With steep hills at its back, the Intercolonial Railway (ICR) bypassed the town while its nearby rival, Campbellton, surged ahead.

The International Paper Company built what was then one of the largest newsprint mills in the world and the town changed forever.

Some Acadians displaced in the Great Upheaval also settled in Dalhousie, and to this day there is a very close balance between anglophones and francophones.

The Eel River Bar First Nation, adjacent to Dalhousie, is home to many Micmac natives, who were the original residents of the region.

The valley lies in a hilly region, part of the Appalachian mountain range, although the Dalhousie town site is situated on a hill side several decameters above sea level with some development to its south on a low ridge of approximately 260 metres elevation.

The town is surrounded by salt and fresh water bodies, which are home to many species of wildlife, unique birds, and fish.

Until 31 January 2008, the economy was dominated by the forestry industry, namely a large pulp and paper mill spanning the waterfront along the Restigouche River.

The 2007 merger of Bowater and Abitibi Consolidated resulted in the decision by the newly merged company to announce the closure of the Dalhousie newsprint mill on 29 November 2007 due to apparent market conditions.

The mill, which had produced 640 tonnes of newsprint per day for shipment by rail, truck and ship to domestic and international markets, was officially closed on 31 January 2008.

Due to the closure of this mill, hundreds were left without work in the local economy and some were forced to move.

Following the closure of the pulp and paper mill in 2008, Pioneer Chemicals closed a processing plant on the western edge of the town.

However, a deal was struck between CN and the Port of Dalhousie for this section of line to remain open under a leasing agreement in November 2011.

[12] The port is located on the south shore of the Bay of Chaleur at the mouth of the Restigouche River, and includes 98 acres (39.66 hectares) of land, 494 acres (200 hectares) of "waterlot," and two cargo facilities—East Bay Marine Terminal, whose chief cargo is paper, and the West Wharf, which imports petroleum and coal and exports ore concentrates.

Via Rail Canada provides passenger train service three days per week with stops at Charlo immediately east of the town and in Campbellton to the west.

[20] In spite of its marine position, this climate regime is typical of New Brunswick and is manifested by vast differences in temperature between the warm summers and the cold snowy winters.