In Ontario specifically, granting a separate school board to Catholics was a condition for the province's entry into Canadian confederation in 1867, due to the perceived imbalance between, at the time, the majority English Protestants and the minority French Catholics.

The historical Catholic - Protestant divide in then-Upper Canada needs to be put into context.

French Catholics had been struggling with discrimination in Canada since the fall of New France in 1759. When British authorities assumed power, they initially brought with them many of the anti-Catholic practices in place in Britain, as these laws had been in Britain since the Reformation. It was their hope and intention that English Protestant settlement could one day overwhelm, supplant and assimilate the local population.

Jesuits had evangelized among the native population since the 1600s, though their activities were in decline by the Seven Years War. No Jesuits were allowed to enter the colony after the fall of Quebec (Quebec at this time included much of southern and eastern Ontario) and the British suppressed the order there for decades. Catholics were also barred from entry to the highest political and administrative offices in the colony and could not run for election in the legislature. Minor, local administrative offices were still open to Catholics.

While Britain had deported the Acadians en masse from the Maritimes, allowing for English Protestant settlement in the vacated lands ... in Quebec, Britain found itself as new masters of a population of some 80,000 French Catholics and, with rising tensions in the Thirteen Colonies, believed that accommodating Quebec's language, religion and property rights was the best course. This was enshrined into law in the 1774 Quebec Act. As more Protestant, anglophone Loyalist migration moved into Canada after the American Revolution, this created inevitable tensions as the new settlers didn't want to live in a colony where the unfamiliar French civil code and Catholic faith had accommodations. The British were forced to divide Quebec in 1791 into Lower Canada (Quebec) where these rights remained intact, and Upper Canada (Ontario) where British laws and customs were paramount.

The anti-Catholic restrictions would only be eased after Britain passed the Catholic Emancipation Act in 1829. The English-speaking settlers who moved into Upper Canada since the 1780's were largely of a brand of Protestant stock -- Anabaptists, Methodists, Quakers, etc. -- that was anti-Catholic to begin with, and virulently so. And in Ontario, they were in the majority. When Irish-Catholic immigration ramped up in the 19th century, sectarian conflicts were inevitable -- with Belfast-like running street battles in the 1840s between Protestants and Catholics in Toronto, for example.

This was the environment the confederation fathers found themselves in, trying to somehow make an amenable union between two solitudes in the 1850s-1860s. Canada today is much more secular and French language rights remain.

While some provinces in modern times have entirely separated religion from the education equation and only divide the system into linguistic boards, making any changes to the Catholic separate school system in Ontario remains a political hot potato.