CHAPTER 7Federalism

What is federalism?

A system of government under which the constitutional authority to make laws and raise revenue is divided between the national government and some number of regional governments

Legal and sociological approaches to federalism (federal constitutions and federal societies)

Reasons for Choosing Federalism

Rational explanations: combining the benefits of greater size

(economic, security) with the retention of regional control and the recognition of diversity.

Reasons for Choosing Federalism

A federal state is ultimately sustained by a sense of political nationality or community, or, failing that, a belief that the status quo is preferable to the consequences of break-up.

When these conditions no longer exist or are under pressure (Belgium, the former Czechoslovakia, and/ or Canada at various points in time) the federal union is likely to be questioned.

Origins of Canadian Federalism

Despite the preference of some Ontario (Canada West) politicians for a unitary system of government, most leaders in the other colonies were unwilling to give up all of their powers to a new national government

Original Expectations

Although there was no consensus, it is clear from various provisions of the Constitution Act, 1867, that the federal government was expected to be the superior level of government

Legislative and revenue-raising powers Quasi-federal features of the constitution

Original Expectations

Politicians have sometimes argued that the intentions of the founders matter, but the courts have been reluctant to base decisions on these disputed intentions

Federal Division of Powers

Sections 91 and 92 of the Constitution Act, 1867 are at the core of this division (http://laws.justice.gc.ca/en/Const/c1867_e.html#distribution)

Most of the major policy fields are characterized by divided governmental authority

Ottawa’s “spending power”

The courts and federalism Peace, order and good government (POGG):

Local Prohibition case (1896) and the “national dimensions” test; Board of Commerce (1922) and the “emergency doctrine”; Anti-Inflation Act (1976) broadened the emergency doctrine

Trade and commerce (s.91[2]): Citizens’ Insurance Co. v. Parsons (1881), limited the T&C power and expansion of provincial authority over “property and civil rights”; in recent decades the courts have supported a broader interpretation of Ottawa’s power to regulate interprovincial trade

The impact of court rulings They seldom provide the final word in

jurisdictional conflicts between Ottawa and the provinces

They often provide a basis for further negotiations between governments, as was true of Re Constitution of Canada, 1981, or simply one element in an ongoing political struggle, as was the case in Reference re Secession of Quebec, 1998

Quebec’s impact on federalism Quebec governments have made special

demands on federalism, pushing intergovernmental relations in a decentralist direction

Quebec began the practice of a province opting out of a federal-provincial program and receiving financial compensation to run its own program

Special status, distinct status and asymmetrical federalism may all be traced to the demands of Quebec provincial governments

Center-periphery relations The political reality is that the influence of

Canadian provinces on federal policy and their treatment by Ottawa has often been unequal, the demands and interests of Ontario and Quebec taking precedence over those of the “peripheral” regions

Federal institutions and the process of intrastate federalism have proven inadequate to the challenge of providing satisfactory representation for provinces outside of central Canada

Center-periphery, cont’d

Saskatchewan and Alberta entered Confederation without full provincial powers

the growing economic strength of the West has sharpened, not diminished, this sense of grievance against Ottawa and central Canada

Provincial governments as champions of regional interests

Institutional reasons for the importance of provincial governments

Given the limitations of intrastate federalism, provincial governments and premiers have emerged as the chief spokespersons for the regions

Province-building Executive federalism (see Figure 7.2),

www.scics.gc.ca/pubs/fmp_e.pdf

Fiscal federalism The gap between the cost of provincial

responsibilities and the provinces’ revenue-raising is at the root of problems of fiscal federalism

At Confederation the responsibilities of the provinces were comparatively inexpensive, but this changed in the middle to late 20th century

Ottawa has entered the picture through the spending power, helping to finance shared-cost programs that are administered by the provinces

And finally…

The financing of health care and the maintenance of national standards is a longstanding source of conflict in intergovernmental relations

Federal social transfers to the provinces (see Figures 7.6)