The global challenge and Canadian federalism

Gordon Robertson

If one were designing a system of government today to meet the “challenges posed by the imperative of world competition,” one would not opt for a federal system. Federalism has many virtues, but maximum economic or operational efficiency is not one of them.

A basic purpose of the federal design, wherever it is used, is to provide counterweights against the unfettered application of the market process in both the political and the economic context. Politically, the naked, unquali- fied, “market” principle of majority rule is to be blunted and restrained: the smaller, less populous regions of a federation are to be protected against the consequences of a simple counting of heads. It is not to be just “one man (or woman), one vote”; something depends on where voters live and what the interests of their region are. In addition, governing is to be divided up so that, for certain purposes, the regions and localities can control their objectives and priorities on the basis of their own preferences, whatever the national majority may want or think.

In the economic context, the qualification of the market process is less specific. It is not constitutionally provided for, as is the political aspect. However, unless the economic powers of the central government of a federation are very strong, and unless regional disparities and the sense of regional identity are of modest dimension, both the facts of constitutional power and the imperative for federal politicians of finding support in all parts of the country mean that the economic market too is qualified in its operation. Simple cost-price arithmetic is not always the final test. The Hibernia project would be much more likely to be left to the forces of the market if there was not a province called Newfoundland with voters and a government to feel a collective sense of injury over unemployment and disparity.

Putting the proposition another way, if the main global challenge of the future is economic, and if (as I believe) the system best designed to produce economic efficiency is a free market, a country starts at a disadvantage in having a federal system of government at all. The disadvantage is greater

The author is Fellow-in-Residence, Institute for Research on Public Policy, Ottawa. This paper was delivered at the 40th annual conference of the Institute of Public Administration of Canada, 1 September 1988.

NOTE

The global challenge and

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THE GLOBAL CHALLENGE AND CANADIAN FEDERALISM

still if the system is, like ours in 1988, characterized by strong provincial governments that make it their function to fight for their regional difference and demand action to reduce any felt disparity.

Clearly we are not going to do away with our federal system. Man doth not live by economics alone. There are great values protected and important purposes served by the provisions of our constitution, based as they are on the realities of Canada. Equally clearly, I think, we are not going to see major constitutional changes that will affect the balance of power, political or economic, within our system. The problem before us, as I see it, is how we reconcile the nature and the political pressures of our federation with the need for national economic efficiency in the increasingly competitive world around us.

I suppose one could start at an earlier point by asking whether there is, indeed, a clear national consensus that the major, or even a major, objective of policy is to meet the challenge of world competition. Reflecting on this led me to wonder what we would select as being our national objectives if we were restating them in our constitution today.

In 1867 the Fathers of Confederation laid them down as “peace, order and good government.” I suppose it is respect for the Holy Trinity and the mystery surrounding it that leads such things to go in threes. Revolutionary France put the objectives then as “liberte, egalite, fraternite.” The American Declaration of Independence set them out as “life, liberty and the pursuit of happiness.” I do not think that we could, in fact, agree on a new trinity of national purposes for Canada. Whatever was proposed would have to be analysed, parsed, dissected and annotated, with a reference to the Supreme Court about the implications of “peace,” or of “order,” or anything else that might be suggested. “Good government” would certainly never pass. What does that imply? Many Canadians would think we have yet to see a government that could meet a constitutional challenge on that objective. If, by a miracle, we could agree on a new trinity for Canada, it almost certainly would not include the achievement of maximum economic efficiency or meeting the challenge of world competition. Other more idealistic and less material purposes would be preferred. Be that as it may, there is no doubt but that it will be fundamentally important for the achievement of any of our national goals in the twenty-first century - political, social or humanitarian - that Canada be able to meet the challenges that will be presented by increasingly severe world competition. If we are going to be operating with essentially our present federal system, what can our governments d o to add to our capacity to maintain or improve our total efficiency as a country?

Attltudes within confederation I do not see anything revolutionary that is likely to produce a sea-change in the way Canada works. It seems to me more likely that greater effectiveness

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GORDON ROBERTSON

in the future will depend rather on adjustments in our values and attitudes and on efforts to avoid things that could exaggerate the problems that are inherent in the nature of this country.

