The Canadian breed of horse invokes a fascinating chapter of North American history and as such it is now a heritage breed and the national horse of Canada. The aims of this study were to determine the level of genetic diversity in the Canadian, investigate the possible foundation breeds and the role it had in the development of the US horse breeds, such as Morgan Horse. We tested a total of 981 horses by using 15 microsatellite markers. We found that Canadian horses have high values of genetic diversity indices and show no evidence of a serious loss of genetic diversity and the inbreeding coefficient was not significantly different from zero. Belgian, Percheron, Breton and Dales Pony, unlike the light French horses, may have common ancestries with the Canadian and could be important founders. However, the Shire and Clydesdale influenced the Canadian to a lesser extent than French and Belgian draft breeds. Furthermore, our finding indicated that there was no evidence of a clear relationship between Canadian and Oriental or Iberian breeds. Also, the Canadian likely contributed to the early development of the Morgan. Finally, these findings support the ancient legends of the Canadian Horse as North America’s first equine breed and the foundation bloodstock to many American breeds and may help in the management and breeding program of this outstanding breed in North America.