The Canadian Forces and civilian participation in the First World War helped to foster a sense of British-Canadian nationhood. The highpoints of Canadian military achievement during the First World War came during the Somme, Vimy, Passchendaele battles and what later became known as "Canada's Hundred Days". The reputation Canadian troops earned, along with the success of Canadian flying aces including William George Barker and Billy Bishop, helped to give the nation a new sense of identity. The War Office in 1922 reported approximately 67,000 killed and 173,000 wounded during the war. This excludes civilian deaths in war-time incidents like the Halifax Explosion.

Support for Great Britain during the First World War caused a major political crisis over conscription, with Francophones, mainly from Quebec, rejecting national policies. During the crisis, large numbers of enemy aliens (especially Ukrainians and Germans) were put under government controls. The Liberal party was deeply split, with most of its Anglophone leaders joining the unionist government headed by Prime Minister Robert Borden, the leader of the Conservative party. The Liberals regained their influence after the war under the leadership of William Lyon Mackenzie King, who served as prime minister with three separate terms between 1921 and 1949.