With Canadian Confederation in 1867, a variety of canal-building projects were undertaken throughout the new country by the new federal government, including renewed interest in a canal that could transit the isthmus at Chignecto.

The Chignecto Ship Railway project was first proposed in 1875 by notable civil engineer Henry Ketchum as a means to transport ships across the Isthmus of Chignecto, shortening the sailing distance between the Bay of Fundy and the Gulf of St. Lawrence by avoiding the necessity of sailing 500 nmi (930 km) around Nova Scotia.

[2]: 13 In 1685, during an inspection of the now defunct Acadian settlement of Beaubassin, intendant Jacques de Meulles reported that a portage of one league could be made by cutting a ditch, since the elevation is low.

An agent of a steamship company in Charlottetown suggested the routes to those ports from Prince Edward Island would save another 100 nmi (190 km; 120 mi) by crossing the isthmus rather than sailing around Nova Scotia.

However, the terminal at Fort Lawrence was located on Cumberland Basin at the discharge point of the Missaguash River on the inter-provincial boundary with New Brunswick and had a high tidal range, necessitating the construction of a lock to accommodate different water levels.

In fall 1890 the primary financiers of the project, Baring Brothers & Co., faced potential insolvency due to the financing of debts in Uruguay and Argentina.

Ketchum appealed to the federal government for help in finishing the project but in 1892 the Parliament of Canada refused to extend the time period for the contract with the Chignecto Marine Transport Railway Company.

Some of the stones used for the breakwaters at Tidnish were moved in 1917 to Cape Tormentine and used in the construction of the docks used for ferry service to Prince Edward Island.

[10][13] With the area having been an important site for trade and military activity in the 1600s and 1700s, proposals to intersect the isthmus with a canal have emerged with various degrees of seriousness since the arrival of Europeans in Canada.

[14] When the Chignecto Ship Railway went defunct in the 1890s, there was a decline in enthusiasm for canal-building projects across Canada more generally since many of the canals built in the late 1800s concluded well over-budget and did not deliver promised increases in commerce.

In the 50-year interim, the newly formed Government of Canada had constructed a network of railways throughout the Maritimes, meaning that any new canal would cannibalise traffic from existing public infrastructure.