It would be a grave error to give credence to France's policy not to intervene in the colonial war. Its primary interest remains to weaken British power anywhere it can, and nothing would suit its designs better than to play a part in the loss of Britain's colonies in America. This may even be the best time to win back Canada. The time is riper now than it may be in the next three hundred years.

For a certain time, France's intervention raised high hopes among the French-speaking population in Canada. Many Canadians believed they were on the brink of "getting rid of the English," but France had definitively renounced Canada.

In truth, France saw the social turmoil and Revolutionary War in America as an opportunity to take its revenge and strike a serious blow to weaken Great Britain for a long time to come. In 1803, Napoleon pursued the same objectives by selling the Louisiana Territory to the Americans. On the diplomatic front, Louis XVI recognized American Independence on December 17, 1777. France even signed a treaty with the young American republic in 1778: the Treaty of Alliance, Eventual and Defensive, which was signed on February 6, 1778, and ratified by Congress on May 4. Although the treaty was originally written in French, the plenipotentiaries signed the 16 articles "in both the French and English languages." In this treaty, France pledged not to undertake any conquests for itself in America. In a secret letter to his ambassador to Philadelphia (then the capital of the United States), Minister Vergennes elaborated on France's motives:

Members of the American Congress have suggested that the king pledge to support the American conquest of Canada, Nova Scotia, and Florida, and there is reason to believe this plan is of the utmost importance to Congress, but the king feels that the possession of these three lands—or at least of Canada—by England could serve as a useful point of concern and caution for the Americans, which would increase their dependence on the friendship and alliance of the king, and it is not in his interest to destroy it. As such, His Majesty feels that he must not make any commitments regarding the conquest in question.

The objective was clear: Canada had to remain a British colony to serve as a permanent threat close to the United States, which would force it to honour its alliance and enable France to fully benefit from its political and military assistance, notably by grabbing its share of all the trade that Great Britain stood to lose with American independence. This also meant that, with its secret policy of playing both sides, France could prevent the Americans from seizing Canada. In short, France acted like any other country and favoured the needs of its own state over all other considerations.

Obviously, the British were greatly concerned by France's return to the scene in North America. Even the Amerindians of Canada demonstrated a certain satisfaction with the return of the French. In January 1780, General Frederick Haldimand, then governor general of Canada, wrote that the friendly relations between natives and Great Britain were "declining every day, particularly after the Americans allied themselves with the French with whom they had a fervent, steadfast attachment." In fact, the French worked hard to rally the Amerindians to the American cause by reassuming their former role of "protector" and "purveyor" from the era of New France. However, the Americans were far from interested in forging alliances with Indians, instead of planning on exterminating them and appropriating their land.

However, the high cost of the war plunged France into a precarious financial situation and accelerated the crisis of the monarchy, which paid very dearly for its revenge on the "Perfidious Albion:" Louis XIV had to call the Estates-General to reform taxes, which sparked the French Revolution (1789) and led to his decapitation in 1793. America's debt to France, which totaled some 35 millions francs, cast a shadow on relations between the two countries.

Thomas Jefferson unilaterally declared America an independent nation (see Declaration of Independence). However, for their independence to be truly recognized, the Americans had to go to war against their former ruler. The conflict between Great Britain and its rebel colonies continued until 1781. The decisive turning point in the war did not occur until France entered the war alongside the American revolutionaries. And it was not until the Treaty of Versailles in 1783 that the new state was officially recognized.

Despite their persistent urging of both English and French-speaking Canadians, the American revolutionists remained very disappointed by the paucity of support they offered. The inhabitants of Québec and Nova Scotia stayed true to the British Crown. For one, French speakers had just been granted valuable concessions from the British government, and the English speakers in Nova Scotia had only just recently arrived from Great Britain and still considered themselves English citizens. As for those living more or less legally in Newfoundland—at the time people were officially prohibited from settling on the island—they were too far removed from the American Revolution and patriotism to consider offering any kind of support.

Inhabitants of New England were divided between those who supported independence — Patriots or Republicans — and those who wished to remain British — Loyalists (or Royalists). The sense of belonging to America had not yet developed to the point of rallying one and all. A number of terms were used to refer to the antagonists in the American colonies: Roundheads or Puritans (for their strict religious beliefs) who were associated with the Whigs in their fight against the Monarchists, who were associated with the Tories. Today monarchists are referred to as Loyalists in the United States, but in Canada, the expression United Empire Loyalists has long been used.

The revolution began to look like a veritable civil war between the two opposing camps. Republicans saw Loyalists as traitors to the American cause. This explains why Loyalists were victims of physical violence, political discrimination, confiscation, and banishment. However, the Loyalists were not without reproach, as they too committed atrocities against the Republicans. All those opposed to the new order of government lost their civil rights and were driven from their homes and land. The States (then colonies) adopted a policy encouraging the confiscation of Loyalist goods — land, homes, livestock, merchandise, etc. — which was passed by Congress in November 1777. This policy fattened public coffers by several million dollars and helped to partially defray the costs of war. Certain Loyalists were lynched. Incidentally, the verb to lynch comes from the Lynch Law of 1837, a process of summary justice attributed to Charles Lynch, a Virginia plantation owner and patriot during the Revolutionary War who led a court and condemned opponents of independence to death by hanging.

