How heavy debt led the colony into provincehood
British Columbia’s union with Canada was not inevitable, some residents wanted to join the United States.
This year marks the 150th anniversary of the union between British Columbia and Canada. The Pacific province has been a part of Canada since July 20, 1871.
During the gold rush, British Columbia had stronger economic links to the American west coast than it did to Canada.
In 1866, U.S. Congressman Nathaniel Banks introduced a bill to assume British North America’s $85 million debt and pay for the construction of railroads and canals in return for sovereignty. The bill failed to pass either house of congress.
Later that decade, two petitions circulated in Victoria in 1867 and 1869 on an American annexation of British Columbia.
The first petition asked Queen Victoria to either relieve the colony of its debts and expenses, and establish a steamer link with Britain, or allow it to join the United States. A part of expenses came from a bloated civil service, which British Columbia tried to eliminate in 1866 by merging with the Colony of Vancouver Island.
“Physical communication was via steamers regularly running between Victoria and San Francisco,” said Dr. Patricia Roy. The steamers carried mail and passengers. British Columbia got much of its news from American wire services after the completion of a telegraph line in 1865
Roy is a professor emeritus of history at the University of Victoria.
Fredrick Seymour, Governor of British Columbia during both petitions, informed the Colonial Office in London, “There is a systematic agitation going on in this town in favor of annexation to the United States.”
The reason to support annexation was mainly economic, said Roy. The fading of the gold rush in the 1860s led to a decline in the colony’s trade and population.
At the time, the British Columbian government had over $1.3 million of debt. Government records show some of the debt had a 12 per cent interest rate.
The calls for annexation to the United States in 1869, however, were mainly supported by the American and German population of the colony, said Roy. “It was almost exclusively confined to Victoria.”
John Robson and Amor De Cosmos, two chief newspaper editors in the colony, strongly supported confederation with Canada.
When British Columbia finally joined Canada in 1871, the federal government promised in an Order in Council to assume all of its debt, take on some costs of government, and complete construction of the Canadian Pacific Railway within a decade.
The same document also promised Canada with a subsidy and a grant totaling at least $141,000 a year, which increased with population growth. Parliamentary records showed that British Columbia would go from running an annual deficit to being $150,000 in the black after confederation.
“The British were happy to be rid of the [financial] burden,” said Roy. Up until confederation, British taxpayers shouldered the colony’s debt.
At the time, some had concerns over whether Canada would fulfill all its promises to the new province. But mainstream opinion had faith in the federal government.
“Canada has acted in good faith. She is thoroughly in earnest, and she aims to fulfil her every engagement…” read the main article of The British Colonist on confederation day.
Canada made good on its promises. The federal government relieved British Columbia of its pre-confederation debts. Financial, engineering and political issues delayed the Canadian Pacific Railway’s completion beyond the envisioned ten-year deadline, but the last spike was driven in 1885.
