Construction of the canal The construction of the canal and the settlement were preceded by a secret decision of the city of Groningen in 1762, in which it was agreed to secretly begin peat extraction in the Drenthe area from the Groningen city lands. This required digging a canal system to the southeast to transport the peat from the Drenthe areas as well. The traditional founding date of the settlement is 11 February 1765, when the mayor and council of the city of Groningen decided to extend the Oosterdiep canal near Wildervank to Bareveld and, parallel to the Semslinie, to dig a new canal northeast to the southeast to allow peat extraction in the peat colonies. This became the Stadskanaal (City Canal). The canal was dug by hand by about a hundred Groningen and German workers under the supervision of peat cutters such as Jan Uniken and the Van der Tuuk, Bosscher, Spier and Oosterwijk families. The Stadskanaal had a double canal system with a main canal and a rear canal. The rear canal was named Boerendiep, which was dug from 1783 onwards. However, the actual foundation of the town did not take place until 1787 when the first peat plots were allocated and the first twelve wooden houses of Stadskanaal were built. The first houses were deliberately built on the north side of the canal because the city of Groningen only wanted residents from Groningen, not from Drenthe. This attitude has resulted in far fewer houses on the south side of the canal to this day. Subsequently, the first wooden lock (the Springersverlaat) was built in the canal. The residents of this remote peat colony were considered very poor.
Industry and rail In 1856, the canal reached
Ter Apel. The canal's further extension to
Munnekemoer near the German border in 1865 increased traffic. This also caused the town center to shift from its original location east of Pekelderstraat further southeast, ending up in the area between Drouwenermond and Buinermond in the 1930s. The poor valley soils left behind after peat extraction were left unfertilized for a long time because the poor residents lacked the money to buy the expensive city soil. However, with the introduction of artificial fertilizer and the rise of the potato from around 1850 onward, the land was bought up by outside settlers and developed, particularly from the Boerendiep. From the second half of the 18th century, the potato led to the construction of several malt distilleries along the canal. In 1861, Stadskanaal gained a rail connection with
Veendam through the construction of a horse-drawn tram line by the Eerste Groninger Tramway-Maatschappij (First Groningen Tramway Company). In 1866, the potato starch factory "Stadskanaal" was founded by Willem Albert Scholten on the site of the former Smit & Bosscher malt distillery. By 1871, there were also five
shipyards and a large number of forges in Stadskanaal. By 1910, the number of shipyards between
Bareveld and the IJzeren Klap near Musselkanaal had risen to 16. Peat barges, coastal vessels, and seagoing vessels were built here. It wasn't until around 1900—long after
Hoogezand-Sappemeer and Veendam—that the first significant industry emerged near the town. In 1895, a horse-drawn tram line to Ter Apel was completed. In the 1900s, Stadskanaal was connected to the NOLS railway lines: in 1905, the town was connected to the Zwolle-Stadskanaal railway line, and in 1910 to the
Stadskanaal-Zuidbroek railway line. In 1924, the Stadskanaal-Ter Apel Rijkgrens railway line of the S.T.A.R. (the national border railway) followed. This made Stadskanaal Station, completed in 1903, a major railway junction with more than 400 railway employees. The factories generated significant employment and drove population growth. In the late 1920s, municipal architect Meinen designed the first expansion plan for the area between the Stadskanaal canal and the S.T.A.R. railway line between Buinermond and Drouwenermond in the Onstwedder section of Stadskanaal. This Parkwijk was developed starting in the 1930s and is centered around Stationslaan between the canal and the station. Villas were built on both sides of this road, near the station, and in Julianapark to the east. Private homes were built on the west side of Stationslaan, and on the east side of Julianapark, alongside many social housing units (such as along Oranjestraat), 't Hofje, with housing for the elderly. A secondary school (1919), an ice rink and an open-air swimming pool were also built in this district. Meanwhile, most of the railway lines disappeared again under pressure from the rise of road transport: In the 1950s, the remaining railway was only used for goods. The canal, which once carried 40,000 ships a year, also had to give way to road transport. New neighborhoods were developed for these workers, such as the Ter Maars plan, which saw the construction of the Maarsstee expansion district northeast of the former Boerendiep within four years, starting in 1959. More expansions districts were built though the 1960s and 1970s with some not complete until the 1990s. As a result, Stadskanaal grew into the second-largest municipality in the province, after the city of Groningen. With the new neighborhoods, the center of Stadskanaal shifted again, this time to the area between the original linear development along the canal and the expansion neighborhoods north of it. In 1970, a new shopping center with modern commercial buildings was built here.
Recent developments From 1978 onwards, Philips steadily reduced its operations in Stadskanaal, resulting in the loss of thousands of jobs in the late 1970s. From 2000 onwards, the remaining factory operations were transferred to other locations, including China. Operations ceased in 2006, and the former Philips site was subsequently redeveloped. == Transport ==