Macpherson emigrated in 1835 from Scotland to Montreal, where he amassed a large fortune in shipping. He moved to Toronto in 1853 and obtained a contract to build a railway line in Canada West (now in Ontario) from Toronto to Sarnia (later part of the Grand Trunk Railway from Toronto to Montreal). He was elected member of the provincial legislative council for Saugeen in 1864, and, when the Dominion of Canada was created in 1867, he was appointed to the Senate. In 1871 he vied with Sir Hugh Allan for a charter to build the Canadian Pacific Railway. As head of the Interoceanic Railway Company, Macpherson sought government assistance; he refused to join Allan's company, which won the charter but subsequently forfeited the contract.

Macpherson was made speaker of the Senate in 1880 and minister without portfolio in the Conservative Cabinet. In 1883 he became minister of the interior, but he retired from that post in 1885, charged with incapacity in dealing with the Northwest Rebellion. Macpherson was knighted in 1884.