The Red Ensign, a red flag with the Union Jack in the upper corner, was created in 1707 as the flag of the British Merchant Marine. From approximately 1870 to 1904, it was used on land and sea as Canada's flag, with the addition of a shield in the fly bearing the quartered arms of Ontario, Quebec, Nova Scotia and New Brunswick. Although its use on land had never been sanctioned except by public usage, in 1892 the British admiralty approved the use of the Red Ensign for Canadian use at sea. This gave rise to the name the Canadian Red Ensign.

As new provinces entered Confederation, or when they received some mark of identification (sometimes taken from their seal), that mark was incorporated into the shield on the Canadian Red Ensign. By the turn of the century, the shield was made up of the coats of arms of the seven provinces then in Confederation.

In 1924, this unofficial version of the Canadian Red Ensign was changed by an Order in Council and the composite shield was replaced with the shield from the royal arms of Canada, more commonly known as the Canadian Coat of Arms. At the same time, this new version was approved for use on Canadian government buildings abroad. A similar order in 1945 authorized its use on federal buildings within Canada until a new national flag was adopted.