The first private telephone system in British Columbia ran from the Dunsmuir Mine at Wellington to the dock at Departure Bay. The Nanaimo telephone Company was incorporated in 1890, and the first Telephone Exchange was located in the Cavalsky Store, with Laura Cavalsky acting as operator. From 1893 until 1908 it operated from the building on Commercial Street that later housed the Daily Free Press. The Nanaimo Telephone Company merged with B.C. Telephone, and from 1908 until 1960 the exchange was located at 76 Bastion Street. B.C. Telephone introduced the busy signal in Nanaimo in 1955, and direct dialing in 1957.
Originally these were two separate buildings. The taller building to the west was built prior to 1908, and was owned by the Knights of Pythias; B.C. Telephone opened its exchange here in 1908. In 1911, it was extended to the rear, and was renovated in 1926, with a new front façade. The smaller building to the east was originally built in 1926 as a garage, with a store above. They were later joined with an addition that now forms the main entry.
The B.C. Telephone Exchange building is a very good example of a vernacular Edwardian style commercial building and is significant as an early example of the adaptive reuse of buildings to suit corporate needs. The façade redevelopment modernized the building and projected a more utilitarian, progressive image, appropriate for a service provider, than the original elaborate façade.