Canada History

Canada History   timelines 
AskAHistorian    blog 




Prehistory | 2 Worlds Meet | New France | England Arrives | Clash of Empires | Revolution | British America | Reform/Revolt | Responsible Government | Confederation | Nation Building | Laurier | The Great War | Roaring 20's | Great Depression | WWII | The Peace | Cold War | Trudeau | PC's in Power | Modern Canada

A New Nation | Nova Scotia Balks  | The Northwest Territories | Manitoba & Riel | Federal Provincial Relations | British Columbia | Prince Edward Island | The Washington Treaty | Scandal | Liberal Interlude | The National Policy | The Railroad | Rebellion | Immigration | Transitions

Macdonald was back in power and the central focus of his National Policy was the building of the trans-continental railway. All of his promises, all of his plans, his support, his legacy, it all revolved around the successful building of a railway, the scope of which no one had ever attempted before.

The deadline for the completion of the new railway was 1891 and a private consortium had to be formed to build and operate the railway. With economic times picking up George Stephen, President  of the Bank of Montreal and Macdonald's old friend and foe, Donald Smith of the Hudson Bay Company, teamed up to form the Canadian Pacific Railway Company.  

In order to interest the Canadian Pacific to bid on the contract to build the railway the Canadian government had to offer very attractive terms. These were

  • $25,000,000 in cash

  • The already completed railway work worth about $35,000,000

  • The CPR would own and operate the railway

  • 25,000,000 acres of western land

  • No competition south of the CPR route for 20 years

  • A perpetual tax exemption

The Liberals immediately attacked the contract in the House of Commons but no other option was readily or realistically available. The American railways were creeping closer and closer to the boarder, threatening to draw the west into it's economic sphere of influence and then potentially absorb the area into the Union.

The man that was picked to build the railway was an American with plenty of experience and the choice proved to be the salvation of the project. William Cornelius van Horne was named the Chief Engineer in charge of Construction. The project started and moved with amazing speed. By 1882 the fort William to Winnipeg section was complete and the railhead surged across the Prairies setting construction records as it went. It also spawned a land boom such as Canada had never seen before. Land prices in Winnipeg rose to match those of the highest in the world and speculation about the route created boom towns all through the west. The CPR shrewdly used their inside knowledge of routing choices to generate enormous amounts of money but the cost of the railway quickly ate up the profits.

By 1883 the money was just about gone and the railway was still far from completion. The Conservatives realizing that their fortunes rode on those of the railway managed to pas a Bill supplying the additional funds. By 1885 the crisis point had once again been reached and it looked as though no more funds would be squeezed from Canada for the railroad, until Louis Riel once again intervened to change the course of Canadian history. The Northwest rebellion created panic throughout the rest of Canada and it was only because the railway was able to transport the Canadian troops to Saskatchewan to defeat the Métis, that the railway was saved. The additional funds were voted to finish the railway and on a cold fall November 7th in 1885 the last spike was driven at a small rail siding named Craigellachie which was the name of the last stand of the highland clans in Scotland. Donald Smith and Macdonald agreed that the name was appropriate.

It was completed 6 years before scheduled, helped quell a rebellion in the west, pre-empted any US ambitions in western Canada and secured Canada as an Atlantic to Pacific nation. It was the longest railroad in the world at that time and had the be built across two of the most difficult barriers in the world, the Canadian shield and the endless ocean of mountains which started with the Rockies and ended with the Coast Mountains. The National Dream had been achieved. 



The CP and the Railway