An Impossible Dream

When American filmmakers remade The Scarlet Letter in 1995, they chose the waterfront in Shelburne, Nova Scotia, to depict the colonial simplicity of tiny Salem, Massachusetts, in the 1600s. To mask any evidence of anachronistic development three centuries later, just a few cosmetic touches were needed. This was heavily ironic, because once upon a time, very briefly, as briefly as a fairy tale, Shelburne could claim to be the biggest city in British North America—the future Canada—and imagine itself surpassing New York. How it rose and fell into decline is a gritty and bitter tale and the fairy behind it must have been malevolent indeed. Seldom has so much brave but misconceived human endeavour been so quickly dissipated.

The simple version of Canadian history my generation imbibed at school in the 1940s nodded approvingly at the United Empire Loyalists. Since loyalty to Britain was almost a religion to us, we thought people who fled the ruffians of the...