The CCF was an alliance of agrarian and labor interests. The transition to the NDP occurred in the 1960s which strengthened institutional ties with unions but also tried to become more of a party for "liberally minded Canadians." The hope was it would displace the Liberals but that never occurred.
There was also already an older Canadian political party called the Labour Party that had been active in the 1910s and 1920s but failed to break through to relevance and eventually disappeared in most provinces before the CCF was founded. Only the branch in Alberta survived long enough to merge into the provincial CCF. The CCF and NDP clearly wanted a new brand.
By the 1960s, "Labour" (and other simple ideological descriptors) was out of fashion everywhere globally as a party name; it had a very pre-WWII feel, and, while it continued to be used by parties that had established brands, new parties called "Labour" weren't really being founded anywhere. By contrast, "New Democratic Party" fits well with the generic, palatable-to-everyone naming strategy of political parties founded in the second half of the 20th century.
