The first great crisis of British rule in North America came in the 1770s. Throughout the 1760s and 1770s British settlers in the Thirteen Colonies were becoming increasingly discontented about aspects of British rule. Above all, they resented the taxes and duties that the British put on to the goods they traded. They felt that if the colonies paid taxes, they should be represented in Parliament. King George refused and the discontent increased. By the 1770s a number of rich and powerful American colonists were convinced that the only way that America would be ruled fairly would be if it ruled itself. The result of this view was the American Revolution, which began in 1776 and resulted in the defeat of the British in 1783. The Thirteen Colonies became the United States of America.

The British did not leave North America, however. They still ruled Upper Canada (modern Ontario) and Lower Canada (modern Quebec). Generally, relations between the British government and the settlers in British North America were reasonably good in the early 1800s.

In 1837-8 some settlers in Upper and Lower Canada rebelled against British rule. The rebellion was not large in scale, and it was quickly defeated, but it had important results. The British government appointed the Earl of Durham to investigate the reasons for the revolts and to suggest ways to make the situation better. After the investigation, the Earl produced a document that became known as The Durham Report. He found that the settlers were upset that, although they had their own Assemblies (Parliaments), the British Governor and his Legislative Council could ignore them. The Governor could only be ordered to take action by Parliament in London and the Canadians did not have MPs in London.

As a result of the report, the British gave the settlers in Canada what they wanted - effectively self-rule, with the union of Upper and Lower Canada in 1840. The British were anxious that Canada should stay friendly to the British empire and not become part of the USA. Canada's timber and shipbuilding industries were important. So were naval bases like the one at Halifax in Nova Scotia. The British learnt the lesson of 1776 and generally gave in to the settlers on the question of letting them rule themselves. This was a noticeable contrast with their attitudes to India and South Africa.

British relations with the USA remained reasonably good, but with tense moments. There was a war between Britain and the USA in 1812. Another major cause of tension was the issue of runaway slaves. Slavery remained in the USA until 1865, but was abolished in the British empire in 1833. Runaway slaves often tried to make their way to Canada (see case study 5). In the 1840s there was huge tension between Canada and the USA over the case of a particular runaway.

There were no further rebellions against British rule in North America, although there were attacks by Irish Fenians in the 1850s and 1860s. Fenians wanted Ireland to gain freedom from the British empire. They had a lot of support among Americans who were descended from Irish emigrants. They launched a number of attacks on British-ruled Canada, although these were not serious threats.

In 1867 the territories of eastern and western Canada came together to form the Canadian Federation, which is the present-day state of Canada. There were disputes between the Canadians and the British of course. However, the majority of Canadians supported the position of Canada as an independent Dominion within the British empire. Canadians developed close links with the USA, but calls for a union with the United States never came to anything.
Overall, Britain profited from its treatment of the Canadian settlers. When Britain faced its greatest threats in the First and Second World Wars, Canada provided troops and supplies and played a key role in the war effort.