The story of commerce in Canada stretches back to a time long before European exploration, deeply rooted in the sophisticated trade systems of Indigenous nations across North America. This exploration aims to unearth the landmark business transactions that have sculpted the nation of Canada.

With Europeans setting foot on Canadian soil, driven by visions of prosperity, the stage was set for pivotal economic activities. They exploited the Grand Banks for fishing, engaged in the fur trade with the Indigenous peoples, and searched for quicker northern routes to Asia, all in pursuit of accessing its riches more efficiently.

Such groundbreaking endeavours could not have been realized without the backing of wealthy benefactors who poured resources into these ventures of high risk and potential reward. The tale of Canada is as much woven with the threads of entrepreneurs, investors, and business magnates as it is with the tales of explorers, warriors, and trailblazers.

This account probes into the commercial metamorphosis of Canada, posing critical inquiries: Who founded the first bank or the first stock exchange in Canada? How were the international trade norms shaped? And why did wheat become a pivotal element of the Canadian economy for a time?

Diving into the commercial heritage of Canada illuminates the fluid and impactful transformations of today. It underscores Canada's evolving role in the ever-globalizing world, stressing the importance of understanding the nation's business past to fully grasp the ongoing shifts in the global economy.

The founding of the Montreal Stock Exchange:  1874 

In 1874, the establishment of the Montreal Stock Exchange marked a pivotal chapter in the history of Canadian finance. This significant event traced its origins back to 1832 when Montreal entrepreneurs began informal stock transactions at the Exchange Coffee House. By 1849, these activities had led to the formation of a broker's association.

Dugald Lorn MacDougall spearheaded a group of visionaries to found the Montreal Stock Exchange, which officially began operations in 1874. The exchange witnessed swift expansion, diversifying its trade from railway and banking shares to include utilities, mining, and burgeoning industrial enterprises. The bustling activity on St. James Street (now rue Saint-Jacques) in Montreal earned it the moniker of Canada's Wall Street. In 1904, the exchange made a significant move to its dedicated premises at 453 St. Francois-Xavier Street, the current site of the Centaur Theatre.

The early 20th century's economic upheavals, especially the 1907 credit crunch, severely impacted the exchange, with share volumes plummeting by nearly 60%. Nonetheless, resilience led to a rebound by 1909, with annual share volumes topping 3.3 million.

The devastating blow of the Great Depression in the 1930s saw trading volumes in Montreal fall dramatically, nearly 90% from 1929 to 1932. While the Toronto Stock Exchange also faced hardships, it surprisingly overtook Montreal in size, a notion unfathomable in the preceding decade. Over time, Toronto surpassed Montreal as Canada's financial nucleus.

The turn of the millennium in 1999 brought significant transformations to Canadian stock exchanges. The Montreal Exchange commemorated its 125th anniversary by specializing as Canada’s financial derivatives exchange. Concurrently, a strategic realignment rendered the Toronto Stock Exchange the sole platform for trading major equities, accompanied by the merger of the Vancouver and Alberta exchanges into the Canadian Venture Exchange.

The inception of the Montreal Stock Exchange was a cornerstone in the development of Canadian capitalism, leading to an era where Canadian markets have integrated into the global financial landscape, reflecting the ongoing globalization of capital markets.

1879: The Dawn of a Distinctly Canadian Economy

In a pivotal moment for Canadian economic history, the National Policy established an economic framework favouring east-west connections over north-south integration with the United States. This strategic direction, crafted by Sir John A. Macdonald in anticipation of the 1878 federal election—which would mark his return to office—remains unparalleled in its significance.

The policy featured a triad of interconnected elements: populating the West, constructing a transcontinental railroad, and implementing protective tariffs. This approach endured beyond a governmental shift in 1896, remaining in effect until the 1989 Free Trade Agreement with the U.S.

The groundwork for the policy's western settlement component was laid through the acquisition of Rupert’s Land from the Hudson’s Bay Company in 1869 and the enactment of the 1872 Dominion Lands Act, which facilitated the free distribution of land to settlers.

The demand for a transcontinental railway, stipulated by British Columbia as a condition for joining the Canadian Confederation in 1871, necessitated an east-west linkage. Efforts to realize this ambition commenced in the 1870s, albeit with modest progress initially. The policy's novel third aspect introduced protective tariffs aimed at nurturing domestic industries.

Upon his political comeback, Macdonald expedited the railway and tariff initiatives, raising tariffs in 1879 to thirty-five percent on manufactured goods and broadening the taxable product range.

While the policy bolstered Canadian industries, it also prompted major American firms to set up subsidiaries in Canada to circumvent the tariffs. The debate between free trade and protectionism persisted in Canada into the late twentieth century.

The establishment of the Canadian Pacific Railway Company (CPR) in 1881 marked a significant milestone, leading to the completion of the railway in 1885 after extensive construction across challenging landscapes. By the early twentieth century, CPR emerged as Canada's largest corporation, symbolizing the policy's success.

The National Policy catalyzed significant investment, immigration, and economic expansion, despite criticism from classical economists for increasing costs and shielding Canadian businesses with tariff barriers. Its enduring legacy lies in fostering Canada's territorial growth to the west and solidifying an East-West economic axis.