Driven by persecution and their allegiance to the Crown, great numbers of Loyalists fled to safety behind British lines. Many Loyalists joined the ranks of various militias such as Butler's Rangers, Roger's Rangers, Jessup' Corps, King's Royal Regiment of New York, etc. In all, some 50 Loyalist regiments fought during the war. From a rather simplistic perspective, Loyalists may be described as belonging to specific categories of citizens: administrators, pastors of the Anglican Church, Legalists with ties to the British Parliament, rich plantation owners, merchants, toadies to the royal family, etc., whereas the Patriots or Republicans were mostly common folk, farmers, workers, craftspeople, etc. In truth, the breakdown was not so simple, as some rich plantation owners also took up the Republican cause, while some rural folk rallied to the Loyalists. Then, the British ultimately lost the war and were no longer able to protect the Loyalists. The policy of discrimination against Loyalists resulted in a redistribution of land and, later, a mass exodus to Canada (i.e., Nova Scotia and the province of Québec).

Before the American Revolution, the number of Germans in America was estimated at some 200,000, while the number of Scotch-Irish totalled around 250,000. Due to religious persecution in France, thousands of Huguenots had emigrated to the English colonies of America because in theory they were barred from New France; one of the first censuses held after the American Revolution revealed the presence of over 100,000 Americans of Huguenot (i.e., French) origin. Certain historians believe that the exclusion of the Huguenots from Canada is one reason for the weak demographic expansion of the French, because the number of Huguenots in the Thirteen Colonies was much higher than the number of colonists sent to Canada during the entire French Regime (10,000 to 13,000 maximum). As for the Africans, they represented one-fifth of the American population: in the 1770s, more than one in five Americans was black. Although the population was heterogeneous at the dawn of Independence, the language and institutions had already been standardized, but American society was far from the egalitarian environment of Canada.

The Thirteen Colonies were divided into four colonies in the north, four in the centre, and five in the south.

The northern colonies included New Hampshire (1663), Massachusetts (1620), Rhode Island (1663), and Connecticut (1662). These were mainly populated by Puritans and dissidents with rigorous, often intolerant religious beliefs. Farming here was less developed than maritime trade (molasses, rum, slaves), handcrafts (pottery, goldsmithing), and urban activities (Boston). These colonies gave rise to relatively theocratic local governments.

The central colonies included New York (1663), New Jersey (1663), Pennsylvania (1681), and Delaware (1663). These regions favoured agriculture, livestock production, fishing, and trade and boasted the greatest ethnic and religious diversity, and as a result, the highest overall tolerance. Here, political and economic life was mainly organized around two urban centres: New York and Philadelphia.

The southern colonies included Maryland (1663), Virginia (1620), the two Carolinas (1663), and Georgia (1662). Political and economic life in this region was dominated by an aristocracy that ran plantations (tobacco, corn, and cotton) using slaves imported as early as 1618

The name Eastern Townships appears misleading, given that they are located in the western portion of the province of Québec, but it should be noted that at the time they were situated to the east of the "upper country" (Ontario), and were so called to distinguish them from Upper Canada's Western Townships.

It was also Alured Clarke who named most of the counties of Lower Canada (a total of 21, plus four districts) after those in the motherland (Buckingham, Bedford, Dorchester, Devon, Effingham, Huntingdon, Kent, Leinster, Northumberland, Surrey, Warwick, York, etc.), leaving a few French names such as Gaspé (an Amerindian place name), Montréal, Saint-Maurice, Orléans and Québec. If he could not successfully assimilate his French-Canadian subjects, the Lieutenant-Governor was bound and determined to anglicize, at the very least, the topographic map of the colony.

Three decades later, as of 1820, some 5,000 British, 3,000 Irish, and several hundred Scottish immigrants (who settled in Scotstown and Stornoway) swelled the ranks of the original Loyalist settlers in the Eastern Townships. The French term Estrie, suggested by Sherbrooke historian Maurice O'Bready in 1940, was officially adopted in 1981 by the Québec government when the province's administrative regions were created. Since then, the two denominations (Eastern Townships and Estrie) coexist, but the first denotes the tourist region; meanwhile the other is the administrative region.

Overall, approximately 6,000 United Empire Loyalists settled along the banks of the St. Lawrence River, from Lake Saint-François to Lake Ontario; on the shores of Lake Ontario itself, including the Bay of Quinte; in the vicinity of the town of Niagara, then called Newark; and along a portion of the Detroit River. The English-language settlement of western Québec—first known as the "upper country", then Upper Canada, and finally Ontario—had begun. In their quest for a compromise, the authorities ultimately set aside a separate district for these English speakers so that they could put in place a British common-law system, while allowing the French population to retain its own civil law code.

However, some of the Loyalists who had settled in the St. Lawrence Lowlands resented not only having to obey French law, but also being forced to answer to French-speaking seigneurs (even though one-quarter of all seigneuries belonged to English speakers). The situation was not always simple, and tensions flared further when the Loyalists added the establishment of Protestant schools and churches to their list of demands. In addition, the Loyalists had become accustomed to self-government in the Thirteen Colonies, and there was no elected assembly in the Province of Québec. The Loyalists decried the colony's lack of a House of Assembly and the fact that the decision makers were not elected officials. Although the authorities yielded to the demands of the new settlers, they nonetheless submitted them to the will of the French Catholic majority. But the Loyalists and other English speakers exerted increasing pressure on the government of London to reform the administration of the colony in their favour, and finally, in 1791, Québec was divided into Lower Canada in the east and Upper Canada in the west.

As of 1784, another 500 Loyalists, many of them soldiers discharged from the King's Rangers, settled on St. John Island. The following year, Loyalists founded Summerside, which to this day is the island's second largest city. Along with Irish and Scottish settlers, they witnessed the growth of the colony's modest population and its increasing prosperity, thanks to the timber trade, naval construction, fishing, and farming. The most commonly spoken languages were English, Scottish, Irish, and French.

In 1798, the name St. John Island was replaced with Prince Edward Island in honour of Prince Edward, Duke of Kent (1767–1820), son of King George III and father of Queen Victoria. At the time, the Prince was commander of the British troops in Halifax.