In its earliest years Canadian railroading was influenced by British rail practice, but after a decade of experience with North American economic and geographic realities, American practice began a fairly rapid rise to dominance that has remained to the present. The first transborder line was completed between Portland, Maine, and Montreal in 1852; it was known as the Atlantic and St. Lawrence Railroad in the three northern New England states and the St. Lawrence and Atlantic in Quebec. At the behest of the Maine promoters of this line, a gauge of 5 feet 6 inches (1,676 mm) was adopted to exclude Boston and its standard-gauge railroads from participation. Once the railroad opened, the international company was sold to and extended by a British company, the Grand Trunk Railway, which ultimately constructed a line from Rivière-du-Loup on the St. Lawrence estuary below Quebec city to Sarnia on the St. Clair River at the Ontario-Michigan frontier. The Grand Trunk infrastructure was much more costly than that found on any other rail line in North America following British practice but was laid out on the Maine gauge of 5 feet 6 inches, which became the first widely adopted Canadian gauge. Only later when the rail crossings of the international boundary became numerous and the generally unsatisfactory example of the Grand Trunk was fully understood were the broad Canadian lines narrowed to the standard gauge.

The Canadian Shield posed a serious obstacle to transcontinental planning. British Columbia, then a British crown colony, was concerned about the impact of an influx of gold prospectors from the United States, and it sought to join the Canadian confederation. In 1871 Prime Minister John A. Macdonald offered British Columbia a railroad connection with the Canadian network within 10 years. An agreement was reached with little knowledge of where and how such a rail line could be built. A Canadian Pacific Railway survey was begun under the direction of Sandford Fleming, former chief engineer of the Intercolonial Railway in the Maritime Provinces. There was some question as to the best route across the Canadian Shield from Callender in eastern Ontario (then the head of steel production in eastern Canada) to the edge of the prairies in eastern Manitoba, but simplicity of construction favoured the northern shore of Lake Superior. In the prairies the choice seemed to rest on which pass through the Rockies would be used. Fleming strongly favoured Yellowhead Pass near present-day Jasper, but the rail builders chose instead Kicking Horse Pass west of Calgary because it would place the railroad much closer to the 49th parallel, thus shielding business in western Canada from competition with American railroads. The final question to be resolved by the Fleming Survey was the route to be employed across the Coast Ranges of British Columbia. Five routes ranging between the Fraser River valley in the south and the Skeena River near the 54th parallel in the north were considered, but the Fraser gorge route to the mouth of that river was selected. By 1885, when the Canadian Pacific Railway was completed by a joining of tracks at Craigellachie in British Columbia, Burrard Inlet, north of the Fraser mouth, was selected as a new port and was named for George Vancouver, the British naval captain who conducted the most detailed survey of this coast.

The Canadian Pacific Railway tied the recently formed dominion together but operated on such a thin market that its charges were high and its network of lines limited. In Manitoba at the turn of the 20th century wheat farmers sought more rail lines, and the province encouraged ramification of the lines with land grants. By the end of the first decade of the century one granger road, the Canadian Northern Railway, promoted a line from Montreal to Winnipeg and then, along with its network of prairie railroads, a second rail route to the Pacific coast, using Yellowhead Pass. This second transcontinental line was finished during World War I, though wartime inflation led to bankruptcy for its promoters.

In the first decade of the 20th century a third transcontinental line was advanced rapidly through a large government subsidy. A proposal was made to construct a rail line from Moncton, New Brunswick, near the ports of Halifax and Saint John, passing through mainly timbered land to the south bank of the St. Lawrence River at Levis opposite Quebec city. From there, the National Transcontinental Railway crossed the Canadian Shield to Winnipeg. There the project was joined to a line of the Grand Trunk. The Grand Trunk Pacific Railway beginning at Winnipeg passed through the fertile belt of the prairies to Edmonton, continuing thence to Yellowhead Pass and across central British Columbia to a totally new port on Kaien Island in Canada just south of the Alaska Panhandle, which was named Prince Rupert. Unfortunately the addition of two new transcontinentals within little more than a year in a time of great inflation placed both concerns in bankruptcy and led to their reversion to public ownership as the Canadian National Railways in 1918.

Since then, there have been further demands for rail lines in Canada, mostly to gain access to heavy raw materials. Manitoba shaped a new port at Churchill on Hudson Bay at the end of the 1920s. Lines from the north shore of the Gulf of St. Lawrence were pushed into Labrador to reach iron deposits in the 1950s. Access to lead-zinc deposits near Great Slave Lake brought a “railway to resources” at Hay River in the Northwest Territory. British Columbia took over an initially private company, the Pacific Great Eastern Railway, and shaped it into the British Columbia Railway. Even Canadian Pacific has reflected this increasing focus on resource flows. In 1989 it opened the Mount MacDonald Tunnel, the longest tunnel in the Western Hemisphere at just over 14.5 km (9 miles); it runs under Rogers Pass in the Selkirk Range of British Columbia. This reflects the turnabout in rail flows in Canada, where transpacific shipping has overtaken transatlantic routes. The steep grades in Rogers Pass required huge horsepower in helper (pusher) engines. By tunneling beneath Mount Macdonald, the transit of the Selkirks was flattened to just under 1 percent.

Despite the fact that Canada’s railways have served for 150 years as Canada’s spine, linking the scattered former British colonies into a single transcontinental country, the system faces challenges in the 21st century. The most important concern is rail-passenger service, which fell off dramatically in the decades after World War II owing to competition from airplanes and automobiles. Much of the rolling stock became outdated, leading to inefficient and costly service. In 1978 the Canadian government established VIA Rail Canada, Inc., as a crown corporation independent of the CN and CP to assume full responsibility for managing all the country’s rail-passenger services (except for commuter lines and some small local lines). VIA was formed in the hope that it would permit an economy of scale not possible when the CN and CP railroads ran independent passenger services, thereby reducing the subsidies needed to support Canada’s rail-passenger system. Unfortunately, the new company acquired ownership of all CN and CP passenger locomotives but did not purchase any track; instead, it compensates the railroads for the cost of operating VIA trains over their tracks. This has only aggravated a perennial problem of arriving at a government subsidy sufficient to meet the service’s operating budget and also to fund fleet modernization, track improvements, and other capital developments.

If the future of rail transportation in central Canada is uncertain, Canada’s north has seen an interesting transition as railways originally built to open the frontier have turned to providing spectacularly scenic journeys for vacationers. In the west, successors to the original transcontinental routes—the Rocky Mountaineer through Banff and the Canadian through Jasper—wind among the majestic Rocky Mountains. From Winnipeg a railway passes through rugged lake and forest country to reach the ocean port of Churchill on Hudson Bay. Ontario’s two northern lines are the Algoma Central, which runs from Sault Ste. Marie through the Agawa Canyon, resplendent with hardwoods in the fall, and the Northland, which cuts through the mineral-rich Canadian Shield to Moosonee, close to an old fur-trading post on James Bay. In Quebec the line running north from the Gulf of St. Lawrence to the iron-ore deposits of Ungava and Labrador is used to take canoeists, fishermen, and hunters into the last great wilderness region of eastern North America.