Canadian Federalism: Performance, Effectiveness, and Legitimacy [4 ed.] 9781487570460

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CANADIAN FEDERALISM

Canadian Federalism Performance, Effectiveness, and Legitimacy Fourth Edition

EDITED BY HERMAN BAKVIS AND GRACE SKOGSTAD

UNIVERSITY OF TORONTO PRESS Toronto Buffalo London

© University of Toronto Press 2020 Toronto Buffalo London utorontopress.com Printed in Canada ISBN 978-1-4875-7044-6 (cloth)    ISBN 978-1-4875-7045-3 (EPUB) ISBN 978-1-4875-7043-9 (paper)   ISBN 978-1-4875-7046-0 (PDF) All rights reserved. The use of any part of this publication reproduced, transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, or stored in a retrieval system, without prior written consent of the publisher – or in the case of photocopying, a licence from Access Copyright, the Canadian Copyright Licensing Agency – is an infringement of the copyright law. Library and Archives Canada Cataloguing in Publication Title: Canadian federalism : performance, effectiveness, and legitimacy / edited by Herman   Bakvis and Grace Skogstad. Names: Bakvis, Herman, 1948–, editor. | Skogstad, Grace, 1948–, editor. Description: Fourth edition. | Includes bibliographical references and index. Identifiers: Canadiana (print) 20200209582 | Canadiana (ebook) 20200209612 | ISBN   9781487570446 (hardcover) | ISBN 9781487570439 (softcover) | ISBN 9781487570453   (EPUB) | ISBN 9781487570460 (PDF) Subjects: LCSH: Federal government – Canada – Textbooks. | CSH: Federal-provincial   relations – Canada – Textbooks. | CSH: Canada – Politics and government – 2006–2015 –   Textbooks. | CSH: Canada – Politics and government – 2015– – Textbooks. | LCGFT:  Textbooks. Classification: LCC JL27 .C36 2020 | DDC 320.471 – dc23 We welcome comments and suggestions regarding any aspect of our publications – please feel free to contact us at [email protected] or visit us at utorontopress.com. Every effort has been made to contact copyright holders; in the event of an error or omission, please notify the publisher. University of Toronto Press acknowledges the financial assistance to its publishing program of the Canada Council for the Arts and the Ontario Arts Council, an agency of the Government of Ontario.

Contents

Contributors vii Preface ix

Part One: Socio-Economic Foundations, Institutions, and Processes of Canadian Federalism   1 Canadian Federalism: Performance, Effectiveness, and Legitimacy 3 herman bakvis and grace skogstad   2 Self-Rule vs. Shared Rule: Canada as a Case of Comparative Federalism 31 jörg broschek   3  Quebec and the Canadian Federation 59 david cameron   4 The Courts, the Division of Powers, and Dispute Resolution  90 gerald baier   5 Criminal Justice and Criminal Law 114 dennis baker   6 Federalism, Political Parties, and the Burden of National Unity: Still Making Federalism Do the Heavy Lifting? 138 herman bakvis and a. brian tanguay

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  7  Intergovernmental Relations in a Complex Federation  165 robert schertzer

Part Two: The Social and Economic Union   8  Federalism and Canada’s Economic Union 195 grace skogstad and matt wilder   9 International Trade and the Evolution of Canadian Federalism 222 christopher j. kukucha 10 Fiscal Federalism: The Importance of Balance  251 douglas m. brown 11 The Three Federalisms and Change in Social Policy  282 keith g. banting 12 Federalism and Universal Healthcare: A Question of Performance and Effectiveness  310 herman bakvis 13 Federalism and Immigration in Canada  337 mireille paquet 14 Federalism and Canadian Climate Change Policy  363 mark winfield and douglas macdonald

Part Three: Re-imagining the Federation 15 Nation to Nation? Canadian Federalism and Indigenous Multi-level Governance 395 martin papillon 16  Municipalities in the Federation 427 jack lucas and alison smith 17 Conclusion: Taking Stock of Canadian Federalism 453 grace skogstad and herman bakvis Index 479

Contributors

Gerald Baier, Associate Professor of Political Science, University of British Columbia Dennis Baker, Associate Professor of Political Science and Director of Criminal Justice and Public Policy, University of Guelph Herman Bakvis, Professor Emeritus, School of Public Administration, University of Victoria Keith G. Banting, Professor Emeritus, Political Studies, and Stauffer Dunning Fellow, School of Policy Studies, Queen’s University Jörg Broschek, Associate Professor of Political Science and Canada Research Chair (Tier 2) Comparative Federalism and Multilevel Governance, Wilfrid Laurier University Douglas M. Brown, Associate Professor of Political Science, St. Francis Xavier University David Cameron, Professor of Political Science, University of Toronto Christopher J. Kukucha, Professor of Political Science, University of Lethbridge Jack Lucas, Associate Professor of Political Science, University of Calgary

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Douglas Macdonald, Senior Lecturer Emeritus, School of the Environment, University of Toronto Martin Papillon, Directeur du Centre de recherche sur les politiques et le développement social (CPDS) and Professor of Political Science, Université de Montréal Mireille Paquet, Associate Professor of Political Science, Concordia University Robert Schertzer, Associate Professor of Political Science, University of Toronto Scarborough and University of Toronto Grace Skogstad, Professor of Political Science, University of Toronto Scarborough and University of Toronto Alison Smith, Assistant Professor of Political Science, University of Toronto A. Brian Tanguay, Professor of Political Science, Wilfrid Laurier University Matt Wilder, SSHRC Postdoctoral Fellow, University of Toronto Mark Winfield, Professor of Environmental Studies, York University

Preface

This fourth edition of Canadian Federalism: Performance, Effectiveness, and Legitimacy examines the same three questions raised by the three earlier editions. How well are the institutions and processes of Canadian federalism performing? Are they effective in addressing substantive problems? And are they seen as legitimate by the various communities and constituencies that make up Canada? In addition, there is continuity with earlier editions insofar as most of the policy sectors and institutions under scrutiny in the previous editions are also the subjects of the chapters in this fourth edition. There are also important changes in this edition that go beyond updating chapter material to take account of developments in Canadian federalism since the last edition, eight years ago. We have several new authors: indeed, 40 per cent of the authors of chapters in this collection are new to this edition. Many of the new authors are also in the early stages of their careers, a feature that we believe attests to the intergenerational interest that Canadian federalism evokes among political scientists in our Country. Adding new authors has also enabled us to include, for the first time, chapters on two important topics. One is Dennis Baker’s chapter on criminal justice and criminal law: the sole subject matter in Canada’s Constitution that assigns responsibility for legislating and administering a subject matter to the two different orders of government. The other is Jörg Broschek’s chapter on comparative federalism, which highlights how the Canadian emphasis on interstate and jurisdictional federalism distinguishes Canada from most other federations.

x Preface

This fourth edition is possible only because of the efforts of many people. We are extremely grateful to the authors of the chapters that appear herein. We also thank our publisher, the University of Toronto Press, and, in particular, Mat Buntin and Marilyn McCormack. Mat managed the early stages of the publication of this text and Marilyn managed the review and publishing process. We also thank the anonymous reviewers commissioned by UTP who found merit in this collection and whose comments saved us and the other authors from errors. As we write this note in early April 2020, the COVID-19 pandemic has hit Europe and North America with full force. It comes at a time when this text is in its final stages of publication. While there can be little doubt of the enormous impact of the pandemic on Canadians’ health and social and economic well-being, its transformative effects on Canadian federalism will not be fully evident for some time. To date, there appears to have been a very welcome degree of collaboration among the senior leaders of our provincial, territorial, and federal governments in tackling the crisis. Whether this “we’re all in this together” spirit will endure remains to be seen. So do the consequences for intergovernmental relations of the fiscal policies being undertaken by our governments to mitigate the economic fallout for Canadians. Once the pandemic crisis is behind us, we hope that the conceptual and analytical tools used in this book will prove helpful in assessing the performance of Canadian governments, as well as the effectiveness and legitimacy of their responses to this unprecedented challenge to our country and, indeed, the world. Herman Bakvis Grace Skogstad

CHAPTER ONE

Canadian Federalism: Performance, Effectiveness, and Legitimacy Herman Bakvis and Grace Skogstad

Since the latter half of the nineteenth century, Canada has sought to unite a linguistically and regionally diverse citizen body within the confines of a single nation-state. The chosen formula has been federalism, primarily through self-rule in two main orders of government. A central government rules on matters common to all citizens, while subnational governments – provincial, in Canada’s case – rule on matters involving regionally distinctive populations. The federal formula also requires that a balance be struck such that neither order of government is subordinate to the other (Watts, 1999: 1). From most perspectives, over time the Canadian federal arrangement has succeeded in striking the requisite balance between unity and diversity. It has also proven to be both flexible and resilient, allowing Canada to adjust its public policies to changing circumstances. Even so, there have always been critics of the way Canadian federalism performs. Some observers have claimed that the federal “balance” is lopsided, skewed by a tendency to either centralization or decentralization; others, that effective policy-making is hampered by either intergovernmental conflict or elite collusion. The legitimacy of the Canadian federal system has also been found wanting by groups with a strong sense of their own national identity, notably francophone Quebeckers and Indigenous peoples. The purpose of this text is to investigate the state of contemporary Canadian federalism. It does so by asking three questions. How well are the institutions of Canadian federalism performing? How do existing patterns of intergovernmental relations help or hinder effective

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policy-making? And how do Canadians evaluate the legitimacy of the institutions, processes, and outcomes of intergovernmental relations? The investigation that follows has three dimensions: descriptive, evaluative, and explanatory. To explain the performance, effectiveness, and legitimacy of Canadian federalism it is necessary to look at a number of factors besides the structures of federalism itself. The Canadian federal system, like federal systems elsewhere, is embedded in a broader social, economic, institutional, and political context. In other words, the institutions and processes of federalism can be seen as both responding to and shaped by 1 structural cleavages in Canadian society, of which the most important historically have been ethno-linguistic and territorial differences in identities, values, and material/economic base; 2 the interests and ideas of authoritative political leaders in provincial and national capitals; and 3 extra-federal institutions including, most prominently, the Constitution and the parliamentary system. These contextual factors, together with others originating in the international political economy, shape the performance of Canadian federalism. Some of them, like the Westminster parliamentary system, are relatively stable over time, and so their effects tend to be stable as well. Others, like the ideas and interests of first ministers, may vary quite widely: as the individuals and the parties who hold the highest government offices change, so (to a greater or lesser degree) does the functioning of Canadian federalism. Furthermore, with new personnel and their ideas, traditional institutions and practices may well be put to different uses and take on new meanings. A major objective of this text is to highlight how these institutional and contextual features interact with the structures and processes of federalism to shape the latter’s performance, effectiveness, and legitimacy over time.

PERFORMANCE: INSTITUTIONS AND PROCESSES Assessing the performance of the Canadian federal system means above all focusing on the functioning of the institutions and processes of Canadian



Canadian Federalism: Performance, Effectiveness, and Legitimacy

federalism. These institutions and processes are, first, the constitutional division of powers between the two orders of government, along with the process of judicial review to which it is subject; second, the institutions of intrastate federalism that provide for the representation of constituent units within the central government and the management of conflicts between the two orders of government; and, third, the institutions and processes of interstate federalism through which the two orders relate directly to one another. Throughout this book, three criteria are used to assess performance: the consistency of governing arrangements with federal principles; the “workability” of the institutions in question, both formal and informal; and the capacity of federal institutions to produce results in the form of agreements.

Consistency with Federal Principles Following K.C. Wheare (1951), a mid-twentieth-century writer, a key principle of federalism is that each order of government is autonomous within its sphere of authority: its jurisdictional powers may be altered only in conformity with constitutional provisions, never through unilateral action by the other order of government. Two questions are relevant here. Does the centre recognize the component units as full members of the federation, with their own powers and the authority to act on them? In addition, do the constituent units recognize the central government as having its own proper and autonomous role? To answer these questions, we begin by examining Canada in comparison with other federations (chapter 2, by Jörg Broschek), the place of Quebec in Canada (chapter 3, by David Cameron), and judicial review of the formal division of powers in the Canadian Constitution (chapter 4, by Gerald Baier). The chapters demonstrate, respectively, how the emphasis on self-rule for the two orders of government, Quebec’s insistence on respect for federal principles, and the courts’ interpretation of the formal Constitution have thwarted the centralist vision of the federation of John A. Macdonald and ensured respect for the federal principle. The second principle of federalism follows from the first, namely the purpose that federal systems are created to serve: to provide a balance between unity and diversity. The relevant “performance” question here is whether the mechanisms of interstate and intrastate federalism in fact secure the balance needed to ensure that the system does not slide into

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either a confederal arrangement (with the central government subordinate to the constituent units) or a unitary system (with the constituent units subordinate to the central government). Generally, the federal balance is a function of both the pattern of intergovernmental relations (interstate federalism) and the representation of constituent units in the central government (intrastate federalism). As explained by Broschek in chapter 2, intrastate federalism is weak in Canada because, unlike most other federations, Canada lacks an effective second chamber of Parliament. The German upper house (Bundesrat), for example, is composed of representatives of the state (Länder) governments, while the Australian and American senates provide direct representation for citizens of the various constituent states. But the Canadian Senate offers no such representation to the provinces or the citizens in them. With limited opportunity for formal representation of provincial interests in federal policy-making institutions, provincial governments have acquired over time greater authority to speak on behalf of the people within their borders. As well, as Broschek notes, the Canadian federation with its separate lists for federal and provincial powers places a premium on self-rule rather than shared rule. As such, Canada stands in opposition to federations such as Germany where joint decision-making in various policy areas tends to the norm. In such federations both orders of government must agree, typically either through unanimity or some sort of qualified majority depending on the rules in place, to arrive at decisions. In Canada there are relatively few places in the Constitution where joint decision-making is required. One consequence of the emphasis on self-rule and the relative paucity of intrastate bodies is that in Canada the task of securing the federal balance falls mainly to interstate federalism, since most intergovernmental activity takes places between governments rather than within an intrastate body such as a senate.

“Workability” We adopt J.S. Dupré’s (1985: 1) classic definition of well-performing federal institutions and processes as providing forums “conducive, and perceived to be conducive, as the case may be, to negotiation, consultation, or simply an exchange of information.” Given a changing policy environment and continually shifting agendas, governments need to



Canadian Federalism: Performance, Effectiveness, and Legitimacy

interact with each other in order to address mutual problems and manage interdependencies; at a minimum, they need to communicate with one another in order to make adjustments in their respective roles. As policy interdependence increases, so does the need for coordination and collaboration.

Capacity to Produce Results In a federal system, producing results means reaching agreement on issues. Conflict is inherent in federal systems. Thus a crucial test of their performance is their ability to manage intergovernmental conflict. Simply agreeing to disagree may be one way of managing conflict. However, citizens will normally expect the two orders of government to set aside their differences and deal with the issues upon which citizens’ well-being and the integrity of the political community as a whole depends. In brief, to perform well a federal system must respect federal principles, sustain the balance between unity and diversity, provide a setting for discussion and negotiation between governments, and facilitate agreement, or at least understanding, on major issues in a manner that respects the positions of both levels of government. Given the centrality of interstate federalism to the performance of the Canadian federal system, patterns of federal–provincial relations is a primary theme in this book. The chapters that follow make it abundantly clear that there is no single way to describe intergovernmental relations in Canada. Patterns shift not only over time but across issues within a single period, and scholars have used a variety of labels to describe them. Figure 1.1, for example, locates several models of federalism along a continuum from independence to interdependence of the two orders of government. At one end of the continuum, central and provincial/territorial governments are independent of one another. This is the classical form of federalism: the “watertight compartments” model in which each order of government has exclusive authority in its sphere of jurisdiction; the emphasis is on self-rule, and no attempt is made to consult or coordinate activities with the other order (Wheare, 1951). But exclusivity of jurisdiction in itself does not ensure respect for the federal balance. Much depends as well on the distribution of legal authority across the two orders of government: each must have sufficient authority to maintain the unity–diversity balance. Striking that balance in the Constitution Act

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Herman Bakvis and Grace Skogstad Figure 1.1.  Models of Canadian Federalism Independent Governments

Collaborative Shared Cost

Unilateral Shared Cost

Collaborative Joint DecisionAsymmetrical Regulatory Making

of 1867 (formerly the British North America Act, 1867 ) was crucial to the formation of a political and economic union that included Quebec. Scholars have generally situated the Canadian federal Constitution in the late nineteenth century at the “watertight compartments” end of the continuum. As Broschek notes in chapter 2, in contrast to most other federal constitutions, the 1867 Act assigned almost all subject matters to either the federal or the provincial order of government, giving that order the exclusive authority both to make laws in that area and to implement them. The one exception is criminal law: what constitutes criminal activity is defined by the federal government in the Criminal Code, but the provinces are responsible for enforcing that legislation. Dennis Baker in chapter 5 explores some of the consequences of this arrangement in the criminal law area. There are also three areas of shared or concurrent jurisdiction: immigration and agriculture have been shared jurisdictions since 1867, and pensions joined them in the mid-twentieth century. Keith Banting in chapter 11 discusses joint decision-making in connection with reform of the Canada-Quebec Pension Plan, an area of shared jurisdiction. Thus, the federal system created in 1867 was situated near the left-hand end of the continuum – but at the same time it was not entirely consistent with the watertight compartments model. In fact the compartments were far from impermeable (Stevenson, 1993; Watts, 2003), and the central government had various instruments it could use in areas of provincial jurisdiction: the power to appoint lieutenant-governors with the right to reserve provincial legislation; the declaratory power that allowed the federal government to take over provincial undertakings in the national interest; the power of the lieutenant-governor to reserve provincial legislation for her majesty’s pleasure; and the power of the governor general to disallow provincial legislation. Federal challenges to provincial legislative authority through these “quasi-federal” mechanisms were infrequent by the late nineteenth century, but it was not until 1943 that Ottawa used the power of disallowance for the last time.



Canadian Federalism: Performance, Effectiveness, and Legitimacy

Since the 1930s Canadian federalism has moved towards the other end of the continuum. As governments at both levels expanded the range of their activities, jurisdictional overlap and policy interdependence intensified. So did the need for consultation and, eventually, coordination. “Consultation” as a model of intergovernmental relations means that governments exchange information and views before acting independently, leaving the other order to make its own arrangements (Watts, 2003). “Coordination” means going beyond consultation to develop mutually acceptable policies and objectives, which each order of government then applies in its own jurisdiction. Successful intergovernmental co-operation around taxation policies during the Second World War continued after 1945 as the Canadian social welfare state was constructed. A period of federal dominance during the Second World War gave way to an era of “co-operative federalism” during the 1950s lasting into the early 1960s (Simeon and Robinson, 1990: chap. 6, 8, and 9). Together, fiscally and politically strong provincial governments and a national government armed with a potent spending power create social programs in areas of provincial jurisdiction like healthcare, post-secondary education, and social assistance. (For a more detailed discussion of “shared-cost federalism,” see Keith Banting in chapter 11.) As noted above, at least one of these social programs, the Canada-Quebec Pension Plan (C/QPP), led to a joint-decision model of federalism: not only did the two orders of government work closely to construct the pension plan, but under its decision-making rules any changes to the plan required the agreement of a specified number of provincial governments as well as Ottawa. Chapter 3 on Quebec by David Cameron goes to the heart of one of the more fundamental asymmetries in the Canadian federation: the relationship between Quebec, the federal government, and the rest of Canada. The Quebec-Canada asymmetry is reflected in a number of policies and programs, such as Quebec having its own public pension plan, albeit one coordinated with the Canada Pension Plan. In the concluding chapter (chapter 17) we will return to Figure 1.1 in conjunction with a more detailed discussion of the applicability of the six models across different policy domains. Collaborative and, earlier, co-operative federalism have long coexisted with competitive federalism. The competitive dynamic is virtually inherent in Canadian federalism, rooted in ideological diversity, genuine

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differences of interests arising from differences in material/economic base and societal demands, and the electoral imperative to gain credit and avoid blame (Simeon, [1972] 2006). Led by different political parties, fighting elections at different times over different issues, provincial and national governments inevitably butt heads as each government seeks to maximize its autonomy, jurisdiction, and standing with voters. (See chapter 6 by Bakvis and Tanguay on the role of parties and party systems in shaping federal–provincial relations.) Intergovernmental competition reached a zenith during the 1970s and early 1980s, when province-building ambitions clashed with the unilateral nation-building initiatives of Prime Minister Pierre Trudeau, as reflected, for example, in the 1980 National Energy Program and constitutional patriation and reform. Competition receded somewhat during the Mulroney era (1984–93). Whether in its co-operative or its competitive form, the pattern of intergovernmental relations that took shape in the 1960s brings elected and appointed officials of the two orders of government into repeated interaction. Labelled “executive federalism” (Smiley, 1976: 54), this is still the defining feature of Canadian federalism. The predominant role of governmental executives (ministers and their officials) in intergovernmental relations is a uniquely Canadian phenomenon that originated in the combination of Canada’s jurisdictional federalism and the Westminster parliamentary system. As noted earlier, Canada’s weak intrastate federalism gives provincial governments both the opportunity and the incentive to claim an exclusive right to represent the interests of Canadians within their borders. In chapters 2 and 7 Broschek and Robert Schertzer respectively elaborate on how the logics of the parliamentary and federal systems combine to create this effect. The national government lacks effective forums for the representation of “provincial” interests. At the same time, political authority is concentrated in the executive: the prime minister/premier and cabinet (Savoie, 1999; White, 2005). Executives at both levels thus have considerable latitude to strike bargains on behalf of their governments. And because these executives are relatively few – numbering fourteen with the inclusion of territorial governments – the federal–provincial bargaining characteristic of executive federalism is, at least in theory, logistically manageable in a way that it would not be in the United States, for example. Accordingly, interprovincial disputes are generally resolved through direct negotiations between ministers or senior officials rather



Canadian Federalism: Performance, Effectiveness, and Legitimacy

than in the upper chamber of the central government, as, for example, in Germany. As suggested above, executive federalism is also a response to policy interdependence: the overlap and duplication that are inevitable with two activist orders of government. Since the rise of the modern welfare state in the mid-twentieth century, there have been very few policy areas in which either Ottawa or the provinces can operate without bumping into the jurisdiction of another government. Thus, finding an effective solution to a policy dilemma, even one that lies entirely within the jurisdiction of a single order of government, invariably requires collaboration with the other order. At the very least, the government with the authority to decide must take into account its implications for other governments. Executive federalism, with its dual logic of co-operation and competition, is therefore central to any discussion of the performance of Canadian federalism, as well as its effectiveness and legitimacy. The most important forums of intergovernmental consultation and coordination are 1 first ministers’ conferences (FMCs) and first ministers’ meetings (FMMs) of premiers and the prime minister; 2 ministerial meetings (i.e., meetings of the various ministers holding a particular portfolio, such as health or the environment); 3 meetings of public servants (officials); and 4 interprovincial meetings of the provinces and the territories, in which the federal government does not take part. FMCs were particularly frequent during the constitutional negotiations of the early 1990s, after which they declined in number and were replaced by less formal FMMs. At the same time, the numbers of ministerial and, especially, officials’ meetings began to increase, and they have grown steadily ever since. These forums of executive federalism have often provided opportunities for intergovernmental co-operation, allowing politicians to circumvent constitutional rigidities and respond more directly to societal demands and problems. Co-operation is most likely when the stakes are relatively low and the participants share the same values, typically in a substantive policy domain. When the stakes are higher, political elites may not be so willing to compromise, and the forums of executive federalism can

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become venues for intergovernmental competition. This dysfunctional feature of executive federalism, Dupré (1985) has argued, has been promoted by the centralization of intergovernmental relations within first ministers’ offices and specialized agencies. It manifests itself in particular at the upper levels: at FMCs or meetings of finance ministers, where the stakes tend to be very high. Since the mid- to late 1990s, some analysts have identified a new variant that they call “collaborative federalism.” For Cameron and Simeon (2002: 49) the distinguishing feature of collaborative federalism is “co-determination of broad national policies.” This collaboration takes one of two forms: federal and provincial/territorial governments “working together as equals,” or provincial and territorial governments working together to formulate national policy themselves, without the federal government. For Lazar (1997), collaborative federalism is less hierarchical than the co-operative federalism of the Pearson and Trudeau years (the 1960s and 1970s), when Ottawa alone initiated shared-cost programs and the provinces followed its lead. In some respects, collaborative federalism reflects Canada’s evolution, since the era of co-operative federalism, into one of the world’s most decentralized federations, with federal and provincial governments relatively evenly balanced in their power and status and at the same time highly interdependent (Watts, 1996: 111). Collaborative federalism represents an effort to formalize the increasingly informal, rules-free relationship that had developed between the two orders of government under executive federalism. Agreements like the 1995 Agreement on Internal Trade (AIT), replaced in 2017 by the Canadian Free Trade Agreement (CFTA; see chapter 8 by Grace Skogstad and Matt Wilder), the 1998 Canada-Wide Accord on Environmental Harmonization, and the 1999 Social Union Framework Agreement (SUFA) sought to clarify and streamline government responsibilities in order to minimize the negative spillover effects for other governments and/or industry. These agreements are not legally binding (“justiciable”), but they do include dispute settlement mechanisms. Whether this rule-based federalism is effective in managing the conflict inherent in federal systems is a question taken up by Gerald Baier in chapter 4. Collaborative federalism emerged in response to the circumstances in which Ottawa and the provinces found themselves in the 1990s. Formal efforts to reverse the decline in perceptions of the performance and legitimacy of the federal arrangement through constitutional reform – specifically the



Canadian Federalism: Performance, Effectiveness, and Legitimacy

Meech Lake Accord (1987–90) and the Charlottetown Agreement (1992) – had failed. When the Liberal government of Jean Chrétien took power in 1993, it rejected constitutional reform as a way of correcting perceived deficiencies in the Canadian federal system. The need to demonstrate that the federal system could be renewed and reformed to work in the interests both of Quebec and of the other provinces was heightened following the razor-thin defeat of the separatist forces in the 1995 Quebec referendum. Collaboration was not the only strategy, however. The referendum result also stiffened Ottawa’s resolve vis-à-vis Quebec separatists, as well as its determination to demonstrate that the government of Canada was a power to be reckoned with. The Reference re Quebec Secession and the subsequent Clarity Bill were two indications of this “tough love” aspect of its strategy. Three other circumstances also promoted collaborative federalism. First was the increasing regional and global integration of the Canadian political economy in the 1990s. It exposed Canadian firms to more foreign competition even while it opened new foreign markets for them. It also required Canadian governments to share more of their sovereignty with international rule-making and rule-enforcement institutions, such as the World Trade Organization. These developments highlighted the interdependence of governments; responding effectively to them, it is argued, demanded greater policy coordination and collaboration between governments within Canada. A second factor was the increasing regionalization of Canada’s national political parties after 1993 with the rise of the Reform and Bloc Québécois parties. (See chapter 6.) As the governing Liberal party became progressively more vulnerable to charges that it did not represent all parts of the country, provincial governments increasingly became the champions of interests and ideas not represented in Ottawa. A third factor was the ascendancy of neo-liberalism and the companion philosophy known as new public management. While the former called for governments to play a smaller role in society and the market, the latter called for governments to work more closely with one another in the interest of greater administrative efficiency and clarity. Proponents of new public management and collaborative federalism espouse similar values and tenets: decentralization, less emphasis on formal rules, and more flexible and informal arrangements (Simeon, 1997). At the same time, regional and global economic integration and the new public management philosophy created pressures for extension of the collaborative model to embrace non-state actors. And a shift in the

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political culture, away from elitist and non-transparent executive federalism towards more direct citizen input into decision-making, had a similar effect (Nevitte, 1996). Among the societal cultural changes that have been particularly consequential, as Martin Papillon explains in chapter 15, is the growing determination of the First Nations in Canada to move beyond the legacy of colonialism and take more direct control over their own affairs in many areas. A number of contextual factors ensured that the competitive dynamic never disappeared from intergovernmental relations in this period, despite the rhetoric of collaborative federalism. Fiscal deficits at both levels of government put the two starkly at odds over who would fund costly social programs like healthcare (see chapter 12). And in other policy domains, as the first edition of Canadian Federalism (2002) showed, initiatives such as the National Child Benefit (1998) demonstrated that the Chrétien government never entirely abandoned the “independent governments” model. As the chapters that follow will make clear, Canadian federalism has taken a variety of forms, sometimes simultaneously: co-operative and competitive, collaborative and independent. Figure 1.1 captures neither the competitive dynamic nor the element of unilateralism in intergovernmental relations. Lazar’s (2006) typology of intergovernmental relations in the area of social policy subdivides the “independent governments” model into classical federalism and unilateral federalism. In the former, governments act independently, and each remains within its own constitutionally assigned jurisdiction; in the latter, one order of government (usually the federal) imposes its views and priorities on the other, usually by attaching conditions to its fiscal transfers. Lazar differentiates unilateral federalism, which he reserves for cases of policy interdependence, from “beggar-thy-partner federalism,” in which governments act independently but the actions of one impose substantial obligations on the other (2006: 29). Accordingly, the classical federalism of independent governments, collaborative federalism, joint-decision federalism, unilateral federalism, competitive federalism, and shared-cost federalism are all models at play in Canadian federalism. The chapters that follow in this collection examine the factors that affect the model and performance of federalism in specific policy domains. As a prelude to these close analyses, it is useful to reflect on system-wide factors that have affected the models and



Canadian Federalism: Performance, Effectiveness, and Legitimacy

performance of the Canadian federation in recent decades. One is the integration of the Canadian and American economies. Writing in the early 2000s, scholars like Lazar, Telford, and Watts (2003) and Simeon (2003) argued that there was no evidence that regional and global integration were undermining the federal bargain or having a discernible impact on Canadian federalism and intergovernmental relations. However, as Christopher Kukucha discusses in chapter 9, the increasing intrusion of international trade agreements into provincial areas of jurisdiction has the potential to reshape intergovernmental relations because provinces alone have the authority to implement provisions of international treaties that fall within their jurisdiction. This development can be expected to create incentives for a model of collaborative federalism. A second system-wide factor affecting the performance and model of Canadian federalism are the ideas and goals of Quebec governments. Since 2003, except for a PQ minority government in 2012–14, Quebec premiers have adopted a position of working with other Canadian governments to achieve their goals. Liberal Premier Jean Charest (2003–12) took the lead in the creation of the Council of the Federation, which potentially made it easier for the ten provincial premiers and three territorial leaders to develop a common bargaining position vis-à-vis the government of Canada. Liberal Premier Philippe Couillard (2014–18) also sought conciliation with the rest of Canada and at one point suggested reopening the constitutional file so as to ensure that Quebec became a full-fledged member of the Canadian federation. Since the election of his Coalition Avenir Québec party in October 2018, Premier François Legault has adopted a self-declared pragmatic approach to politics and federalism. Whether Legault’s pragmatism lends itself to co-operative or competitive federalism can be expected to depend upon the extent to which the province’s goals are consistent with or in conflict with those of other Canadian governments. A third systemic factor that affects the performance of Canadian federalism is the ideas of first ministers at the federal level regarding how federalism can and should work (see chapter 7 by Robert Schertzer). Conservative Prime Minister Stephen Harper (2006–15) publicly espoused a policy of Open Federalism that respected provincial jurisdiction and was less intrusive in provincial affairs (Harmes, 2007). Such a policy, alongside the Conservative government’s “small government” preference,

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implied the need for less intergovernmental collaboration. Unlike previous Liberal governments that sought to demonstrate the importance of the national government (and thus garner votes) by expanding the scope of federal activity to include spheres of provincial jurisdiction like health, child care, and cities, the strategy of the Harper Conservative government to achieve these same ends was to expand the role of the government of Canada in areas of federal jurisdiction like defence and criminal justice (prisons), and to retract it in areas of provincial jurisdiction like healthcare (see chapter 12) and the environment (chapter 14 on climate change). That is, while the Paul Martin Liberal government’s minority status (2003–6) and its search for votes lent momentum to collaborative federalism, the Conservative government’s philosophy veered towards the independent governments’ model. However, the Harper Conservative government’s preference for a lesser government role in the economy was derailed to some considerable degree when it was forced – on real threat of defeat – by opposition parties into stimulus spending to mitigate the effects of the downturn in the American and global economy after September 2008. This stimulus spending subsequently entailed collaboration with provincial/territorial and municipal governments on rescue plans for auto plants in Ontario and accelerated spending on infrastructure projects. The Conservative government also discovered the electoral benefits of infrastructure projects; like Liberal and Progressive Conservative governments before them, the party’s brand was promoted on new bridges and highways in closely fought ridings. The election of the Justin Trudeau Liberal government in 2015 and its promised “sunny ways” approach to federalism heralded a return to greater collaboration and a move away from the disengaged attitude of the Harper Conservative government. Ottawa introduced a new Canada Child Benefit that altered the Harper-era changes. It increased the size of the child benefit received by families, making it tax free as well as means-tested and eliminating the advantages given to single-income families. These changes were made with the view of giving more money to middle- and lower-income families. The Canada-Quebec Pension Plan was reformed to enhance retirement benefits by approximately 50 per cent once fully implemented. Although two or three provinces were initially opposed to the enhancements, once the critical threshold of the C/QPP amending formula was reached (seven out of ten provinces



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encompassing two-thirds of the population), recalcitrant provinces such as Saskatchewan and Manitoba came on board. A fourth factor that affects the performance of federalism across several policy domains is the shift in economic power westward, especially to Alberta, notwithstanding the significant decline in energy prices since 2014. For the first time in Canada’s history, the redistribution of wealth across provinces put Ontario in the equalization-receiving category in 2009–10, where it remained for the next nine years. Alberta’s shifting economic fortunes in the federation have also put pressure on the equalization program more broadly. As Douglas Brown explains in chapter 10, Alberta governments – NDP and Conservative – have complained that Alberta gets the “short stick” on equalization. Notwithstanding the fact equalization is financed exclusively by the government of Canada through its general revenues, Conservative Premier Jason Kenney threatened to hold a referendum on whether Alberta should continue to contribute to the equalization program. Alberta’s referendum threat can be read as evidence of the frustrating situation in which the province finds itself: one of low world energy prices and a stalemate over the completion of the Trans Mountain pipeline expansion and access to Asian markets for Alberta bitumen. The impasse over Trans Mountain has pitted Alberta against not only Ottawa but also BC. The two provinces launched court actions against each other over threats to cut off the other’s oil supplies and wine shipments respectively. And, finally, a fifth systemic factor that affects the model and performance of federalism is the ideology and partisan affiliation of governments at the two orders. There is some evidence that federal and provincial governments that share an ideological affiliation (and therefore, usually, a partisan affiliation as well) are more likely to co-operate with one another than those that are not aligned on ideological or partisan grounds. One example is the C/QPP reform. The province of Ontario under the Liberal government of Kathleen Wynne pushed hardest for the C/QPP enhancement. Without that impetus, the amendment would have been unlikely. In another policy area, Mark Winfield and Douglas Macdonald (chapter 14) highlight how changes in the governments of Alberta and Ontario, and several others, led to the unravelling of the Trudeau government’s carbon pricing strategy. The Ontario Conservative premier not only repudiated the agreement his Liberal predecessor as premier had struck with Ottawa, but also challenged the constitutionality of the

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federal government’s legislation and required all gas stations in Ontario to post stickers holding Ottawa responsible for the increase in the price of gas. The chapters on federalism and political parties (chapter 6) and climate change (chapter 14) both suggest what has to date been a significantly underestimated role for political parties and, in particular, the electoral cycle, in shifts between collaborative and competitive federalism.

EFFECTIVENESS: POLICY OUTPUTS AND OUTCOMES “Effectiveness” refers explicitly to policy outcomes: the public policies and programs made within and resulting from the web of intergovernmental interactions. How effective are they in dealing with the substantive problems that occasioned intergovernmental bargaining and conflict resolution in the first place? How efficient are the resulting programs in marshalling resources? Do policies allow for asymmetry where it is desired and appears warranted? Do policy outcomes allow international commitments to be met? The fact that two or more governments reach agreement on a particular issue does not necessarily mean that the underlying social or economic issues have been effectively resolved. Focusing on substantive policy typically requires the use of benchmarks or standards to see how policy outcomes measure up. But assessment is easier in some policy areas than in others. In the case of the environment, it is possible to measure quantities of emissions and effluents. In other areas, however, one has to depend on more qualitative assessments. The quality of policy outcomes often lies in the eyes of the beholder. It is also useful to remember that there is a distinction between “policy outcomes” and “policy outputs.” Policy outputs – the decisions made regarding programs and policies – may have unintended consequences, and as a result their actual outcomes may look quite different from the original plan. It is often only with hindsight that the distinction between outputs and outcomes becomes clear. It is difficult to determine exactly how federalism and intergovernmental relations affect public policy outcomes. First, developments in any policy area are contingent on several factors, of which federalism is only one – though it may be the most important. Studies of federal systems have found no discernible effects of federalism on policy outcomes



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and have had difficulty identifying any differences between federal and decentralized unitary states in this respect (Braun, 2000; Norris, 2005). Second – and a reason why those studies have yielded few results – is that the effects of federalism on policy-making are likely to depend on the prevailing model of federalism: independent governments, unilateralism, competitive, collaborative, or joint-decision (McRoberts, 1993; Banting, chapter 11 in this volume). Nonetheless, over the past decade there has been a revival of interest in linking federalism, and specific forms of federal governance, not only to policy outcomes but also to accountability regimes (e.g., Graefe, Simmons, and White, 2013). More recent work suggests that poor outcomes are often a function of a mismatch between a specific performance management regime and a particular form of federal governance (see Jones et al., 2019). Any discussion of how different models of federalism shape public policy outcomes in Canada must begin with a discussion of the spending power: the power that allows the Parliament of Canada to make payments to individual Canadians, institutions, or provincial governments for purposes outside its constitutional jurisdiction. Although the spending power can be used in a way consistent with the independent governments model (e.g., when the federal government makes payments directly to individual Canadians for child care or to post-secondary educational institutions), it is more often used as an instrument to increase interdependence across the two orders of government. The federal spending power has important implications for the performance, effectiveness, and legitimacy of the federation. It breaches the federal principle of exclusive jurisdictions and (as will be discussed further in the next section) undermines the legitimacy of the federal system in the eyes of many Quebeckers in particular. The chapters on social policy in this volume (chapters 11 and 12) suggest that its impact on the effectiveness of the federation may be more positive. But the impact of its use has generally been judged differently, depending on whether it is used unilaterally (in a model of unilateral federalism, to use Lazar’s [2006] term) or constrained by collaborative or joint-decision federalism. The arm’s length or “independent governments model” of classical federalism preserves autonomy and freedom of action at both levels. It gives each government the opportunity and flexibility to experiment and innovate in devising solutions to policy problems (Banting, 1995). Indeed, citizens who live outside an innovative state or province may

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eventually benefit from its experiments. The classic Canadian example is the adoption of universally available and publicly funded hospital and clinical care, following Saskatchewan’s pioneering example (see chapter 12). A more recent example is child care; Quebec’s innovative low-cost, universally available program has provided an attractive model for child-care advocates in other provinces. Some analysts argue that the “independent governments” model is likely to be particularly efficacious in addressing citizens’ demands when the competitive dynamic is uppermost (Breton, 1996; Harrison, 1996; Young, 2003). Competition across provinces can create “a race to the top” when voters press their provincial governments to emulate policies and standards developed somewhere else (Harrison, 2005). In a period of buoyant finances, the competition for voters’ support can lead both orders of government to expand public services and take on new state activities, as Banting demonstrates in chapter 11. The “independent governments” model can also work to the advantage of non-state actors with the resources to organize on both federal and provincial fronts. Having two access points, federal and provincial, gives non-state actors two kicks at the can, allowing them to play one order of government off against the other in pursuit of their policy objectives. There are, of course, downsides when governments act independently of one another and fail to coordinate their activities. The risks of policy incoherence and program incompatibility increase. Problems are more likely to be ignored when blame can be shifted to the other order of government. This dynamic is especially likely when it is unclear which level of government should be responsible for addressing a problem, or when resolving it will entail significant financial or political costs. Even when intergovernmental competition promotes the development of new programs, the results may not be entirely beneficial. Policies may be designed with more concern for the interests of the sponsoring government than for efficacy in dealing with the problem at hand. A tax benefit or direct payment to parents to help cover child-care costs, for instance, may serve the interests of a government seeking to improve its image among voters; however, such a policy may do very little to create the new daycare spaces that working parents need. The joint-decision-making model is often associated with ineffective policy-making and poor outcomes (Scharpf, 1988; Pierson, 1995). This model requires joint action of governments at both levels, by virtue of



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either unanimous or super-majority agreement. Governments lose their autonomy and flexibility, but they do retain the power of veto. With multiple points at which change can be rejected, joint decision-making can lead to a number of “traps.” Existing programs become difficult if not impossible to modify. When agreement is reached, the outcome is often less than optimal – a “lowest common denominator” solution, designed to satisfy the most recalcitrant party. As with any collaborative model, resolving substantive problems in the most effective and efficient way is likely to take second place to the political and institutional concerns of state actors, to the desire for status and recognition, and to gain credit and avoid blame. From the perspective of non-state actors, the multiple “veto points” offered by a joint-decision model present both opportunities and obstacles. As Banting explains in chapter 11, those who favour the status quo are likely to welcome the high threshold of agreement for policy change, while those who seek change will be frustrated. Co-operative and collaborative models fit somewhere between the “independent governments” and joint-decision models, depending on how formalized they are and how much scope they leave for independent action by governments. Social safety-net programs are a case in point. At first the government of Canada contributed half the costs of hospital care, post-secondary education, and social assistance. Then it reduced its financial contribution for these programs, leaving the provincial level to pay a larger share of the tab, although the shift to block funding gave the provinces more tax room and more scope to direct the money as they saw fit. More recent forms of collaborative federalism have limited the participating governments’ scope for action; SUFA, for example, constrains the federal spending power even while recognizing its legitimacy. It is often said that the more rule-bound the collaborative model, the greater the likelihood that intergovernmental relations will be hampered by these joint-decision traps, particularly if unanimity for decisions is required. On the other hand, specific rules governing decision-making that allow for qualified majority decision-making (as distinct from unanimity), as in the case of the Canada Pension Plan, can help limit the occurrence of joint-decision-making traps (Brown, Bakvis, and Baier, 2019). The ability of Canadian federalism to tackle major policy challenges has varied over time. The Depression of the 1930s is widely seen as a low-water mark, when the Judicial Committee of the Privy Council insisted on a classic interpretation of federalism that prevented the national

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government from playing a broader role in social and economic programs to address the needs of Canadians. Federalism scored higher points after the Second World War, as governments variously recognized their interdependence, co-operated, and competed with one another for the political affections of Canadians (Simeon, [1972] 2006). If international indices measuring physical and social well-being and overall quality of life are reliable guides, it appears that federalism has not impeded Canadian federal and provincial governments in their pursuit of effective and coherent policies, either jointly or separately. However, if one looks at specific areas the variation in effectiveness becomes apparent. Chapter 12 on healthcare argues that Canada’s effectiveness in this area is subpar compared to other nations and that the particular form of federalism at work here is in good part to blame. Thus, the effectiveness of Canadian federalism depends on both the policy area or substantive issue in question and the model of federalism at work. The following chapters cover a wide array of policy areas: from social policy and healthcare to the environment, economic development, skills training, and international trade. They also investigate some subjects that involve multiple policy issues: cities, Indigenous governance, recognition of Quebec’s distinct needs, and the role of non-governmental actors in intergovernmental relations. These policy areas have been chosen for three reasons. First, they are essential to the integrity of the Canadian social and economic union. In the field of social policy, for example, programs such as child and healthcare represent principles central to Canadian identity and citizenship: all Canadians, regardless of where they live, share both the obligation to finance these programs and the right to benefit from them. It is the sense of mutual obligations and rights that underpins Canada as a social union (Courchene, 1994). Policies in areas such as international trade (chapter 9 by Christopher Kukucha) and climate change (chapter 14 by Mark Winfield and Douglas Macdonald) have more to do with the productivity and competitiveness of the economic union. At the same time, distinctive provincial needs and tastes in these policy areas reinforce claims for provincial jurisdiction and policy diversity. This policy array therefore provides insight into the balance struck between the rights and duties of membership in the social and economic union, on the one hand, and recognition of the diverse needs and circumstances of the constituent provincial units and communities, on the other.



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Second, the policy areas chosen for examination are ones that allow us to assess the resilience and adaptability of Canadian federalism in response to different kinds of challenges. The contextual shift from a period of government deficits to one of fiscal surpluses, and vice versa, for instance, has significant implications for social policies (health, child care, and post-secondary education); it also tests the capacity of fiscal federalism to continue playing the role of an east–west “social railway” ascribed it by Thomas Courchene (1994). Canadians’ commitment to income redistribution appears to be threatened as we increasingly trade more with non-Canadians than with each other. Canada’s participation in international environmental treaties and protocols tests the capacity of the two orders of government to devise a coherent response to evolving international environmental norms and to implement effective international agreements at home. Similarly, Canada’s integration into the North American political economy tests the collaborative capacities of Canadian governments, in this case to develop coherent trade and economic development strategies. Third, the policy areas and issues examined in this book contain a mix of high- and low-profile issues on which the dynamics of intergovernmental relations, and potentially the models as well, can be expected to differ (Dupré, 1985). Some issues, like economic development strategies, post-secondary education funding, fiscal federalism, and international trade, are of interest to specialized policy communities. Others, like healthcare, attract the attention of all Canadians. Some fall somewhere in between, engaging the attention of the general public only intermittently. Intergovernmental competition is expected to be greater on high-profile issues, particularly when the issue is an old one with a history of intergovernmental acrimony (e.g., healthcare), while co-operative or collaborative models are more likely to come to the fore on issues of interest mainly to those citizens with a direct stake in the policy. International trade and climate change are examples here. Issues that touch deeply on provincial areas of jurisdiction, or that are associated with a history of intergovernmental acrimony, are likely to prove especially difficult tests. Policy interdependence itself is not necessarily a barrier to effective policy-making; indeed, at times it is necessary. Whether it becomes a problem will depend on the public salience of the policy area and the historic legacy of intergovernmental relations attached to it.

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Even though the focus of this text is on the role of federalism in policy development, it is important not to exaggerate federalism’s impact. Developments in any one policy area are contingent on a number of factors, and (as we observed earlier) federalism’s impact in that area may be minimal at a particular point in time. At other times federalism may well be the crucial factor determining success or failure. Furthermore, neither competition nor co-operation should be automatically equated with positive outcomes. Competition can be associated with either innovation or stalemate; co-operation with either problem resolution or elite collusion.

LEGITIMACY Governments must be perceived as legitimate if they are to count on the unequivocal support of citizens. Legitimacy is a reflection of the public’s perceptions of the appropriateness of governing arrangements and their outcomes. In federal systems, the cleavages of region, culture, language, and the division between Indigenous peoples and immigrant settlers (to name the most obvious case) raise the real possibility that some citizens may view the governing arrangements associated with federalism as legitimate and others may not. To appraise the legitimacy of Canadian federalism, therefore, we view it through the separate lenses of the various communities and constituencies that make up Canada. One highly relevant question for appraising the legitimacy of Canadian federalism is whether the governing federal arrangements incorporate the various constituent units’ understandings of their own roles and status in the federal system. As David Cameron explains (chapter 3), Quebec’s political elite (if not most of its population) has had a different understanding of federalism from its counterparts in other provincial capitals and in Ottawa. For Quebec’s political elite, the federal union represents the union of two political communities, “peoples,” or “nations”: one English-speaking and located mostly outside Quebec; the other overwhelmingly francophone and based in Quebec. In the words of Claude Ryan (2003: 1), “Quebec is the seat of a national community. Its legislature and government are national institutions, at least in their jurisdictions.” English-speaking Canada,



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by contrast, sees the country as a union of territorial units (provinces), all of which are equal in legal status. In other words, the distinction is between Canada as a multinational federation (of which Quebec is one of two or more constituent nations) versus Canada as a territorial federation (Tully, 1995). The understanding that Quebec constitutes a distinct political community within Canada has led Quebec’s political elite to demand two things of the federal system: (1) formal recognition of Quebec’s distinct status within the federation and, consistent with such recognition, (2) ­preservation and expansion of the province’s legal authority and autonomy so as to safeguard the unique cultural and linguistic character of the Quebec national community. For Quebec’s political elite, the legitimacy of the federal system depends overwhelmingly on the degree to which it provides for asymmetry between Quebec’s status in the federation and that of the other provinces (Gagnon, 2001). There has always been some asymmetry in the autonomy and power of different provinces within the Canadian federation (Watts, 2005). Some asymmetrical features were embedded in the Constitution Act of 1867; others have been introduced over time. One example of the latter is the administrative arrangement under which Quebec runs its own version of the Canada Pension Plan. All the provinces were offered this option and could take it up. While Alberta has indicated its interest in doing so in the post-2019 federal election period, Quebec remained the only province to offer its own pension plan through to 2020. Even so, Quebec’s aspirations for formal recognition of its distinct status within the federation were thwarted by the Constitution Act, 1982. The failure of subsequent efforts at constitutional reform in the Meech Lake Accord and the Charlottetown Agreement almost proved deadly for Canadian federalism. The 1995 referendum on Quebec’s secession from Canada was defeated by the slimmest of margins. Quebec is not the only political community to question the legitimacy of Canada’s federal Constitution. So do the Indigenous peoples in Canada. Martin Papillon (chapter 15) reminds us that Indigenous peoples also seek recognition and greater control over their own communities, often through a third order of self-governing communities. Papillon explores the progress that has been made towards Indigenous self-government and the obstacles that still lie in the way of reconciling the federal system and Indigenous self-government.

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A different sort of pressure on the federal system comes from the order of government that has been excluded from the federal arrangement. Advocates for the municipal level argue that changes in the global economy have put cities at the heart of provincial and national competitiveness strategies, and therefore that cities urgently need greater political autonomy and more fiscal resources. Jack Lucas and Alison Smith weigh the case for city-states against that for better coordination of federal and provincial policies with respect to cities in chapter 16. For many Canadians, including executives of most of the English-speaking provinces, assessing the legitimacy of the Canadian federal system means examining the appropriateness of the procedures and processes followed in policy-making and the substantive features of policy outcomes. Are the rules of the game by which governments interact and negotiate to arrive at policy decisions accepted by governments themselves? How well do existing federal institutions and intergovernmental processes conform to citizens’ expectations regarding their own roles as participants in decision-making? Are these processes consistent with norms of accountability and transparency? Do they meet the expectations of the relevant policy community? Do the outcomes of intergovernmental policy-making reflect the distinct values and preferences of the communities concerned? Are they consistent with those communities’ standards of effectiveness, efficiency, and fairness? The three criteria – performance, effectiveness, and legitimacy – are closely linked. Weak performance, in the form of gridlock in executive federalism, for instance, will normally lead to policy ineffectiveness. Problems will go unresolved where effective action requires intergovernmental co-operation. Yet intergovernmental consensus in itself does not necessarily yield effective policies. It may simply mean that the two orders of government have agreed to ignore politically difficult issues. Repeated over time, policy ineffectiveness will only lead citizens to give failing marks to the system as a whole. Similarly, a federal system that underperforms by failing to provide sufficient scope for the expression of regional particularities will also undermine the legitimacy of the system. Because legitimacy is appraised in both substantive and procedural terms, the links between effectiveness and legitimacy are complex. Furthermore, the norms, procedures, and rules are often opaque. One would ordinarily expect citizens to support federal practices that yield effective policies by addressing problems in a timely and efficient



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manner. If the political culture places a high priority on democratic processes, however, policies arrived at through closed, non-transparent, and unaccountable processes may still be viewed as illegitimate, even if they are highly effective in delivering certain outcomes. When individual Canadians are asked to appraise the legitimacy of Canadian federalism, they appear to be much more interested in outcomes than in respect for federal principles. Cutler and Mendelsohn (2001) found that Canadians outside Quebec show little concern for whether governments respect the constitutional division of powers. They found Canadians care more about results in important policy areas and want governments to co-operate to achieve those results. Even so, individual Canadians’ perceptions of the legitimacy of Canadian federalism are likely to be based on both the results of executive federalism (output legitimacy) and its procedures (input legitimacy). Certainly, Jennifer Smith (2004) argues that Canadian federalism falls short when it comes to promoting democratic participation in the policy-making process. Upon entering the third decade of the twenty-first century, federalism continues to provide the essential framework for governance in Canada. How effectively and legitimately it does so, and how it is changing as political elites within both orders of government grapple with contemporary challenges, is the subject of the chapters that follow.

REFERENCES Banting, K. 1995. “The Welfare State as Statecraft: Territorial Politics and Canadian Social Policy.” In European Social Policy, edited by S. Leibfried and P. Pierson, 269–300. Washington, DC: Brookings Institution. Braun, D. 2000. “Territorial Division of Power and Public Policy-Making: An Overview.” In Public Policy and Federalism, edited by D. Braun, 27–56. Aldershot, UK: Ashgate. Breton, A. 1996. Competitive Governments: An Economic Theory of Politics and Public Finance. New York: Cambridge University Press. Brown, D., H. Bakvis, and G. Baier. 2019. Contested Federalism: Certainty and Ambiguity in the Canadian Federation. 2nd ed. Don Mills, ON: Oxford University Press. Cameron, D., and R. Simeon. 2002. “Intergovernmental Relations in Canada: The Emergence of Collaborative Federalism.” Publius 32, no. 2: 49–71. https://doi.org/10.1093/oxfordjournals.pubjof.a004947.

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Herman Bakvis and Grace Skogstad Courchene, T.J. 1994. Social Canada in the Millennium: Reform Imperatives and Restructuring Principles. Toronto: C.D. Howe Institute. Cutler, F., and M. Mendelsohn. 2001. “What Kind of Federalism Do Canadians (outside Quebec) Want?” Policy Options 22, no. 8: 23–9. https:// policyoptions.irpp.org/magazines/should-we-legalize-drugs/what-kind -of-federalism-do-canadians-outside-quebec-want/. Dupré, J.S. 1985. “Reflections on the Workability of Executive Federalism.” In Intergovernmental Relations, edited by R. Simeon. Toronto: University of Toronto Press. Gagnon, A.-G. 2001. “The Moral Foundations of Asymmetrical Federalism.” In Multinational Democracies, edited by A.-G. Gagnon and J. Tully, 319–38. Cambridge: Cambridge University Press. Graefe, P., J.M. Simmons, and L.A. White, eds. 2013. Overpromising and Underperforming?: Understanding and Evaluating New Intergovernmental Accountability Regimes. Toronto: University of Toronto Press. Harmes, A. 2007. “The Political Economy of Open Federalism.” Canadian Journal of Political Science 40, no. 2: 417–37. https://doi.org/10.1017 /S0008423907070114. Harrison, K. 1996. Passing the Buck: Federalism and Canadian Environmental Policy. Vancouver: University of British Columbia Press. ———, ed. 2005. Racing to the Bottom? Provincial Interdependence in the Canadian Federation. Vancouver: University of British Columbia Press. Jones, S., G. Bouckaert, P. Fafard, and L. Bernier. 2019. “Strange Bedfellows: Federal Systems and Performance Management.” Regional and Federal Studies 29, no. 4: 479–505. https://doi.org/10.1080/13597566.2018 .1517086. Lazar, H. 1997. “Non-Constitutional Renewal: Toward a New Equilibrium in the Federation.” In The State of the Federation 1997: Non-Constitutional Renewal, edited by H. Lazar, 3–38. Kingston, ON: Institute of Intergovernmental Relations, Queen’s University. ———. 2006. “The Intergovernmental Dimensions of the Social Union: A Sectoral Analysis.” Canadian Public Administration 49, no. 1: 23–45. https:// doi.org/10.1111/j.1754-7121.2006.tb02016.x. Lazar, H., H. Telford, and R.L. Watts. 2003. “Diverse Trajectories: The Impact of Global and Regional Integration on Federal Systems.” In The Impact of Global and Regional Integration on Federal Systems: A Comparative Analysis, edited by H. Lazar, H. Telford, and R.L. Watts, 1–36. Kingston, ON: McGill–Queen’s University Press. McRoberts, K. 1993. “Federal Structures and the Policy Process.” In Governing Canada: Institutions and Public Policy, edited by M.M. Atkinson, 149–78. Toronto: Harcourt Brace Jovanovich. Nevitte, N. 1996. The Decline of Deference: Canadian Value Change in Cross-national Perspective. Peterborough, ON: Broadview.



