Lethbridge has connection to historic tariff, says local historian

By Sam Leishman - Lethbridge Herald Local Journalism Initiative Reporter on February 22, 2025.

Lethbridge has a fascinating connection to Canada’s current economic affairs, according to one local historian.
Bill Hillen says Sir Alexander Galt not only established the city and surrounding area with his work to develop coal mines, railways and agriculture in the mid-1800s, he also played a role in the very first tariff Canada imposed on the United States.
Recent threats from President Donald Trump to charge a 25% tariff on a wide variety of Canadian imports inspired Hillen to investigate the historical trade relations between the two countries. The implementation of such tariffs has been delayed until at least Mar. 4.
Tariffs are a complex tool generally used to promote production and investment within the country charging the tariff rather than relying on imports from foreign countries. To put it in the simplest terms possible, the money paid by the foreign company once its goods are imported is meant to support the budget of the country charging the tariff.
Hillen says Canada had no protective tariffs in place prior to the Cayley-Galt Tariff of 1858.
About four years prior, Galt was part of a delegation invited to the United States to discuss the Canadian-American Reciprocity Treaty with who would later become President Abraham Lincoln, which addressed the free trade of raw materials like lumber, furs and much more. America was an industrial powerhouse at that time, exporting large quantities of manufactured goods to Canada.
Galt agreed with the policy, but ultimately understood the bigger economic forces at play.
Recognizing that Canada had plenty of resources of its own to rely on, Hillen says Galt proposed a 20% tariff on fully-manufactured American goods and 10% on partially-manufactured goods in an effort to expand the colony’s budding industry. Tariffs also funded a large portion of the government’s budget before income tax was introduced, Hillen added, which is not the case today.
Even though his actions were met with shock and resentment, Hillen says Galt’s economic vision contributed significantly to how Canada would develop as a country independent of the US.
“Canada had their Trump, and it was Galt,” Hillen joked. “He moved and shaked. He created things that have lasted right through to now.”
Hillen notes that it’s important to reflect on historical events like the Cayley-Galt Tariff to gain a better understanding of current circumstances, a skill that he thinks we often lose touch with. Though he doesn’t claim to be an expert himself, Hillen argues that we tend to skim the surface of history, opting to focus more on short-term achievements like the history behind interesting local buildings, for example.
While he says it’s certainly important to acknowledge various forms of history, Hillen’s passion is diving into these deeper topics that connect with the very foundation of how Canada has succeeded over time and continues to navigate modern challenges.
Taking a holistic view of the history of taxes and tariffs into account, Hillen says Trump’s actions echo other movements, like the Boston Tea Party that ultimately intensified into the American Revolution. “Trump is looking at the debt of the United States, which is in the trillions of dollars, and he’s saying, ‘We’re bankrupt. We can’t afford to keep paying for things that mean nothing.'”
Hillen says he might not agree with all of Trump’s decisions, but he sees the current situation as a wake up call for Canada and the United States that they cannot continue to operate from a position of incessant debt to other countries.

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