In the early colonial days, Britain had a kind of tenuous hold on Canada -- they had defeated the French and claimed possession of Quebec, but there were more French Canadians than Anglos and the British knew that they didn't have the troops to contain a widespread rebellion. Ontario was still only sparsely settled, enough so that (as earlier posters have mentioned) the influx of 40,000 Loyalists leaving the new United States had a major impact on our society and culture to this day.
So the British forged alliances with friendly First Nations, in return for protection of their trading posts and territories, and military assistance in case you-know-who attacked. When the numbers of British settlers were still pretty low, the aboriginals had quite a bit of power. If it hadn't been for the Iroquois, the US would probably have gotten, if not all of Ontario, probably the bits by the border (including the "more scenic" side of Niagara Falls, which I still can't believe we got to keep!). The British promised the Iroquois all kinds of things, including most of the Grand River valley in central Ontario, to be their own forever. However, as the numbers of British residents increased, the arrangement became more lopsided in their favour, and bit by bit the promised lands were taken back. A similar pattern also happened on the West Coast. In the mid-1800s, cities like Victoria were virtually bilingual (with courts, businesses, schools, and even newspapers using native languages like Chinook Jargon). But later the government tried to "modernize" the First Nations and eradicate traditional culture, through things like the residential schools mentioned earlier.
Ironically, a lot of Canadian history is based on our scramble to grab land before the US could! That's why we were in such a rush to link up with the West Coast and settle the Prairies -- there was already a northward trickle of US farmers and prospectors, and the government in Ottawa was certain that it was only a matter of time before the former Hudson's Bay Company lands became de facto American states, due to "possession by right of population". So the feds gave British Columbia all kinds of incentives to join Confederation (including assurances of "a daily boat to Seattle and a weekly one to San Francisco" from Victoria) to keep them from signing a deal with the US. And they gave the railways large amounts of land in exchange for the promise of a transportation route to the Pacific. The Canadian government used lavish overseas ad campaigns and promises of free land to try to recruit new immigrants for the Prairies -- hundreds of thousands of people, from the Ukraine and Central Europe.
It's actually rather cringe-making to read the newspaper editorials from a hundred years ago. They heaped scorn on the Slavs, Poles, Italians, and others who weren't from the preferred northwestern Europe -- but the sentiment seemed to be, "anything so we aren't gobbled up by the Americans -- at least they aren't Asian or African!".
We did have slavery but it ended earlier than in the US (and some aboriginal groups on the coast had it as well, with slaves kidnapped from neighbouring tribes -- it seems to pre-date European contact). There was (and still is) a substantial black community in Nova Scotia, including descendants of people who'd escaped north prior to the Emancipation Proclamation. Unfortunately they too have faced discrimination (e.g., the story of Africville).
Before and during the 20th century, Canada experienced a civil rights movement of its own. A lot of groups had been unfairly treated -- the Chinese were exploited as labourers to build the railways (and there was actually a law passed to ban Chinese immigration). My entire family was interned with the other Japanese Canadians during the war -- they didn't have voting rights until 1947, and immigration from Japan, halted in wartime, wasn't okayed until the 1960s. Worse yet, we turned back boatloads of Jewish refugees fleeing the Nazis, and sent them back to Europe to certain death.
The Canada you're looking at today is quite different than it was, only 3 or 4 decades ago. We changed our immigration policy so it focused on family reunification, skills, and refugees rather than on ethnic quotas. We instituted Medicare and other social programmes. We got rid of capital punishment. We changed the language laws (this is still controversial, but after talking to French-Canadians who were denied basic opportunities in the province their ancestors built, I'm starting to see why). We got the Charter of Rights and Freedoms in 1982. Our ties with the UK are now largely ceremonial.
Many of the things that American DUers have complimented us on are part of this "new Canada". We got our new flag in 1965 and a lot of other things happened at the same time. Pearson and Trudeau and Douglas -- people like that re-made us. For sure, they were only human beings, and they didn't know whether this would work or what would happen in the long term. Compared to the US we often look wimpy, ephemeral, and -- to use a recent word -- dithering. I thought the country was going to break apart during that last referendum, and between that and the pressure to harmonize with the US, I don't know whether we will still exist in a hundred years.
But I hope so. I started teaching Canadian history and geography a couple of years ago, and the reading and thinking I had to do to get ready for that really forced me to address a lot of issues I'd never even considered before.
You might find this site useful:
http://history.cbc.ca/histicons/
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