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Norris, P. 2005. “Stable Democracy and Good Governance in Divided Societies: Do Powersharing Institutions Work?” Faculty Research Working Paper RWP05-014. Cambridge, MA: John F. Kennedy School of Government, Harvard University. Pierson, P. 1995. “Fragmented Welfare States: Federal Institutions and the Development of Social Policy.” Governance 8, no. 4: 449–78. https:// doi.org/10.1111/j.1468-0491.1995.tb00223.x. Ryan, C. 2003. “Quebec and Interprovincial Discussion and Consultation.” Kingston, ON: Queen’s Institute of Intergovernmental Relations. https:// www.queensu.ca/iigr/sites/webpublish.queensu.ca.iigrwww/files/files /WorkingPapers/CouncilFederation/FedEN/7.pdf. Savoie, D.J. 1999. Governing from the Centre: The Concentration of Power in Canadian Politics. Toronto: University of Toronto Press. Scharpf, F. 1988. “The Joint-Decision Trap: Lessons from German Federalism and European Integration.” Public Administration 66, no. 3: 239–78. https://doi.org/10.1111/j.1467-9299.1988.tb00694.x. Simeon, R. (1972) 2006. Federal–Provincial Diplomacy: The Making of Recent Policy in Canada. Toronto: University of Toronto Press. ———. 1997. “Rethinking Government, Rethinking Federalism.” In The New Public Management and Public Administration in Canada, edited by M. Charih and A. Daniels, 69–92. Toronto: Institute of Public Administration. ———. 2003. “Important? Yes. Transformative? No. North American Integration and Canadian Federalism.” In The Impact of Global and Regional Integration on Federal Systems: A Comparative Analysis, edited by H. Lazar, H. Telford, and R.L. Watts, 125–72. Kingston, ON: McGill–Queen’s University Press. Simeon, R., and I. Robinson. 1990. State, Society, and the Development of Canadian Federalism. Toronto: University of Toronto Press. Smiley, D.V. 1976. Canada in Question: Federalism in the Seventies. 2nd ed. Toronto: McGraw Hill-Ryerson. Smith, J. 2004. Federalism. Vancouver: University of British Columbia Press. Stevenson, G. 1993. Ex Uno Plures: Federal–Provincial Relations 1867–1896. Montreal: McGill–Queen’s University Press. Tully, J. 1995. Strange Multiplicity: Constitutionalism in an Age of Diversity. Cambridge: Cambridge University Press. Watts, R.L. 1996. Comparing Federalism in the 1990s. Kingston, ON: Institute of Intergovernmental Relations, Queen’s University. ———. 1999. The Spending Power in Federal Systems: A Comparative Study. Kingston, ON: Institute of Intergovernmental Relations, Queen’s University. ———. 2003. “Managing Interdependence in a Federal Political System.” In The Art of the State: Governance in a World Without Frontiers, edited by T.J.

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Herman Bakvis and Grace Skogstad Courchene and D.J. Savoie, 121–52. Montreal: Institute for Research on Public Policy. ———. 2005. “A Comparative Perspective on Asymmetry in Federations.” Kingston, ON: Institute of Intergovernmental Relations. https://www .queensu.ca/iigr/sites/webpublish.queensu.ca.iigrwww/files/files /WorkingPapers/asymmetricfederalism/Watts2005.pdf. Wheare, K.C. 1951. Federal Government. London: Oxford University Press. White, G. 2005. Cabinets and First Ministers. Vancouver: University of British Columbia Press. Young, R. 2003. “Managing Interdependence in a Federal Political System: Comments.” In The Art of the State: Governance in a World without Frontiers, edited by T.J. Courchene and D.J. Savoie, 153–60. Montreal: Institute for Research on Public Policy.

CHAPTER TWO

Self-Rule vs. Shared Rule: Canada as a Case of Comparative Federalism Jörg Broschek

Canadian federalism represents a fascinating case for comparative federalism scholarship for at least three reasons. First, it is remarkable that Canada adopted a federal Constitution in the 1860s, rather than embarking on what was then the predominant unitary pathway of state formation. Second, the drafters of the Constitution constructed a federal institutional architecture that, in an almost exceptional way, displayed features of self-rule at the expense of shared rule. Finally, in interaction with other institutional, ideational, and societal factors, this institutional framework has facilitated a distinct pattern of federal dynamics that has been, at the same time, highly resilient and highly conducive to political change. State formation entails the creation of a new political, administrative, economic, and cultural centre. As such, it is an inherently conflict-laden process, generating centre–periphery conflicts. Federalism is only one contingent institutional solution to accommodate such conflicts. In fact, unlike Norway or Italy, Canada belongs to the small number of nineteenth-century nation-states that became federal states.1 In order to reconcile diverging interests between those actors who favoured a strong central government and those who represented peripheries, the Fathers of Confederation were influenced by two different models of territorial politics, the British and American approaches, and aligned them in a way that would facilitate a constitutional compromise. While they adhered to the British tradition of Westminster-style government, the Constitution

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drafters refrained from accommodating peripheral interests within a unitary framework as in Britain’s “dual polity” (Bulpitt, 2008). Instead, they emulated the American approach to reconcile centre–periphery conflicts by entrenching a federal system. The reconfiguration of both institutional traditions in the context of Canadian state formation established a new variant within the small universe of federal democracies. While most federal systems seek to balance the institutional capacity of each governmental tier for autonomous action through self-rule with the need to collaborate through shared rule, Canadian federalism places an almost exceptional emphasis on self-rule. Shared rule, by contrast, has always been underdeveloped. As such, the Canadian case stands in sharp contrast with the German case, where shared rule is the most defining feature of the federal architecture. Other federal systems such as Australia, the United States, or Switzerland rank somewhere in between. The institutional imbalance between self-rule and shared rule results from the combination of Westminster democracy on the one hand and a dual conception of federalism on the other. Both institutional elements have reinforced each other, concentrating power resources on the federal and provincial levels rather than sharing them between and among territorial units within the federal arena. This basic institutional configuration is highly path-dependent and has become more firmly entrenched over time, with important implications for institutional and policy dynamics. While it has been difficult to reverse this pathway by enacting structural reforms that would strengthen shared rule within the federal system, Canadian federalism is certainly not static. As will be argued in this chapter, institutional resilience has kept federalism open for ongoing dynamic adjustments. The chapter is divided into four parts. The first section introduces an analytical framework for analyzing similarities and differences between and among federal systems. Building on this framework, the second section situates the Canadian case within a broader comparative setting. The third section examines how Canadian federalism performs in historical-comparative perspective. The final section provides a focused discussion of how the distinct configuration of federalism in Canada generates distinct problems related to policy effectiveness and legitimacy that differ profoundly from those observed in “shared rule” federations like Germany.

Self-Rule vs. Shared Rule: Canada as a Case of Comparative Federalism

COMPARING FEDERALISM: AN ANALYTICAL FRAMEWORK Federalism is one option to accommodate centre–periphery conflicts within territorially divided societies. The creation of the modern state was an inherently centralizing, conflict-laden process. While cultural, economic, and political elites aspired to establish a new centre through the concentration and territorial expansion of political authority, peripheral groups sought to entrench mechanisms that would prevent them from becoming marginalized within the new polity (Rokkan, 1999). In most cases, such mechanisms were entrenched within a unitary state. Only about 25 out of approximately 200 states (12.5 per cent) have a federal constitution, and only 8 out of 36 OECD countries (22 per cent) are federations. Although unitary states such as the United Kingdom and Spain feature regional units as well, federalism conceives sovereignty as shared between the federal level and constituent units. By contrast, in unitary states sovereignty is considered to be indivisible and vested exclusively within the central level of government (Hueglin and Fenna, 2015; Watts, 2008). The distinction between unitary and federal states tends to obscure, however, the fact that federalism itself is a highly diversified, multi-dimensional phenomenon (Benz and Broschek, 2013). At least three interacting dimensions need to be distinguished: the societal, the ideational, and the institutional. First, the sociological foundation of federal systems varies (Amoretti and Bermeo, 2004; Erk, 2007). As a constitutional form of conflict accommodation, federalism reflects the existence of territorially defined social cleavages. Such cleavages have historical roots in state formation processes and divide societies along linguistic, ethnic, religious, economic, and cultural lines. The configuration of territorially defined cleavages during state formation differs, and while some cleavages may become reinforced over time, others may weaken. The social cleavage structure of federal systems, therefore, varies in terms of the number, types, and intensity of territorially defined cleavages that lie at the heart of centre–periphery conflicts. Moreover, the configuration of territorially defined cleavages also affects nation-building within federal systems. The salience of linguistic cleavages, especially if reinforced through religious and/or cultural cleavages, can lead to the emergence of multinational federations (Amoretti and Bermeo, 2004; Gagnon and Seymour, 2012).

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Second, as mentioned above, the existence of territorially defined cleavages alone cannot explain the emergence of federalism. If analyzed in isolation, cleavages also do not tell us much about the specific operation of federal systems. Scholars of comparative federalism have argued, therefore, to take ideas more seriously to understand how abstract cleavages shape political discourses within federal systems (Béland and Lecours, 2011: 201; Benz and Broschek, 2013). Ideas manifest themselves in debates about unity and diversity, the narratives about the normative foundations of federalism as well as the construction of (national) identities, communities, and loyalties towards the federal and sub-federal level. The degree of contestation within a federal system becomes visible through competing ideas in discursive interactions about the role and authority of sub-federal and federal governments. On a more general level, ideas find expression in two different, yet related, principles of federalism: self-rule and shared rule. Self-rule represents the idea that political authority within a federal system should primarily be exercised autonomously by sub-federal units (such as provinces, states, cantons, or Länder) and the federal level, respectively. Accordingly, each level of government should enjoy as much freedom as possible to act independently from the other. Shared rule, by contrast, highlights interdependence and power-sharing. Accordingly, this principle represents the idea that federal and sub-federal governments should work together in the exercise of political authority (Broschek, 2015; Watts, 2008). Third, the institutional configuration of federalism reflects the relative weight of self-rule and shared rule. Both ideational principles are variously built into the architecture of federal systems (Watts, 2008: 8). Federal systems consist of four main institutional building blocks: the allocation of powers, fiscal federalism, the system of intergovernmental relations (IGR), and the second chamber. Each institutional component tends to align with either self-rule or shared rule and contributes to define the overall shape of a federal system (Table 2.1). The allocation of powers can be either dual or shared and integrated. In dual federations, jurisdictions are allocated exclusively between both governmental tiers. In shared-powers federations, both levels have authority to act. An integrated allocation of powers represents a distinct form of shared powers that we typically find in some Continental European federations. Here, one level (usually the federal) has the power to legislate in a certain policy domain while the other level

Self-Rule vs. Shared Rule: Canada as a Case of Comparative Federalism Table 2.1.  Self-Rule and Shared Rule in Federal Systems

Allocation of powers

Self-Rule

Shared Rule

Dual and exclusive jurisdiction

Shared and/or integrated (one level legislates, the other level implements) Shared taxing powers Encompassing equalization schemes, jointly administered High degree of organization, including decision rules like qualified majority versus unanimity Low or non-existent scope for unilateral action, compulsory negotiations through collaboration and joint decision-making Rather strong; Council model (regional interests represented on federal level through constituent units’ governments)

Fiscal federalism

Exclusive taxing powers for each governmental tier No or only focused equalization schemes, administered by one governmental tier Intergovernmental Low degree of relations (IGR) institutionalization High scope for unilateral action, voluntary co-operation contingent on willingness of governments

Second chamber

Rather weak; Senate model (regional interests represented on federal level through elected senators)

(usually constituent units) implements federal legislation, with varying degrees of autonomy.2 Fiscal federalism reflects self-rule if both governmental tiers are equipped with exclusive access to tax revenue and if redistributive mechanisms – most notably horizontal and/or vertical equalization programs – are weak or non-existent. By contrast, encompassing equalization schemes and shared taxing powers indicate alignment with the idea of shared rule federalism. Moreover, if the system of IGR is based on self-rule federalism, it tends to have a low degree of institutionalization, allowing for unilateral action and/or co-operation on a voluntary basis. By contrast, shared rule federalism provides for a highly institutionalized system of IGR with little or no room for unilateralism. Instead, collaboration and joint decision-making are the predominant modes of interaction (see also the introductory

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chapter in this volume). These modes of interaction are also governed by specific decision rules such as qualified majorities instead of unanimity, which may limit the ability of one single actor exercising a veto. Finally, to be consistent with self-rule federalism, regional participation rights in federal decision-making need to be limited. Accordingly, the second chamber is weak and/or organized around the senate principle. In the case of shared rule federalism, the second chamber is strong and, ideally, offers constituent units’ governments a voice in federal decision-making, as exemplified in the German Bundesrat. The German Bundesrat is not directly elected. Instead, it is composed of representatives of sub-federal governments, who enjoy strong participation rights in federal legislation. In many instances, a majority of the Bundesrat can even veto bills introduced by the federal government. Table 2.1 represents a stylized analytical framework to compare institutional variation among federal systems. Individual cases combine elements of self-rule and shared rule and can be mapped on a continuum between two extreme poles: self-rule on one end, shared rule on the other. From a comparative perspective, Canadian federalism is remarkable, as shared-rule elements are extremely weak and decision rules, except for constitutional amendments and the Canada-Quebec Pension Plan, largely absent. Instead, the institutional architecture of Canadian federalism resembles almost an ideal-type of self-rule federalism.

SITUATING THE CANADIAN CASE Canada belongs to the six “classical” federations that came into existence in North America and Europe as so-called “coming together” federations (Stepan, 1999): the United States (1789), Switzerland (1848), Canada (1867), Germany (1871), Australia (1901), and Austria (1920). Coming together federations are aggregative in the sense that representatives from prospective constituent units negotiated the creation of a new federal state. In this respect, they differ from more recent cases of “holding together” federations, such as Belgium, where an existing unitary state was transformed into a federal state in 1993 in order to prevent secession. On the one hand, Canadian federalism shares important institutional similarities with the other federations in the Anglo-Saxon tradition, the United States and Australia, while it differs from those federations in

Self-Rule vs. Shared Rule: Canada as a Case of Comparative Federalism

the Continental European tradition: Switzerland, Germany, and Austria (Table 2.2). A dual allocation of powers is a typical feature of the former. In all three cases, the drafters of the Constitution were guided by the principle of self-rule, expecting that it would be possible to clearly demarcate spheres of exclusive authority for each governmental tier. Consistent with this motive, moreover, the system of IGR has always featured a comparatively low degree of institutionalization. The historical context for state formation in Continental Europe was different from the experience of the Anglo-Saxon settler societies and promoted, early on, a stronger role for shared rule. Unlike in the colonial context of North America and Australia, in Europe many prospective constituent units – like Prussia or Bavaria – had developed modern state structures with significant bureaucratic capacities in the early and mid-nineteenth century, prior to federalization. While the newly created federal level assumed new competencies, it remained therefore dependent, to various degrees, on the administrative capacities of sub-federal units. As a consequence, the allocation of competencies is more often shared or even integrated, and the greater need for coordination resulted in a more institutionalized system of IGR (Benz, 2013; Lehmbruch, 2019). On the other hand, the distinction between Anglo-Saxon and Continental European federations is not clear-cut. For example, Canadian federalism shares with Switzerland and Belgium societal heterogeneity, in particular linguistic and pronounced regional economic diversity. In addition, Belgium and Canada are both multinational federal democracies with contested ideational foundations of federalism. In all three federations, moreover, self-rule has always remained an important feature of the institutional architecture. Sub-federal units in Belgium (the regions and communities) and Switzerland (the cantons) enjoy considerable legislative autonomy in important jurisdictions such as taxation and healthcare, similar to the Canadian provinces. The Swiss cantons also have more leeway, which means stronger self-rule capacities, when they implement federal legislation than in the German and Austrian Länder. Finally, noticeable differences also exist within the sample of federations in the Anglo-Saxon tradition. In the United States, federalism was established with the framework of a presidential system, while in Canada and Australia federalism is linked to a specific type of parliamentary system: Westminster democracy. The interaction of federalism and “extra-federal” institutions (see the introductory chapter in this

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Created in 1789 De-federalization 1861, refederalization 1865

50 states

Socio-economic and sociocultural diversity moderate-strong Mono-national

Historical

Sub-federal units

Societal (territorial cleavages, national integration)

United States

Socio-economic and sociocultural/ linguistic diversity moderatestrong Mono-national

26 cantons

Created in 1848 Replacement of federal constitutions in 1874 and 1999

Switzerland

Socio-economic and sociocultural/ linguistic diversity strong Multi-national

10 provinces, 3 territories

Created in 1867

Canada

Table 2.2.  Canadian Federalism in Comparative Perspective

Socio-economic and sociocultural diversity moderate (since 1990) Mono-national

16 Länder

Created in 1871 Replacement of federal constitution in 1919 De-federalization 1933, refederalization 1949

Germany

Socio-economic diversity moderate and sociocultural diversity low-moderate Mono-national

6 states, 3 territories

Created in 1901

Australia

Socio-economic diversity moderate and sociocultural diversity low Mono-national

9 Länder

Created in 1920 Defederalization 1934; refederalization 1945

Austria

Socio-economic and sociocultural diversity high Multi-national

3 regions, 3 communities

Created in 1993

Belgium

Dominance of self-rule with shared rule counterweights

Institutional foundation of federalism

Self-rule and shared rule balanced

Not contested in principle

Dominance of self-rule, weak shared rule

Contested (compact theories, Indigenous rights vs. settler society) Dominance of shared rule, weak self-rule

Not contested

Dominance of self-rule with shared rule counterweights

Not contested

Dominance of shared rule, weak self-rule

Not contested

Dominance of self-rule with shared rule counterweights

Contested (Flemish Movement)

Source: Author’s compilation building on Forum of Federations (2005); Hueglin and Fenna (2015); Loughlin et al. (2013); Watts (2008). Note: De-federalization is defined as the termination of a constitutionalized federal relationship between and/or among constituent units and the federal level. Re-federalization is defined as the institutionalization of a federal system after it had been temporarily abandoned.

Not contested in principle (but ongoing relevance of states’ rights doctrine)

Ideational foundation of federalism

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volume) has important consequences. For example, while regional interests in the United States participate in federal decision-making through elected senators in Congress, a distinct version of intrastate federalism,3 in Australia and, even more so, in Canada regions are represented in the system of IGR, or interstate federalism. In both federal systems, sub-­ federal governments seek to influence federal decision-making primarily in negotiations with their federal counterpart in what is called “executive federalism” (Smiley, 1976: 52ff.) or, for Canada more specifically, “federal-provincial diplomacy” (Simeon, 2006). And finally, although the two Westminster democracies, Australia and Canada, are very similar in their basic configuration, they differ profoundly in their long-term institutional trajectories. While Canada was a highly centralized federation at the outset, Australia was highly decentralized. These initial outcomes of state formation were reversed in both cases over time, with Canada becoming one of the most decentralized and Australia one of the most centralized federations worldwide. Societal, ideational, and institutional variations of federalism have important implications for assessing the performance, effectiveness, and legitimacy of individual federal systems. First, by comparing federal systems synchronically, at a given point in time we observe significant differences regarding the societal context (cleavages, nation-building), the ideas and discourses shaping the politics of federalism, and the institutional configuration of federal systems. This becomes particularly obvious through a comparison of most dissimilar cases, such as Canada and Germany. Canada is a multinational federal democracy. Its federal society is characterized by pronounced regional economic and socio-cultural cleavages, and the ideational foundations have been contested from the beginning. Germany, by contrast, is mono-national. Although regional economic and socio-cultural differences have increased since German reunification in 1990, they are still moderate from a comparative point of view and the ideational foundations of federalism are not contested. Moreover, the institutional configuration of federalism contrasts sharply in both cases. Accordingly, the definition of problems for the performance and effectiveness of federalism, as well as the range of options considered as legitimate, are very different in both federal systems. Second, if we compare federal systems diachronically (meaning their dynamic development over time), we can also observe interesting similarities and differences. Federal systems are not static. All three

Self-Rule vs. Shared Rule: Canada as a Case of Comparative Federalism

dimensions of federalism change over time, and so do the definition of problems, the scope of viable solutions, and, possibly, the perception of what is considered acceptable or not. Change, however, does not emerge in a vacuum. As will be illustrated in the following sections, it is always bounded by past developments, ideational and institutional constraints.

PERFORMANCE The Federal Principle: Ideational Ambiguity Canada has survived as a multinational federal democracy since its formal establishment through the BNA Act in 1867. It has shown itself to be capable of addressing substantial crises without falling apart. Like in Switzerland or Australia, federalism has been a persistent feature of Canada’s political order. This sets Canada apart from cases where federalism was suspended and reintroduced in the wake of major critical junctures, such as occurred in the United States during the Civil War between 1861 and 1865, in Germany between 1933 and 1949, and in Austria between 1934 and 1945 (see Table 2.2). Canada also contrasts with other multinational but unitary states such as Spain or the United Kingdom. In Spain, for example, the transition from a unitary to a federal state failed in 1873 and set the country on a different constitutional trajectory that makes it very difficult to accommodate territorial conflicts today. Belgium, by contrast, eventually adopted a federal constitution in 1993, following an incremental process of decentralization reforms after 1970. However, it is still grappling with its unitary past (Swenden and Jans, 2006). In this respect, Canada has been consistent with the federal principle. To be sure, the federal powers of reservation and disallowance, along with the declaratory power, represented elements of Canada’s political order at odds with the constitutional principle of federalism. As these powers were frequently deployed in the aftermath of Confederation, the period between 1867 and 1896 is often described as an era of “quasi-federalism.” With the transition from John A. Macdonald’s Conservative government to the Liberal government under Wilfrid Laurier, these powers came to be used far less frequently, giving way to the era of “classical federalism” during which federalism established itself as a principle that was widely recognized (Simeon and Robinson, 1990).

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At the same time, however, the meaning of federalism remained open and contested (Brown, Bakvis, and Baier, 2019; Gagnon, 2009; Rocher, 2009). Again, the Canadian case differs, to varying degrees, from other modern federations. In Germany, for example, Unitarismus, a widely shared belief among political and economic elites in the necessity to establish uniform conditions within the formal confines of a federal constitution through collaboration, superseded a long-standing tradition of federal ideas rooted in the autonomy of diverse regions during the second half of the nineteenth century (Lehmbruch, 2000). A similar predominant ideational commitment to foster uniformity and harmonization can be found in Australia or Austria. Even in the United States or Switzerland, where territorial diversity is more broadly accepted, federalism is rooted in an ideational consensus that emerged in the aftermath of order-shattering events. Post-reconstruction in the United States, for example, was an effort not only to re-institutionalize political authority within a federal framework, but also to solidify a new understanding of federalism that would buttress a more centralized developmental pathway (Johnson, 2007). In Switzerland, the Sonderbundwar of 1847 initiated the transformation of the formal confederal order into a federal constitution. Although this original federal constitution was overhauled twice, in 1874 and 1999, its foundational ideational premises have been relatively stable, as reflected in a general consensus on the nature and origins of state authority (Kriesi and Trechsel, 2008). A similar ideational “lock-in,” or historical entrenchment of a widely shared belief in the normative foundations of the federal order among a majority of the population and political elites, has never happened in Canada. In this respect, Canadian federalism is a rather rare case in the Global North. As Peter Russell (2017) has argued, historically Canada’s federal multinational democracy still copes with the legacy of two “incomplete conquests.” Centre-formation in Canada lacked the penetrating power of similar processes in other federations as European imperial powers refrained from a complete conquest of Indigenous peoples and the francophone population. This legacy, in turn, hampered any subsequent efforts among the three “foundational pillars” to constitute themselves on the ideational level as one demos – in other words, as a political community whose members can, despite all differences, mutually agree on a set of foundational values that constitutes its existence (Russell, 2004).

Self-Rule vs. Shared Rule: Canada as a Case of Comparative Federalism

Although it was possible to reach a compromise on a federal constitution between 1864 and 1867, the federal principle itself remained “in flux” (Vipond, 1989: 5). Under the leadership of Ontario’s premier Oliver Mowat, the so-called provincial rights movement began to challenge John A. Macdonald’s imperial conception of federalism (Armstrong, 1981; Vipond, 1991). Over the course of the late nineteenth and early twentieth centuries, the provinces cultivated two powerful counter-narratives in the form of compact theories about the historical foundations and normative implications of Canadian federalism (Cook, 1971). Accordingly, Confederation had to be interpreted either as a compact among equal provinces or, in the view of Quebec, as a compact between the two founding nations: the French and the English. While both reject a centralized federal system and a subordinate role of the provinces, they disagree about the role of the provinces themselves. While the narrative that Canada is a compact among equal provinces opposes asymmetrical arrangements for individual provinces, the narrative of Canada as a compact between two nations serves as a normative foundation for Quebec’s claims to be recognized as a distinct society and province within Canada. Moreover, Indigenous peoples have vigorously articulated their own interpretation of Canadian federalism, adding another layer of ideational complexity. For the most part, Indigenous rights advocates envisage a renewed nation-to-nation relationship that can be reconciled with the existing institutions of Canadian federalism (Hueglin, 2003; Ladner, 2017). For others, similar to the argument of Quebec sovereignists, consequential de-colonialization needs to be conceived of as territorial coexistence outside a shared framework of Canadian state authority (Alfred, 1999).

Institutional Ambiguity: The Legacy of Interstate Federalism From a comparative point of view, Canada’s dual approach to the allocation of competencies is similar to that in the United States, Australia, Belgium, and, to some degree, Switzerland. The main rationale behind this approach is to assign state functions exclusively to either order, creating “watertight compartments.” The original BNA Act of 1867 appears to epitomize this approach through a dual list enumeration (Hueglin and Fenna, 2015). With the exception of agriculture, immigration, and criminal law, the Fathers of Confederation assigned almost all state

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functions of the time to either the federal level or the provinces, rather than creating a single or multiple list approach, which would tend to leave greater scope for concurrent powers. The dual list approach, however, entailed a paradox because the delegates obviously refrained from delineating rather precisely the scope and boundaries of the provisions entailed in sections 91 and 92 of the BNA Act. It was only possible to reach a consensus on a federal Constitution as long as advocates of a more centralized form of federalism and those who favoured a more decentralized federation could interpret the compromise in their own way. As Vipond (1989: 7–8) states, “most supporters of the Confederation proposal did their best to avoid giving these general propositions substance.... [T]he text read one way, seemed to guarantee local self-government [but it] could be read with equal ease as a massive hedge against local control.” Institutional ambiguity, therefore, facilitated agreement, but left many questions unresolved. It shifted problems into the future and passed them over, for the most part, to the Judicial Committee of the Privy Council (JCPC) in London to solve. In this respect, the Canadian case does not represent an idiosyncrasy per se. Federal constitutions are often regarded as incomplete contracts (Farrell and Héritier, 2007), and the Canadian case does not differ from other federations that feature strong elements of self-rule such as the United States or Australia. Ambiguity became amplified, however, in a very distinct way through the lack of intrastate federalism and the presence of Westminster democracy. Canadian political scientists disagree in terms of how they assess the relative importance of intrastate federalism in the original constitutional scheme. For some, like Donald Smiley (1971) or Roger Gibbins (1982), the delegates anticipated that the Senate would serve as an important institutional device for regional representation in federal politics. In addition, informal institutions like the regional composition of the cabinet and caucuses would ensure that regional interests have a safeguard at the federal level. For others, the Canadian case was highly consistent with the principle of self-rule federalism from the very beginning (Smith, 1984; Vipond, 1989). From this perspective, Canada appears as almost unique in the way it lacked almost any effective institutional checks through mutual entanglement even at the moment of creation. Regardless of how one evaluates these diverging interpretations, it is more important that there seems to be consensus on the decline of intrastate federalism over time, however pronounced at the outset. The lack of responsiveness of federal

Self-Rule vs. Shared Rule: Canada as a Case of Comparative Federalism

institutions, most notably the executive, to regional demands was experienced in particular by francophone Canadians in a series of events in the aftermath of Confederation. Interventions by francophone members of the federal government and the government of Quebec to prevent the enactment of the New Brunswick Common Schools Act in 1871, the execution of Louis Riel in 1885, or the Public Schools Act in Manitoba in 1890 can be seen as a sequence of “negative feedback effects,” a mechanism that undermines the effectiveness of an institution over time (Jacobs and Weaver, 2014). Rather than relying on intrastate federalism, provincial governments thus further capitalized on the potential of institutional ambiguities entailed in the dual allocation of powers to consolidate and protect their interests within the federal arena (Broschek, 2012). Westminster democracy further reinforced this trend. Although the principle of parliamentary supremacy is not without limits, institutional ambiguity makes it very difficult to determine where it ends. This has opened the door for federal governments to bypass the division of powers. After the JCPC limited the scope of the peace, order, and good government clause, which had to be balanced against a broad interpretation of section 92(13) (provincial property and civil rights), and the gradual disuse of the powers of reservation and disallowance, the federal government developed the functionally equivalent federal spending power doctrine during the twentieth century (Telford, 2003). This institutional resource allowed the federal government to launch programs unilaterally, or to foster provincial compliance through the “shadow of hierarchy” (Scharpf, 1997). Ottawa used its spending power to nudge policy innovation in areas of exclusively provincial jurisdiction without encountering effective opposition through a second chamber as occurs in the United States, Germany, or Switzerland. Moreover, Westminster democracy on the provincial level encouraged a distinct form of province-building. As Lori Thorlakson (2000) has argued, the German Länder are not per se weaker than the Canadian provinces. The main difference between both developmental trajectories is the form of what she calls “government-building” – the more encompassing notion for “province-building” introduced by Canadian scholars. While the Länder developed considerable administrative authority as a consequence of the integrated division of powers, the provinces have expanded legislative authority and widened the scope of provincial public policy in important areas of social and economic policy. And while shared rule provisions

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enable the German Länder to effectively shape, or even block, important federal legislative initiatives, the provinces are successful in carving out policy space and aggrandizing their jurisdiction.

Federal Dynamics between Reform and Adaptation The historical development of Canadian federalism reveals a remarkable capacity to generate institutional change. Leaving aside rather exceptional episodes like the era of “mega-constitutional politics” (Russell, 2004), Canadian federalism has been largely immune to stalemates resulting from the “joint-decision traps” or divided government obstacles found in Germany or the United States (Brady, 1993; Lehmbruch, 2000; Scharpf, 1997; Schultze, 1984). The comparatively high capacity to produce institutional change in Canada is not, however, without limitations. Institutional change itself can take two different forms: explicit and deliberate as institutional reform or, alternatively, implicit and more passive through adaptation (Benz and Colino, 2011). While Canadian federalism has demonstrated a comparatively high capacity for adaptation, institutional reforms seeking to rebalance self-rule and shared rule are more difficult to achieve. Institutional reforms directed at strengthening shared rule, most notably through intrastate federalism, have frequently failed. They either never materialized, as in the case of Senate reform or, as with the Social Union Framework Agreement of 1999, often had little effect. In fact, in comparative perspective Canada is among those federations that produce a high number of intergovernmental agreements. A comparative study by Jeffrey Parker (2015) ranks Canada second in a sample of six federations. But intergovernmental framework agreements in Canada are vulnerable because they are usually not binding. Their workability depends on the willingness of political actors to comply. Changing governmental priorities, which have the potential to be more sweeping in Canada’s Westminster democracy than in other parliamentary democracies, or deliberate neglect are often detrimental to institutionalizing and internalizing routinized co-operation on an ongoing basis. A recent example is the Pan-Canadian Framework on Clean Growth and Climate Change of December 2016 (see chapter 14 by Winfield and Macdonald). Prime Minister Justin Trudeau’s attempt to relaunch a new era of collaboration within the intergovernmental

Self-Rule vs. Shared Rule: Canada as a Case of Comparative Federalism

arena appeared to have gained some momentum when all provinces except Saskatchewan agreed to this new framework agreement. However, federal and provincial unilateralism soon resurfaced through the battle over carbon pricing between Manitoba, New Brunswick, Ontario, Saskatchewan, and Alberta on the one hand, and the federal government on the other hand. Some institutional reforms aimed at strengthening shared rule certainly succeeded. An example is the Council of the Federation (CoF). There is still considerable scepticism regarding the CoF’s innovative potential (Simmons, 2017), but fifteen years after its inception it displays a greater degree of activism than its Australian counterpart, the Council for the Australian Federation (CAF), which was created in 2006 as a horizontal intergovernmental forum for state and territory governments (Collins, 2015). However, a broader comparative-historical perspective suggests that the CoF has a weak institutional basis. For example, the Conference of Cantonal Governments, a similar horizontal body created in Switzerland in 1993, has a secretariat with about twenty-seven permanent staff, compared to about two positions in the CoF secretariat in Ottawa. Institutional reforms are often path dependent. Change is bounded and easier to achieve as long as it reinforces rather than reverses the established institutional logic of federalism. In federal systems that feature strong elements of shared rule, institutional reforms often aim at disentangling both governmental tiers. Conversely, federations that display strong features of self-rule, like Canada or Australia, seek to entrench more elements of shared rule, or intrastate federalism. Preliminary evidence suggests that such attempts are only of very limited or moderate success at best (Broschek, 2015). For example, major institutional reforms that strengthened self-rule, like the ongoing devolution of authority toward the territories, the creation of Nunavut in 1999, and the Nisga’a Treaty of 1998, were enacted, but Senate reform failed. If institutional reforms are difficult to achieve, political actors can revert to adaptation. The combination of institutional ambiguity and power concentration in Canadian federalism has proven to be particularly conducive to this mode of institutional change, offering a broad array of options to alter the status quo without formally changing the institutional framework. The reinterpretation of the scope of jurisdictional boundaries through landmark decisions such as the Labour

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Conventions Reference (UKPC 6, [1937] A.C. 326) or, more recently, the Supreme Court decision in the Comeau case (2018 SCC 15) exemplify the judiciary’s important role in promoting adaptive change. In these cases, the courts empowered the provinces by giving provincial jurisdictions a broad interpretation. In other cases, like the Crown Zellerbach decision in 1988 ([1988] 1 S.C.R. 401), institutional ambiguity strengthened the authority of the federal government by widening the scope of the peace, order, and good government clause. Moreover, governments themselves have been able to exploit ambiguities through “conversion”: that is, by redirecting old institutions to new purposes (Mahoney and Thelen, 2010: 17). An illustrative example is the federal spending power doctrine. It can be seen as an effort to re-establish institutional power resources in a changing environment. As the powers of reservation and disallowance were no longer viable options, the federal government developed the spending power doctrine in the context of the emerging welfare state as a tool to bypass constraints emanating from the division of powers. The judiciary generally seems to play a greater role in resolving jurisdictional conflicts between the federal level and constituent units in federations that align more with the principle of self-rule. Shared rule federations like Germany or Switzerland, by contrast, are more rigid. An integrated allocation of authority, for example, is less ambiguous as each order of government assumes a certain function (legislation or implementation). Constitutional disputes are thus more frequent in federations that feature a dual allocation of competencies. Similar to Canada, the Supreme Court in the United States and the High Court in Australia have significantly shaped authority relationships between the federal level and constituent units. Supreme Courts in the United States, for example, have variously interpreted the Interstate Commerce clause and, in doing so, altered authority relationships between Washington and the states. The Australian High Court fundamentally reinterpreted the reserved state powers doctrine in 1920, paving the way for a more centralizing dynamic. What makes Canada different, however, is the lack of intrastate mechanisms and the realities of Westminster democracy. In the United States, for example, a broader interpretation of the Interstate Commerce clause in the context of the New Deal legislation was counteracted by Southern Democrats in the Senate, who were able to water down progressive legislative initiatives (Finegold, 2005). The federal government in Canada, by contrast, was able to deploy the federal

Self-Rule vs. Shared Rule: Canada as a Case of Comparative Federalism

spending power to circumvent the restrictions imposed by the JCPC in the context of the Employment and Social Insurance Act in 1937 (see also Banting in chapter 11 of this volume). Finally, the importance of adaptation for federal dynamics in Canada can also be observed in the system of intergovernmental relations. While intergovernmental arrangements vary significantly in individual sectors (Schertzer, McDougall, and Skogstad, 2016), they have oscillated between collaboration and unilateralism on the level of first ministers. This cyclical dynamic contrasts with more persistent patterns in many other federations: most notably, those in Continental Europe that feature a higher degree of IGR institutionalization. Canadian prime ministers, by contrast, have an incentive to develop distinct leadership patterns to address issues related to the economy, national unity, and the welfare state (LeDuc and Pammett, 2016). Different leadership styles often affect IGR: some prime ministers, like Brian Mulroney or Justin Trudeau, embrace a collaborative approach while others, like Pierre Trudeau, Jean Chrétien, or Stephen Harper, revert back to unilateralism.

EFFECTIVENESS AND LEGITIMACY Federalism can have an enabling or constraining effect on policy development. From a comparative point of view, the high propensity for adaptive institutional change in Canada is also reflected at the level of public policies. The concentration of power at both governmental tiers, Westminster democracy, and the weakness of intrastate federalism enable provincial and federal governments to innovate either unilaterally or through co-operation. Joint decision-making, the dominant intergovernmental mode in Germany, is rare and largely limited to the Canada-Quebec Pension Plan and constitutional policy, and involves specific decision rules. In a similar vein, the federal government is not confronted with a strong second chamber, as in Germany or the United States, or mandatory referenda as in Switzerland, institutional features that have the potential to obstruct policy innovation. Both governmental tiers not only enjoy legislative, regulatory, and fiscal resources to innovate, experiment, and learn from each other, but they can also adopt various intergovernmental modes to tackle policy issues. These modes vary from negative coordination, where governments mutually adjust their actions

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in response to initiatives from other governments, to different forms of positive coordination like consultation, co-operation, or collaboration (see Bakvis and Skogstad in chapter 1 of this volume).4 By and large positive effects of this institutional configuration can be seen, for example, in the field of primary and secondary education policy, where Canada performs significantly better than other federal systems (OECD, 2016; Wallner, 2014). Immigration and international trade policy also represent policy areas characterized by productive intergovernmental co-operation between the provinces, territories, and the federal level (see Paquet, chapter 13, and Kukucha, chapter 9, in this volume). Institutional constraints are lower in Canadian federalism than in other federations, most notably those which feature strong elements of shared rule. Yet de facto policy interdependencies nevertheless exist and are even further reinforced through a comparatively high degree of uncertainty and ambiguity (Brown, Bakvis, and Baier, 2019). These institutional conditions can also work against effective policy development. For example, provincial policy innovation may not be sufficient to create policy transformation within a pan-Canadian context, as in what so far have been failed efforts to establish a national pharmacare program or a Canada-wide framework for the creation of early childhood development and daycare policy (Friendly and White, 2012). Moreover, Westminster democracy perpetuates such problems, as it is particularly prone to swift policy reversals, typically following an election, putting “reforms at risk” (Patashnik, 2008). In the absence of either a federal government committed to take on a leadership role by promoting change through the “shadow of hierarchy” (Scharpf, 1997), or the internalization of norms that encourage deliberation and problem-solving rather than pure bargaining among the provinces (horizontally) or between the federal and provincial/territorial level (vertically), policy effectiveness may be difficult to achieve (Schertzer, McDougall, and Skogstad, 2016). The question of policy effectiveness is inherently tied into the question of legitimacy in federal systems. Output legitimacy refers to the capacity of governments to produce effective policy solutions, to promote the general welfare of citizens, and to protect minorities from oppression by majorities (Scharpf, 1999). Issues typically identified in reform discourses often resemble those in federations that align more with self-rule, like Australia, and are diametrically opposed to those in shared rule federations like Germany. Shared rule tends to generate problems resulting

Self-Rule vs. Shared Rule: Canada as a Case of Comparative Federalism

from the constraining effect of federalism. Accordingly, federalism is considered to promote lowest common denominator outcomes, stalemate, or even deadlock while the capacity to innovate is low (Schultze, 1999). By contrast, self-rule federalism is more conducive to policy innovation, but effectiveness may suffer, as indicated above, from policy shifts and reversals, or duplication and overlap (Broschek, 2015). Input legitimacy refers to the responsiveness of elected officials, which means the degree to which their actions correspond with citizens’ preferences, expressed primarily through elections (Scharpf, 1999). Canada’s self-rule federalism mitigates serious problems for input legitimacy that often surface in discourses on the quality of democracy in more entangled shared rule federations. In Germany and Austria, for example, federalism is often blamed for the ongoing disempowerment of sub-federal legislatures, the obstruction of a federal government’s agenda through the second chamber, and blurred responsibilities (Schultze, 1999). In particular, compulsory negotiations through joint decision-making undermine democratic accountability. Joint decision-making, as Fritz Scharpf (1993) has aptly put it, often results in compromises that satisfy no one, and no one wants to accept political responsibility. Sub-federal legislatures, moreover, usually have no choice but to ratify such packages negotiated behind closed doors. In Canada, negotiations behind closed doors do not jeopardize democratic accountability in the same way because they are, for the most part, voluntary. Executives can, at any time, exit the negotiation table and pursue their political agenda unilaterally. Accordingly, federal and sub-federal legislatures are not necessarily weakened through executive federalism in a similar way. Rather, the main problem for input legitimacy results from the possibility of federal encroachment. Notably, the unilateral use of the spending power in areas of exclusive provincial jurisdictions arguably represents the most prominent threat to input legitimacy.

CONCLUSION Building on the distinction between self-rule and shared rule as two foundational principles of federalism, this chapter has situated the Canadian case within the universe of the seven federations in the Global North: the six classical federations plus Belgium. This analytical distinction is

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more encompassing than other prominent concepts that usually focus on one or two constitutive features of Canadian federalism, such as its multinational character or its decentralized nature (see, for example, Erk, 2007).5 The self-rule/shared rule lens promises to capture similarities and differences among federal systems and their dynamics that are often ignored in the literature. The Canadian case belongs to the group of Anglo-Saxon federations that emerged from de-colonialization within the British Empire. As such, it shares important similarities with American and, even more so, Australian federalism. In all three cases, self-rule is predominant, albeit with important modifications. Self-rule is manifested in a dual allocation of competencies, the predominance of interstate federalism, and, accordingly, a comparatively low degree of institutionalization of IGR. Shared rule and intra-institutional checks for regional interests in federal decision-making processes exist in all three federations as well, but they tend to be weaker than in the Continental European federations.6 In these cases, the integrated allocation of competencies and strongly institutionalized intergovernmental relations reflect the significance of shared rule for the practice of federal politics. In Germany and Switzerland, the strong second chamber further magnifies these institutional characteristics. Such differences in institutional configuration have important implications for the performance, effectiveness, and legitimacy of federalism. Ambiguity and unpredictability often lie at the heart of reform discourses not only in Canada, but also in the United States and Australia. Jurisdictional duplication and overlap, for example, result from ambiguity while concerns about unilateral behaviour stem from unpredictability. Political reforms often seek to address such problems through the system of intergovernmental relations, with varying success. In the United States, for example, efforts to improve co-operation through executive federalism are difficult to achieve not only due to the sheer number of state governors, but also because the presidential system privileges legislative rather than executive actors representing regional interests through the Senate. In Australia, the Council of Australian Governments (COAG) has provided a more formalized forum for vertical intergovernmental cooperation between the Commonwealth and the states and territories since the early 1990s. However, it suffers from the Commonwealth’s dominant role insofar as the COAG is directly located within the federal government.

Self-Rule vs. Shared Rule: Canada as a Case of Comparative Federalism

Comparison of Canada with more dissimilar cases like Austria, Germany, and, to some extent, Switzerland can be equally important to better understand the Canadian case. It shows how the performance of federalism in these cases is shaped through institutional entanglement rather than uncertainty and ambiguity. Related problems for the effectiveness and legitimacy of federalism are stalemate, muddling through, and a lack of democratic accountability – problems that are very different from those usually identified in Canadian federalism.

NOTES 1 During nineteenth-century state formation, federalism became a persistent feature of the state in six cases: Mexico (1824), Switzerland (1848), Argentina (1853), Canada (1867), Germany (1871), and Brazil (1891). 2 In Canada the federal level and the provinces implement their legislation through their own public service (Service Canada and, for example, Service Ontario). In Germany, by contrast, citizens usually deal with Land or municipal administrations in areas of federal jurisdiction. The federal public service is limited to a few core exclusive jurisdictions like foreign affairs, customs, or the national civil aviation authority (Laufer and Münch, 2010: 132–3). One notable exception in Canada is the Canada Revenue Agency (CRA), which is akin (yet not similar) to an integrated allocation of powers, as the CRA administers income and corporate taxes for most provinces. 3 Alan Cairns (1979) has distinguished two versions of intrastate federalism: either by rendering the federal level more responsive to regional interests, for example through a more effective representation of regions in federal institutions like the second chamber (“centralist intrastate federalism”), or by empowering the role of provincial governments directly at the federal level, for example by replacing the Senate model with a second chamber that follows the German Bundesrat model (“provincial intrastate federalism”). In this model, the second chamber is composed of sub-federal executives and not elected senators. Regional interest representation in the United States corresponds to the first model, that is, “centralist intrastate federalism.” 4 On the distinction between “negative” and “positive” coordination, see also Scharpf (1997). 5 For an excellent review of approaches to the comparative study of Canadian federalism, see Hueglin (2014). 6 The notable exception is Belgium, which has a more dualistic structure reflecting self-rule.

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Jörg Broschek GLOSSARY cleavages  A concept developed in political sociology to identify and analyze the main structural dividing lines within a society like ethnicity, religion, or class. Territorially defined cleavages capture conflicts between groups within a society that are concentrated within certain territorial boundaries, like provinces or regions. They are often historically rooted in centre– periphery conflicts and have socio-economic, socio-cultural, and/or socio-political foundations. Examples in Canadian federalism include the cleavage between western and central Canada or between Quebec and the Rest of Canada (ROC). coming together federalism  A federal system created through association of previously independent constituent units. holding together federalism  A federal system that replaces a unitary state, often as a response to the threat of secession. input and output legitimacy  Indicate two types of legitimacy in democratic systems. Input legitimacy refers to the normative requirement that political decisions need to reflect the preferences of the citizens, most notably through effective participation. Output legitimacy refers to the normative requirement that political decisions also need to effectively address policy problems, promote the general welfare of the citizens, and protect minorities from the potential threat of the “tyranny of the majority.” institutional ambiguity  Captures the relative openness of institutional rules to more than just one interpretation. joint-decision trap  A concept introduced by Fritz Scharpf to analyze the pathologies of joint decision-making. Because political decisions depend on agreement on a large number of actors representing the federal and sub-federal levels, joint decision-making tends to promote deadlock or lowest common denominator solutions. As a consequence, joint decisionmaking loses legitimacy, but political actors are often unable to adopt a different mode because exit options are rarely available. self-rule versus shared rule  Two different principles of federalism. Self-rule emphasizes autonomy and the capacity of the federal and subfederal levels to make collective decisions independently of each other, within their respective scope of jurisdiction. Shared rule emphasizes interdependence and the need for collaboration between the federal level and sub-federal units (vertically), as well as among sub-federal units (horizontally). Both principles variously underpin the institutional architecture of federal systems and inform political discourses about federalism reforms. state formation  The historical process of constructing a modern territorial sovereign state.

Self-Rule vs. Shared Rule: Canada as a Case of Comparative Federalism REFERENCES Alfred, G.T. 1999. Heeding the Voices of Our Ancestors: Kahnawake Mohawk Politics and the Rise of Native Nationalism. Toronto: Oxford University Press. Amoretti, U., and N. Bermeo, eds. 2004. Federalism and Territorial Cleavages. Baltimore: The Johns Hopkins University Press. Armstrong, C. 1981. The Politics of Federalism: Ontario’s Relations with the Federal Government. 1867–1942. Toronto: University of Toronto Press. Béland, D., and A. Lecours. 2011. “The Ideational Dimension of Federalism: The ‘Australian Model’ and the Politics of Equalisation in Canada.” Australian Journal of Political Science 46, no. 2: 199–212. https://doi.org/10 .1080/10361146.2011.567974. Benz, A. 2013. “Dimensions and Dynamics of Federal Regimes.” In Federal Dynamics: Continuity, Change, and the Varieties of Federalism, edited by A. Benz and J. Broschek, 70–90. Oxford: Oxford University Press. Benz, A., and J. Broschek, eds. 2013. Federal Dynamics: Continuity, Change, and the Varieties of Federalism. Oxford: Oxford University Press. Benz, A., and C. Colino. 2011. “Constitutional Change in Federations: A Framework for Analysis.’ Regional and Federal Studies 21, no. 4–5: 381–406. https://doi.org/10.1080/13597566.2011.578886. Brady, D. 1993. “The Causes and Consequences of Divided Government: Toward a New Theory of American Politics?” American Political Science Review 87, no. 1: 183–94. https://doi.org/10.2307/2938966. Broschek, J. 2012. “Historical Institutionalism and the Varieties of Federalism in Germany and Canada.” Publius: The Journal of Federalism 42, no. 4: 662–87. https://doi.org/10.1093/publius/pjr040. ———. 2015. “Pathways of Federal Reform: Australia, Canada, Germany, and Switzerland.” Publius: The Journal of Federalism 45, no. 1: 51–76. https:// doi.org/10.1093/publius/pju030. Brown, D., H. Bakvis, and G. Baier. 2019. Contested Federalism: Certainty and Ambiguity in the Canadian Federation. 2nd ed. Don Mills, ON: Oxford University Press. Bulpitt, J. 2008. Territory and Power in the United Kingdom: An Interpretation. Colchester: ECPR Press. Cairns, A. 1979. From Interstate to Intrastate Federalism in Canada. Kingston, ON: Institute of Intergovernmental Relations, Queen’s University. Collins, E. 2015. “Alternative Routes: Intergovernmental Relations in Canada and Australia.” Canadian Public Administration 58, no. 4: 591–604. https:// doi.org/10.1111/capa.12147. Cook, R. 1971. Provincial Autonomy, Minority Rights, the Compact Theory: 1867–1921. Ottawa: Information Canada (Commission on Bilingualism and Biculturalism: Studies of the Royal Commission on Bilingualism and Biculturalism 4).

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Jörg Broschek Erk, J. 2007. Explaining Federalism: State, Society and Congruence in Austria, Belgium, Canada, Germany and Switzerland. New York: Routledge. Farrell, H., and A. Héritier. 2007. “Introduction: Contested Competences in the European Union.” West European Politics 30, no. 2: 227–43. https:// doi.org/10.1080/01402380701238741. Finegold, L. 2005. The United States: Federalism and Its Counter-factuals. In Federalism and the Welfare State: New World and European Experiences, edited by H. Obinger, S. Leibfried, and F. Castles. Cambridge: Cambridge University Press, 138–78. Forum of Federations, ed. 2005. Handbook of Federal Countries 2005. Montreal: McGill-Queen’s University Press. Friendly, M., and L.A. White. 2012. “‘No-lateralism’: Paradoxes in Early Childhood Education and Care Policy in the Canadian Federation.” In Canadian Federalism: Performance, Effectiveness, and Legitimacy. 3rd ed., edited by H. Bakvis and G. Skogstad, 183–202. Don Mills, ON: Oxford University Press. Gagnon, A., ed. 2009. Contemporary Canadian Federalism: Foundations, Traditions, Institutions. Toronto: University of Toronto Press. https:// doi.org/10.3138/9781442687721. Gagnon, A., and M. Seymour, eds. 2012. Multinational Federalism: Problems and Prospects. London: Palgrave. Gibbins, R. 1982. Regionalism: Territorial Politics in Canada and the United States. Toronto: Butterworths. Hueglin, T. 2003. “Federalism at the Crossroads: Old Meanings, New Significance.” Canadian Journal of Political Science 36, no. 2: 275–94. https:// doi.org/10.1017/S0008423903778639. ———. 2014. “Embracing Imperfection: How Canada Fares in the Comparative Federalism Literature.” In Canada: The State of the Federation, 2011, edited by N. Verrelli, 9–26. Montreal: McGill-Queen’s University Press. Hueglin, T., and A. Fenna. 2015. Comparative Federalism: A Systematic Inquiry. 2nd ed. Toronto: University of Toronto Press. Jacobs, A., and K. Weaver. 2014. “When Policies Undo Themselves: SelfUndermining Feedback as a Source of Policy Change.” Governance 28, no. 4: 441–57. https://doi.org/10.1111/gove.12101. Johnson, K. 2007. Governing the American State: Congress and the New Federalism, 1877–1929. Princeton, NJ: Princeton University Press. Kriesi, H., and A. Trechsel. 2008. The Politics of Switzerland: Continuity and Change in a Consensus Democracy. Cambridge: Cambridge University Press. Ladner, K. 2017. “Taking the Field: 50 Years of Indigenous Politics in the CJPS.” Canadian Journal of Political Science 50, no. 1: 163–79. https:// doi.org/10.1017/S0008423917000257. Laufer, H., and U. Münch. 2010. Das föderative System der Bundesrepublik Deutschland. München: Bayerische Landeszentrale für Politische Bildung.

Self-Rule vs. Shared Rule: Canada as a Case of Comparative Federalism LeDuc, L., and J. Pammett. 2016. Dynasties and Interludes: Past and Present in Canadian Electoral Politics. 2nd ed. Toronto: Dundurn Press. Lehmbruch, G. 2000. Parteienwettbewerb im Bundesstaat. 3rd ed. Wiesbaden: VS Verlag für Sozialwissenschaften. ———. 2019. “Sub-Federal State-Building and the Origins of Federalism: A Comparison of Austria, Germany and Switzerland.” In Configurations, Dynamics and Mechanisms of Multilevel Governance, edited by N. Behnke, J. Broschek, and J. Sonnicksen, 369–85. London: Palgrave Macmillan. Loughlin, J., J. Kincaid, and W. Swenden, eds. 2013. Routledge Handbook of Regionalism and Federalism. New York: Routledge. Mahoney, J., and K. Thelen. 2010. “A Gradual Theory of Institutional Change.” In Explaining Institutional Change: Ambiguity, Agency and Power, edited by J. Mahoney and K. Thelen, 1–37. Cambridge: Cambridge University Press. OECD. 2016. PISA 2015: Results in Focus. https://www.oecd.org/pisa /pisa-2015-results-in-focus.pdf. Parker, J. 2015. Comparative Federalism and Intergovernmental Agreements: Analyzing Australia, Canada, Germany, South Africa, Switzerland and the United States. New York: Routledge. Patashnik, E. 2008. Reforms at Risk: What Happens after Major Policy Changes Are Enacted. Princeton: Princeton University Press. Rocher, F. 2009. “The Quebec-Canada Dynamic or the Negation of the Ideal of Federalism.” In Contemporary Canadian Federalism: Foundations, Traditions, Institutions, edited by A.-G. Gagnon, 81–131. Toronto: University of Toronto Press. Rokkan, S. 1999. State Formation, Nation-Building, and Mass Politics in Europe: The Theory of Stein Rokkan, edited by P. Flora, S. Kuhnle and D. W. Urwin. Oxford, UK: Oxford University Press. Russell, P. 2004. Constitutional Odyssey: Can Canadians Become a Sovereign People? 3rd ed. Toronto: University of Toronto Press. ———. 2017. Canada’s Odyssey: A Country Based on Incomplete Conquests. Toronto: University of Toronto Press. Scharpf, F. 1993. Autonomieschonend und gemeinschaftsverträglich: Zur Logik der europäischen Mehrebenenpolitik. MPIFG Discussion Paper 93/9. Cologne. ———. 1997. Games Real Actors Play: Actor-centered Institutionalism in Policy Research. Boulder, CO: Westview Press. ———. 1999. Governing in Europe: Effective and Democratic? Oxford: Oxford University Press. Schertzer, R., McDougall, A., and G. Skogstad. 2016. Collaboration and Unilateral Action: Recent Intergovernmental Relations in Canada. IRPP Study No. 62. Montreal: Institute for Research on Public Policy. Schultze, R.-O. 1984. Entwicklungen des Föderalismus in Deutschland, Kanada, und Australien: Wider den Fatalismus unbefragter

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Jörg Broschek Unitarisierungsannahmen. Zeitschrift für Parlamentsfragen 15, no. 2: 291–304. ———. 1999. Föderalismusreform in Deutschland. Widersprüche - Ansätze Hoffnungen. Zeitschrift für Politik 46, 173–94. Simeon, R. 2006. Federal-Provincial Diplomacy: The Making of Recent Policy in Canada. Toronto: University of Toronto Press. Simeon, R., and I. Robinson. 1990. State, Society, and the Development of Canadian Federalism. Toronto: University of Toronto Press. Simmons, J. 2017. “Canadian Multilateral Intergovernmental Institutions and the Limits of Institutional Innovation.” Regional & Federal Studies 27, no. 5: 573–96. https://doi.org/10.1080/13597566.2017.1389725. Smiley, D.V. 1971. “The Structural Problem of Canadian Federalism.” Canadian Public Administration 14, no. 3: 326–43. ———. 1976. Canada in Question: Federalism in the Seventies. Toronto: McGrawHill Ryerson. Smith, J. 1984. “Intrastate Federalism and Confederation.” In Political Thought in Canada: Contemporary Perspectives, edited by S. Brooks, 258–77. Toronto: Clarke Irwin. Stepan, A. 1999. “Federalism and Democracy: Beyond the U.S. Model.” Journal of Democracy 10, no. 4: 19–34. https://doi.org/10.1353/jod.1999.0072. Swenden, W., and M.T. Jans. 2006. “‘Will It Stay or Will It Go?’ Federalism and the Sustainability of Belgium.” West European Politics 29, no. 5: 877–94. https://doi.org/10.1080/01402380600968745. Telford, H. 2003. “The Federal Spending Power in Canada: Nation-Building or Nation-Destroying?” Publius: The Journal of Federalism 33, no. 1: 23–44. https://doi.org/10.1093/oxfordjournals.pubjof.a004976. Thorlakson, L. 2000. “Government Building and Political Development in Federations: Applying Canadian Theory to the German Case.” Regional and Federal Studies 10, no. 3: 129–48. https://doi.org/10.1080 /13597560008421135. Vipond, R.C. 1989. “1787 and 1867: The Federal Principle and Canadian Confederation Reconsidered.” Canadian Journal of Political Science 22, no. 1: 3–25. https://doi.org/10.1017/S0008423900000810. ———. 1991. Liberty and Community: Canadian Federalism and the Failure of the Constitution. Albany: SUNY Press. Wallner, J. 2014. Learning to School: Federalism and Public Schooling in Canada. Toronto: University of Toronto Press. Watts, R.L. 2008. Comparing Federal Systems. 3rd ed. Montreal: McGill-Queen’s University Press.

