Economic Growth, Economic Structure, and Real Gross Domestic Product in Early Canada, 1695-1739: Estimates and Analysis
University of Newcastle; Victoria University of Wellington - School of Economics & Finance
William and Mary Quarterly, 3rd series, Vol. 45, pp. 684-711, 1988
At present there are two general points of view on the economy of early Canada. The dominant viewpoint is that the economic system was stagnant, due to the exaggerated concentration on the fur trade and insufficiencies of internal and external markets. This viewpoint is disputed with the counterargument put forward that the economy was becoming diversified and strong, and that it was on par with British America in the second quarter of the eighteenth century. However both these viewpoints are backed up by incoherent statistical and literary sources and the evidence is too fragmented to come to a firm conclusion. A more solid foundation for understanding this colony's economic structure and evolution could be produced by rough approximations of real gross domestic product for early Canada. Comprehensive and accurate censuses prepared for Canada by colonial authorities allow for a construction of a constant dollar GDP series. This RGDP series for 1695-1739 enables the computation of a per capita output series and growth rate, and permit for empirically grounded comparisons of early Canada with British America. The results, which are negatively biased, show an overall annual growth rate of 0.5 to 0.7 percent, which is on a par with some estimates of British America's annual growth. The majority of this growth is from the agricultural sector, though the non-agricultural sector also had a good growth rate. While at times the fur trade did have a positive impact on the growth rate, it was in decline. In conclusion, it appears that early Canada's economy was not stagnant nor relatively impoverished and instead was economically dynamic and prosperous.
Keywords: Growth, Structure, Canada, Real GDP, Estimates, Analysis, Fur trade
JEL Classification: O40, E01, N11
Date posted: January 18, 2010