Does the Conquest Explain Quebec’s Historical Poverty? The Economic Consequences of 1760

Abstract

The British Conquest of Quebec in 1760 was a key moment in Canadian history as it marked the beginning of a tense coexistence between French and English Canadians. Many argue that the Conquest had strong economic consequences in the form of the relative poverty of the French settlers. The mechanisms proposed are manifold, but they all rely on a key feature: a retreat from the market by French farmers. Using 171 years of wheat price data for Quebec City and Montreal, I test whether there are any signs of this retreat from the market and instead find the opposite: over time, markets grew more integrated across regions. In fact, there are more signs of disintegration during the era of French rule. Additionally, over time, regional prices became better predicted by current prices elsewhere than by the lagged prices in the same region. By the 1830s, markets in Quebec were as well integrated as those in economies such as the United States, France, Britain and Germany. The evidence in this paper is consistent with recent empirical findings about Quebec’s economic history, and so I argue that the case for the Conquest’s initiation of the relative poverty of Quebec (also dubbed “economic inferiority” in the historiography) is non-existent. This does not exclude long-run consequences of the Conquest, but the correct answer must lie elsewhere than in conventional explanations.

Keywords: Conquest, Canadian Economic History, Quebec, Canada, Market Integration

JEL Classification: Q17, N51, N71