Following the recommendations published in the Royal Commission on Chinese Immigration in 1885, the Chinese Immigration Act of 1885 was a Canadian Act of Parliament that placed a head tax of $50 on all Chinese immigrants coming to Canada. Assented on 20 July 1885, the intention of the Chinese Immigration Act was stated explicitly in its heading, reading "An Act to restrict and regulate Chinese immigration into Canada."
In the early 1880s during the building of the Canadian Pacific Railway, as many as 17,000 Chinese immigrants came to Canada to work as labourers. This was as a result of the cheap labour demand in the West. Major labour shortages in British Columbia and surrounding areas threatened the economic viability of the emerging Canada. Thus, as a way to bring the West economic efficiency, Chinese immigration was encouraged in the early 1880s. Furthermore, the Canadian Pacific Railway (CPR) was formed to physically unite Canada and required cheap labour to complete its construction. Founded in 1881, the CPR was completed on November 7, 1885 - "six years ahead of schedule - when the last spike was driven at Craigellachie, B.C." After its completion, the demand for Chinese immigration dropped dramatically and became dispensable.
Dissatisfaction with Chinese immigration grew and in 1885 a Royal Commission was appointed to obtain proof that restricting Chinese immigration would be in the best interests of the country. Prime Minister John A. McDonald originally refused to introduce prohibitive measures, but eventually yielded and appointed the commission. The commission was entitled Royal Commission on Chinese Immigration in 1885 and interviewed hundreds of people with the goal of understanding the majority's view on Chinese immigration.
The Commission was led by Joseph-Adolphe Chapleau and John Hamilton Gray who gathered testimony regarding Chinese immigration at public hearings across British Columbia and compared these testimonies to those gathered on the Pacific Coast of the United States. The testimonies of 51 people were submitted. Only 2 Chinese witnesses were consulted: two officials from the Chinese Consulate in San Francisco. Multiple viewpoints were reported, including some in favour of Chinese immigration on an economic efficieny scale. But, the overall consensus on the state of Chinese immigration was a vocalized demand for its restriction. Claims against the Chinese were slanderous and were found to have little evidence behind them. Despite this, the Commission recommended a moderate legislation against Chinese immigration and proposed a $10 head tax.