Born in Cornwall, Canada West, the son of Alexander Eugene Macdonald and Grace Mackay Taylor, Macdonald was educated in the schools of Cornwall before joining the 2nd Cornwall Volunteer Militia Rifle Company as an ensign in 1863. He was promoted to lieutenant in 1865, captain in 1866, major in 1871, and lieutenant-colonel in 1877. He served during the Fenian raids of 1866, the Red River expedition of 1870, and the North-West Rebellion of 1885.