The British Isles remained a prime source of immigrants, with three times as many coming from there as from the United States. With the influx of immigrants from Eastern Europe, however, the makeup of Canada's population became increasingly varied.

Economically, American capital played an increasingly important role in Canada's development. American investment in Canada jumped dramatically, though British investment was still three times as large. On the trade side, however, the United States by 1911 accounted for 60 per cent of Canada's imports, though Britain remained Canada's most important export market into the 1920s. The trend was clear: it was only a matter of time until the United States became Canada's pre-eminent economic partner.

An Ambiguous Imperialist

Sir Wilfrid Laurier

Laurier admired and respected Britain and the democratic political system exemplified by the mother of parliaments at Westminster. As a French Canadian, however, he did not feel the visceral emotional pull that so many English Canadians did. And he certainly did not share the desire for a vast imperial parliament to govern the Empire. This was the goal of the Imperial Federation League, which was founded in Britain in 1884 but quickly spread to Canada. Laurier sought to avoid the extremes of those who wanted a federated empire with fully co-ordinated policies, and those who sought a completely independent Canada. It was a delicate balancing act that left him vulnerable to attack from both sides.

The 1897 Colonial Conference, celebrating Queen Victoria's Diamond Jubilee, was an orgy of British and imperial self-congratulation. The vast extent of the world's map coloured in the red of empire was heady indeed, and even the freshly knighted Sir Wilfrid was carried away by the emotional rhetoric, expressing views that were as imperialist as any. Yet, in the actual give and take of the conference, he made it clear that his priority was the settlement of Canada, not the contribution to imperial defence that Colonial Secretary Joseph Chamberlain sought. Imperial federation would continue to be touted by many, but it was never in the realm of practical politics.

The emotional strength of imperial sentiment, however, was clearly demonstrated in 1899 when Britain became embroiled in the Boer War against Afrikaner settlers in Southern Africa. Like Macdonald, Laurier had no desire to become involved in Britain's colonial battles. Unfortunately for Laurier, the situation was not the same as it had been for Macdonald during the Sudan crisis. South Africa was a more serious affair for Britain, imperialist sentiment in English Canada had strengthened immeasurably under the influence of the Diamond Jubilee celebrations, and the British government was actively seeking help from the colonies.

Canadian force on horseback crosses the Modder River in South Africa in 1900.

When war broke out in October 1899, deep fissures in the country, and in Laurier's own Cabinet, were quickly revealed. French-Canadian opinion was firmly against participation, while imperial emotions ran rampant in Anglophone circles. The government had little choice but to aid Britain. On October 13, Cabinet agreed to recruit, equip and transport 1,000 volunteers to fight the Afrikaners, although Britain would pay them. The government insisted that this should not be "construed as a precedent for further action," a disclaimer sufficient to hold most of Laurier's Quebec supporters -- but not the more extreme French-Canadian nationalists led by Henri Bourassa, who quit the Liberal party in disgust. This split along linguistic lines would recur in the much greater crises of the two world wars of the next century.

The 1902 Colonial Conference came in the aftermath of the war, and Chamberlain hoped to capitalize on the imperial enthusiasm. Laurier politely, but firmly, asserted that the status quo was quite sufficient for him. He particularly declined to make any direct contribution to imperial defence, since that would "entail an important departure from the principle of colonial self-government." The bonds of empire would continue to be primarily emotional.

As always, Canada's relations with the United States continued to be triangular, with Britain involved by necessity. And Britain's priority continued to be the maintenance of good relations with the United States, which was a country now beginning to feel an imperialist fervour of its own. In 1898, Britain backed Washington during the Spanish-American War, through which the Americans won control of Spanish territories in Cuba and the Philippines. This flexing of American muscle made it clear that in the new century the United States would emerge from its North American bastion to play a wider role in the world arena.

There were continuing fisheries and tariff problems between Canada and the United States, but a more serious issue gaining significance concerned the boundary with Alaska. In 1898, the three governments agreed to return to the tried and true method of a Joint High Commission. On the British side, the delegation consisted of a British chairman, four Canadians (including Laurier), and the Premier of Newfoundland (which did not join Canada until 1949), a clear recognition that the issues to be dealt with were North American ones. Although progress was made on some of the questions, the Commission collapsed over the question of Alaska's border.

