Staples thesis

The staples thesis is a theory of Canadian economic development. The theory “has its origins in research into Canadian social, political, and economic history carried out in Canadian universities…by members of what were then known as departments of political economy.” From these groups of researchers, “the two most prominent scholars following this approach were Harold Innis and W.A. Mackintosh.” During the 1990s, it was revived by Daniel Drache through his work on resource capitalism and Canadian political economy.

Innis argued that Canada developed as it did because of the nature of its staple commodities: raw materials, such as fish, fur, lumber, agricultural products and minerals, that were exported to Europe. This trading link cemented Canada's cultural links to Europe. The search for and exploitation of these staples led to the creation of institutions that defined the political culture of the nation and its regions.

Innis argues that different staples led to the emergence of regional economies (and societies) within Canada. For instance, the staple commodity in Atlantic Canada was cod. This industry was very decentralized, but also very co-operative. In western Canada the central staple was wheat. Wheat farming was a very independent venture, which led to a history of distrust of government and corporations in that part of the country. (Also important, however, were the shocks caused by volatility in the market for wheat and by the weather itself on the growing season.) In Central Canada, the main staple was fur, and the fur trade dominated the economy for many years. This fur trade was controlled by large firms, such as the Hudson's Bay Company and thus produced the much more centralized, business-oriented society that today characterizes Montreal and Toronto.

Innis depicted the relationship between regions of Canada as one of "heartland" to "hinterland": The periphery, or hinterland, is dominated by the core, or heartland. Because the heartland was dependent upon the search for and accumulation of staples (which were located in the hinterland) to perpetuate the economy, it sought to gain economic and political power by exploiting the hinterland.

To Innis, it was the fur trade that created the geographical boundaries of Canada. The early links between the Canadian interior and eastern ports led to Canadian unity and its distinctiveness from the United States. However, the importance of fur as a staple product also resulted in the northern half of the continent remaining dependent on Britain for trade and thus essentially British for so much of its history.

While the staples thesis originally described the evolution of the Canadian state, it has since been used to study the economies of many nations that are dependent upon resource-extraction and primary industries. The staples thesis states that exportation of raw materials can trigger sustainable economic growth - while its critics argue that reliance on commodity export can constitute a development trap.