Smith McKay was born on March 21, 1817, in Pictou, Nova Scotia.

He was a merchant, sealing captain, mineralogist, and politician. He arrived in St. John’s, Newfoundland, in 1844, and in 1850, he became a partner in McKay & McKenzie, a fishery supply and export business. In 1852, they sent vessels to the seal-fishery and in 1853, McKay acted as master of the sealing vessel Clara and captain of the schooner Snipe which brought back oil from humpback whales. The partnership of McKay and McKenzie dissolved and Daniel J. Henderson became McKay’s new partner in 1855, becoming McKay & Henderson. McKay became interested in mineral exploration. In 1857, he conducted a survey on the northwest shore of Notre Dame Bay and discovered copper at Tilt Cove, the first considerable discovery in Newfoundland. In 1864, he formed a partnership with Charles James Fox Bennett under the name Union Copper Mine. McKay was the manager of the mine and was also involved in other mining ventures. By 1880, Newfoundland had become the 6th largest copper producer in the world. By 1877 trouble began to develop between McKay and Bennett in connection with the operation of the mine at Tilt Cove which resulted in Bennet buying all McKay's mine interests. In 1883, McKay was appointed to the politically sensitive position of chairman of the Board of Works.

In 1869, he married Susan Locke (1846–1890). He died on December 8, 1889, in St. John’s, Newfoundland.