Established by the 1938 Metis Population Betterment Act as a relief measure for the province's impoverished Métis people,[3] the rough and swampy Cold Lake settlement was found to be unsuitable for agricultural purposes.

A royal commission was formed to investigate the living conditions of Alberta's "half-breeds" (as the Métis were known), who were then squatting on road allowances with no ready sources of cash income, or trapping in remote areas without access to education or health services.

Farm colonies, in which the Métis themselves would provide most of the physical labour, would be a suitably inexpensive relief scheme for the cash-strapped Alberta government to implement.

Caslan (now Buffalo Lake) was the final addition, reserved for Métis veterans returning from World War II before being thrown open to general settlement in 1951.

The exact boundaries of the Cold Lake settlement, as described in its enabling legislation, are as follows: The east half of Township 66, Range 1, west of the Fourth Meridian in the Province of Alberta;All that portion of Section 14, Township 65, Range 1, west of the Fourth Meridian, in the Province of Alberta, not covered by the waters of Cold Lake, and not including the island at the mouth of the Matenau River—