Born in Calgary, Alberta, and raised on a farm in Erickson, near Creston, British Columbia, his childhood was somewhat isolated. After working as a farm hand, a bank clerk, and a park ranger, Birney went on to college to study chemical engineering but graduated with a degree in English. He studied at the University of British Columbia, University of Toronto, University of California, Berkeley and University of London.
During his year in Toronto he became a Marxist–Leninist. Through a brief and quickly annulled marriage to Sylvia Johnston, he was introduced to Trotskyism. In the 1930s he was an active Trotskyist in Canada and Britain and was the leading figure in the Socialist Workers League but disagreed with the Trotskyist position on World War II and left the movement.
During the conflict, he served as a personnel officer in the Canadian Army (an experiences that he used in his 1949 novel, Turvey).
In 1946, Birney began teaching at the University of British Columbia, "where he founded and directed the first Canadian creative writing programme." His work led to the establishment of Canada's first Department of Creative Writing at UBC.
In 1995, Birney died of a heart attack.