Hamilton grew slowly until the late 1820s when a newly-constructed canal through Burlington Beach permitted schooners and steamers entry into Burlington Bay.With the access points for roads ascending the Niagara Escarpment, the canal transformed the fledgling community into a significant port. With enormous migration from the United Kingdom during the 1830s, its fortunes grew, in part because its location made it an ideal spot for mercantile houses, granaries and manufacturing establishments that could serve the surrounding region. Plans were made for a steamboat company, a bank and a railway to London.
An economic panic and the Rebellions of 1837 delayed the railway's construction until the early 1850s. Led by land agent and lawyer Sir Allan MacNab and others, the city bought into the Great Western Railway and other lines. Though the railway boom collapsed in 1857, it had attracted stove and farm-implement foundries, and in subsequent decades the town established other industrial businesses that would flourish into the mid-20th century. Ready-made clothing and sewing-machine manufacture developed there during the American Civil War, and by the 1890s the Hamilton Blast Furnace Company was producing pig iron. In the early 1900s, national railway construction and American branch plants serving the prairie market touched off a factory and residential construction boom that lasted until 1913. During both world wars, Hamilton industries concentrated on the production of war materiel, converting successfully after 1945 to serve the strong market for appliances, automobiles and houses.
With the closing of textile mills and knit-wear plants in the 1950s and 1960s, Hamilton became increasingly dependent on steel and related industries. However, in the final two decades of the 20th century, manufacturers had to respond to increasing continental and global competition. Three of the region's largest employers, Otis Elevator, Firestone and International Harvester shut down their local operations, while others were forced to dramatically restructure their workplaces. Both major Hamilton steel plants reduced their workforce by nearly one half. In spite of these economic shocks, Hamilton did not become a decaying or depopulated "rust belt" city. Traditional manufacturing continues to play an important, if declining, role in the Hamilton economy and, as elsewhere, the service sector has continued to grow, as have some new recycling and waste disposal industries.