My grandmother's grandmother was in her bedclothes one night when the Americans burst in.

"Twelve of them came down to us in the middle of the night demanding arms and they had each suspended to their sides swords and rifles," she wrote of the fearful moment when she and her Welsh-born barrister husband became combatants.

"They searched the house but William (being a strong Tory) had the precaution to hide his guns and pistols … I then felt alarmed and rather dreaded the consequences of refusing them arms, fancy me close to William's elbow, pale as death in my night dress covered with a cloak – I think I could almost have fired at them myself; after that we were not undressed for some weeks," lest they need to flee the house, pistols in hand, at short notice.

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"What a country this is, my dear Mother," Catherine Lloyd-Jones wrote to her family in England. "This is to come to nothing but war – and civil war the worst of all – being in danger of being shot by our neighbours and people are in danger of their lives unless armed with their pistols even to go a mile from their own home … little did we anticipate a bloody war which will eventually take place, pray God the Americans may not invade us, they are great cowards."

Those terrifying events took place not during the War of 1812, but two decades later. Yet to my ancestors and most of their well-heeled neighbours, the war had not really ended, and the "Americans," which by then meant any Canadian born south of the border or drawn to democracy, were a greater threat than ever.

As we mark the 200th anniversary of the war's beginning this week, we should pay far more attention to what happened after its end: It was the decades-long victory dance, not the war itself, that really shaped Canada.

Judging by my ancestors, it's hard not to conclude that winning the war was the worst thing ever to happen to this country.

The events that Catherine describes took place in Brantford, Ont., during part of what became known as the 1837 rebellions, that fast-quashed series of democratic uprisings that flashed across Upper and Lower Canada for a year – but for most people of the British colonies, they were simply the latest extension of an undeclared civil war that had begun in 1812 and had become only more urgent and personal as the years wore on.

By this point, after decades of mounting paranoia, the enemy was everywhere, or so it seemed. In the minds of my ancestors, the war had turned the Canada-U.S. border, previously a rather nebulous thing that farmers, merchants and preachers crisscrossed with little consideration, into a fortress barrier.

Like most Upper Canadian Tories in those days, Catherine and William believed that, in the years after the 1815 Treaty of Ghent, Canada's U.S.-born majority had become potential traitors, the border was something that had to be sealed tight against both invaders and immigrants, and such concepts as democracy, public education, religious freedom, church-state separation and industrial capitalism were dangerous Americanisms to be kept at bay.

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While the United States flourished, colonial Canada became a paranoid, insular place, with a sparse population and an economy limited to resources – a condition that would poison its growth for almost a century and leave an even longer legacy of choked-off development.

Viewpoint of the elite overtakes the majority

Catherine and William Lloyd-Jones were the quintessential new Canadians of the post-1812 era, their views shaped by the stark logic of victory: fiercely loyal to the Crown and to the colonial administration, however tawdry and corrupt it might be, and almost genetically opposed to anything from south of the border, however beneficial it might be.

Those attitudes would have put them in the elite minority in 1812, but a quarter-century later had become the standard Canadian ideology.

But my other ancestors, those who had arrived earlier, who had hung around the Brantford, Dundas and Wentworth areas during the War of 1812 and in the decades before, were rather more silent on such matters.

Like most Canadians of the time, the Millars, MacFarlanes and Smiths were farmers, small traders, remittance men and cattle thieves, some loyal to the king and some utterly indifferent, many of whom had drifted back and forth across the border between Ontario and New York in search of a better life.

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I can't find records of any of them having fought in the war, and that's not surprising: In 1812, the colonial authorities were shocked to discover that almost nobody wanted to enlist and that most of their subjects were either disinterested in or hostile to the war.

The vast majority of Upper Canada's 100,000 citizens were immigrants from the United States, only perhaps 7,000 of them the mythic United Empire Loyalists (who had fled the American Revolution out of British affinity), the rest only interested in peace, order and a chunk of prime Ontario farmland.

That's why the redcoats enlisted the Six Nations to help fight in 1812: not out of any concern for native rights (as the bands would tragically learn after the war), but out of desperation.

Three years of cross-border raids, blockades and bloody battles changed things forever. My forebears were given their first harsh dose of this in the summer of 1814, when the war, in its final months, turned inward.

My family seat of Ancaster, east of Brantford just outside Hamilton. played host to the Bloody Assize, in which 19 area residents were charged with high treason (in some cases for little more than holding the wrong ideas). Fifteen of them had the dubious honour of being the last people in the British Empire sentenced to be hanged, drawn and quartered – that is, disembowelled with hot pokers.

In the end, only eight were executed, and by the slightly less horrid means of slow hanging – but the message would endure, and those executions would set the tone. Canada was now a defensive place where dissenting ideas, and the people who held them, would not be tolerated.

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What the heroic British colonel Sir John Le Couteur called "a hot and unnatural war between kindred people" had ended that natural kinship between northern Americans and Canadians – in large part because the Canadians decided to abandon the fast-expanding North American culture and then retreat into an agrarian, colonial netherworld for a century.

"Compared to the dynamic United States, Upper Canada seemed a sleepy rural backwater" in the decades after the war, historian Alan Taylor writes in his excellent The Civil War of 1812. He quotes physician John Howison, who in the 1820s looked across from his farm in Niagara-on-the-Lake to New York: "There," he wrote, "bustle, improvement and animation fill every street; here dullness, decay and apathy discourage enterprise and repress exertion."

