Former Liberal MP Marlene Jennings had asked the Mounties during last May's election campaign to look into the legality of the $50-million G8 legacy fund.
The fund was used to pay for gazebos, parks, streetscape upgrades and other beautification projects in Treasury Board President Tony Clement's Parry Sound-Muskoka riding, which hosted the G8 summit.
Jennings' complaint was prompted by a draft of an auditor general's report, leaked to The Canadian Press in the midst of the election campaign, which suggested the funding may have been illegally obtained.
After reviewing the matter for almost seven months, the RCMP has now concluded there is no need for an investigation.
"To date, no information has been brought forward by the auditor general or otherwise that suggests contravention of an act of Parliament that would warrant a criminal investigation by the RCMP," Supt. Paul Bateman wrote in a Nov. 8 letter to Jennings.
Jennings said Tuesday that another officer told her by phone that the case could be re-opened should more information come to light.
The early draft of the auditor general's report said the government "misinformed" Parliament when it sought authorization for an $83-million fund aimed at relieving congestion at border crossings. MPs were not told that more than half the fund would actually be spent on G8 legacy projects far from any border crossing.
The wording of the final report, released after the election, was softened and all reference to illegality dropped, although the verdict remained that the government had not clearly or transparently explained how the money was to be spent. The final report also slammed the government for the unprecedented lack of any paper trail documenting how the government chose which projects deserved funding.
John Wiersema, the interim auditor general, has said it doesn't appear the government set out to deliberately mislead Parliament. Rather, it was trying to expedite the flow of money so that projects could be completed before the June 2010 summit.
Wiersema has also said "the legal profession could have an interesting, long debate" about whether the government broke any laws but it was not up to the auditor general's office to make such a determination.