Britain had taken possession of lands in western Canada in the form of Rupert's Land, which was then transferred to Canada after Confederation. Canada established the province of Manitoba and the Northwest Territories. Additionally, some land was set aside for the national railway and some land remained under the control of the Hudson's Bay Company, leaving the rest as public lands, to be negotiated with the Indigenous peoples. From 1871 onwards, the Government of Canada negotiated the Numbered Treaties on behalf of the Crown with the First Nations of western Canada to extinguish aboriginal title, establish reserves and establish federal obligations such as education and health care in exchange for lands to settle. Today, there are concerns by the First Nations of western Canada that the Numbered Treaties did not cover all title issues. The First Nations assert they were not only not fairly compensated for their lands, but that only the lands taken up for immigration and settlement were covered in the treaties and that other lands and natural resources were not covered.^{[citation needed]}

Canada passed the Dominion Lands Act in 1872 to encourage settlement. The Act was applied to the province of Manitoba and to the Northwest Territories. Upon the creation of the provinces of Saskatchewan and Alberta from the Northwest Territories, the Act continued to apply to them. It was also extended to the Peace River Block of British Columbia. In 1876, the Act was amended to prohibit single women from claiming a homestead, except those classified as the head of a household, which effectively limited female participation to widows with dependent children; this contrasted with the United States, where single women were permitted to homestead.^[2] In 1930, the federal government agreed to transfer control over the public lands and natural resources to the prairie provinces by means of the Natural Resources Acts.^[3][4][5][6] From that point onwards, the Dominion Lands Act only applied in the North-West Territories.^[7]

The Act gave a claimant 160 acres (65 ha) for free, the only cost to the farmer being a $10 administration fee. Any male farmer who was at least 21 years of age and agreed to cultivate at least 40 acres (16 ha) of the land and build a permanent dwelling on it (within three years) qualified. This condition of "proving up the homestead" was instituted to prevent speculators from gaining control of the land.^[1]

The Act also launched the Dominion Lands Survey, which laid the framework for the layout of the Prairie provinces that continues to this day.^[1]

An important difference between the Canadian and U.S. systems was that farmers under the Canadian system could buy a neighboring lot for an additional $10 registration fee, once they had made certain improvements to their original quarter-section. This allowed most farmsteads to quickly double in size, and was especially important in the southern Palliser's Triangle area of the prairies, which was very arid. There it was all but impossible to have a functional farm on only 160 acres (0.65 km²), but it could be managed with 320. Canadian agriculture was consequently more successful than U.S. agriculture in this arid region.^[8]

Bloc settlements were encouraged by section 37 which allowed associations of 10 or more settlers to group their houses together to form a settlement to fulfil their cultivation obligations on their own homestead while residing in a hamlet.

The first version of the Act set up extensive exclusion zones. Claimants were limited to areas further than 20 miles (32 km) from any railway^{[dubious – discuss]} (much of the land closer having been granted to the railways at the time of construction). Since it was extremely difficult to farm wheat profitably if you had to transport it over 20 miles (32 km) by wagon, this was a major discouragement. Farmers could buy land within the 20 mi (32 km) zone, but at a much higher price of $2.50 per acre ($6.2/ha). In 1879, the exclusion zone was shrunk to only 10 miles (16 km) from the tracks; and in 1882 it was finally eliminated.

Less than half of the arable land in the West was ever open to farmers for homesteading under the Act. The Hudson's Bay Company, which had once controlled the entire prairies, had kept five percent of the land as part of the terms of the surrender of its charter. Both the railways and Hudson's Bay sold land to land companies and to farmers on the open market. Additional areas were set aside for schools and government buildings. Overall, about 478,000 square kilometres (118,000,000 acres) of land was sold away by the Government of Canada under the Act.^{[citation needed]}

From 1930 onwards, the Act only applied to the public lands in the Northwest Territories. The homestead provisions of the Act, designed to encourage agricultural settlement on the prairies, had little application to the conditions in the Northwest Territories. Parliament repealed the Act in 1950, replacing it with the Territorial Lands Act,^[9] which was better adapted to the conditions in the Territories. The new Act did not contain any homesteading provisions.^[1]

• "Last Best West"

• Sarah Carter. Imperial Plots: Women, Land, and the Spadework of British Colonialism on the Canadian Prairies (2016)
• Kirk N. Lambrecht. The Administration of Dominion Lands, 1870-1930 (1991)

• Moving Here, Staying Here: The Canadian Immigrant Experience Archived 2007-09-30 at the Wayback Machine at Library and Archives Canada