On June 20, 1868, then Governor General Lord Monck issued a royal proclamation asking for Canadians to “celebrate the anniversary of the confederation.” However, the holiday was not established statutorily until 1879, when it was designated as Dominion Day, in reference to the designation of the country as a Dominion in the British North America Act, 1867. The holiday was initially not dominant in the national calendar; up to the early 20th century, Canadians thought themselves to be primarily British, being thus less interested in celebrating distinctly Canadian forms of patriotism. No official celebrations were therefore held until 1917 – the golden anniversary of Confederation – and then none again for a further decade.

As the anniversary of Confederation, Dominion Day, and later Canada Day, was the date set for a number of important events, such as the inauguration of the CBC’s cross-country television broadcast (1958), the flooding of the Saint Lawrence Seaway (1958), the first colour television transmission in Canada (1966), the inauguration of the Order of Canada (1967), and the establishment of “O Canada” as the country’s national anthem (1980). Other events fell on the same day coincidentally, such as the first day of the Battle of the Somme in 1916 – shortly after which the province of Newfoundland and Labrador recognized July 1 as Memorial Day to commemorate the Newfoundland Regiment’s heavy losses during the battle – and the enactment of the Chinese Immigration Act in 1923 – leading Chinese-Canadians to refer to July 1 as Humiliation Day and boycott Dominion Day celebrations, until the act was repealed in 1947.
Under the federal Holidays Act, Canada Day is observed on July 1 unless that date falls on a Sunday, in which case July 2 is the statutory holiday, although celebratory events generally take place on July 1 even though it is not the legal holiday. If it falls on a Saturday, the following Monday is generally also a day off for those businesses ordinarily closed on Saturdays.

Thank you Wikipedia.