Smith was born at Forres, Moray, Scotland and joined the Hudson's Bay Company [HBCo] in 1838. He attained the rank of chief factor in 1862 and was the company's land commissioner in Manitoba from 1870 to 1874. He was one of the principal financiers of the Canadian Pacific Railway (and drove the last spike of the CPR in 1885) and a major investor in the Bank of Montreal. He represented Selkirk, Manitoba in the House of Commons from 1871 to 1880, and was MP for Montreal West from 1887 until 1896 when he formally retired from politics.
He made a fortune, many times over, from investments in land, railways, and banking. He was knighted in 1886 and raised to the peerage as Baron Strathcona and Mount Royal in 1897. He was Canada's high commissioner to Great Britain from 1896 until 1913.
As High Commissioner, Lord Strathcona used his influence and his personal fortune to promote several imperial causes. He is possibly best known for equipping and maintaining the celebrated cavalry unit known as Lord Stathcona's Horse during the Boer War (1899-1902). He also promoted educational causes. He was a generous patron of McGill University in Montreal, he founded the Royal Victoria College for women, and was rector and chancellor of the University of Aberdeen.
Strathcona's philanthropy, educational interests and imperial enthusiasms converged in 1909 when he established the Strathcona Trust, an endowment intended to promote military drill and physical training in the public schools of Canada. The physical education curriculum in many provinces, including British Columbia, originated with programmes funded by the Strathcona Trust.
Lord Strathcona Elementary School in Vancouver is named after him.