Pacific Scandal

The Pacific Scandal was a political scandal in Canada involving allegations of bribes being accepted by 150 members of the Conservative government in the attempts of private interests to influence the bidding for a national rail contract. As part of British Columbia's 1871 agreement to join Canadian Confederation, the government had agreed to build a transcontinental railway linking the Pacific Province to the eastern provinces. The proposed rail project, when completed, was the most intensive and ambitious of its kind ever undertaken to date. However, as a new nation with limited capital resources, financing for the project was sought after both at home and abroad, naturally attracting interest from Great Britain and the United States.

The scandal ultimately led to the resignation of Canada's first Prime Minister, Sir John A. Macdonald, and a transfer of power from his Conservative government to a Liberal government led by Alexander Mackenzie. One of the new government's first measures was to introduce secret ballots in an effort to improve the integrity of future elections.

For a young and loosely defined nation, the building of a national railway was an active attempt at state-making, as well as an aggressive capitalist venture. Canada, a nascent country with a population of 3.5 million in 1871, lacked the means to exercise meaningful de facto control within the de jure political boundaries of the recently acquired Rupert's Land; building a transcontinental railway was national policy of high order to change this situation. Moreover, after the American Civil War the American frontier rapidly expanded west with land-hungry settlers, exacerbating talk of annexation. Indeed, sentiments of Manifest Destiny were abuzz in this time: in 1867, year of Confederation, US Secretary of State W.H. Seward surmised that the whole North American continent "shall be, sooner or later, within the magic circle of the American Union." Therefore, preventing American investment into the project was considered as being in Canada's national interest. Thus the federal government favoured an "all Canadian route" through the rugged Canadian Shield of northern Ontario, refusing to consider a less costly route passing south through Wisconsin and Minnesota.

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