An esteemed group of business folks, academics and politicians are meeting in conference this weekend to discuss the creation of an international trade corridor that would stretch from Buffalo, New York across the northeastern United States to Atlantic Canada.

Code name for the corridor is “Atlantica”.

Atlantica is premised on the age old notion that prior to Confederation, Maritime trade patterns were north-south and the region was an economic powerhouse, trading with the United States, the Caribbean, Europe and northern Africa. As the story goes, all this changed in 1867 with Confederation and the subsequent shift in trade from north-south to east-west.

Those who would turn back the clock forget that wood was the primary staple of Maritime trade for much of the 19th century. European demand for timber brought investment and immigration to eastern Canada; it fostered economic development; and it transformed the regional environment far more radically than the earlier exploitation of fur and fish. The lumber trade encouraged the building of towns and villages, the opening of roads and exploration.

Maritimers produced wooden masts for the Royal Navy, wooden shingles, barrel staves, wooden boxes and spool wood for textile factories. Wood was also the basis for a thriving shipbuilding industry led by New England emigrations to Saint John in the 1760s.

Indeed, Saint John became the largest shipbuilding center in the Maritimes. Major centers also developed in St. Martin's, the Miramichi and Nova Scotia’s Yarmouth and Pictou Counties. Shipbuilding was also a part of the landscape in Moncton and Shediac.

Promoters of the Atlantica Conference appear to blame Confederation (1867) for the region’s economic fortunes. In so doing they confuse Sir John A. MacDonald’s “National Policy” (1878) with Confederation. The National policy was a response to the U.S. rejection of “reciprocity”.

The National Policy was a three point plan to establish a protective tariff around Canada, build the Canadian Pacific Railway (CPR) and stimulate expansion into western Canada. Some Maritime entrepreneurs flourished in this protected environment while many companies in Ontario and Quebec stumbled in the face of enormous competition from American branch plants.

I would argue that it was completion of the CPR that did most of the damage in the Maritimes.

In the years following introduction of the National Policy, the Maritimes experienced a boom as foreign imports became prohibitively expensive and our larger regional manufacturers produced goods for both the regional market and new Canadian markets opened for cotton textiles, refined sugar, iron and steel.

With completion of the Canadian Pacific Railway to Saint John, the days of the wood and water economy gave way to a new rail-based economy of coal and iron. Central Canadian manufacturers demanded coal to fuel their plants. The railways needed more rails and rail cars.

Coal mines in Cape Breton mines provided a base for expansion of the iron and steel industry in Sydney. Iron works, strategically located near coal mines in the Pictou region, produced pig-iron and supplied the railways with forgings, spikes, and car-axles. In 1894, the newly amalgamated Nova Scotia Steel Company acquired the iron ore deposit at Wabana, Newfoundland and built furnaces at North Sydney to supply rolling stock, car shops and related industries at New Glasgow.

The rate of Maritime industrial expansion in the 1880s exceeded that of Central Canada by fifteen percent, and its manufacturing output relative to total production increased from 37 percent in the 1880s to 48 percent in 1890. By the end of the decade Saint John had almost doubled its industrial output, ranked third in Canada in the production of machinery and first in the production of nails and brass.

So why do these Atlantica folks want to re-write history?

It’s because they forget that while some sectors of the Maritime economy flourished with the National Policy, the development of secondary manufacturing enterprises occurred haphazardly and without organization thus depriving the region of advantages that could be found in strategic location, purchasing power and economies of scale and production.

In the 1880s, the Maritime Provinces also suffered from the highest rate of out-migration in Canada and a population growth rate that was only 1.1% as compared to 13.5% in the previous decade.

When the CPR was completed, Maritime industries initially viewed the railway as a means of accessing markets in Ontario and Quebec but by the 1890s it was a floodgate through which inexpensive goods produced by much larger central Canadian manufacturers drowned out small domestic producers in the Maritimes. The casualties were high. Those who are promoting Atlantica today believe that new transportation infrastructure would return the Maritimes to the more prosperous times of the 19th century. You can’t go back in time. Nothing is as it was.

Conference delegates who dwell on the past will ignore the fact that nothing today prevents Atlantic Canada from trading north-south except the U.S. preoccupation with border security, the continuing shortage of production (scale) economies in Atlantic Canada and the non-tariff barriers that are put in the way of some Canadian exports.

Those who oppose Atlantica fear that open trade borders would lead to the economic integration of Canada and the United States and ultimately the loss of Canadian sovereignty. They need not worry.

The reality is that with few exceptions (notably energy), Atlantic Canada is no better prepared for an open border trade corridor than it was in 1878.

Atlantic Insight is a published Blog inventory of opinion articles published weekly in New Brunswick's print media as written by W.E. (Bill) Belliveau, who is a resident of Shediac, New Brunswick, and small business owner, operating his Moncton-based marketing consultancy, Bell Strategic. He can be reached by e-mail at bill.bellstrategic@nb.aibn.com