Colin Macdonald was a merchant in Panmure Island and Georgetown, Prince Edward Island. He was born on the Eilean Shona, Inverness, Scotland, on 10 December 1781 to Andrew Macdonald (ca. 1752-1833) and Isabella Macdonald (ca. 1760-1840) of the Island of Canna, daughter of Ronald of Borrodale. He was one of 15 children. Colin never married.

Unlike his brothers, Hugh and Angus, Colin originally pursued a military career rather than become involved in the family business. He was first appointed Lieutenant of temporary rank and later Ensign in the 104th Regiment. It was in this capacity that he first arrived in Prince Edward Island as part of the Regiment’s Recruiting Service some time prior to 1804. Because of ill health, Colin was forced to return to England on a sick leave of absence in 1810, after which he was then transferred to the 72nd Regiment of Foot as a Lieutenant. He eventually had to go on sick leave again and retired to half pay. By 1818, he had taken up permanent residence in Prince Edward Island although he frequently traveled back to England, his last trip taking place in 1859. Many of Colin's extant papers reflect his attempts to receive his half pay.

While stationed in Prince Edward Island, Colin acted as agent for his father Andrew and negotiated the purchase of Panmure and Boughton Islands from Sir James Montgomery. It appears that a deal was reached in 1804 although conflicts with the Montgomerys over the real nature of this purchase plagued Andrew for many years. Andrew, Isabella, and most of their children arrived at Panmure Island some time between May and November 1806.

After retiring from the army, Colin appears to have become involved in the family mercantile business and constructed several buildings in Georgetown, two of which were still standing in 2012: the family home on Water Street and a house on Kent Street which was originally one of Colin’s warehouses. Although living with Hugh and his family along with his sisters Catherine and Matilda in Panmure Island, in 1836 Colin arranged for the construction of the large home on Water Street which was still in Macdonald hands in 2012. By the early 1840s, Colin, Hugh, and family moved permanently to the house in Georgetown. Colin died there on 11 May 1860. In his will, Colin left the house in Georgetown and his other properties to his three nephews Andrew Archibald, Archibald John, and Augustine "Austin" Colin, the sons of Hugh.