This article uses the censuses of 1842 of Canada East (modern‐day Quebec) and Canada West (modern‐day Ontario) to help explain the historical differences in living standards between Canada and the United States. The wage and price data contained in the censuses suggest a gap of 42 percent between Canada East and Canada West. We argue that Canada East was substantially poorer than the rest of Canada and, as it represented such a large proportion of the total population of the initial four Canadian provinces (over 35 percent), that relative poverty weighed heavily in determining the extent of differences in living standards between Canada and the United States. These findings change the perspective on the roots of the differences between the two countries. We propose that any research agenda trying to explain those differences should focus heavily on Quebec.