Galt emigrated from England to Sherbrooke, Lower Canada (later Canada East, now Quebec), in 1835 and worked for the British American Land Company, serving as a commissioner from 1844 to 1855. In this role he built up an understanding with the eastern townships and the English-speaking minority of Canada East. He gave active support to the promotion of the St. Lawrence and Atlantic and the Grand Trunk railways. He entered politics in 1849 as an independent member for Sherbrooke County in the legislature of the united province of Canada. Reflecting the opinion of his English-speaking constituents, he did not support the bill compensating citizens for losses incurred by French-Canadians during the 1837 rebellion. He favoured annexation by the United States in order to achieve Anglo-Saxon ascendancy over the French Roman Catholic majority in Canada East and, more overtly, to promote economic growth. He resigned from the legislature in 1850 but was reelected for Sherbrooke town in 1853; he maintained that seat and remained leader of the English-speaking minority until 1872.

In 1858 Galt declined a ministry in the brief George Brown–Antoine-Aimé Dorion administration, but that same year he became minister of finance in the John Macdonald (Macdonald, Sir John)–George-Étienne Cartier government on condition that federation of British North American provinces be government policy. As finance minister (1858–62, 1864–67) Galt adopted a policy of protection for Canadian manufacturers. He supported the Macdonald–Brown–Cartier coalition, which advocated federation (1864), and worked on the necessary negotiations at the Charlottetown, P.E.I.; Quebec; and Westminster conferences; he was knighted for his services in 1869.

Following the creation of the Dominion of Canada (1867), Galt was first finance minister of the Dominion government, but he resigned after a disagreement with Macdonald. He declined further Cabinet office but gave intermittent support to the government until retiring from Parliament in 1872. He then began to advocate Canadian independence as an ultimate goal. He served as first Canadian high commissioner in London from 1880 to 1883, after which he retired from public life.