CHAPTER THREE

Quebec and the Canadian Federation David Cameron

Evaluating Canadian federalism according to the three criteria of performance, effectiveness, and legitimacy is a challenging exercise; the judgments inevitably carry a good dose of subjectivity, depending on the perspective and frame of reference one brings to bear on the subject. In the midst of the bloody American Civil War, it would have been hard to argue that American federalism was a success. Austrian federalism would have been hard to discover and applaud in 1938–45, when Nazi Germany took over the country and incorporated it into the Third Reich. So when, in the life of a country, you make your assessment is important. But there is also the question of what you are assessing. What is success and how will you recognize it? Is it simple survival, endurance, living from one year to another? Or is it meeting the purposes for which the federation was created in the first place? Is it the capacity of that political community to suppress violence and unmanageable conflict? To act as a barrier to tyranny? Or is it the measures many federalism scholars often use – the fostering of local experimentation, the alleged fact that the states or regions in a federal system are schools for democracy, and federalism’s capacity to bring government closer to the people? Is it simply good government? Or, finally, is it a federation’s apparent utility in managing ethno-cultural, religious, and other forms of diversity within the country? Questions of this magnitude arise when one is seeking to evaluate the Canadian federation in relation to Quebec and Canada’s francophone

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population, because French-English relations go to the existential heart of the Canadian political community. How you assess Canada’s performance in this domain depends radically on your foundational values and preferences. Lord Durham would no doubt have judged the evolution of the country on the basis of whether it was leading effectively to the assimilation of French Canadians into English-speaking North America (Durham, 1982; Cameron, 1990). John A. Macdonald would have assessed the issue differently; to the extent that Quebec and French Canada did not get in the way of building a strong national (meaning Canadian) government and a strong national economy, he would have pronounced the arrangements successful (Ajzenstat et al., 2003). A.A. Dorion, however, as one of the most eloquent exponents of the French-Canadian view in the Confederation debates, took a very different position; the purpose of the new federal arrangement, and the single most important criterion of its success, would be the degree to which it protected the survival of French Canada (Waite, 1963). Evaluative differences almost as great exist today, although few contemporary Canadians would seriously adhere to the Durham view. Nevertheless, the assessment of the performance, effectiveness, and legitimacy of the Canadian federation as it relates to Quebec engenders widely different opinions. Some – and I would place myself in this camp – regard the operation of Canadian federalism vis-à-vis Quebec as a success. Despite many failures, setbacks, and injustices, the federal framework has permitted the francophone community in Quebec not simply to survive, but to develop, to transform itself according to its lights. French-speaking Canadians have used their majority status in Quebec to shape the provincial government and public policy very substantially to suit their needs, and Quebec as a federal actor has profoundly influenced the character and operation of Canadian federalism. What is more, with the Supreme Court’s judgment on the Secession Reference in 1998, Canadians now know that the country rests ultimately on the consent of the people in its federal units, and that it is possible for a province to secede constitutionally from Confederation if there is a clear and authoritative withdrawal of that consent. A large number of Quebec citizens, and many, perhaps most, of the Québécois political elite, on the other hand, would likely regard the



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Canadian federal experience as deeply flawed, a story of continuing failure so far as Quebec is concerned.1 The English-speaking majority in Canada, on this view, has consistently used its power and control over the federal government to ensure that its vital interests are protected, and to resist the continuing efforts of members of the francophone community to secure their rights, advance their interests, and establish a standing in the federation that they themselves would recognize as just and appropriate. Through the aggressive use of the spending power and the passage of the 1982 Constitution, the federal government has sought to trump the constitutional distribution of authority between it and the provinces, centralizing power in Ottawa. Quebec is subject to the 1982 Constitution, but not a consenting party to it, leading to the perverse situation that the jurisdiction which, far more than any other, pressed for constitutional reform is the only jurisdiction whose aspirations were not met. There is no way that I know of to establish a federal balance sheet on this matter that everyone could agree to. The differences are not rooted in miscalculation, but in different worldviews. François Rocher (2009: 81) points out that “even the least attentive observer would note that the interpretation of the evolution of Canadian federalism differs greatly depending on the origin of the author.” And compelling evidence can be advanced on both sides. Just as I would acknowledge that the fact that Quebec has never signed on to the 1982 Constitution raises a question about the legitimacy of Canada’s constitutional arrangements, so, I imagine, would Québécois colleagues acknowledge that the experience of French-speakers and of Quebec within Canada since Confederation could have been a whole lot worse. It is helpful to make these widely diverse understandings of the situation clear at the beginning of this chapter, so that the reader will have a sense of the larger context within which the narrative is placed. It is, then, not so much a matter of establishing an uncontested truth, as it is a matter of appreciating the angle of vision from which one gazes on the Canadian federal experience. In what follows I suggest that there were a number of reasons why a federal structure of government for Canada seemed – if not inevitable – at least highly logical, and I argue that the role of French Canada and Quebec was critical in establishing a vibrant federal system in this country.

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FEDERATIONS AND UNITARY STATES: THE LOGIC OF FEDERAL GOVERNMENT IN CANADA Federations are not at their inception the naturally emerging product of long historical experience (as is, for example, the United Kingdom), but “artificial” constructs, created by explicit agreement at a certain historical moment. These political regimes are self-consciously willed into being by an agreement or compact, usually a federal constitution, which establishes a new political order. If a political regime is the product of a formal founding moment or social compact, then it is possible to give reasons for why the deed was done. What are the characteristic reasons for creating federal structures? Some of the most obvious are • • • •

large size of the territory; defence and common security; creation of a larger, stronger economic union; the accommodation of history, tradition, and local loyalties as new states are formed; • the accommodation of significant, territorially concentrated ethnic, cultural, linguistic, or religious differences in existing states; and • the protection of liberty by the dispersion and limiting of state power. In the case of Canada in 1867, two of the key reasons that several of the colonies of British North America chose to establish a new political association were, first, the need to create a strong, common security zone for all the colonies, faced with a retreating Britain and a powerful and bellicose American North, flushed with its recent victory over the South in the Civil War, and, second, the desire to create an integrated economy and transportation system in the top half of North America, and to settle, develop, and control the central and western part of the continent north of the 49th parallel. These were reasons to form a new, larger political association, but they were not, in themselves, reasons for federalism; in principle, a new, large unitary state would have done these tasks just as well or better, which is in fact what John A. Macdonald believed. However, a unitary state was not in the cards for a number of reasons. One obvious factor was the sheer size of the territory under consideration,



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particularly given the available communications technologies of the day. The idea that, in the huge territory of British North America, a single, unitary state could effectively perform all the necessary duties of an emergent modern democratic state was not plausible; dispersing the powers and responsibilities of the state in a decentralized form of government made good sense. Equally important were two elements in the socio-political situation confronting the founders at the time of Confederation. British North Americans in large numbers felt a strong loyalty to their own colonial governments and to the political communities of which they were already members. They were not prepared to abandon these local governments in favour of an untried experiment in a new, larger, and more distant political realm. The strength of local loyalties and the suspicion of the new arrangements can be seen in the fact that two of the colonies that had been party to the discussions declined to join Confederation in 1867; Prince Edward Island did not enter Confederation until 1873, and Newfoundland stood apart until 1949. Further evidence of local loyalty and suspicion of the new arrangements may be seen in the fact that one of the original signatories, Nova Scotia, had second thoughts soon after coming on board and tried unsuccessfully to get out of the deal to which it had just signed on. The second socio-political element was French Canada. It would be no exaggeration to say that a larger political association that failed to make substantial provision for the protection and self-government of the French community in North America would have been impossible. The preservation of a coherent French community and the re-establishment of a significant capacity for that community to govern itself after the experience of the United Province of Canada were unconditional objectives during the Confederation debates. That covers five of the items on our list above – size, security, the economy, local loyalties, and ethno-cultural diversity. The sixth – the protection of liberty – was not really a concern for the colonial politicians who put the Confederation bargain together. Britain’s North American colonies had all been granted responsible government by the time the discussion of these new arrangements occurred. There was simply an assumption that the benefits of self-government and the protection of liberties that the colonial societies were enjoying would be carried forward into whatever new institutional framework was created.

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The two spoilers, then – the two requirements that absolutely had to be met if the new Canadian association were to be accomplished – were the preservation of the colonial units and their governance capacity, and the preservation and self-government of French Canada: both drove the Fathers of Confederation to federalism. It would be difficult to say that one was more essential than the other; both were necessary for the Confederation bargain to be consummated, and from then on, both echo through the Canadian federal story. Our focus in this chapter, however, is on the place of French Canada and Quebec in the Canadian federal system.

FEDERAL PRESSURES BEFORE FEDERALISM: THE FRENCH FACT PRIOR TO 1867 The association of distinct communities, then, is a principle buried deep in our history. The encounter of European settler societies with Indigenous communities and governments brought two radically different civilizations in contact with one another. Until the power of Indigenous people was reduced, the British Crown took care to recognize and treat Indigenous communities as pre-existing autonomous entities. The federalizing potential of this reality was submerged for well over a century, not to rise again until the latter half of the twentieth century. The French were the first to confront this challenge in what was ultimately to become British North America. The arrival of French explorers and settlers in the sixteenth and seventeenth centuries raised the question of intercultural, and indeed, inter-civilizational, relationships. The English inherited the issue when they assumed control of this part of North America in 1759, but they faced another, even more fateful, challenge: how were they to deal with the 65,000-strong French community they encountered on the banks of the St. Lawrence? Acadian-style expulsion proved not to be an option; forced integration or assimilation was not feasible, and – for some of the early imperial representatives – not desirable. Accommodation in some form or another was the chief remaining alternative. It would be wrong to leave the impression that this was a clear policy choice, taken self-consciously at one point in time, after careful discussion and analysis in Great Britain’s Whitehall. The choice was made in fits and starts over decades, largely by dint of geopolitical events to which



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the British imperial authorities had to respond. A policy direction could be set in Whitehall, but it had to be implemented a couple of thousand miles across the sea in British North America, and both distance and local exigencies offered policy space to local British officials in North America to adapt policy and develop actual arrangements that could be implemented in the practical circumstances they faced. One can get a sense of the movement of policy in the early years by reviewing some of the critical documents of the period. The Royal Proclamation of 1763 enunciated the basis on which relations with Indigenous peoples would be carried on; it sought to limit the westward expansion of the American colonies; it provided for representative institutions; and it outlined a policy of assimilation for the French who had stayed on in British North America after the Conquest or Cession. The Quebec Act of 1774 has often been called the charter of French Canada. Passed in anticipation of the pending American Revolution of 1775–81, the Quebec Act offered French Canada, and especially its elites, much of what they sought: toleration of French Canada’s way of life, the establishment of the Roman Catholic Church and its power to collect tithes, a special oath to permit Catholics to hold civil office, an acceptance of the seigneurial land holding system, and recognition of the French civil law. The Constitutional Act, passed in 1791 after the American Revolution had successfully delivered independence to the United States, recognized the loss of territory to the US, and attempted to cope with the heavy influx of Loyalist immigration to British North America by dividing Quebec into Upper and Lower Canada, implicitly acknowledging Lower Canada as the homeland of the French Canadians. It retained French civil law and the establishment of the Roman Catholic Church in Lower Canada, and supported the introduction of representative government in both Canadas, with French Canadians enjoying political rights to vote and run for office in the Lower Canada Assembly. The Durham Report of 1839, prepared in the aftermath of the 1837 rebellions in Upper and Lower Canada, proposed a return to the assimilation strategy of earlier years. Dismissing French Canadians as an “uninstructed, inactive, unprogressive people,” Lord Durham believed North America belonged to the English, that “great race which must, in the lapse of no long period of time, be predominant over the whole North American Continent” (Durham, 1982: 27, 146). Durham believed that by reuniting Upper and Lower Canada in a new United Province of

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Canada, the continuous immigration of English-speaking peoples would swamp the French Canadians over time and lead to their assimilation into English-speaking North America. He also proposed the introduction of responsible government, making the British representative subject to the will of the colonial assembly, bringing a substantial measure of self-government to the British colony. The British government proceeded with part of Durham’s proposals, passing the Act of Union in 1840, which created the United Province of Canada, but declined to institute responsible government, which did not come to the British North American colonies until 1848. English and French Canadians worked within the United Province system until it was dismantled by Confederation in 1867, but it did not have the hoped-for effect. Instead of leading to the assimilation of French Canadians into an English majoritarian political system, leaders from the two communities turned this expectation on its head, paying scrupulous attention to the needs and prerogatives of the two linguistic communities, and instituting a practice of double majorities and other consociational arrangements for the conduct of the business of the province. What was meant to lead to assimilation in reality confirmed the significant dualism of Canadian society, and the need to find means to accommodate that dualism in our national politics. By the time the Confederation bargain was negotiated in the mid-1860s, the continued existence of the French Catholic community was a given and an unquestioned fact; finding the means of accommodating that fact appropriately in the new constitutional arrangements was one of the key challenges of the negotiations that led to the establishment of Canada.

CONFEDERATION: IRRESOLUTION AT THE HEART OF THE 1867 DEAL The British North America Act, now known as the Constitution Act, 1867, responds to this central element of Canadian diversity in a number of ways: • It established Canada as a federation, thus responding to both the regional and the binational features of British North America. • It severed the United Province of Canada, which had amalgamated Upper and Lower Canada in 1840, thereby giving provincial status,



•

• •

•

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with government power and constitutionally defined jurisdictions, to Quebec, where the vast majority of French Canadians lived. Thus, Confederation’s country-building aspiration had an element of separation embedded in it. The jurisdictions allocated to provinces – and therefore to Quebec – were the matters of greatest concern to French Canadians seeking to protect and control their own community: hospitals, charities, education, municipal institutions, the solemnization of marriage, and property and civil rights in the province. The French system of civil law was recognized in Quebec for civil matters. The French and English languages were accorded a limited degree of constitutional status. Either could (and still can) be used in the debates and proceedings of the Parliament of Canada and the Legislature of Quebec, and in the courts of the two jurisdictions. The Catholic and Protestant school systems existing at the time of Confederation or established afterwards were given constitutional protection.

Unresolved at the country’s inception, however, and still unresolved today, are two competing conceptions of Canada’s federal association and the meaning of 1867. Is Confederation best understood as a constitutional agreement among the four original provinces, now grown to ten, or as a compact between two founding peoples? An act or a pact (Stanley, 1956; Canada, Royal Commission on Bilingualism and Biculturalism, 1965; Paquin, 1999)? Most English-speaking Canadians would incline to the first view; the vast majority of French-speaking Canadians would argue it is the second. The Fathers of Confederation were able to agree on the formal terms of the new political association, but not on its deeper meaning. Each side was able to preserve its own view of itself and its own view of the federal association. Were there two peoples coming together in an historic compact, each pre-existing and each pursuing the protection and advancement of its own identity in the new configuration? Or was it an act bringing into a new association a group of British colonies, populated predominantly by British colonists, where the question of people or peoples did not seriously enter into the equation? Thus was created the greatest fault line in the Canadian political order – a disagreement about the very meaning of Canada, which lay, for the

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most part unacknowledged, at the deepest foundation of the Canadian state. Both sides, for the sake of getting agreement and creating the new political regime, came to terms on what they could agree on and were complicit in burying this cleavage so far as possible beneath the terrain of normal political discourse. The issue of the constitutive status of Canadian federalism was not resolved, therefore, but covered over in the 1867 Constitution. The Canadian federation is formally an association of provinces, not a union of peoples, but there was enough of the latter in the agreement to permit Quebec to participate and to allow that other conception of the association to establish itself and endure. Far from disappearing or being rendered powerless by inattention, this cleavage has had the power to unleash political earthquakes and to shake the very foundations of the constitutional order. And it has done so, regularly, in our history. Canada’s moments of deepest conflict have invariably led Canadians to the edge of this existential chasm between political worldviews. The Riel Rebellions of 1869 and 1885, the Manitoba Schools Crisis in the latter part of the nineteenth century, the Conscription Crises in World War I and World War II – all have drawn their destructive energy from this underlying and virtually unbridgeable cleavage. The terms of reference of Quebec’s renowned Tremblay Commission, established by Premier Maurice Duplessis in 1953, left no doubt about the Quebec government’s view of the salience of this issue nor about the government’s position: the first article of the Commission’s terms of reference states that “the Canadian confederation, born of an agreement between the four pioneer provinces, is first and above all a pact of honour between the two great races which founded it” (Kwavnick, 1973: 1). As we shall see below, that divergence of view continues unabated, although in a modern idiom. Until the 1960s there was a further ambiguity. On the francophone side of the equation, how was one to understand the French fact in Canada? Was it to be understood as French Canadians wherever they found themselves across the country, or as Quebec (or, yet again, the French in Quebec)? Quebec was always recognized as the foyer principal of French Canada, but the other, more expansive view included as well the francophones of New Brunswick, who today compose around one-third of that province’s population, the 500,000 or so Franco-Ontariens, and the smaller groups scattered elsewhere in the country; on this more expansive view, these people were understood as integral parts of the



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French-Canadian community in North America. For much of our political existence, both conceptualizations of francophone identity had currency and were a vital part of public debate. The status and prospects of French Canada writ large was clearly at the centre of the nineteenth-century Riel and Schools controversies in Manitoba: would the western part of the country be French and English, or was it to be the preserve of English speakers? At one point this was thought by many French Canadians to be an open question, although by the end of the nineteenth century, English Canadians in the other provinces had made it pretty clear that the west would be anglophone (Heintzman, 1971). This ambiguity over how to understand the French fact in Canada was dissolved during the 1960s with the fragmentation and provincialization of French Canada. French Canadians in Quebec adopted a statist nationalism very different in its character and implications from the more religiously based French-Canadian nationalism of the previous century. Their central preoccupation became the fortunes of the French-speaking community within Quebec–the Québécois; this view undermined the broader multi-province understanding of French Canada. Over time, the French minorities in the other provinces drew the lesson from the new situation and began to redefine themselves in provincial terms. The Acadiens of New Brunswick had thought of themselves in distinctive terms for some time, but the Franco-Ontariens, Franco-Manitobains, Fransaskois, and so on, realizing that they could no longer rely on the leadership of the French Canadians in Quebec for their survival, came to understand that they would have to deal directly with their own provincial governments, often with the assistance of a concerned federal government. How did this shift in perspective and positioning occur?

FRENCH CANADA AND QUEBEC IN THE FEDERATION PRIOR TO 1960 Much has been written about the nature of French Canada and Quebec in the generations after Confederation. Over time, a defining myth grew up in French Canada depicting the character of that community and the way in which it saw itself differentiated from the rest of North American society. French Canada was understood to be defined by its Catholicism; its rural, agrarian economy and social structure; and the French language.2

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Life was thought to revolve around the parish church, with the church rivaling the state as the central institution of French Canada. The myth was not without substance, but the reality of French Canada was always richer and more diverse than allowed for (McRoberts, 1993: chaps. 2–4). Yet the myth was powerful in shaping the attitudes, assumptions, and behaviour of people both within and outside Quebec. The virtue of the federal system was that it created a subnational government with special responsibility for the protection of the heart of the French Canadian community in North America, the territory where a decisive majority of French Canadians lived. The job of that government was to help preserve a way of life and to shield the community from the corrosive impact of a huge and growing English majority in North America. The Tremblay Report (Quebec, Commission royale d’enquête sur les problèmes constitutionnels, 1956) was the most elaborate and philosophically sophisticated statement of this general worldview and remains influential today (Laforest, 2010). Yet it described a society that was already in the process of disappearing. By the time the Tremblay Commissioners reported, Quebec was long since more urban than rural, more industrial than agricultural. The Quebec provincial government under Premier Maurice Duplessis functioned largely within the framework of this myth and did relatively little to help Quebec and Quebeckers adjust to the modern realities with which their society was increasingly infused. What role did Quebec play in the evolution of the Canadian federal system during this period? It was something like a sheet anchor that imposed a constraint or a drag on what might otherwise have been a powerful drift in the development of the federal system. The existence of the Province of Quebec in Canada’s federal order meant that there was a federal constraint on English-speaking Canada, limiting the extent to which the processes of modernization and the centralizing effects of world wars and economic depression were able to trump the forces of decentralization in the country.3

THE QUIET REVOLUTION: INTERGOVERNMENTAL RELATIONS TRANSFORMED With the death of Duplessis in 1959 and the untimely demise of his successor, Paul Sauvé, in 1960, the rudderless Union Nationale was



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defeated by the Quebec Liberals in the 1960 provincial election, and the Quiet Revolution began. Much has been written about this period of Quebec’s history, and some have argued that it does not really qualify as a “revolution,” quiet or noisy, because, for example, there were no radical structural changes in the institutions and governing processes of the province (McRoberts, 1993: chap. 5). In fact the transformative forces of urbanization and industrialization had been working their magic in Quebec for generations; Quebec society had been changing throughout the earlier part of the twentieth century, as had the rest of Canada. Like elsewhere, French Canadians were moving off the farms and villages of the provinces into the factory towns and cities of the region; some were moving right out of Quebec, to states south of the border (Brault, 1986). The Quiet Revolution may be best understood as a period of ideological and political, rather than material, transformation, in which the conservative nationalism of the previous era was rapidly replaced by a positive, liberal nationalism; the provincial state assumed pride of place in the institutions of the French-speaking community, quickly pushing the Catholic Church into the background; the government assumed responsibility for education and for establishing some of the basic institutions of the modern welfare state. It became as well far more active in the development of the provincial economy. It was, therefore, not simply a sudden shift at the level of ideology, but a period of significant policy and institutional innovation as well. There were significant changes at the level of society, too. Perhaps the most eloquent testimony of this is found in the precipitous decline in Quebec’s birthrate. As Kenneth McRoberts points out, in 1956 Quebec’s fertility rate was close to four children per couple. “Yet, over the years 1959–72, it plummeted 56 per cent, falling below the rate of 2.1 needed to maintain population size” (McRoberts, 1993: 139). In a few short years, Quebec’s birthrate fell from the highest to the lowest in Canada.4 This extraordinary decline symbolizes a remarkably rapid shift in social norms and practices within the French-speaking community, as well as the breathtaking decline in the role of the Catholic Church in the life of Quebec. The impact of the Quiet Revolution on the federal government and intergovernmental relations was immediate. Where traditionally Quebec had adopted a protective posture in intergovernmental relations, seeking to defend its position and its people’s way of life, it became in the 1960s an agenda-setting government, demanding changes in the way

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in which the federation worked and actively pursuing policy goals that would invest Quebec with a greater capacity to determine its own social and economic development. The challenge to Canadian federalism was of two sorts: the quest for increased autonomy and greater jurisdictional control for Quebec; and the demand for greater fiscal resources, both through a decentralization of tax space from Ottawa to the province and increased federal fiscal transfers. Quebec’s desire for greater tax room was shared by a number of provinces seeking to reverse the fiscal centralization that had occurred during the war years, but, unlike the other provinces, it placed its demands in the context of nation-building. Faced with a reformist government in Ottawa under Lester Pearson (1963–8), Premier Jean Lesage and his colleagues acted adroitly on the intergovernmental front to ensure that progressive social and economic policy was executed within Quebec by Quebec, rather than by the federal government. A good example of this can be seen in Ottawa’s effort to establish a national pension plan. Through stormy intergovernmental negotiations, Quebec succeeded in opting out of the Canadian plan, introducing its own version and using the capital it generated to establish the Caisse de dépôt et placement, which became in time a powerful provincial investment and economic development vehicle. The Quebec government’s reformist zeal was demonstrated by the nationalization of a number of private hydroelectric companies in 1962 and their incorporation into Hydro Quebec. The period of the Quiet Revolution, from 1960 to around 1966, marked a profound shift in Quebec’s self-conception, its development strategies, and thus its approach to federalism and intergovernmental relations. Quebeckers increasingly wanted to see themselves as members of a modern national community and expected their government to help them build a set of institutions and the social, educational, and economic capacities appropriate to a modern state – but en français. The government’s desire to respond and to find the resources needed to do the job set it on a collision course with Ottawa. Quebec’s goals produced not only acute intergovernmental conflict but also a deepening cleavage in identities and in perceptions of the roles of the two orders of government. Earlier French-Canadian nationalists had been inclined to argue that the problem was that the constitutional order was not respected by Ottawa; increasingly, Québécois nationalists contended that the problem was that the Constitution itself needed to be transformed.



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THIRTY YEARS OF TRAVAIL: 1965–1995 The Quiet Revolution marked the onset of an extended period of nation-building in Quebec, which ripened into demands for constitutional reform and ultimately spawned a powerful sovereignist movement. How was the nation understood? The essentially binary view of the federation did not change, but the idiom through which it was expressed was different, as was the sense of collective identity. French Canadians in Quebec identified themselves as Québécois, and the distinctive features of their national community narrowed and sharpened. Where once the dimensions of identity were understood to be multiple – French, Catholic, rural – they were reduced effectively to one. The Québécois were defined by language, by the singular fact that they spoke French. In his 1968 manifesto for sovereignty-association, An Option for Quebec, René Lévesque wrote: “At the core of this [Québécois] personality is the fact that we speak French. Everything else depends on this one essential element and follows from it or leads us infallibly back to it” (Lévesque, 1968: 4). This reshaping of identity was inevitable, once Quebeckers became more like the rest of North American society in their lifestyle and aspirations, and the markers of religion and rurality were discarded. Until the 1960s, no Quebec government had established a language policy; it was not seen to be necessary (Gagnon and Montcalm, 1990). By the end of the decade, this had changed; a succession of governments passed language legislation, culminating in the Parti Québécois Bill 101 in 1977. Language has been a central policy preoccupation ever since. The cleavage noted earlier resurfaced with a bang at the start of this long period of nation-building, but it was different because the perception of national identity and the economic and political circumstances were different. French-speaking Canadians were still inclined to view the federal relationship in dualistic or binary terms, at least so far as the principled meaning of Confederation was concerned, if not in constitutional fact. A central part of their constitutional ambitions was in fact to bring the terms of the foundational document into line with reality as they perceived it. The two-nations theory, special status for Quebec, the distinct-society concept, the notion of sovereignty-association – these ideas were all ways of representing the constitutional implications of the French fact within the context of the binary relationship that, in the view of the Québécois, lay at the heart of the Confederation bargain.

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These concepts were at bottom constitutional in character; they implied a particular understanding of the Canadian federal system, not just of Quebec, and they fostered a different style of intergovernmental relations. Much of the next thirty years of intergovernmental discussion was devoted to an often-heated debate about the validity of these concepts and whether or not they were to receive constitutional expression. Most of the normal intergovernmental business of the federation – relating, for example, to fiscal arrangements; federal support of healthcare, social assistance, and higher education; pension policy; the free trade agreements; international relations; and so forth – was mediated through Quebec’s nation-building aspirations. The pressure for change was relentless, no matter what party or political leader was in office in Quebec City. For three decades Quebec put Canada to the question in an unrelenting effort to transform the relationship. The debate was played out on several fronts. First of all, there was a vigorous and often rancorous discussion “within the family” – both among Quebeckers themselves and their political leaders within the province, and between francophone political elites in Quebec City and Ottawa. At times it seemed as if the rest of the country were onlookers, so intense was the contestation between and among francophone citizens and their political leaders. Pierre Elliott Trudeau led the federal Liberal Party during much of this period (1968–79 and 1980–4), and the conflict between him and René Lévesque invested the discussion about Quebec’s place within or outside Canada with a highly personal dimension, most in evidence publicly during the 1980 referendum campaign and in the constitutional talks that followed. This was the heyday of executive federalism and numerous first ministers’ conferences – many of them televised – convened to tackle the large questions of the day. These conferences became the forum within which not just the conflict between Ottawa and Quebec City could be played out, but also the place where the differences between Quebec and the rest of the country, and latterly between many of the other provinces and the federal government, were given expression, often personified by compelling provincial premiers. Intergovernmental relations at this time tended to be both more public, more aggressively conflictual, and more obviously “zero-sum” in character. The stakes were seen to be higher than usual, having to do with collective identities, membership in the federation, and



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the “architectural” features of the Canadian political community, such as constitutional reform and control over energy policy (Russell, 2004). Québécois saw themselves as a nation, and there was a tendency within French-speaking Canada to view the other partner in similar terms. Just as there was a French-speaking national community, so, it was believed, there was the equivalent in English-speaking Canada – a national community that lay behind the superstructure of the other provincial governments, and that had the singular advantage of being able to count on, not only its many provincial governments, but the federal government as well, to see to its interests. That was not for the most part how the rest of the country understood itself, and it seemed less and less true as the 1960s and 1970s wore on. It was not just Quebec but the rest of the country that was changing, and many of the other provinces during this period embarked on a process of province-building, seeking to strengthen provincial institutions and policy capacity, and challenging the federal government for control and resources. Some of this was learned from observing Quebec. Unintentionally, Quebec broke trail for the other provinces and inadvertently encouraged them to pursue their own process of redefinition and regional development. The hierarchical model of the federal–provincial relationship was gradually set aside by many of the provinces and replaced with a more egalitarian and less paternalistic assumption about the respective roles of the federal and provincial governments. This change helped to further fragment whatever understanding of an English-Canadian national community there may have been and reinforced the belief that the Canadian federation was an association of provinces, not a partnership of two nations. The thirty years of travail or mega-constitutional politics (Russell, 2004) are bracketed by Quebec’s Quiet Revolution at the beginning and the second Quebec referendum on sovereignty at the end. In between, there was the passage of Canada’s Official Languages Act, the October Crisis, the election of the PQ, the passage of Bill 101, the first referendum on sovereignty-association in 1980, the debate over the Constitution and its patriation in 1982 with the introduction of an amending formula and a Charter of Rights and Freedoms, the negotiation of the Meech Lake Accord in 1987 and its demise in 1990, the intergovernmental agreement on the Charlottetown Accord and its referendum defeat in 1993, and the razor-thin victory for the federalist forces in the second Quebec

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referendum in 1995. All of these bore directly on the effort to find a way of accommodating the new Quebec in the Canadian federation. Alongside these, there were major intergovernmental issues, such as the successive adjustment of the fiscal arrangements between the federal government and the provinces and the establishment of some of the key components of the Canadian welfare state (pensions; support for health, post-secondary education, and social assistance; the adjustment of employment insurance programs), the National Energy Program, and the free trade agreements. Each issue had Quebec-sensitive dimensions to it, and all issues involved Quebec directly as a participating government in the federal–provincial forums that tackled them. These were unusually stressful and significant decades for the Canadian federation and for intergovernmental affairs. Why did Canada experience these acute federal and national-unity pressures? Why did they burst out when they did and in the way they did? It is not every day that the very existence of a modern democratic state is called into question. I would suggest that three factors help us in some measure to understand what brought on these existential pressures. The first and most obvious is the rapid transformation of Quebec and Quebec society, which put Canada dramatically to the test. What might be understood as the increasingly acute contradictions between what was happening on the ground in French Canada, socially and economically, and the formal belief system that framed its culture came to a head after the death of Duplessis, unleashing a wave of political reform and attitudinal change. It soon became apparent that Quebeckers increasingly wanted many of the same things as their English-speaking compatriots, but they wanted them in a French-language universe. Whereas the divergence of aspirations in the previous era had reduced head-to-head competition between the two linguistic communities, Quebec and French Quebeckers after the Quiet Revolution began to share the same ambitions as other Canadians – educational achievement, economic and commercial opportunity, a secular, urban life, the nuclear family. Prior to the Quiet Revolution, the two societies were well positioned to minimize conflict except in moments of crisis; each community thought of itself as espousing different values and pursuing distinguishable social and economic objectives. In normal times, members from each side could get on with their lives without directly confronting one another, because the relationship was not understood to be directly competitive. This was always less true in



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practical reality than it was at the level of myth and opinion, but there was, nevertheless, a significant shift with the transformation of Quebec starting in the 1960s. Now, values and aspirations began to converge, with the result that there was more direct competition between members of the two groups; if francophones in Quebec were to fulfill their ambitions, anglophones would need to give way, linguistically and economically. The stress arising from change was felt at the federal level as well. French-speaking Canadians challenged their subordinate status in the country’s common institutions, and demanded its correction – in Parliament and in the cabinet, in the public service, and in the general operations and agencies of the federal government. A new flag for Canada was adopted in 1965, as part of the effort to respond to these pressures, just as the country’s currency had been “bilingualized” about a decade before; the symbolic apparatus of the state was gradually altered, with the removal over time of outward manifestations of the British link and their replacement with indigenous forms of representation. The shift was most evident in the regulation of language. The Government of Canada, while struggling to block or limit Quebec’s drive for special status, also attempted to broaden the recognition of the French fact, not only in Quebec, but across Canada. The Official Languages Act, passed under the leadership of then Prime Minister Trudeau in 1969, made French and English official languages for all matters pertaining to the institutions of the Parliament and Government of Canada, and provided for services to citizens in either official language, where the numbers warranted. In addition, the federal government began supporting second-language and minority-language education in the provinces across the country, with the hope that increasing numbers of young Canadians would grow up with a reasonable knowledge of the second language. In Quebec, language rapidly took centre stage politically. The disappearance of other markers of identity increased the sense that the residual, thinned-down identity was fragile and at risk. Given that the French language had become the critical identifier of the Québécois, its health and status became an obsessive preoccupation of opinion leaders and politicians. A draft of Bill 101 was the first piece of legislation the newly elected Parti Québécois placed before the National Assembly in 1977 (Fraser, 1984: 91–112). French also assumed a central place in Quebec’s nation-building strategy, because it would prove to be the instrument for altering the relationship and relative status of the two language

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communities within the province. The various pieces of language legislation, passed over a decade from 1969 to 1977, were designed to do several things. Most importantly, they aimed to ensure that immigrants to Quebec would integrate themselves into the francophone community, not the anglophone.5 This became critical as the French-speaking Canadian birthrate plummeted; it was believed that, depending on whether immigrants integrated into the French-language or the English-language community in Quebec, immigration would either be a boon to the survival of the Québécois in North America or the instrument of their collective demise. The language legislation was also designed to guarantee that the language of business and commercial life, and, more generally, the normal language of the province, would be French. The minorisation of the English-speaking community in Quebec was necessary if French were to become the dominant language in its foyer principal in North America. A second factor that explains why the country entered into this difficult period as and when it did is the evolution of English-speaking society in Canada. In the decades following World War II, English-speaking Canada was changing, too, partly as a result of the general post-war modernization processes most societies were experiencing, and, more specifically, because of a reform of immigration policy in the 1960s to allow easier access for immigrants from Asia, Africa, Latin America, and the Caribbean. This reform sharply increased the racial, cultural, linguistic, and religious diversity of Canada’s immigrants and contributed to the reconceptualization of Canada from a British North American community with a large French minority to a multicultural society composed of two major language groups. Thus, while Quebec was rapidly and demonstrably changing, the rest of the country was going through its own even quieter quiet revolution, partly in response to the Quebec challenge and partly as a result of the significantly different immigration patterns that began to transform Canada’s cities. Some of the stress on the federation arose, then, out of the effort to accommodate and reconcile these two overlapping but distinctive processes of change. A third factor in explaining the charged character of our politics and intergovernmental relations during much of this period had to do with leadership. In René Lévesque, the sovereignty movement found a political leader who was trusted and held in high regard by the Quebec people, enabling the Parti Québécois over time to become a highly successful political party and provincial government. Lévesque offered



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reassurance to the many people who thought at the time that the sovereignty of Quebec was a radical and dangerous proposition. Fatefully, he was confronted in Ottawa with another Quebec politician who was highly regarded and trusted, but who took a position aggressively contradictory to that of Lévesque. Pierre Trudeau was the unusual sort of political leader who argued his position from first principles and, at least on the national question, wished to make things clear. Given his passionate anti-nationalism, together with the fact that he was a French-speaking Quebecker, it is no surprise that the debate over Quebec’s status took on an air of even higher drama than it otherwise would have. More generally, the fact that the majority of the key federal political players during this whole period were Quebeckers made the debate, among many other things, a passionate in-house struggle between members of the Quebec family. The period starts with Lester Pearson in charge in Ottawa (1963–8), and came to an end during Jean Chrétien’s rule (1993–2003). Quebeckers held the office of prime minister for thirty-five of the forty years between 1963 and 2003. Consider how different things might have been had Robert Stanfield defeated Pierre Trudeau in the 1968 election. Instead of confrontation and internecine contestation within the Quebec family, one would have had a continuation of the pragmatic, low-key, accommodative style that marked the leadership of Lester Pearson; though none of us can say what the result would have been, the tone would clearly have been very different from that set by Trudeau. The importance of the conjunction of leadership with circumstance and opportunity is often underestimated in assessing the reasons for the unfolding of political events.

THE RETURN OF NORMAL POLITICS Although it was not evident at the time, the 1995 Quebec referendum on sovereignty marked a turning point in Canada’s long period of intergovernmental travail. The close referendum result might have suggested that 1995 set the stage for the final contest between sovereignists and federalists in Quebec. But, surprisingly, the outcome set the stage for something very different: the gradual return of normal politics in Canada. With the narrow defeat of the referendum, it was as if Quebeckers – francophone and anglophone, sovereignist and federalist – had had

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enough. The heat went out of the nationalist debate, both within and outside Quebec, and it appeared that Canadians – whether out of boredom, fatigue, or frustration – simply turned their minds to other things. In Quebec, Lucien Bouchard, who had succeeded Jacques Parizeau as premier of Quebec in January 1996, declared that he had no intention of holding another referendum on sovereignty until “winning conditions” presented themselves. None did prior to his retirement from politics in March 2001 and the defeat of the PQ under Bernard Landry in 2003. Not even the passage of the federal Clarity Act in 2000, in response to the 1998 Supreme Court Reference on Secession (Schneiderman, 1999), was enough to deter the Québécois and other Canadians from their determination to set aside the sturm und drang of high-wire constitutional politics for the pursuit of a quieter life. Citizens, it seemed, had no stomach to continue the bruising national debate they had carried on for the previous thirty-five years. The politicians followed suit. The warriors of the national-unity battles were replaced by politicians of less heroic stripe, who viewed politics more prosaically as a means of regulating conflict and pursuing common public purposes in a democratic society, and less as a glorious field of conflict in which battles are lost and won before an anxious and admiring audience of citizens. The salience of summit federalism decreased dramatically, and intergovernmental relations returned to pretty much what they had been historically: a game politicians play with one another, generally out of the public eye. Federal–provincial disputes – whether about the fiscal imbalance, equalization, or Ottawa’s transfers to the provinces to support social programs – ceased to be heavily burdened with national-unity implications, and began to look more like the normal, ongoing conflicts that arise in any functioning federal system. By the time Stephen Harper assumed office as the leader of a minority Conservative government in 2006, the shift to normal politics had conclusively been made. In that year, consistent with what was then his Quebec strategy, Harper brought a resolution to the House of Commons recognizing Quebec as a nation within Canada. Despite the fact that he sprang the idea on the opposition parties with only a few hours’ notice, the resolution passed with massive support from all parties – 265 members to 16. The resolution declared that “the Québécois form a nation within a united Canada.” During the debate, the prime minister stated that the



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rationale for the motion was simple: “Quebeckers want recognition, respect and reconciliation ... they do not want another referendum” (House of Commons, 2006, 2035). Three days later, Quebec’s National Assembly in a vote of 107 to 0 recognized “the positive nature of the motion” (Quebec National Assembly, 2006, 697–8). If there were any doubts that Canadians had no wish to re-enter the national-unity fray, this initiative surely put the matter to rest. In acknowledging that Quebec is a nation, the House of Commons resolution – at least conceptually – went further than granting special status to Quebec or recognizing it as a distinct society. While it is true that the recognition took the form of a parliamentary resolution rather than a constitutional amendment, it was striking how little public debate or reaction it occasioned, despite the federal minister of intergovernmental affairs of the day resigning in protest. A survey by the Mowat Centre, entitled Portraits 2017: A Fresh Look at Public Opinion and Federalism, underlined this shift back to normal politics (Parkin, Hartmann, and Alwani, 2017). Focusing on opinion in Ontario and Quebec, it showed that the people in these two provinces shared the same priorities for making the country better. Neither Ontarians nor Quebeckers were noticeably dissatisfied with the current division of powers between the two orders of government, and enlarging Quebec’s jurisdiction at the expense of Ottawa was no longer a priority matter for Quebeckers. Collaboration between the two orders of government was positively regarded by people in both provinces, and there appeared to be a common view in the two provinces that federal resources were generally distributed fairly. The identity of Quebeckers was more strongly associated with their province than was the case with Ontarians, and they continue to hold a more decentralized orientation overall, but these differences did not appear to lead to significantly different approaches to the federation and its functioning. Clearly, though, the return of normal politics does not mean the disappearance of conflict or the attenuation of diversity. The resounding 2018 defeat of Philippe Couillard’s Liberal Party in Quebec brought the Coalition Avenir Québec (CAQ) into government in the province. Quebec’s traditional sovereignist party, the Parti Québécois, took a drubbing in that provincial election. It lost twenty of the thirty seats it had held at the previous election in 2014, mostly to the CAQ. A strongly nationalist but non-sovereignist political party, the CAQ has asserted Quebec’s distinctive identity in a number of ways, the most

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dramatic being Bill 21, An Act Respecting the Laicity of the State. Highly popular within the province, this 2019 legislation prohibits a broad range of public officials (those with coercive authority; Crown prosecutors, government lawyers, and judges; and school principals and teachers) from displaying religious symbols while they are on duty. It also requires people receiving public services to uncover their faces for identification or security purposes. The legislation invokes the notwithstanding provision (section 33) of the Canadian Charter of Rights and Freedoms to exempt the legislation from its provisions. Bill 21 has attracted vigorous opposition both within and outside of Quebec. It became an issue in the 2019 federal election campaign, with the federal parties uncomfortably discussing whether the Government of Canada should challenge the legislation. The federal election also surprised many people with the resurgence of the Bloc Québécois, once thought to be in its death throes. Led by a highly experienced communicator, Yves-François Blanchet, the Bloc – sovereignist, but not actively pursuing sovereignty – made an effective case to the Quebec electorate that it was in their interest to have the Bloc in the federal Parliament, single-mindedly focusing on the needs and aspirations of Quebec. Buoyed by the weakness of the other parties, the Bloc increased its parliamentary representation from ten to thirty-two seats, picking up three Conservative, eight Liberal, and eleven NDP ridings. For those who have observed the decades of struggle over the sovereignty of Quebec, what is striking in these cases is that the pursuit of nationalism and the protection of national identity are alive and well in Quebec, but the aspiration for independence is not. If the Quebec question has moved off the national political agenda, what has taken its place? Nothing of equivalent magnitude or intensity, but the main contemporary locus of conflict in the Canadian federation has shifted westward, to western Canada, where the aspirations for natural resource development collide with climate concerns. At present, climate change, pipeline politics, and Indigenous issues have moved to the forefront, shaping both national politics and the politics and policy debates within several provinces. The October 2019 federal election underlined this. The debate about the federal carbon levy, which attracted fierce opposition from the premiers of Ontario, Saskatchewan, and Alberta, was really a controversy about climate change and the petroleum-based economy. The election results revealed a reawakening



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of western alienation not seen for many years, but it also uncovered a significant national majority in favour of serious public measures to combat climate change.

CONCLUSION Performance. Effectiveness. Legitimacy. How does one evaluate Canadian federalism’s performance in relation to Quebec? How does one assess Quebec’s contribution to Canadian federalism? Let me take the second question first. How does one assess Quebec’s contribution to Canadian federalism? If one regards the structure and processes that compose governance in Canada to be in part a learning system, then it may be said that a great deal of growth and democratic learning has arisen out of the often frictional relationship between the French and English in Canada. The experience of more than two centuries of cross-cultural accommodation within the frame of a single political order teaches people something about the political arts of compromise, tolerance, and respect for the position of the other. Painfully, Canadians have learned that winner-take-all politics is not a recipe for success or community amity north of the 49th parallel. We learn that there are some social cleavages that cannot be overcome without doing violence to one’s deepest values, but that they can only be lived with, generation after generation. Our internationally recognized capacity for multiculturalism and productive immigration, as well as our belated efforts to make things right between Indigenous and other Canadians, owe something to our experience of living within a political community inhabited by two large linguistic and cultural groups. Let me turn now from political culture to constitutional and political structure. Here Quebec’s contribution is somewhat clearer. In the absence of French Canada and Quebec, our federal system would have been very different. Earlier I described French Canada’s conservative, reclusive nationalism prior to the 1960s as a kind of sheet anchor, restraining Canada from drifting more and more towards a centralized federal system. From the 1960s to the 1990s, Quebec became much more than simply a drag on the ambitions of the federal government, instead directly challenging it and claiming – in many cases, successfully – that political power and policy authority should flow away from Ottawa and

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towards Quebec. Indeed, it wanted an actual reconstitution of the system along these more decentralized lines. For at least a hundred years until the dawn of the twenty-first century, most of the dominant economic, social, and political forces seemed to have favoured the increase and concentration of power in central governments. One of the most powerful corrective mechanisms in federations, constantly making the case for decentralization and the dispersion of power, has been territorially concentrated ethno-cultural diversity. In this respect, Quebec has been a faithful, steady counterweight to the forces of centralization in the Canadian federation. This line of reasoning doesn’t quite complete this very limited exercise in evaluation, because one would still have to sort out whether constraining the forces of centralization in Canada is a good or a bad thing. People are entitled to hold different opinions on the matter, but it certainly seems to be the case that Quebec was instrumental in the preservation of a vital, functioning federal system in Canada. What of the first question? How does one evaluate the Canadian federation’s performance in relation to Quebec? Has Canada’s federal system been good for Quebec? Here it is necessary to emphasize once again the fact that there are radically different opinions on this matter, symbolized by the fact that the Parti Québécois and a good portion of the Quebec population have wanted to wind up the federal experiment, while many other Quebeckers and a great majority in the rest of Canada believe that that would be a disaster. In my view the Canadian federation and political system have been good for Quebec, for French Canadians, and for the Québécois. It has been the framework within which French Canada has survived, within which it has changed, and within which Quebec is now flourishing.6 Canadian federalism has largely accommodated Quebec’s evolving conception of itself and its developing expectations for self-government. Canada has not responded as fully or as quickly to Quebec’s declared needs as many in Quebec would like, but the country has listened and changed. The language barrier and the social distance between the two societies remain in place, and, despite efforts to increase second-language capacity, relatively few surmount it comfortably, but this arguably is not a reasonable criterion of assessment in a large, decentralized federal country, especially on a continent in which the world’s lingua franca is dominant.7 Indeed, some degree of linguistic separation may be beneficial to the preservation of Quebec’s



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French-language society. On balance, then, I would say that Quebec has benefited from its association with the rest of Canada. The Canadian federal system has performed fairly effectively over the years in relation to the Quebec question. But what of legitimacy in the eyes of Quebeckers? Here there is a serious question. All other provinces agreed to the passage of the 1982 constitutional amendments; Quebec did not. The Government of Quebec and the National Assembly both opposed the passage of the Constitution Act. In the Quebec Veto Reference, the Supreme Court of Canada unanimously held that Quebec did not possess a veto; given the fact that nine provinces and the vast majority of the Canadian population plus the federal government supported patriation, one could argue that the act was not only legal, but legitimate. One can add, as Pierre Trudeau did, that his Liberal government in Ottawa had recently been elected (1980), winning seventy-four out of seventy-five seats in Quebec; its support of the Constitution Act, therefore, must reflect the perceived legitimacy of the amendments on the part of the province’s federal representatives. But these arguments do not cut much ice with some Quebeckers, and the reason why goes back to the competing conceptions of the federal association that lie unresolved at the heart of Confederation. Is it an association of provinces or of French and English peoples? If one takes the latter view, and we have seen how widely accepted that view is in French-speaking Canada, then the constitutional amendments of 1982 are – even if formally legal – lacking in legitimacy in that they proceeded despite the opposition of one of the country’s two founding peoples (Laforest, 1992). And the voice of the people of Quebec speaks through the National Assembly and the Government of Quebec, not through Parliament and its Quebec representatives, even if the prime minister is a Québécois. You can accept that view of the country as valid or not, but it is difficult to deny that Quebec as a jurisdiction plus a proportion of the French-speaking citizens of Canada have withheld recognition of the patriation of Canada’s Constitution as a legitimate act. This is a deficiency in our constitutional arrangements, which, were it possible, it would be desirable to repair.8 While I share the view that reopening the constitutional file is inadvisable, I nevertheless am of the view that until this situation is corrected – until Quebec consents to the 1982 Constitution – there is something awry in our constitutional and federal arrangements.9

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David Cameron NOTES 1 Public opinion polls consistently find a large minority of Québécois to be in favour of the sovereignty of Quebec. According to Alain-G. Gagnon (2009: 3): “As it is practiced in Canada, federalism has never been popular in Quebec. It is not that the Québécois are opposed to federalism in itself but rather that they refuse to accept the way it is implemented by Ottawa.” 2 Michel Brunet (1957) identifies three themes in traditional French-Canadian thinking: agriculturalism, anti-statism, and messianism. 3 This is not something that Quebec achieved all on its own. The local loyalties of other parts of the country also had a role to play. Oliver Mowat, premier of Ontario from 1872 to 1896, was in fact the first defender of provincial rights, battling John A. Macdonald in a series of legal and political disputes to enhance the power and authority of Ontario. 4 Jean Chrétien reflects this transformation. He was the eighteenth of nineteen children, nine of whom perished in infancy. He and Aline Chrétien have three children, one of them adopted. 5 The Quebec concern with immigrant integration continues unabated; witness the passage in 2019 of Bill 21, which forbids public servants in positions of authority from wearing religious symbols and requires persons giving or receiving public services to do so with their faces uncovered. 6 It must be admitted, though, that the interplay since World War II of Quebec nationalism, urbanization, and federalism has made the position of francophone minorities outside of Quebec more fragile. 7 Language Matters: How Canadian Voluntary Associations Manage French and English (Cameron and Simeon, 2009) explores linguistic practices at the level of civil society organizations and finds that bilingualism is a feature of head offices and leadership actors, but not of members. 8 I have explored, with Jacqueline Krikorian, a possible way in which this issue might be tackled (Cameron and Krikorian, 2008). 9 I have argued elsewhere, however, that the legitimacy of a political order rests on a broader foundation than a single act or event such as the passage of the 1982 Constitution (Cameron, 2015). GLOSSARY Bill 101 The Charter of the French Language (Bill 101), passed by the Quebec National Assembly in 1977, made French the official language of Quebec. Its purpose was “to make French the language of government and the law, as well as the normal and everyday language of work, instruction, communication, commerce and business.” Clarity Act  The federal Clarity Act (2000) followed the findings of the 1998 Supreme Court Secession Reference opinion. It provided that the federal government would not enter into negotiations with a province on the basis



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of a referendum on secession unless the House of Commons determined that the referendum question was clear and a clear majority of the population of the province had voted in favour. Conscription Crisis – World War I  The first Conscription Crisis broke out in 1917, when Prime Minister Borden passed legislation implementing compulsory military service in Canada to assist in the recruitment of troops to fight in Europe. Most French Canadians opposed the legislation while most English Canadians favoured it. Conscription Crisis – World War II  Acutely aware of the divisive impact of conscription in the previous war, Prime Minister Mackenzie King pledged that there would be no conscription for overseas military service. In response to strong public pressure from English Canada, King held a plebiscite seeking to be released from the pledge. It passed, but 73 per cent of Quebec voters voted against the proposal, while over 80 per cent of voters in the other provinces voted in favour. King passed legislation formally authorizing conscription if necessary. Durham Report  Lord Durham’s 1839 Report on the Affairs of British North America, reporting on the 1837 Rebellions in Lower and Upper and Canada, is best known in Canada for its severe comments on French Canadians and their society, and its recommendation to consolidate Upper and Lower Canada in a united province. Manitoba Schools Crisis  In 1890, Manitoba abolished French as an official language in the province and withdrew public funding for separate denominational schools, thereby effectively ending the English Protestant and French Catholic school systems. These measures removed the protections of the Manitoba Act of 1870, which had brought Manitoba into Confederation. They deeply offended the French, Catholic minority in the province and outraged opinion in Quebec, but Manitoba’s actions were ultimately upheld by the highest court (then the British Judicial Committee of the Privy Council). Riel Rebellions  The Métis leader, Louis Riel, led two rebellions in what became Manitoba and Saskatchewan, opposing the settlement of the Prairies by English-speaking easterners and the displacement of Indigenous peoples. The Red River Rebellion occurred in 1869, and the North West Rebellion took place in 1885. sovereignty-association  The central plank in the Parti Québécois platform under René Lévesque was sovereignty-association, a scheme that called for the independence of Quebec, linked to a negotiated political and economic association with the rest of Canada. Supreme Court Reference on Secession  In response to the question of whether Quebec had the right to unilaterally declare its independence, the Supreme Court of Canada found that Quebec possessed no such right, either in international or Canadian law. But it also said that, in the event that a clear majority of provincial voters in response to a clear question

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David Cameron favoured independence, there would be a constitutional obligation on the part of the rest of Canada to negotiate with Quebec. Tremblay Report  Quebec Premier Maurice Duplessis created the Royal Commission of Inquiry on Constitutional Problems in 1953 in response to what he saw as the centralizing approach of the federal Rowell-Sirois Report and the Massey Commission. The Tremblay Report elaborated a powerful philosophically grounded view of traditional French-Canadian culture and advanced a classical understanding of federalism in which each order of government (but particularly the federal government) would confine itself scrupulously to its own sphere of jurisdiction. REFERENCES Ajzenstat, Janet, Paul Romney, Ian Gentles, and William Gairdner, eds. 2003. Canada’s Founding Debates. Toronto: University of Toronto Press. Brault, Gerard. 1986. The French-Canadian Heritage in New England. Hanover, NH: University Press of New England. Brunet, Michel. 1957. “Trois dominantes de la pensée canadienne-française: l’agriculturisme, l’anti-étatisme, et le messianisme. Essai d’histoire intellectuelle.” In Écrits du Canada français III, 33–117. Montreal. Cameron, David. 1990. “Lord Durham Then and Now.” Journal of Canadian Studies 25, no. 1: 5–38. https://doi.org/10.3138/jcs.25.1.5. ———. 2015. “Canada’s Constitutional Legitimacy Deficit: Learning to Live with It.” In Thinking Outside the Box: Innovation in Policy Ideas, edited by Keith Banting, Richard Chaykowski, and Steven Lehrer, 277–94. Kingston: McGill-Queen’s Press. Cameron, David, and Jacqueline Krikorian. 2008. “Recognizing Quebec in the Constitution of Canada: Using the Bilateral Constitutional Amendment Process.” University of Toronto Law Journal 58, no. 4: 389–420. https:// doi.org/10.1353/tlj.0.0010. Cameron, David, and Richard Simeon, eds. 2009. Language Matters: How Canadian Voluntary Associations Manage French and English. Vancouver: University of British Columbia Press. Canada, Royal Commission on Bilingualism and Biculturalism. 1965. A Preliminary Report of the Royal Commission on Bilingualism and Biculturalism. Ottawa: The Commission. Durham, Lord. 1982. Lord Durham’s Report: An Abridgement, edited by Gerald M. Craig. Ottawa: Carleton University Press. Fraser, Graham. 1984. PQ: René Lévesque and the Parti Québécois in Power. Toronto: Macmillan. Gagnon, Alain-G., ed. 2009. Contemporary Canadian Federalism: Foundations, Traditions, Institutions. Toronto: University of Toronto Press. Gagnon, Alain-G., and Mary Beth Montcalm. 1990. Quebec: Beyond the Quiet Revolution. Scarborough: Nelson Canada.



