Local music festivals have been operating in Canada since 1908 when the first Festival was organized in Edmonton, AB. It made such a positive impression that other prairie communities began holding their own festivals almost immediately. By 1953 every province had at least one operating festival, and at that point the Federation was officially established. The growth and success of these music festivals can be attributed to the dedication of volunteer organizers.

The first all-Canadian Music Competition was held in Canada's Centennial Year (1967) with the finals being held in Saint John, New Brunswick. The National Centennial Committee, in conjunction with provincial governments, funded this competition. The Federation of Canadian Music Festivals, founded in 1949, was primarily responsible for the organization and administration.

In 1972 the National Festival was instituted on an annual basis, with final competitions being held in early September at the Canadian National Exhibition in Toronto.

In 1973, CIBC became the Festival's corporate sponsor ... a relationship that was to last for 24 years, and it was much appreciated!

In 1981 it was decided that the National Festival would be held in a different province each year.

Starting in 1998, with the end of CIBC sponsorship, the Federation entered new partnering relationships with cities, towns, companies, corporate sponsors and interested parties so that the National Festival could continue on an annual basis. These new relationships continue to be forged today.

The National Festival Trust Fund was also established, to build for the future.