The Department of Finance

Canada's financial affairs have been a priority of the executive branch of government from the outset of Confederation, when Alexander Tilloch Galt (1817-1893) was appointed as the first minister of Finance. The department he administered in 1867 was a merger of the inspectors general who had been responsible for the finances of the former colonies in British North America. In the earliest days the department's staff numbered 38 -- over time that number grew to a high of 6,000; today the department consists of fewer than 1,000 employees.

The fluctuation in size of the Department of Finance reflects the changing political and economic climate in which it has operated. When the Department was officially created by statute in 1869, it was tasked with important but relatively limited duties, with its primary responsibility being to collect and spend public monies. In the twentieth century the Department's function became far more complex, as the First World War saw the federal government institute a tax for Canadian citizens, together with a system of borrowing from individuals through Victory Loans.

These innovations were matched by international economic changes brought about by the Great Depression and the Second World War. By the late twentieth century, the Department of Finance had assumed a far broader role in guiding national economic development, while at the same time it evolved into a more specialized central agency responsible for federal economic research, analysis and planning. The tremendous advances made by the Canadian economy over the past century have been matched by the growing authority of the Department of Finance at the centre of the Canadian government, and by the influence of the minister of Finance as a key member of the Canadian executive.