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Its basically a diplomacy / wealthy check for countries.
Basically, countries make agreements between themselves that say that a person with a passport from X country does not need a visa to visit Y country. This may be part of a trade agreement, part of a treaty, part of some larger agreement (For example, EU passports are good for any EU country because they are all part of the EU, thats included as part of countries being in the EU, not as part of an individual agreement.
So a country that has really good diplomacy might get into a lot of international agreements that let their passport enter countries without a Visa, even if all they do in the treaty is be a mediator for it. Switzerland is perhaps the most famous for this. Its not uncommon for Switzerland to be the neutral location where international treaties are negotiated, and in order to facilitate that, they get their passport to be accepted basically anywhere that wants access to those talks. So if Canada wants to be allowed into the Switzerland political arena (and they do) they need to make an agreement with Switzerland to let people visit without Visas.
The other side is money. Tourists from wealthy countries tend to spend a lot of money while on vacation, and so other countries generally want to provide access for those tourists to enter the country and spend all that money. So a country that has a relatively large wealth for individual peoples will often have a strong passport. Singapore does this really well, the Singapore passport is very very strong, largely because Singaporeans tend to have a lot of money to spend.
The third side is also money, but its more on the very wealthy / business side of money. Basically, everyone wants to sell to certain countries, with America being the poster child for this. Americans are famous for buying shitty quality goods at super expensive prices, and every country wants in on that. In order to facilitate that kind of trade, you need mid level executives / logistics people / ships etc to be able to go back and forth without needing to stop for visas all the time. So countries are happy to have Americans come into the country without a Visa, because they want some of those people to be importers.
None of these are on their own ofc. Relatively wealthy countries tend to also have a lot of diplomatic contact, and that means they often include visiting without a visa, even if they are not politically neutral. Several politically neutral countries have strong visas because they are Tax havens, and the very wealthy who use those countries to not pay taxes want to be able to travel freely.
Some countries are mass exporters, and the companies they export to want to be able to travel to that country, so they push the governments to make Visa agreements so they can more easily gain access to the low cost stuff from those countries to sell.