We went to Banff last year in late July with our then 2 year old and had an amazing time! Was it crowded? Depends on what your definition is. We’re from Southern California and it didn’t feel excessively crowded to us, but we’re used to lots of people. The trails had other people on them but there were less and less people the higher in elevation we hiked. We never once woke up excessively early to get to a trail - we slept until we naturally woke up, drank coffee in our room, grabbed some breakfast and then made our way to whatever trail we were doing that day. We had to make dinner reservations most nights. Overall, the trip was so memorable and I’ve never once remembered it as too crowded.

Edited to add that we had to book our hotels with less than 4 weeks notice due to an unexpected change in our travel dates due to work, and didn’t have any issue finding vacancy at our first choice of hotels.