To understand the peculiar implications of sterling devaluation for the Maritimes, it appears necessary to review briefly the nature of the Maritime economy. The economy of the Maritime region, including Newfoundland, has long been based upon the exploitation of the major resources of the area: the forest, the farm, the sea, and the combination of Newfoundland iron ore and Nova Scotia coal. It was aptly termed by the Royal Commission on Dominion-Provincial Relations a “wood-wind-water” economy. The Maritimes are essentially a primary producing area, and the secondary industries are for the most part engaged in processing forest, farm, and sea products, and in the production of steel and steel products. There are, of course, other secondary industries producing consumer goods such as textiles, boots and shoes, brushes, and other specialized products. These plants are usually small, and confined to the local market. Many have survived competition from Ontario and Quebec with difficulty.

Traditionally most of the Maritimes' key products—lumber, pulp and paper, fish, apples, and potatoes—have been exported. With the exception of pulp and paper produced on the mainland, these exports have gone for the most part to sterling markets; in Newfoundland, even pulp and paper products have gone to Britain. The United Kingdom has been the traditional market for lumber and apples; fish has gone to the United Kingdom, the British West Indies, and Australia. Most of the exported potatoes have gone to the Latin American countries, principally Cuba and the Argentine, as seed stock.