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Heintzman, Ralph. 1971. “The Spirit of Confederation: Professor Creighton, Biculturalism, and the Use of History.” Canadian Historical Review 52, no. 3: 245–75. https://doi.org/10.3138/CHR-052-03-01. House of Commons. 2006. Debates. 39th Parl., 1st Sess., no. 087, November 27, 2035. Kwavnick, David, ed. 1973. The Tremblay Report. Toronto: McClelland and Stewart. Laforest, Guy. 1992. Trudeau et la fin d’un rêve canadien. Sillery, QC: Editions du Septentrion. ———. 2010. “The Meaning of Canadian Federalism in Québec: Critical Reflections.” Revista d’Estudis Autonòmics I Federals, no. 11 (October): 10–55. Lévesque, René. 1968. An Option for Quebec. Toronto: McClelland and Stewart. McRoberts, Kenneth. 1993. Quebec: Social Change and Political Crisis. 3rd ed. Toronto: McClelland and Steward. Parkin, Andrew, Erich Hartmann, and Kiran Alwani. 2017. Portraits 2017: A Fresh Look at Public Opinion and Federalism. Toronto: Mowat Centre. Paquin, Stéphane. 1999. L’invention d’un mythe: Le pacte entre deux peoples fondateurs. Montreal: VLB. Québec, Commission royale d’enquête sur les problèmes constitutionnels. 1956. Rapport de la Commission royale d’enquête sur les problèmes constitutionnels, 4 vols. Québec: La Commission. Quebec National Assembly. 2006. Votes and Proceedings, no. 065, November 30, 697–8. Rocher, François. 2009. “The Quebec-Canada Dynamic or the Negation of the Ideal of Federalism.” In Contemporary Canadian Federalism: Foundations, Traditions, Institutions, edited by Alain-G. Gagnon, 81–131. Toronto: University of Toronto Press. Russell, Peter. 2004. Constitutional Odyssey: Can Canadians Become a Sovereign People? 3rd ed. Toronto: University of Toronto Press. Schneiderman, David, ed. 1990. The Quebec Decision: Perspectives on the Supreme Court Ruling on Secession. Toronto: James Lorimer and Company. Stanley, George F.G. 1956. “Act or Pact: Another Look at Confederation.” Report of the Annual Meeting of the Canadian Historical Association 35, no. 1: 1–25. Waite, Peter B., ed. 1963. The Confederation Debates in the Province of Canada, 1865. Toronto: McClelland and Stewart.

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CHAPTER FOUR

The Courts, the Division of Powers, and Dispute Resolution Gerald Baier

Canada’s federal system has, for some time, been characterized by a large gap between the jurisdictional map of the written constitution and the activities of governments. Overlapping jurisdictional responsibilities and the dominance of federal financial powers make the formal division of powers a relatively poor guide to “who does what?” in the Canadian federation. After a sequence of failures to amend the Constitution in the 1980s and 1990s, the primary agent of evolution in the federation has been intergovernmental negotiation. Rather than alter the Constitution to reflect the practices of the federation, intergovernmental relations have sought the accommodation of differing governmental priorities and preferences through co-operative institutions, some relatively advanced, others much more piecemeal and ephemeral. Since the 1960s, the products of this mutual priority-setting, negotiation, and co-operation have committed governments to increased collaboration and have further blurred the question of “who does what?” In a more “classical” federal system there would be bright line divisions between national and sub-unit jurisdiction, and courts would play a central role patrolling boundaries and keeping governments to their constitutionally assigned tasks. The role of courts in such a case is largely to give greater certainty to the meaning of constitutional assignments and to update the division of powers to accommodate unanticipated governmental activities. In a federal system characterized by the blurring of responsibilities, the role of courts is less clear. A preference for



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collaborative, intergovernmental federalism certainly does not mean that all conflict disappears, or that governments will not ultimately rely on their constitutional authority to pursue policies that other governments do not like or refuse to co-operate with. As evidence, one need look no farther than pipelines and carbon pricing in the present federation. But governments in a more co-operative system of federalism prefer to negotiate rather than litigate. Negotiating keeps the executive power in greater control of outcomes, even if other governments have to be involved. Litigating the Constitution to create brighter line rules is risky, as the courts and, ultimately, a constitutional court have the last word. This chapter examines the place of courts, particularly the Supreme Court of Canada (SCC), in Canada’s collaborative federal model. Although there is an almost ever-present need for dispute resolution in a federation like Canada, its courts are not necessarily the institutions called on to settle intergovernmental disputes. Today, when courts are relied upon to resolve intergovernmental disputes it is a clear sign that governments have either run out of opportunities and patience for negotiation or have taken entrenched positions that do not allow them to compromise with one another. Alternatively, courts are also engaged in the processes of Canadian federalism when citizens seek to enforce constitutional obligations that their governments may be trying to avoid through the obfuscation of jurisdictional ambiguity. Two trends are notable. First, the fledgling institutions of intergovernmental co-operation and collaboration have sought to displace some of the referee role of the Supreme Court in disputes, with mixed success but not without some blessing from the court itself. Second, the Supreme Court still finds itself playing the role of referee or umpire when governments reach the limits of their co-operative or collaborative capacity. Provincial governments appear to see court challenges against Ottawa or their fellow provinces as a way to help win elections or prove ideological bona fides rather than solve intergovernmental problems. Certainly, the constitutional challenge by some provinces to the federal carbon pricing regime appears to fall into this category. The chapter begins with a brief description of how judicial review of the Constitution has historically shaped Canadian federalism. It then looks at a selection of recent interventions by the Supreme Court in issues of intergovernmental conflict. These examples illustrate the more traditional role of the Supreme Court in intergovernmental relations,

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but also some of the court’s own ambivalence about its umpire role. The chapter then compares these recent approaches with the alternatives that have been produced in the post–Charlottetown Accord era of intergovernmental agreements. Finally, the role of judicial power in intergovernmental relations and the approaches taken by governments and the courts to some contemporary federal–provincial conflicts are illustrated. Special attention is given to court cases involving Quebec and federal initiatives to combat climate change. The seeming ambivalence of the Supreme Court about its umpire role puts the federal system at something of a crossroads. In recent years, the Supreme Court has been willing to be definitive and enforce an interpretation of the jurisdictional map if it appears necessary to resolve intergovernmental disputes. At other times, it has deferred its responsibility for patrolling the boundaries of the federation and encouraged negotiation and intergovernmental solutions under the umbrella of what it routinely labels “co-operative federalism.” Given the preference of intergovernmental actors to settle disputes away from the courts, when the Supreme Court adopts the latter attitude – and is willing to endorse co-operative federalism as an alternative to its role as judicial umpire – the result is to minimize the oversight role of the courts in upholding the Constitution. In effect, when the Supreme Court abdicates its umpire role, the manoeuvrability of governments over the guarantees of the federal Constitution is prioritized.

JUDICIAL REVIEW AND CANADIAN FEDERALISM Where did Canada’s decentralized federation come from? Historically, critics often indicted judicial review as responsible for the expansion of provincial power. If not for the permissive interpretation of provincial powers by the Law Lords of the Judicial Committee of the Privy Council (JCPC), went the argument, the strong central government envisioned by the Fathers of Confederation would have been realized. Early disputes between the provinces and the federal government gave a more prominent role to the judiciary as an umpire. For nearly the first 100 years of Confederation, governments challenged the respective boundaries of one another’s constitutional powers. In particular, the provinces successfully challenged the scope of the federal Parliament’s power to



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make laws for the “peace, order, and good government” (POGG) of Canada, as granted by the preamble to section 91 of the Constitution Act, 1867. At Confederation, this clause was generally believed to represent a grant of residual or plenary power that, with the help of the federal government’s assumption of the seemingly most important legislative and taxing powers, as well as its powers to reserve or disallow provincial legislation, would ensure that Canadian federalism took a centralized form. However, the scope of the POGG clause was profoundly influenced by those early challenges and the interpretation of the JCPC. Rather than read POGG generously as the centralist Fathers of Confederation had seemingly intended, the JCPC chose to restrict the scope of the clause. It categorized POGG largely as an emergency provision – to be resorted to only on rare occasions. The emergency interpretation of POGG was distinguished early on from a second interpretation that extended the power to cover matters of a national concern. The national concern interpretation was rarely granted. When POGG was successfully invoked, it was usually for emergency circumstances. In contrast, the JCPC favoured the enumerated powers of the provinces, especially the power over property and civil rights granted by section 92(13). Portions of the federal Parliament’s response to the Great Depression (the so-called Bennett New Deal) were ruled ultra vires according to this pattern, thus raising the considerable ire of progressive legal and political observers in Canada. The Canadian critics of the JCPC took it as gospel that a Canadian court would not interpret the federal Parliament’s POGG power so restrictively (Laskin, 1951; see Cairns, 1971). After the abolition of appeals to the JCPC in 1949, the early years of the autonomous Supreme Court seemingly proved the critics right. In one of its last decisions on Canadian federalism, the Canada Temperance Federation case, the JCPC offered up the possibility that POGG could be more generously interpreted in areas of national concern. The Supreme Court took full advantage of this line of reasoning and began to define a broader scope for the POGG power under the national concern doctrine. The court included under the rubric of POGG the national control of aeronautics ( Johannesson, 1952), atomic energy (Pronto Uranium Mines, 1956), a national capital region (Munro, 1966), and seabed natural resources (Offshore Minerals, 1967). This cautious run of centralization was essentially brought to a halt by the Anti-Inflation Reference case of 1976. The Supreme Court, led by one of the most outspoken critics of previous POGG jurisprudence,

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Chief Justice Bora Laskin, was asked to consider the constitutionality of the federal government’s inflation control legislation. If ever the debate between an emergency and national concern justification for the use of the POGG power was to be resolved, this case presented amenable facts for consideration. The decision of the court, however, offered no clear interpretation of POGG as a justification for the exercise of federal power in matters of national concern. The court left unresolved the potential of a federal plenary power and in the process ushered in a period of “balanced” federalism that has seemed to favour neither level of government (Hogg, 1979; Russell, 1985). Recent decades have seen sporadic attention paid to questions of constitutional jurisdiction. Since the Anti-Inflation Reference (1976), the Supreme Court has opened up some possibilities for the extension of federal power under POGG, but it has also seemed to maintain the balanced approach embodied by the Anti-Inflation decision (Baier, 2006). Federal power over the environment as a matter of national concern was first justified under the POGG clause in Crown Zellerbach (1988), but the court subsequently backed away from too generous an interpretation of the national concern doctrine. In Hydro-Quebec (1997) and the Firearms Reference (2000), the Supreme Court opted for a more generous interpretation of the federal power over criminal law instead of a generous interpretation of the POGG power. More recently, however, two provincial courts of appeal explicitly raised the national concern branch of POGG in reference cases where the two provinces (Saskatchewan and Ontario) challenged the federal government’s carbon pricing scheme. In both cases the decisions found Ottawa’s legislation to be intra vires, explicitly citing national concern over climate change as one of the valid reasons for Ottawa undertaking its scheme (Reference re Greenhouse Gas Pollution Pricing Act [SK 2019]; Reference re Greenhouse Gas Pollution Pricing Act [ON 2019]). Alberta has been more successful in its court of appeal, which narrowly found the federal scheme to be ultra vires Parliament. Appeals of the Saskatchewan and Ontario rulings will be heard by the Supreme Court in March 2020. POGG features prominently in the federal government’s arguments. Several other provinces acted as intervenors, doing so on a variety of grounds (e.g., Quebec favours carbon pricing but rejects Ottawa’s authority to price carbon; Ontario, Saskatchewan, and Alberta reject both pricing carbon and Ottawa’s right to price it). These challenges will have repercussions for many years to



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come, not only for the country’s capacity to deal with climate change but also for other areas where “national concern” might apply. POGG jurisprudence is only one part of the history of how the division of powers has been interpreted by Canada’s highest courts. The federal trade and commerce power has been interpreted in an equally restrictive way, particularly when compared to its broadly construed “cousin” in the commerce power of the United States government. Perhaps as a result of its lack of success in the courts, the federal government has tried to assert itself less with legislation and more with its spending power and subsequent agreements with the provinces. The Securities Reference (Reference Re: Securities Act, 2011) is one of a few recent cases that signalled the Supreme Court’s preference for sending governments back to the negotiating table rather than imposing jurisdictional solutions upon them. Perhaps ironically, in Securities it did so while at the same time making the case for a court-preserved division of powers. The Harper government sought to create a national securities regulator to add capital markets to some of the already substantial powers the federal government has over banking regulation. For a long time, such proposals have regularly encountered considerable resistance from the provinces who had been the primary regulators of stock exchanges and had shown some evidence of being willing to co-operate with one another in their regulatory efforts. The Harper Conservative government, with the support of the Liberal government of Ontario, by far the largest provincial regulator of securities, brought forward legislation in 2010 to create a single national regulator. Due to objections from several provinces (Alberta and Quebec prominent among them), the legislation was simultaneously referred to the Supreme Court to test its constitutionality. The federal government sought to justify its new regulator on the basis of its section 92 power over trade and commerce. Like the POGG power, trade and commerce has been acknowledged by the court in the past to have a “national concern” branch. A unanimous court ruled against the proposed regulator and rejected the national concern justification. The court also noted that, even while co-operation between federal and provincial governments had become the “dominant tide” of Canadian federalism, the court still had a duty to patrol boundaries. To wit: “The ‘dominant tide’ of flexible federalism, however strong its pull may be, cannot sweep designated powers out to sea, nor erode the constitutional balance inherent in the Canadian federal state” (para. 62).

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The court’s investigation of securities regulation determined that many parts of what amounts to present-day regulation can and have been accommodated under provincial laws pertaining to property and civil rights. To jettison these provincial efforts in favour of a federal claim to take over the whole of securities regulation because of the existence of some national (or even international) aspects of the field could not, in the court’s view, be justified. Co-operative federalism re-emerged in the conclusion of the judgment where the court counselled the federal government and provinces to return to the table and consider a more co-operative scheme that would allow each order of government to regulate in the areas that more properly adhere to their previously affirmed constitutional jurisdictions. The court argued that “a cooperative approach that permits a scheme that recognizes the essentially provincial nature of securities regulation while allowing Parliament to deal with genuinely national concerns remains available” (para. 130). In many ways the Securities decision is redolent of the Labour Conventions case of 1937. Then, the JCPC, drawing on a similar nautical metaphor, ruled regarding the performance of Canada’s treaty obligations: In totality of legislative powers, Dominion and provincial together, she [Canada] is fully equipped. But the legislative powers remain distributed, and if in the exercise of her new functions derived from her new international status Canada incurs obligations they must, so far as legislation be concerned when they deal with Provincial classes of subjects, be dealt with by the totality of powers, in other words by co-operation between the Dominion and the Provinces. While the ship of state now sails on larger ventures and into foreign waters she still retains the water-tight compartments which are an essential part of her original structure. (Attorney General of Canada v. Attorney General of Ontario [1937] A.C. 327, III Olmsted 180 (Privy Council))

THE SUPREME COURT AND CO-OPERATIVE FEDERALISM As indicated by the Labour Conventions decision noted above, the recent endorsement of co-operative federalism is not new for the Supreme Court. However, the court’s understanding of co-operative federalism



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has varied over the years. In the past, its decisions have been less about encouraging governments to find co-operative solutions and more about recognizing the limits of what the court can enforce when federal and provincial governments enter into long-run commitments that, at least to some degree, subvert or ignore the constitutional division of powers. The products of a flexible approach to federalism are generally found in more transactional agreements between governments or occasionally in federal legislation outlining standards or regulations to which the provinces must conform in order to receive federal funds or programming. These intergovernmental agreements are the backbone of the federal system. However, they are notorious for their weak degree of internal or judicial enforceability. As products of negotiation and compromise they are much more dependent on the goodwill of the partners to the agreement than they are on the Constitution, which is more transparent and legally enforceable (justiciable) by governments or citizens. As Katherine Swinton notes, “the method for resolving disputes about obligations between governments tends to lie in the political, rather than the legal, arena. Indeed, some intergovernmental agreements are designed not to be enforceable in any other forum” (1992: 140). The observation that intergovernmental agreements are political, not legal, documents is bolstered by the unwillingness of the Supreme Court to interfere when disputes have arisen about such agreements. The leading example and illustrative case is the Reference Re: Canada Assistance Plan (CAP ; 1991), in which a unanimous Supreme Court refused to limit Parliament’s power to unilaterally alter (and reduce) its obligations to provinces under long-standing federal–provincial cost-sharing agreements. Parliament was able to limit the increases in CAP grants to the provinces not then receiving equalization, despite a history of 50/50 cost-sharing. The provinces had no legal recourse to force the continuation of equal cost-sharing, even when departure from this formula was likely to have a negative impact on the delivery of services. The CAP case is generally interpreted as a warning to the provinces about the risks they take in dealing with the federal government in the strictly non-constitutional realm (Barker, 2000; Baier, 2002a). But the CAP reference only touches on what might be called the external enforceability of intergovernmental agreements. Since the Canada Assistance Plan never took a constitutional form, altering Parliament’s obligations was as simple as passing new legislation and, as the court ruled, the

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provinces had few grounds on which to appeal. Any federal or provincial legislation has a duty to abide by constitutional guarantees, whether of federalism jurisdiction or of rights. These obligations are matters of external enforceability; that is, courts must ensure that legislation, including legislation that enacts intergovernmental agreements, still abides by rules like the division of powers. When agreements go unaltered, but remain unimplemented or are not respected by one party or another, there is an added dimension of internal enforceability. The court essentially argued in the CAP case that no external guarantee in the Constitution or elsewhere existed to stop the federal Parliament from changing the internal terms of its agreement with some or all of the provinces in the exercise of its constitutionally assigned power to spend. Doubts about the external enforceability of intergovernmental agreements have always been present (Sossin, 1999),1 but increasingly the possibility that intergovernmental agreements have some internal enforceability seems headed for the same fate. In the Finlay cases, a recipient of social benefits tried to ensure that the government of Manitoba lived up to what she argued were its obligations under the Canada Assistance Plan. Although the complainant was initially successful at the lower court level, a narrow majority of the Supreme Court in Finlay (1993) did not support the argument and refused to directly patrol the program and its funding levels, leaving it to the province to achieve “substantial compliance” with the objectives of the CAP. This ruling dashed hope that courts would recognize that “intergovernmental agreements are not the preserve of the signatory governments” and that courts would give “the citizen status to patrol the intergovernmental relations process and to enforce obligations between governments” (Swinton, 1992: 145). The court’s more recent encouragement to governments to negotiate seems to ignore its own role in forcing governments to collaborate lest judicial enforcement be necessary. For example, the Chicken and Egg Reference (Attorney-General for Manitoba v. Manitoba Egg and Poultry Association et al., 1971) was a tactical use of judicial review by the province of Manitoba to challenge interprovincial trade barriers set up by Ontario and Quebec, largely in response to one another. Ultimately those governments, with the aid of the federal government, found a co-operative solution satisfying to all parties, but there was a sense that co-operation was greatly assisted by the threat of a more unilateral finding by the Supreme Court that might jeopardize provincial powers over intraprovincial marketing of agricultural commodities.



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Governments’ recourse to the courts can be seen as an effort to set the agenda, or perhaps more accurately, to alter the playing field of negotiations by altering the relative constitutional resources of the actors. A government’s hand in negotiation and compromise is strengthened if it can be assured it has a stronger constitutional claim to jurisdiction than its opponents. An example is the intervention of the Supreme Court in the Reference Re: Employment Insurance Act (2005), which forced the court to revisit questions about unemployment insurance and pension schemes first considered in the 1930s. At that time, constitutional amendments became necessary to provide the federal government with adequate constitutional jurisdiction to deliver services in some of those fields. The federal government has since used that heading of employment insurance to design a number of different benefit programs, including plans for maternity and parental leave from regular employment. Quebec has long sought greater control over social and economic policy matters in which the federal government exercises jurisdiction. At Quebec’s behest, the Meech Lake and Charlottetown Accords both contemplated limits on federal jurisdiction in provincial labour market development. Since those failed attempts at constitutional change, Quebec has sought more control over areas of social welfare related to employment, including the provision of parental leave. Because the parental benefit program is somewhat outside the original rationale of unemployment insurance, a case could be made that provinces could provide such programs under their own social welfare jurisdiction. Most provinces have demurred from the expense. However, during the Liberal government of Jean Chrétien, federal parental benefits were reduced, giving the Quebec government added incentive to implement its own, more generous program. Quebec sought to retain federal transfers for parental leave benefits to Quebeckers, but to have them administered by the provincial, rather than the federal, government. Negotiations between Quebec and Ottawa through the late 1990s failed to produce an agreement. In 1999, the Chrétien government reversed its original policy and increased the federal benefits substantially. It also suspended efforts to negotiate an opt-out version of the parental leave program with Quebec. Quebec went ahead with its own enhanced program but initiated a challenge to the constitutionality of the federal government’s program. The Quebec government argued that the employment insurance power was intended to cover only people who were

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involuntarily unemployed but able to work, and that the parental leave provisions of the federal program were ultra vires. The Quebec Court of Appeal agreed. It offered a fairly narrow reading of the federal power and found that parental benefits more appropriately belonged under the provincial constitutional headings of “property and civil rights” or “matters of a merely local nature.” The federal government appealed the ruling to the Supreme Court because it jeopardized not only the parental leave program delivered by the employment insurance legislation, but also programs for sickness and compassionate leave: levers that future governments have used to be more generous on matters of social policy. The federal government also renewed negotiations with Quebec for some shared delivery of the enhanced Quebec plan. In October of 2005, the Supreme Court ruled unanimously that parental benefits were legitimately part of the federal power for employment insurance in the amended section 91(2a) of the Constitution Act, 1867. The ruling was almost irrelevant, as the negotiations between Quebec and the federal government had been settled earlier that year. The federal ministers involved in the negotiations repeatedly hailed the agreement as evidence that co-operative federalism works. One might be sceptical about how well the negotiations would have gone if the spectre of an adverse constitutional ruling was not hanging over both parties. The more compelling weakness of the seeming preference for co-operative federalism by the Supreme Court is the weak position that it puts citizens in when seeking to challenge the preferences of their governments. Donald Smiley (1979) long recognized that the forums of intergovernmental relations were democratically imperfect. They left citizens on the outside of intergovernmental co-operation, even when such co-operation might ignore citizen preferences or seek to avoid the traditional accountability for jurisdictional matters assigned to governments under the Constitution. Healthcare, as a paradigmatic case of intergovernmentalism, is a very good example. In Chaoulli v. Quebec (Attorney General) (2005), Dr. Jacques Chaoulli, a physician activist who had long contested regulations in the Quebec healthcare system, challenged restrictions in Quebec’s Health Insurance Act and Hospital Insurance Act that prevent residents in the province from purchasing private health insurance or private services in a hospital. He argued that the excessive delays experienced in the Quebec health system,



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combined with the lack of private options for patients that result from legislative prohibitions against private insurance and care, amounted to violations of federal and provincial Charter rights to security of the person. Chaoulli’s argument did not challenge the constitutionality of provincial jurisdiction over healthcare; in that sense it is not a typical federalism or division of powers controversy. The Supreme Court of Canada agreed that the undue wait times experienced in the Quebec public system and the lack of private alternatives amounted to a violation of rights under the Quebec (but not the Canadian) Charter. Finding a violation under the Quebec Charter, but not the federal Charter, limited the application of the decision solely to the province of Quebec. Had the court found a violation of federal guarantees, legislation in other provinces similar to that in Quebec would also have been found to be unconstitutional. A long-running case that has been playing out in the BC Supreme Court since 2009 (still ongoing as of the start of 2020) covers much of the same ground as Chaoulli (namely challenging the single-payer system and a ban on the extra-billing regime) on Charter grounds. The case exists largely due to the crusade of Dr. Brian Day, founder of the Cambie Surgery Centre and an advocate of opening up the Canadian health system to more private provision of services.2 Day’s efforts to change government policy toward healthcare through lobbying or other methods have been largely unsuccessful even though he has been president of the Canadian Medical Association, the primary professional and lobbying organization for Canadian doctors. The case has taken many years to proceed to trial and has highlighted some of the inertia in health policy-making. The Charter arguments being made in the case, specifically around section 7 of the Charter, have been getting a more receptive hearing from the court in recent years, so it may yet have some impact on the shape of the healthcare system. Another case where an individual has been able to challenge the relatively closed intergovernmental system is what has become known as the New Brunswick Beer case (Comeau, 2018). In 2012, Gerard Comeau, a New Brunswick resident, purchased a significant amount of alcohol in Quebec, where prices were cheaper than in his home province. Upon crossing the border Mr. Comeau had his purchases seized and was fined $300. Comeau challenged the restriction on interprovincial transport of alcohol in provincial court and won. The case was eventually appealed to

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the Supreme Court where the restrictions were upheld. A long-standing irritant for both citizens and commercial interests has been the existence of trade barriers between the provinces. Despite apparent prohibitions to such barriers in the Constitution, the provinces have historically been protective of local industries and interests, and that has resulted in a number of formal and informal practices restricting trade across provincial boundaries. In Comeau the court found that the guarantee of a free market in section 121 of the Constitution Act, 1867 did not prevent provinces from pursuing other regulatory or policy goals (in this case the regulated sale of alcoholic beverages). The court’s language even puts something of a damper on its apparent enthusiasm for co-operation between the provinces. Given the room to create indirect trade barriers that the Comeau decision leaves, and the limited success that the federal government has had in promoting a freer market within the country (see chapter 8), mechanisms for coordination and conflict resolution between the provinces will likely remain relatively inaccessible to citizens and corporations. Still, the important lesson of these three cases is the opportunity that litigation provides for ordinary citizens to become involved in intergovernmental relations. Drs. Chaoulli’s and Day’s activism on healthcare issues have taken a variety of forms prior to their constitutional challenge. By challenging the constitutionality of legislation, Chaoulli and Day have been able to impact an area otherwise dominated by intergovernmental negotiations and a certain degree of indifference to change, despite well-documented challenges in the healthcare system. While it has become gospel for Canadian politicians to pledge their support for the healthcare system or to promise fixes to the system for future generations, there are serious accountability flaws in a policy field so dominated by intergovernmental interaction. Most Canadians have difficulty identifying who is even responsible for the delivery of healthcare, making it hard for them to influence policy or to hold anyone accountable (Cutler, 2004). Resorting to constitutional challenges may be an imperfect tool, but it is an opportunity nonetheless to infiltrate some of the closed circles of intergovernmental policy-making and to make governments respond. Federalism litigation, we should not forget, is routinely commenced by individuals or societal actors who disagree with the enacting government’s constitutional authority to proceed as it had. Efforts to break into the closed club of healthcare policy-making that constitutes the



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intergovernmental protocol reminds us of the limited opportunities for some interests to get a hearing in a collaborative federalism world.

THE SUPREME COURT AND QUEBEC While a dominant theme of the Supreme Court in recent decades has been the avoidance of drawing clear jurisdictional lines and attempting to strike a balance between orders of government, there have been a limited number of cases where the court has drawn firmer lines, primarily involving Quebec or issues of major concern to Quebec. And in these cases the court endeavoured, implicitly or explicitly, to protect Quebec interests. Four of these cases merit discussion, one of them dating back to 1997 and three of them during the latter half of the Harper government’s tenure. The first case, the Secession Reference (1998), followed the near loss of the Yes side in the 1995 Quebec referendum. Revolving around the question of whether Quebec had a right to secede and to hold a referendum on the question, the case was initiated by an individual in Quebec in Quebec courts. The federal government then took it up and referred it to the Supreme Court in the form of three questions: Under the Canadian Constitution can the Quebec government or legislature effect the unilateral secession of Quebec? Is there, under international law, a right to self-determination? If there is a conflict between domestic and international law on the right to self-determination, which would prevail in Canada? Although the SCC ruled that Quebec did not have a constitutional right to unilateral secession, it did say that Ottawa and the other provinces were obliged to engage Quebec (or any other province) in good faith negotiations if there was a referendum result with a clear majority on a clear question favouring secession. The ruling left unspecified what constituted a clear majority and a clear question and passed on this responsibility to the political realm, which filled in the details when the Liberal government passed the Clarity Act in 2000. The Quebec government did not support the reference, nor did it act as an intervenor. However, while not necessarily seeing itself as a winner in the case, Quebec secessionists “took heart that the court recognized formally that Canada is divisible” (Bateman et al., 2017: 158). Between the Secession ruling and the Clarity Act, the net result was a less ambiguous set of rules around an important question in a federation where such rules are generally lacking.

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Two further bright line cases relating to Quebec were the Nadon and Senate Reform references. The Nadon case (Reference Re: Supreme Court Act, ss. 5 and 6, 2014) was particularly dramatic insofar as Chief Justice McLachlin was accused by the Harper government of undue interference in the process to fill a vacancy on the court itself. There are expectations, one might argue even constitutional conventions, around regional representation on Canada’s Supreme Court. But the Supreme Court Act clearly requires that three of the justices are appointed from the bar of Quebec. Marc Nadon, a semi-retired federal court judge, was appointed to fill a Quebec vacancy in the fall of 2013. Prior to the appointment, Chief Justice McLachlin had called the minister of justice to alert him that Nadon might not be eligible given that he had not been a member of the Quebec bar for some time. After Justice Nadon was sworn in, his appointment was challenged in court by a private citizen in Toronto. The Quebec government in turn asked the federal government to refer the matter directly to the Supreme Court, which it did. In the subsequent six-to-one ruling the court found that appointees filling a Quebec vacancy had “to be currently either a section 96 Quebec judge or a member of the Quebec bar,” thus making the Nadon appointment invalid (Bateman et al., 2017: 180). The same judgment also ruled that a proposed change by the Harper government to the Supreme Court Act, which would have rendered the currency requirement inapplicable, constituted a constitutional amendment requiring the application of section 41 of the Constitution Act, 1982. It requires the unanimous consent of the provinces in addition to the federal Parliament. With this decision the court affirmed the unique role, expectations, and requirements applicable to the three Quebec positions on the nine-member court. When the most recent Atlantic vacancy on the court emerged, Prime Minister Trudeau considered abandoning the regional representation requirement in favour of other forms of representation, including the possibility of appointing the first Indigenous justice to the court. When Chief Justice McLachlin’s seat on the court became vacant at her retirement, Prime Minister Trudeau acknowledged the “custom of regional representation” (Yakabuski, 2017) and ensured that she was replaced with a western Canadian appointee. In 2019, the Trudeau government announced a special process for the Quebec government to appoint two members to the independent advisory board responsible for developing the short list of candidates



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for Supreme Court vacancies from Quebec (Fine, 2019). The process was used for the first time in July of that year for the appointment of Justice Kasirer, to the apparent satisfaction of the Quebec government. The significance of the affirmation of the unique position of Quebec justices on the court should not be underestimated given the fact that it is one of the few formal intrastate institutions in the Canadian federation. The Senate Reference case (Reference Re: Senate Reform, 2014) involved reform of the Senate, an issue that proved to be a continual preoccupation of Prime Minister Harper and his government. Late in the Conservative government’s final term, it referred to the Supreme Court a list of six questions touching on term limits for Senate appointees, the capacity of the federal Parliament to alter fixed term limits, to set up mechanisms to allow Parliament and the provinces to consult with their citizens on possible nominees to the Senate, whether the property qualifications for senators can be repealed, whether Parliament can abolish the Senate outright and, if not, whether the unanimity rule of the Constitution’s amending procedure is then required. The government received a negative response to four of its six questions. Only in the case of property qualifications did the court allow that Parliament had the authority to alter them. As Bateman et al. (2017) point out, even though it was a continual preoccupation throughout its term in office and even though an earlier SCC decision on Senate reform (Reference Re: Authority of Parliament in Relation to the Upper House, 1980) indicated there would be major constitutional roadblocks, the Harper government had done very little to engage provinces on the possibility of Senate reform or the need to deploy the amending formula. When the Supreme Court’s unanimous opinion was delivered, most provinces, many of which were not averse to outright abolition, expressed disappointment. But not Quebec, which hailed the decision as historic. As Brown, Bakvis, and Baier (2019: 266) note, “For Quebec, the decision was clearly an affirmation that it had the capacity to say no to substantial changes, even for an institution that it held in low esteem and to which it attached little importance.” The Securities Reference case, discussed earlier, affected all provinces, but, as with the Senate Reference case, the stakes were higher for Quebec. Its civil code contracts and other matters related to civil law are handled differently compared to other provinces. Furthermore, the financial sector under provincial regulation – caisse populaires (equivalent of credit

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unions) – handles many more transactions than do federally regulated banks, and constitutes a bigger share of the financial sector in Quebec than in other provinces. According to William Coleman (2002), over the years Quebec developed a far more extensive and variegated regulatory system than elsewhere. Thus, for Quebec the SCC ruling that the proposed national securities regulator was ultra vires was seen positively. At the same time, the court’s counsel to seek “cooperative solutions that meet the needs of the country as a whole as well as its constituent parts” (Reference Re: Securities Act, 2011) is not something that the Quebec government is likely to embrace, given the negative connotations associated with co-operative federalism in that province. In years past, particularly in the early post-war era, co-operative federalism was synonymous with the top-down, cost-shared federal initiatives, actively resisted by the governments of Duplessis and Lesage. According to Brown, Bakvis, and Baier (2019: 266), its fear in this respect was “at least partially realized when, subsequent to the ruling, the Conservative government launched its Cooperative Capital Markets Regulator initiative.” The Quebec government referred this scheme to its court of appeal, which ruled it invalid on the grounds that it subjected the province’s power to legislate to an external entity (Renvoi relatif à la réglementation pancanadienne des valeurs mobilières, 2017). A year later the SCC reversed the decision, ruling that joining the new Pan-Canadian Cooperative Securities Regulator did not entail a provincial legislature transferring its sovereignty to an external body (Reference Re: Pan-Canadian Securities Regulation, 2018). Quebec did not win its case, but neither did it lose it, since membership in the new Pan-Canadian regulator remained voluntary. According to Brown, Bakvis, and Baier (2019: 266), what appeared to be “at stake was the fact that Quebec could see no recognition at all of its unique position in this field in the new federal legislation.” To recap, in Nadon the court recognized that the requirement for three judges to come from the bar of Quebec “is to ensure not only civil law training and experience on the Court, but also to ensure that Quebec’s distinct legal traditions and social values are represented on the Court, thereby enhancing the confidence of the people of Quebec in the Supreme Court as the final arbiter of their rights.... [This] protects both the functioning and the legitimacy of the Supreme Court as a general court of appeal for Canada” (Reference Re: Supreme Court Act, ss. 5 and 6, 2014). This role of the Quebec justices does not mean that they always



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or even mostly act in unison. According to a detailed examination of the rulings and public statements of Quebec Supreme Court justices by Robert Schertzer (2016), there is in fact considerable variation in how they view their role as Quebec representatives. Nonetheless, even this brief review of Quebec-related SCC decisions suggests that the representation of Quebec’s unique values on the court has had an impact on Quebec-related cases. The reaction from Quebec governments, both Liberal and PQ, to these decisions has generally been positive, suggesting that within Quebec the confidence in and the legitimacy of the court as the final arbiter has at a minimum been maintained, if not enhanced. This legitimacy will matter when rights issues related to the province’s secularism law make their way to the Supreme Court.

CONCLUSION: THE DEVIL YOU KNOW The judicial review of federalism is a difficult practice to defend on strictly democratic criteria. This volume’s benchmarks of performance, effectiveness, and legitimacy provide some grounds for doing so. While judicial reasoning is not always as consistent or as objective as its practitioners may profess (and hence may lack legitimacy), the use of a judicial umpire is a relatively efficient and final (and thereby effective) mechanism for the resolution of intergovernmental disputes. Judicial power has become increasingly scrutinized by Canadians since the enactment of the Charter of Rights and Freedoms, but at the same time the practice of federal judicial review in Canada has a more muted political character than is generally true of other federal high courts (Baier, 2002b), and engages seemingly less controversial issues than rights litigation. It is controversial, however, as the Supreme Court’s power in the federation runs up against the incrementalist, pragmatic style favoured by intergovernmental relations. The court’s cautious approach notwithstanding, over the past two decades it has rendered a number of decisions that have been crucial in maintaining a careful balance between federal and provincial powers and, over the past decade, in affirming the federal character of the Constitution, especially with respect to Quebec’s unique position in Confederation. In doing so the court perhaps can be criticized for the homogeneity of its views, where all the justices appear to be singing from the same legal song sheet. In the case of Comeau (2018) and his challenge

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of section 121, a complex case to be sure, one might have expected to see more division among the justices or more caveats on how provinces use policy or regulatory objectives to trump the core provisions of section 121. And in the Securities case (Reference Re: Securities Act, 2011) some legal scholars are undoubtedly discomfited not only by the echoes of the JCPC era but also by the uncritical acceptance of a weakly articulated co-operative federalism. Even if judicial review has only a limited direct role in shaping the federation, the resources it assigns are still important to the settlement of intergovernmental issues. Judicial settlement of disputes is by its nature much more zero-sum than negotiation and compromise. For the most part, only one party wins in any given constitutional litigation. While negotiation can overcome those results, judicial determinations have some influence on the bargaining power that participants have in the negotiations. Hence, the effectiveness and definitive nature of judicial review has probably led governments to opt out of judicial settlement of disputes. Here we encounter a question of overall performance. While judicial review is seen as generally legitimate and is effective, overall dispute resolution suffers from weak performance. The provinces, according to this thinking, are right to be suspicious of the new third-party umpires created in intergovernmental agreements or of leaving those agreements to the enforcement of the courts. But the creeping informalism of Canadian federalism may not ultimately be to the advantage of the provinces or of democracy. Federalism litigation is not the zero-sum game participants may think. In many of the cases discussed above, the Supreme Court’s traditional role as an arbiter of the division of powers plays only a part in the eventual outcome of an intergovernmental policy dispute. If the Supreme Court cannot settle the dispute, what particular advantage does it offer? Its advantages are procedural ones. Judicial review, unlike the newer mechanisms of intergovernmental dispute resolution such as the ones discussed in chapter 8 for resolving internal trade disputes, offers actors other than governments an opportunity to be engaged and influential in the politics of intergovernmental relations. It also reinforces the constitutional character of the federal order. It reminds governments that the Constitution, not intergovernmental compromise, is meant to be supreme. If intergovernmental agreements are all that holds the



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federation together, the federal order will begin to be much more confederal, dependent upon the goodwill of governments rather than the guarantees of the Constitution. Students of executive federalism have increasingly questioned the weak accountability and transparency of intergovernmental relations, and the undemocratic character of executive federalism. As more and more of the business of Canadian federalism is done at the executive level, the critique rings truer and truer. The emphasis on settling, avoiding, or amicably resolving disputes in the new collaborative federalism is certainly about pursuing noble goals of co-operation, but it is also about keeping the business of governing and policy-making strictly in the preserve of governments. This is poor performance for the intergovernmental system. As Harvey Lazar (2003: 5) has noted, “differences among governments are normal and intergovernmental conflict can be constructive when it exposes competing ideas to public deliberation.” Collaborative federalism, as it has been practised in Canada, often tries to erase that advantage from the intergovernmental process by keeping it behind closed doors. Federalism litigation, we should not forget, is routinely commenced by individuals or societal actors who disagree with the enacting government’s constitutional authority to proceed as it had. Whether one agrees or disagrees with the positions of Dr. Chaoulli, the Cambie Surgery Centre, and Mr. Comeau, their efforts to break into the closed clubs of healthcare policy-making and interprovincial trade are reminders of the limited opportunities for some parties to get a hearing in a collaborative federalism world. Indigenous communities, with a separate set of rights enumerated in the Constitution, have been less likely to pursue these kinds of interventions. But they too are on the outside of government decision-making more often than not. More judicial review would improve the performance of the intergovernmental dispute settlement system by truly opening up intergovernmental relations to outsiders, that is to say, to actors other than governments. Such opportunities to avail oneself of constitutional guarantees against governments have all but disappeared in the dispute resolution mechanisms of contemporary federalism. Certainly, the Charter of Rights and Freedoms provides an opportunity to hold intergovernmental agreements to an individual rights standard, but the courts have proven fairly resistant, Chaoulli (2005) notwithstanding, to second guessing the policy choices of legislatures in issues of intergovernmental

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co-operation. That certainly appeared to be the case with Comeau (2018), and governments seem to prefer this limited oversight. Nonetheless, in the present era, with cases looming over carbon pricing and pipelines and with some provincial governments more than willing to take the risk of a negative legal outcome, the Supreme Court may well find itself having to revisit issues related to POGG and the national concern branch, issues that it has largely avoided over the past two decades. In brief, with a shift to a more combative form of federalism, we may also see a more prominent role for the court.

NOTES 1 Sossin includes “disputes involving intergovernmental relations” among the settings that stand outside the reach of judicial inquiry. 2 Since the case is still ongoing and as of early 2020 no verdict has been delivered, there is no formal reference yet for this case. A link to the various documents and proceedings can be found here: http://www.savemedicare. ca/court_documents. GLOSSARY intra vires  A concept used by the courts in constitutional law cases when deciding whether or not a law passed by a federal or provincial legislature is within (“intra”) the powers (“vires”) of that legislature. Governments as well as citizens can challenge the validity of a law by asking a court to rule whether the law is indeed intra vires of the legislature. It is the opposite of ultra vires (see below). Judicial Committee of the Privy Council (JCPC)  Served as the final court of appeal for Canada until 1949 when the Supreme Court of Canada took over that function. Founded in 1833, the JCPC is composed of senior judges and still hears appeals from some smaller Commonwealth countries. Its role in shaping the Canadian Constitution in the nineteenth until mid-twentieth century was highly controversial given that several of its decisions appeared to favour provincial powers over federal ones. peace, order, and good government (POGG)  Frequently referred to by its acronym, POGG, in the Canadian constitutional context refers to wording in section 91 of the Constitution Act, 1867 (previously labelled the British North America Act, 1867) that gives purpose to the overall objective of the Canadian federal government. It was also seen at the time of Confederation as a residual power held by the federal government, in



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contrast to the United States where the states held the same power. John A. Macdonald and other Fathers of Confederation felt that, along with other federal powers such as disallowance, it gave the federal government scope to override provincial powers when necessary. The wording of POGG is both general and ambiguous, and perhaps for this reason the JCPC was reluctant to use it to justify federal laws when they were challenged. Instead, by the twentieth century it had reduced POGG to an emergency power very narrowly defined. Secession Reference  Following the 1995 sovereignty referendum in Quebec, the government of Canada referred three questions on the legality of a unilateral declaration of independence to the Supreme Court. The court ruled that a unilateral declaration had no legal grounding in either domestic or international law, and should a clear majority of residents in a province vote to secede from Canada on the basis of a clear referendum question, the federal government and the other provinces had an obligation to negotiate secession. The federal government based its 2000 Clarity Act on the ruling. ultra vires  The opposite of intra vires (see above). Courts in ruling on the constitutionality of a law may decide that it is beyond the powers (ultra vires) of the legislature to pass such a law. REFERENCES Baier, G. 2002a. “Judicial Review and Federalism.” In Canadian Federalism: Performance, Effectiveness and Legitimacy, edited by H. Bakvis and G. Skogstad, 24–39. Don Mills, ON: Oxford. ———. 2002b. “New Judicial Thinking on Sovereignty and Federalism: American and Canadian Comparisons.” Justice System Journal 23, no. 1: 1–24. ———. 2006. Courts and Federalism: Judicial Doctrine in the United States, Australia and Canada. Vancouver: University of British Columbia Press. Barker, P. 2000. “Acceptable Law, Questionable Politics: The Canada Assistance Plan Reference.” In Political Dispute and Judicial Review: Assessing the Work of the Supreme Court of Canada, edited by H. Mellon and M. Westmacott, 165–82. Scarborough: Nelson. Bateman, T., J.L. Hiebert, R. Knopff, and P. H. Russell, eds. 2017. The Court and the Charter: Leading Cases. 2nd ed. Toronto: Emond Montgomery. Brown, D.M., H. Bakvis, and G. Baier. 2019. Contested Federalism: Certainty and Ambiguity in the Canadian Federation. Don Mills, ON: Oxford University Press. Cairns, A. 1971. “The Judicial Committee and Its Critics.” Canadian Journal of Political Science 4, no. 3: 301–45. https://doi.org/10.1017 /S0008423900026809. Coleman, W. 2002. “Federalism and Financial Services.” In Canadian Federalism: Performance, Effectiveness, and Legitimacy, edited by H. Bakvis and G. Skogstad, 178–96. Don Mills, ON: Oxford University Press.

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Gerald Baier Cutler, F. 2004. “Government Responsibility and Electoral Accountability in Federations.” Publius 34, no. 2: 19–38. https://doi.org/10.1093 /oxfordjournals.pubjof.a005028. Fine, S. 2019. “Quebec to Have Say on Its Supreme Court Picks.” Globe and Mail, May 15, 2019. Hogg, P. 1979. “Is the Supreme Court of Canada Biased in Constitutional Cases?” Canadian Bar Review 57: 721–39. Laskin, B. 1951. “The Supreme Court of Canada: A Final Court of and for Canadians?” Canadian Bar Review 29: 1038–79. Lazar, H. 2003. “Managing Interdependencies in the Canadian Federation: Lessons from the Social Union Framework Agreement.” In Constructive and Co-operative Federalism? Kingston, ON: IIGR/IRPP. Russell, P. 1985. “The Supreme Court and Federal-Provincial Relations: The Political Use of Legal Resources.” Canadian Public Policy 11, no. 2: 161–70. https://doi.org/10.2307/3550698. Schertzer, R. 2016. “Quebec Justices as Quebec Representatives: National Minority Representation and the Supreme Court of Canada’s Federalism Jurisprudence,” Publius 46, no. 4: 539–67. https://doi.org/10.1093 /publius/pjw017. Smiley, D. 1979. “An Outsider’s Observations of Federal-Provincial Relations Among Consenting Adults.” In Confrontation and Collaboration: Intergovernmental Relations in Canada Today, edited by R. Simeon, 105–12. Toronto: Institute of Public Administration of Canada. Sossin, L.M. 1999. Boundaries of Judicial Review: The Law of Justiciability in Canada. Scarborough, ON: Carswell. Swinton, K. 1992. “Federalism under Fire: The Role of the Supreme Court of Canada.” Law and Contemporary Problems 55, no. 1: 121–45. https:// doi.org/10.2307/1191760. Yakabuski, K. 2017. “Trudeau’s Supreme Court Conundrum.” Globe and Mail, November 20, 2017. https://www.theglobeandmail.com/opinion /trudeaus-supreme-court-conundrum/article37024619/. CASES Attorney-General for Manitoba v. Manitoba Egg and Poultry Association et al., [1971] S.C.R. 689. Chaoulli v. Quebec (Attorney General), [2005] 1 S.C.R. 791. Finlay v. Canada (Minister of Finance), [1993] 1 S.C.R. 1080. Johannesson v. West St. Paul, [1952] S.C.R. 292. Munro v. National Capital Commission, [1966] S.C.R. 663. Pronto Uranium Mines, Ltd. v. O.L.R.B., [1956] 5 D.L.R.(2nd). R. v. Comeau, [2018] 1 S.C.R. 342. R. v. Crown Zellerbach, [1988] 49 D.L.R. (4th). R. v. Hydro-Québec, [1997] 151 D.L.R. (4th).



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Reference Re: Anti-Inflation, [1976] 68 D.L.R. (3rd). Reference Re: Authority of Parliament in Relation to the Upper House, [1980] 1 S.C.R. 54. Reference Re: Canada Assistance Plan, [1991] 83 D.L.R. (4th). Reference Re: Employment Insurance Act (Can.), [2005] 2 S.C.R. 669. Reference Re: Firearms Act (Can.), [2000] 1 S.C.R. 783. Reference Re: Greenhouse Gas Pollution Pricing Act, [2019] ONCA 544. Reference Re: Greenhouse Gas Pollution Pricing Act, [2019] SKCA 40 Reference Re: Offshore Mineral Rights of B.C., [1967] S.C.R. 792. Reference Re: Pan-Canadian Securities Regulation, [2018] SCC 48. Reference Re: Securities Act, [2011] SCC 66, 3 S.C.R. 837. Reference Re: Senate Reform, [2014] SCC 32. Reference Re: Supreme Court Act, ss. 5 and 6 (Nadon), [2014] SCC 21, 1 S.C.R. 433. Reference Re: The Secession of Quebec, [1998] 161 D.L.R. (4th). Renvoi relatif à la réglementation pancanadienne des valeurs mobilières, [2017] QCCA 756.

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CHAPTER FIVE

Criminal Justice and Criminal Law Dennis Baker

Unlike virtually all of the other powers found in sections 91 and 92 of the Constitution Act, 1982, which typically assign a whole “subject-matter” to one level or the other, Canada’s criminal justice powers are divided functionally. Section 91(27) grants the federal Parliament the “exclusive legislative authority” over all matters coming within “The Criminal Law ... including the Procedure in Criminal Matters.” Section 92(14) states that each provincial legislature “may exclusively make Laws” in matters coming within the “Administration of Justice in the Province.” This form of “horizontal or administrative federalism” is common in some federal systems (Germany, for example), but it is otherwise alien to the Canadian federal design (Brown, Bakvis, and Baier, 2019: 11).1 Its usage for Canada’s criminal justice powers reflects an understanding that the awesome power of criminal prosecution requires “a careful and delicate division of power” (Wetmore, 1983: 305), separating the federal Parliament’s power to make criminal law from the provincial power to enforce it. Explaining and evaluating the features of Canadian criminal justice federalism is the task of this chapter. But given the anomaly of its functional nature, a modified “performance, effectiveness, legitimacy” framework is needed for this peculiar area of Canadian federalism. The editors of this volume include fidelity to constitutional text and a balance between diversity and unity as part of “performance,” but, for the criminal justice powers, the textual division is especially important. To perform well, this division of powers must not simply preserve a core subject area (as the



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other powers in sections 91 and 92 require) but also maintain the unusual functional separation that characterizes the criminal justice powers. In general, Canadian federalism has eschewed “watertight compartments,” at least since 1949 when the Supreme Court of Canada replaced the Judicial Committee of the Privy Council (JCPC) as the final court of appeal, in favour of doctrines that are more generous to legislative activity at both levels. While the “pith and substance” of legislation must be within a level of government’s jurisdiction, “ancillary” effects on the other’s jurisdiction are routinely allowed, and the courts have been generous in finding a “double aspect” to many issues, allowing both levels to legislate in any given area. This approach is more problematic when the division also requires a functional separation since these more general doctrines invite both levels of government to undermine the uniformity of criminal law and other criminal justice norms that ­functionalism is meant to protect. By allowing the provinces to essentially legislate criminal law and permitting the federal government criminal enforcement powers, the liberty-protecting purpose of dividing criminal justice powers has diminished over time. In the same vein, “effectiveness” must be understood differently in the functional context. When it comes to criminal justice, “effectiveness” can be a problematic standard. After all, the most efficient criminal justice system, where the crime rate might be lowest, might also be one with few regards for procedural rights and where a small number of actors could exert total control over the system. Such a police state would likely be an anathema to most Canadians. A better measure of effectiveness would ask whether criminal justice policies fulfill the functions expected of them, regardless of whether the division of powers contributes to or interferes with that function. A full answer would be beyond the scope of this chapter and a subject more appropriate for a book on criminal justice rather than federalism, but the federal framework of Canada policing provides an instructive example. Policing needs are met by an adaptive arrangement that pays little regard to federal principles but responds to changes in circumstance and fiscal capacity. But, as described in detail below, those neglected federal dimensions continue to impose costs and introduce obstacles to accountability. In the third and final section of this chapter, the legitimacy of criminal justice federalism is discussed. Canadians as a whole demonstrate considerable confidence in their criminal justice system, despite any

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shortcomings of the division of powers. In general, Canadian criminal justice actors and institutions enjoy relatively high levels of support, but this support is not uniform and is noticeably weaker among some communities. This variation is due primarily to non-federalism factors (and typically related to controversies over police behaviour), but with respect to Indigenous communities, federalism plays an exacerbating role in further alienating vulnerable Canadians from criminal justice administration. As federal subjects, by virtue of section 91(24) of the Constitution Act, 1867, Indigenous peoples are less likely to be participants in the provincially driven criminal justice administration. While this is hardly a complete explanation for their poor treatment throughout the criminal justice system, Canada’s federal design is an additional troublesome obstacle for the reconciliation that is already so difficult to achieve.

MAINTAINING THE FUNCTIONAL DIVISION OF POWERS The functional division of criminal justice powers operates in a political context where both the provinces and the federal government have strong incentives to act. “Each level of government bears a portion of the costs of criminality,” the Supreme Court of Canada notes, “and each level of government therefore has an interest in its suppression” (Chatterjee, 2009: para. 15). With a near-constant parade of high-profile cases attracting media attention, crime is almost always a salient issue that politicians will seek to address. While each level of government does have a lever to alleviate crime, the functional divide is vulnerable to overreach and to “elite collusion” that circumvents some of the burdens the divide is designed to preserve. The origins of the functional division stem from two competing impulses at the time of Confederation: a desire for national uniformity in criminal law and an appreciation for local justice. With respect to the latter, there was little appetite to disrupt the already-established systems of local justice in each of the provinces/colonies. Local prosecutors – originally private citizens themselves – were preferred to distant ones who might be less interested in seeing justice done or insufficiently sensitive to local circumstances. Similarly, local police were already in place in urban areas prior to Confederation (Toronto Police established in 1835,



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with Quebec City and Montreal following soon afterwards in 1838). In 1867, as Justice Dickson observed, it was natural for this existing system of “local administration of justice, local police forces, local juries, and local prosecutors” to be “perpetuated and carried forward into the Constitution through 92(14)” (Hauser, 1979: 1032). While the administration was strictly local, the laws being administered were not. The provinces were applying criminal law primarily derived from English common law. This meant that “criminal law” would not have been considered entirely under local control at the time of Confederation, since it was largely the product of judicial decisions and authorities that evolved over centuries in English courtrooms. To the extent criminal law was based on English statutes, these too were largely adopted by the colonies, even if the penalties were mitigated over time.2 This is a sharply different context from the domestically controlled, statute-based criminal law with which Canadians would soon become familiar (Brown, 1989). While the Criminal Code of Canada was not enacted until 1892 – making it one of the earliest criminal law codifications in Anglo-American history – Sir John A. Macdonald saw a uniform criminal law as an essential unifying force to undergird his “new nationality.” He celebrated the fact that every Canadian “belonging to what province he may, or going to any other part of the Confederation, knows what his rights are in that respect, and what punishment will be if an offender against the criminal laws of the land” (Waite, 2006: 25). Creating this uniform law would necessarily be the domain of the federal Parliament and was seen not as an encroachment on provincial autonomy, but rather a needed reform of the English system. Uniformity in criminal law also meant that individual liberty would likely be better protected on the enlarged national stage. Conversely, local administration could be more lenient in its application of the federal law, but without the ability to define criminal behaviour itself, it could never be harsher than what the federal law allowed. Similarly, the federal Parliament could deem behaviour criminal by including it in the Code, but it could not directly prosecute offenders without local actors assenting to its application. From the perspective of the individual Canadian to whom it applies, there must be concordance between the proscribed criminal behaviour, as defined by the federal Parliament, and the appropriate administration by provincial governments; this gives individual liberty an additional check before it is threatened by criminal sanction.

