Established in 1909 by Sir Wilfrid Laurier, the creation of the Department of External Affairs can be seen, in part, as a reaction to the American victory in the Alaska Boundary dispute, a clear demonstration of Canada's lack of treaty-making power. Initially located over a barbershop, with a respected  public servant at its head and staffed with a few clerks, External Affairs handled primarily administrative functions, such as the issuing of passports. 
Diplomacy remained under British control until the mid-1920s, when Mackenzie King transformed the Department into a proper foreign office. Its greatest years of influence coincided with Canada's role during and immediately following the Second World War. 
Under Pierre Trudeau, External Affairs undertook reforms to meet the criticism that English Canadians were favoured over French Canadians. In 1982, restructuring brought activities such as international trade and development assistance under its control.