The discovery of gold in the Yukon made a remote boundary dispute that had remained unresolved for years suddenly critical. When the United States purchased Alaska from Russia in 1867, it also inherited an 1825 Anglo-Russian treaty defining the boundary. The difficulty lay in the ambiguity of this definition. On the interpretation hinged Canada's ocean access to the Yukon -- and the goldfields. When the High Commission negotiations faltered, a stalemate ensued.

The British suggested a three-member arbitration panel that would include an appointee from a European third party but the Americans refused. Washington wanted a six-member panel, three from each side; Canada refused. Ottawa also rejected the idea that Latin America might supply a third party.

Laurier, bolstered by the confidence engendered by Canada's increasing prosperity, was determined to take a hard line.

Unfortunately for him, the British were not. Their need for American friendship was only made more necessary by their involvement in the Boer War. In 1901 the British gave the Americans permission to build the Panama Canal. Laurier had wanted this used as a bargaining chip over Alaska, but predictably the British looked after their own interests first, and they gave away this concession to keep the Americans sweet.

The next blow came in the form of an assassin's bullet that cut down the conciliatory President William McKinley, bringing Vice-President Theodore Roosevelt to the highest office in the United States. Roosevelt had made his reputation during the Spanish-American War, when he led his Rough Riders in a charge up San Juan Hill in Cuba. Teddy Roosevelt represented blustering American nationalism at its worst. He immediately sent 800 troops to Alaska, underlining his determination "to be ugly" over the boundary issue. Laurier, pressured by Britain, now agreed to a six-member arbitration panel to consist of distinguished and impartial jurists from each side.

Unwilling to leave anything to chance, Roosevelt appointed three members who were clearly anything but impartial, including his own secretary of state, instructing them that he would brook no compromise. This left the one British member in an impossible position. The inevitable happened, and he voted with the Americans.

In fact, the United States had the better case and would probably have won before an independent tribunal. But Roosevelt's manipulations, and Britain's acquiescence, were so blatant that Canadians were enraged. The disparity of strength between Canada and the United States -- as well as Britain's inability, not to mention unwillingness, to redress the imbalance -- was never more starkly revealed. The whole affair gave a boost to a sense of Canadian nationalism, coupled with anti-Americanism and resentment of Britain.

Laurier was moved to assert in Parliament that "so long as Canada remains a dependency of the British Crown the present powers that we have are not sufficient for the maintenance of our rights. It is important that we should ask the British Parliament for more extensive power, so that if we ever have to deal with matters of a similar nature again we shall deal with them in our own way, in our own fashion, according to the best light that we have." Typically, however, Laurier made no such demand.

Despite Canadian anger over Alaska, relations with the Americans were multifaceted and ongoing. They also caused much frustration to those who had to deal with them -- and with Laurier. New actors were soon in place who took it upon themselves to finally clean up the growing backlog of Canadian-American issues.

Governor General Earl Grey was instrumental in shaping Canada's relations with the United States.

In 1904 Earl Grey (of Grey Cup fame) became Governor General; in 1907 James Bryce was appointed British ambassador in Washington. Both were staunch advocates of British-American friendship, the partnership of the two great Anglo-Saxon powers that became a theme in some British and American circles at this time. They were determined to forward the cause by clearing up remaining points of contention between Canada and the United States, none of which was as emotional as Alaska. Bryce was also anxious to rid himself of the voluminous day-to-day business of cross-border relations, which he estimated took up three-quarters of the Embassy's time.

They were fortunate to have a like-minded American to work with in the person of Secretary of State Elihu Root, who, despite his membership on the Alaska tribunal, did not share Roosevelt's belligerent attitude. He, too, wished to clean up what he saw as the "mess" in the Canadian-American relationship.

Thanks in large part to the activism of these men, by 1911 no less than eight treaties and agreements had been negotiated, removing most of the irritants affecting the Canada-United States relationship. Most of these arrangements dealt with housekeeping measures, not glamorous but necessary for two countries sharing a continent. Institutions were created that took many of the issues out of the political arena, allowing them to be dealt with before they reached crisis proportions. These mechanisms also enabled issues to be handled by direct Canadian-American negotiations without the necessity of continual British involvement. Canada's control of her own foreign affairs was thus enhanced gradually and quietly.

Several of these bilateral initiatives were of particular significance. The International Boundary Commission was established in 1908 to finally settle remaining areas of dispute as a purely technical procedure without the histrionics of Alaska. The Boundary Waters Treaty of 1909 established the International Joint Commission, whose role was to advise both governments on issues that affected waters straddling the border. These included increasingly important questions related to power development and pollution. The perennially prickly question of fisheries was handled by the creation of the International Fisheries Commission in 1908 and the referral of outstanding claims in 1909 to the Permanent Court of Arbitration at The Hague. That Canadian-American relations were placed on a new footing was due in large part to the work of James Bryce.