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Maintaining this functionalism requires some sense of what is meant by “criminal law” and what is meant by its “administration.” The former question has preoccupied much of the federalism jurisprudence in this area. The classic Canadian legal definition states that criminal law is “(1) a prohibition; (2) backed by a penalty; (3) with a criminal law purpose” (AHRA Reference, 2010: para. 35). A vast majority of laws could easily meet the first two requirements, leaving the third requirement – the criminal law purpose – to do all the heavy lifting. In the Margarine Reference (1949: 50), Justice Rand helpfully supplied his oft-repeated, inclusive list of criminal law purposes: “Public peace, order, security, health, morality.” Rand’s formulation of what constitutes a valid criminal purpose proved too charitable; each of the listed purposes could be construed as subsuming entire powers of the provinces (the inclusion of “health” alone raises this concern). As Morris Manning (2002) describes, the jurisprudence stemming from section 91(27) is largely animated by one concern: what is the “outer limit” of what might be considered “criminal law”? The JCPC struggled to determine whether questionably criminal federal legislation could be justified using the power. In the Board of Commerce case (1922), Viscount Haldane attempted to limit 91(27) to instances “where the subject matter is one which by its very nature belongs to the domain of criminal jurisprudence.” Despite the tautological nature of his definition, Haldane’s formulation reflects an intuition that there is something special about “criminal” policies that might distinguish them from federal powers. Less than a decade later in the Proprietary Articles Trade Association case, Lord Atkin was adamant that this distinction could not hold (“The criminal quality of an act cannot be discerned by intuition”) and instead held that there was only one standard: “Is the act prohibited by penal consequences?” (P.A.T.A., 1931: 9). Lord Atkin’s approach was problematic for at least two reasons: (1) it essentially allowed the federal government to claim anything was criminal simply by criminalizing it (attaching those “penal consequences”), and (2) since the provinces also have the power in 92(15) to impose any “Fine, Penalty, or Imprisonment,” it is unclear how penal consequences alone could distinguish the national power. As one commentator suggests, “just as Haldane’s definition was too narrow, Lord Atkin’s has proven to be too wide” (Friedland, 1984: 53). The difficulty of finding appropriate limits for section 91(27) continued as the Supreme Court assumed its role as Canada’s final court



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of appeal. The court has favoured a broad, permissive interpretation of the power that has allowed the federal Parliament to legislate criminal law for health reasons (RJR-MacDonald [1995] upholding the Tobacco Act as intra vires), to achieve environmental objectives (R. v. Hydro-Québec [1997] upholding the Canadian Environmental Protection Act), and to protect the “economic life of the public” (Goodyear Tire v. R. [1956] upholding the Combines Investigation Act). It also includes the power to dismantle “cooperative federalism” schemes (in this case, the repealed long gun registry) and destroy any data without sharing it with provincial partners (Quebec v. Canada, 2015). The scope of the federal power has been wide enough to raise the concern that the criminal law power is becoming a “proxy” for the “national concerns” element of the peace, order, and good government clause (Baier, 2006: 141; Snow, 2018: 61–2). The court has occasionally limited the use of section 91(27) when the federal government is deemed to have intervened too deeply in areas of provincial regulation (as it did with some sections of the Assisted Human Reproduction Act [2010]) or when it attempted to make the breach of provincial law a criminal offence (Boggs v. R., 1981). The focus on potential federal overreach using section 91(27) has obscured the question of the “exclusivity” of the federal power when the matter is plainly criminal, and this doctrinal confusion has allowed provinces to enact statutes that supplement or extend criminal law (Baker, 2014). It is now common for provinces and municipalities (using delegated provincial authority) to add supplementary penalties for criminal behaviour that is already prohibited by the Criminal Code. The City of Edmonton, for example, passed a bylaw penalizing “public fighting,” an easier-to-prove, fine-attaching alternative to the Criminal Code’s assault provisions (Keshane, 2011). Similar laws and bylaws have permitted duplication of Criminal Code provisions related to fraud (Eurosport Auto, 2003), obscenity (The Adult Entertainment Association, 2007), protection orders (Fairchuk, 2003), victim surcharges (Wucherer, 2005), and a provincial sex offender registry (Dyck, 2008) (see also Baker, 2014: 281–2, and Friedland, 1984: 56). These provincial-level enactments were legitimated by the Supreme Court’s decision in Chatterjee (2009), where Ontario’s Civil Remedies Act (CRA) was challenged as an unjustified intrusion into federal criminal law. The CRA allowed provinces to seize property that was likely to have been used in criminal activity. Stopped by police for a valid traffic offence,

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Robin Chatterjee had a difficult time explaining the $29,000 in cash and drug production equipment in his car, despite the fact that no actual drugs were found. Without the drugs themselves, it was unlikely that Chatterjee could be successfully prosecuted under the federal Controlled Drugs and Substances Act since the Crown would be required to prove beyond a reasonable doubt that Chatterjee was dealing in drugs. Under the much lower “civil standard” of proof for the provincial law, however, it only needed to be established that Chatterjee was “more likely than not” to have been involved in the drug trade. The implication of the CRA is staggering: it essentially duplicates every federal criminal offence at the provincial level and allows for a lesser standard of proof to impose penalties that are penal in nature. It does so even though the federal Criminal Code itself provides for confiscation of property, but only after a conviction is bestowed. For the court, however, this was simply a valid exercise of the province’s section 92(13) power over “property,” since, after all, the consequence was merely a confiscation of property and not imprisonment. It is true that a violation will not directly lead to incarceration, but it would be a mistake to minimize the consequences of property confiscation. Chatterjee might recover from his loss, but what about the loss of a house that is alleged to have been part of a grow-op? Moreover, research has shown that debt exacerbated by fines can contribute to a spiralling context of criminality that is difficult to escape (Greene, 2019). Despite those concerns, the court found the CRA to be intra vires since its “dominant purpose” is “to make crime in general unprofitable, to capture resources tainted by crime so as to make them unavailable to fund future crime and to help compensate private individuals and public institutions for the costs of past crime” (para. 4). In this view, a legitimate objective of the province is to “suppress crime” (para. 15) and it may use its powers – section 92(13) and the section 92(16) power over local matters – to do so. This ruling is consistent with the “dominant tide” of Canadian federalism jurisprudence, which is generous in recognizing the jurisdiction of both levels of governments and endorses “a fair amount of interplay and indeed overlap between federal and provincial powers” (OPSEU, 1987: para. 27). This jurisdictional generosity has some peculiar consequences for Canadian criminal justice policy. In addition to undermining the criminal standard of proof by replacing it with the civil standard, it provides



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a federalism work-around for any norm of criminal justice that is perceived as onerous to the state. Indeed, “public fighting” bylaws, such as in Edmonton, are designed to be “more efficient” since they avoid the paperwork necessary for a criminal charge of assault (Keshane, 2010: para. 32). While the Charter applies to all acts of government, including provincial laws and municipal bylaws, its key criminal due process provisions only apply upon arrest (section 10) or when a charge is brought (section 11). For this reason, “provincial criminal law” is appealing to authorities seeking criminal law enforcement with fewer criminal law protections. This outcome is often favoured by both levels of government, which helps explain why the federal government would intervene in cases like Chatterjee to support provincial laws that infringe upon the exclusivity of federal power. In a 2013 discussion paper, the federal Department of Justice suggested downloading some crimes to the provincial level to allow for “the assurance of lower penalties or no time in jail in exchange for reduced protection under the Charter” (Kari, 2013). The exchange of lesser penalties for reduced due process rights is problematic since police are likely to use the easier-to-administer provincial offences for cases where they might have otherwise issued “warnings,” resulting in more convictions, a greater proportion of which, given the lower standard of proof, may be made in error. Allowing the provinces to legislate de facto criminal law also transforms the concept of “decriminalization,” since the criminal prohibition is likely to be replaced by provincial regulation. For example, the regulatory space created by the 2018 legalization of marijuana – federal law amending the Controlled Drugs and Substances Act – was preemptively filled by ten different schemes of varying levels of restriction. The provincial power to legislate for the administration of justice can further undermine “decriminalization” by allowing provincial authorities to persecute those exercising newfound liberties. The decriminalization of homosexuality in 1969, for example, was followed by a decades-long campaign of harassment by provincial- and municipal-level police against LBGTQ communities (Hooper, 2019). There are limits on provinces legislating in the area of criminal law. In particular, the province’s law cannot be explicitly “criminal” in its “pith and substance.” However, in practice, the Supreme Court has only rarely invalidated provincial laws and municipal bylaws on the grounds that they are in essence criminal law. The exceptions include Calgary’s street

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prostitution bylaw struck down in Westendorp (1983) and Nova Scotia’s abortion regulation invalidated in Morgentaler (1993). In the former, Justice Laskin ruled a municipality is not able “to usurp exclusive federal legislative power” and noted that if this type of bylaw was permitted then a municipality could also “seek to punish assaults that take place on city streets,” a then-absurd result that would materialize with the endorsement of Edmonton’s “public fighting” bylaw years later. In Morgentaler, Justice Sopinka overturned Nova Scotia’s attempt to use aggressive regulation to effectively outlaw abortion in defiance of its decriminalization five years earlier (in the more famous 1988 Morgentaler decision) as an invasion of the field of criminal law. “The guiding principle,” Sopinka wrote, “is that the province may not invade the criminal field by attempting to stiffen, supplement or replace the criminal law ... or to fill perceived defects or gaps therein” (para. 55). This guidance has been largely ignored in the jurisprudence that affirms provincial criminal law, and it is hard to imagine laws like Ontario’s Civil Remedies Act or Edmonton’s bylaw as anything but attempts to “supplement” the criminal law or “fill perceived defects or gaps therein.” Lawyer Asher Honickman (2017) suggests that we need to return to the “words” of the Constitution Act, 1867 and its “exclusivity principle.” Whatever the merits of a return to “watertight compartments” for other areas of divided jurisdiction, the criminal law powers have a special claim to being treated more rigorously. While some overlap in jurisdiction is unavoidable – road safety, for example, invites both a provincial and a federal role (O’Grady v. Sparling, 1960) – it is also true that the “criminal” element must continue to be exclusively federal (so, for example, it is not open to the province to include a “vehicular murder” provision in their Highway Traffic Act). It is not an easy balance to maintain, but it is essential to the functional approach required by the constitutional text. On the other side of the ledger, the “exclusive” provincial power in section 92(14) over administration appears as porous as the power to legislate criminal law. Here the balance is unsettled by federal encroachments on administrative matters like the power to prosecute. Since its enactment in 1892, the Criminal Code of Canada required all criminal prosecutions to be undertaken by the “Attorney General of a province.” This changed in 1969 when section 2 of the Code was amended to allow for the Attorney General of Canada to prosecute “with respect to proceedings instituted at the instance of the Government of Canada.”



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While this assertion of federal authority led to a series of contentious constitutional challenges decided by the Supreme Court in the late 1970s and early 1980s (Hauser, 1979; Wetmore, 1983; C.N., 1983; see Baker, 2017: 434–7), the authority of the federal government to prosecute offences is now well established. In addition to drug crimes, federal prosecutors are statutorily assigned the authority to conduct terrorism prosecutions and immigration-related proceedings. The bulk of Criminal Code prosecutions continue to be conducted by provincial Crowns, but under the currently prevailing constitutional understanding, the provinces could decline to prosecute, or the federal government could strip them of this responsibility (Baker, 2017; Wright, 2019). No federal government has been so bold as to assume carriage of all Criminal Code violations, if only for budgetary reasons since it would “upload” the substantial costs of prosecution for little reward. Peter Hogg notes that “there seems to be no informed sentiment in favour of a federal takeover of criminal law enforcement, and it would be strenuously resisted by the provinces,” leaving him to conclude that such a takeover “is adequately deterred by political forces” (1997: 19–18). So, does it matter at all which level of government prosecutes criminal offences? In addition to unbalancing the functional separation between criminal law and its administration, federal prosecutions also complicate trial procedures, especially with respect to drug offences. Often committed in conjunction with other Criminal Code charges (particularly assault, theft, conspiracy, and organized crime offences), drug charges can be resolved by separate, parallel processes (wasting judicial resources and an additional burden for the accused). However, it is better to combine them in a single prosecution, especially where the issues are complex. In a combined prosecution, prosecutors at both levels co-operate (with considerable deference to the earned expertise in drug matters that the federal service has garnered) and a letter delegating all authority to a single prosecutor can remedy any concern. While judicial review of these arrangements often stress that any loss of accountability can be mitigated by the provincial Attorney General’s power to alter the agreement at any time (“He keeps ultimate control over this criminal prosecution” [Luz, 1988: para. 22]), there is no evidence that any ongoing scrutiny is actually performed. These arrangements continue to be subject to occasional challenges on constitutional grounds, but usually unsuccessfully (Trang, 2001). To make matters even more complicated,

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in Quebec, federal prosecutors only prosecute drug charges laid by the RCMP and not those laid by provincial police. In sum, the deviation that allows for federal prosecution of criminal law introduces an additional level of complexity – and confusion – that requires informal adaptations and arrangements. A similar tendency is even more evident in the division of policing power.

EFFECTIVENESS AND THE POLICING POWERS Policing is perhaps the quintessential aspect of criminal justice administration. In bureaucratic terms, the police might be considered “front-line service providers.” As such, section 92(14) should make the provinces exclusive lawmakers for policing matters. But only two province-wide police services – the Ontario Provincial Police established in 1909 and the Sûreté du Québec established in 1870 – are currently operating.3 There are also a variety of municipal forces, some of which predate Confederation, that are authorized by both section 92(14) and section 92(8) (“Municipal Institutions in the Province”). But this account misses a major player in Canadian policing: the Royal Canadian Mounted Police (RCMP). Not only is the red serge of the RCMP a near-universally recognized symbol of Canadian policing, but the federal service has broad jurisdiction across the country: it provides national policing services and local policing in eight of the ten provinces, all three territories, and over 150 municipalities. There are many communities in rural Canada where the RCMP might be the only police service. Given that there is no explicit constitutional authority for a federal role in policing, the RCMP’s dominant role in Canadian policing demonstrates that practical necessity can exert a controlling force over the niceties of constitutional federalism. The RCMP originates from two separate forces that were intended to perform limited, specialized roles. In the wake of federal parliamentarian D’Arcy McGee’s assassination in 1868, personal and institutional security on Parliament Hill became a priority. Prime Minister Macdonald’s answer was the Dominion Police, a Canadian analogue to the US “Secret Service,” but expanded to perform security services for other federal undertakings, like the Halifax Naval Shipyards. With a clear connection to securing and protecting federal matters, it is hard to see the Dominion Police as much of an infringement on the provinces’ section 92(14) power, but



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that did not stop some, like Liberal Opposition Leader Edward Blake, from objecting to the existence of a federal police force on constitutional grounds and worrying that any such police unit might “give rise to a constant source of jarring with local governments” (Debates, May 18, 1868). The second constituent force was the North-West Mounted Police (NWMP), created by the federal government in 1873 to establish and maintain order in the territories (where, by definition, there was no provincial government). The NWMP was not the typical police service that one might find in a settled community, but rather a quasi-military unit charged with additional police and judicial functions. The NWMP travelled over 1000 kilometres in 1874 as part of the “March West,” essentially a roll-out of federal authority over portions of the country that lacked any colonial government. A full accounting of this aspect of the NWMP’s role – and particularly its impact on the Indigenous peoples – is complex and beyond the scope of this chapter, but it would have been seen as unavoidably federal and not an infringement on any provincial power of policing. The RCMP’s transformation into a truly national police force was largely by circumstance and not by design. Soon after they were established, the Dominion Police began to take on more policing roles – like the new science of fingerprinting – to provide assistance to other forces. The NWMP became both the local police for the areas settled by the March West (until the western provinces were established, a process complete by 1905) and a federal military arm that could be used both domestically (against Riel and the rebellions) and internationally (deployed to the Boer War in South Africa). When the NWMP was used to quell labour unrest in the first decades of the twentieth century, it attracted considerable controversy and opposition. Mackenzie King promised that the force would no longer be used in this fashion and, in 1920, combined the NWMP with the Dominion Police to form the RCMP. It came with an uncertain mandate: if the RCMP was not going to be used for labour disruptions or other objects of federal concern, what would it do? In 1922 Progressive Leader T.A. Crerar introduced a motion to restrict the force to operating exclusively in the northern territories (i.e., not in the provinces) and to correct the constitutional anomaly of federal policing (MacLeod, 1994: 46–7). Mackenzie King’s minister of the militia, George Graham, responded that “speaking technically, on absolutely legal or constitutional grounds,” Crerar was “absolutely right that the provinces

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ought to look after the maintaining of order within their several territories” but “in working out the affairs, particularly of a new country, we are not always safe in adhering to the letter of the constitution” (Debates, April 10, 1922: 831). Graham continued by simply accepting that the Constitution would have to yield to the usefulness of a federal force: “sometimes we have to violate almost the letter of the law, in order to be practical” (Debates, April 10, 1922: 831; MacLeod, 1994: 47). Controversy over the RCMP’s constitutional status finally abated when it became clear that the provinces could no longer afford to provide policing services during the crippling economics of the Great Depression. In 1932, when provincial police forces in Manitoba, Saskatchewan, Alberta, New Brunswick, Nova Scotia, and Prince Edward Island folded, they were replaced by divisions of the RCMP. A seventh provincial police force, the British Columbia Provincial Police, was replaced by a division of the RCMP in 1950. Regardless of their “exclusive” authority to legislate for the administration of justice, provinces simply could not bear the practical costs of policing. In this respect, the RCMP could provide the economy of scale that would lower the overall cost of policing to the provinces. Uniforms, for example, could be bought more cheaply on a greater scale than they could be for even relatively big provincial forces.4 The mutually agreeable solution was for the federal government to provide policing service more cheaply than an independent provincial force. Under contractual agreements between the federal government and each of the provinces, the RCMP provide policing services at both the provincial level and for municipalities in the province without their own force. The terms of these contracts have been subject to considerable controversy and political negotiation (Lunney, 2012), but an additional federal subsidy of 10 to 30 per cent has made contracting virtually irresistible for many communities (McClearn, Freeze, and Dhillon, 2018). In addition to the financial price to be paid, there is also an added cost of contract policing in terms of accountability. Government direction of police is controversial in the best of circumstances; Beare and Murray (2007: 3) refer to the “widely accepted, if constitutionally shaky, theory that governments give policy direction to the police but cannot interfere in operational matters.” However, accountability is surely exacerbated by the additional confusion engendered by contract policing. The recent Wet’suwet’en protests against the Coastal GasLink pipeline



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demonstrate the problem. Since the RCMP were attempting to enforce an injunction (requested by Coastal GasLink) and the regulation of this pipeline was properly within BC’s jurisdiction, the RCMP were acting in their capacity as a provincial police force (and thus beyond any possible federal direction). With protests taking place across the nation and federal works (like the railways) obstructed, pressure mounted in February 2020 for federal action involving what appears to many Canadians as our “national” police force. While governments of all levels should always proceed with great caution in directing police action, it is understandable why Canadians would look to their national leaders to address what seemed like an issue for the RCMP. Moreover, when policing matters do go awry, federalism in these “contracting” provinces adds an extra level of complexity, as the tragic events that led to the death of Robert Dziekanski illustrate. Dziekanski, a newly landed immigrant from Poland who spoke no English, had been detained at Customs at Vancouver International Airport for over nine hours before being seen acting erratically in the International Reception Lounge. A physical confrontation with four RCMP officers – and including two discharges of TASER weapons against him – was found to have contributed to Dziekanski’s death in the early morning hours of October 14, 2007. In light of the questions concerning the RCMP’s actions and policies in the matter, the BC Government appointed a Commission of Inquiry, led by Justice Thomas Braidwood, to investigate the matter. Earlier jurisprudence (Scowby v. Glendinning [1986] and Starr v. Houlden [1990]) established that provincial inquiries of this sort could not be a “substitute for an investigation and preliminary inquiry into specific individuals in respect of specific criminal offences,” but rather should be “aimed at investigating, studying and recommending changes for the better government of their citizens” (Starr: para. 40). With a policing force (the RCMP) beyond the province’s jurisdiction, the recommendations of the inquiry would not only have to be aimed at future reforms (and not criminal or disciplinary charges) but also require the federal government’s acquiescence (see Lunney, 2012: 445–6). Braidwood recommended an Independent Investigations Office (IIO) to investigate any incidents where a “person has died or suffered serious harm as a result of the actions of a police officer,” essentially importing the Special Investigations Unit (SIU) that Ontario established in 1990. In order to follow this recommendation, the BC

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Government amended its own Police Act (as Ontario did in 1990 to its Police Services Act), but then had to take the additional step of reaching an agreement with the RCMP to have the IIO apply to the federal force. The RCMP and the IIO entered into a Memorandum of Understanding to this effect in 2012. However, it is worth asking whether the added complexity of the federal dimension inhibits or further delays accountability measures that are often difficult to establish under even the best conditions. In other contract police jurisdictions, units similar to the SIU and IIO are still only able to address issues with municipal police and may not consider RCMP conduct (four provinces – half of the contracting provinces – do not have provincial police accountability measures that apply to the RCMP; for more information on the variations across the provinces, see Parent and Parent, 2018: 200–30). They may simply be awaiting their own tragedy to prompt this sensible reform, but the federalism aspect is likely an additional obstacle to greater accountability. In addition to contract policing, the RCMP has continued to develop expertise in policing functions that are more effectively done at the national level, essentially undertaking roles similar to those performed by the Federal Bureau of Investigation in the United States. Crimes that have an international scope (human trafficking, for example) and policing matters that often transcend provincial boundaries (organized crime investigations, and criminal intelligence matters generally) are appropriate subjects for a national police agency. There has been general acceptance of the RCMP taking on these roles – which they play in both contracting and non-contracting jurisdictions – and accumulating expertise in these critical areas. In some cases, however, the RCMP’s role duplicates provincial policing. The Ontario Provincial Police established Canada’s first sex offender registry, with the RCMP later following with a national registry that, despite having the obvious advantage of being more comprehensive, is considered inferior to the Ontario one (Friscolanti, 2008). If federalism allows for the provinces to be “laboratories of democracy” (as Justice Brandeis once described), then the sex offender registry is a good example of a federal scheme that might not even exist without earlier sub-unit experimentation. On the other hand, the duplication in Ontario might be now considered wasteful and inconvenient, but the application of both registries to Ontarians has been upheld against constitutional challenges (Dyck, 2008).



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Some suggest that the RCMP burden of contract policing has hampered the force’s effectiveness in its national policing role. Ken Hansen (2018) points to an “organizational schizophrenia” where local policing detracts from the RCMP’s focus “on the complex defence and security threats confronting Canada.” Former RCMP Commissioner Paul Kennedy recommends that we embrace the RCMP as a truly “national police force that deals with complex crime” (Quan, 2019) and let provincial forces manage local policing matters. For the immediate future, however, it is unlikely that the RCMP will shed the local dimensions that, after almost ninety years, are now well entrenched.

LEGITIMACY To a large extent, Canadians have adopted Macdonald’s vision of criminal justice as a nation-wide, unifying force, with the expectation that the law in Victoria should be the same as it is in St. John’s. Indeed, provincial variation that results from different applications of section 92(14) is sometimes seen as illegitimate. There has been controversy, for example, over the discrepancy between the three provinces that employ “charge screening” by Crown Attorneys and the other provinces that leave that decision exclusively with police (Penney, Rondinelli, and Stribupoulos, 2011: 446). Another example is the wide variety of provincial rules and practices regarding bail that persist even despite the single shared “law” on bail found in the Criminal Code (Antic, 2017: para. 65). Some provinces require “sureties,” others do not; some provinces overuse bail conditions, others less so; some provinces deal with bail issues swiftly, others are paralyzed by a “culture of adjournment” (Webster, 2015). In a recent case, the court has found that “[d]espite the fact that pre-trial detention is governed by federal law, there has been widespread, and systemic, divergence in the approach taken to 90-day detention reviews across Canada” (Myers, 2019: para. 14). Such variation is clearly the result of different provincial policies and practices regarding the “administration of justice,” and is rightly seen as problematic from the standpoint of the accused. The Supreme Court has encouraged greater uniformity by providing additional guidance on the proper statutory interpretation of the Code and through greater enforcement of the Charter’s guarantee of reasonable bail (section 11(e)). The Charter and the Code can exert a

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centralizing force on criminal justice, but given the wide variety of provincial practices, it can often amount to little more than “whack-a-mole,” especially since the remedies for these Charter violations are often left again to provincial determination. Despite the complexities introduced by federalism, Canadians have considerable confidence in their criminal justice system. In a 2013 survey, 76 per cent of Canadians had a great deal or some confidence in the police and, in a 2009 survey, 93 per cent were satisfied with their personal safety from crime (Canada, 2017). While there is wide variation of confidence in different criminal justice actors, the overall confidence Canadians have in their criminal justice system is higher than in other western jurisdictions (Re-inventing Criminal Justice, 2014: 5). While no one would deny there are dysfunctions – and perhaps some of them relate to the federal structure – most Canadians accept the legitimacy of the criminal law and its administration. What may be true of Canadians in aggregate is not necessarily the case for particular communities, where confidence in the administration of justice has eroded because of a deterioration in the relationship between the community and criminal justice actors. For example, 54 per cent of black Torontonians believe the police do a poor job at treating them fairly (but 85 per cent still feel the police do an average or better job at ensuring safety) (Black Experience Project, 2017: 49). Police shootings and use-of-force controversies can deplete this confidence dramatically and, at least tangentially, federalism may further impair already-difficult investigations and measures of accountability. For the most part, however, and with one major exception, these problems, while pressing and substantial, are not strongly related to federalism matters. Federalism might play a larger role in determining the legitimacy of the criminal justice system in the eyes of Indigenous Canadians. The final stage of the criminal justice process – sentencing and corrections – certainly demonstrates a systemic problem of overrepresentation. Although they make up 4 per cent of Canada’s population, Indigenous Canadians constitute 23.2 per cent of the federal inmate population. The incarceration rate for Indigenous adults is approximately ten times higher than it is for other Canadians (OCI, 2013). That discriminatory outcome alone would be sufficient for Indigenous Canadians to question the quality of Canadian justice, but it is only one aspect of an overall system that seems consistently tilted against them. At the beginning



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of the criminal justice process – policing – the stories of injustice are long-standing and well known. The federal role for the RCMP was promoted in 1927 as having “peculiar facilities for dealing with the Indian population” because it discharged its duties in this area “with efficiency and sympathy” (MacLeod, 1994: 52). However, any current assessment of the RCMP’s performance would have to take account of its role in Canada’s shameful residential schools – for which the RCMP has made an official apology – and its ineffectiveness (at best) in addressing the many cases now being identified by the Missing and Murdered Indigenous Women Inquiry. It is little wonder that many of today’s Indigenous communities would refuse to accept the RCMP as a “neutral” arbiter for managing protests against pipelines and other matters of concern. Although the role of the RCMP in past mistreatment of Indigenous peoples is clearly a vital concern for policing in Canada, it is also difficult to see it solely as a function of federalism. After all, controversies about the policing of Indigenous Canadians can be found at all levels of government: the provincial OPP’s role in Dudley George’s death at Ipperwash, the provincial Sûreté du Québec’s troubling behaviour revealed by the Viens Commission, and the municipal Saskatoon Police’s “Starlight Tours” are just three notorious examples. The solution may lie with the self-governing police forces that are increasingly found in Indigenous communities, but they are often just as under-resourced as other services on reserves. But, to the extent those Indigenous police forces further complicate Canada’s already fragmented policing scheme and raise constitutional questions, they could surely be justified on the “practical” grounds we extend to other policing work-arounds. An injustice to Indigenous peoples that might be more clearly connected to criminal justice federalism is their underrepresentation on juries. Here, the federal power to legislate for Indigenous peoples and their property (section 91(24)) may contribute to their further neglect by the largely provincial administration of justice. For example, Ontario jury rolls (from which juries at trial are drawn) are primarily sourced by municipal enumerations under the Assessment Act. Without other jury selection measures, enumeration lists would entirely omit residents of reserves. In places like Kenora, Ontario, selecting juries from municipal enumeration lists can lead to dramatic underrepresentation: while 30 to 36 per cent of the population lives on a reserve,

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only 10 per cent were on the jury roll (Iacobucci, 2013: para. 133). Although the provincial Juries Act obligates the local sheriff “to obtain the names of the inhabitants of the reserve from any record available,” in practice this task has been left to various provincial officials, including county court staff (Iacobucci, 2013: para. 136). It does not take much imagination to connect this fragmented local approach to systematic underreporting. This shortcoming was partially remedied by the availability of lists that were maintained by the then Indian and Northern Affairs Canada (INAC)5 and made available to the Provincial Jury Centre under the federal Access to Information Act (Iacobucci, 2013: para. 137). In 2001, INAC advised the Ontario Ministry of the Attorney General that they would no longer provide these lists because sharing this personal information was prohibited under privacy regulations (Iacobucci, 2013: para. 141). Ontario continued to use the 2000 INAC lists even as they became increasingly outdated (Iacobucci, 2013: para. 142). It was not until 2011, when a series of controversies related to Indigenous underrepresentation on juries prompted the Iacobucci Report, that serious efforts to remedy this problem began, and not until 2019 that Ontario shifted to using OHIP information to source its jury rolls. (Other provinces use health card information for this purpose, and Iacobucci recommended it for Ontario. Although clearly a much needed reform, this method still likely underrepresents Indigenous Canadians who use health facilities that do not require a provincial health card). While federalism is by no means the only or even most prominent factor in the underrepresentation of Indigenous peoples on Canada’s juries – other systemic forms of discrimination are probably stronger drivers – it likely contributes to the maladministration, since provincial systems by default ignore them and special efforts must be made to have these “federal citizens” included. Unlike the bail system, where variation could be tamed by the uniform application of the Charter, the Supreme Court in Kokopenace decided there was no constitutional right to a representative jury for “societal groups” (2015: para. 65). Since the jury serves as “the conscience of the community, as the ultimate protection against oppressive laws and oppressive law enforcement ... and ought to enhance the legitimacy of the criminal justice system” (Kokopenace, 2015: para. 220), the exclusion of Indigenous Canadians is appalling but sadly reflective of their treatment throughout the entire system.



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CONCLUSION There are additional dimensions of Canadian criminal justice federalism than those discussed herein; they include, for example, the division of correctional powers in sections 91(28) and 92(6) and the federal dimensions of criminal courts. However, the controversies and features described above should be sufficient evidence that criminal justice is one of the more arcane areas of Canadian federalism. Its complexity might explain why political scientists have only rarely given it in-depth treatment (Smith [1994] is one of the few) and why legal scholars have typically discussed federalism and criminal justice in separate silos (Friedland [1984] is a notable exception). The unusual functional alignment of powers in criminal justice alone makes it challenging to study, since comparisons with other powers are difficult. And yet the criminal justice powers must not be ignored. They are central to state power and arguably the most important powers that can be exercised directly against citizens, often with life-changing consequences. When it comes to performance, effectiveness, and legitimacy, Canada’s criminal justice federalism earns mixed grades. Its performance in securing the functionalism explicit in the constitutional text is imperfect at best. Permitting both levels of government to extend their criminal justice policies beyond their own “watertight compartments,” as commonplace in virtually every other area of Canadian federalism, obscures the functional approach. Despite the increasingly blurry boundaries, it still remains possible to identify a rough federal framework where criminal law is made by the national Parliament and administered by the provinces. With respect to effectiveness, the role of “practical” accommodations in overcoming doctrinal obstacles cannot be overstated. The federal structure of Canadian policing proves that flexible pragmatism will trump doctrinal dogmatism. That ability to meet expectations – regardless of the federal conditions – helps explain why Canadians are generally satisfied with their criminal justice system. At the same time, federalism is also a minor contributing factor in delegitimizing the system in the eyes of Indigenous Canadians. At the most abstract level, Canadian criminal justice federalism privileges constitutional pragmatism over principle, function over form, and general legitimacy over specific injustices. As such, it may have more in common with other areas of Canadian federalism than initially suggested.

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Dennis Baker NOTES 1 The United States Constitution, which serves as an inspiration for some other elements of Canada’s Constitution, and the Australian Constitution, which otherwise follows a number of other Canadian assignments of power, both formally leave criminal justice to the sub-unit state level. 2 The complexities in each pre-Confederation colony are detailed in Girard, Phillips, and Brown, 2019: 275–80, 543–50. 3 A potential third – the Royal Newfoundland Constabulary – only services metropolitan areas in that province. 4 McClearn, Freeze, and Dhillon (2019) also note that RCMP salaries are lower compared to other services and RCMP staff models provide fewer police per capita than other forces. Not all of these “economies” are necessarily benign. 5 This federal ministry was renamed Aboriginal and Northern Development Canada in 2011 and then changed to Indigenous and Northern Affairs Canada in 2015. GLOSSARY administration of justice  That which is necessary to implement and enforce the substance of criminal law; usually encompassing the police, prosecutors, and the courts. This term is contested, but generally understood as permitting provincial control over the instruments of justice and how they are operationalized in the province. codification  The process of translating unwritten, often dispersed principles and rules into a written, systematized law. The Criminal Code of Canada, a federal statute, codified criminal laws that were previously found in English legal texts, judicial decisions, and sporadic statutes. criminal law  The category of law that deals with those who commit criminal offences. “Crime” is a notoriously difficult word to define since it may include all acts or omissions that the state identifies as a crime (a “positivist” definition), but that account is in tension with a more “naturalistic” definition that restricts it to acts or omissions that are inherently wrong or evil in some way. In criminal law, this tension is often described using the Latin terms malum prohibitum (wrong because it is prohibited) and malum in se (wrong in itself). The former has an empirical simplicity, but the latter has a significant normative force that cannot be ignored. functionalism  An approach to the federal division of power that emphasizes a power’s purpose rather than its subject matter. Instead of simply permitting the exercise of power in a given area, functionalism requires that power be exercised in accordance with the fulfillment of a purpose or mode of operation. Canadian criminal justice is divided functionally



Criminal Justice and Criminal Law between the federal government that legislates criminal law and the provinces that administer it.

REFERENCES Baier, G. 2006. Courts and Federalism: Judicial Doctrine in the United States, Australia, and Canada. Vancouver: University of British Columbia Press. Baker, D. 2014. “The Temptation of Provincial Criminal Law.” Canadian Public Administration 57, no. 2: 275–94. https://doi.org/10.1111/capa.12068. ———. 2017. “The Provincial Power to (Not) Prosecute Criminal Code Offences.” Ottawa Law Review 48, no. 2: 417–46. https://doi.org/10.2139 /ssrn.2914001. Beare, M.E., and T. Murray. 2007. “Introduction.” In Police and Government Relations: Who’s Calling the Shots?, edited by M.E. Beare and T. Murray, 3–15. Toronto: University of Toronto Press. Black Experience Project. 2017. “Experience With Police Services and the Criminal Justice System.” https://www.environicsinstitute.org/docs /default-source/project-documents/black-experience-project-gta/black -experience-project-gta---8-experience-with-police-services-and-the-criminal -justice-system.pdf?sfvrsn=db9f04c_2. Brown, D., H. Bakvis, and G. Baier. 2019. Contested Federalism: Certainty and Ambiguity in the Canadian Federation, 2nd ed. Scarborough, ON: OUP Canada. Brown, D.H. 1989. The Genesis of the Canadian Criminal Code of 1982. Toronto: University of Toronto Press. Canada (Department of Justice, Research and Statistics Division). 2017. “The Canadian Criminal Justice System: Overall Trends and Key Pressure Points.” November 23, 2017. https://www.justice.gc.ca/eng/rp-pr/jr/press/. Friedland, M.L. 1984. A Century of Criminal Justice. Toronto: Carswell Legal Publications. Friscolanti, M. 2008. “There’s a Problem with Canada’s Sex Offender Registry.” Maclean’s, June 9, 2008. Girard, P., J. Phillips, and R.B. Brown. 2019. A History of Law in Canada, Volume One: Beginnings to 1866. Toronto: University of Toronto Press. Greene, S.A. 2019. “A Theory of Poverty: Legal Immobility.” Washington University Law Review 96, no. 4: 753–801. Hansen, K. 2018. “The Problem at the Root of the RCMP’s Dysfunctional Culture.” Maclean’s, January 19, 2018. Hogg, P. 1997. Constitutional Law of Canada. 4th ed. Toronto: Carswell. Honickman, A. 2017. “Watertight Compartments: Getting Back to the Constitutional Division of Powers.” Alberta Law Review 55, no. 1: 225–52. https://doi.org/10.29173/alr795. Hooper, T. 2019. “Queering ’69: The Recriminalization of Homosexuality in Canada.” Canadian Historical Review 100, no. 2: 257–73. https:// doi.org/10.3138/chr.2018-0082-4.

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Dennis Baker Iacobucci, F. 2013. First Nations Representation on Ontario Juries: Report of the Independent Review. https://www.attorneygeneral.jus.gov.on.ca/english /about/pubs/iacobucci/First_Nations_Representation_Ontario_Juries .html. Kari, S. 2013. “Paper Touts ‘No Jail’ Option in Exchange for Reduced Charter Protection.” Law Times, June 17, 2013. Lunney, R.F. 2012. “Galloping Off in All Directions: An Analysis of the New Federal–Provincial Agreement for RCMP Contract Police Services and Some Implications for the Future of Canadian Policing.” Canadian Public Administration 55, no. 3: 433–50. https://doi.org/10.1111/j.1754 -7121.2012.00232.x. Macleod, R.C. 1994. “The RCMP and the Evolution of Provincial Policing.” In Police Powers in Canada: The Evolution and the Practice of Authority, edited by R.C. Macleod and D. Schneiderman, 44–56. Toronto: University of Toronto Press. Manning, M. 2002. “Criminalization by Regulation: The Outer Limits of Section 91(27) of the Constitution Act, 1867.” National Journal of Constitutional Law 13: 309. McClearn, M., C. Freeze, and S. Dhillon. 2018. “The RCMP’s Thin Red Line: Is Contract Policing Unsustainable?” The Globe & Mail, March 7, 2018. Office of the Correctional Investigator. 2013. Aboriginal Offenders – A Critical Situation. https://www.oci-bec.gc.ca/cnt/rpt/oth-aut/oth -aut20121022info-eng.aspx. Parent, R., and C. Parent. 2018. Ethics and Canadian Law Enforcement. Toronto: Canadian Scholars. Penney, S., V. Rondinelli, and J. Stribopoulos. 2011. Criminal Procedure in Canada. Markham, ON: LexisNexis Canada. Quan, D. 2019. “Rethinking the Mounties’ Mandate: RCMP Needs to Quit Municipal, Provincial Policing, Critics Say in Wake of New Report.” National Post, April 10, 2019. Re-inventing Criminal Justice: Final Report. 2014. The Sixth National Criminal Justice Symposium on Public Confidence in the Criminal Justice System. https://icclr.law.ubc.ca/wp-content/uploads/2017/06/6th-National -Criminal-Justice-Symposium-1-1.pdf. Smith, D.E. 1994. “The Police and Political Science in Canada.” In Police Powers in Canada: The Evolution and the Practice of Authority, edited by R.C. Macleod and D. Schneiderman, 184–208. Toronto: University of Toronto Press. Snow, D. 2018. Assisted Reproduction Policy in Canada: Framing, Federalism, and Failure. Toronto: University of Toronto Press. Waite, P.B. 2006. The Confederation Debates in the Province of Canada, 1865. 2nd ed. Montreal: McGill-Queen’s University Press. Webster, C.M. 2015. “Broken Bail” in Canada: How We Might Go About Fixing It. https://www.justice.gc.ca/eng/rp-pr/jr/request-demande.html.



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Wright, W. 2019. “Canada’s ‘Constitution Outside the Courts’: Provincial NonEnforcement of Constitutionally Suspect Federal Criminal Laws as Case Study.” In The Constitution in Transition, edited by R. Albert, P. Daly, and V. MacDonnell, 103–35. Toronto: University of Toronto Press. CASES Adult Entertainment Association of Canada v. Ottawa (City) [2007] ONCA 389. Boggs v. R., [1981] 1 S.C.R. 49. Canada (Attorney General) v. Alberta (Attorney General), [1922] 1 AC 191 (Board of Commerce case). Canada (Attorney General) v. Canadian National Transportation Ltd., [1983] 2 S.C.R. 206 (C.N.). Chatterjee v. Ontario (Attorney General), [2009] 1 S.C.R. 624. Goodyear Tire & Rubber Co. of Canada v. R., [1956] S.C.R. 303. O’Grady v. Sparling, [1960] S.C.R. 804. OPSEU v. Ontario (Attorney General), [1987] 2 S.C.R. 2. Proprietary Articles Trade Association v. Canada (Attorney General), [1931] 2 D.L.R. 1 (UK JCPC). Quebec (Attorney General) v. Canada (Attorney General), [2015] 1 S.C.R. 693. R. v. Antic, 2017 SCC 27, [2017] 1 S.C.R. 509. R. v. Dyck, [2008] ONCA 309. R. v. Eurosport Auto Co. Ltd., [2003] BCCA 281. R. v. Fairchuk, [2003] MBCA 59. R. v. Hauser, [1979] 1 S.C.R. 984. R. v. Hydro-Québec, [1997] 3 S.C.R. 213. R. v. Keshane, [2010] ABPC 275 (CanLII); overturned in [2011] ABQB 525. R. v. Kokopenace, [2015] 2 S.C.R. 398. R. v. Luz (H.C.J.), [1988] CanLII 4529 (ON SC). R. v. Morgentaler, [1988] 1 S.C.R. 30. R. v. Morgentaler, [1993] 3 S.C.R. 463. R. v. Myers, [2019] SCC 18. R. v. Trang, [2001] ABQB 150. R. v. Wetmore, [1983] 2 S.C.R. 284. R. v. Wucherer, [2005] BCCA 336. Reference Re: Assisted Human Reproduction Act (AHRA), [2010] 3 S.C.R. 457. Reference Re: Validity of Section 5(a) Dairy Industry Act, [1949] S.C.R. 1 (Margarine Reference). RJR-MacDonald Inc. v. Canada (Attorney General), [1995] 3 S.C.R. Scowby v. Glendinning, [1986] 2 S.C.R. 226. Starr v. Houlden, [1990] 1 S.C.R. 1366. Westendorp v. The Queen, [1983] 1 S.C.R. 43.

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CHAPTER SIX

Federalism, Political Parties, and the Burden of National Unity: Still Making Federalism Do the Heavy Lifting? Herman Bakvis and A. Brian Tanguay

Political parties perform a number of essential functions in liberal democracies: organizing electoral choices for citizens, representing interests, channelling political participation, and recruiting decision-makers for government are among the most important (King, 1969; Covell, 1991). In federal systems, parties are frequently called upon to perform another task, namely, to unify the nation. In Canada, broad-based brokerage parties have long played a crucial nation-building role, constituting what David Smith called the “sinews of a healthy federalism” (1985: 1). From Confederation to the Diefenbaker landslide of 1958, and despite the repeated emergence of regional protest parties from 1921 onward, the two main national parties continued to play this pivotal role. However, they have had less success since the late 1950s as voters in the western provinces, in particular, have chafed under a series of governments – those of Pierre Trudeau, Brian Mulroney, Jean Chrétien, and, more recently, Justin Trudeau – seemingly dominated by central Canada. The election in 1993 of a Liberal government with close to two-thirds of its seats drawn from Ontario only served to heighten this perception of a central Canadian bias. The rise of the Bloc Québécois in Quebec and the Reform Party of Canada in the west constituted strong evidence that the party system had become both regionalized and fragmented. In the early twenty-first century, there were further changes. The Reform and Progressive Conservative parties consolidated into a single Conservative Party of Canada, and won a minority government in 2006.



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The Bloc Québécois declined and by 2015 lost its official party status. The NDP had a surprising success in the 2011 election, winning 103 seats (more than half of them from Quebec) and forming the Official Opposition. And in 2015, the Liberal Party under Justin Trudeau defeated the majority Conservative government of Stephen Harper, forming its own majority. Then in 2019 the party system reverted back to a Liberal minority government with the Conservatives in second place and the NDP holding the balance of power. Thus, in the space of a little over a decade the party system appears to have shifted from one-party dominance to fragmentation to something akin to the two-party-plus system last seen in the 1980s. Could this new state of affairs also mean that parties may once again constitute the “sinews of a healthy federalism”? This chapter poses three questions: Is there a renewed prospect of parties playing a more active role in carrying the burden of national unity, particularly now that we have two national parties and a less fragmented system? What can we reasonably expect of the two main parties as national integrators? And, by extension, is the knitting function of political parties in federal systems, as displayed in the 1960s and 1970s, once again relevant? The first part of the chapter examines some mechanisms through which parties perform “knitting” functions and where they appear to fall short. Parts two and three discuss how the party system has performed in the past, from its putative decline in the final decades of the twentieth century to its possible revival more recently. We then briefly examine in succession three factors that have at times helped offset the centrifugal tendencies of the party system: intrastate federalism, in particular the role of regional caucuses in parliament and ministers; the role of minority governments in shaping the federal– provincial agenda; and the mobility of political actors – both elected and appointed – between the provincial and federal levels of government. The concluding section addresses the performance, effectiveness, and legitimacy of the party system in relation to the Canadian federation by reconsidering the role that we expect parties to play in federal systems.

A PARTIES-BASED THEORY OF FEDERALISM As Campbell Sharman (1994) notes, there are three aspects to a “parties-based theory of federalism,” beginning with William Riker’s

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concept of “the federal bargain” (Riker, 1964). The first of these is the degree of partisan symmetry–asymmetry in a federation, which Riker argued determined the nature of the federal bargain and whether the federation was centralized or decentralized. A symmetrical party system, with the same parties operating at the national and state or provincial levels, would lead to a more centralized federation, especially if the link between the state and national parties was strong. A strong federal–provincial/state linkage was indicated if a party had a strong presence at both state and national levels, if the two levels shared many members in common, and if local elected officials typically moved up to the national level through the medium of the party. Most of Riker’s work was based on evidence from the United States, where the party system is in many ways more flexible and open than its Canadian counterpart. The second aspect of parties-based federalism is the intrastate dimension: the representation of local and regional interests directly in national governance. The thinking here is that parties facilitate the representation of local and regional interests in national political institutions by providing conduits not only for communication but for flows of power, influence, and, above all, people: elected officials from the local and provincial/state arenas who move up to the national arena while maintaining their links with the former. This pattern has several advantages. Politicians starting their careers at the provincial level and aspiring to higher office at the national level know they must not appear too parochial: they must keep broader national perspectives in mind, and national ambitions reduce politicians’ inclination to focus purely on local issues. At the same time, politicians at the national level who have local and regional experience under their belts are likely to be more understanding of the issues faced by local and regional governments (Barrie and Gibbins, 1989). Finally, regional governments and parties can help national governments perform better by serving as talent pools from which national parties can recruit candidates for national office who have actual government experience. Examining the degree of alignment between provincial and federal levels of Canadian parties in partisan support, party ideology, nominating procedures, and financial linkages, Donald Smiley argued that on Riker’s integrated versus confederal dimension “the Canadian party system is significantly more confederal than that of any other federation with which I am familiar” (1987: 117). He concluded that there was a disjunction between the federal and provincial party systems; for all



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intents and purposes the two party systems operated in two separate realms (see also Dyck, 1996). At the same time, Smiley and Watts (1985), in their classic book on intrastate vs. interstate federalism, argued that the federal cabinet, the most important manifestation of party government under the Westminster model, remains the only significant intrastate institution: that is, the only institution within the government of Canada capable of representing regional interests. Since the parties remain the primary source for the recruitment of cabinet ministers, they remain an important part of the equation, if only by default. The third dimension of parties consists of the structure of party systems and the norms governing competition between them. William Chandler (1987) identified three types of party system: single-party majority; multiparty with one party dominant; and coalition, where no single party has a majority and two or more parties constituting a majority of parliamentary seats form a coalition in order to make government work. The importance of these distinctions, according to Chandler, lies in the type of competition and relations between the parties. In the singleparty majority system, Chandler claims, highly adversarial relations are often the norm, especially in parliamentary systems. Multiparty with one party dominant systems can also be highly adversarial, but are less so when the dominant party has a rather narrow base. Coalition-style systems are the least likely to be adversarial. For Chandler, the single-party majority system is the most problematic for federalism because adversarial norms are likely to undermine the collaborative norms necessary for the smooth functioning of the federation. The parties under this model would likely exacerbate rather than alleviate conflict between the national government and the constituent units. Chandler’s point – that the combativeness between parties is essentially transplanted to the federal–provincial arena when “federal and parliamentary traditions are combined within one regime” (1987: 156) – may help explain conflict between federal and provincial governments. Carty and Wolinetz (2004), also focusing on the “coalition” model, concede that Canadian parties have long eschewed inter-party coalitions of the type typically found in European systems; yet “their leaders regularly actively engage in bargaining and accommodative coalition-style politics in the federal–provincial decision-making arena” (Carty and Wolinetz, 2004: 67–8). They suggest that competitive behaviour at the level of parties is not necessarily transplanted directly into the federal–provincial arena.

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Although the Canadian party system falls short on the three dimensions noted above, we would argue that it does help to link regions to the centre and promote collaboration, though not necessarily in ways consistent with the standard theories of parties-based federalism. In particular we note the somewhat neglected role of party professionals, especially political staff, in linking federal and provincial governments and their agendas. Furthermore, we believe the “knitting function” should not be the only function on which we expect parties to perform well.

CANADA’S PARTY SYSTEM FROM 1867 TO 1993: THE TRIUMPH OF REGIONALISM Since Canada’s birth as a nation, regionalism has played a prominent role in federal politics. Until the middle of the First World War, however, these regional tensions were effectively contained within a competitive two-party system in which the governing party – the Conservatives, largely under John A. Macdonald, from 1867 to 1896 and the Liberals under Wilfrid Laurier from 1896 to 1911 – forged a winning electoral coalition based on solid pluralities (often outright majorities) of the vote in the two most populous provinces, Ontario and Quebec. Together these two provinces accounted for between 60 and 75 per cent of the seats in the House of Commons, and no party was able to win national office without attracting the support of a solid core of moderate nationalist voters in Quebec. This pattern was not broken until the election of the pro-conscription Unionist government in 1917, which saw Unionist Liberals, mainly outside of Quebec, join with the Conservatives. It wasn’t until the Diefenbaker landslide of 1958 that a single-party government was able to form a majority government without having to depend on representation from Quebec. The compromises needed to make Canada a viable political and economic entity – fostering industrialization behind high tariff barriers, opening up the west to settlement, and providing the Maritimes with their own railroad and favourable freight rates, for example – smoothed over the fundamental divisions within the country (see chapter 8 on the economic union). But regional economic grievances, coupled with rapid industrialization and urbanization in the early part of the twentieth century, shattered the two-party system and led to the development of a



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second national party system (English, 1977; Carty, 1988). Between 1921 and 1925 the balance of power was held by the Progressives, the first in a long line of regional protest parties – including the Co-operative Commonwealth Federation (CCF) and Social Credit in the 1930s – challenging the dominant parties’ monopoly on representation. Although these newer minor parties did not necessarily hold the balance of power, they nonetheless articulated the economic, political, and cultural grievances of particular regions and social classes within Confederation (Mallory, 1954; Gagnon and Tanguay, 1996). The two most successful prime ministers in this second party system, Mackenzie King and Louis St. Laurent, contained the challenge to the established political and economic order posed by the regional protest parties. Both party leaders – but King in particular – were astute practitioners of the art of brokerage politics, the pragmatic cobbling together of party programs designed to appeal to a broad coalition of diverse interests. King, for instance, limited the effectiveness of the Progressives as the voice of agrarian protest by buying off some of the movement’s leaders (most notably T.A. Crerar) with cabinet posts. By the late 1920s the Progressives were a spent force in federal politics. King and St. Laurent also moderated regional conflict within the party system by stocking their respective cabinets with influential regional chieftains – men like J.G. (Jimmy) Gardiner (former premier of Saskatchewan), C.D. Howe (north-western Ontario), and Ernest Lapointe (Quebec). These figures gave direct representation to broader provincial and regional interests in the Canadian cabinet. Howe, who as minister variously of transport, munitions and supply, and reconstruction was best known for his prowess on the national stage, nonetheless ensured that north-western Ontario was well taken care of. King frequently heeded the advice of these ministers on regional matters and was particularly dependent on Lapointe for counsel on virtually all matters relating to Quebec. This brokerage system of party politics was far from complete, however, since some provinces, such as Alberta, were simply frozen out of the arrangement. The system generally worked – in large part because the ministers in question were able to deliver votes and seats at election time. Two changes were afoot, however. First, while the patronage system declined following the Civil Service Reform Act of 1918, it was replaced in good part by the pork barrel in the form of large-scale government contracts awarded to favoured regions (Noel, 2001). The new regional

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barons allowed the Liberal Party’s connections with the constituencies to atrophy (Whitaker, 1977). Second, in the post-war period regional brokering was largely displaced by the “pan-Canadian” approach of John Diefenbaker and, later, Pierre Elliott Trudeau (Smith, 1985). The arrival of television in the mid-1950s sharpened the focus on national leaders and helped make regional power brokers less critical in the conduct of election campaigns and delivery of the vote. The electoral defeats suffered by the federal Liberals in 1957 and 1958 laid the groundwork for this third, “pan-Canadian” system. It was less accommodating of regional interests than its two predecessors. The policies pursued by each successive prime minister were shaped by a centralizing vision of the country, even if some leaders (Diefenbaker) were more sensitive to regional concerns than others (Trudeau). Diefenbaker’s concept of “One Canada” and his Bill of Rights drew attention to the formal equality of all citizens and “appealed to Canadians as Canadians regardless of where they lived or what language they spoke” (Smith, 1985: 27). Lester B. Pearson’s national medicare program, the Canada Pension Plan, and the Royal Commission on Bilingualism and Biculturalism, along with Trudeau’s Official Languages Act, National Energy Program (NEP), and Charter of Rights and Freedoms were even more centralizing in nature. Trudeau’s pan-Canadian policies in many ways failed to unite the country, leaving a significant proportion of Quebec feeling betrayed and creating animosity towards Ottawa in many other regions (McRoberts, 1997). Official bilingualism and the National Energy Program antagonized the western provinces, and although Trudeau’s constitutional reforms may have struck a responsive chord in some parts of English Canada, they alienated Quebec and provided fertile soil for the later growth of the sovereignist movement. The pan-Canadian thrust of federal economic and social policy from 1957 to 1984 was paralleled by the development of an increasingly regionalized party system. The two main parties drew the bulk of their electoral support from one or two regional strongholds, as did the CCF– NDP. None of these parties was actually a national party in the sense of enjoying solid cross-country support. Except in 1968, the Liberals won elections mainly because of their pre-eminence in Quebec, where they typically won between 75 and 99 per cent of the available seats. However, the Liberals were virtually shut out in the west: in 1980 they won only 2.5 per cent of the region’s seats; their western MPs accounted for 1.4 per



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cent of the governing caucus (see Appendix 1). The Liberals’ woes in the west were mirrored by the Conservatives’ failure to make any electoral headway in Quebec. In 1979 Joe Clark formed a minority government with only 1.5 per cent of his caucus from Quebec (see Appendix 1). This regional fragmentation was exaggerated by Canada’s first-pastthe-post electoral system. For example, even though the Progressive Conservatives managed to win at least 13 per cent of the popular vote in Quebec in the five elections held between 1968 and 1980, this electoral support consistently translated into two or three seats at most (Tanguay, 1999). The problems thereby created were compounded by conscious party electoral strategy. Party officials tended to direct the bulk of their limited organizational and financial resources to those regions in which they stood the best chance of winning. After its crushing defeat in 1958 by the Diefenbaker landslide win, the Liberal Party undertook a number of reforms. It centralized its party structures, recruited new candidates, modelled its campaign techniques on American practices (improved use of television and opinion polling, for example), and shifted its electoral appeal to the urban ridings in British Columbia, Ontario, and Quebec, more or less conceding rural voters to the populist Diefenbaker (Wearing, 1981). Thus it is commonplace to depict the evolution of the Canadian party system in linear fashion – from patronage to brokerage to pan-Canadianism and then into a spiral of ever increasing regionalization – and to see the Mackenzie King period in particular as the heyday of a cohesive Canadian federation brought together through a well-integrated Liberal Party. Yet this depiction is not entirely accurate. First, the integration was far from complete. As R.K. Carty (2002: 726) has noted, success in bringing all regions into the fold can be a dangerous thing: major crises affecting the Canadian party system “have typically arisen when an overreaching national party collapsed under the strain of trying to accommodate the conflicting demands of too many interests gathered into a political omnibus.” Carty points to the eventual collapse of the all-encompassing coalitions constructed by Robert Borden, John Diefenbaker, and Brian Mulroney as a warning that “successful brokerage parties ... have to be careful not to actually catch all the interests” (726). The Mackenzie King coalition was successful precisely because it was more limited in scope. In brief, the construction of all-encompassing coalitions within national parties was a rare occurrence and often fatal over time.

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The Mulroney government also illustrates that change was far from linear. The cabinet formed in 1984 was a throwback to an earlier era, centred on ministers with a strong presence in key regions: John Crosbie from Newfoundland, who dominated the Atlantic region; Donald Mazankowski from Alberta; and (for a while) Lucien Bouchard as Mulroney’s Quebec lieutenant. Furthermore, Mulroney’s style was more reminiscent of Mackenzie King than of Diefenbaker or Trudeau. Even during the Trudeau period, however, regional representation in cabinet – the intrastate dimension – was far from absent (Bakvis, 1991). Though mere shadows of the old regional barons under King and St. Laurent, regional ministers continued to perform, and arguably still perform, important representational functions. After the Liberals suffered near-defeat in the federal election of 1972, for example, the party resurrected the role of “political ministers,” one for each province, and gave them responsibility for allocating pork-barrel type funding as well as patronage and party organizational matters in their respective provinces. In addition to dealing with party matters, however, these new-style regional ministers were also critical conduits for provincial governments. In the Maritimes, Trudeau-era figures such as Romeo Leblanc and Allan J. McEachen interacted on a regular basis with the premiers of New Brunswick and Nova Scotia, respectively. In effect this interaction came through necessity. Many of the projects promoted by political ministers (and their colleagues) – new roads, bridges, educational institutions, and the like – fall under provincial jurisdiction. Persuading a provincial government to construct a new bridge in a regional minister’s federal riding, for example, usually involved some kind of quid pro quo, such as federal funding for a project high on the list of provincial priorities.

