This water tower was originally built by the CPR at MacGregor and donated and moved to the Museum in 1987. It is the only water tower known to have been moved.

When rail lines were constructed through Manitoba, the railways had to construct water towers along the lines as steam locomotives needed water on a regular basis. These tanks were constructed at regular intervals along rail lines These towers held about 40,000 gallons (about 180,000 litres) of water and would enable the locomotives to fill quickly and frequently.

In most cases, water had to be pumped into the water towers from a lake or creek.  At times the railways had to construct significant facilities to supply water to the track side tanks. The MacGregor tower was gravity filled from Jacksons Lake, seven miles south of Sidney, some 15 miles from MacGregor. In other cases, dams were built on creeks or rivers to assure the railway of an adequate supply.

The tower is 54 feet high and consists of two separate structures. The 40,000 gallon inner tub is made of 3″ thick cedar and is supported by 16′ square timbers, 22′ high in the air. The height provides the gravity pressure needed to fill the locomotives.

The outer shell, which is not attached to the tub, simply serves as an insulated cover for the water. By having a stove at the bottom of the building during the winter months, the outside shell would prevent the water from freezing. It was quite common that railway water towers in eastern Canada did not have the outer shell as winter weather was not as severe as in Western Canada. These outer shells were not often found on US railroads either as these roads were further south enjoying warmer winter weather.

CPR and CNR wooden water tower designs were quite similar. Apparently the CNoP, a predecessor to the CNR, and the CPR had a close relationship with each other when the CNoP first appeared as MacKenzie and Mann, owners of the CNoP, had been very reliable construction contractors for the CPR. They were able to borrow a number of building plans from the CPR which partially explains why CPR and CNR buildings in the west often appear quite similar.