Before Canada became a nation in 1867, the area of North America that now composes Canada was a large expanse of widely scattered community of British and French origins. It was an area with diverse landscapes that physically divided them from the north if the Unites States. There was little connection among communities politically or economically. These colonies of British North America traditionally traded with British and with the United States, very little among themselves. These colonies even had customs duties that, to some extent, restricted such trade. In the mid 1800s, important events and changes took place.
British repealed the Corn Laws and Navigations Acts, with had been economically beneficial to the colonies for generations, British began imposing taxes on the colonies at the same rate it applied to all other trading countries, a situation to which the colonies had never been accustomed.
From 1861 to 1864, Americans were involved in a major civil war. British had traditional economic ties with the southern part of the United States that provided cotton to British markets. In the meantime, since the war was essentially between the North and South, the North resented Britishs connection with the South. In addition, during the last year of the American Civil War, the American Government of the dominant and ultimately victorious North, refused to renew a ten-year free trade agreement with United Canada, the large British colony in the central part of British North America. These arbitrary events brought concern and even fear to these colonies. With the loss of traditional trading arrangements and the end of the civil war, the North being victorious, the colonists feared that the Americans might turn on the British colonies in retaliation for Britishs moral support for the South.
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