FROM CHRÉTIEN TO HARPER TO TRUDEAU: FROM ONE-PARTY DOMINANCE TO HYPER-REGIONALISM TO TWO-AND-A-HALF PARTY SYSTEM The 1993 election was a watershed for the Canadian party system. The collapse of the Progressive Conservative government was unprecedented in Canadian electoral history. The rise of the Reform Party in the west and the Bloc Québécois in Quebec, and the fact that the Liberals drew the bulk of their seats from Ontario, with only spotty representation



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from other regions of the country, suggested that the regionalization of the party system had entered a new and dangerous phase. While the Liberals could claim representation from all regions of the country, most of their nineteen Quebec seats came from Montreal ridings with heavy concentrations of anglophones and non-francophone minorities; the BQ, overwhelmingly, had become the voice of francophone Quebec. As well, the Reform Party was clearly the first choice of voters in the two most disaffected western provinces, Alberta and British Columbia. The Parti Québécois returned to power in Quebec City in 1994, and when it held the second referendum in fifteen years in the fall of 1995, the No side won with only the slimmest of margins. After the referendum, the Chrétien government governed much as previous Liberal governments had: from the centre, finding informal ways to accommodate Quebec’s demands. Especially after Chrétien’s third victory in 2000, when the Liberals made gains in Quebec at the expense of the Bloc, it appeared that Canada’s “government party” had successfully revived its traditional formula and was now poised to extend its benign dictatorship (Simpson, 2001) well into the twenty-first century (Tanguay, 2003). There were some crucial differences from the past, however. The regional coalitions under King, St. Laurent, and Mulroney comprised three components: Quebec, Ontario, and the west (usually a single province such as Alberta or Saskatchewan). In the Chrétien era, for the first time Ontario became the Liberals’ primary stronghold. The principal partisan vehicles from Quebec and the west represented not a competing national party but two distinct regional parties (Reform in the west and the nationalist Bloc in Quebec). There were three other features serving to undermine the capacity of the Liberal Party to act as a broker of regional interests. First, the Liberals’ total dominance in Ontario, and in turn the domination of the parliamentary party by the Ontario Liberal caucus, illustrated Chandler’s thesis that party competition in a single-party majority (i.e., Westminster) system can exacerbate conflict in a federal system. The 100-plus members of the Ontario federal Liberal caucus took it on themselves to do battle with the controversial Conservative provincial government of Mike Harris. Second, a dominant party facing a weak or fragmented opposition is almost certain to develop pockets of corruption. In the Liberal case the corruption manifested itself in what became known as the sponsorship scandal. It involved inflated contracts

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for government advertising, primarily in Quebec, and with some of the money attached to these contracts being kicked back to members of the federal Liberal Party. In the election of January 2006, the Conservatives broke through in Ontario and won ten seats in Quebec, forming a minority government and demonstrating that it was still possible for a national party other than the Liberals to gain at least a partial foothold in the province of Quebec. There were some other noteworthy features to the new Conservative minority government. Seven of Harper’s twenty-seven ministers had served in provincial cabinets – one of the highest proportions ever, not seen since the days of Macdonald and Laurier. In addition to bringing some of their provincial sensibilities to the cabinet table, these ministers also brought the new government hands-on and recent experience in elected office. This feature is clearly consistent with the Riker model of an integrated party system, in which personnel moving from the regional to the national level bring with them a number of positive attributes. It is also a feature that has been largely absent from the Canadian party system (Smiley, 1987; Barrie and Gibbins, 1989). Also notable was the presence in cabinet of no fewer than five representatives from Quebec, including Lawrence Cannon, who had served in the Liberal cabinet of Robert Bourassa, and Josée Verner, who was also closely associated with the Bourassa government. Half (14) of Harper’s ministers came from Ontario and Quebec, a proportion that reflected the weight of central Canada electorally and in the federal system, and the Conservatives’ desire to consolidate their electoral gains in those two provinces. The electoral result of 2006 seemed to offer the Conservatives an opportunity to both broaden their base and make further inroads into those key provinces. Subsequent developments, however, prevented the Conservatives from capitalizing on their 2006 results. The 2008 election brought to a standstill the Conservatives’ foray in Quebec and their longer-term strategy of building a sufficiently large base in that province to form a majority government. While they retained ten seats in Quebec, they failed to make their hoped-for breakthrough into the voter-rich suburbs around Montreal. The election of 2011 was in some ways as dramatic as the 1993 election. The Conservatives lost five of their ten Quebec seats but gained an overall majority, with a significant twist: a majority government without Quebec as the crucial deciding factor. The seats the Harper



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government obtained outside of Quebec were sufficient to ensure its majority. The collapse of the Liberals in Ontario was not necessarily a surprise, but the drubbing suffered by the Bloc Québécois and the meteoric rise of the NDP in Quebec were. In addition to obtaining 103 seats overall, more than half of the NDP’s tally came from Quebec, until then a graveyard for the social democratic party’s electoral hopes. With the majority Conservative government and the NDP as Official Opposition together constituting over 87 per cent of the seats in the House, the system appeared, in a single election, to have reverted back to something akin to the two-and-a-half party system of years gone by, only with the positions of the NDP and the Liberals reversed. In the subsequent elections in 2015 and 2019 the Liberals regained their traditional central position with a majority government and a minority government, respectively, with the NDP being relegated to fourth place in 2019 by a resurgent Bloc Québécois, losing all save one seat in Quebec.

REGIONAL CAUCUSES AND REGIONAL MINISTERS The regional caucuses of the parties constitute another dimension of intrastate activity. All parties with more than one MP per province or region have a regional caucus, which tends to be dominated by the regional or political minister (see Hilderman and Thomas, 2013, for a discussion of the role and significance of regional and sub-regional caucuses in the federal parties). Representational activities within regional caucuses tend to take place under the cloak of caucus secrecy (Thomas, 1985). As a result – even though it is a fundamental principle of political representation that politicians must be seen to be working in the interests of their constituents – the efforts of MPs and ministers on behalf of their provinces will often not be known or visible to the public. Even so, party discipline and caucus secrecy have not prevented either ministers or MPs from publicly voicing concerns if they feel important provincial interests are at stake. John Crosbie, the Atlantic regional minister in the Mulroney cabinet, famously rebuked the prime minister and extracted a public apology from the deputy prime minister over a proposed Canada–France fisheries treaty that, in the eyes of the Newfoundland MP and the government of his province, would

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have compromised the cod stocks and other species off Newfoundland (Crosbie, 1997: 261–6). And in the fall of 2010, when BHP Billiton made a takeover bid for Saskatchewan-based Potash Corporation, the thirteen government MPs from Saskatchewan made known that they were very nervous about having to explain a possible decision to approve the hostile takeover to their constituents (Chase and McCarthy, 2010). In the Justin Trudeau government, the role of both regional ministers and regional caucuses has been much less evident. Even more so than the Harper and Chrétien governments, the Trudeau government has relied on what Donald Savoie (1999), in connection with the Chrétien government, has referred to as the art of “governing from the centre.” Its agenda, emphasizing Indigenous rights, women’s rights, and climate change, both cuts across and challenges more traditional agendas where the recognition and economic well-being of different provinces and regions are often the main concern. Thus, the basic system of regional ministers and caucuses has evolved and become attenuated under both Stephen Harper and Justin Trudeau. Yet, regional representation still has some meaning. A governing party whose regional representation in Parliament is uneven can compensate with a more regionally balanced cabinet. Appendix 1 presents data on regional representation in both Parliament and cabinet since 1867. Note that where regional representation is lacking in Parliament, the difference is almost always compensated for in cabinet. In 2011, while Quebec provided only 3 per cent of the Conservatives’ seats in Parliament (5 out of 166), just over 10 per cent of Harper’s ministers came from that province. The distribution of cabinet positions in the Liberal government elected in 2015 was also consistent with past practice, certainly with respect to numbers and percentages. However, in the case of Atlantic Canada, the MPs appointed to the cabinets were relatively junior and assigned to less important portfolios. Nearly all long-serving Atlantic Liberal MPs were overlooked in the formation of the 2015 cabinet. After the 2019 general election, Justin Trudeau sought to compensate for the Liberals’ lack of representation from the west – the party was shut out in Alberta and Saskatchewan, and just over 10 per cent of the caucus came from the four western provinces and the territories (see Appendix 1) – by appointing a special representative for the Prairies outside of cabinet to act as the political antennae for the region. Thus, the quality and impact of regional representation can vary considerably, depending on



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the prime minister and ministers in question and simply the availability of elected MPs from the region in question.

MINORITY GOVERNMENT Minority governments raise the prospect that substantial issues of a federal–provincial nature will be taken up, discussed, and perhaps even resolved among political parties rather than in the executive federalism arena (e.g., Baier, Bakvis, and Brown, 2005). They also raise the hope that regional voices are able to express themselves directly and openly through regionally based parties, rather than be subsumed in traditional brokerage-style national parties, and that accommodation can occur in the context of open debate in Parliament and parliamentary committees rather than through traditional elite accommodation either in the federal–provincial arena or within traditional parties. The Liberal minority government of Lester Pearson (1963–8) laid the basis for key social programs such as the Canada-Quebec Pension Plan (C/QPP) and medicare, something that would likely not have occurred without the active support by and pressure from the NDP in Parliament (Russell, 2008). From the perspective of federal–provincial relations in the social policy field, this era was truly transformative. For those who hoped for similar changes during the extended period of minority government from 2004 to 2011, the results would have been disappointing. The NDP did persuade the short-lived minority government under Paul Martin to put more money into certain federal– provincial programs, such as post-secondary education. However, under the Harper minority government (2006–11) no such leverage was available. Instead this government relied more on the relentless use of attack ads and related techniques to put the opposition parties on the defensive and at a strategic disadvantage (Martin, 2010). At the same time, the Michael Ignatieff-led Liberals did succeed in getting the Conservative government to commit to a stimulus package during the financial crisis of 2009. The election once again of a minority government in 2019, this time under the Liberals with the NDP and the Bloc Québécois holding the balance of power, may well see a repeat of the 1963–8 era that featured an ­accelerated federal–provincial social policy agenda highlighted by the launch of medicare and the Canada Pension Plan. It was a

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development made possible by a strong push from the NDP, which then held the balance of power.

MOBILITY AND PARTISAN ALIGNMENT Central to the Riker model of how parties serve the cause of federal integration is the idea of partisan alignment between the national and local levels and the upward mobility of elected officials through the party from the local to the national level. Among other things, national– provincial/territorial partisan alignment and mobility help foster informal linkages, trust, and understanding between the two levels. As Smiley (1987) notes, the Canadian system has never fared very well in this regard. Barrie and Gibbins observe “that career mobility from provincial to national office is the exception rather than the rule” (1989: 138) and that mobility has declined over time. As noted earlier, however, the election of the Harper government in 2006 saw a number of former Progressive Conservative ministers of the Harris government move to Ottawa and enter the Harper cabinet. Still, even during the Mackenzie King era, the number of provincial figures moving to Ottawa was actually quite limited. In 2019, this trajectory played out in reverse, as a former member of the Harper cabinet, Jason Kenney, became premier of Alberta. There is also some interparty mobility. Individuals closely associated with the Liberal government of Robert Bourassa in Quebec entered the Harper cabinet. Jean Charest’s transformation from leader of the federal Progressive Conservative party to leader of the Quebec Liberal Party and then premier of Quebec can be seen as a successful move in the other direction. Thus, the low overall mobility between provincial and federal parliaments and the weak links between federal and provincial parties have not prevented close interaction between individual ministers in the federal and provincial governments in the past. Even if their attention is often focused on what Thomas (1985) calls allocational issues, the more astute ministers will take their regional role seriously and use it to convey broader regional concerns directly into cabinet. Meanwhile, other ministers and their staffs, as well as the prime minister, will often consult regional ministers to get a sense of the way various issues might play out in their particular regions or provinces. In brief, while it can be argued that the Canadian federation would perform better if the career path of



Federalism, Political Parties, and the Burden of National Unity

federal politicians were to incorporate a stint in a provincial legislature, and ideally as a member of the same party, the Canadian federation and party system have been able to overcome this obstacle to some extent. At the same time, simply having the same party in power at both the federal and provincial levels is no guarantee that relations will be closer, friendlier, or more effective. The pitched battles between Lester Pearson and Premier Ross Thatcher of Saskatchewan, or Mackenzie King and Mitch Hepburn of Ontario – all of them Liberals – are legendary. Robert Bourassa, as the Liberal premier of Quebec, supported Progressive Conservative Prime Minister Brian Mulroney in the 1988 federal election campaign, to the chagrin of federal Liberal leader John Turner. And much more recently, a common membership in the NDP family did not prevent the NDP governments of BC and Alberta from taking opposite positions on the Trans Mountain pipeline in a bitter and highly public dispute compounded by the federal NDP leader taking the side of BC. These examples suggest that common partisan ties are not likely to be helpful when it comes to bridging major divisions between governments; conversely, partisan differences are not likely to be a major hindrance when it comes to forging partnerships when there is a common interest. It also suggests that the Carty and Wolinetz (2004) coalition model is only half right. Although party differences found in provincial and federal legislatures rarely enter the federal–provincial arena, adversarial norms – a common feature of Canadian politics generally – often do, pitching even governments of the same partisan stripe against each other. A new variation on this theme was introduced in 2019: the federal Liberal–Conservative split on the carbon tax is now being replicated at the provincial level, with freshly elected Conservative provincial governments, all opposed to the carbon tax, taking their opposition directly into the federal–provincial arena. The 2019 federal election also saw the unprecedented spectacle of the Conservative premier of Alberta directly intervening in the battle by actively campaigning against the Liberals in a number of key Ontario constituencies. Interestingly, Progressive Conservative Premier Blaine Higgs of New Brunswick, himself a former executive in the oil industry, acknowledged that the re-election of Justin Trudeau’s Liberals meant that carbon pricing was a fact of life, and that his province would accordingly seek to devise a carbon tax of its own (Poitras, 2019). All this, nonetheless, suggests that the partisan dimension is in fact becoming more important.

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There is a further aspect worth discussing. Work based on the Riker model focuses on the movement of elected officials from the state/provincial level to higher levels of government. The more movement there is between the two levels, the greater the degree of integration. However, this focus ignores the role played by unelected officials, both public servants and political staff. In Canada there is a long history of such individuals moving from one government or level to another, particularly when there is a change in government. In the 1960s there was a major exodus of officials from Saskatchewan after the defeat of the NDP government, including key figures such as A.W. Johnson and Tommy Shoyama. Both ended up as senior officials in the Department of Finance in Ottawa where they helped shape and implement medicare. The past decade has seen a further variation on the mobility phenomenon: the movement of senior political staff from the provincial to the federal level and vice versa. The most notable example was the move of a number of key staffers of the Liberal government in Ontario under Dalton McGuinty (2003–13) to Ottawa in 2015 where two of them came to occupy the two most senior positions (chief-of-staff and principal secretary) in the office of Prime Minister Justin Trudeau. One of the signature achievements of the 2015–19 Trudeau government was the federal–provincial agreement on the C/ QPP expansion in which the Liberal government of Ontario played a key role in pressuring not only Ottawa but also the other provinces. It is likely that close collaboration between senior political staffers in both governments helped bring the negotiations to a successful conclusion.

PERFORMANCE, EFFECTIVENESS, AND LEGITIMACY Before turning to our three thematic criteria, let us briefly review the main points so far. First, the party system of the past may not always, and indeed may never, have performed the role attributed to it. The party omnibus was far from all-encompassing, and when all regions of the country are represented within a single major party, the results are almost always calamitous, as Carty (2002) has argued. Party government appeared to work best when it took the form of a minimum winning coalition with two or three anchors in critical regions of the country. In the absence of an elected or provincially appointed second chamber, and with an electoral system that routinely produces wide discrepancies



Federalism, Political Parties, and the Burden of National Unity

between popular votes and seats, the institution that makes the system work has always been the federal cabinet. Regional representation in cabinet was the critical link in the eras of both Macdonald and King. When a governing party’s regional representation in Parliament is un­ even, that imbalance can be compensated for in cabinet. At a minimum it would be unwise to assume there was a period when parties played a more critical role in linking regions to the centre. Federal and provincial party systems were already bifurcated in the 1920s and 1930s, ostensibly the heyday of regional brokerage, and parties in general have always been limited in terms of the regional interests they accommodate at any one time. In short, it may be unrealistic to use the past either as a standard by which to judge the current party system or as a model we might wish to recreate in order to relieve the present system of executive federalism of some of the burden of national unity. It might be that the Canadian party system was never all that critical to the functioning of federalism; the Canadian federation survived despite the limited integrative capacity of Canadian parties. In applying the three assessment criteria we should include not only the integrative dimension of parties but also the extent to which they help foster flexibility and responsiveness. These three elements are related; for instance, integrative capacity may be improved when the party system demonstrates flexibility. Also, these criteria should not apply solely or even primarily to the goal of integration. The fact that the provinces, and in particular Ontario and Quebec, often elect parties at the provincial level with a partisan stripe different from that of the federal government can be seen as contributing to the ability of the Canadian federal system to facilitate the pursuit of different, even competing, agendas, which is after all what federalism is all about. In other words, allowing for different aspirations may well contribute to increasing the legitimacy of the system rather than detracting from it. Certainly, the different federal and provincial electoral arenas allow citizens to signal to each other, to their government, and to other governments – both federal and provincial – their thoughts and intentions. Quebec offers a fine illustration. For most of Canadian electoral history, its voters supported the Liberals or the Conservatives in federal elections – until 1993 when they decided to support a party, the Bloc Québécois, working outside of the two traditional governing parties. Then in 2011 this support shifted dramatically to the NDP. Support for the NDP proved

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short-lived, however, as its seat tally dropped dramatically in the 2015 election down to sixteen from fifty-eight and then down to a single seat in 2019. The implication is that Quebec voters saw the NDP as somewhat akin to a parking lot: a temporary transition place after tiring of their affair with the Bloc before deciding on whether to rekindle their interest in it. By 2019, a good portion of these voters had indeed returned to the Bloc, helping to elect thirty-two Bloc members (up from four in 2015), while slightly more drove off with the Liberals, electing thirty-five of them. The upsurge in Bloc support can be explained in part as the result of a backlash against the negative sentiment outside of Quebec over Bill 21, Quebec’s secularization bill that bans the wearing of religious symbols by provincial civil servants, legislation that enjoys strong support from most francophones in Quebec. It could also be that in 2019 Quebec voters decided to hedge their bets by sending to Ottawa both a contingent of Bloc MPs, who would articulate and reinforce the nationalist message already being conveyed by the governing party in Quebec (the CAQ), and an equally strong contingent of Liberals, who would be able to represent them directly in the federal government. In any event, in a public opinion poll taken shortly after the election asking respondents how pleased they were with its outcome, Quebeckers appeared to be the most pleased, with 67.6 per cent saying they were pleased or somewhat pleased versus 59 per cent for the country as a whole and 33.8 per cent of those on the prairies (Nanos, 2019). In brief, elections and their outcomes can be seen as part and parcel of the federal fabric of this country where voters both signal their happiness or unhappiness with their governments and foreshadow major shifts that are in the offing (Johnston and Cutler, 2003). More than sixty years ago, Frank Underhill speculated that Canadian voters balanced one-party government at the federal level through “some instinctive, subconscious mental process” by electing governments of a different partisan complexion at the provincial level ([1955] 1961: 237). This proposition was quickly dismissed as overly simplistic (Scarrow, 1960), but some more recent research has found some empirical support for the idea (Erickson and Filippov, 2001). What was particularly intriguing in the 2019 election results is that the Liberals elected approximately seventy MPs in Ontario ridings that only sixteen months previously elected Progressive Conservatives to represent them in Queen’s Park (federal and provincial ridings share the same boundaries in Ontario).



Federalism, Political Parties, and the Burden of National Unity

CONCLUSION Is it realistic to expect the party system to do the heavy lifting when it comes to the integration of the Canadian federation? If so, how effective has the party system been in this task? In this chapter, one of our arguments is that the integrative capacity of parties was always limited, and to claim that at one point in our history there was a golden age where the party system played a much more critical role in national unity is misleading. The regionalization and fragmentation in the party system that have occurred on and off over the years likely contributed to, as well as reflected, deep fissures in the federation. At the same time, having all regions represented within the governing party’s parliamentary caucus as a result was not necessarily conducive to greater national unity, as illustrated by what followed after the 1958 and 1984 landslides. Rather, the more effective governing regimes tended to be where the party was anchored in two or perhaps three key provinces, a format that provided greater flexibility and made managing caucus expectations much easier. Furthermore, in discussing the performance and effectiveness of parties in a federal context one needs to keep in mind that integration and national unity should not be the only objectives. Having dissimilar parties at the federal and provincial levels can in fact be a positive force, helping to maintain a balance of power between the centre and the constituent units. This feature is all the more important in light of the inherent tendency of Westminster systems to concentrate power at the centre (Savoie, 1999). Having strong governments at the provincial level of a different ideological stripe can be seen as a desirable component in a parliamentary system where checks on the executive tend to be weak. Finally, the models used to examine the role of parties and party systems need to be rethought. The original Riker (1964) model, based almost exclusively on the American system, assumes a simple two-party system where the key variables are the degree of partisan alignment or misalignment between the state and federal levels and the mobility of elected officials from local to national circles. We have noted that there are further dimensions and nuances to political parties operating within a federal system that need to be taken into account. In Canada, where the BC Liberal Party, for example, is much closer to the federal Conservative Party than to the federal Liberal Party (both in terms of voting support and personnel), formal party labels are not that reliable,

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if not outright misleading as a guide to linkages between the federal parties and their putative provincial counterparts. We also noted that within political parties the key figures are not just the politicians but also advisors, pollsters, and party-friendly policy experts, and how the movement of these personnel and their networks can be seen as a major factor in facilitating co-operation between levels of government. The shift of key political staff from the Ontario Liberal government to the Trudeau government in 2015 and later a similar movement of former Harper government political staff to the Ontario Ford government in 2018 are but two recent examples. The role of elections, and in particular the balance theory, in which it is argued that citizens will support a party at the provincial level opposite that of the party in power at the federal level, merits renewed interest. What limited evidence there is on this theory is mixed, which is all the more reason why it should be examined more closely, particularly because if it is borne out it would constitute an important part of our overall system of checks and balances. In brief, the role of parties and party systems in federations should be seen not just as a mechanism for national integration but also as an important means for ensuring a balance of power within the federation and as part of a system of countervailing powers. If we assess the performance and effectiveness, and also the legitimacy, of the present party system within this broader framework, it may well lead us to conclude that it has acquitted itself reasonably well.

Governing partya

LIBERAL-CONSERVATIVE CONSERVATIVE LIBERAL CONSERVATIVE CONSERVATIVE CONSERVATIVE CONSERVATIVE LIBERAL LIBERAL LIBERAL LIBERAL CONSERVATIVE UNIONIST Liberal Conservative LIBERAL CONSERVATIVE LIBERAL LIBERAL LIBERAL LIBERAL

General election

1867 1872 1874 1878 1882 1887 1891 1896 1900 1904 1908 1911 1917 1921 1925 1926 1930 1935 1940 1945 1949

– 7.1 (7) 1.5 (2) 5.1 (7) 6.5 (9) 10.3 (13) 11.1 (13) 7.6 (9) 7.7 (10) 14.6 (20) 13.5 (18) 13.6 (18) 36.0 (54) 5.2 (6) 18.4 (21) 21.4 (25) 22.6 (31) 20.3 (35) 23.9 (43) 15.6 (19) 22.0 (42)

Westb 47.0 (47) 38.4 (38) 47.8 (65) 44.6 (62) 40.3 (56) 43.7 (55) 38.9 (46) 36.9 (44) 27.7 (36) 27.7 (38) 27.8 (37) 54.6 (72) 48.0 (72) 17.2 (20) 58.8 (67) 18.8 (22) 43.1 (59) 32.6 (56) 31.1 (56) 27.9 (34) 28.8 (55)

Ont. 45.0 (45) 39.4 (39) 25.7 (35) 33.8 (47) 36.7 (51) 26.2 (33) 23.7 (28) 41.2 (49) 44.6 (58) 38.7 (53) 39.1 (52) 19.7 (26) 2.0 (3) 56.0 (65) 2.6 (3) 52.1 (61) 17.5 (24) 32.6 (56) 34.4 (62) 40.9 (50) 35.6 (68)

Que. 8.0 (8) 15.2 (15) 25.0 (34) 16.5 (23) 16.5 (23) 19.8 (25) 26.3 (31) 14.3 (17) 20.0 (26) 19.0 (26) 19.6 (26) 12.1 (16) 14.0 (21) 21.6 (25) 20.2 (23) 7.7 (9) 16.8 (23) 14.5 (25) 10.6 (19) 15.6 (19) 13.6 (26)

Atl.

% of Seats from (# of Seats)

13 13 14 14 14 15 14 14 16 16 14 18 22 19 14 18 19 16 18 20 21

Totalc

Cabinet

– 7.7 (1) – – – – 7.1 (1) 7.1 (1) 6.3 (1) 12.5 (2) 14.3 (2) 22.2 (4) 27.3 (6) 15.8 (3) 21.4 (3) 27.8 (5) 21.1 (4) 25.0 (4) 27.8 (5) 20.0 (4) 19.0 (4)

West

38.5 (5) 38.5 (5) 35.7 (5) 35.7 (5) 42.9 (6) 33.3 (5) 35.7 (5) 28.6 (4) 37.5 (6) 37.5 (6) 35.7 (5) 38.9 (7) 40.9 (9) 31.6 (6) 14.3 (2) 22.2 (4) 36.8 (7) 25.0 (4) 27.8 (5) 35.0 (7) 33.3 (7)

Ont.

30.8 (4) 23.1 (3) 28.6 (4) 28.6 (4) 28.6 (4) 33.3 (5) 28.6 (4) 35.7 (5) 31.3 (5) 31.3 (5) 28.6 (4) 27.8 (5) 18.2 (4) 31.6 (6) 57.1 (8) 38.9 (7) 26.3 (5) 31.3 (5) 27.8 (5) 30.0 (6) 28.6 (6)

Que.

(Continued)

30.8 (4) 30.8 (4) 35.7 (5) 35.7 (5) 28.6 (4) 33.3 (5) 28.6 (4) 28.6 (4) 25.1 (4) 18.8 (3) 21.4 (3) 11.1 (2) 13.6 (3) 21.1 (4) 7.1 (1) 11.1 (2) 15.8 (3) 18.7 (3) 16.6 (3) 15.0 (3) 19.0 (4)

Atl.

% of Cabinet Positions from (# of Cabinet Positions)

These data were originally compiled by Shannon Wells in 2004 and subsequently updated by the authors in 2011 and 2019. Financial support provided by the Social Sciences and Humanities Research Council is gratefully acknowledged.

APPENDIX 1:  REGIONAL REPRESENTATION IN GOVERNMENT CAUCUS AND FEDERAL CABINET

LIBERAL Progressive Conservative PROGRESSIVE CONSERVATIVE Progressive Conservative Liberal Liberal LIBERAL Liberal LIBERAL Progressive Conservative LIBERAL PROGRESSIVE CONSERVATIVE PROGRESSIVE CONSERVATIVE LIBERAL LIBERAL LIBERAL Liberal Conservative Conservative CONSERVATIVE LIBERAL Liberal

1953 1957 1958 1962 1963 1965 1968 1972 1974 1979 1980 1984 1988 1993 1997 2000 2004 2006 2008 2011 2015 2019

15.9 (27) 20.3 (23) 31.6 (66) 42.2 (49) 7.8 (10) 6.9 (9) 18.2 (28) 6.4 (7) 9.2 (13) 43.4 (59) 1.4 (2) 28.9 (61) 28.4 (48) 16.4 (29) 11.0 (17) 9.4 (16) 11.9 (16) 53.2 (66) 48.2 (69) 44.6 (74) 17.4 (32) 10.8 (17)

Westb 29.4 (50) 54.0 (61) 32.5 (68) 30.2 (35) 39.8 (51) 38.9 (51) 40.9 (63) 33.0 (36) 39.0 (55) 41.9 (57) 35.4 (52) 31.8 (67) 27.2 (46) 55.4 (98) 65.2 (101) 58.5 (100) 55.2 (74) 31.4 (39) 35.7 (51) 44.0 (73) 43.5 (80) 50.3 (79)

Ont. 38.8 (66) 7.1 (8) 23.9 (50) 12.1 (14) 36.7 (47) 42.7 (56) 36.4 (56) 51.4 (56) 42.6 (60) 1.5 (2) 50.3 (74) 27.5 (58) 37.3 (63) 10.7 (19) 16.7 (26) 21.1 (36) 15.6 (21) 8.0 (10) 7.7 (11) 3.0 (5) 21.7 (40) 22.3 (35)

Que. 15.9 (27) 18.6 (21) 12.0 (25) 15.5 (18) 15.6 (20) 11.5 (15) 4.5 (7) 9.2 (10) 9.2 (13) 13.2 (18) 12.9 (19) 11.8 (25) 7.1 (12) 17.5 (31) 7.1 (11) 11.1 (19) 17.1 (23) 7.3 (9) 7.7 (11) 8.4 (14) 17.4 (32) 16.6 (26)

Atl.

% of Seats from (# of Seats)

20 22 23 21 26 26 29 30 29 30 33 40 33 23 28 28 38 27 38 39 31 37

Totalc

Cabinet

25.0 (5) 36.4 (8) 30.4 (7) 33.3 (7) 15.4 (4) 11.5 (3) 20.7 (6) 13.3 (4) 13.8 (4) 30.0 (9) 12.1 (4) 32.5 (13) 24.2 (8) 21.7 (5) 17.6 (5) 17.6 (5) 23.6 (9) 40.7 (11) 42.1 (16) 38.5 (15) 29.0 (9) 13.5 (5)

West 30.0 (6) 31.8 (7) 30.4 (7) 33.3 (7) 38.4 (10) 34.6 (9) 34.5 (10) 40.0 (12) 34.5 (10) 40.0 (12) 36.4 (12) 27.5 (11) 33.3 (11) 43.5 (10) 42.9 (12) 42.9 (12) 39.4 (15) 33.3 (9) 31.6 (12) 38.5 (15) 35.5 (11) 45.9 (17)

Ont. 30.0 (6) 13.6 (3) 21.8 (5) 19.0 (4) 30.8 (8) 34.6 (9) 34.5 (10) 33.3 (10) 37.9 (11) 13.3 (4) 36.4 (12) 27.5 (11) 30.3 (10) 21.7 (5) 25.0 (7) 25.0 (7) 21.0 (8) 18.5 (5) 13.1 (5) 10.3 (4) 22.6 (7) 29.7 (11)

Que.

15.0 (3) 18.2 (4) 17.4 (4) 14.3 (3) 15.4 (4) 11.5 (3) 10.3 (3) 13.3 (4) 13.8 (4) 16.7 (5) 15.1 (5) 12.5 (5) 12.1 (4) 13.1 (3) 14.3 (4) 14.3 (4) 15.7 (6) 11.1 (3) 10.5 (4) 12.8 (5) 12.9 (4) 10.8 (4)

Atl.

% of Cabinet Positions from (# of Cabinet Positions)

Source: Guide to Canadian Ministries since Confederation (Canada: Privy Council Office, 2009); Senators and Members – Historical Information (Canada: Library of Parliament, 2006); The Canadian Ministry (Canada: Privy Council). https://www.ourcommons.ca/Members/en /ministries?ministry=29&province=all&gender=all&lastName=all. Accessed May 18, 2011, November 4, 2015, and November 8, 2019. a Upper-case = majority government; lower-case = minority government. b “West” includes NWT, Yukon, and Nunavut. c Size of cabinet for the year of each general election includes changes occurring up to and including 31 December of that year (i.e., includes the last ministerial shuffles for each portfolio but does not include portfolios terminated in that year).

Governing partya

General election

APPENDIX 1 (CONTINUED)



Federalism, Political Parties, and the Burden of National Unity

GLOSSARY brokerage party  Brokerage parties seek to forge broad-based electoral coalitions, bringing together voters from different social classes, religious groups, and regions. They appeal to voters primarily on the basis of leadership, style, and patronage and have exhibited a large degree of ideological flexibility. first-past-the-post electoral system  Also known as the single-member, simple plurality electoral system, this “winner-take-all” form of voting is the electoral system currently in use for federal and provincial elections in Canada. Voters vote for a single candidate in a given riding or constituency; the candidate receiving the most votes (but not necessarily a majority) in the riding wins. government party  Whitaker (1977) coined the term “government party” to describe the Liberal Party of Canada that, by the 1950s, had in many respects merged with the federal government apparatus. The term “natural governing party” is also sometimes used. intrastate vs. interstate federalism  Cairns (1979) and Smiley and Watts (1985) have distinguished between two basic methods of accommodating regional (or subnational) interests in a federal system. The institutions of interstate federalism, such as first ministers’ conferences, allow the two levels of government to meet face-to-face, whereas the institutions of intrastate federalism, such as the Senate (as it was originally designed), cabinet, and cabinet committees, afford the provinces a voice within the central government itself. Reform Party of Canada  Founded in the fall of 1987 with the slogan “The West Wants In,” the Reform Party of Canada was an important expression of western alienation from the federal party system, the ideological vehicle of a potent form of right-wing populism, and one of the most successful minor parties in the country’s political history. Under the leadership of Preston Manning, Reform won fifty-two seats in the 1993 general election and sixty seats in 1997, making it the Official Opposition. In 2000, it transformed itself into the Canadian Reform Conservative Alliance (better known as the Canadian Alliance) and then in 2004 merged with the Progressive Conservative Party to create the Conservative Party. REFERENCES Baier, Gerald, Herman Bakvis, and Douglas Brown. 2005. “Executive Federalism, the Democratic Deficit and Parliamentary Reform.” In How Ottawa Spends, 2005–06, edited by G. Bruce Doern, 163–82. Don Mills, ON: Oxford University Press. Bakvis, Herman. 1991. Regional Ministers: Power and Influence in the Canadian Cabinet. Toronto: University of Toronto Press.

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Herman Bakvis and A. Brian Tanguay Barrie, Doreen, and Roger Gibbins. 1989. “Parliamentary Careers in the Canadian Federal State.” Canadian Journal of Political Science 22, no. 1: 137–45. https://doi.org/10.1017/S0008423900000871. Cairns, Alan C. 1979. From Interstate to Intrastate Federalism. Kingston: Queen’s University, Institute of Intergovernmental Relations. Carty, R. Kenneth. 1988. “Three Canadian Party Systems: An Interpretation of the Development of National Politics.” In Party Democracy in Canada, edited by George Perlin, 15–24. Scarborough: Prentice-Hall. ———. 2002. “The Politics of Tecumseh Corners: Canadian Political Parties as Franchise Organizations.” Canadian Journal of Political Science 35, no. 4: 723–45. https://doi.org/10.1017/S0008423902778402. Carty, R. Kenneth, and Stephen Wolinetz. 2004. “Political Parties and the Canadian Federation’s Coalition Politics.” In Canada: The State of the Federation 2002: Reconsidering the Institutions of Canadian Federalism, edited by J. Peter Meekison, Hamish Telford, and Harvey Lazar, 57–76. Kingston, ON: Institute of Intergovernmental Relations. Chandler, William M. 1987. “Federalism and Political Parties.” In Federalism and the Role of the State, edited by Herman Bakvis and William M. Chandler, 149–70. Toronto: University of Toronto Press. Chase, Steven, and Shawn McCarthy. 2010. “Potash Politics Put Tories on Spot.” Globe and Mail, October 22, 2010. Covell, Maureen. 1991. “Parties as Institutions of National Governance.” In Representation, Integration and Political Parties in Canada, edited by Herman Bakvis, 63–127. Toronto: Dundurn Press. Crosbie, John. 1997. No Holds Barred: My Life In Politics. Toronto: McClelland and Stewart. Dyck, Rand. 1996. “Relations Between Federal and Provincial Parties.” In Canadian Parties in Transition, edited by A. Brian Tanguay and Alain-G. Gagnon. 2nd ed., 160–89. Scarborough, ON: Nelson. English, John. 1977. The Decline of Politics: The Conservatives and the Party System, 1901–1920. Toronto: University of Toronto Press. Erikson, Robert S., and Mikhail G. Filippov. 2001. “Electoral Balancing in Federal and Sub-national Elections: The Case of Canada.” Constitutional Political Economy 12: 313–31. https://doi.org/10.1023/A:1012529023870. Gagnon, Alain-G., and A. Brian Tanguay. 1996. “Minor Parties in the Canadian Political System: Origins, Functions, Impact.” In Canadian Parties in Transition, edited by A. Brian Tanguay and Alain-G. Gagnon. 2nd ed., 106–34. Scarborough, ON: Nelson. Hilderman, Jane, and Paul Thomas. 2013. “Climbing the Ladder of Dissent: Backbench Influence in the Canadian House of Commons.” Paper presented at the annual meeting of the Canadian Political Science Association, University of Victoria, June 4–6. Johnston, Richard, and Fred Cutler. 2003. “Popular Foundations of Divided Government in Canada.” Paper presented to the Canadian Political Science Association Annual Meeting, Halifax, NS.



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King, Anthony. 1969. “Political Parties in Western Democracies: Some Sceptical Reflections.” Polity 2, no. 2: 111–41. https://doi.org/10.2307 /3234095. Mallory, James R. 1954. Social Credit and the Federal Power in Canada. Toronto: University of Toronto Press. Martin, Lawrence. 2010. Harperland: The Politics of Control. Toronto: Viking Canada. McRoberts, Kenneth. 1997. Misconceiving Canada: The Struggle for National Unity. Toronto: Oxford University Press. Nanos. 2019. “Nanos Globe and Mail and Nanos National Survey: Project 2019–1524.” November. Noel, S.J.R. (Sid). 1996. “Patronage and Entourages, Action-Sets, Networks.” In Canadian Parties in Transition, edited by A. Brian Tanguay and Alain-G. Gagnon. 2nd ed., 238–51. Scarborough, ON: Nelson. Poitras, Jacques. 2019. “Higgs May Create His Own Carbon Tax. Here Are His Options.” CBC News, October 24, 2019. https://www.cbc.ca/news/canada /new-brunswick/new-brunswick-carbon-tax-higgs-trudeau-1.5332588. Riker, William H. 1964. Federalism: Origin, Operation, Significance. Boston: Little, Brown. Russell, Peter. 2008. Two Cheers for Minority Government: The Evolution of Canadian Parliamentary Democracy. Toronto: Emond Montgomery. Savoie, Donald J. 1999. Governing from the Centre: The Concentration of Power in Canadian Politics. Toronto: University of Toronto Press. Scarrow, Howard A. 1960. “Federal-Provincial Voting Patterns in Canada.” Canadian Journal of Economics and Political Science 26, no. 2: 289–98. https:// doi.org/10.2307/138656. Sharman, Campbell. 1994. “Discipline and Disharmony: Party and the Operation of the Australian Federal System.” In Parties and Federalism in Australia and Canada, edited by C. Sharman, 23–44. Canberra: Federalism Research Centre, Australian National University. Simpson, Jeffrey. 2001. The Friendly Dictatorship. Toronto: McClelland and Stewart. Smiley, Donald V. 1987. The Federal Condition in Canada. Toronto: McGraw-Hill Ryerson. Smiley, Donald V., and Ronald L. Watts. 1985. Intrastate Federalism in Canada. Toronto: University of Toronto Press. Smith, David E. 1985. “Party Government, Representation and National Integration in Canada.” In Party Government and Regional Representation in Canada, edited by Peter Aucoin, 1–68. Toronto: University of Toronto Press. Tanguay, A. Brian. 1999. “Canada’s Political Parties in the 1990s: The Fraying of the Ties That Bind.” In Canada: The State of the Federation 1998/99, edited by Harvey Lazar and Tom McIntosh, 217–44. Montreal: McGill–Queen’s University Press, published for the School of Policy Studies, Queen’s University.

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Herman Bakvis and A. Brian Tanguay ———. 2003. “Canada’s Quasi-Party System: The Causes and Consequences of Liberal Hegemony.” Inroads 12 (Winter/Spring): 136–41. Thomas, Paul G. 1985. “The Role of National Party Caucuses.” In Party Government and Regional Representation in Canada, edited by Peter Aucoin, 69–136. Toronto: University of Toronto Press. Underhill, Frank H. (1955) 1961. “Canadian Liberal Democracy in 1955.” In In Search of Canadian Liberalism, 227–42. Toronto: Macmillan. Wearing, Joseph. 1981. The L-Shaped Party: The Liberal Party of Canada, 1958–1980. Toronto: McGraw-Hill Ryerson. Whitaker, Reginald. 1977. The Government Party: Organizing and Financing the Liberal Party of Canada, 1930–58. Toronto: University of Toronto Press.

CHAPTER SEVEN

Intergovernmental Relations in a Complex Federation Robert Schertzer

The Canadian federation is extremely complex. This complexity stems, partly, from the dizzying array of legal, political, and policy layers that come with dividing power between multiple orders of government. Understanding who does what – which government is ultimately responsible for a policy issue and what they have done on that file – is notoriously difficult in Canada (Simmons and Graefe, 2013). This lack of jurisdictional clarity is a defining feature of debates between federal and provincial politicians on critical files such as the environment, natural resources, and healthcare. The complexity of Canadian federalism also reflects the significant diversity and differences that exist among Canadians. Canada is among the most diverse countries in the world. Approximately five million people have immigrated to Canada in the last twenty years (IRCC, 2016; CIC, 2006). The views of recent migrants toward the federation tend to differ from those who have lived in Canada longer – generally showing more support for the federal government over ties to their provincial governments (Bilodeau, White, and Nevitte, 2010). There are also the longer-standing regional differences across Canada: Westerners, Ontarians, Quebeckers, Easterners, and Northerners perceive of themselves as different political communities and have some differing political and policy preferences (Cochrane and Perrella, 2012; Elkins and Simeon, 1980). This diversity is also related to the real economic and labour-market differences across the country (see chapter 8), as

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debates over the extraction of natural resources and the implementation of carbon taxing (see chapter 14) aptly demonstrate. One of the fundamental features of the Canadian political culture is that there are cleavages between different areas of the country (Henderson, 2004; Wiseman, 2007). You only need to ask Canadians whether Quebec is a distinct society, whether the federation is working for western Canadians, or whether we should build new pipelines to transport oil to tidewater to see these fault lines. This chapter focuses on how this complexity impacts intergovernmental relations (IGR) and our assessment of its performance, effectiveness, and legitimacy. It focuses on one particularly important element of complexity in Canadian federalism that tends to encapsulate the many layers noted above: the different visions of what the Canadian federation is and ought to be that permeate politics. It then lays out the different ways that governments have (and have not) worked together, and how these patterns of IGR have shifted over time. Finally, it discusses how this complexity – the differing ideas about the nature of the federation and the legacies of past approaches to IGR – have shaped more recent IGR during the tenures of prime ministers Stephen Harper and Justin Trudeau. This review of recent IGR makes clear that the nature of relations and the ability to collaborate are increasingly contingent on a number of factors, with agreement among the actors involved on their roles and how to work together being particularly critical.

FEDERALISM, FEDERATION, AND INTERGOVERNMENTAL RELATIONS Before discussing the different federal visions in Canada, it is important to distinguish among a few core concepts, notably federalism, federation, and IGR. These concepts are often problematically conflated. Federation and federalism are used interchangeably. IGR is generally ill defined and seen as the natural byproduct of a federal system of government, when in fact federations have many mechanisms to manage the tension between central and sub-state governments. By defining these concepts we are better able to appreciate their complexity; understand how this complexity impacts IGR in practice; and, thus, assess their performance, effectiveness, and legitimacy.



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Federalism Federalism can be understood in two ways. First, federalism is an ideology (King, 1982; Watts, 1998). It is largely a normative position directed at mobilizing political action – an argument for how things ought to be – with a specific goal of promoting a particular way of organizing government. In short, federalism promotes the value of shared and self-rule between two or more orders of government (Watts, 1998: 120; McGarry and O’Leary, 2007: 180; King, 1982). In this way, we can understand federalism as an ideology similar to other worldviews like liberalism, communism, or nationalism. Second, federalism is also used as a descriptive term. Federalism can be used to describe systems of government based on federal principles. In this way, federalism is a “theoretical and operational concept” (Elazar, 1987: 38). This is a common tendency in Canada, where we often refer to “Canadian federalism” when discussing the entire system of government. Accordingly, federalism can be used to describe processes and dynamics in a federation – for example, the decentralization of power and responsibilities to provincial governments, though increasingly this type of decentralization is termed “federalization” (Paquet, 2014).

Federations A federation is a specific type of institutional arrangement – a particular way to organize government. Federations belong to a broader set of federal political systems – such as unions, like the European Union – where the overarching principle is one of self-rule and shared rule (Watts, 1998; Elazar, 1987; see Broschek, chapter 2 in this volume). Federations share four common characteristics that set them apart from other ways of organizing government: (1) they have at least two orders of government (for example, a federal and provincial order); (2) they have a written constitution, wherein the roles and responsibilities of the orders of government are outlined; (3) they have a formal dispute arbitration mechanism to settle disagreements between the orders of government – usually this is through courts of law and particularly an apex court, like the Supreme Court of Canada; and (4) they have institutions and processes to allow the orders of government to communicate and work together (see Watts, 1998, 2008). Beyond these features, federations vary considerably in the

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extent to which they are centralist or decentralist, in their underlying sociological diversity (whether they have national minority communities, like Quebec, that mobilize for autonomy or not), and whether they are democratic or not. We can understand federations, then, as deliberate policy choices – as the implementation of a specific set of institutional mechanisms to achieve the goal of shared and self-rule (Hueglin and Fenna, 2006: 28). But we can also see federations as a kind of compromise – federations are often the result of different political actors finding ways to balance a desire for political unity with the realities of diversity. The latter was the case in Canada. The Canadian division of powers between federal and provincial governments was a compromise between the founders who wanted a more centralized form of government (notably John A. Macdonald) and those who wanted more autonomy for the provinces (notably George-Étienne Cartier) (Ajzenstat et al., 1999). Similarly, federations are often “inherited,” shaped by the pre-existing institutional structures at the time of their founding. In Canada’s case, these inherited features included a number of agreements, treaties, and constitutional decrees that regulated relations between the English, French, and Indigenous peoples prior to 1867 (Russell, 2017; Simeon, 2013: 287; Smiley, 1987).

Intergovernmental Relations IGR is a deceptively complex concept. On the one hand, it simply refers to the relationship – the interactions – between different governments in a country to share information and make decisions. In this sense, IGR can be compared to diplomacy on the international stage (Simeon, 2006). As Bakvis and Skogstad discuss in the introduction, these relations primarily take place between senior elected and unelected government officials in what is often called “executive federalism.” On the other hand, IGR has various aspects: its tone shifts in line with different ideas about how relations should be carried out (e.g., as conflictual or co-operative); it is conducted in numerous forums (e.g., formal and informal processes and institutions); it takes place vertically (e.g., federal–provincial) and horizontally (e.g., between provinces); it has many different actors (e.g., two or more governments represented through officials, ministers, first ministers, but also non-governmental actors); and it can have many different outcomes (e.g., from nothing, to handshakes, to signed



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agreements, to constitutional amendments). The focus in this chapter is the federal–provincial–territorial dimension of IGR. (See chapter 15 for an assessment of Crown–Indigenous relations.) Perhaps because of this complexity, while there are many different studies of how we conduct IGR in Canada, what explains the different patterns of IGR, and what its impact has been on politics and policy (see, for example, Cameron and Simeon, 2002; Inwood, Johns, and O’Reilly, 2011; Skogstad and Bakvis, chapter 17, in this volume), clear definitions are notoriously difficult to find (Alcantara, Broschek, and Nelles, 2016). Indeed, it is at times hard to see IGR as anything but executive federalism – the two concepts in Canada are often synonymous. Similarly, distinguishing between IGR and multi-level governance can be difficult: whereas IGR generally involves government actors, is more hierarchical, and is relatively closed to outsiders, multi-level governance tends to involve multiple government and non-government actors across a range of levels to develop and implement policy (Alcantara, Broschek, and Nelles, 2016: 39). Nevertheless, building on this long line of work, we can define IGR as the set of norms, institutions, and outputs related to government interaction in a federation (Schertzer, 2015; Schertzer, McDougall, and Skogstad, 2018; Simmons and Graefe, 2013). The norms of IGR refer to the shared ideas and principles about how governments ought to interact. These norms can relate to both how governments should work together (the working rules) and the objectives of interaction (the substantive outcomes). The institutions of IGR refer to the different processes and venues that allow actors to engage with one another. These institutions – the mechanisms of IGR – can be formal or informal, vertical or horizontal, and include two or more governments. The outputs of IGR refer to the results of interaction. These results are shaped by the norms and institutions that informed the method of interaction – varying from little evidence of contact to jointly negotiated agreements and policies. These three elements of IGR help us describe its complexity in practice, explain what drives different approaches to IGR, and assess their impact on Canadian politics and policy.

CANADA’S COMPETING FEDERAL VISIONS In Canada, there are many different federalisms.1 People from across the country hold divergent ideas about the very nature of the federation

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and how it ought to be organized. These points of view reflect competing ideas about how the institutional makeup of the federation should reflect its underlying sociological nature. They are often called “federal visions” or “diametrically opposed concepts, norms and values” about the nature of the federation “based on different underlying definitions of political identity” (Rocher and Smith, 2003: 22). These federal visions are not just theories: they have informed political mobilization throughout Canadian history and still do so today. The institutional features of shared and self-rule in Canada have been shaped by these federal visions over time (Rocher and Smith, 2003: 37; Black, 1975; Schertzer, 2016; Russell, 2017). This relationship between the changing institutional features of the Canadian federation and the competing federalisms points to one of the key attributes of the federal visions: they are both purported descriptions of what the federation is and ideal models of what it ought to be (Black, 1975: 2–3, 7). While there are many different views on the nature of the Canadian federation, there are three main perspectives: the pan-Canadian, provincial equality, and multinational federal visions.

Pan-Canadian Vision The pan-Canadian vision has a long history, going through a number of iterations since Canada’s founding, with Prime Minister Pierre Trudeau – and to a lesser extent his son, Prime Minister Justin Trudeau – embodying the most recent versions (Rocher and Smith, 2003: 34). At the heart of this vision is a view of Canada as one bilingual, multicultural pan-state nation (Rocher and Smith, 2003: 34–7; McRoberts, 2001: 703–7). Building on this view of the sociological foundations of Canada, the subscribers to this vision place particular emphasis on the role of the federal government in the lives of Canadians. The vision thus promotes a centralized federation, where the provinces are administrative territories that are clearly subordinate to the federal government. It also frames mechanisms of shared rule, like the federal cabinet, Senate, and Supreme Court, as national institutions that represent Canada’s pluralism. To support their position, subscribers to the pan-Canadian vision point to the extensive powers granted to the federal government in the Constitution Act, 1867 (particularly unlimited taxing and spending powers and the reserve and disallowance powers). They also point to



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the process of patriating, and the substance of, the Constitution Act, 1982 and the defeat of the Meech Lake and Charlottetown Accords as demonstrating the power of the perspective (Rocher and Smith, 2003: 34–7). Today, this vision is most clearly expressed through support for Canada-wide programs such as universal healthcare and Prime Minister Justin Trudeau’s national carbon tax.

Provincial Equality Vision The provincial equality vision also has roots in the nineteenth century, stressing that Canada is the result of a “compact” among four autonomous colonies in 1867 (Rocher and Smith, 2003: 23; Russell, 2004: 48–52). This vision frames the provinces as the primary political community of belonging. Its subscribers thus see the Canadian polity as a collection of provincial identities – with the Canadian nation being based upon recognition of the equal diversity of its constitutive elements (Rocher and Smith, 2003: 24–6). This view of political identity informs a view of the federal government as the sum of its provincial parts. From this perspective, the federation should be decentralized, with an equal distribution of powers and status to provinces, since the original compact of the federation is seen as taking place between equal partners (Rocher and Smith, 2003: 23–6). In a related manner, the institutions of shared rule in Ottawa are understood from this perspective as venues to equally represent the regional diversity of the country. The supporters of this vision point to the political process of adopting the Constitution Act, 1867 (e.g., framing this as a compact between four equal partners), and the subsequent provincial rights movement following Confederation as evidence of its historical validity (Russell, 2004: chap. 4). The promoters of the provincial equality model also reference the more recent unanimity clauses in the constitutional amending formula, the Federal–Provincial Internal Trade Agreement (1994), the Social Union Framework (1999), and the Calgary Declaration (1999) as more contemporary examples of the vision’s impact on Canadian federalism (Rocher and Smith, 2003: 25–7). Today, the provincial equality vision generally is expressed through resistance to the idea that Quebec is distinct among the provinces, and calls (often from those in the western provinces) for fairness in how federal programs like equalization and program funding are rolled out.

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Multinational Vision The multinational vision originally stressed the binational character of Canada as a key driver for establishing a federal system of government. The Anglo-Franco dynamic remains a key aspect of Canadian politics – with the two solitudes still a powerful idea that influences both the practice and the study of politics; however, over time, this perspective has moved beyond an exclusive focus on Quebec and the Rest of Canada to incorporate Indigenous peoples (Rocher and Smith, 2003: 28–33; McRoberts, 2001; Russell, 2017). The core of this vision is that the Canadian federation was the result of a compact among three founding peoples, which continues to define the core elements of Canada as three separate sociological nations: English Canada, the Québécois, and Indigenous peoples (Russell, 2017; Resnick, 1994; Schertzer and Woods, 2011). From this view of the sociological underpinnings of Canada, the multinational vision sees subnational jurisdictions as either ethno-national (Quebec, Nunavut, and Indigenous self-governing communities) or territorial/ administrative units (the remaining provinces) (Kymlicka, 1998: chap. 10). Because of this variety in the basis of the subnational units – and because the majority of provinces are territorially based – the subscribers to this vision accept that power can and should be distributed asymmetrically between units (Kymlicka, 1998: 139; McRoberts, 2001: 711). In a related manner, the view that the federation resulted from a compact among multiple national groups leads subscribers to ideally see the institutions of shared rule in the federal government as venues to protect and represent the interests of these national minority communities. The promoters of the binational, now multinational, vision often point to the federation as a compromise between anglophones and francophones as the foundation for its validity. They cite, for example, the Great Coalition between anglophone and francophone leaders in the Province of Canada and the implementation of federalism to accommodate the francophone nation (Russell, 2004: 18–33). Further evidence is the practice of a Quebec “veto” over the rounds of constitutional negotiation from “Fulton-Favreau” to “Victoria” in the 1960s and 1970s (Russell, 2004: chap. 6). Central to this vision is the emergence of asymmetrical arrangements for Quebec in the Canadian federation, particularly in areas such as immigration policy (see chapter 13). Multinationalists also draw attention to a number of more recent developments to argue



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that their model ought to be the governing paradigm for contemporary federal design in Canada. Notably, they highlight the rise of Indigenous nationalism and the Assembly of First Nations in the mid-twentieth century in response to assimilationist policies. They also reference the central government’s move towards recognition of national diversity as a basis for asymmetry from the 1990s: examples are the Meech Lake and Charlottetown Accords, the 2004 first ministers’ meeting on the Future of Health Care, and the recognition of Quebec as a distinct society through motions in Parliament in 1999 and as a nation in 2006. Prime Minister Justin Trudeau’s consistent adoption of a nation-to-nation framing of the relationship between Canada and Indigenous peoples has further solidified this vision of the federation. While these three federal visions capture important differences in how people understand the nature of the federation, nuance is lost when we create taxonomies like this one. For example, there are other important perspectives on the federation. Rocher and Smith (2003) have argued that a fourth federal vision – a rights-based vision – emphasizes how the Charter of Rights and Freedoms has undercut the importance of provincial identities and governments, creating a single political community of “Charter Canadians” that primarily associates with the federal government. Similarly, while people may accept that Canada comprises multiple national communities, they do not always then advocate or accept that the federation should be decentralized and allow for asymmetrical powers and responsibilities. Prime Minister Justin Trudeau has been a strong supporter of a nation-to-nation relationship with Indigenous peoples, while also implementing several clearly pan-Canadian environmental and social policies that have centralized elements of the federation. Nevertheless, these three visions usefully aggregate the main competing waypoints for how people across Canada and the actors within the system understand what the federation is and what it ought to be. This complexity in how people view the federation – both its underlying sociological foundations and its institutional structure – is an important factor shaping IGR in Canada. It is certainly not the only factor. There are many things that impact the dynamics of IGR: the party–political affiliation and ideological stance of the political actors involved (see chapters 6 and 14), legacies from past decisions and conflicts, the importance of the policy file to a particular government’s mandate and electoral prospects, and the material costs and implications for different policy options, to name

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only a few. But the underlying ideas that the public and political actors hold about the nature of the federation are among the most important of these factors, for two reasons. First, the three federal visions outlined here represent diametrically opposed views on the very social foundations of Canada and what is expected from its federal institutions. Throughout Canadian history, political actors holding these opposing positions have clashed when discussing, debating, and negotiating key policies and changes to the federation. These opposing positions and the related conflict have necessitated considerable IGR and driven how IGR took place. They were at the heart of the long-running conflict preceding and following the 1982 constitutional amendments. Second, when political actors across federal and provincial/territorial governments share similar views on the nature of the federation, they are more likely to engage in productive IGR and work together towards some shared policy goal. For example, a shared vision for universal healthcare and a social safety net was central to the establishment of the welfare state in Canada (see chapters 11 and 12 in this volume). Regardless of whether IGR is more conflictual or co-operative, these underlying ideas about the nature of the federation shape relations. To better understand these shifts in IGR, it helps to look at how relations have changed over time in Canada.

