On March 31st, 1949, Newfoundland united in Confederation with Canada. When Newfoundland became a province of Canada, the manufacture and issue of Newfoundland postage stamps were discontinued. The terms of Confederation included the condition that Newfoundland postage stamps could be used after the Union until the supply became exhausted. This had the effect of validating Newfoundland postage stamps for the prepayment of postage charges on mail posted anywhere in Canada.
The stamp issued to commemorate this historic event illustrates John Cabot's ship, the Matthew, under sail off the Newfoundland coast. Historical records recognize John Cabot as the first European to discover this island in the year 1497. He claimed the country for King Henry VII of England. The stamps design was based on a model of Cabot's ship, the Matthew made by Ernest Maunder of St. John's, Newfoundland.