Canada in the American Civil War At the time of the American Civil War , Canada did not yet exist as a federated nation . Instead , the territory consisted of the United Province of Canada ( parts of modern southern Ontario and Quebec ) and the separate colonies of Newfoundland , New Brunswick , Prince Edward Island , and Nova Scotia , as well as a crown territory administered by the Hudson ' s Bay Company called Rupert ' s Land . Britain and its colonies were officially neutral for the duration of the war . Despite this , tensions between Britain and the United States were high due to incidents on the seas , such as the " Trent " Affair and the Confederate commissioning of the CSS " Alabama " from Britain . Canadians were largely opposed to slavery , the preservation of which was one of the main goals of the Confederate States of America , and Canada had recently become the terminus of the Underground Railroad . Close economic and cultural links across the long border also encouraged Canadian sympathy towards the Union . The conservative press in Canada East supported the secession and ridiculed the Yankees as lacking in morality . There was talk in London in 1861 – 62 of mediating the war or recognizing the Confederacy . Washington warned this meant war , and London feared Canada would quickly be seized . " Trent " Affair . In November 1861 tensions escalated between Washington and London when an American warship stopped the British mail ship on the high seas and seized two Confederate diplomats . London demanded their return and an apology , and to signal its intention to defend its possessions sent 14 , 000 combat troops to Canada , while the colonials planned to raise 40 , 000 militia . The crisis ended when President Abraham Lincoln released the diplomats ; he did not issue an apology . The British decided that colonial union was now a high priority , as it would relieve London of the need to defend Canada . Grand Trunk Railway Brigade . Rising concerns over the security of railways in Canada while the Civil War raged in the United States led to the 1862 creation of the Grand Trunk Railway Brigade . This unit of Canadian Volunteer Militia recruited amongst railway employees had infantry and artillery companies deployed along the railway lines in Canada East and Canada West . Confederate activity in Canada . Because of Canada ' s location and sympathy for the Southern cause , Confederate operators secretly used Canada as a base , in violation of British neutrality , particularly in the Maritimes . The Maritimes ' struggle to maintain its independence from Canada , led some Maritimers to be sympathetic to the South ' s desire to maintain its independence from the North . For example , Halifax merchant Benjamin Wier ( 1805 - 1868 ) acted as Halifax agent for many of the Confederate blockade runners active during the Civil War . In return for ship repair facilities in Halifax , the Confederates supplied him with valuable cotton for re - export to Britain , a lucrative but hazardous course for Wier which required severing his business connections with New England . " Chesapeake " . On 7 December 1863 , while the new Union tug " Chesapeake " was preparing for service in the South Atlantic Blockading Squadron , 17 Confederate agents disguised as passengers seized it off Cape Cod , Massachusetts . Word of the takeover reached Portland on the morning of 9 December and quickly spread from there . The news prompted federal officials at northern ports along the coast to speedy action . On 17 December , the recently captured blockade runner " Ella and Annie " — which had been hastily manned , armed and sent to sea — finally caught up with the " Chesapeake " at Sambro , Nova Scotia . Shortly thereafter , the Northern gunboat arrived on the scene ; and its commanding officer prevented " Ella and Annie " from taking the recaptured tug back to Boston , lest such action seriously undermine relations between the United States and the British Empire . Instead , to observe diplomatic protocols , he escorted " Chesapeake " to Halifax where he asked Canadian colonial Admiralty court to restore it to its owner . The Confederate sympathizers were never convicted and the tension arising from the Chesapeake Affair received international attention . CSS " Tallahassee " . On August 18 , 1864 , the Confederate ship under the command of John Taylor Wood sailed into Halifax harbour for supplies , coal and to make repairs to its mainmast . Wood began loading coal at Woodside , on the Dartmouth shore . Two Union ships were closing in on the " Tallahassee " , the " Nansemont " and the " Huron " . While Wood was offered an escort out of the harbour he instead slipped out of the harbour under the cover of night by going through the seldom - used Eastern Passage between McNab ’ s Island and the Dartmouth Shore . The channel was narrow and crooked with a shallow tide so Wood hired the local pilot Jock Flemming . The " Tallahasse " left the Woodside wharf at 9 : 00 p . m . on the 19th . All the lights were out , but the residents on the Eastern Passage mainland could see the dark hull moving through the water , successfully evading capture . St . Albans Raid . The most controversial incident was the St . Albans Raid . Montreal was used as the secret base for a team of Confederates attempting to launch covert and intelligence operations from Canada against the United States . To finance their cause in October 1864 , they robbed three banks in St . Albans , Vermont , killed a citizen , and escaped back across the border with $ 170 , 000 . They were pursued by Union forces over the Canadian border , creating a diplomatic incident . The Canadians then arrested the Confederate raiders , but the judge ruled the raid was an authorized Confederate government operation and not a felony which would permit extradition via the Webster - Ashburton Treaty . Canadians in the U . S . Army . The best recent estimates are that between 33 , 000 and 55 , 000 men from British North America ( BNA ) served in the Union army , and a few hundred in the Confederate army . Many of these men already lived in the United States ; they were joined by volunteers signed up in Canada by Union recruiters . Canada refused to return 15 , 000 American deserters and draft dodgers . Calixa Lavallée was a French - Canadian musician and Union officer during the American Civil War who later composed the music for " O Canada " , which officially became the national anthem of Canada in 1980 . In 1857 , he had moved to the United States and lived in Rhode Island where he enlisted in the 4th Rhode Island Volunteers of the Union army during the American Civil War , attaining the rank of lieutenant . Canadian - born Edward P . Doherty was a Union Army officer who formed and led the detachment of Union soldiers that captured and killed John Wilkes Booth , the assassin of Lincoln , in a Virginia barn on April 26 , 1865 , 12 days after Lincoln was fatally shot . Canadian born Sarah Emma Edmonds was a noted Union spy . At least 29 Canadian - born men were awarded the Medal of Honor . Economic effects . The Civil War period was one of booming economic growth for the BNA colonies . The war in the United States created a huge market for Canada ' s agricultural and manufactured goods , most of which went to the Union . Political effects . The American Civil War had decisive political effects on the BNA colonies . The tensions between the United States and Britain , which had been ignited by the war and made worse by the Fenian Raids , led to concern for the security and independence of the colonies , helping to consolidate momentum for the of the colonies in 1867 . In this regard , the conflict also had an important effect on discussions concerning the nature of the emerging federation . Many Fathers of Confederation concluded that the secessionist war was caused by too much power being given to the states , and thus resolved to create a more centralized federation . It was also believed that too much democracy was a contributing factor and the Canadian system was thus equipped with checks and balances such as the appointed and powers of the British appointed Governor - General . In reaction a guiding principles of the legislation which created Canada – the British North America Act was peace , order , and good government . This was a collectivist antithesis to American individualism that became central to Canadian identity .