Selling Alaska to Canada--then part of the British Empire-- was never on the table, but to explain why requires walking though British-Russian relations in the mid-19th century as well as the status of Canada in 1867.

British-Russian relations can be broadly characterized as hostile, with Britain opposing Russian expansion west and south. In particular, it's worth pulling out the Crimean War. British, and more generally Western European, sentiments toward Russian expansionism had deteriorated since the Russo-Turkish and Russo-Persian wars, and there was anxiety that Russia would push further southeast--namely, that it would seize control of Constantinople--as well as Central Asia (the "Great Game," ultimately tinged with the fear that Russia would, however improbably, seize India from the British).

Russia, in 1829, probably had to ability to capture the city, but likely did not have the ability to administrate it or contend with Western responses to the seizure. But this is the background that leads us to the Crimean War, where a coalition of the Ottoman Empire, France, Sardinia, and Britain defeated the Russian Empire. The proximate cause of the Crimean War was a religious dispute for Christianity in the Ottoman Empire, but the veil was rather thin, instead reflecting Western opposition to Russian expansionism, both real and imagined. The war was bloody, expensive, and embarrassing, a major factor precipitating the reforms of the 1860s and leading to the modernization of Russia over the ensuing decades to "catch up" to other world powers (this would never, however, be achieved). One key moment from the Crimean War is the defense of Petropavlovsk in the summer of 1854. Petropavlovsk is a port city on the Pacific coast of Kamchatka, just about as far as you can get from Petersburg. And while Russia had managed to defend the city, the real threat of British attacks from the east underscores the opposition to British control of Alaska.

Canada, before confederation in 1867, was composed of a variety of territories administrated by the British Empire; both British Columbia and the Northwest Territories border Alaska, and extending these colonies to Alaska was a real Russian fear. (Conversely, Americans expressed optimism during the purchase of Alaska that it would facilitate the seizure of British Columbia, creating a contiguous country).

Why sell it at all, though? As early as 1853, Russia had considered selling Alaska for several reasons: the lucrative fur trade had been drying up in recent decades, while the marginal location would be all but impossible to defend should Britain elect to invade. Manifest Destiny and the Californian Gold Rush also highlighted that the Americans may well just seize Alaska too, so selling it is surely preferable to simply losing it by whatever means. Nikolai Muravyov-Amursky, then celebrated governor-general of East Siberia, proposed that the sale would strengthen Russo-American relations while freeing efforts to focus on Asia. His proposal was followed by a more actionable offer by Konstantin Nikolaevich in the late 1850s; the question was tabled during the early 1860s given the American Civil War, but in 1866 William Seward again entered into negotiations with the diplomat Eduard von Steckl to secure the sale of Alaska, which progressed quickly, and in the spring of 1867 Alaska was successfully purchased by the United States.