In 1784, Britain split the colony of Nova Scotia into three separate colonies: New Brunswick, Cape Breton Island, and present-day peninsular Nova Scotia, in addition to the adjacent colonies of St. John's Island (renamed Prince Edward Island in 1798) and Newfoundland. The colony of Cape Breton Island had its capital at Sydney on its namesake harbour fronting on Spanish Bay and the Cabot Strait. Its first Lieutenant-Governor was Joseph Frederick Wallet DesBarres (1784–1787) and his successor was William Macarmick (1787). From 1799 to 1807, the military commandant was John Despard , brother of Edward.
An order forbidding the granting of land in Cape Breton, issued in 1763, was removed in 1784. The mineral rights to the island were given over to the Crown by an order-in-council. The British government had intended that the Crown take over the operation of the mines when Cape Breton was made a colony, but this was never done, probably because of the rehabilitation cost of the mines. The mines were in a neglected state, caused by careless operations dating back at least to the time of the final fall of Louisbourg.
Large-scale shipbuilding began in the 1790s, beginning with schooners for local trade moving in the 1820s to larger brigs and brigantines, mostly built for British shipowners. Shipbuilding peaked in the 1850s, marked in 1851 by the full rigged ship Lord Clarendon, the largest wooden ship ever built in Cape Breton.
Merger with Nova Scotia
In 1820, the colony of Cape Breton Island was merged for the second time with Nova Scotia. This development is one of the factors which led to large-scale industrial development in the Sydney Coal Field of eastern Cape Breton County. By the late 19th century, as a result of the faster shipping, expanding fishery and industrialization of the island, exchanges of people between the island of Newfoundland and Cape Breton increased, beginning a cultural exchange that continues to this day.
During the first half of the 19th century, Cape Breton Island experienced an influx of Highland Scots numbering approximately 50,000 as a result of the Highland Clearances. Today, the descendants of the Highland Scots dominate Cape Breton Island's culture, particularly in rural communities. To this day, Gaelic is still the first language of a number of elderly Cape Bretoners. A campaign of violence and intimidation by the provincial school board led to the near extermination of Gaelic culture. The growing influence of English-dominated media from outside the Scottish communities saw the use of this language erode quickly during the 20th century. Many of the Scots who immigrated there were either Roman Catholics or Presbyterians, which can be seen in a number of island landmarks and place names.
The 1920s were some of the most violent times in Cape Breton. They were marked by several severe labour disputes. The famous murder of William Davis by strike breakers, and the seizing of the New Waterford power plant by striking miners led to a major union sentiment that persists to this day in some circles. William Davis Miners' Memorial Day is celebrated in coal mining towns to commemorate the deaths of miners at the hands of the coal companies.