Second Phase of Industrialization

Hydroelectricity was Key

While railways were key to economic prosperity in the 19th Century, hydroelectricity was to be the key to prosperity in the early 20th Century.  Hydroelectricity spurred industrial development in the rural areas of Canada’s two largest provinces, Ontario and Québec as demand for raw materials like coal, wood, aluminum and other minerals increased.  These new industries were powered by hydro-electric plants like those established along the Gatineau and the Saint-Maurice rivers. In short, new economic sectors are developed, favoured by the use of a new source of energy: hydroelectricity.  

And to take advantage of the proximity of all these resources (i.e. materials and energy), new industries were being located in new regions, thus stimulating economic development there as well.  Hydroelectric power plants allowed the development of two new industries:  Metallurgy (especially aluminum smelters) and Chemical industries.  These new industries needed large quantities of energy to produce their products. This is why their factories were installed very close to large hydroelectric power plants.  

Raw Materials in Demand

In Quebec, the second phase of industrialization is based on the exploitation of natural resources. Industrial development was fueled by a demand for raw materials, particularly in the central provinces and in the United States.  Many natural resources were sought after, especially metal-rich ores like Copper, Silver, Gold, Nickel, as well as Asbestos.  New mines were being opened in Ontario and Quebec. This helped encourage the development of regions like the Saguenay, Lac-Saint-Jean, Chaudière-Appalaches, and Côte-Nord.  Since mining became more important during the second phase, the development of the railway system was pushed to develop even further. It was need to transport the ore (raw metals) to factories in other cities , to be transformed there into manufactured goods. 

Wood and timber were also highly sought after during these tiems, particularly by the pulp and paper industry.  Certain regions of Quebec, such as Abitibi, Gaspésie, Eastern townships and Mauricie attracted many pulp and paper mills.  

Text source : Matt Russell (with additions by Caroline Clarke)

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What was the impact of the second phase of industrialization on Québec’s economy?

Corporations and Monopolies

During this period, large corporations sought to gain control of their particular areas of the economy.  Through mergers or buying out smaller firms, these companies tried to be the only or the most powerful business in their area.  This is a phenomenon known as monopoly capitalism.  A few examples of monopoly capitalism can be seen in Québec.  The Montreal Light, Heat & Power Company was a utility that had a monopoly over electricity and natural gas distribution in the city after it absorbed some smaller companies.  Without competition, the company could raise rates and assure itself of constant profit.  Similarly, the Dominion Textile Company was created by a merger of four smaller companies and had a near monopoly on the production of textiles in Canada.  

Text source : Matt Russell

Rich and Poor – The Gap Widens

A booming economy, growing population, and a sense of optimism characterized the Laurier years of 1896-1911.  Stories of self-made millionaires kept people’s dreams alive that they could make it too.  However, the economic liberalism of the time meant that for many Canadians, life was hard.  Despite the boom times, the harsh reality was that the gap between rich and poor was real and wide.  Most people worked physical jobs, with long hours.  Farmers worked dawn to dusk, factory labourers worked 9 to 10 hours a day, six days a week.  There were few government policies to alleviate the gap between the rich and the rest – no capital gains or income taxes.  The government also did not provide unemployment insurance, pensions, health care or workers' compensation.  If you were jobless, elderly, injured or disabled in any way you had to rely on the kindness of family and friends or the charity of churches to survive.   For working people, money was always tight.  Malnutrition and poor housing conditions continued to plague working-class neighbourhoods.  Infant mortality rates were especially high in cities like Montreal.

Text source : Matt Russell

Unions and the Struggle of the Working Class

While unionization had been legalized in the late 1800’s, government and business frowned on the organization of workers.  Working conditions were difficult and dangerous, and companies refused to recognize the right of workers to collectively bargain.  The growing numbers of immigrants also created a pool of labour that companies could exploit.  They would work for the lowest possible wages and endured working conditions that many Canadians would not tolerate.

Workers faced barriers to organization. Unions in the West attempted to organize workers based on industries and were influenced by socialism and communism. Strikes were common and there were over 1000 industrial disputes between 1901 and 1911.   Industrial workers also often faced strike breakers, the police, and even the militia when they attempted to strike for better pay and improved working conditions.  Workers in Québec faced the additional opposition of the Catholic Church, which was hostile to socialism and preached obedience and subservience.  In fact, the Church launched its first union in Chicoutimi in 1907 and later in 1921 brought all of the Catholic unions together into the Confédération des travailleurs catholiques du Canada.  Most unions in Québec were craft unions that united skilled workers in a particular discipline.  Many of these unions were associated with the American Federation of Labour (AFL) .  The AFL was more conservative than unions in Western Canada and only pursued goals such as collective bargaining and written contracts.  They were suspicious of uniting skilled and unskilled workers and hostile to the broader ideas of socialism and communism. In a vast country with large distances and a small population, unions were unable to succeed in becoming a national force.

Laurier’s government did attempt some reforms. In 1900, the Department of Labour was created, and in 1908, it became a full Ministry under the leadership of future Prime Minister William Lyon Mackenzie-King. Mackenzie-King worked as a conciliator in labour disputes prior to becoming Minister and then implemented laws that imposed mandatory conciliation in disputes in utilities and mines which prevented strikes and improved the pay and working conditions of thousands of workers. In Québec, the provincial government passed a law in 1909 to provide compensation of up to 50% of wages in an industrial accident. 

Text source : Matt Russell