Why did Halifax lose financial and manufacturing functions to Montreal and Toronto after 1867?

Following the confederation of Canada in 1867, Halifax experienced a significant shift in its economic standing. The federal government implemented protectionist policies designed to address a global recession that lasted from 1873 to 1895.1

These policies negatively impacted international trade, which had previously served as a cornerstone of the Halifax economy. As a result, the city lost much of its financial, wholesale, and manufacturing capacity. These functions were largely absorbed by Montreal- and Toronto-based firms through a series of mergers, buyouts, and takeovers.1