Although the land was initially under provincial control, the Government of British Columbia agreed to transfer control of the Railway Belt to the Government of Canada, as a condition of the British Columbia Terms of Entry[1] into Confederation.
The CPR had relied on selling the lands to settlers to assist in financing the construction of the railway, the same technique it used in the Prairie provinces.
To assist in the financing, in 1883 the Province agreed to transfer another block of land, the Peace River Block, to the control of the federal Government, which in turn granted portions to the CPR for land development.
Federal control of the Railway Belt and the Peace River Block became an issue of controversy and provincial resentment after the CPR was built.
Eventually, in 1930 the federal government agreed to transfer the Railway Belt and the Peace River Block back to the province.