經過數次立憲會議之後，1867年憲法法案於1867年7月1日通過，加拿大省、新不倫瑞剋省、新斯科捨省三個英屬北美殖民地組成加拿大聯邦。加拿大獲得羅伯特領地和西北部地區的控製權，並將兩者合併成西北地區，這一舉動促使該地區的原住民梅蒂人在1870年7月發動紅河起義並建立從西北地區分離出的馬尼托巴省。
1871年，不列顛哥倫比亞省（不列顛哥倫比亞殖民地與溫哥華島殖民地已在1866年合併）加入聯邦。兩年後，愛德華王子島也加入聯邦。
首任總理約翰·亞歷山大·麥剋唐納及他的保守黨政府設立關稅以保護加拿大新生的製造業。為了開發西部，加拿大政府資助三項橫加鐵路項目（包括加拿大太平洋鐵路），並配合自治領土地法 ，開始對大平原的開發。為了維護這片新開發區域的治安，加拿大政府設立西北山地警察局。1898年掀起的剋朗代剋淘金熱為加拿大西北領地帶來大批移民，這一事件直接促使這片區域從西北領地分離並建立育空地區。在加拿大自由黨的總理威爾弗裏德·勞雷爾的領導下，歐洲移民開始在大平原地區定居，因此促成艾伯塔省和薩斯喀徹溫省在1905年建立。
Following several constitutional conferences, the Constitution Act officially proclaimed Canadian Confederation on July 1, 1867, initially with four provinces: Ontario, Quebec, Nova Scotia, and New Brunswick. Canada assumed control of Rupert's Land and the North-Western Territory to form the Northwest Territories, where the Métis' grievances ignited the Red River Rebellion and the creation of the province of Manitoba in July 1870. British Columbia and Vancouver Island (which had been united in 1866) joined the confederation in 1871, while Prince Edward Island joined in 1873. In 1898, during the Klondike Gold Rush in the Northwest Territories, parliament created the Yukon Territory. Alberta and Saskatchewan became provinces in 1905. Between 1871 and 1896, almost one quarter of the Canadian population emigrated southwards, to the U.S.
To open the West and encourage European immigration, Parliament approved sponsoring the construction of three transcontinental railways (including the Canadian Pacific Railway), opening the prairies to settlement with the Dominion Lands Act, and establishing the North-West Mounted Police to assert its authority over this territory. This period of westward expansion and nation building resulted in the displacement of many Indigenous peoples of the Canadian Prairies to "Indian reserves", clearing the way for ethnic European block settlements. This caused the collapse of the Plains Bison in western Canada and the introduction of European cattle farms and wheat fields dominating the land. The Indigenous peoples saw widespread famine and disease due to the loss of the bison and their traditional hunting lands The federal government did provide emergency relief, on condition of the Indigenous peoples moving to the reserves. During this time, Canada introduced the Indian Act extending its control over the First Nations to education, government and legal rights.