On 12 January 1910, the Laurier government introduced legislation to establish a Canadian navy. The British Admiralty had continued to pressure the dominion governments to establish Dominion Fleet Units, and, in response, Laurier proposed the Naval Service Bill. The Bill called for the establishment of a Canadian navy consisting of four light cruisers and six destroyers. The legislation also called for the construction of a naval college in Halifax.

Both Robert Borden's Conservatives and Henri Bourassa's Quebec nationalists opposed the Naval Bill. Many Conservatives thought that Canada could best strengthen imperial naval defence by a making a direct cash contribution to the British government. These funds would pay for the construction of additional warships for the Royal Navy. Bourassa argued that the creation of a Canadian navy would serve to protect British imperial interests at the expense of Canadian "national" interests.

On 4 May 1910, Laurier managed to pass the Bill, and the Royal Canadian Navy was officially established. The naval question, however, would dominate the federal election campaign, and, as a result, Robert Borden's Conservatives would win a majority in the House of Commons on 21 September 1910. Neither English Canadians nor Quebecers had supported Laurier's Naval Bill.

 

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