The Power of Disallowance Protects British Financiers

The centralization of fiscal power in the hands of the federal government was accompanied by its close control over banking and finance, again with a view to stabilizing the overseas market for its debentures. The federal power of disallowance was used against provincial statutes that threatened to invoke the ire of British financiers.

--R. T. Naylor, The Banks and Finance Capital, vol. 1 of The History of Canadian Business, 1867-1914 (Montreal: McGill-Queen's University Press, 2006), 254.

Political Unions Aid the Sale of Securities and Tariffs Reassure Debenture Holders

In 1841, the Province of Canada was created to abet the process of selling public securities, and subsequent tariff policy aimed to keep the debenture holders reassured. In 1867 precisely the same tactic was tried, with new territory brought within the federal tax collectors' grasp to ensure a steady flow of interest payments to Britain and keep up the quotation of public securities. In 1879, paralleling the fiscal policy of the late 1850's, a high tariff strategy was adopted, a key objective of which was to ensure an inflow of revenue to finance infrastructure and to pay off the public debt.

--R. T. Naylor, The Banks and Finance Capital, vol. 1 of The History of Canadian Business, 1867-1914 (Montreal: McGill-Queen's University Press, 2006), 58.

Branch-Plant Imperialism

The British North America Act was derived from a political theory of branch-plant imperialism: lower levels of government, the colonial legislatures, were formerly weak and dependent on Britain; now they were to be weak and dependent on Ottawa, which in turn was ultimately answerable to Westminster. The federation of the colonies was a highly centralized one. In fact, the degree of independence exercised by the colonial (provincial) legislatures was reduced by the results of Confederation, which represented a regression from the degree of autonomy that Reform administrations had succeeded in achieving.

--R. T. Naylor, The Banks and Finance Capital, vol. 1 of The History of Canadian Business, 1867-1914 (Montreal: McGill-Queen's University Press, 2006), 5-6.