THE SHIFTING NATURE OF IGR IN CANADA: THE TURN TOWARD COLLABORATION AND THE INCREASINGLY CONTINGENT NATURE OF RELATIONS IGR is one of the central pillars of Canadian government (Simeon and Nugent, 2012: 59).2 The nature and tenor of IGR between federal, provincial, and territorial governments – how it is conducted and what it achieves – has shifted considerably over time. One of the central themes of the work on Canadian IGR is that there are few formal, constitutionally entrenched institutions that govern the relationship between the federal and provincial governments (Bolleyer, 2009: chap. 3). Accordingly, IGR in Canada has been shaped to an extent by the willingness of the federal, provincial, municipal, and Indigenous actors to engage one another and the strategic calculations of those involved (Cameron and Simeon, 2002: 65). Clearly the ideological and partisan factors of



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the actors involved play into this willingness (see chapters 6 and 14). At the same time, this continuity in the foundations of IGR in Canada (a relative lack of constitutionalized IGR and a history of relations shaped by the willingness of actors to engage one another) has been punctuated at points by significant changes in how IGR is practiced and what it has achieved (Broschek, 2010). Providing a taxonomy of these periods of continuity and change has been a major preoccupation for Canadian political scientists (see Simeon, 2002; Cameron and Simeon, 2002; Bickerton, 2010). As the next section shows, drawing clear lines between periods of IGR is difficult. The vast scope of policy fields where the federal, provincial, municipal, and Indigenous governments interact means that there is no one method or tenor to relations, and the impact of previous decisions and negotiations means that broader trends and the specific desires of key actors (like prime ministers) do not always deliver a shift in how IGR takes place (Bickerton, 2010; Skogstad and Bakvis, chapter 17, in this volume). Despite this fluidity, there is also a general consensus that there are a few identifiable periods where the overall tenor and approach to IGR has shifted throughout Canadian history (see Simeon and Robinson, 2004; chapter 1 in this volume). We can add an additional layer of specificity to this classification of periods by elaborating upon the different norms, institutions, and outcomes of IGR that defined the relationship (see Table 7.1). In chapter 1 of this volume, Bakvis and Skogstad provide an overview of the first four periods of IGR noted above. We can add a fifth period to this list – one where the tenor of relations is more contingent on a number of factors. This most recent period, from roughly 2006 forward, has seen the established norms and processes of collaborative IGR challenged in different ways from both federal and provincial actors, resulting in oscillations between collaborative and conflictual relations in very short spans of time. Whether this period is a completely new era of IGR, or a shift in how collaborative IGR is more contingent on the views of the actors carrying out relations, remains to be seen. But, given the changes that we have seen in recent IGR under prime ministers Harper and Trudeau, it is worth carving this period out from what came before to reflect on this point. Indeed, as the next section discusses, despite their opposing approaches to IGR, both Harper and Trudeau faced a complex set of factors that pulled them towards an approach that was more contingent on the legacies of past agreements, competing ideas

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Contingent

Collaborative

Conflictual

Co-operative

Classical

Approach

Established views on shared and exclusive roles and methods of working together increasingly challenged by various factors (electoral, ideological, legacies, issue and policy area, etc.)

Independent orders exercising authority within areas of exclusive (“watertight”) jurisdiction Increasing coordination given recognition of overlapping jurisdiction in select areas (social union), but federal government retains a leadership role Significant interaction driven by mandates to protect interests of competing constituencies (national/provincial/Indigenous) Increasing multilateral negotiations recognizing equal, interdependent orders with shared responsibility in many policy areas

Norms (Procedural and Substantive)

Multilateral, bilateral, or unilateral IGR reflects understanding of ideal working rules and substantive view of respective roles in a policy field (or lack of shared views)

Multilateral, co-chaired first ministers’/ministerial/ officials’ forums

First ministers’ meetings; Supreme Court cases

First ministers’ and ministerial meetings; federal spending power key to establishing national programs

Constitution Act, 1867 (s. 91/92); Court cases (JCPC)

Institutions

Non-constitutional, framework agreements and vision statements with associated bilateral agreements for each province (across a range of policy sectors) Multilateral or bilateral (nonconstitutional) agreements across many policy areas; increasing federal and provincial unilateral action on key files

Supreme Court decisions and constitutional amendment – Constitution Act, 1982

Formal agreements and constitutional amendment – building social union through expansion of welfare state

Expanding provincial autonomy in areas like property and civil rights (via JCPC)

Outputs

Table 7.1.  Overview of Dominant Approaches to IGR in Canada (1867 to present)

2006–

1990s–2006

1970s–1980s

1940s–1960s

1867–1930s

Period



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about the nature of federalism, and the related willingness of others to accept their approach. However, before turning to this recent IGR and how the complexity of Canadian federalism has shaped relations, it is helpful to first discuss the collaborative model. Most argue this approach has been the dominant one since the mid-1990s, and so elaborating on its core attributes here can help us assess whether we are seeing a shift away from this approach and how it has shaped recent IGR. Collaborative IGR is largely defined by a set of shared norms on how to carry out IGR and related perspectives on the nature of the federation. Underpinning this approach is thus a shared view of the nature of the federation that accepts the two orders of government as joint owners over a number of policy fields (Cameron and Simeon, 2002: 48, 54; Lazar, 2006: 28–9). Similarly, while the federal and provincial governments may not be equal in all respects, those that adopt this approach largely accept that even where governments technically hold exclusive responsibility for a policy area under the Constitution, actions they take will undoubtedly affect the interest of the other order. These underlying views of the nature of the federation inform a set of working rules that stress that intergovernmental co-operation is vital to effective and legitimate policy development. These procedural norms emphasize the need to include other orders of government in discussing the goals and designs of policies that may impact their interests – often also seeking input from stakeholders, interest groups, and non-governmental organizations that also may be impacted (Cameron and Simeon, 2002: 64). The institutions and processes of collaborative IGR reflect these norms: multilateral forums that include the federal government and all provinces (sometimes with the participation of Quebec, though not always) are a key venue for this form of IGR. These forums tend to have a federal– provincial co-chair model and a mandate to carry out joint policy development and decision-making through free and fair negotiations (Cameron and Simeon, 2002: 61–3). Outcomes indicative of the collaborative approach reflect these underlying norms and institutional process (Simmons and Graefe, 2013: 30–2), showing a demonstrable commitment to reaching agreements that balance federal (national) objectives with the more specific (regional) interests of the provinces involved (Schertzer, 2015). These outcomes thus often include some national vision or policy goal that all governments agree to, which is then tailored to the interests of each province through subsequent bilateral agreements.

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There are many detailed accounts of the shift towards a more collaborative approach to IGR. They cite examples starting in the mid-1990s that demonstrated a shift towards norms of shared federal–provincial ownership, the adoption of multilateral institutions, and outputs that sought to balance federal and provincial interests in a number of policy sectors. In brief, collaborative IGR is generally seen as emerging with the Agreement on Internal Trade (AIT) in 1994. This first milestone was followed by an extension of the approach to other key policy sectors: the labour market, with active supports in the form of Labour Market Development Agreements in 1996; international trade, with increasing involvement of the provinces in negotiations from 1995 forward (Skogstad, 2008); the environment, with the Canada-Wide Accord on Environmental Harmonization in 1998; the Social Union Framework Agreement (SUFA) in 1999; healthcare, with an agreement on a common federal–provincial vision in 2000, followed by the Health Care Accord in 2004; and the establishment of the interprovincial Council of the Federation in 2003 (see Cameron and Simeon, 2002: 55–64). Whether IGR in this period was truly collaborative is debated (Simmons and Graefe, 2013). For some, the changes to IGR starting in the mid-1990s were less about collaboration and more about the federal government downloading responsibilities to the provinces to cut its own budget (for an overview, see Brown, Bakvis, and Baier, 2019: 127–34). However, a wider view shows a clear change from the more conflictual relations of the 1970s and 1980s (Cameron and Simeon, 2002). And, as argued elsewhere and the next section reinforces, even if relations are predominately “collaborative,” at any given time different approaches to IGR are clearly observable across the wide set of policy fields wherein governments engage one another (Skogstad and Bakvis, chapter 17, in this volume; Schertzer, McDougall, and Skogstad, 2018).

RECENT IGR UNDER HARPER AND TRUDEAU: INCREASINGLY CONTINGENT ON COMPETING IDEAS AND LEGACIES OF PAST APPROACHES Collaborative IGR, firmly established by the early 2000s as the dominant approach, was explicitly challenged by the election of Prime Minister Harper in 2006. Harper did not share the same views of the federation



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that underpinned previous collaboration: he did not recognize that both orders of government had shared and overlapping jurisdiction across a large number of policy fields, or that multilateral federal–provincial negotiation was required to manage this overlap. Instead, Harper came to power preaching the virtues of a new “open federalism,” which was based on a much different view of the nature of the federation and the roles of both orders of government in the lives of Canadians (Harper, 2005). Open federalism was a doctrine based on respecting the exclusive jurisdiction of the two orders of government, as laid out in the constitutional division of powers (CPC, 2006: 42). The importance of respecting provincial autonomy was central to his view. This recognition took concrete form through a promise to stop employing the federal spending power to encroach on areas of provincial constitutional jurisdiction and to address the fiscal imbalance. This focus on exclusive jurisdiction indicated that open federalism, in Harper’s own words, “is not entirely new,” and in fact shares much with the classical model noted above (Harper, 2004; Banting, 2006: 80). But the view still had a place for intergovernmental interaction. Harper (2005) clearly expressed from the outset that his vision of federalism included “co-operating with the provinces in the exercise of their legitimate constitutional jurisdiction” and facilitating their input into the formulation of federal policy where it affected provincial interests. There was even a promise for a Charter of Open Federalism to help govern intergovernmental co-operation (CPC, 2006), but it never materialized. The more classical approach to IGR at the heart of open federalism was clearly observable in high-profile decisions and policy actions taken by the federal government under Harper’s leadership. It was a central theme – applied in tandem with addressing the fiscal imbalance – in the first two budgets of the Harper era. The 2006 budget documentation laid out a series of principles that sought to establish an economic union that untangled the federal and provincial governments, mainly by pulling back the use of the federal spending power in areas of provincial jurisdiction and promising to transfer funds to allow provinces to fulfill their role in the federation (Harmes, 2007: 420–2). These promises were followed up with reforms to the federal transfers to provinces, moving towards largely unconditional grants and per capita funding models combined with an increase in the equalization program, paired with unilateral changes to healthcare funding in 2011 (Canada, 2007;

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Fox, 2007; Boessenkool and Speer, 2015; Dunn, 2016: 4). Perhaps the clearest signal of Harper’s preference for the more classical approach to IGR was his disdain for public, multilateral meetings with his provincial and territorial counterparts. In stark contrast to past PMs, Harper only held two multilateral first ministers’ meetings during his entire tenure. At the same time, we cannot frame Harper’s time in office as one where the two orders of government worked in isolation from one another, never meeting to discuss policy issues. Indeed, despite Harper’s personal lack of multilateral engagement, he is reported to have had over 250 bilateral (one-on-one) meetings or calls with his provincial counterparts between 2006 and 2012 alone (Dunn, 2016: 8). Perhaps even more telling, multilateral meetings between federal, provincial, and territorial ministers and deputy ministers were also very common during his time in office: there were an average of twenty-two multilateral meetings taking place between federal and provincial ministers each year between 2006 and 2015 (and an average of thirty meetings of deputy ministers) (Dunn, 2016: 9). In several key policy areas multilateral collaboration was actually the primary approach to IGR during Harper’s time in office (Schertzer, McDougall, and Skogstad, 2018). In 2012, for example, the federal and provincial governments established the first-ever common vision for the immigration system, with an associated action plan to deliver on their joint objectives; they followed this up by working closely to significantly reform the selection of economic migrants through the Express Entry system (Schertzer, 2015). Similarly, the federal and provincial governments signed two multilateral framework agreements, with supplementary bilateral agreements for individual provinces, that outlined their shared goals in the agriculture sector (one in 2008 and one in 2013); these agreements built on pre-existing policy goals that were aimed at opening up the agriculture sector to a free-market approach and to clarify how the federal and provincial governments would share the cost of supporting farmers (Skogstad, 2008: chap. 3). And, even in one instance where the federal government abandoned its earlier promises to stay out of provincial jurisdiction and made a unilateral decision to reform funding to support labour market training, multilateral collaboration ended up being a key factor in managing federal–provincial conflict. In 2013 the federal government announced that it was going to unilaterally change how it would support the retraining of workers



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who lost their jobs: it wanted to shift away from transferring money to provinces to deliver labour market training services to a model that would give support directly to workers (with employers, the federal and provincial governments each splitting the cost for a new Canada Job Grant) (Hayes, 2014). Traditionally, provinces have taken the lead role in retraining workers, and this announcement caught them off guard. They mobilized and used long-standing multilateral IGR institutions to push the federal government to back off from its initial position and to drop its plan. The result was a multilateral framework agreement that ultimately recognized the lead role of the provinces in the policy area. Much like Harper before him, Justin Trudeau came to power in 2015 seeking to break from how his predecessor conducted IGR. Unlike Harper, his stated preference was to collaborate with provinces, territories, Indigenous peoples, and municipalities. Coordinated federal– provincial action was central to many of the promises in the 2015 Liberal platform (e.g., action on climate change, investing in infrastructure and public transport, funding healthcare and prescription drugs). In the eighty-eight-page platform, provinces and territories were mentioned over fifty times (Liberal Party of Canada, 2015) – most of the time with qualifiers such as “work with” or “collaborate” (Dunn, 2016). In this respect, one of the central themes of Trudeau’s campaign was to avoid unilateral action and instead develop public policy with provinces and territories as partners. Similarly, Trudeau was clear that he wanted a more collaborative relationship with Indigenous peoples (see chapter 15). The 2015 Liberal platform promised a “renewed relationship” with Indigenous peoples and to engage them in a “nation-to-nation” process of negotiation on a host of issues like housing, health, and education; it also committed to an inquiry into missing and murdered Indigenous women and girls and to implement the recommendations from the Truth and Reconciliation Commission (Liberal Party of Canada, 2015: 46–8). The adoption of a nation-to-nation framing for the Indigenous–Canada relationship was a particularly noteworthy break from previous federal leaders: it signalled that Trudeau was open to working with Indigenous peoples as equals “based on a recognition of rights, respect, co-operation and partnership” (Trudeau, 2015b; Laforest and Dubois, 2017). These early signals indicated that Trudeau’s vision of federalism diverged significantly from Harper. Trudeau promised to govern in a

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way that respected “the spirit of federalism” (Trudeau, 2015a). His early discourse gave an impression that he saw the federation as a system where the provinces, territories, Indigenous peoples, and municipalities were all partners with the federal government (Laforest and Dubois, 2017). The upshot of this view is that such a partnership requires collaboration to achieve meaningful progress on many critical files. After winning power, Trudeau’s first year in office reinforced that the process and substance of IGR would largely follow a collaborative model. His mandate letters for the federal cabinet directed ministers to work closely and collaboratively with the provinces and Indigenous peoples (see Dunn, 2016). He held three first ministers’ meetings within a twelve-month period, even inviting premiers to join him at the international Paris Climate Conference. A number of multilaterally negotiated federal–provincial–territorial agreements were signed. They included a plan in June 2016 to enhance benefits under the Canada Pension Plan. In March 2016 the Vancouver Declaration was signed, and in December 2016 the Pan-Canadian Framework on Clean Growth and Climate Change to reduce greenhouse gas emissions was signed by all provinces and territories except Saskatchewan (see chapter 14 in this volume). These developments demonstrated adherence to a view of the federation where the two orders were equal partners, using multilateral institutions of IGR to discuss and negotiate policies that sought to balance national objectives with regional needs. However, looking beyond the headlines and considering the entire mandate of Trudeau’s first term as prime minster shows that IGR was not all sunny ways: despite the rhetoric and early signs, his vision of federalism included a strong federal role that made it difficult to sustain a collaborative relationship with provinces and Indigenous peoples. Across the first four years of Trudeau’s time in office there was considerable conflict with provinces and unilateral federal action. This conflictual IGR was most evident on the energy and environment file. The initial multilateral approach where provinces would lead by levy­ ing a carbon tax in line with national targets crumbled. Five provinces (Alberta, Saskatchewan, Manitoba, Ontario, and New Brunswick) pulled out of the original deal, and in response the federal government imposed its own levy in those provinces. Ontario and Saskatchewan challenged the constitutionality of a federally imposed carbon tax in court, with the support of other provinces. Some of these provinces began to shift their



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position following the 2019 federal election – New Brunswick Premier Blaine Higgs indicated the province would adopt a carbon pricing plan, and Alberta announced a revised carbon pricing plan – but the court challenges continued. Nevertheless, the initial multilateral consensus of the Vancouver Declaration on the roles and responsibilities of the orders of government was replaced by conflict over who has the right to set the price on carbon and unilateral federal action to enforce a national objective against the wishes of many provinces. Similar shifts from a seeming consensus on the roles and responsibilities of the two orders towards greater conflict and unilateralism marked the 2015–19 period. This shift is evident in the revitalization of the federal spending power, for example. In healthcare funding, rather than follow the model of the multilaterally negotiated framework agreement of 2004 under Prime Minister Martin, Trudeau’s government opted to increase funding beyond the main transfer through a series of bilaterally negotiated agreements that abided by nationally established standards to reinforce a federal role in the field (Marchildon, 2016; Canada, 2017; see also chapter 12 in this volume). Through its infrastructure plan, the federal government is seeking to shape provincial spending to better align with “national priorities,” while also creating a de facto urban policy that bypasses them to focus on its key areas of concern (notably public transit and green infrastructure) (Canada, 2018; Bradford, 2018). These actions have been met with considerable resistance by many provinces. The federal–provincial conflict that has materialized over Trudeau’s mandate could be easily attributed to partisan politics. When Trudeau was elected in 2015, Liberal premiers governed in seven provinces, and there was only one strongly conservative premier in office (Brad Wall in Saskatchewan). By 2019, six conservative premiers were elected, only three Liberal premiers remained, and there was one NDP premier. These more conservative premiers picked a number of public fights with Trudeau, including on the carbon tax (Ford in Ontario), the need to approve the federally owned Trans Mountain pipeline and to reform equalization (Kenney in Alberta), and the management of asylum seekers and immigration (Legault in Quebec and Ford in Ontario), among other topics. (For further discussion of these intergovernmental conflicts, see chapter 14 on the carbon tax, chapter 10 on equalization, and chapter 13 on immigration.)

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However, the conflictual IGR and unilateral federal action that marked the later half of Trudeau’s first four years in office were about more than just partisan politics and ideological divides. The conflicts also reflected an underlying disagreement between the key actors on how the federation should function and the federal government’s role within it. Trudeau’s approach to federalism always included a strong federal government. The flexibility given to provinces to implement their own carbon tax was premised on a federal backstop from the beginning. The promised increases in healthcare and infrastructure spending were aimed at reinforcing national priorities. So, while there were early indications of wanting to work with the provinces to realize their priorities, Trudeau’s federal government was also seeking to do it on its own terms. Over time the federal view became difficult to reconcile with the views of provincial governments and actors on how things like regulating the environment, funding healthcare, and building infrastructure should function in their jurisdictions. And, nearer the end of Trudeau’s first term, powerful actors (Jason Kenney, Doug Ford, and François Legault) with clear views of their own provincial roles emerged and increasingly challenged the prime minister.

ASSESSING THE PERFORMANCE, EFFECTIVENESS, AND LEGITIMACY OF RECENT IGR The overview of past and recent IGR in this chapter highlights the complexity of Canadian federalism. It shows us that there are multiple, competing ideas about how the federation should be organized, and how it should function. It also shows how the dominant approaches to conducting IGR in Canada have shifted over time – from an initial period of minimal interaction, to co-operation, to conflict, to collaboration, and more recently to this collaboration being increasingly contingent on the actors involved sharing similar views of their roles in the federation. Despite these large-scale shifts in the broader dynamics of IGR, when we consider more recent relations we can also see how at any given time multiple approaches to IGR are taking place simultaneously. Despite the desire of Prime Minister Harper to reduce intergovernmental contact in line with his doctrine of open federalism, we can also find evidence of collaboration in various policy fields. Similarly, despite Prime Minister



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Trudeau’s desire for collaborative relations with the provinces and Indigenous peoples, his first four years in office were marked by considerable and increasing conflict. These different but sometimes simultaneous facets of Canadian federalism and IGR mean that how we assess their performance, effectiveness, and legitimacy often depends on where we sit in the federation, our own ideas about the nature of Canadian federalism, and how we think IGR ought to be conducted. From this position, a few insights emerge about IGR during the tenure of Prime Minister Harper. On first blush, we can assess Harper’s approach to IGR as clearly privileging performance and effectiveness over legitimacy. His preference was for the federal and provincial governments to stick to their own lanes, reducing contact to make things work. He was also not afraid to use unilateral action to advance policy objectives. The unilateral changes to healthcare funding and equalization and attempts to reform key institutions like the Senate exemplified this more classical approach to IGR. But these actions often came at the cost of regular engagement with provinces, territories, Indigenous peoples, and municipalities when developing and implementing policy. For some, the legitimacy generated from co-operation and negotiation is more important than achieving results. Well-performing and effective IGR is sometimes as much about the process as the outcome. But, as noted above, there were also clear examples of multilateral collaboration on important files like immigration, agriculture, and the labour market during Harper’s tenure. This leaves a decidedly mixed assessment of IGR over this period: there were policy areas where IGR was marked by unilateralism and little engagement, and others where past approaches and converging ideas about the roles and responsibilities of the governments led to significant multilateral negotiation. IGR under Harper could thus be characterized as “not necessarily collaboration, but collaboration if necessary.” In contrast, during the first four years of Prime Minister Justin Trudeau IGR could be seen as the polar opposite in many respects. Given his early rhetoric and actions, one could be tempted to say that IGR during Trudeau privileged legitimacy over performance and effectiveness. Trudeau was clear and provided early examples that his government would work closely with the provinces, territories, Indigenous peoples, and municipalities: he would govern by – or even as – consultation. Working with provinces to negotiate multilateral agreements on key files like public pensions

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and the environment seemed to mark a considerable break from the decade under Harper. But, despite the legitimacy such negotiations can generate, they also make it difficult to come to agreements given the many different players at the table with sometimes competing interests. Over time, these tensions and the differing ideas among the key players in the federation on their respective roles led to increasing conflict. The crumbling of a federal–provincial consensus on the carbon taxing scheme, criticism for the lack of progress on advancing reconciliation with Indigenous peoples, disagreement over pipelines, conflict over the approach to funding healthcare, and the management of the asylum seeker file are only a few examples of the shifting tide of IGR between 2015 and 2019. Again, this leads to a mixed assessment of IGR under Trudeau: early signs that multilateral negotiation could perform well to produce both effective and legitimate policy gave way to conflict, and examples of unilateral action through the federal taxing and spending powers produced policies challenged by many of the provinces. In this respect, IGR under Trudeau has largely been marked as “collaboration, but with significant strings attached.” This multifaceted assessment of recent relations leads to two broader insights into IGR in Canada. The first is that prime ministers and other actors do not always get the IGR they want. This has been noted before (see Bickerton, 2010), but the last fifteen years have only reinforced this point. The complexity of the Canadian federation – the differing interests of the players involved, the competing ideas of their respective roles and how IGR should be conducted, combined with a long legacy of past relations – shapes how IGR is carried out. It also means that at any given time, despite the preferences of powerful actors, relations can take many different forms, from limited, to conflictual, to highly collaborative. Today we find ourselves in a period where the tenor of relations and the ability to collaborate are highly contingent on a complex set of factors, with agreement among the actors involved on their roles and how to work together being particularly critical. The second insight is that the nature of Canadian federalism creates a paradox. The complexity of Canada’s social and political landscape, combined with the lack of formal institutions of IGR and relatively weak shared rule mechanisms, make IGR crucial to managing this complexity. At the same time, these conditions also make IGR extremely difficult. The Canadian federation needs IGR, but its inherent complexity makes carrying out



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IGR in a way that performs well and is simultaneously effective and legitimate a challenge.

NOTES 1 This section draws from Schertzer (2016: chap. 1). 2 This section draws from elements of Schertzer (2018); Schertzer, McDougall, and Skogstad (2018). GLOSSARY multi-level governance  Refers to the involvement of not just multiple governments but also non-governmental actors in the development and implementation of policy. multinational vision of the Canadian federation  Views the Canadian federation as a compact among three separate founding, sociological nations: English Canada, the Québécois, and Indigenous peoples. The subscribers to this vision accept that power can and should be distributed asymmetrically between units. The institutions of shared rule in the federal government are seen as venues to protect and represent the interests of the national minority communities. norms  Shared ideas and principles that prescribe particular activities or ways of organizing society. They are often said to have both a regulating and a regularizing effect on the behaviour of people. open federalism  Coined by Prime Minister Harper to describe his approach to federalism. It entailed a commitment to respect the exclusive constitutional jurisdiction of the provinces, and to avoid use of the federal spending power to encroach on areas of provincial constitutional jurisdiction. Harper stated open federalism did not rule out the Government of Canada co-operating with the provinces and included provincial input into the formulation of federal policy when provincial interests were affected. pan-Canadian vision of the federation  Views Canada as a single bilingual and multicultural nation in which the federal government should play a predominant role in the lives of Canadians. Institutions of shared rule, like the federal cabinet, Senate, and Supreme Court, are viewed as national institutions that represent Canada’s pluralism. provincial equality vision of the federation  Frames the provinces as the primary political community to which Canadians belong, and believes the federation should be decentralized, with provinces having equal power and status. The institutions of shared rule in Ottawa are understood as venues to equally represent the regional diversity of the country.

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Robert Schertzer REFERENCES Ajzenstat, Janet, Paul Romney, Ian Gentles, and William Gairdner, eds. 1999. Canada’s Founding Debates. Toronto: University of Toronto Press. Alcantara, Christopher, Jorg Broschek, and Jen Nelles. 2016. “Rethinking Multilevel Governance as an Instance of Multilevel Politics: A Conceptual Strategy.” Territory, Politics and Governance 4, no. 1: 33–51. https://doi.org /10.1080/21622671.2015.1047897. Banting, Keith. 2006. “Open Federalism and Canada’s Economic and Social Union: Back to the Future?” In Open Federalism: Interpretations, Significance, edited by Keith Banting, 77–86. Kingston, ON: Institute of Intergovernmental Relations. Bickerton, James. 2010. “Deconstructing the New Federalism.” Canadian Political Science Review 4, no. 2–3: 56–72. Bilodeau, Antoine, Stephen White, and Neil Nevitte. 2010. “The Development of Dual Loyalties: Immigrants’ Integration to Canadian Regional Dynamics.” Canadian Journal of Political Science 4, no. 3: 515–44. https:// doi.org/10.1017/S0008423910000600. Black, Edwin R. 1975. Divided Loyalties: Canadian Concepts of Federalism. Montreal: McGill-Queen’s University Press. Boessenkool, Ken, and Sean Speer. 2015. “How Stephen Harper’s Open Federalism Changed Canada for the Better.” Maclean’s, December 2015. Bolleyer, Nicole. 2009. Intergovernmental Cooperation: Rational Choices in Federal Systems and Beyond. Oxford: Oxford University Press. Bradford, Neil. 2018. “A National Urban Policy for Canada? The Implicit Federal Agenda.” 24. Montreal: IRPP Insight. Broschek, Jörg. 2010. “Federalism and Political Change: Canada and Germany in Historical-Institutionalist Perspective.” Canadian Journal of Political Science 43, no. 1: 1–24. https://doi.org/10.1017/S0008423909990023. Brown, Douglas, Herman Bakvis, and Gerald Baier. 2019. Contested Federalism: Certainty and Ambiguity in the Canadian Federation. 2nd ed. Oxford: Oxford University Press. Cameron, David, and Richard Simeon. 2002. “Intergovernmental Relations in Canada: The Emergence of Collaborative Federalism.” Publius: The Journal of Federalism 32, no. 2: 49–72. https://doi.org/10.1093/oxfordjournals. pubjof.a004947. Canada. 2007. “Restoring Fiscal Balance for a Stronger Federation.” Ottawa: Government of Canada. ———. 2017. “A Common Statement on Principles on Shared Health Priorities.” Ottawa: Government of Canada. ———. 2018. “Investing in Canada: Canada’s Long-Term Infrastructure Plan.” Ottawa: Government of Canada. Citizenship and Immigration Canada (CIC). 2006. “Facts and Figures 2006.” Ottawa: Government of Canada.



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Cochrane, Christopher, and Andrea Perrella. 2012. “Regions, Regionalism and Regional Differences in Canada.” Canadian Journal of Political Science 45, no. 4: 829–53. https://doi.org/10.1017/S0008423912001011. Conservative Party of Canada (CPC). 2006. “Stand Up For Canada.” Ottawa. Dunn, Christopher. 2016. “Harper without Jeers, Trudeau without Cheers: Assessing 10 Years of Intergovernmental Relations.” 8. Montreal: IRPP Insight. Elazar, Daniel. 1987. Exploring Federations. Tuscaloosa: University of Alabama Press. Elkins, David, and Richard Simeon. 1980. Small Worlds: Provinces and Parties in Canadian Political Life. Toronto: Methuen. Fox, Graham. 2007. “Harper’s Open Federalism: From Fiscal Imbalance to Effective Collaborative Management of the Federation.” Policy Options 28. Montreal. Harmes, Adam. 2007. “The Political Economy of Open Federalism.” Canadian Journal of Political Science 40, no. 2: 417–37. https://doi.org/10.1017 /S0008423907070114. Harper, Stephen. 2004. “My Plan for Open Federalism.” National Post, October 27, 2004. ———. 2005. “Yes, Mr. Martin, There Is a Better Approach to Federalism.” Globe and Mail, December 22, 2005. Hayes, Brigid. 2014. “What You Need to Know about the Canada Job Fund.” Caledon Commentary. Ottawa. Henderson, Ailsa. 2004. “Regional Political Cultures in Canada.” Canadian Journal of Political Science 37, no. 3: 595–615. https://doi.org/10.1017 /S0008423904030707. Hueglin, Thomas, and Alan Fenna. 2006. Comparative Federalism: A Systematic Inquiry. Peterborough, ON: Broadview. Immigration, Refugrees and Citizenship Canada (IRCC). 2016. “Facts and Figures 2016.” Ottawa: Government of Canada. Inwood, Gregory, Carolyn Johns, and Patricia O’Reilly. 2011. Intergovernmental Policy Capacity: Inside the Worlds of Finance, Enviorment, Trade and Health. Montreal: McGill-Queen’s University Press. King, Preston. 1982. Federalism and Federation. London: Croom Helm. Kymlicka, Will. 1998. Finding Our Way: Rethinking Ethnocultural Relations in Canada. Toronto: Oxford University Press. Laforest, Guy, and Janique Dubois. 2017. “Justin Trudeau and Reconciliatory Federalism.” Policy Options, June 19, 2017. Lazar, Harvey. 2006. “The Intergovernmental Dimensions of the Social Union: A Sectoral Analysis.” Canadian Public Administration 49, no. 1: 23–45. https://doi.org/10.1111/j.1754-7121.2006.tb02016.x. Liberal Party of Canada (LPC). 2015. “A New Plan for a Strong Middle Class.” Ottawa. Marchildon, Gregory. 2016. “Bilateral Health Agreements between the Federal and Provincial/Territorial Governments in Canada.” 13. Montreal: IRPP Insight.

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and Grace Skogstad, 59–78. 3rd ed. Don Mills, ON: Oxford University Press. Simeon, Richard, and Ian Robinson. 2004. “The Dynamics of Canadian Federalism.” In Canadian Politics, edited by James Bickerton and Alain Gagnon, 101–26. Peterborough, ON: Broadview. Simmons, Julie, and Peter Graefe. 2013. “Assessing the Collaboration That Was Collaborative Federalism 1996–2006.” Canadian Political Science Review 27, no. 1: 25–36. Skogstad, Grace. 2008. “Canadian Federalism, International Trade and Regional Market Integration in an Era of Complex Sovereignty.” In Canadian Federalism: Performance, Effectiveness and Legitimacy, edited by Herman Bakvis and Grace Skogstad, 223–45. 2nd ed. Toronto: Oxford University Press. Smiley, Donald V. 1987. The Federal Condition in Canada. Toronto: McGraw-Hill Ryerson. Trudeau, Justin. 2015a. “Letter to the Premier of Quebec from Liberal Party of Canada Leader Justin Trudeau.” Ottawa. ———. 2015b. “Statement by the Prime Minister of Canada Following the Swearing-in of the 29th Ministry.” Ottawa. Watts, Ronald L. 1998. “Federalism, Federal Political Systems, and Federations.” Annual Review of Political Science 1, no. 1: 117–37. https:// doi.org/10.1146/annurev.polisci.1.1.117. ———. 2008. Comparing Federal Systems. 3rd ed. Kingston, ON: McGill-Queen’s University Press. Wiseman, Nelson. 2007. In Search of Canadian Political Culture. Vancouver: University of British Columbia Press.

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CHAPTER EIGHT

Federalism and Canada’s Economic Union Grace Skogstad and Matt Wilder

Economic nation-building was a major rationale for Confederation. Faced with the task of forging an economic union out of different regional economies, there is ample evidence that Canadian governments have succeeded in creating a functioning economic union in Canada. Canadians share a common currency and monetary policy, as well as common policies with respect to external economic relations. Other policies that significantly affect the economic union, such as taxation, are coordinated across the two orders of government. Nonetheless, Canada’s internal economic union remains incomplete insofar as uncoordinated federal and provincial government policies impede the interprovincial circulation of goods, labour, capital, and services. There are also chronic complaints in some provincial quarters about the willingness of the federal government to balance fairly the competing interests of different provincial and regional economies. Moreover, the increasing integration of provincial/regional economies into North American and global supply chains raises questions about the capacity of Canadian governments to pursue made-in-Canada national and regional economic development policies. The objective of this chapter is to address the role of Canada’s federal system in maintaining and enhancing Canada’s economic union. It is important at the outset to emphasize that Canada’s federal system is one factor among others that affects the nature of Canada’s economic union. Moreover, the effects of federal institutions and practices interact

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with other factors, most notably the regional structure of the Canadian economy. If it is thus difficult to isolate the independent effects of Canada’s federal system on the nature of the Canadian economic union, it is nonetheless still possible to offer some insights into how the constitutional division of powers and their exercise by governments within Canada’s federation have shaped the performance, effectiveness, and legitimacy of Canada’s economic union. The first section of the chapter begins by distinguishing among different types of economic associations. It then describes the allocation of constitutional powers in Canada with respect to the construction and functioning of Canada’s economic union. This section documents the sole jurisdiction of the government of Canada to establish a customs union and to exercise the most important powers with respect to creating a monetary union. It also clarifies that both orders of government have important and overlapping jurisdictional levers when it comes to promoting individual firms, economic sectors, and provincial/regional economic development goals. The second section of the chapter provides an historical overview of how governments have exercised the jurisdictional powers and fiscal and regulatory policy instruments to pursue economic development goals. These analyses demarcate governments’ shifting roles over time: a predominant role for the Canadian government in the economic union through to the 1960s; intervention by both federal and provincial governments during the 1970s through to the mid-1980s; a transition in the early 1990s away from direct state intervention to assisting firms and industries in the market economy; and an emphasis on government support under the auspices of cultivating the “knowledge economy” from the late 1990s to the present. This second section affirms that the division of powers in Canada’s Constitution, in interaction with the regional structure of Canada’s economy, has played an important role in the functioning of Canada’s economic union. Distinct provincial economic structures have tested the capacity of the federal government to devise economic policies that are perceived as fair by all provinces/regions. Lacking intrastate forums within the government of Canada for representing their regional development ambitions, provinces have been empowered by Canada’s federal Constitution to act on their perceptions of unfair treatment by Ottawa. Since the 1960s, several provinces have exercised their considerable jurisdiction to develop



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their provincial economies to the benefit of local industries at the expense of their neighbouring provinces. Although the resulting disruptions to the internal market have created tensions within the federation, governments have lacked incentives to minimize interprovincial economic barriers, including by harmonizing their economic development policies. In recent decades, however, structural shifts in the form of economic globalization and the emergence of the knowledge-based economy appear to have created incentives for Canadian federal governments to reorient their economic development policies towards more regionally neutral policies. These same external pressures also appear to be giving provinces incentives to commit to eliminating or harmonizing those of their policies that impede the full functioning of the Canadian internal economic union. The third section of the chapter summarizes and offers conclusions on the extent to which federalism is implicated in the performance, effectiveness, and legitimacy of the Canadian economic union. In terms of performance, the general pattern is one of weak or non-existent coordination of governmental economic policies, even while there are examples of intergovernmental co-operation and collaboration. In terms of effectiveness, objective economic indicators indicate a well-functioning albeit incomplete economic union. Just how serious interprovincial barriers to the internal market are is a matter of conflicting evidence and debate. Assessments of the legitimacy of federal economic development policies are, nonetheless, marred by perceptions, especially in western Canada, of discriminatory treatment.

CANADA’S CONSTITUTION AND THE CANADIAN ECONOMIC UNION To determine the nature of Canada’s economic union, and how it has been affected by Canada’s federal system, it is useful to distinguish different forms of economic association. A customs union exists, such as in Canada, when the entities within it adopt common policies with respect to external economic relations; for example, common tariffs on imports. A common market, such as the European Union (EU), is an association within which goods, capital, services, and labour move freely, without being subject to fiscal or regulatory barriers posed by constituent

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members. A common market that has a single currency and a central bank to manage the currency is described as a monetary union; the member states of the EU that constitute the Eurozone are an example. As distinguished from a common market, a complete economic union entails deliberate efforts to transform separate economic entities into a single economic space via common or harmonized policies affecting the development and management of the economy. In addition to policies with respect to external and internal trade, a number of other policies are also thereby implicated in the creation and preservation of an economic union. They include monetary policy; fiscal policies (taxation, fiscal transfers); infrastructural policies such as for transportation and communications; financial services and securities regulation; and sectoral policies such as for industry, agriculture, natural resource, and energy development (Canada, 1980; Norrie, Simeon, and Krasnick, 1986: 293). By way of example, the EU, despite its considerable efforts, fails to qualify as a complete economic union because of its inability to harmonize the full breadth of these policies. The allocation of powers with respect to the economic union in the 1867 Constitution Act was heavily influenced by the geopolitical context within which Confederation occurred. The British North American (BNA) colonies that joined politically to form Canada relied upon export markets to purchase their products (principally cod, wheat, and agricultural commodities but also some manufactured goods). When the preferential access these colonies enjoyed to Great Britain ended in the mid-1800s, the solution was a reciprocity agreement with the United States. Between 1854 and 1866, Canadian goods entered the US tariff-free. The end of reciprocity required the united province of Canada and the other BNA colonies (Nova Scotia, New Brunswick, and PEI) to find an alternate market. Defence considerations also reinforced these incentives for an interprovincial union. With the end of the US civil war in 1865, Canada faced a large army on its southern border: a threat that was magnified by the rhetoric of US politicians to expand into the prairie west. Creating a common economic space within Canada – one that joined central Canada to the Maritimes and the west – was a means to further both economic and political/defence goals. Given this context, not surprisingly, the Constitution Act, 1867 (formerly the BNA Act, 1867) gave the government of Canada significant jurisdictional powers to create a common Canadian economic space. It acquired



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jurisdiction over trade and commerce in section 91(2) – a power that the courts subsequently interpreted to include both external and interprovincial trade. Federal jurisdiction does not extend to intraprovincial trade; the latter is a matter for the provinces. Its additional jurisdiction over customs and excise laws (section 122) and any mode or system of taxation in section 91(3) gave the federal government the authority to create a customs union, including by imposing tariffs on imported goods. The government of Canada also acquired the jurisdiction to create a monetary union and manage monetary policy (whose objective is to preserve the value of money by keeping inflation low, stable, and predictable). The federal government obtained exclusive authority over currency and coinage (section 91(14)); banking, incorporation of banks, and the issuance of paper money (section 91(15)); savings banks (91(16)); interest (91(19)); legal tender (91(20)); and authority to borrow money on the public credit (91(4)). Provinces cannot establish a separate money system or currency controls. Canadian monetary policy is conducted independently by the Bank of Canada, which, since 1991 under renewable agreements with the government of Canada, aims for an inflation target of 2 per cent. Provinces cannot establish banks; the largest financial services (federally chartered banks) are thus regulated by the government of Canada. However, provinces have over the years incorporated trust companies, credit unions, and insurance companies that also receive deposits and lend money (section 92(11)).1 The government of Canada’s authority over financial institutions is also limited by the right of provinces and territories to regulate the securities industry; that is, firms that raise capital in the form of debt (bonds) or equity (stocks) on stock exchanges. Nor can the government of Canada control provincial governments’ borrowing; they have the right to borrow money on the sole credit of the province (section 92(3)) and run budgetary deficits. The intent at Confederation was to create a common market. Section 121 of the 1867 Constitution Act stated: “All Articles of the Growth, Produce and Manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the other Provinces.” Judicial review has subsequently confirmed section 121 precludes provinces from levying tariffs or import quotas on goods from another province.2 It does not, however, impose an absolute free trade regime within Canada. As most recently ruled in the 2018 R. v. Comeau case, section 121 permits provinces to pass laws that have the incidental effect of impeding the passage of

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goods over interprovincial borders, providing the law’s main purpose is not to prevent the entry of goods from other provinces. Section 121, ruled the Supreme Court of Canada, has to be read in conjunction with sections 91 and 92. Of relevance to interpreting section 121 are section 92(13), which gives the province the right to legislate with respect to “property and civil rights within the province,” and section 92(16), which gives the province the right to legislate on “generally all matters of a merely local or private nature in the province.” Moreover, insofar as section 121 makes no reference to the free movement of services, capital, enterprises, or persons, provincial governments can implement non-tariff barriers that restrict their internal free movement. The result, as discussed later in this chapter, is an incomplete internal Canadian market. Besides its allocation of the legal powers that affect Canada’s customs union and internal common market, Canada’s Constitution has affected the powers of both orders of government to develop and manage the Canadian economy. Both federal and provincial governments are equipped with considerable fiscal (taxing and spending) resources to engage in economic development (see chapter 10). The federal government can raise taxes by any mode (section 91(3)) and spend the monies so raised as it sees fit, including on matters that fall within provincial jurisdiction. Provinces have the ability to raise direct taxes (92(2)) and manage the crown lands they own (92(5)). As discussed further below, for provinces with abundant natural resources, the provinces’ right to manage and receive royalties from their resources like forests, hydro power, oil, natural gas, and mineral deposits adds up to appreciable revenue sources. In sum, Canada’s Constitution equips both orders of government with regulatory and financial powers and resources to promote economic development. Structural factors – like Canada’s comparatively small population, extensive geography, and a resource-based economy dependent upon export markets – have made Canadian governments reluctant to allow market forces alone to determine the structure of the Canadian economy and its development and growth (Tupper, 1986: 354). The focus in this chapter is on the economic policies of governments that fall into the category of industrial policy, that is, efforts to encourage particular industries and regions to innovate, adjust, and capture economies of scale; to increase employment; to reduce economic vulnerability in the face of falling prices and reduced demand; and to improve the standard of living of Canadians (Leslie, 1987: 187).3 The two orders of government share a number of policy instruments



Federalism and Canada’s Economic Union

Figure 8.1.  Share of Provincial GDP by Industry, 2018 100 90 SHARE OF GDP (%)

80 70 60 50 40 30 20 10 0

NFL

PEI

NS

NB

QC

Energy and mining

ON

MB

SK

AB

BC

YK

NWT

NU

Agriculture, forestry, fishing, and hunting

Manufacturing

Services

Source: Authors’ calculations based on Statistics Canada Table 36-10-0400-01, “Gross Domestic Product (GDP) at Basic Prices, by Industry, Provinces and Territories, Percentage Share.”

to deploy in pursuit of industrial policy, namely fiscal instruments in the form of subsidies and tax incentives; direct delivery of goods and services through government-owned enterprises; regulations and incentives that nudge economic actors to behave in ways consistent with government goals; policies that facilitate information exchange and coordination among economic actors; export and marketing assistance; and regulations that can protect and privilege Canadian businesses vis-à-vis foreign competition. Figure 8.1 provides a profile of current provincial economies, demonstrating the extent to which their gross domestic product (GDP) is derived from different industries. It shows the far greater significance of the energy and mining sectors to Newfoundland and Labrador, Alberta, Saskatchewan, and the Northwest Territories as compared to other provinces and territories. Compared to other provinces, Ontario and Nova Scotia are more reliant on service sectors, and Quebec on manufacturing. Differences in provincial economies are long-standing. Since Confederation, Canadian provinces/regions have varied, often significantly, in the extent to which their economic fortunes have depended on agriculture, forestry, fishing and hunting, manufacturing, and energy and mining.

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Not surprisingly, then, federal efforts at economic development policy have frequently faced the challenge of reconciling the disparate interests of different provinces/regions. Intergovernmental conflict has ensued amidst charges of federal policy providing benefits to one region at the expense of the economic well-being of another. Illustrative examples are the National Policy and the National Energy Program, discussed below. Provincial industrial policies aimed at promoting local industries are also susceptible to the same charge of discrimination – and hence, a source of interprovincial conflict. The next section of the chapter provides an historic overview of the different regulatory and financial policy instruments used by federal and provincial governments to promote economic development, and the extent to which their largely uncoordinated efforts have engendered intergovernmental conflict.

FEDERAL DOMINANCE: CONFEDERATION TO THE 1970s In the post-Confederation period, the federal government assumed leadership in constructing a national economy. The 1879 National Policy represented a deliberate effort to use federal jurisdictional powers to create an internal Canadian market. It imposed tariffs on imported manufactured goods, thereby protecting Canadian manufacturers from foreign competition in the Canadian market. The federal government used its authority over interprovincial transport to finance and regulate the construction of interprovincial railways to the Maritimes and western Canada, and its authority over immigration policy to settle prairie Canada in the late 1800s and early 1900s. Together, tariffs, national railways, and a populated western Canada created the basis for an east–west trading system. The National Policy was widely viewed as discriminatory in western Canada and the Maritimes, where it was perceived as benefitting central Canada at their expense (Gibbins, 2007). The tariff protected domestic manufacturers, wherever located in Canada, while its costs were borne by consumers. Although both the manufacturing sector and most consumers were located mainly in central Canada, consumers in central Canada could still be seen to benefit from the tariff because of the



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knock-on effects of manufacturing activity. The situation was different for the primary producers in western and Maritime Canada whose major markets were external. Not just their consumer costs, but also their production costs were driven up by higher priced input goods, like farm machinery, as a result of the federally imposed tariff (Leslie, 1987: 113). It is thus not surprising that the legacy of the National Policy was to undermine the credibility of the federal government to represent the economic aspirations of regions other than central Canada (Atkinson and Coleman, 1989: 65). Besides tariffs on costly imports like farm machinery, other aspects of federal economic development policy also created perceptions of western regional discrimination. A major bone of contention was that, contrary to the situation of other provinces, the governments of Manitoba, Saskatchewan, and Alberta did not acquire ownership of their Crown lands and natural resources when they became provinces. The government of Canada had retained ownership of prairie Crown lands on the grounds that it needed the funds from the Crown lands to finance prairie settlement and railway building. The transfer of their Crown lands and natural resources to the three prairie provinces in 1930, states Leslie (1987: 4), “symbolically closed” the National Policy. Notwithstanding its role as the major architect of the Canadian economic union, the federal government has never been the only order of government to promote economic development. It shares its authority to do so with the provinces/territories. Beginning in the nineteenth century, Ontario, for example, used its ownership of provincial Crown lands and resources to promote the mining, forestry, and hydroelectricity sectors within the province (Nelles, 1974). At various times, the courts have checked Ottawa’s economic development efforts. Most notably, its effort during the 1930s Great Depression to create a national marketing scheme for crops and other agricultural products – in order to enhance the competitiveness of Canadian farmers vis-à-vis domestic and foreign buyers – was struck down by the Judicial Committee of the Privy Council as an intrusion into provincial jurisdiction over intraprovincial marketing (see chapter 4). The federal government continued to assume the dominant role in developing the economy through to the late 1960s. As chapter 10 on fiscal federalism discusses, the centralization of fiscal policy that began during the Second World War continued in the post-war period.

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Keynesian policies were adopted to smooth out the inherent instability of a market economy that was heavily dependent on the export of unprocessed primary products (Leslie, 1987: 5). The government of Canada’s direct aid to industry increased over the 1960s, as it gave incentives to industry to locate in the slow-growth regions of Quebec and the four Atlantic provinces of Newfoundland and Labrador, Nova Scotia, New Brunswick, and Prince Edward Island. Although Ottawa usually developed these regional development programs on its own, at times Ottawa has co-operated with provinces in managing them (Norrie, Simeon, and Krasnick, 1986: 297; Bakvis, 1991).

ACTIVIST FEDERAL AND PROVINCIAL GOVERNMENTS: 1970s–MID-1980s Both orders of government underwent an important transition in their role in economic development via industrial policies in the 1970s (Haddow, 2008). Nationalist governments in Quebec, and subsequently other provincial governments, revved up their efforts to develop their local economies by providing grants, loans, tax allowances, and other incentives to local industries. Governments in Alberta and Saskatchewan, highly dependent upon extractive resources, pursued policies to spin off new industries from their fossil fuel and potash sectors (Richards and Pratt, 1979). In addition to seeking greater control over and credit for the economic development activities it engaged in under agreements with provinces, the federal Liberal government led by Prime Minister Pierre Trudeau also became more interventionist in promoting structural changes in the economy. Using fiscal policy (taxation, spending) and by restricting foreign investment, the Trudeau government aimed at positioning Canadian manufacturers to withstand foreign competition in the domestic market and expand their exports of higher value, processed goods (Leslie, 1987: 8–9). Both federal and provincial governments also established public (government-owned) enterprises to produce and deliver goods and services (Laux and Molot, 1988). These different federal and provincial initiatives were usually taken unilaterally, and without coordination with other governments (Tupper, 1986: 375; Leslie, 1987: 187; Simeon and Robinson, 1990: chap. 10).



Federalism and Canada’s Economic Union

However, there were notable instances of federal and provincial co-operation. In the early 1970s, the federal government pooled its legal authority over interprovincial and export marketing with provincial governments’ rights to regulate marketing within their province in order to establish national systems of supply management in the dairy, poultry, and egg sectors. Supply management limited the domestic production of these commodities to domestic demand, regulated these commodities’ prices, and protected Canadian producers of these commodities from foreign competition (Skogstad, 1987, 2008). The development and pricing of oil and gas resources brought the Pierre Trudeau Liberal government into sharp conflict with Newfoundland and Labrador (Blake, 2015) and the western Canadian provinces of Saskatchewan and Alberta (Simeon and Robinson, 1990: 236–49). Tensions reached the boiling point when the Pierre Trudeau government implemented the National Energy Program (NEP) in 1980. It imposed new taxes on the oil and gas industry – thereby increasing the revenues of the federal government – as well as controls on oil and gas prices. The latter were seen to serve the interests of industrial and other consumers located mainly in central Canada. The NEP also sought to increase federal control over oil and gas exploration by providing incentives for exploration and development in northern Canada and on federal Crown lands. The federally owned Crown corporation, Petro Canada, acquired a 25 per cent interest in all Canada Lands discoveries. Alberta and Saskatchewan, heavily dependent on oil and gas revenues, viewed the NEP as a direct attack on their jurisdiction over the development of their natural resources, as well as a discriminatory policy that favoured central Canada at their expense. The NEP was widely blamed for undermining investment in oil and gas exploration and development in provinces. The intergovernmental conflict and threat to Canadian unity triggered by the NEP were resolved by changes in federal government policy (deregulating domestic oil prices) and the affirmation of provinces’ jurisdiction over their non-renewable resources in section 92A of the 1982 Constitution Act.4 Notwithstanding this important constitutional victory, the NEP continues to cast a long and dark shadow over intergovernmental relations between Alberta and Liberal governments in Ottawa. Provincial dissatisfaction with centralized decision-making at the federal level has also been attributed to the 1984 restructuring of the federal Department of Regional Industrial Expansion (DRIE), formerly

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the Department of Regional Economic Expansion (DREE). The new framework witnessed the creation of several regional ministries to serve western Canada, the Atlantic Region, northern Ontario, Quebec, and – following the 2008 recession – southern Ontario (see further, below). Yet, as noted by Conteh (2013), federal regional development expenditures were, until recently, dwarfed by their provincial counterparts.

1990–2000: FROM INTERVENTIONIST TO MARKET-ORIENTED ECONOMIC DEVELOPMENT Major changes occurred in the 1990s concerning the management of the Canadian economy, a catalyst for which was the report of the Royal Commission on the Economic Union and Development Prospects for Canada (also known as the Macdonald Commission). Convened by the Trudeau Liberal administration in Ottawa in 1982 to assess, among other things, economic governance in Canada, the commission’s report to the Mulroney Progressive Conservative government in 1985 favoured non-intervention in the market and free trade with the United States. The ideas underlying the commission’s position were strongly influenced by monetarist economic theory and the problem of persistent inflation that characterized the 1970s and 1980s. In a rejection of classical Keynesianism, which justifies government intervention to achieve full employment, the commission endorsed the concept of the non-accelerating inflation rate of unemployment (NAIRU), which tolerates a rate of unemployment (about 8 per cent, at the time) that keeps inflation in check (Macdonald et al., 1985: 276). Although provincial administrations were divided on the free trade issue, most governments in Canada (and the rest of the world) were experiencing fiscal crises by the early 1990s. Indeed, for many governments the state of affairs was such that they could no longer afford to borrow money to fund government programs (MacKinnon, 2003). Most governments were therefore pre-empted from taking or resuming an activist stance on economic matters. Those that did, like the Ontario NDP government under Bob Rae, did not fare especially well politically or economically (Bradford, 2003). The problem was that the global economy in the early 1990s was undergoing major restructuring, with traditional manufacturing industries relocating to developing countries



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where labour costs were much lower. In many cases, governments that tried to resist the trend incurred costs only to delay the inevitable (Blais, 1986). The free trade agenda and fiscal crisis of the state also ushered in a wave of privatization. On one hand, many governments in Canada were eager to relinquish inefficient and unprofitable state-owned enterprises in exchange for quick cash. On the other, the principles of free trade and the general ethos of liberalization held that economic affairs are generally best left to market actors. Thus, consistent with trends elsewhere in developed countries, Canadian and provincial governments have privatized or dismantled many, but not all, of their state-owned enterprises (Bird, 2015). With respect to the economic union, trade agreements have strengthened north–south and global trade ties and weakened east–west linkages. Canada’s regions are more loosely connected to one another in terms of their sources of prosperity; most provinces export more to international markets than they do to other provinces (Statistics Canada, 2018). Accordingly, devising policies for a national Canadian economy on the premise of economic linkages that mutually benefit its constituent political (provincial) units has become ever more problematic. Despite the growing importance of international markets to most Canadian provinces, the government of Canada has not retreated from economic development/adjustment. It funds economic development agencies in all regions of Canada: the Western Economic Diversification Fund in western Canada; the Federal Economic Development Initiative for Northern Ontario (FEDNor); the Atlantic Canada Opportunities Agency (ACOA); the Canadian Northern Economic Development Agency (CanNor) in the three territories; and, since 2009, the Federal Economic Development Agency for Southern Ontario (FedDev). It directs funding to creating the infrastructure of a nation-wide knowledge-based economy: increasing funding for research-granting agencies and research and development (R&D) in innovative industrial sectors, such as agriculture and food, digital technology, and clean (green) technologies (Bakvis, 2008; Haddow, 2008: 232; Philipps et al., 2018; Philipps and Hertes, 2019). As indicated by Figures 8.2 and 8.3, although the extent to which the federal government subsidizes economic activity has diminished steadily since the 1970s, it continues to inject several billion dollars into the Canadian economy every year. The 2019–20 budget also indicates a strong federal commitment to economic development.5

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12 10 8 6 4 2

Federal

17

15

20

13

20

11

20

09

20

07

20

05

20

03

20

01

20

99

20

97

19

95

19

93

19

91

19

89

19

87

19

85

19

83

19

81

19

79

19

77

19

19

75

0

19

BILLIONS ($)

14

Provincial

Source: Authors’ calculations based on Statistics Canada Table 36-10-0477-01, “Revenue, Expenditure and Budgetary Balance - General Governments.” Inflation adjusted, 2018 Canadian dollars. Provincial series includes all provinces, excludes territories.

