expatriate Irish papers still took that view, but McGee had changed his tune and now championed both the British and Canadian unions.

--E.A. Heaman, Tax, Order, and Good Government: A New Political History of Canada, 1867-1917 (Montreal: McGill-Queen's University Press, 2017), 58.

The Canadian Senate: Protecting the Rights of the Rich Minority

Macdonald hard-wired some powerful champions of property into the BNA Act. His sympathies were Burkean ones. Edmund Burke had argued, in the late eighteenth century, that large landed proprietors were a kind of political ballast that protected small proprietors who would otherwise be too weak to protect themselves from a predatory state. During the Confederation debates, Macdonald advocated an appointed upper house on grounds that "we must protect the rights of minorities, and the rich are always fewer in number than the poor." Members must be at least thirty years of age and own $4,000 of real property--an astronomically high qualification.

--E.A. Heaman, Tax, Order, and Good Government: A New Political History of Canada, 1867-1917 (Montreal: McGill-Queen's University Press, 2017), 39.
 

Cartier Made English-Canadian Wealth Flow from West to East

George-Étienne Cartier owed his influence to an eclectic alliance including the Catholic Church that had educated him, French-Canadian associations and newspapers, and moneyed interests. Cartier chaired the railway committee for the fourteen years before Confederation, and under his watch, Montreal was the epicentre of railway finance and politics. The Grand Trunk Railway, the Bank of Montreal, the government, and party coffers all intertwined in complicated and lucrative ways. Where Macdonald owed his career to his ability to make French-Canadian political power flow from east to west, Cartier owed his career to his ability to make English-Canadian wealth flow from west to east.

--E.A. Heaman, Tax, Order, and Good Government: A New Political History of Canada, 1867-1917 (Montreal: McGill-Queen's University Press, 2017), 37.

George Brown Defends the Middle-Class

But brokerage politics that gave Lower Canada the whip hand seemed, to George Brown, to undermine middle-class hegemony. The middle classes, fresh from their fight for responsible government, must reassert their right to rule against corruption and violence emanating from both ends of the spectrum, the patrician and the plebeian.

--E.A. Heaman, Tax, Order, and Good Government: A New Political History of Canada, 1867-1917 (Montreal: McGill-Queen's University Press, 2017), 38.

Confederation and the Rule of Property

The leading architects of Confederation distrusted democracy and sought to entrench the rule of property. John A. Macdonald, George-Étienne Cartier, A.T. Galt, John Sandfield Macdonald, Charles Tupper, Joseph Howe, to name a few, saw in democracy an American-style demagoguery. Cartier described property as the element that must govern the world. All believed that the political weight of the propertied classes had to be specially protected.

--E.A. Heaman, Tax, Order, and Good Government: A New Political History of Canada, 1867-1917 (Montreal: McGill-Queen's University Press, 2017), 32.

George Brown on Wealth Transfers from Upper Canada to Lower Canada

George Brown complained long, loudly, and often of the demographic disparity and of a parallel disparity of wealth. According to Brown, a prospering Upper Canadian population and economy was not just yoked to a primitive Lower Canadian peasantry: it was transferring its hard-earned wealth to that peasantry.... Brown's fiscal complaints came to the forefront in 1859. That year, Macdonald's finance minister, Alexander Tilloch Galt, introduced a tariff that went beyond mere revenue towards something approaching protection for Canadian manufactures. The tariff was necessitated by a debt crisis.... George Brown was by political inclination a free trader and "country" politician. He believed Adam Smith's arguments that economic meddling by politicians made for economic inefficiency and corrupt politics.

--E.A. Heaman, Tax, Order, and Good Government: A New Political History of Canada, 1867-1917 (Montreal: McGill-Queen's University Press, 2017), 22-23.