At the root of it all should, I think, be a greater recognition of the interests we have in common and a lessened tendency to celebrate the things that divide us. The sense of regionalism in Canada is strong, and effective capacity for provincial operation - and for federal action - to meet regional interests and priorities is essential. But we hear far more about those differing or conflicting elements of our national life than we do about the need to act in concert and to do it effectively. Canada is not just a “community of communities,” and “co-operative federalism” should not always mean the achievement of agreement among governments by finding a way to meet whatever aspect of regional interest may motivate some provincial government at some point of time. There has to be a greater recognition by governments, media, and the public that intergovernmental discussions and negotiations are not just a game in which success means achieving some sort of agreement with no or little regard for the cost of it.

If I am right that it will be important to emphasize the things that unite rather than the things that divide us, the most worrying thing on our horizon is the commitment in the Meech Lake Accord to annual constitutional conferences.

Meech Lake and the Constitution The series of constitutional conferences that began in February 1968, and lasted until November 1981, had to occur: a fundamental probem within our federation made them necessary. The problem was, of course, the dissatisfaction of Quebec with the federal balance that had been established in 1867 as that balance had developed during our first century as a country. From 1968 to 1974 or 1975, no province other than Quebec was interested in constitutional reform. The other provinces were content with the constitution as it was and deplored the time and boredom of the conferences. It was the policy of the then federal government on petroleum pricing and resource taxing that awakened western interest in the constitution. But once that interest emerged, things were never the same again. Every province found something it wanted to change in the constitution. From then on succeeding constitutional conferences increased the appetites and ambitions of provincial interests somewhere in the country. The consequences of the growing appetites were augmented by the shibboleth, which gradually became clearer and more insistent, of the absolute equality of all provinces. Nothing could be done to meet the undoubtedly unique concerns of Quebec, as the only province in Canada of French language and majority, without doing the same for all the rest.

If we want to avoid a new round of rancorous dispute among our

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governments we should at almost all costs avoid being drawn into a new round of comprehensive constitutional review.

I say at almost all costs because of the temptation to suggest that the way to avoid such constitutional review would be to reject, or to try to revise, Meech Lake with its commitment to annual constitutional meetings. I am convinced that Meech Lake cannot be revised in advance of acceptance. N o government in Quebec, now or in the future, could accept less than the five points that are, in that agreement, the basis of Quebec’s willingness to acquiesce in the constitutional “deal” of 198 1-82. N o Assemblee nationale, having approved Meech Lake in 1987, would approve less. An attempt at revision before acceptance would amount, in the end, to rejection. And if we are to avoid things that could diminish Canada’s capacity to meet the challenge of world competition in the future, I can think of nothing that would have a more disastrous effect than the resurrection of opposition in Quebec to acceptance of our constitution. A Canada with a resentful Quebec refusing to co-operate under an imposed constitution would be a crippled country.

The rejection of the Meech Lake agreement, as embodied in the Constitution Amendment, 1987, would be seen in Quebec as rejection by English-speaking Canada of the renewed federalism that was promised when Quebec rejected sovereignty-association in the referendum of 1980. It would pave the way for a revival of the separatist option as the only solution for Quebec - with all the consequences that would have for unity of purpose and coherence of action in Canada. The willing participation of Quebec in a constitutional settlement that is fair and reasonable, as Meech Lake is, is the rock on which Canada’s capacity to act effectively in the years ahead will depend. Let there be no illusion. The Meech Lake Accord is crucial. It would be a fundamental mistake to imperil it in seeking a degree of perfection that will not be achievable.

Incidentally, unless there is something I have missed, the press is wrong in its constant reference to a 1990 deadline for action on the Constitution Amendment, 1987, to implement the Meech Lake Accord. There is nothing in the text of the amendment that imposes a deadline. So far as the Constitution Act, 1982, is concerned, there is no time limit on the approval of an amendment that requires unanimous consent - as Meech Lake does. Subsection 2 of section 39 of the Constitution Act does impose a three-year limit for the completion of the process of approval under the general amending procedure in section 38, which requires the approval of two- thirds of the provinces with 50 per cent of the provincial population. However, that time limit does not apply to amendments that require unanimous consent and come under section 4 1.

I think the point is important and not merely technical. It would be far better to wait for the two remaining provinces to provide provincial unanimity, even over several years and several provincial elections, than to


GORDON ROBERTSON

lose the approvals that have been given so far. There are many flaws in Meech Lake, but it is a dangerous delusion to believe that a renewed negotiation would lead to something better. I am confident it would not. Instead it would almost certainly produce a situation of grave danger for Canada that could compromise all our hopes.

The only other constitutional amendment that seems to me to be important for the more effective operation of Canada as a country is Senate reform.

