"Investment in railroads helped more than anything else to open up northern resources to southern capital and entrepreneurship. On railroads, the province spent prodigously, George Ross often boasted that under Liberal governments railroad mileage in New Ontario had risen from a mere 12 miles in 1881 to almost 1,750 in 1904. The impulse was so strong and the Liberal commitments so binding that even under reduced assistance from the subsequent Conservative governments new construction proceeded with abated enthusiasm at a rate of 300 miles per year. Rare indeed a line was built without a provincial subsidy, bond guarantee. and grant; some obtained all three! Between 1867 and 1914 the province aided the construction of 2,783 miles of track the extent of $7,969,406 and pledged at least that much s credit again in support of various railroad bond issues. her and above their cash subsidies, Mackenzie and Mann floated a $5 million bond guarantee from the province and owned more than three million acres of crown land in support of the Canadian Northern. An equally persuasive F. H. Clergue convinced the Ross government to increase the usual 5,000 acre per mile grant to 7,400 acres for his Algoma Central line and to throw in the timber and mineral rights which usually remained vested in the crown. Clearly the provincial government could assume no responsibility for the transcontinentals, but it could claim the initiative for three north-south lines (the Northern, the Algoma Central and the Temiskaming and Northern) which, as it turned out, were much more important factors in the industrialization of the north.
These "development roads," and especially the Temiskaming and Northern Ontario, exposed the north both physically and psychologically to the energies of the Toronto business community. By the end of the nineteenth century Toronto had firmly established itself as the pre-eminent regional metropolis of southern Ontario, organizing and financing the trade and commerce of a prosperous, agricultural hinterland. Rail penetration of the Canadian Shield necessarily expanded that hinterland and changed its character. At first the railroads were driven northward simply to tap new agricultural areas to the north and west, but the incredibly rich silver and gold deposits unearthed by railroad construction redirected attention to the much greater opportunities presented by the natural resources of the Shield. Railroads thus brought the Shield under the dominance of Toronto, which developed in response the techniques, facilities and in a sense the energies to finance resource industries, especially mining, with a vigour that Montreal, for some reason, seemed to lack. Toronto's initial advantages of transportation and experience on the Canadian Shield imparted a powerful thrust to its rise from regional to national metropolitan stature. Indeed, as Professor Careless has observed in this connection, the "successive opulent suburbs of Toronto spell out a veritable progression of northern mining booms."
Much of the credit for initiating this mutually profitable relationship must rest with Ontario governments of this time, which in addition to extending the normal generous subsidies to private railroad companies, intervened even more positively to build and operate as a state enterprise the strategically important Temiskaming and Northern Ontario Railway. Without a transcontinental of its own, the Toronto business community seized upon a railroad to Hudson Bay as a cheap and ready, if not entirely rational, substitute. En route to tidewater, so it was argued, the railroad would necessarily expand the city's agricultural hinterland, and by offering a third outlet to Europe, the northern seaport would reduce Toronto's dependence upon Montreal and New York. One promoter actually proposed that a Hudson Bay railroad in conjunction with northwest passage shipping company would make Toronto the headquarters for the Klondike. In due course Hudson Bay became a self-justifying symbol of Ontario manifest destiny and metropolitan commercial ambition. Although several such themes were projected with the usual civic éclat, each failed considerably in accomplishment; the James Bay Railroad managed reach only as far as Parry Sound, and the Toronto and Hudson Bay, among others, remained gloriously stillborn.
Eventually both Toronto businessmen and northern resource promoters turned to the provincial government for help. Taking an "average business man's point of view with no axe to grind," John Bertram told the Toronto Board of Trade 1901 that it was both necessary and sensible that the state should build the northern railways. "The chief thing to be considered was transportation," he said, "and the government would be lacking (land grants) in its duty, to give away such a rich inheritance to any railroad corporation." On January 15,1902, just on the eve of an important provincial election, the Ross government introduced a bill to build a railway from North Bay into the Temiskaming district which, it hoped, would give access to the vast arable lands of the Clay Belt discovered only two years earlier, extend the operations of the lumbering industry and expose, in the Minister of Public Works' prophetic words, "deposits of ores and minerals which are likely upon development to add greatly to the wealth of the province Announcement of the planned intersection of the Ontario go ernment line with the National Transcontinental gave Toronto at long last, its national connections. "I believe it [the T. & N. O.] will prove of inestimable value," J. F. Ellis remarked in his presidential address to the Toronto Board of Trade "in developing and settling the fertile wheat lands of New Ontario and the West-lands that are now practically valueless because of the want of railway facilities. Ontario and particularly Toronto, will be the great gainers." But on their way to Hudson Bay and the West, Toronto businessmen suddenly discovered the Canadian Shield. The T. & N. O. and Cobalt taught Toronto to see its new northern hinterland in its own terms."
- H. V. Nelles, The Politics of Development: Forests, Mines & Hydro-Electric Power in Ontario, 1849-1941. Second Edition. McGill-Queen’s University Press, 2005 (1974), p. 117-120
