| The earliest record of shipbuilding
in the Maritimes is 1606, when two small boats were built at Port Royal. It was not
until 1751, however, when Governor Cornwallis at Halifax offered a bounty
of ten shillings per ton for every new vessel produced, that a native shipbuilding
industry was encouraged in the Maritimes provinces, and began to take shape.
Substantial increases in population in the late 1700s and early 1800s meant
that the building of large ships for the purpose of exporting the region's
plentiful resources of timber and fish had become possible.
New Brunswick was the first province to develop a significant industry. Shortly after the arrival of settlers from New England in the 1760s, a shipbuilding firm was established in St. John, which was later to become the largest shipbuilding center in the Maritimes. Major centers would also develop in St. Martin's and Miramichi, New Brunswick, and in Yarmouth and Pictou Counties in Nova Scotia, as well as along the shores of the Bay of Fundy.
Britain, following the American Revolution, had forbidden the United States' participation in the West Indies trade, and this market therefore became more accessible and more attractive to Maritime shipowners. Britain's demand for lumber was substantial. In 1783 the Broad Arrow Policy was extended to British North America, and from 1806 to 1815 the colonies had a virtual monopoly on the British timber market, due to the blockading of European ports during the Napoleonic war. The export of timber from Nova Scotia was encouraged by bounties, subsidies and lower duties, in order to provide Great Britain with a secure alternative to European timber. Shipyards were often set up by men in the timber trade, sometimes financed from Britain. Later they became more locally financed and employed local craftsmen.
In the 1820s the Navigation Laws were changed to allow the colonies general freedom of trade. This new opportunity was offset by the re-admission of the United States to the West Indies trade in 1830. In 1849 the complete repeal of the Navigation Laws and the resulting loss of protection of trade caused a brief depression in shipbuilding activity, but encouraged the emergence of larger, more efficient shipyards.
Initially, ship owning was the offspring of the timber trade, and merchants became short-term owners of ships destined to be sold in Britain, to save transport money. By the mid 19th century, there were 176 000 tons of registered shipping in Nova Scotia. An enormous growth occurred between 1850 and 1878, to over 1 000 000 tons. This increase is thought to be due to the loss of American shipping during the Civil War. Nova Scotia shipowners began to transport foreign goods in the service of foreign merchants, including the export of American staples in large quantities and for high rates. However the export of Maritime staples had reached its height and begun to taper off.
Throughout the 1860s and 70s, wooden merchant vessels continued to be built in the Maritimes at a relatively low cost (between $25 and $40 per ton) as compared to iron steamships. From 1878 onward, however, the supply of international shipping began to catch up with the demand, freight rates fell, and the decline of wooden shipbuilding in Nova Scotia began. Another factor was the decline in local staple exports from Nova Scotia, such as fish and timber, and a change in government policy encouraging the transportation of such products by rail to central Canada.