Senate reform and government collaboration I said at the outset that a basic purpose of federal design, in any federation, is to provide counterweights against domination by simple majority rule: in other words, protection within the structure of the national government for the less populous parts of the country. The invariable instrument in federations is a “second chamber” in the national legislature that is not based on representation by population. In the United States, Australia, and Switzerland the second chamber is based on equality of representation by all the states or cantons regardless of population, except for a few “half- cantons” in Switzerland. In the Federal Republic of Germany there is limited variation in representation: three, four, or five from each state. Canada has never had a Senate that effectively meets this fundamental federal purpose. Our senators do not represent the people in the provinces in which they reside: they represent no one. They cannot speak for any region, for they have no authority to do so. In short, a Senate appointed by the central government cannot discharge the basic function of a second chamber in a federation.

It is to be hoped that the present cynical abuse of power by the Liberal majority in the Senate may, in the end, convince thinking people in Canada that this one serious mistake in our federal structure must at last be remedied. The pious hypocrisy about protecting the democratic right of the people of Canada to decide on the Free Trade Agreement is clever and seductive, but it is totally specious. What we have is a small group of people, appointed as an act of political patronage and with responsibility to no one, exercising a power that is technically constitutional for a purpose that is totally partisan. The objective of this archaic cabal is to frustrate the operation of a democratically elected government. And why do they do it? Because they think it will help their party at the polls. As a test of the motives of the Liberals in the Senate, one might ask if they would have blocked a Free Trade Agreement, amended to their taste, if it had been a Liberal government proposing it. Obviously they would not. The democratic principle they so virtuously defend today would somehow not apply.

It is no excuse that something like this ploy was perpetrated in 1913. A lot of things were considered acceptable seventy-five years ago that we do not



tolerate today. It was acceptable then that women should have no vote: they were not yet thought constitutionally to be “persons.” An appointed, irresponsible, patronage-based Senate was acceptable in 1867 - and in 1913 -it is not acceptable today. The only kind of Senate that can have legitimacy in discharging the necessary balancing function in a federal system is a Senate that is elected.

Why do I refer to this issue in a discussion on intergovernmental collaboration? It appears to be irrelevant, but it is not. Properly designed reform of the Senate is probably the thing that would, in the long term, do the most to bring more co-operative relations among our governments. An improbably proposition? I think not.

We have a federal system because we cannot have a unitary one: our regional differences are too deep. Those regional differences and interests should find public expression in our Parliament in order that our central institutions of government may be seen to be hearing and giving due weight to the concerns of all parts of Canada. Those concerns cannot be freely expressed in our House of Commons. Party discipline there does not permit it. The constant issue in that chamber is to defend or to attack the government of the day. Local concerns cannot be aired. They would fragment the unity each party wants to display for its essential purpose of parliamentary warfare. Nor can regional interests be aired with any authority in our Senate: no one there represents anyone. No senator is worth listening to as the voice of the West, of Quebec, or of any sector or section of the country. So our Parliament is not, in either House, the visible, articulate expression of regional concerns that the legislature of a federation should be.

The fact that our Parliament cannot now discharge this essential federal function does not, of course, mean that regional differences disappear or are not heard. They are articulated and advocated by our provincial governments, not just about areas of provincial constitutional responsibility, but in relation to matters that are essentially federal: interest rates, the money supply, tariff policy, federal economic policy, and many other things that are not within provincial jurisdiction. In short, the provincial governments have taken on the essential task of giving open expression to regional interests in debates over national policy. One may ask what is wrong with that? I think there are several things wrong and most of them relate to the effectiveness of Canada to meet the global challenge of the future.

With provincial governments in the role of the defenders of the regional interest on questions of national policy, we inevitably produce contest and confrontation between the levels of government. This makes more difficult the collaboration that is important for effective total government in Canada. The confrontations also broaden the areas of bargaining and weaken the capacity of the central government to adhere to policies it may consider


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important in the national interest. For such things, the provincial governments have no responsibility; they are elected for provincial purposes, not to be regional voices to aid in the formulation of national policy. This is not to blame the provincial governments. They are discharging a function that is essential in a democratic federation. However, it should be discharged in the Parliament of Canada by a properly constructed second chamber. If that could be made possible, we might do more gradually to improve the relations among our governments, in a permanent and reliable way, than by any other more obvious but less enduring device.

