The investigation comes after Mayor Richard Atwell accused the municipality of using the software to spy on him, while also admitting he lied about having an extramarital affair with one of his campaign volunteers.
Both Saanich police and Atwell's council colleagues have denied the allegations, saying a review has concluded the new software is simply a security measure.
The mayor said he has sent two letters to the B.C. Office of the Police Complaint Commissioner, and said publicly that he was stunned by the fact that the police did not see a conflict of interest in doing the review.
The privacy commissioner is launching the investigation on her own — not responding to a complaint by Atwell.
Denham said on Tuesday she needs to know the facts about the new software, how it's being used and what personal information is being collected.
Her investigation will be completed by the end of March.