During the Canadian Pacific Railway's construction of the national railway in the 1880s, it became involved in the sale and settlement of land. Part of the provisions made by the government to the company were 25 million acres (10 million ha) of land in a belt along the railway. Land grants were administered by the company's Land Department in Winnipeg until 1912 when the responsibility was transferred to the Department of Natural Resources.
DNR had three divisions: Irrigation Projects, Lands, and Mines, and was administered by an Advisory Committee and an Executive Branch. Peter L. Naismith was the manager of the DNR from 1912 to 1927, and Samuel Graham Porter from 1927 to 1942. Settlement was closely linked to the construction of large irrigation works, which were increasingly centred in Alberta, therefore the headquarters of the department was moved to Calgary. In 1903 CPR was granted land in southern Alberta, called the Irrigation Block (divided into the Eastern, Western, and Lethbridge Sections) upon which to develop irrigation systems.
Colonization of the Irrigation Block was originally administered by the CPR Land Department (Calgary office). In 1912 the responsibility was transferred to DNR, and after 1916 to the Department of Colonization and Development (subsequently called Department of Irrigation and Colonization) with headquarters in Montreal. After 1919 the Department of Irrigation and Colonization was represented in western Canada by the subsidiary Canadian Colonization Association. The nonprofit CCA was jointly formed by the CPR, Canadian National Railway and the federal government to recruit and secure settlers to Canada. CPR took over CCA after 1923. To assist in the reception and placement of immigrants, CPR encouraged the organization, and financially assisted, a number of national colonization boards. The administration of British Columbia land grants and the stimulation of settlement was originally the responsibility of the Land Department, but in 1903 a new department, the British Columbia Land Department, took over these responsibilities.