Canada. Dept. of Finance : The Department of Finance as it is now called dates back to Confederation, even though some functions it performed already existed under various constitutional regimes. One example is the Inspector General who became the Minister of Finance in 1869.
At various times, the Department of Finance has included Treasury Board, the Comptroller of the Treasury, the Royal Canadian Mint, Income Tax Inspection, old age pensions and superannuation, and the Tariff Board.
At the time of Confederation, there was absolutely no need to reorganize the established system. The British North America Act maintained that, until the federal Parliament should make other provision, all legislation in force at the time of union would remain in effect. All provincial civil servants who performed duties not assigned exclusively to the provinces were to become employees of the Government of Canada. By virtue of this agreement, the provincial Department of Finance of United Canada became the nucleus of the new federal department, and the personnel in the Nova Scotia and New Brunswick departments continued to perform the same duties in the branch offices.
The first legislation affecting the Department of Finance enacted after Confederation was enacted in 1867. In many ways, it resembled the provincial legislation of 1864, but a number of major amendments had been made. The Deputy Minister of Marine and Fisheries and the Deputy Minister of Militia were added to the Board of Audit, which increased its membership to nine. All payments from the Treasury were to be made by cheque signed by the Receiver General and the Minister of Finance, but no cheque could be issued without a warrant of the Governor General in Council. No warrant could be prepared without a certificate from the Auditor General certifying that the expenditure had been authorized by Parliament. If the Auditor General refused to issue a certificate on the claim that there was no parliamentary authority for the expenditure, the Minister of Finance could order the expenditure if the Attorney General, in a written opinion, stated that such authority existed. In such cases, the Auditor General had to submit to Parliament through the Minister of Finance all documents on the subject. The provision for emergency expenditures for public works without parliamentary sanction, which had been contained in the Act of 1864, was reenacted, but it was expanded to include emergency expenditures of all types.
In 1869, an Act was passed which provided a statutory basis for the Department of Finance and a Federal Treasury Board. The latter had already been created by an order in council on July 2, 1867 and consisted of the Receiver General and the Ministers of Finance, Customs and Inland Revenue. Treasury Board, which was also required to serve as a committee to the Privy Council, was responsible for examining and reporting on all matters relating to finance, revenue, expenditure and public accounts referred to it by the Privy Council or which, in its estimation, had to be brought to the Council's attention.
In 1870, following a report by Civil Service Commissioners recommending the merger of the accounting and audit branches of the Department of Finance, the office of Deputy Inspector General was abolished and his duties and authorities were transferred to the Auditor General who was given the additional title of Deputy Minister of Finance. The legislation which brought about this change in the organization of the department did stipulate, however, that the Deputy Inspector General in office at the time, William Dickinson, would retain his title as long as he remained an officer of the Department of Finance.
In 1878, the Department of Finance was reorganized to place the Auditor General beyond any political influence. The Audit Office was removed from Finance and established as a separate department. The Auditor was given authority to make all regulations governing his office, subject to Treasury Board approval. A Deputy Minister of Finance was appointed and was to be the ex officio secretary of the Treasury Board; he was also required to keep the accounts of the government's financial agents in England and the accounts of banks authorized to receive and pay public funds. Moreover, he was responsible for keeping the accounts of interest paid on Canadian stocks, bonds and other securities. He had to countersign and register all Canadian bonds, keep track of Dominion notes, bank savings deposits and other funds held in trust. The Deputy Minister of Finance prepared public accounts which then had to be countersigned by the Auditor General before being submitted to Parliament by the Minister.
The Act of 1878, which in all its essential features was modelled on the British Exchequer and Audit Department Act passed in 1866, transformed the Auditor General who was a servant of Cabinet into a servant of the House of Commons.
That same year, a move was made to abolish the Receiver General as a separate department, but due to unforeseen difficulties, the bill was not passed. The following year proved more successful, as the Minister of Finance became the ex officio Receiver General, and his Deputy Minister became the ex officio Receiver General.
The basis for the organization of the Department of Finance as constituted by the legislation of 1878 and 1879 has survived to date with few changes or additions. In 1885, the membership of Treasury Board was changed to include the Minister of Finance as Chairman, the Ministers of Customs, Inland Revenue, Justice, the Secretary of State and an additional minister who was to be appointed by the Governor in Council. Two years later, another amendment was made to have the Board consist of the Minister of Finance, once again as Chairman, plus five ministers of the Privy Council and nominated by the Governor in Council.
In 1951, the Financial Administration Act was adopted to enshrine in one statute all measures pertaining to financial administration in Canada, the audit of public accounts and the financial control of Crown Corporations. At that time, a few additional changes were made to the organization and its responsibilities.
World War II saw the introduction of government controls on foreign exchange, prices of commodities and several products. Agencies to monitor these controls were created by order in council under the War Measures Act. Many of these agencies came under the Minister of Finance.
Today, the Department of Finance is the government agency responsible for advising the Government of Canada on economic and financial matters. The Department's primary mandate is to plan and administer the government's fiscal policy. In this respect, it is responsible for preparing the budget which is essentially a forecast of government expenditures for the fiscal year and the ways of producing the income to support the anticipated expenditures.
