John Lorn McDougall, a former member of Parliament, was appointed the first independent Auditor General of Canada in 1878. The job was previously performed by a government official, the deputy minister of finance.
The Auditor General of the day had two main functions: to examine and report on past transactions, and to approve or reject the issuance of government cheques.
The Auditor General’s annual reports to the House of Commons in that era were weighty documents, sometimes as long as 2,400 pages! They listed every single government transaction, from the purchase of bootlaces to contracts for bridge building. Those detailed records revealed a focus different from the work of the federal audit office of our day. But like today, the Auditor General of the late 19th century was expected to report on whether public money was spent the way Parliament intended.
In 1931, Parliament transferred responsibility for issuing cheques to a newly created government official, the Comptroller of the Treasury. This drew a clear line between the duties of government and the auditor: the government was responsible for collecting and distributing public funds, while the auditor was responsible for examining and reporting on how those funds were handled.
The work of the Office began to move in its current direction in the 1950s, when the Auditor General began to report on "non-productive payments." These were transactions that, while legal, provided no apparent benefit to Canadians. The reports were controversial, however, because government officials felt the Auditor General was commenting on government policy and therefore going beyond his mandate.
The 1977 Auditor General Act clarified and expanded the Auditor General’s responsibilities. In addition to looking at the accuracy of financial statements, the Auditor General was given a broader mandate to examine how well the government managed its affairs. The new Act maintained the important principle that the Auditor General does not comment on policy choices but does examine how policies are implemented.
In June 1994, the Auditor General Act was amended to provide for the production of up to three reports per year in addition to the annual report.
Further amendments to the Act in December 1995 established the position of Commissioner of the Environment and Sustainable Development within the Office of the Auditor General of Canada.
In June 2005, Parliament passed the Budget Implementation Act, 2005, which amended both the Auditor General Act and the Financial Administration Act. Through these amendments, seven additional Crown corporations became subject to the special examination requirement of the Financial Administration Act.
In December 2006, Parliament passed the Federal Accountability Act, which amended the Auditor General Act. This gave the Auditor General the authority to conduct performance audits where any recipient has received more than one million dollars under a funding agreement.
In June 2007, Parliament passed the Kyoto Protocol Implementation Act. Under the Act, the Commissioner of the Environment and Sustainable Development was required to prepare a report at least once every two years, up to and including 2012 on Canada’s progress in implementing the Climate Change Plans and meeting its obligations under the Kyoto Protocol. The Commissioner was also required to include in his report any observations and recommendations on any matter he considered relevant.