20世紀早期，作為自治領的加拿大仍被英國控製着外交事務，所以當英國在一戰對德宣戰時加拿大也自動參戰，被派往西方戰綫的加拿大志願兵後來更組成加拿大軍團。這支軍隊在維米嶺戰役和其它主要戰役中都擔當相當重要的角色。參與一戰的650,000名加拿大人中，約60,000人戰死，173,000人負傷。1917年，保守黨總理羅伯特·萊爾德·博登對法裔魁北剋人實行強製徵兵，徵兵危機爆發，而再加上對魁北剋省以外的法語學校的爭議，導致魁北剋人的身份認同開始轉變並令自由黨發生內訌。之後在1917年羅伯特所領導的聯合黨贏出大選。 1919年，加拿大獨立於英國加入國際聯盟，隨後的1931年威斯敏斯特法案更肯定加拿大的獨立性。
1930年代的大蕭條給加拿大經濟帶來沉重打擊。為了應對大蕭條，合作社聯邦聯合會在40年代至50年代於薩斯喀徹溫省推出多項社會福利政策。二戰期間，在自由黨總理威廉·萊昂·麥肯齊·金帶領之下加拿大對德宣戰。第一支加拿大軍隊於1939年12月抵達英國。
加拿大軍隊參與許多重要戰役，其中包括迪耶普戰役、入侵意大利、諾曼底戰役、霸王行動和斯海爾德河戰役。在荷蘭被德國占領期間，加拿大為流亡的荷蘭王室提供庇護，之後加拿大更把荷蘭從納粹德國解放出來。二戰期間，加拿大為該國軍隊以及英國、中華民國和蘇聯製造許多軍事裝備，使加拿大經濟飛速發展。儘管在1944年魁北剋再次爆發徵兵危機，但在戰後加拿大成為一個強大的經濟體並擁有一支龐大的軍隊。
Because Britain still maintained control of Canada's foreign affairs under the Constitution Act, 1867, its declaration of war in 1914 automatically brought Canada into World War I. Volunteers sent to the Western Front later became part of the Canadian Corps, which played a substantial role in the Battle of Vimy Ridge and other major engagements of the war. Out of approximately 625,000 Canadians who served in World War I, some 60,000 were killed and another 172,000 were wounded. The Conscription Crisis of 1917 erupted when the Unionist Cabinet's proposal to augment the military's dwindling number of active members with conscription was met with vehement objections from French-speaking Quebecers. The Military Service Act brought in compulsory military service, though it, coupled with disputes over French language schools outside Quebec, deeply alienated Francophone Canadians and temporarily split the Liberal Party. In 1919, Canada joined the League of Nations independently of Britain, and the 1931 Statute of Westminster affirmed Canada's independence.
Crew of a Sherman-tank resting while parked
Canadian crew of a Sherman tank, south of Vaucelles, France, during the Battle of Normandy in June 1944
The Great Depression in Canada during the early 1930s saw an economic downturn, leading to hardship across the country. In response to the downturn, the Co-operative Commonwealth Federation (CCF) in Saskatchewan introduced many elements of a welfare state (as pioneered by Tommy Douglas) in the 1940s and 1950s. On the advice of Prime Minister William Lyon Mackenzie King, war with Germany was declared effective September 10, 1939, by King George VI, seven days after the United Kingdom. The delay underscored Canada's independence.
The first Canadian Army units arrived in Britain in December 1939. In all, over a million Canadians served in the armed forces during World War II and approximately 42,000 were killed and another 55,000 were wounded. Canadian troops played important roles in many key battles of the war, including the failed 1942 Dieppe Raid, the Allied invasion of Italy, the Normandy landings, the Battle of Normandy, and the Battle of the Scheldt in 1944. Canada provided asylum for the Dutch monarchy while that country was occupied and is credited by the Netherlands for major contributions to its liberation from Nazi Germany.
The Canadian economy boomed during the war as its industries manufactured military materiel for Canada, Britain, China, and the Soviet Union. Despite another Conscription Crisis in Quebec in 1944, Canada finished the war with a large army and strong economy.