CSL had humble beginnings in Canada East in 1845, operating river boats on the Saint Lawrence River in general commerce. The Richelieu Navigation Company was established by Jacques-Félix Sincennes and other Montreal businessmen. The company was amalgamated with Sir Hugh Allan's Canadian Navigation Company, to form the Richelieu and Ontario Navigation Company, in 1875. Subsequent growth over the years was tied to expansion of the canal system on the upper St. Lawrence River (the precursor to the Saint Lawrence Seaway), and to a new Welland Canal connecting to the upper Great Lakes.

The year of 1911 saw the merger of Richelieu and Ontario Navigation Company with James Playfair's Northern Navigation Company. In 1911 the Richelieu And Ontario Navigation Co. were allowed to increase their capital stock. At a special meeting of shareholders held on June 26, it was decided to increase the stock from $5,000,0000 to $10,000,000, with the distribution of new shares to be issued by the directors. The majority of the shares of the Northern Navigation Co. Ltd. and of the Inland Lines Ltd. were purchased and paid for with fully paid up stock of the R. And O Navigation Co. Five additional directors were added to the reorganized Richelieu And Ontario Navigation Co. James Playfair became the vice president and managing director.^[The companies were allowed to continue operating under their respective names from that time.

In 1912 the Richelieu and Ontatio Navigation Co. took over the Niagara Navigation Company, covering operation of the steamboats Cayuga, Chicora, Chippewa, Carona and Ongiara, operating under the banner of the Niagara-Toronto Division and the Hamilton Division including the Hamilton Steamboat Company's steamships Macassa and Modjeska were also acquired along with the Turbinia, formerly owned by the Turbine Steamship Co. Both companies had been absorbed into the Niagara Navigation Company. From that time, on, the new company advertised their services via the tag line "Niagara To The Sea" in brochures, indicating their coverage of the passenger trades from the Niagara to the St. Lawrence regions.

The launching of the Northern Navigation Noronic was set for June 2, 1913. A large number of Richelieu and Ontario Navigation Co.'s directors and guests went from Sarnia, Ontario on the Hamonic to witness the event. Shortly after the Hamonic entered Lake Superior, the managing director James Playfair was notified of the passing of his father John S. Playfair and he was transferred mid-lake to an R and O freighter, about 80 miles (130 km) from Sault Ste. Marie and returned to Toronto by special train. The christening of the Noronic was performed by Mrs. E. Bristol, the wife of another director, instead of by Mrs. Playfair, as at first intended.

A special meeting of the shareholders of Richelieu And Ontario Navigation Co. was held in the company's office in Montreal, on June 19, 1913, to ratify an agreement of sale of the company's assets to a new company formed for that purpose. The new company was to be called Canada Transportation Lines Limited and would include acquisition of: Richelieu And Ontario Navigation Company Ltd.; Inland Lines Ltd.; Northern Navigation Co. Ltd,; St. Lawrence River Steamboat Co. Ltd.; Richelieu And Ontario Navigation Co. of the United States.; Quebec Steamship Co. Ltd.; Canada Interlake Line, Ltd.; Ontario and Quebec Navigation Co., Ltd.; Merchants' Montreal Line; SS Haddington and Thousand Island Steamboat Co., Ltd.

In the early part of December it was announced that Canada Transportation Lines would be renamed Canada Steamship Lines Limited.

CSL's growth through the industrial booms of both world wars was largely tied to the increasing importance of the steel industry in Ontario, where mills were built, or soon to be built, in Sault Ste. Marie, Hamilton, and Nanticoke. CSL also tapped into the last of the remaining coal traffic from Pennsylvania across the Great Lakes to railways in Canada. Following railway dieselization, subsequent coal traffic would be moved by CSL to large fossil-fuel burning electrical power plants.

In addition to its cargo shipping, the company expanded its overnight passenger shipping traffic as well. Most notably the popular Hamonic, Huronic and Noronic of the old Niagara Navigation Company 1902–1912 lineage (roughly 6,000 GRT and 350 foot a piece). Their last passenger ships, however, came out in 1928. They were the cruise ships St. Lawrence, Quebec and Tadoussac; all built at the Davie Shipbuilding and Repair Co. in Lauzon, P.Q. "St. Lawrence" was built in 1927, and Quebec and Tadoussac were identical sister ships of 1928. They ran together with Richelieu, the former Narraganset (1913) of Long Island Sound, which was purchased by CSL about the same time the other three were built by Davie. The three ships were all 350 feet in length, had a breadth of 70 feet, and were 8,000 tones GRT; Richelieu was slightly smaller. They sailed on the St Lawrence and Saguenay Rivers, departing from Montreal and stopping at Quebec City, Murray Bay and Tadoussac (where the company owned hotels) and up the Saguenay to Bagotville (La Baie). Richelieu was able to go on to Chicoutimi because of her shallower draft. Quebec burned at Tadoussac in 1950 with the loss of seven lives, and the other three ships continued on the route until 1965. After the opening of the St. Lawrence Seaway, Tadoussac's bow was modified to make her able to make a few trips into Lake Ontario, and even made occasional trips through the updated Welland Canal to Buffalo and Detroit in the early 1960s. With the Yarmouth Castle fire in 1965 near the Bahamas, stricter coast guard safety regulations in the form of the new international SOLAS program put an end to the three ship's long careers. The Richelieu, St. Lawrence, and Tadoussac were all sold to Joseph de Smedt of Belgium. Tadoussac was renamed Passenger No. 2 and Richelieu, Passenger No. 3. Passenger No. 2 and the old St. Lawrence were eventually scrapped after serving as accommodation ships in the early 1970s, while Passenger No. 3 was sold to Danish interests and was renamed St. Lawrence 2 and served as an accommodation ship for Eastern Bloc refugees before being sold to Arab interests in 1975 as workers' barracks in Sharjah, UAE, where she became half-buried in sand by 1981, and scrapped down by 1990. The earlier Hamonic had burned due to a dock side fire in 1945 at Point Edward and was later scrapped. Huronic had already been converted to carry only freight by 1944, was retired and scrapped in 1950.

CSL was found responsible for the disastrous September 1949 fire and destruction of its ship the SS Noronic in Toronto Harbour. The fire swept through the ship killing 118 to 139 passengers (many as they slept), but no members of the crew. Inadequate alarm, passenger evacuation plans, and neglected extinguishing systems are found at fault. The captain was suspended one year for abandoning the ship before ensuring crew and passengers were safe. She was demolished in 1950.

No new passenger ships were built by this line or most other shipping lines due to the declining passenger ferry trade. To date, and despite something of a resurgence in passenger traffic on the Great Lakes in recent years, CSL has no known plans for a cruise ship service on or off of the Great Lakes.