The canal was part of a scheme by English/Austrian entrepreneur William Adolf Baillie Grohman in the 1880s to breach Canal Flats and divert water from the upper Kootenay River into the Columbia system, thereby sufficiently lowering the level of Kootenay Lake to reclaim the 48000 acres rich alluvial plain in the Creston area and open up a north-south navigational system from Golden to Montana.