Following the British conquest of Quebec, development of the St. Lawrence region proceeded along lines which were little changed from earlier times: the great river itself served to direct the movement of European influence inland, with Montreal developing as the centre through which the commercial activity associated with staple development on the frontier was channeled. In the late 18th and early years of the 19th Centuries the bulk of this activity was still provided by the fur trade, although this trade was by then approaching the limits imposed on its growth by the dwindling fur supplies in the far north-west and increasing competition from the rival Hudson Bay fur trading system.
The importance of the St. Lawrence River and the commercial life built around it has been a standard theme in Canadian historical writing. The influential historian, Donald Creighton, and his followers depicted the St. Lawrence River and its interconnecting portages and river extensions as a central communications system around which Canada developed as an economic, political and social entity. The Montreal-based fur trade emerged, in their view, as the first realization of a transcontinental "Canadian" economy, an economic system linking the farthest reaches of British North America to Montreal which, in turn, provided the essential link to Britain and the rest of the world. When the competition between the "Canadian" North West Company and the London-based Hudson’s Bay Company culminated in the 1821 merger of the two organizations, the first "empire of the St. Lawrence", as Creighton styled it, came to an end, and with it, the first phase of what could be thought of as truly "Canadian" development.
The great question then was whether the old "Empire of the St. Lawrence" could be reconstructed. The prospects for this were not very bright. If the merchants, bankers, and traders of Montreal and Toronto were to find new business opportunities, it seemed that new staple trades, and new frontiers of investment opportunity would be needed. Timber, lumber and wheat were already real possibilities, and the latter seemed particularly promising. Even after Upper Canada was constituted as a separate colony, it remained very much a hinterland of Montreal and the lower St. Lawrence region. Manufactured goods and supplies of all kinds had to be shipped up river to supply the settlements being established along the north shore of Lake Ontario and whatever goods could be produced for export from that rough frontier region (mostly grain and the potash produced by processing ashes from burned timber) would either find markets in the better populated centres of Lower Canada or be channeled through those centres for sale in overseas, most likely British, markets.
Servicing the expanding agricultural frontier of Upper Canada could be expected, then, to provide some business for the merchants of Montreal. Even more attractive, however, was the possibility of capturing the trade of the rapidly expanding agricultural frontier in the American mid-west. Rich as the agricultural resources of Upper Canada were, they were clearly limited compared to those being opened up as settlers moved westward in the American territories to the south of the Great Lakes.
This commercial strategy, however, was threatened by competition for east-west traffic from alternative American routes connecting the continental interior with the markets and overseas shipping ports of the eastern United States. These competing routes were being strengthened in the early decades of the 19th century by a new transportation technology, already developed in Europe and being rapidly applied in the US as well - canals.
By the 1830’s, the Americans were busy building a network of waterways which promised to link the ports of the east coast to centres on the Mississippi, the Ohio, and the Great Lakes. These systems made it possible and economical to link the western frontier regions of the US to American ocean ports without passing through British North American territory. Particularly threatening to the commercial community on the St. Lawrence was the Erie Canal, completed in 1825, which made it possible to ship goods from Buffalo on Lake Erie to New York at rates considerably lower than those available on the old Great Lakes–St. Lawrence system.
For the St. Lawrence to become competitive with the Erie, massive investments would be required to overcome the natural obstacles which impeded navigation on the system. The worst of these were the Niagara escarpment in Upper Canada and the rapids near Montreal in Lower Canada. Surmounting such physical difficulties would require substantial investments which, it seemed, would have to be government supported. Arranging such public backing, however, proved to be politically difficult because of the entrenched conflicts of interest among various groups in the two colonies. In Lower Canada the largely Anglo-American merchants of Montreal were enthusiastic supporters of improvements to the waterway, but the mainly French-speaking Roman Catholic majority of the population there was suspicious of change, especially change which might lead to higher taxes. In Upper Canada the commercial interests in favour of rebuilding the waterway were opposed by a coalition of reformers bent on breaking the hold of the established business clique running the province.
Both the engineering and the political-economic obstacles were eventually overcome. The Niagara impediment was dealt with by the Welland Canal, which was opened to traffic in 1829. In Lower Canada, the Lachine Canal, completed in 1824, provided passage through the rapids where the St. Lawrence bends south around the island on which Montreal is built. In 1842 the British government successfully negotiated the union of Lower Canada and Upper Canada, creating a united province better able to support major public works and other measures necessary for its economic and political survival. Britain also provided the new province with substantial financial support for its canal projects. By 1848 Canada possessed an elaborate and well-engineered system of canals connecting the Great Lakes to the sea. Unfortunately, by then new developments in transportation were rendering inland waterways obsolete.
The standard reference on the St.Lawrence waterway and the commercial life which grew up around it was once Donald Creighton’s, The Empire of the St. Lawrence (originally published as The Commercial Empire of the St. Lawrence, 1760-1850). Creighton described his work as "a study of commerce and politics," the purpose of which was to "trace the relations between the commercial system of the St. Lawrence and the political development of Canada." More recent work suggests that Creighton exaggerated the role played by commercial interests in Canadian development during the period before 1850. Michael Bliss, author of a major study of the history of Canadian business (Northern Enterprise) is particularly critical of Creighton’s work, which he claims was more influenced by a romantic vision than by basic research. Even if it was, like the staples approach it was so closely aligned with, Creighton's vision serves to structure the complex interaction of geography, politics, and economics which shaped the emergence of Canada as an independent nation in the latter part of the 19th Century.
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