This was the result of deliberate policies, carried out as part of the colonial administration's victory dance, designed to prevent Canada from becoming anything like the United States – either in population, in culture, or in economic success. They were, to a huge degree, successful.

Democracy suddenly becomes a curse

Three things took place during those tense postwar years that would permanently alter the shape and nature of Canada.

First, we became a country opposed to the "American" notions of democracy, popular sovereignty and church-state separation. Democracy became a curse: In the years after the war, Edward Baynes, another British colonel, warned of "the American interloper industriously undermining the fidelity of his neighbours by disseminating democracy."

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By the 1830s, lieutenant-governor Francis Bond Head was declaring a "moral war … between those who were for British institutions, against those who were for soiling the empire by the introduction of democracy."

This would continue through the century: John A. Macdonald was an outspoken opponent of democracy and prevented Canadians who didn't own property from being able to vote – something they would achieve only at the very end of the 19th century, almost 80 years later than in the United States. We distinguished ourselves through our distrust of our own people.

This was by no means inevitable. In the years right after 1812, those democratic and entrepreneurial ideas seemed to have the support of a majority of Upper Canadians.

"The events of the war," historian Colin Read wrote, "demonstrated that a significant portion of the province's approximately one hundred thousand inhabitants were either indifferent or hostile to the British cause … how to purge the province of this lamentable pro-American element was clearly a major question, then."

The solution, our leaders decided, was to import people who were loyal – not inventive or talented or ambitious, but loyal.

Alexander Macdonell, the Catholic bishop for Upper Canada, warned after the war that Canada needed to subsidize a great wave of Scottish immigration if it was to guard against the "contagion of democracy."

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The government was soon paying cashiered soldiers from the Napoleonic wars and bankrupt but loyal English farmers to make the crossing. It worked, in a sense: The American-born, who were a majority in 1812, had fallen to only 7 per cent of the population by 1842.

But that pointed to the second development: We became a nation that repelled, rather than attracted, the most ambitious and desirable immigrants.

Whereas before the war, Upper Canada founder John Graves Simcoe had recognized that people from the British Isles would be flooding to the huge ports of Boston and Manhattan, and had encouraged those new Americans to come north to join the expansive new Canadian settlements, the post-1812 administration banned Americans from entering.

Those who had lived here for decades had to swear an oath of allegiance – and the authorities made it increasingly difficult to do so.

People simply stayed away. British emigrants, whatever their loyalties, had little interest in coming to a country that forced them to adopt a singular ideology and participate in a choked-off economy.

As a result, Canada missed most of the 19th-century European emigration boom. From 1851 to 1900, Canada attracted 734,900 immigrants from England, Wales and Scotland, while more than 3.1 million headed to the United States.

It was worse than that: A large proportion of those who came to Canada, often through government-subsidized recruitment programs, were simply waiting to head south. During that same half-century, 866,000 more people emigrated from Canada (mainly to the United States) than immigrated to it. Only in the Laurier era in the next century, when we began to attract non-British immigrants, did people choose to stay.

Third, the idea of an individualistic, entrepreneurial, industrially adventurous economy became alien and undesirable. The hewing of wood, the drawing of water and the selling of furs may been the origins of Canada, but the post-1812 rulers turned them into an unavoidable fate.

The colonial administrators of Upper and Lower Canada, and later the prime ministers of the Dominion of Canada, made it clear over and over, right through the 19th century, that they favoured an agrarian, resource-based model of development.

Because we had imported a population composed largely of middle managers, loyal followers and acquiescent farmers, we had the right people for this.

And in the years after 1812, we forged the institutions to make it happen.

Canada studiously avoided introducing mass public education, even at the primary-school level, until well into the 1840s, lest it spread American ideas. And, as part of the post-1812 cauterization of the border, it banished the idea of separating church and state, instead making the Anglican and Catholic faiths almost mandatory – their leaders were granted one-seventh of all land that hadn't already been surveyed.

Before the war, Methodist and Baptist preachers from the United States had promoted a distinctly North American individ- ualism, built on a personal witness before God, that had become the most popular form of worship among newly settled Canadians.

Afterward, Canada rigidly enforced the much more hierarchical, acquiescent forms of worship by making Anglicanism and Catholicism de facto established religions and blocking U.S. preachers from crossing the border.

This, too, came to define the difference between Canada and the U.S., and played a big role in shaping the Canadian view of the world.

Rewriting history covered up the truth

By the time my grandmother's grandmother was middle-aged and the terror of armed rebellion was far behind her, all of this had come to seem natural, and Canada's history books had been written to make it sound like destiny. But her world view, the one that overtook Canada, was almost entirely the product of an over-zealous moment of victory.

During that moment, Bishop John Strachan, the Anglican firebrand who did so much to shape the post-1812 Canada, declared that the war had distinguished "our friends from our foes, and rid us of all those traitors and false friends whom a short-sighted and mistaken policy had introduced among us."

The victory had indeed allowed Canada to purge itself of a great many people, institutions, ideas and possibilities. In three years of bloody fighting we had successfully secured our border – and then, for a century after, used it to keep the sunlight out. Two centuries later, we are still feeling the effects.

Doug Saunders is a member of The Globe and Mail's London-based European bureau.