The first large group of Icelanders arrived in Canada in 1873 and by 1875 had settled on the western shore of Lake Winnipeg. Their colony (which included present-day Gimli and Riverton, Man), was known as New Iceland, was self-governing, and had its own constitution. When the province of Manitoba was enlarged to include the District of Keewatin, the New Icelanders voted to join the province. Other groups of Icelanders later established settlements across the prairies and in British Columbia. Many moved to Winnipeg to enter trades and professions. The 1986 census listed 4,470 Icelanders living in Canada. Gimli has remained the focal point of Icelandic culture in Canada and is the site of annual Icelandic festivals, which began in 1889.

The Icelanders were among the most literate of Canada's early minority immigrants. Even the poorest families had libraries, however modest. The recitation and composition of poetry was an esteemed avocation, and at least two Icelandic-Canadian poets, Guttormur J. Guttormsson and Stephan G. Stephansson (1853-1927), achieved fame in Iceland. Eight of Stephansson's poems were set to music in ballad, bluegrass, and folk-rock styles by the Canadian musician Richard White in his 1985 album Sun Over Darkness Prevail.

Several folk poets have perpetuated in Canada the four-line philosophic or nature poems developed to a high level by the 'húsgangar' - an Icelandic custom which takes versifiers from house to house in a kind of competition to see whose poems are the best. The quatrains often were chanted to simple tunes. Several other folksong genres have survived in Canada. A few examples of the ancient rimur were collected (recorded) in the 1960s from an elderly male informant - Valdimar Jonsen - in Gimli. These long narratives sometimes comprise 50 to 60 quatrains, their stories describing the exploits of such Icelandic folk heroes as Fertram, Jómsvikingar, and Hjálmar. Again the quatrains are chanted to a simple, archaic tune. The texts are often couched in archaic language.

Later folksong genres are more developed musically and much shorter. These include love songs, drinking songs, shepherding songs, fishing songs, religious songs (sometimes satirical), and a host of casual ditties on a variety of topics. (Another Icelandic folk tale was the basis of Jack Behrens' opera The Lay of Thrym.) Few ballads have survived.

Many songs are of literary origin, so the usual distinction between 'folksong' and 'art song' is difficult to maintain. Piano and violin accompaniments add a further dimension of sophistication to folksong presentation. Accompaniment is almost a prerequisite for such locally composed songs as The Gimli Waltz. Arrangements of some Icelandic songs have been made by W.H. Anderson.

A 1962 survey by Kenneth Peacock of Icelandic settlement in Manitoba noted only one traditional instrument, the langspil, a narrow rectangular box about a metre long, fitted with two metal strings and frets. This instrument was made shortly after 1900 by a farmer south of Gimli. It is housed in the Canadian Museum of Civilization folk instrument collection, which also holds more than 270 Icelandic folksongs collected by Peacock in Yorkton, Winnipeg, Gimli, Arnes, and Arborg, Man, and by Magnus Einarsson in Manitoba and Saskatchewan.

Musicians of Icelandic origin or descent who have pursued careers in Canada include Omar Blondahl, Snjolaug Sigurdson, Frank Thorolfson (whose father Halldor was conductor of the Winnipeg Icelandic Choral Society), and Thelma Guttormson Wilson. Sveinbjörn Sveinbjörnsson (1847-1927), a composer of chamber and orchestral music and of the Icelandic national hymn, spent some years in Canada. His son, Thordur John William Swinburne (b Edinburgh 1891, d 1984), was a medical doctor and amateur composer in Canada after 1919.

Gunnsteinn Eyjolfsson (b Iceland 1866, d Riverton, Man, 1910), best known in the Icelandic community as a writer and essayist, also composed, learning through correspondence with various US musicians after he settled in New Iceland in 1876. He had 15 songs or choral works published in Sönglög (Winnipeg 1936). Jon Fridfinnsson (1865-1936) studied with Eyjolfsson and wrote many songs, and a cantata (text by the Icelandic poet David Stefansson) that was performed in Winnipeg by the Icelandic Male Voice Choir and Choral Society.

Steingrimur Kristjan Hall (b New Iceland 1877, d 1969?) settled in Winnipeg with his wife, the soprano Sigridur Hordal, and was organist at the First Icelandic Lutheran Church until ca 1936. He published three books (1924, 1949, and 1954) of Icelandic songs. Hjörtur Larusson (b Iceland 1874, d ?), a cornetist who moved to Canada in 1890, formed the Jubilee Band, a 19-member wind ensemble (15 members being Icelandic immigrants).

Bjorgvin Gudmundsson (b Iceland 1891, d there 1961) studied with Jónas Pálsson in Winnipeg, where he wrote the cantata Adveniat regnum tuum (1924-5). Sponsored by the Icelandic-Canadian community he studied at the RAM and wrote three more cantatas in Winnipeg in 1931 before returning to Iceland. While in Canada he also wrote the oratorio Fridur á jördu (Peace on Earth), which was premiered in Reykjavík in 1945. The musicologist-composer Hallgrimur Helgason (b Eyrarbakki, Iceland, 3 Nov 1914) lived 1966-74 in Regina, where he taught at the University of Regina and was deputy concertmaster of the Regina Symphony Orchestra and conductor of the Folksong Harmony Choir. Among his compositions written in Canada are a Sonata for solo violin, Sonata No. 2 for violin and piano, Piano Trio, and Quartet for flute, violin, cello and piano.

Jónas Pálsson (b Iceland 1875, d New Westminster, BC 1947) moved to Winnipeg in 1900 where he became one of the principal piano teachers and an organist-choirmaster. Among his works are Ten Songs (Tíu sönglög) (Östlund 1907).

The violinist Palmi Palmason (b Winnipeg 22 Feb 1909, d Toronto 13 Aug 1974) studied first with the violin builder and teacher Olafur Thorsteinsson in Husavick, Man, then with John Waterhouse in Winnipeg, and he was a member of the Winnipeg Symphony Orchestra. He taught his sister, the violinist Pearl Palmason (b Winnipeg 2 Oct 1915), who studied as well with Elie Spivak and Kathleen Parlow at the TCM. She became a member of the TSO in 1941, played principal second violin 1960-2, and was a member of the orchestra until 1981. She was also a member of the Hart House Orchestra and has performed as soloist in recital and in concert. She played with the COC orchestra 1981-5 and became concertmaster of the Oakville Symphony Orchestra in 1987. Other musicians of Icelandic origin in Canada include the Vancouver soprano and teacher Thora Thorsteinsson Smith, the Toronto teacher Alda Palsson, the choral conductor Ragnar H. Ragnar, the teacher Anna Sveinson Lowe, and the jazz pianist Bob Erlendson.

The Icelandic soprano Gudrun Simonar visited Canada and gave a recital in Winnipeg in the late 1950s. The Icelandic Singers, who first visited Canada in 1946, sang at Expo 67, where the MSO performed Jón Leifs' Iceland Overture, Opus 9 at the Scandinavian Gala.

The Lyric Arts Trio appeared at the 1973 ISCM festival in Reykjavik, and NMC performed in 1976 at the Nordic Music Days Festival in that city. Robert Aitken had appeared in Iceland 23 times by 1991 to give masterclasses in flute and composition.