It is going to be difficult to get Senate reform, and Meech Lake has greatly complicated the task. Its terms pass the luscious patronage of Senate appointments to the provincial governments but then require that, if the Senate is to be changed, those same provincial governments must agree unanimously (not by majority as before) to forego the newly gained joys in the interest of a national purpose that they may not much like anyway. Perhaps only two things will make it possible: increasing revulsion at the Senate as it now is, and awareness that a Senate that can serve Canada in its federal character is important if this country is to work the way it should.

If it was important, as it was in 1968, to recognize that the federal arrangements and balance of 1867 were no longer acceptable to Quebec and French Canada, it is equally important now to recognize that the failure of the BNA Act to give proper weight and representation to the West in our national Parliament is no longer acceptable to that region. As I see it, it is not simply a matter of equity and justice, although those are both important. It is also the fact that, until we remedy this defect, our national governments - no matter what their party basis may be from time to time - will have to govern in a climate of western discontent and against the pressures of western governments that speak for that discontent.

I am not naive enough to think that an elected Senate, even one incorporating the “3 E’s”, would make western discontent vanish or cause western governments to cease their advocacy of western concerns. N o informed person either thought in 1968 or thinks today that “renewed federalism” would meet all the concerns of Quebec or of French Canada. But what has been done over twenty years to meet those concerns, if continued by approval of Meech Lake, has made and will make for a more united and more effective Canada. If it was important - as it was - to appeal to all governments to make that effort for Quebec, in the interests of our unity, it is equally important now to do something to meet western discontent with our federal balance. It has been a constant since long before I first heard it, as a boy in Saskatchewan, more than sixty years ago. It has not diminished. In my opinion, it will not diminish until Ontario, Quebec, and the people of Canada generally recognize the problem and try to do



something about it: something specific, something as clearly directed toward the western problem as the distinct society clause is toward that of Quebec.

A return to the federal principle While the effectiveness of government in Canada would benefit, I believe, from the attitudes and the actions to which I have referred, one other thing might just be worth trying. That is a degree of return to our point of departure in 1867: the idea that each level of government, federal and provincial, had a particular role and function and each should mind its own business.

As we know, in 1867 Confederation did not contemplate the need or the desirability of intergovernmental collaboration. The functions of government were distributed; they were thought of as being distinct and identifi- able. Each level of government would do its own task, responsible to its own electors. The dice were, of course, loaded in favour of the federal government, with reservation and disallowance of provincial laws frequently carried out when the federal government thought its interests required it. However, for the first thirty-nine years of our national existence there was not a single federal-provincial conference or meeting.

It was the enlargement of provincial powers and responsibilities through judicial interpretation of the BNA Act, especially by the Judicial Committee of the Privy Council in the 1890s and early 19OOs, decline in the political acceptability of the federal powers of reservation and disallowance, and the gradually increasing scope of governmental activity generally, especially after the Second World War, that caused intergovernmental relations to grow and to flourish. I was both a witness and a participant in the process. In a survey we made in the Federal-Provincial Relations Office in Ottawa in 1978 - an office that had not existed before 1974 - we found that, in the previous decade, federal and provincial ministers and senior officials had come together at formal meetings an average of five hundred times a year. I suspect that in the decade since then the count may well be higher.

It will be apparent that our growing pattern of intergovernmental discussion and efforts at collaboration over the last thirty years is contrary to the concepts and intentions of 1867. Of greater importance is the question whether that pattern, and the efforts to achieve “co-operative federalism,” do not erode the capacity of the federal government to govern effectively.

Donald Smiley, one of the most perceptive and thoughtful observers of our federalism - and the inventor of the term “executive federalism” to describe our dependence on intergovernmental negotiations - levelled six charges against the system in a paper he gave in 1978. One charge was that it “leads to continuous and often unresolved conflicts among governments.” Smiley was writing at a time when we had had ten years of the “tough


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federalism” of Pierre Trudeau after four years of co-operative federalism under Lester Pearson. The federal-provincial process was indeed leading, at that time, to unresolved conflicts. It was a rough, acrimonious period in federal-provincial relations. A good part of the reason was because Mr. Trudeau stubbornly believed that a strong central government was essential for the effective operation of Canada as a country. There were other reasons as well, but that was a central factor. Mr. Trudeau would not agree to changes in policy or in our constitution that he thought would diminish the capacity of the government of Canada to meet the challenges of that day and of the future.

