The National Policy consisted of three main components, which were to create a national infrastructure for the country of Canada. The purposes of the policy were to create two tariffs, to complete the building of the intercontinental railroad, and to settle the west of Canada. In 1878, after being re-elected into government with the Conservative party, John A. MacDonald introduced the National Policy. Although he made this policy famous and a success in his time, other political leaders had their hands in its" success in their times as well.
During MacDonald's rule, Charles Tilley, the Finance Minister, adopted two distinct tariffs; Protective tariffs and Revenue tariffs. The Protective tariffs were high duties placed on goods, imported but able to be produced in Canada. These duties were placed in order to protect the Canadian industries and manufacturers. Revenue tariffs were low duties placed on goods, imported but not manufactured in Canada. These duties were placed in order to make revenue for the federal government. .
The building of the Intercontinental Railroad was a stipulation of British Columbia when they joined the Confederation in 1871. The Intercontinental Railroad, known as the Canadian Pacific Railroad (CPR), was a policy that should have been completed before the National Policy was introduced. Prior to 1878, Alexander Mackenzie (Prime Minister of Canada 1873-1878) decided to hold off the construction of the railroad due to federal problems in trade and money matters. When John A. MacDonald was re-elected, he was determined to complete the railroad. He was so determined; he gave a ten-year deadline of completion.
A contracted company, the CPR, while being financed by the Canadian government, would complete the railroad. The CPR received alternating land on either side of the railway, which was sold to farmers in order to pay for the CPR's other expenses. In two years, from 1880-1882, the railway was completed from Fort William to Winnipeg.