In a budget move last month, the Canadian government axed a watchdog responsible for keeping tabs on its secret spy agency.

Eva Plunkett, the inspector general of the Canadian Security Intelligence Service (CSIS), had been responsible for monitoring the agency’s activities since 2003. Her post has been removed.

The decision, which the Canadian government said would save the taxpayer $1 million each year, will leave the agency monitored by the Security Intelligence Review Committee. This agency restricts itself to retrospective review rather than active oversight on a “risk management” basis, due to the relatively small number of people compared to CSIS’ size, it said.

In 2010, Plunkett highlighted dozens of failures to adhere to policy, and noted 43 errors in operational reporting. She called for greater diligence and pointed to yearly increases in policy breaches.

SIRC’s 2010-2011 annual report highlighted no errors in operational reporting or departures from policy. It did suggest that the SIRC’s mandate be expanded to include other agencies working with CSIS because of increasingly close relationships between agencies working in national security.

“The existing review mechanisms – including SIRC – are neither configured nor equipped to examine fully Canada’s increasingly integrated national security activities,” said its annual report.

Canada made its top-secret Communications Security Establishment Canada (CSEC) into a separate federal agency last year. The CSEC, previously a department of the National Defence Agency, is also to get its own $880 million headquarters next door to CSIS, and linked by a glass walkway.

[An earlier version of this story incorrectly stated what CSIS stands for. The first “S” stands for Security, not Secret.]