SU-GCM,
An outline of the history of Flight Inspection in Canada and the procedures currently used is available here:
ICASC - The History of Flight Inspection in Canada
The reason for the close-in manoeuvering is that, irrespective of the method used to find the aircraft's real position in the sky, the accuracy of the ILS is built up by flying "cuts" at fixed offsets and/or altitudes to the centre of the beam. Please realise I'm really simplifying this - there's a full FAA book on the procedures here
http://naco.faa.gov/index.asp?xml=fioo/tech More on the history is here:
http://naco.faa.gov/index.asp?xml=fioo/fihistory
If you look you'll see that a certain wide-bodied bizjet is the favourite platform for Flight Inspection - as a NavCanada Technician said to me - "It's a great platform & you can talk a walk around the cabin to stretch your legs."