Tariff Structure, Trade Expansion, and Canadian Protectionism, 1870-1910

Canada's trade policy at the end of the 19th century is commonly viewed as protectionist and extremely costly. In this paper, we employ the Anderson-Neary Trade Restrictiveness Index to re-examine this view. Based on product-level customs data, we show that Canadian trade policy between 1870 and 1910 was more restrictive than previously understood, but created smaller welfare losses than previously believed. These results are primarily driven by high tariffs on inelastic, non-competing import goods. Although Canada's tariff structure becomes more restrictive over the period, our findings indicate it was not as protectionist or as costly as once thought.