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Magnus was born on June 21, 1911 to Gudmundur and Margret Eliason in North Laufholi, in the Arnes district in Manitoba. He was born with only 10 percent normal vision. In the early 1930's, Magnus and his brothers Helgi and Frank headed to the Peace River district of northern British Columbia and Alberta, to homestead in the Icelandic settlement of Sunnybrook near Dawson Creek, BC.
Greatly influenced by his parents’ liberal political views, Eliason became involved in politics and was a founding member and organizer of the Co-operative Commonwealth Foundation (CCF), forerunner of the New Democratic Party of Canada (NDP). He ran for the CCF nomination in Peace River in the 1937 provincial election, but was defeated. After a number of unsuccessful campaigns for public office for both the CCF and the NDP, Eliason was elected in 1968 to Winnipeg City Council as Councillor for Ward 2. Except for the years 1971 to 1974 and 1977 to 1980, he served on council until his retirement in 1989. Of his time in civic politics, Eliason was most satisfied by his work on low-income housing and the preservation of heritage buildings. In the latter capacity, he was given a Distinguished Service Award by Heritage Winnipeg.
Eliason was passionate about his Icelandic heritage. He worked tirelessly both in the Icelandic community and for the Scandinavian Centre. He has served as president and for several years undertook fundraising efforts for the Scandinavian Centre. In 2003 the President of Iceland invested Magnus with Iceland's highest honour, the Order of the Falcon. Among many other organizations, Magnus was a member of Heritage Winnipeg and the Council of Canadians. He died on November 11, 2005.