One of the major reasons for the perceived "mess" in cross-border affairs was Canada's lack of any proper government responsibility or procedures to deal with foreign relations. This was compounded by the circuitous nature of imperial diplomacy, which, since Canada could not negotiate directly with the United States, necessarily involved the Colonial Office in London, the Governor General in Ottawa, and the British ambassador in Washington. When you add to the mix Laurier's notorious procrastination, it is easy to see why Grey and Bryce were frustrated. With London's acquiescence, Bryce managed to bring about more direct dealings between the North American partners, cutting out much of the triangulation.

But the situation in Ottawa needed work as well. Grey complained bitterly that there were only three officials in Ottawa who knew anything about Canada's foreign relations. One drank, one was virtually inarticulate "and conversation with him is as difficult as it is to extract an extra tight cork," and the third was Under-Secretary of State Joseph Pope. In fact, Pope was a one-man foreign office. One of the most experienced officials in Ottawa, he had served as Macdonald's private secretary before entering the civil service. As under-secretary from 1896, he handled most of the government's correspondence related to foreign affairs.

Pope knew at first-hand the inefficiencies of the system and shared the frustration of Grey and Bryce. He had long advocated the establishment of a new department, under the Prime Minister, to centralize control of the paper flow. At the time, incoming dispatches were scattered among various government departments. Consequently, no one was sure where different issues stood or where important documents could be found. Bryce found this particularly irritating in trying to deal with the wide range of issues in Canadian-American relations. Both he and Grey became firm advocates of the creation of "a sort of Foreign Office" that would make Canada, in Grey's words, "prompt and satisfactory to deal with."

Sir Joseph Pope: first under-secretary of the Department of External Affairs

Laurier finally agreed to act in 1909, creating the Department of External Affairs with Pope as its under-secretary, though placing it initially under the jurisdiction of the Secretary of State. The role of the department was modestly conceived as that of a "post office" that would control the flow of documents but would in no way "make" foreign policy, which remained the prerogative of the British. Nor did Pope himself, who strongly supported the imperial connection, aspire to such a role. However, the groundwork was laid for such an evolution, as Canada gained increasing control of her foreign relations.

Although relations with the United States were crucial to Canada, membership in the Empire meant that Canada was not isolated from the mounting crisis in Europe. Paramount to British security was the maintenance of the Royal Navy as the most powerful in the world. By 1909 Germany, though primarily a land power, was threatening that supremacy as both countries raced to construct the newest class of battleship, the dreadnought, which rendered earlier ships obsolete. Laurier now came under pressure to come to the aid of the mother country from the Conservative opposition in Parliament and from the imperialistically minded of his own followers. He rejected the idea of giving an emergency donation to Britain, opting instead for using the small Fisheries Protection Service as a base for developing a Canadian navy.

A recruitment poster issued by Canada's newly-created navy in 1911.

Laurier's policy came under fire from both sides. Those who felt that the urgency of the situation required an immediate contribution to the British Admiralty derided his "tin-pot navy," while Quebec nationalists opposed aiding Britain's naval position by any means. Laurier's Naval Service Act of 1910, which created a navy that would be completely under Canadian control and not necessarily made available to Britain even in wartime, was denounced by imperialists and Quebec nationalists alike, for diametrically opposing reasons -- the former feared that the navy would not be available to Britain when needed; the latter feared that it would be. After losing a by-election in a supposedly safe Quebec riding, Laurier retreated. But the issue would have a critical impact during the general election in 1911.

In 1910 Laurier's minister of finance, W.S. Fielding, returned from trade negotiations in Washington with an offer that was as dazzling as it was unexpected. The U.S. Administration of William Howard Taft was now willing to accept a reciprocity agreement that would permit free trade in natural products while allowing Canada to retain her tariff on most manufactured goods.

This was the glittering prize that all Canadian governments had longed for since the days of Macdonald. It now fell into Laurier's lap just when his aging government, nearly 15 years in office, needed revitalizing. When Fielding dropped the bombshell on Parliament on January 26, 1911, the opposition was devastated. The old fox, Laurier, had seemingly done it again.