We are now back to co-operative federalism. We have indeed seen less conflict since Mr. Mulroney came into power in 1984. He and his government deserve great credit for taking the animosity out of federal- provincial relations and for restoring civility to intergovernmental discussion. But has there been a price for that? What kind, and paid by whom? I think there has indeed been a price. I think most of it has been paid by the federal government. The price has been twofold. Part is in the level of federal expenditures, with heavy burden on the future in the form of our budgetary deficits. The other part is in a reduced capacity by the federal government to act decisively in areas of federal responsibility.

The budgetary price is apparent: we see it being paid day by day. The most constant source of “co-operation” is for the federal government to make major expenditures that will mollify some or all of the provincial governments. Money can float off a great deal of acrimony and conflict. However, some day the constraints of debt - which, of course, includes the cumulative deficits of all governments - and of inflation will begin to bite and to impose painful choices. That form of co-operation will become more difficult. Perhaps our greater worry should be whether the limitation on the financial emollient to produce co-operative federalism will lead to steadily more concessions in the capacity of our national government to govern in the areas for which it is responsible.

In a “Supplementary Statement” to the report of the Macdonald Commission in 1985 Albert Breton said that “the doctrine of co-operative federalism relates to the condemnation, by those who adhere to it, of unilateralism, that is, of independent action by any one government of the federation.” Professor Breton added that “although in principle the condemnation applies to all, in practice it strikes much harder at the federal government.” I think Breton is right. I think, too, that his warning should give us thought as we consider whether “intergovernmental partnership” and “intergovernmental collaboration” are adequate prescriptions for Canada in meeting the challenge of the future.

We clearly cannot go back to 1867. Government has become too broad in scope and too complex in nature to fit into neat boxes of completely



independent responsibility. However, that does not mean that we either need to be or should be as unconcerned about the constitutional locus of responsibility for a policy or action, or quite as confident about “collaboration” as an unmitigated good, as we are today. In short, I think there would be a lot to be said for our governments - and not least the federal government - trying to stay out of things that can as well or better be left to the other partner in our federal house.

There is a great propensity in human affairs to profit from experience by making ourselves ready to fight the last war. We are right not to want to see a return to the intergovernmental conflicts of the 1970s. But I think we have been too ready to assume that closer and more general collaboration is a complete and costless answer. The rapidity of change in the problems with which governments have to cope today and will have to face in future, together with the increasingly competitive environment, will put steadily greater value on a country’s capacity to act. Too great a reliance on intergovernmental collaboration can exact a high price in decisive and timely action in the national interest.

The basic problem in getting governments to adhere more strictly to the constitutional boundaries of their areas of responsibility is, of course, political. Interest groups do not normally know much about constitutional niceties and they do not want to. Their interest is in getting action on whatever single issue they have espoused. They put pressure on whichever government and whatever politicians they can reach. The politicians react like Pavlov’s dogs in response to electric shocks. They tend to promise whatever will reduce pain in the specific present and increase votes in the next election - and let the future take care of itself. All of this is pretty normal political conduct in a democratic society. However, it does make a mess of the distribution of functions in a federal system. The question is whether politicians in Canada will ever be able to summon enough courage to say that a popular course of action is not the business of their government: that it is provincial, not federal - or that it is federal and not provincial.

Perhaps the only thing that will bring this about, if it ever happens, is not an increase in political courage or in constitutional understanding but a growing shortage of cash. If that squeeze becomes sufficiently painful, perhaps the annual conferences of first ministers that will be a constitutional requirement under the Meech Lake Accord can serve a really useful purpose - a purpose for which they were almost certainly not intended. That purpose would be to try seriously to sort out functions and activities so that two levels of government do not, without real need, both get into programs that could and should be done by one alone.

During the constitutional discussions of the 1970s there was a good deal of interest by the governments of Quebec and the western provinces in what


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were called “federal intrusions” into provincial areas of responsibility. The objective then was to try to clarify the distribution of powers under sections 91 and 92 of the BNA Act. It proved a hopeless exercise, as it will if it is attempted again in the proposed annual constitutional conferences. But the difficulties of precise constitutional delineation do not exclude the application of plain common sense to specific, practical problems.

The most hopeful prospects for increased effectiveness in the operation of our governments in the future may lie in prosaic, undramatic measures of this kind. Such measures will be most likely to be taken if the glamour of political promises is dimmed by sheer penury - a prospect that seems not at all impossible in the light of today’s deficits. I am not quite certain whether that is to be taken as an optimistic or a pessimistic conclusion to these comments.


The global challenge and Canadian federalism

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