In the physical management of records, that's done by the RCMP through the CPIC system. This has been the status quo since the Criminal Records Act was enacted. By keeping the records sealed and apart, in the ordinary course of duties, a police officer checking CPIC would not see a record that has been pardoned, but the record would not have been obliterated from the electronic system. It would still exist somewhere.
Of course, there are hard-copy records of the conviction. It's not a complete purging of the record, but it strictly limits access to that record. That's what is meant by keeping it separate and apart.