It is named for Lieutenant-Colonel John By, who supervised the construction of the Rideau Canal. The winding two-lane road had a speed limit of 60 km/h (37 mph) for its entire length, until in 2022 the stretch from Bronson Avenue to Daly Avenue was reduced to 40 km/h (25 mph).[2]
For many decades the area east of the canal had held Ottawa's main rail lines connecting to the Ottawa Union Station near the northern end of the canal. In 1966, rail service was controversially relocated to the new Ottawa Station about 3 km (1.9 mi) southeast in an industrial area in the east end of the city as part of an urban renewal plan, leaving the area on the eastern bank of the canal open for development. The Colonel By Drive was built in part on this newly-available rail right-of-way.[3] The Queen Elizabeth Driveway, another scenic Canadian parkway, already served the same purpose on the other side of the canal.
Historically, like other National Capital Commission parkways, Colonel By Drive has been periodically closed to motor vehicle traffic and reserved for active transportation use. In 2021, the stretch between Canal Woods Terrace and Daly Avenue was closed from July 2 to September 6 for this reason.[4] However, as of 2024, Colonel By Drive is not included in this active transportation program.[5]