Interesting WikiPedia article on the Maritimes (WikiPedia.org) contains as good a summary and exploration of the reasons for the economic problems we've been facing for over a century. The crux of it seems to be that the tarrifs John A. MacDonald brought in after confederation limited the historically strong trade between the Maritimes and Great Britain, New England and the Carribean, instead forcing them to compete with central Canadian companies for access to central Canadian markets (at an obvious geographical disadvantage.)

The exact date that the Maritimes began to fall behind the rest of Canada is difficult to determine. Historian Kris Inwood places the date very early, at least in Nova Scotia, finding clear signs that the Maritimes "Golden Age" of the mid-nineteenth century was over by 1870, before Confederation or the National Policy could have had any significant impact. Richard Caves places the date closer to 1885, however. T.W. Acheson takes a similar view and provides considerable evidence that the early 1880s were in fact a booming period in Nova Scotia and this growth was only undermined towards the end of that decade. David Alexander argues that any earlier declines were simply part of the global Long Depression, and that the Maritimes first fell behind the rest of Canada when the great boom period of the early twentieth century had little effect on the region. E.R. Forbes, however, emphasizes that the precipitous decline did not occur until after the First World War during the 1920s when new railway policies were implemented. Forbes also contends that significant Canadian defence spending during the Second World War favoured powerful political interests in Central Canada such as C.D. Howe, when major Maritime shipyards and factories, as well as Canada's largest steel mill, located in Cape Breton Island, fared poorly.

One of the most important changes, and one that almost certainly had an effect, was the revolution in transportation that occurred at this time. The Maritimes were connected to central Canada by the Intercolonial Railway in the 1870s, removing a longstanding barrier to trade. For the first time this placed the Maritime manufacturers in direct competition with those of Central Canada. Maritime trading patterns shifted considerably from mainly trading with New England, Great Britain, and the Caribbean, to being focused on commerce with the Canadian interior, enforced by the federal government's tariff policies.

Simultaneously with the construction of railways in the region, the age of the wooden sailing ship began to come to an end, being replaced by larger and faster steel steam ships. The Maritimes had long been a centre for shipbuilding and this industry was hurt by the change. The larger ships were also less likely to call on the smaller population centres such as Saint John and Halifax, preferring to travel to cities like New York and Montreal. Even the Cunard Line, founded by Haligonian Samuel Cunard, stopped making more than a single ceremonial voyage to Halifax each year.

More controversial than the role of technology is the argument over the role of politics in the origins of the region's decline. Confederation and the tariff and railway freight policies that followed have often been blamed for having a deleterious effect on the Maritime economies. Arguments have been made that the Maritimes' poverty was caused by control over policy by Central Canada which used the national structures for its own enrichment. This was the central view of the Maritime Rights movement of the 1920s, which advocated greater local control over the region's finances. T.W. Acheson is one of the main proponents of this theory. He notes the growth that was occurring during the early years of the National Policy in Nova Scotia demonstrates how the effects of railway fares and the tariff structure helped undermine this growth. Capitalists from Central Canada purchased the factories and industries of the Maritimes from their bankrupt local owners and proceeded to close many of them down, consolidating the industry in Central Canada.

The policies in the early years of Confederation were designed by Central Canadian interests, and they reflected the needs of that region. The unified Canadian market and the introduction of railroads created a relative weakness in the Maritime economies. Central to this concept, according to Acheson, was the lack of metropolises in the Maritimes.