As of July 2, 2003, the date of the coming into force of the Courts Administration Service Act, the two divisions of the former Federal Court of Canada became two separate courts - a court of appeal (Federal Court of Appeal) and a trial court (Federal Court).

The Federal Court of Canada came into existence on June 1, 1971, through the enactment of the Federal Court Act. Its roots, however, go back almost a century before by way of its predecessor, the Exchequer Court of Canada.

When the Dominion of Canada was created, the British North America Act, 1867 (now Constitution Act, 1867) did not establish specific courts but, by section 101, authorized the Parliament of Canada to provide a "General Court of Appeal for Canada" and "any additional Courts for the better Administration of the Laws of Canada." Pursuant to this, a separate act establishing the Supreme Court of Canada and the Exchequer Court of Canada was passed in 1875. For many years Exchequer Court decisions were subject to appeal not only to the Supreme Court but, ultimately, to the Judicial Committee of the Privy Council in the United Kingdom. Appeals to the Privy Council were abolished in 1949.

The Exchequer Court originally had a very limited exclusive jurisdiction: revenue cases against the federal government. It also shared jurisdiction with the provincial courts in actions by the government to enforce federal revenue law or in relation to any civil action at common law or in equity.

Over the life of the Exchequer Court, its jurisdiction gradually increased and changed. Within the first twenty-five years, it had acquired exclusive jurisdiction over all litigation brought against the federal government, and its authority included admiralty matters, as well as suits between citizens relating to industrial property like patents and trade marks. Tax and citizenship matters became its concern. In 1960 it was given non-exclusive jurisdiction as a superior court of criminal jurisdiction for handling certain offences under the Combines Investigation Act.

An increasing acceptance of responsibility of government in relation to the citizen was reflected in expanding remedies obtainable against the federal government. In 1887 the government became subject to certain actions arising out of the negligence of its officers, and the Crown Liability Act of 1952 put the government in the same position as a private citizen in virtually all matters of tort. Some of the Court's exclusive jurisdiction was lost at this stage, as it became possible to sue the government in provincial courts in the matter of certain torts where the claim was for less than one thousand dollars.

By way of the Federal Court Act, Exchequer Court jurisdiction was inherited by its successor and augmented. The most important new area was the Court's power to review decisions of all federal boards, commissions or other tribunals. The new Act also gave jurisdiction in claims respecting aeronautics and interprovincial undertakings, and in matters involving bills of exchange and promissory notes where the Crown is a party.

Significant changes again occurred with the coming into force of amendments to the Federal Court Act on February 1, 1992. Parties seeking relief against the Crown were no longer required to apply to the Federal Court but were given the option of choosing the provincial courts, and the Federal Court Trial Division's exclusive jurisdiction was retained only where federal statutes expressly provided for it. At the same time the judicial review procedure was revised and simplified, with the Trial Division being given original jurisdiction except in respect to specific boards for which review is available in the Court of Appeal.

While judicial review occupies much of the Court's time today, there is a broad jurisdiction which includes Crown, immigration, citizenship, admiralty, customs, intellectual property, tax, labour relations, transportation, communications, parole and penitentiary proceedings, as well as some limited criminal jurisdiction. New federal legislation often provides a specific right of appeal or review in the Federal Court of Canada.