Once the initial euphoria wore off, however, opposition to the deal began to surface. Members of the business community, including many with the strongest Liberal connections, denounced the agreement as leading inevitably to further integration of the North American economy and to the end of Canada's economic independence and of the British connection. Buoyed by this attack on their opponent, the Conservatives fought the agreement vigorously in Parliament. Finally an exasperated Laurier called an election to decide the matter for September 1911.

Laurier faced a powerful opposition. In his own power base of Quebec, the nationalists joined with the Conservatives. Here Laurier's navy was the decisive question, tying him down to defend his home turf. In English Canada the dominant issue was reciprocity. "We must decide," Conservative leader Robert Borden proclaimed, "whether the spirit of Canadianism or Continentalism shall prevail on the northern half of the continent."

Borden's cause was helped immeasurably by the comments of prominent American politicians, such as the Speaker of the House of Representatives, Champ Clark, who expressed his hope for the day when "the American flag will float over every square foot of the British North American possessions, clear to the North Pole." The Liberals were solidly defeated, and Borden, the stolid Nova Scotian, took office.

Borden may have lacked Laurier's eloquence and charisma, but he certainly displayed the dogged determination that would be needed in the years ahead. He had led the Conservatives to three election defeats before achieving victory, yet managed to retain the party leadership. Although he had forged an alliance with the Quebec nationalists, Borden's power base was imperialist Ontario. Unlike Laurier, he would not hesitate to play a larger role in the affairs of empire, though not without demanding a comparable voice in policy.

In 1912 Borden placed the Department of External Affairs under the control of the Prime Minister, where it remained until 1946. He also hired Loring Christie as the department's legal adviser the next year. A brilliant young Canadian law graduate from Harvard, Christie worked for a prominent New York law firm but wanted to come home. While the daily routine of the department would be administered by the aging and conservative Joseph Pope, Christie would act as Borden's foreign policy adviser, providing the intellectual underpinning for Borden's growing activism in foreign affairs.

Impressed by the increasing seriousness of the naval situation, Borden in 1912 agreed to make an emergency contribution to Britain of $35 million for the construction of three dreadnoughts. However, he insisted in return on a say in policy, for "those who accept a share in a responsibility for the defence and security of this vast Empire are no longer to be considered as wards by self-constituted guardians." The British offer of representation on the Committee of Imperial Defence when issues of concern to Canada were discussed was not overly generous, but it was a beginning.

Borden now suffered the consequences of his own tactics over reciprocity. To overcome Liberal obstructionism, Borden forced his Naval Aid Bill through the House of Commons by using closure to limit parliamentary debate for the first time. But the Liberal-dominated Senate promptly threw out the naval legislation. When war with Germany finally came in August 1914, no contribution had been made to the Royal Navy, while the Canadian navy consisted of two obsolete cruisers acquired from Britain for training purposes.

Although swept into office on a wave of anti-Americanism, Borden was far too pragmatic to continue to play on that theme. Reciprocity may have been rejected, he asserted after the election, but not because of any "spirit of unfriendliness to the great neighbouring republic." That was disingenuous, to say the least, but such polite fictions are sometimes necessary. Finance Minister Thomas White was quickly despatched to New York to assure American investors that they were still welcome in Canada. Canadian-American amity was a popular topic for after-dinner speakers, particularly since 1914 would mark the 100th anniversary of the end of the last war between the two neighbours. Great plans were made to celebrate this century of peace, until the guns of Europe drowned out the cheering.

Lesson Plan

The Laurier Era was marked by an aggressive immigration policy to encourage population of the west, growing American influence in the Canadian economy, and a moderate position regarding Canada's relationship with Britain.

This chapter describes Laurier's handling of the Boer War which was typical of the careful balance he tried to maintain, as Macdonald had, between offering limited moral support for Britain without making major financial commitments to imperial defence. At the beginning of the Laurier era, Canada's relations with the U.S., including issues like the Alaska Boundary dispute, still involved Britain. But over the years and with the activism of Governor General Earl Grey and British ambassador to Washington James Bryce, a number of bilateral agreements were reached which eventually allowed more direct Canada-U.S. relations. Our own Department of External Affairs was created in 1909, though initially it was mostly a central controller of paper work for international documents. Borden gave it more importance in 1912 by putting it under the control of the Prime Minister.

This chapter also explains how two foreign policy issues contributed to Laurier's defeat in 1911 - a reciprocity agreement with the U.S. and Laurier's Naval Service Act of 1910.

French-English split over imperial relations (eg: Boer War and Naval bill)

Increasing independence in our settlement of disputes with the U.S.