In 1905, he broke with Laurier and resigned from cabinet over the issue of publicly funded religious education in the new provinces of Alberta and Saskatchewan.

While many of the immigrants came from Britain and the United States, there was also, to Canada, a large influx of Ukrainians, Scandinavians, Doukhobors, and other groups from the Austro-Hungarian Empire.

He famously defended the "stalwart peasants in sheep-skin coats" who were turning some of the most difficult parts of the western plains into productive farms.

After presiding over the creation of Alberta and Saskatchewan in 1905, Sifton resigned from cabinet following a dispute with Laurier over religious education.

[5] A sometimes repeated assertion on immigration policy, that "a stalwart peasant in a sheep-skin coat, born on the soil,[...]is good quality," was made in a 1922 article he wrote.

His brother-in-law Theodore Arthur Burrows would also serve as a Liberal MP in the Laurier government, and he was later appointed the tenth Lieutenant Governor of Manitoba.

Brad Austin portrays Sifton in episode 15 of season 13 "The Trial of Terrence Meyers" (February 10, 2020) of the Canadian television period detective series Murdoch Mysteries.