The area of Banff wasn’t originally a town until CPR set up camps to work on the railroad. The settlement was known by its CPR siding name for much of its early existence: Siding 29. The reasoning for the name “Siding 29” was simple: every 10 miles from Medicine Hat, the CPR would add a siding. Medicine Hat was known as Siding 1 and Laggan (Lake Louise) would be Siding 33. Banff just happened to be Siding 29.
In 1883, the Canadian Pacific Railroad completed the stretch of track through the Banff region and by the end of the year, it had gone as far as Laggan Station (Lake Louise). The original Banff station was constructed in the railway town of Siding 29 along the base of the Cascade Mountain. The town had 2 general stores, a lumber yard, butcher shop, and a hotel. A saloon would eventually be created in Siding 29 which would sell illegal bootleg whiskey[1].
While the Canadian Pacific Railway line was being constructed through the Banff region, a couple of off-duty railway workers – Frank McCabe and William McCardell – were out prospecting and they stumbled across what today is the Cave and Basin hot springs. Not long after this point, there were several ownership disputes over who owned the hot springs and these disputed made the existence of the hot springs known. The federal government resolved the disputes in 1885 by establishing National Reserve within a 10 square mile area of Sulphur Mountain. This was accomplished by passing an order in council (Canadian version of Executive Order in the US) that stated that the hot springs need to be set aside for “the sanitary advantage of the public”[1]. This reserve protected the area for 2 years before more formal legislation was created in what would eventually become Banff National Park.
After the creation of the nature reserve around the discovered hot springs, the town would move west about two miles. Siding 29 was deserted and the new townsite would be known as Banff, Alberta – the only town in the Banff valley that exists today[1].
References:
[1] Robinson, S. (1980). the natural and human history of banff national park: A REPORT ON THE NATURAL AND HUMAN HISTORY OF BANFF NATIONAL PARK. Parks Canada. http://parkscanadahistory.com/publications/banff/banff-natural-human-history.pdf (Original work published 1978)