2000–PRESENT: INDIRECT INTERVENTION AND THE KNOWLEDGE ECONOMY While the liberalization agenda was no doubt forcefully pursued in the late 1980s and early 1990s, its underlying ideas never reached hegemonic status. Indeed, by 2000, the so-called “Washington consensus” that favoured market-based policies had unravelled as economists and policymakers became attentive to market failures that hinder ­innovation – namely, non-appropriable knowledge spill-overs and imperfect markets for skills development (Stiglitz, 1998; Williamson, 2000). Canadian governments thus adopted, and in some sense overstepped, OECD recommendations to cultivate the knowledge economy by way of indirect interventions (OECD, 1999). Consequently, the post-2000 era has



Federalism and Canada’s Economic Union

Figure 8.3.  Comparison of Expenditures through Economic Development Ministries 5

BILLIONS ($)

4 3 2 1 0 1989

1999

2019

1989

Federal

1999

2019

Ontario Operating

1989

1999

2019

Quebec

Transfers

Source: Authors’ calculations based on budget estimates. Inflation adjusted, 2018 Canadian dollars.

witnessed a significant increase in the use of non-tariff barriers – such as subsidies, government procurement, and tax incentives – many of which are not directed to knowledge-based or innovative industries. Whereas Figures 8.2 and 8.3 display cash expenditures, Lester (2018) calculates that, with tax measures and Crown corporation activity included, federal subsidies amounted to $14.0 billion while those of the four largest provinces (BC, Alberta, Ontario, and Quebec) reached $14.6 billion in 2014–15. While it is arguable that subsidizing industry under the pretence of correcting market failures is a guise used to justify protectionism, Figure 8.4 offers some support for the contention that federal commitments to funding research have rebounded after a lull in the 1990s. On the other hand, the fact that current amounts scarcely exceed the previous peak in the early 1990s means that the question of whether rhetoric surrounding the knowledge economy matches government action remains. Policy initiatives to render Canadian enterprises – and the economy as a whole – more competitive do not appear to be any better coordinated with provincial governments than in the past. At the same time,

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0.8 0.6 0.4 0.2

72 19 74 19 76 19 78 19 80 19 82 19 84 19 86 19 88 19 90 19 92 19 94 19 96 19 98 20 00 20 02 20 04 20 06 20 08 20 10 20 12 20 14 20 16 20 18

0.0 19

BILLIONS ($)

1.0

Source: Statistics Canada Table: 36-10-0477-01, “Revenue, Expenditure and Budgetary Balance - General Governments.” Inflation adjusted, 2018 Canadian dollars.

they produce less overt conflict between Ottawa and the provinces (Haddow, 2008: 231). There are, nonetheless, examples of intergovernmental co-operation and collaboration in quest of adjusting and protecting Canadian industries from the ups and downs of the global economy. Housing, transportation and infrastructure, labour market training, and, especially, agriculture are all examples. In agriculture, governments at both orders have worked together since the early 1990s to design cost-shared programs to help Canadian farmers manage their income and business risks (Skogstad, 2008: chap. 3). The formula they have struck on in this area of concurrent jurisdiction entails an overarching multilateral framework that defines a set of shared goals and programs for all provinces. It is accompanied by bilateral agreements specific to individual provinces and territories under which the latter have flexibility to design and implement programs tailored to the distinct needs and goals of their local agri-food sectors (Schertzer, McDougall, and Skogstad, 2018). Yet another example of intergovernmental co-operation was the coordinated response of the



Federalism and Canada’s Economic Union

governments of Canada, Ontario, and Quebec to bail out the two auto manufacturers, Chrysler and GM, during the 2008 economic recession (Constantelos, 2014). The auto bailout is a potent reminder of how the federal government’s exercise of its fiscal powers continues to be important to regional economic development. Its exercise of its exclusive regulatory powers also remains significant to regional development. In 2010, the Harper government indicated to BHP Billiton that it would back the Saskatchewan government’s opposition to its hostile bid to acquire the Potash Corporation of Saskatchewan. BHP Billiton subsequently withdrew its bid. Besides its exclusive powers to regulate foreign investment, the government of Canada also affects the economic development of provinces by virtue of its management of the Canadian–American relationship, including on trade issues (see chapter 9), and, as discussed further below, by virtue of its legal authority to approve (or not) oil and gas pipelines that cross provincial or national borders. As mentioned above, provincial governments continue to be fully engaged in industrial policy on behalf of local industries. Resource-dependent provinces like Alberta use the full array of their policy instruments – advantageous tax, royalty, and regulatory regimes – to support their oil and gas sector (Urquhart, 2018). Yet, provinces’ economic building goals, too, face the legal and political constraints of federalism – as Alberta’s efforts to export its bitumen (from the oil sands) to extra-provincial markets and consumers illustrate. The proposed Northern Gateway pipeline project to ship Alberta bitumen out of Kitimat, British Columbia, was first approved by the Harper Conservative federal government in 2014 only to be rejected by the Justin Trudeau Liberal government in 2015. The minority BC NDP government of Premier John Horgan (2017–), reliant on the support of the Green Party for its legislative proposals, has opposed the twinning of the Trans Mountain pipeline. A proposed Energy East pipeline to transport diluted bitumen from Alberta and Saskatchewan to refineries and ports in New Brunswick was abandoned by TransCanada.6 By early 2020, the Federal Court of Canada had given its approval to the Trans Mountain pipeline, purchased by the Government of Canada in 2018 in an effort to salvage the project. Still, Indigenous peoples’ opposition to the pipeline continued to raise questions about the pipeline’s timely completion.

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SUMMARY AND DISCUSSION A wide range of government policies affect the performance of the Canadian economy. It is, accordingly, important to refer to other chapters of this book to arrive at a full judgment of how federalism has affected the performance, effectiveness, and legitimacy of the Canadian economic union. The focus of this chapter has been narrower: an examination of how federal governments, and to some extent provincial governments, have exercised their jurisdictional powers to further national and regional economic development goals. As the overview has revealed, Canadian governments have not been averse historically to producing goods and services themselves, via state/public enterprises or Crown corporations. However, for the most part, governments have been loath to interfere with the autonomy of individual firms; accordingly, their economic development policies have been geared to supporting private economic actors, including by assisting them to adjust to changes in the external political economy (Atkinson and Coleman, 1989). How have Canadian governments fared against the benchmarks used in this text to measure performance? Have federal principles been upheld in the sense that jurisdictional powers of governments are respected? The answer to this question is “yes”; governments have been able to exercise their constitutional authority with respect to economic development free of unilateral action by the other order of government. Are federal institutions – formal and informal – present and working in the sense of providing forums “conducive to negotiation, consultation, or simply an exchange of information” (Dupré, 1985)? Here the answer is “no.” Provinces have lacked an intrastate forum within which to articulate their interests inside the government of Canada. Although provinces were initially willing to allow the federal government to take the lead in establishing nation-wide policies, once they intervened more actively to promote the development of their local economies, the need arose for coordination of government actions. Provinces have created regional, as well as multilateral, forums (the Annual Premiers Council succeeded by the Council of the Federation) within which to address cross-provincial boundary issues. However, their effectiveness appears to be limited to producing voluntary, non-binding agreements (Simmons, 2017).7 Intergovernmental forums that bring federal, provincial, and territorial governments together to coordinate economic development



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and adjustment policies have been lacking. The result is that provinces and the federal government have largely acted in an uncoordinated fashion, with little accountability to one another. As Norrie, Simeon, and Krasnick (1986: 295) observe, “there is a fundamental tension with federalism that will underlie all specific efforts at policy harmonization.” The reason is that federal systems are created to enable their constituent units to exercise jurisdiction over the policy spheres important to preserving the very diversity that ruled out a unitary form of government in the first place. Policy harmonization through coordinated action is perceived as necessary, though, when constituent units’ jurisdiction extends beyond policy spheres in which diversity is valued over uniformity. Even when harmonization is perceived to be desirable, the challenge remains of balancing the gains (in efficiency, effectiveness) from coordination with sensitivity to regional/provincial concerns. When provincial economic structures vary considerably, as they do in Canada, common economic policies will also have differential regional effects, with some provinces perceiving gains from them and others, losses (Norrie, Simeon, and Krasnick, 1986). The need to balance unity and diversity goals in economic adjustment policies leads Haddow (2008) to argue for the constitutional status quo: that is, neither centralizing policies controlled by Ottawa nor devolution to provinces, insofar as the latter would serve only the interests of larger and more affluent provinces but not smaller and poorer provinces. How have Canada’s federal institutions fared when it comes to the effectiveness of their public policies and programs? That is, are substantive problems being dealt with? And are policies efficient in marshalling resources, allowing for asymmetry as warranted, and enabling international commitments to be met? There is no single answer to the effectiveness question. Some point to evidence of a well-functioning Canadian economy, citing, for example, the fact that Canada’s financial institutions proved robust during the 2007–8 Great Recession and that Canada enjoys one of the highest standards of living in the world. The latter can obviously be attributed not just to domestic policies but to liberalizing trade agreements pursued by Canadian governments (see chapter 9). Trade agreements, particularly NAFTA, have integrated a diverse range of Canadian producers and products into regional supply chains, even while they have not made us exceptionally dependent, by

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comparative standards, on a single (US, in the case of Canada) market (Beaulieu and Song, 2015). In contrast to such macro-level indicators of economic performance, others emphasize the economic costs and inefficiencies that result from barriers to the interprovincial movement of goods, services, capital, and labour (Standing Senate Committee on Banking, Trade and Commerce, 2016; Canadian Chamber of Commerce, 2018). The federal government is responsible for some of these barriers, as the Macdonald Royal Commission (1985) observed, citing the federal government’s regional development agencies, its regionally tailored unemployment insurance programs (see chapter 11 in this text), and supply management as examples of federal barriers to the common economic union. Several barriers are the result, however, of provinces’ active use of their jurisdictional powers to promote local industries and residents. As early as 1980, a position paper by the government of Canada highlighted the economic costs of provincial procurement policies that gave preference to provincially produced goods and services, local hiring restrictions and professional licensing requirements that differed across provinces and so impeded labour mobility, and provincial restrictions on out-of-province investment and takeover bids that impeded the free movement of capital across provinces (Canada, 1980). Recent estimates of the economic costs of these barriers differ. Critics say unharmonized regulatory policies cost industry as much as $50 billion annually (Standing Senate Committee on Banking, Trade and Commerce, 2016; Canadian Chamber of Commerce, 2018). Others argue the figure is much lower, and, moreover, that it is entirely appropriate in a federal system for provinces to vary in their approaches to such things as environmental protection, regional economic development, public services, and consumer protection (Sinclair, 2017).8 Canada’s bilingual character and the dominance of the French language in Quebec also explain and justify the persistence of internal trade barriers in Canada relative to Australia, another federal system (Smith and Mann, 2015). Efforts of provincial, territorial, and federal governments to co-operate to reduce and eliminate barriers to the free movement of goods, persons, services, and investment date back to the voluntary 1995 Agreement on Internal Trade (AIT). In 2016, the four western Canadian provinces bound themselves to reducing non-tariff (regulatory) barriers in the New West Partnership (Kukucha, 2015). Nonetheless, by 2015 Canada



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had made significantly less progress in eliminating internal trade barriers over three decades than had Australia (Smith and Mann, 2015). The most recent display of the willingness of governments at the two orders to remove and/or reconcile policies that currently discriminate in their treatment of workers, goods, services, and investment is the Canadian Free Trade Agreement (CFTA). It replaced the AIT when it entered into force in July 2017. Under the CFTA, governments agree to not provide more favourable treatment to goods, services, investments, and workers from their own province or territory than is accorded to other Canadian jurisdictions (Canadian Free Trade Agreement, 2018). The CFTA nonetheless lists a total of 144 specific exemptions, including in energy sectors, natural resource development, and trade in alcoholic beverages.9 The CFTA comes in the wake of Canada’s entering into a Comprehensive Economic and Trade Agreement with the European Union. Some of its provisions, including the access of EU firms to public (government) procurement of goods and services, fall into provincial areas of jurisdiction. The international trade agreement has thus increased the incentives for Canadian governments to remove and/or harmonize remaining impediments to interprovincial movement of goods, labour, capital, and services. To the extent such policy harmonization occurs, intergovernmental tensions within the Canadian economic union can be expected to be reduced, albeit not eliminated entirely. Finally, how do different Canadians evaluate the legitimacy of the governing arrangements for the economic union and the outcomes they produce? Evaluations of legitimacy revolve overwhelmingly around perceptions of the fairness of federal economic development policies. Even while “a credible grand ‘balance sheet’” of the range of federal economic policies may defy systematic analysis (Norrie, Simeon, and Krasnick, 1986: 323), there can be little doubt that perceptions of unfairness and regional discrimination, particularly in western Canada, surround federal economic development policies. Whether these perceptions pose a threat to the Canadian economic union itself is unclear. An online survey conducted in December 2018– January 2019 of 5,732 Canadians found that a strong majority of Canadians (nine in ten) agree that workers in Canada should have the right to move to another province or territory, while only three in ten say their province or territorial government should be allowed to favour local businesses by preventing businesses from elsewhere in Canada selling

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their products in their province or territory (Environics Institute for Survey Research, 2019). More than half, as well, want their provincial or territorial government to try to find a balance between its economic interest and that of other parts of Canada even if it means compromising on some of the policies that might be best for them. However, Albertans are an outlier in terms of these sentiments. Fully 45 per cent of them believe the province should put the provincial interest first even if it weakens the economies of other parts of Canada. Moreover, Alberta is the only province in which a majority (55 per cent) favours each province/territory making its own policy (Environics Institute for Survey Research, 2019). The extent to which Albertans share these sentiments is likely heightened by the economic distress experienced by many residents of the province in the wake of the global downturn in oil prices after 2014, and their frustration with obstacles to approval for pipelines to transport the province’s bitumen through other provinces and to tidewater. However, the Alberta sentiments undoubtedly also reflect an enduring perception that the province has been chronically unfairly treated by federal governments dependent upon vote-rich central Canada. If the government of Canada has had difficulty – as it has – in devising policies that do not appear to discriminate against one or more regions of the country, does that mean there should be no federal role in regional economic development? The answer to this question must be “no.” Ottawa abdicating a role in regional economic development would not serve the needs of the smaller and less wealthy provinces and regions of the country, whose firms and citizens often need assistance beyond what their provincial governments can afford when it comes to adjusting to technological and other challenges that affect their competitiveness. At the same time, however, given their expertise regarding the functioning of their local economies, it is important for provincial governments to maintain a role in regional economic development. As such, further collaboration of governments at the two orders is desirable.

NOTES 1 These provincially incorporated financial institutions do not need to maintain reserves (money on hand) with the Bank of Canada, to which



2 3 4

5

6

7

8 9

Federalism and Canada’s Economic Union the government of Canada has delegated the right to adjust interest rates. Accordingly, the Bank of Canada’s authority over monetary policy, which depends upon its ability to affect lending practices by changing reserves, is weakened when these near banks comprise more than a small share of total banking (Norrie, Simeon, and Krasnick, 1986: 303). Manitoba (A.G.) v. Manitoba Egg and Poultry Association (the Manitoba Egg Reference) [1971] S.C.R. 689. Blais (1986: 4) defines industrial policy as “the set of selective measures adopted by the state to alter industry organization.” It affirmed exclusive provincial jurisdiction over exploration for nonrenewable natural resources and over the development, conservation, and management of all resources, including electric power. Section 92(A) also gave the provinces concurrent power over trade in natural resources, subject to federal paramountcy, and the right to levy indirect taxes on nonrenewable natural resources and electricity. Although the Superclusters program has attracted more attention than any other, the Strategic Innovation Fund receives the plurality of program dollars paid out by the Ministry of Innovation, Science and Economic Development. Major investments involve industrial research and development in food processing and health diagnostic technology. While TransCanada cited economic reasons, political opposition to the pipeline, including from the premier of Quebec, explains why the government of Canada did not attempt to rescue the pipeline as it did by purchasing Trans Mountain. An exception is the role the Council of the Federation played in securing agreement among provinces to engage with the government of Canada in the negotiation of a free trade agreement with the European Union. Sinclair (2017) states that most empirical studies find the costs of internal trade barriers range from 0.05 per cent to 0.10 per cent of GDP. Examples of items on which governments agree to work towards reconciliation/harmonization can be found at https://www.cfta-alec.ca/wp-content/ uploads/2019/06/RCT-2019-2020-Workplan-List-of-Measures-Final-May29-2019.pdf.

GLOSSARY Crown corporation  An enterprise wholly owned by a federal or provincial government. The extent to which Crown corporations operate independently of government oversight is laid out in the legislation that establishes them. global supply chains  Also called value chains, they are the network of firms involved in producing a good or service through to the consumer. Goods produced in global supply chains have inputs from firms located in different countries.

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Grace Skogstad and Matt Wilder interprovincial economic barriers  Also called interprovincial trade barriers, they are any policies that have the effect of impeding the free flow of goods, services, labour, and money across provinces. Keynesianism  The theory that governments should maintain demand for goods and maintain employment by using their monetary and fiscal policies. knowledge-based economy  Emphasizes the importance of scientific knowledge, research, and information/computer-based technologies as a source of economic competitiveness through innovation. liberalization  Changes that move towards a market economy by relying more on prices to clear markets, and reducing government policies that control the economic activities of private firms. market economy  An economy in which most economic decisions are taken by the use of markets, rather than, as in a planned economy, by governments. In a market economy, private firms compete freely (with minimal government restrictions) and prices for goods and services are determined by supply and demand. monetarist economic theory  An economic theory that states that the supply of money in an economy is the main determinant of economic performance. Accordingly, lowering interest rates is considered the appropriate means of stimulating the economy, while raising interest rates is considered the appropriate means of combating inflation. NAFTA  Under the North American Free Trade Agreement (1994–), Canada, the United States, and Mexico agreed to the progressive reduction of most barriers to trade and investment between their countries. National Energy Program (NEP)  The initiative by Liberal Prime Minister Pierre Trudeau to secure a larger share of federal revenues from the oil sector, increase Canadian ownership of the oil industry, and reduce Canadian dependence on imported foreign oil through greater Canadian self-sufficiency. It embittered relations between the government of Canada and the western oil-producing provinces, especially Alberta. National Policy  Refers to the government of Canada’s effort to construct a nation-wide economy through the use of tariffs on imported goods, the construction of an interprovincial railway, and attracting immigrants to populate western Canada. policy harmonization  Refers to rendering the policies of different jurisdictions more similar. Harmonization can occur with respect to policy objectives or specific rules and regulations prescribing how activities are to be carried out. protectionism  The belief that restricting international trade is desirable in order to reach goals such as preventing unemployment, promoting particular kinds of industrial development, affecting the distribution of incomes within a country, and/or improving a country’s terms of trade.



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REFERENCES Atkinson, Michael, and William D. Coleman. 1989. The State, Business and Industrial Change in Canada. Toronto: University of Toronto Press. Bakvis, Herman. 1991. Regional Ministers: Power and Influence in the Canadian Cabinet. Toronto: University of Toronto Press. ———. 2008. “The Knowledge Economy and Post-Secondary Education: Federalism in Search of a Metaphor.” In Canadian Federalism: Performance, Effectiveness and Legitimacy, edited by Herman Bakvis and Grace Skogstad, 205–22. 2nd ed. Don Mills: Oxford University Press. Beaulieu, Eugene, and Yong Song. 2015. “What Dependency Issues? ReExamining Assumptions about Canada’s Reliance on the U.S. Export Market.” SPP Research Papers 8, University of Calgary School of Public Policy, 3. Bird, Malcolm G. 2015. “Canadian State-Owned Enterprises: A Framework for Analyzing the Evolving Crowns.” Policy Studies 36, no. 2: 133–56. https:// doi.org/10.1080/01442872.2014.1000843. Blais, André. 1986. “Industrial Policy in Advanced Capitalist Democracies.” In Industrial Policy (The Collected Research Studies), edited by André Blais, 1–53 (chapter 1). Royal Commission on the Economic Union and Development Prospects for Canada. Ottawa: Minister of Supply and Services. Blake, Raymond. 2015. “Politics and the Federal Principle in Canada: Newfoundland Offshore Oil Development and the Quest for Political Stability and Economic Justice.” Canadian Historical Review 96, no. 1: 32–60. https://doi.org/10.3138/chr.2643. Bradford, N. 2003. “Public-Private Partnership? Shifting Paradigms of Economic Governance in Ontario.” Canadian Journal of Political Science 36, no. 5: 1005–33. https://doi.org/10.1017/S0008423903778949. Canada. 1980. Securing the Canadian Economic Union in the Constitution. Ottawa: Minister of Supply and Services Canada. Canadian Chamber of Commerce. 2018. Death by 130,000 Cuts: Improving Canada’s Regulatory Competitiveness. http://www.chamber.ca /advocacy/regulate-smarter-toolkit/DRAFT_DeathBy130000Cuts _ImprovingCanadasRegulatoryCompetitiveness.pdf. Canadian Free Trade Agreement. 2018. Internal Trade Secretariat, Annual Report. Winnipeg. https://www.cfta-alec.ca/wp-content/uploads/2019/01 /CFTA-Annual-Report-2017-2018-English-with-Audit.pdf. Constantelos, John. 2014. “Vetoes and Venues: Economic Crisis and the Roads to Recovery in Michigan and Ontario.”Canadian Journal of Political Science 47, no. 4: 827–53. https://doi.org/10.1017/S0008423914001073. Conteh, Charles. 2013. Policy Governance in Multi-Level Systems: Economic Development and Policy Implementation in Canada. Montreal: McGill–Queen’s University Press.

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Grace Skogstad and Matt Wilder Dupré, J. Stefan. 1985. “Reflections on the Workability of Executive Federalism.” In Intergovernmental Relations, edited by Richard Simeon, 1–32. Toronto: University of Toronto Press. Environics Institute for Survey Research. 2019. 2019 Survey, Canada: Pulling Together or Drifting Apart? June. https://www.environicsinstitute.org /docs/default-source/confederation-of-tomorrow-2019-survey---report-1 /confederation-of-tomorrow-survey-2019---report-1-pulling-together-or -drifting-apart---final-report.pdf?sfvrsn=9abc2e3e_2. Gibbins, Roger. 2007. “Federalism in the 21st Century: Defining the Common Economic Space.” Policy Options, March. https://policyoptions .irpp.org/magazines/equalization-and-the-federal-spending-power /federalism-in-the-21st-century-defining-the-common-economic-space/. Haddow, Rodney. 2008. “Federalism and Economic Adjustment: Skills and Economic Development in the Face of Globalization.” In Canadian Federalism: Performance, Effectiveness and Legitimacy, edited by Herman Bakvis and Grace Skogstad, pp. 246–65. 2nd ed. Don Mills, ON: Oxford University Press. Kukucha, Christopher. 2015. “Internal Trade Agreements in Canada: Progress, Complexity and Challenges.” Canadian Journal of Political Science 48, no. 1: 195–218. https://doi.org/10.1017/S0008423915000232. Laux, Jeanne Kirk, and Maureen Appel Molot. 1988. State Capitalism: Public Enterprises in Canada. Ithaca, NY: Cornell University Press. Leslie, Peter. 1987. Federal State, National Economy. Toronto: University of Toronto Press. Lester, John. 2018. “Business Subsidies in Canada: Comprehensive Estimates for the Government of Canada and the Four Largest Provinces.” University of Calgary School of Public Policy Publications, 11 (1). Macdonald, Donald, et al. 1985. Report of the Royal Commission on the Economic Union and Development Prospects for Canada. Vol. 2. Ottawa: Ministry of Supply and Services Canada. MacKinnon, Janice. 2003. Minding the Public Purse: The Fiscal Crisis, Political Trade-Offs, and Canada’s Future. Montreal: McGill–Queen’s University Press. Nelles, H. Vivian. 1974. The Politics of Development: Forests, Mines & Hydro-electric Power in Ontario: 1849–1941. Toronto: Macmillan. Norrie, Kenneth, Richard Simeon, and Mark Krasnick. 1986. Federalism and Economic Union in Canada. Royal Commission on the Economic Union and University of Toronto Press and Supply and Services Canada. Toronto: University of Toronto Press. OECD. 1999. “Managing National Innovation Systems.” Paris: Organization for Economic Cooperation and Development. Philipps, Peter W.B., and Aaron Hertes. 2019. “Implementing the New Innovation Agenda.” In How Ottawa Spends 2018–2019 Next?, edited by Katherine A.H. Graham and Allan Maslove, 129–39. Ottawa: School of Public Policy and Administration, Carleton University. Philipps, Peter W.B., Graeme Jobe, Adity Das Gupta, Sarah Juma, Paul Trujillo Jacome, Samuel Kanyoro Karba, Achint Rastogi, and Michael Horvath.



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2018. “Science and Innovation Policy for Canada’s next 150 Years.” In How Ottawa Spends Canada @150 2017–2018, edited by Katherine A.H. Graham and Allan M. Maslove, 46–58. Ottawa: School of Public Policy and Administration, Carleton University. R. v. Comeau. 2018, SCC 15. https://scc-csc.lexum.com/scc-csc/scc-csc/en /item/17059/index.do. Richards, John, and Larry Pratt. 1979. Prairie Capitalism: Power and Influence in the New West. Toronto: McClelland and Stewart. Schertzer, Robert, Andrew McDougall, and Grace Skogstad. 2018. “Multilateral Collaboration in Canadian Intergovernmental Relations: The Role of Procedural and Reciprocal Norms.” Publius: The Journal of Federalism 48, no. 4: 636–63. https://doi.org/10.1093/publius/pjx066. Simeon, Richard, and Ian Robinson. 1990. State, Society, and the Development of Canadian Federalism. Toronto: University of Toronto Press. Simmons, Julie M. 2017. “Canadian Multilateral Intergovernmental Institutions and the Limits of Institutional Innovation.” Regional & Federal Studies 27, no. 5: 573–96. https://doi.org/10.1080/13597566.2017.1389725. Sinclair, Scott. 2017. “Five Things to Know about the Canadian Free Trade Agreement.” April 11. http://behindthenumbers.ca/2017/04/11 /five-things-know-canadian-free-trade-agreement/. Skogstad, Grace. 1987. The Politics of Agricultural Policy-Making in Canada. Toronto: University of Toronto Press. ———. 2008. Internationalization and Canadian Agriculture. Toronto: University of Toronto Press. Smith, Andrew, and Jatinder Mann. 2015. “Federalism and Sub-National Protectionism: A Comparison of the Internal Trade Regimes of Canada and Australia.” Institute of Intergovernmental Relations, School of Policy Studies, Queen’s University, Working Paper 2015-01. Standing Senate Committee on Banking, Trade and Commerce. 2016. Tear Down These Walls. Ottawa: Senate Committee Reports. Statistics Canada. 2018. “Interprovincial Trade Flows.” https://www150 .statcan.gc.ca/n1/pub/13-607-x/2016001/1059-eng.htm. Stiglitz, Joseph E. 1998. More Instruments and Broader Goals: Moving toward the Post Washington Consensus. Helsinki: United Nations University. Tupper, Allan. 1986. “Federalism and the Politics of Industrial Policy.” In Industrial Policy (The Collected Research Studies), edited by André Blais, 347–78 (chapter 10). Royal Commission on the Economic Union and Development Prospects for Canada. Ottawa: Minister of Supply and Services. Urquhart, Ian. 2018. Costly Fix: Power, Politics, and Nature in the Tar Sands. Toronto: University of Toronto Press. Williamson, John. 2000. “What Should the World Bank Think about the Washington Consensus?” World Bank Research Observer 15, no. 2: 251–64. https://doi.org/10.1093/wbro/15.2.251.

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CHAPTER NINE

International Trade and the Evolution of Canadian Federalism Christopher J. Kukucha

The role of provincial and territorial governments in Canada’s foreign trade policy has been affected by system-wide constitutional and international factors, with consequences for the effectiveness and legitimacy of intergovernmental relations. Constitutional and international considerations serve as both catalysts and deterrents for sub-federal involvement in this area of Canadian federalism. Under the British North America Act, Canada’s international relations were limited to implementing treaties negotiated by Great Britain. The result was that foreign policy was absent from Canadian intergovernmental relations, especially in trade where agreements focused on tariffs, a federal responsibility. In the 1970s, however, international rules and norms moved into domestic policy space, creating a need for greater federal–provincial consultation to successfully negotiate and implement new rules-based obligations. The intergovernmental process peaked with direct provincial and territorial participation in negotiations for the Canada–European Union Comprehensive Economic and Trade Agreement (CETA), although this precedent was not repeated for later treaties. Throughout, all levels of government worked collaboratively to effectively pursue offensive and defensive interests in the final agreements, albeit with some tensions regarding regional, sectoral, and normative trade issues. The incremental nature of this evolving process, however, reflects patterns of policy continuity, as opposed to a new institutional or ideational phase in Canadian federalism. Further, issues of compliance remain problematic,



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given a history of international trade and investment disputes focusing on provincial practices, as well as an unwillingness by some provinces to comply with panel rulings or reimburse Ottawa for awarded damages. Finally, this area of Canadian federalism suffers from deficits in legitimacy. Yes, sectoral, provincial, and regional concerns are represented, but civil society groups and Indigenous peoples do not have meaningful impact on policy outcomes.

SYSTEM FACTORS – CONSTITUTIONAL ISSUES AND AN EVOLVING INTERNATIONAL TRADE REGIME In some cases, system-wide factors reflect differing approaches to intergovernmental relations, such as Stephen Harper’s “open federalism” or Justin Trudeau’s early reliance on federal–provincial conferences. Other examples include the role and impact of Indigenous peoples or the importance of environmental programs, pipelines, or other joint social programs. This chapter does not discount the relevance of these considerations but instead focuses on domestic constitutional issues and the emergence of a post-war international trade regime, as these two factors have the most relevance for international trade and the evolution of Canadian federalism. Constitutionally, Canadian provincial and territorial governments have a degree of international legitimacy not granted to sub-federal actors in other federations. In the BNA Act, there is limited reference to foreign relations given Canada’s early status as a colony. As a result, clarification of powers for international trade occurred with precedents outlined by the Judicial Committee of the Privy Council (JCPC) and the Supreme Court of Canada – related to treaty making; trade and commerce; peace, order, and good government (POGG); and the criminal law power. These judicial decisions affirmed federal control over the negotiation and implementation of foreign trade and environmental agreements. Federal control was further reinforced by provisions of international law, such as the Vienna Convention on the Law of Treaties and federal-state clauses in the General Agreement on Tariffs and Trade (GATT), established in 1948, and the Canada–US Free Trade Agreement (CUSFTA), which came into effect in 1989. At the same time, however, many of the Canadian courts’ decisions determined the right of Canadian provinces, and by

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extension territorial governments, to intervene on international matters with relevance to sub-federal jurisdiction (Paquin, 2013; Kukucha, 2005). Initially, however, early trade agreements did not intrude into areas of sub-federal jurisdiction. Following the Second World War the goal was to adopt Keynesian principles of state intervention using the GATT to dismantle protectionist wartime economies and reduce tariffs in areas of comparative advantage. Member states, however, also continued to protect specific defensive interests by maintaining tariffs in politically and economically sensitive sectors. These “first-generation” trade agreements dominated the GATT until the 1960s when the Kennedy Round negotiated its first non-tariff anti-dumping code. The subsequent Tokyo Round, while continuing to focus on tariffs, also expanded rules-based codes to include technical barriers, import licensing, subsidies, countervailing measures, and customs valuation. Although member states had the option of signing on to these codes, what critics called “GATT à la carte,” governments now faced increasingly complex trade negotiations (Hart, 1998). The transition from first-generation to second-generation agreements represented a significant development in the management of international trade. Tariff-based relationships had guided the actions of states for centuries, but the emergence of a rules-based system, especially one focusing on “behind the border” issues and positive lists, was an important evolution of the broader regime. This change occurred as tariffs became less useful for moderating trade distortions. Technology, improved production and shipping practices, increasingly interdependent markets and supply chains, and the political will of Western allies seeking to embed a liberal economic order during the Cold War also played a role. By the 1990s, the Uruguay Round had expanded early GATT codes to include new rules-based language in several areas, such as services and procurement, including the first use of negative and hybrid lists. In most cases, the World Trade Organization (WTO), which replaced the GATT in 1995, and other regional agreements, such as the 1994 North American Free Trade Agreement (NAFTA) among Canada, the United States, and Mexico, also established “legally scrubbed” benchmark treaty language that served as templates for subsequent negotiations, which again intruded into areas of domestic and sub-federal jurisdiction. Recent developments, however, suggest that second-generation agreements may be in a period of transition due to a loss of US leadership,



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tensions with China, divergent priorities of developed and developing economies, the dominance of state-owned enterprises, and weak commitments to existing regime norms. The European Union (EU), one of the world’s strongest regional economies, has also struggled with depressed currencies, the ongoing Brexit dilemma, and extended negotiations with like-minded countries, such as CETA. It is too early to predict if these changes represent the potential stagnation or end of the “second-generation” era, but they do suggest that a return to the ambitious rules-based progress that occurred during the Uruguay Round and in other subsequent agreements is unlikely. Others, however, argue that this potential transition opens political and economic space for socially progressive “third-generation” trade agreements. The current Trudeau Liberal government, for example, has attempted to forward a Progressive Trade Agenda, prioritizing labour, environmental, gender, Indigenous peoples, human rights, and sustainable development issues (Madner, 2017). This idea was first articulated during CETA negotiations by Canada’s then minister of foreign affairs, Chrystia Freeland, who referred to Canada as a “progressive” country with “progressive” values in an attempt to ease European concerns over a proposed Investment Court System (Lilly, 2018). In subsequent years, the Trudeau government reaffirmed its commitment to its Progressive Trade Agenda without explicitly defining specific objectives. However, it is generally accepted that the agenda prioritizes social justice issues as well as other “new” areas of trade, although not to the detriment of labour, the environment, gender, or other human rights concerns (Stephens, 2018: 3). All of these developments create challenges for federal, provincial, and territorial governments in Canada. In the first-generation era, international trade negotiations focused on tariffs, which limited matters under consideration to areas of federal jurisdiction. With second-generation commitments, however, officials at all levels of government were forced to gain expertise on a range of new issues, as well as on compliance matters related to international disputes and domestic policy initiatives. If existing regime norms continue to be threatened, it is possible that system priorities will shift from negotiations and rule-making and towards protectionism, trade wars, and ongoing disputes and matters of compliance. If progressive trade issues usher in a new “third generation”

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of agreements, this will also force practitioners to develop capacity on numerous complex social issues (Kukucha, 2016).

INCREMENTAL INTERGOVERNMENTALISM – INSTITUTIONS, PROCESSES, AND RESULTS Of specific interest is how, if at all, these systemic factors impact the workability of Canadian federalism in matters of foreign trade policy. Initially, federal–provincial consultation occurred as part of the Canadian Trade and Tariffs Committee, which was later supplemented with a Canadian Coordinator for Trade Negotiations (CCTN). Federal–provincial engagement further increased during the Canada–US FTA negotiations, which extended contact beyond CCTN practices, usually in the form of monthly meetings with provincial officials. Following the implementation of CUSFTA, the CCTN became the Committee for the Free Trade Agreement (CFTA), with representation from all ten provinces but not territorial governments. Ottawa also established a series of consultative committees with various provincial departments to address sectoral concerns and ongoing trade irritants. In the early stages of NAFTA negotiations, an additional forum was added in the form of the Committee for North American Free Trade Negotiations (CNAFTN). The CNAFTN represented a new level of co-operation between Ottawa and the provinces. Provincial governments received copies of draft proposals tabled by the US and Mexico as well as information on a number of specific sectoral issues. On several occasions, the provinces also had access to material not yet reviewed by cabinet (Doern and Tomlin, 1991: 128–30; Kukucha, 2008: 51–5). Today, regularized intergovernmental contact occurs within the Federal, Provincial, Territorial Committee on Trade (C-Trade), which replaced CNAFTN. This group meets four times annually and provides a forum for officials from all levels of government to exchange information related to international trade and negotiations. Draft documents are also shared and, for the most part, provinces and territories are encouraged to provide feedback and guidance on proposals. Although some provinces expressed concern with C-Trade in the past, especially in relation to information sharing and input, it is now accepted as a highly valuable mechanism of intergovernmental



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relations. C-Trade is also supplemented with additional discussions between Ottawa, the provinces, and the territories on regulatory reforms, international trade disputes, and the negotiation of Mutual Reciprocal Agreements. In some cases, Ottawa also allowed limited provincial participation in pre-CETA negotiations with specific relevance to sub-federal jurisdiction, such as NAFTA’s Side Deals, the North American Agreement on Environmental Cooperation, and the North American Agreement on Labour Cooperation. Canada’s negotiation of the New World Wine Accord, which established the World Wine Trade Group in 2001, adopted similar patterns of engagement, as did the 2003 Canada–EU agreement on labelling and market access for wine (Kukucha, 2008: 98–101). Despite these changes, it is important to stress that the expansion of sub-federal consultation and participation during this period represented an incremental evolution, or what Grace Skogstad has called a degree of “path dependency,” or policy continuity, to intergovernmental relations in this area of Canadian federalism. Ottawa remained in full control of international negotiations, including new rules-based issues such as dispute settlement, services, subsidies, and competition policy. Evolving sub-federal involvement also did not move beyond functional cross-border relations in forums such as the Pacific NorthWest Economic Region, as well as the practice of executive federalism adopted in other policy areas. For the most part, the provinces received more information, but still had no formalized role in the formulation of Canadian foreign trade policy (Skogstad, 2012: 205–10). CETA, however, was different, with the direct participation of Canadian sub-federal governments in negotiations. Requests for heightened sub-federal involvement, however, did not come from provincial or territorial governments, but rather EU officials concerned about the failure of the 2006 Canada–EU Trade and Investment Enhancement Agreement and previous trade disputes regarding sub-federal compliance, especially for alcohol and beef. The EU, however, did not want provinces and territories at the table. It wanted only sub-federal commitments, which, as one official pointed out, “is not the same thing.”1 Ultimately, it was Stephen Harper who offered the direct participation of provincial and territorial governments, consistent with his support for “open federalism.” The formal confirmation of this sub-federal role came from the Council of the Federation in 2009 and included a pledge to ensure international

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commitments applicable to Canadian provinces and territories. Initially, Newfoundland and Labrador decided to engage only as observers but fully joined negotiations in March 2011. For the EU, potential economic gains and guarantees of Canadian sub-federal compliance were more important than the format of negotiations (Skogstad, 2012: 209–10). As CETA negotiations unfolded, provincial and territorial representatives were limited to tables relevant to sub-federal jurisdiction, such as services, procurement, monopolies, technical barriers to trade, investment, labour and environmental issues, and state-owned enterprises (Paquin, 2013). Direct provincial and territorial participation was also regulated in formal sessions with federal officials negotiating for the government of Canada. In fact, provincial and territorial representatives could only talk if asked to do so by the Canadian negotiator at the table, and this was not a frequent occurrence (Skogstad, 2012: 210). Further, this process created a level of awkwardness that did not exist in previous negotiations, with two to three European representatives sitting across from twenty to thirty “Team Canada” members. Even finding a facility for negotiations was problematic and expensive.2 As a result, a pattern began to emerge, where a preliminary meeting, referred to as “the show,” would occur where all European, federal, provincial, and territorial representatives would gather and engage in dialogue and note taking. Later, a smaller meeting occurred, where more explicit negotiations took place, often without sub-federal representation. Eventually, provinces and territories were removed from all tables in the late stages of talks, and instead were briefed on a daily basis.3 In the words of one official, “by the end, it was similar to typical federal–provincial participation that occurred prior to CETA.”4 Regardless, CETA represented another incremental evolution of intergovernmental relations. Information sharing between federal, provincial, and territorial officials was extensive, with all levels of government collaboratively posting information in a number of formats, including the Canada Gazette. Canada’s chief negotiator, Steve Verheul, also met with provincial and territorial officials on the eve of talks and at the end of each day of formal negotiations. In total, provinces and territories would often have up to sixty representatives attending these formal rounds. Extensive consultation also took place before and after face-to-face talks in both C-Trade and on an ad hoc, as needed, basis (Verheul, 2010). One positive outcome was increased consensus within the Canadian delegation, as



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federal officials worked closely with provincial and territorial counterparts. When needed, Canada could also call for a “time-out” in talks, walk down the hall, and come back with a “pan-Canadian” position.5 Perhaps more importantly, the CETA process, and the conciliatory role of Canada’s chief negotiator, created a new level of “trust-ties” between all federal and sub-federal Canadian negotiators (Poirier, Saunders, and Kincaid, 2015: 465; Cairney, 2012: 73; Lysenko and Schwartz, 2015: 19–20).6 As one observer noted, the provinces and territories were “not driving trade policy” but it was very difficult for Ottawa to say no when specific concerns were identified (Kukucha, 2016).7 As another official suggested, the “new normal” emerging from CETA was not direct sub-federal participation but rather improved communication, transparency, and co-operation, diminishing provincial and territorial demands for a greater role.8 CETA also provided opportunities for provinces and territories to initiate partnerships with other participants. The easiest linkages were horizontal, with other sub-federal governments. For the first time provincial and territorial trade officials were physically in the same location during negotiations, often with extended breaks that allowed for unprecedented levels of direct interaction. Some provinces, especially Quebec, also pursued transnational contacts outside of the formal negotiations. Quebec’s chief negotiator, Pierre Marc Johnson, for example, arranged a number of one-on-one meetings with Mauro Petriccione, the EU chief negotiator (Paquin, 2013: 551). Other provinces and territories instead chose to invest efforts into building closer ties with Canadian negotiators, given that federal officials would be presenting Canada’s final positions on issues vital to sub-federal interests. This strategy was often implemented in conjunction with developing horizontal linkages with other provinces.9 Not surprisingly, there were also tensions between Ottawa and sub-­ federal representatives during CETA. Federal officials often complained of “exorbitant asks” by provincial and territorial bureaucrats, linked to a perceived deficit in knowledge regarding the form and practice of international negotiations. Sub-federal representatives also expressed concerns related to the amount of information made available, often using the term “information dump,” to describe struggles in processing and analyzing the volume of information provided by Ottawa. Officials from both levels of government were often frustrated with the partisan nature of information from the Prime Minister’s Office, citing economic projections with little basis in reality.10 Finally, the lack of convergence

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between provinces on all aspects of CETA meant that Ottawa never faced pressure from a pan-Canadian sub-federal negotiating front, limiting provincial and territorial co-operation to specific sectoral negotiations with easily identifiable commonalities.11 As CETA unfolded, Canada also initiated bilateral discussions with India, participated in Trans-Pacific Partnership (TPP) negotiations, and concluded a trade agreement with Korea. Interestingly, there was no consistent role for Canadian sub-federal governments in these cases, and none reflected the CETA model. For India, the Indian government rejected any direct sub-federal role from the outset, given that most negotiated issues fell under federal jurisdiction. Another factor was the small Indian delegation, typically three people, which narrowed the range of topics to be engaged but also raised questions of “optics” if provincial and territorial negotiators vastly outnumbered those participating from India. Finally, the difficulty and expense in getting provincial and territorial delegations to Delhi was a further deterrent.12 The TPP and subsequent Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), however, had a more ambitious agenda. As expected, the provinces and territories were engaged by federal negotiators but in all cases were not directly “in the room” as in CETA. Provincial and territorial representatives, however, typically received daily updates during ministerial meetings and formal negotiations. Ottawa also encouraged the attendance of provinces and territories at negotiating sessions and ministerial meetings. As such, sub-federal officials were generally satisfied with the TTP/CTPP consultative process.13 Full participation, comparable to CETA, was not a reality, especially due to the logistics and costs of getting provincial and territorial officials overseas at the same time. As always, intergovernmental engagement continued, but on an ad hoc basis dependent on the issues being negotiated at any given time (Kukucha, 2016; Paquin and Marquis, 2019). The renegotiation of NAFTA, however, represented a different process than CETA, India, or the TPP/CTPP. First, it was the renegotiation of an older and well-entrenched trilateral trade agreement, which meant that government officials and sectoral interests had to “relearn” the technical language of the original NAFTA text, as well as specific offensive and defensive interests as they applied in a twenty-first-century context. The speed and politicization of the negotiations was also a challenge, exacerbated by Freeland’s prominent role in the media, presidential



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elections in Mexico, mid-term Congressional elections in the United States, provincial elections in Quebec and Ontario, and threats from President Trump to terminate NAFTA. These considerations also placed provincial and territorial trade officials under a high level of political scrutiny from premiers and cabinet members. According to one bureaucrat, conversations during CETA would occur every month with the assistant deputy minister, but with NAFTA “calls were almost daily at the deputy minister level or higher.”14 As in other trade negotiations, the “new-NAFTA” also highlighted a number of opportunities for Canadian sub-federal governments. Quebec’s Ministry of International Relations created trade and economic “fact sheets” for thirty different US states, which officials and business groups used in lobbying and outreach campaigns aimed at state governors and members of Congress.15 In other cases, provincial officials worked closely on sectoral issues, sharing workloads on agenda items, although always prioritizing offensive and defensive interests. This included institutional engagement in conjunction with the 2017 Council of the Federation meeting in Alberta as well as during the NAFTA round held in Montreal (Paquin and Marquis, 2019). There was also a high level of collegiality between federal, provincial, and territorial officials, with an extension of the “gold standard” of intergovernmental relations during CETA facilitated by Verheul, who maintained a lead role in the NAFTA negotiations.16 Other provinces, however, were less enthusiastic, noting close consultation but not to CETA levels, especially given the different federal personalities involved in NAFTA and the absence of long periods of time together in European capitals.17 The new NAFTA also created barriers for sub-federal involvement. The content of negotiations, for example, often excluded provincial and territorial jurisdiction or adopted benchmark language from other agreements. Unlike previous agreements, the Canadian Embassy in Washington played a significant role in briefings and preparation for negotiations. Finally, NAFTA unfolded in staggered stages, with inconsistent sub-federal engagement and consultation in Washington and Ottawa, especially when talks shifted to bilateral negotiations between Mexico and the US, leaving some provinces and territories to feel “somewhat marginalized.” This was exacerbated in the end stages of talks leading to the final US–Mexico–Canada agreement (USMCA), which were ad hoc and lacked the regular schedules of earlier rounds.18 By the end, opinions varied, with some provinces, such as Ontario, relatively pleased with the

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“Team Canada” approach, while others, such as Quebec, suggested it was a low point in post-CETA consultation (Paquin and Marquis, 2019). These developments do not preclude a return to the CETA model of participation in the future, to at least some degree. As one representative suggested, this will likely be decided on a case-by-case basis. New negotiations with a significant trading partner, such as China, could create the political and economic will to engage expansive and new sub-federal issues. Others, however, have cited the potential negative impact of western alienation in the aftermath of the 2019 federal election and the Liberals’ failure to elect any MPs from Alberta or Saskatchewan. Since a China agreement is not currently on the horizon, and sub-federal trade officials have an established working relationship with Freeland, Trudeau’s new deputy prime minister and minister of intergovernmental affairs, federal–provincial consultation in this policy area will continue to evolve incrementally, without altering existing best practices within Canadian federalism.19 As such, the institutional process of intergovernmental relations will maintain a level of policy continuity, at least in the foreseeable future. It is also clear that evaluating policy processes solely in an institutional context, which dominates studies of Canadian federalism, provides limited insight. As Skogstad and Schmidt (2011) have pointed out, ideational considerations, adopted in the international relations and comparative political economy literature, are also relevant. Specifically, do national and transnational ideas and discourses reinforce past practices by acting as “cognitive locks,” or instead as catalysts for “unlocking” embedded narratives and practices, creating innovation in both process and outcome? Although Peta (2018) has argued that iterative international trade consultations have created embedded narratives creating a form of de facto institutionalization of federal–provincial relations, the evidence presented in this discussion suggests otherwise.

EFFECTIVENESS: POLICY OUTCOMES AS RELATED TO INTERNATIONAL TRADE AGREEMENTS AND DISPUTES As with process issues, evaluations of policy outcomes in Canadian federalism are typically measured in domestic institutional terms. In



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this case, however, international objectives driven by system factors also offer considerable insight. Specifically, the protection and advancement of offensive and defensive sub-federal interests, as evident in the final technical language of foreign trade agreements, allows for an evaluation of the impact of provincial and territorial governments since provincial/ territorial positions must be articulated to federal officials who then take them forward, or not, as part of broader Canadian negotiating positions. An examination of recent trade agreements suggests considerable sub-federal effectiveness in this policy area. The 2014 Canada–Korea Free Trade Agreement, for example, reflects several sub-federal priorities. In terms of tariff reductions, a number of offensive goals were attained. Overall, South Korea agreed to remove duties from 98.2 per cent of its tariff lines on Canadian products, and Canada committed to remove 97.8 per cent of duties on its tariff lines. Broken down on a provincial/territorial basis, these cuts include fish and seafood products (British Columbia and Atlantic Canada); forestry and value–added wood products (BC and Ontario); metals and minerals, including aluminum and nickel (BC, Ontario, and Quebec); the aerospace industry (Manitoba and Quebec); chemicals and plastics, medical equipment, and fertilizer (Ontario, Saskatchewan, and Quebec); and wheat, pork, beef, and natural gas (Alberta, Saskatchewan, and Manitoba) (Government of Canada, 2014). Similar defensive interests are identifiable in the Canada–Korea Agreement with the exclusion of sensitive sectors and the adoption of already existing benchmark language in others. Provincial purchasing, pricing, and distribution practices for alcohol are excluded, and protection for the terms “Canadian whisky” and “Canadian rye whisky” is provided. The accord also applies much of the already existing WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS) as well as the WTO’s Agreement on Technical Barriers to Trade. Further, access to service providers is consistent with terms under already existing US and European agreements, both of which followed the WTO’s General Agreement on Trade in Services (GATS). As always, Canada excluded natural resources and “public services” such as health, public education, and other social services. Finally, provincial, territorial, and municipal procurement projects were not included in the Canada–Korea agreement (Government of Canada, 2014: 27–45). With CETA, Canada and the EU agreed to eliminate over 98.5 per cent of tariff lines, although existing barriers were already low, limiting

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offensive opportunities for Canadian provinces and territories. A key gain for Alberta and other prairie provinces was beef, pork, and wheat. Under CETA, Canada gained duty-free access for 45,838 tons of exports in carcass weight equivalent (CWE), of which 30,838 tons is fresh beef. This is in addition to the 4,162 tons of CWE access awarded to Canada as part of the EU beef hormone dispute. A total of 75,000 tons CWE of Canadian pork will also now enter the EU duty-free, with low and medium quality wheat limits rising to 100,000 tons, up from 38,853 prior to CETA (European Commission, 2014). Other offensive market access priorities, however, are more difficult to evaluate, given trade-offs that occurred during broader CETA negotiations. Rules of origin, for example, are a challenge as Canada and the EU have different standards in a number of sectors. In cases such as automobiles (Ontario) and fish (Atlantic Canada and British Columbia), Canadian products have difficulty meeting EU rules of origin guidelines. The sub-federal compromise sought and attained by Canadian negotiators was to obtain “rules of origin derogations” allowing access for goods to a certain level that would not have to comply with EU regulations. For fish, this included important coastal exports of fish fillets, lobsters, salmon, herring, and sardines. Up to 100,000 Canadian passenger vehicles also received derogation for EU entry. The result, therefore, was improved sub-federal market access, although not always reflected in direct tariff cuts (European Commission, 2014). Procurement also represented varying degrees of sub-federal offensive and defensive priorities. CETA, for example, allows for unprecedented access to EU suppliers for procurement projects of the federal government, provincial governments, Crown corporations, utilities, municipalities, academic institutions, school boards, and publicly funded health and social services entities. Not only are provinces included, but also the depth of liberalization has become significantly broader with access to utilities procurement (although not absolute), which represents approximately $1 billion annually in the Canadian market (Kukucha, 2015a). Provincial and territorial mass transit contracts are also part of the final agreement. Sub-federal willingness to include these sectors was based on a perceived comparative advantage for some provinces, especially with hydroelectric power in Quebec, British Columbia, and Manitoba. The significance of these developments was mitigated, however, by exclusions related to healthcare, security and policing, and public-private partnerships for



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services and utilities. In most cases, procurement bidding thresholds also did not exceed existing commitments in the WTO’s General Procurement Agreement and Buy American Agreements (Collins, 2015). Other sub-federal defensive interests are also evident when examining CETA’s final legal text. For dairy products, CETA allows for higher imports of EU cheese (accounting for approximately 2 per cent of Canada’s milk production), but other technical language does not dramatically extend agricultural obligations beyond existing WTO and NAFTA commitments. The practices of provincial liquor boards related to listing, quotas, and purchasing, previously the focus of a number of Canada–EU disputes, also remain largely intact. In addition, the accord adopts similar WTO language on technical barriers and sanitary and phytosanitary measures, including the Canada–EU Veterinary Agreement, both of which are sensitive to provincial areas of jurisdiction (Government of Canada, 2013: 7–13). Finally, sub-federal defensive priorities are evident with services. CETA adopts a negative list but its annexes do not move well beyond already existing “GATS-plus” models, such as the Canada–Korea Free Trade Agreement. This includes labour mobility and existing limitations on licensing and qualification requirements, although the agreement does point to the possibility of future liberalization in occupations where parties have similar objectives. It should also be noted that several EU documents publicly recognized the need to address Canadian, provincial, and territorial concerns related to sensitive sectors (European Commission, 2014). Similar trends are evident when examining the USMCA, known as the Canada–United States–Mexico Agreement (CUSMA) in Canada. For example, supply management – which imposes high tariffs on imports of dairy products, eggs, and poultry – was not eliminated, and Ottawa made it clear that compensation would be provided for losses by Canadian producers. New access to Canadian and American dairy markets was negotiated, but the reciprocal 3.6 per cent increase only slightly deviated from pre-existing benchmarks of 3.25 per cent granted under CETA and the CPTPP. CUSMA provisions related to automobiles also reflected Canadian interest in maintaining deeply embedded North American supply chains in this sector, especially Canada’s proposal to tie rules of origin to wages of US $16 an hour, with the intent of maintaining manufacturing jobs. Further, dispute settlement reflected Canadian and sub-federal priorities, especially the “red line” Canada drew on

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maintaining NAFTA’s Chapter 19 panels, which played an important role in previous trade challenges, such as softwood lumber. NAFTA’s Chapter 11 investment panels were removed, but this was not a loss for Canadian negotiators given the large number of claims in recent years, many of which challenged provincial and territorial practices and policies (Morrow, McKenna, and Nolen, 2018). Finally, CUSMA provides some insight on the Trudeau government’s new Progressive Trade Agenda. CUSMA, for example, introduced new language related to a wide range of environmental concerns such as the ozone layer, ship pollution, air quality, marine litter, and corporate social responsibility. The Labour chapter in CUSMA adopted a number of already established International Labour Organization (ILO) standards but also explicitly prioritized gender considerations including LGBTQ rights related to gender identity and sexual orientation in Article 23.9 (Discrimination). Article 23.12.5 further highlighted the need for co-operation on issues such as equal pay for equal work, child care, and nursing mothers. Having said that, enforcement mechanisms for both chapters in CUSMA do not move beyond provisions in the original NAFTA. Consultative processes and dispute panels are available for complainants but there are no financial penalties for rulings (Government of Canada, 2018). Within Canadian federalism, there is also no unified commitment to Progressive Trade Agenda issues across provinces and territories. Not surprisingly, NDP governments tend to be more open to normative trade issues, but not always. The then Liberal government of Ontario also expressed trust in federal negotiators on Progressive Trade Agenda issues, while Quebec was less enthusiastic, especially with the possibility of including Indigenous rights on environmental issues (Paquin and Marquis, 2019). Quebec, with the support of Alberta, however, was successful in maintaining NAFTA’s Commission on Environmental Cooperation (CEC), located in Montreal, despite pressures from both Mexico and the US.20 Canadian federalism, therefore, facilitates the pursuit of sub-federal objectives in the negotiation of trade agreements. Another key measure, however, is whether it serves as an effective mechanism for the implementation of international commitments, especially as evident with international disputes. One of the earliest trade disputes centred on alcohol. Historically, Canadian provinces maintained monopolies or near monopolies on the sale of alcoholic beverages. Provincial liquor control



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boards carefully regulated the sale and importation of all alcohol, with a special emphasis on wine and beer, in order to protect local producers and raise government revenue. As such, foreign imports were subject to a range of measures including high federal tariffs but also sub-federal price mark-ups and quotas. An early dispute between Canada and the European Community (EC) was tied to a 1979 Statement of Intent signed by Canadian provinces to limit these practices. The EC, however, argued that Ontario’s marketing practices violated this agreement. The matter was eventually submitted to a GATT dispute panel, which sided with the EC in October of 1987. Subsequent discussions on alcohol were held with Europe over the next two decades. More recently, the United States also filed a WTO complaint against British Columbia for measures related to the supply of wine in grocery stores. The US dispute, focusing on Article III:4 of the GATT (national treatment), was subsequently joined by Australia, New Zealand, and Argentina, and is currently in the WTO dispute panel process. In a related development, Australia launched its own 2018 complaint related to the sale of wine in grocery stores in BC, Ontario, Quebec, and Nova Scotia (World Trade Organization, 2019). International trade disputes have also targeted provincial procurement practices. In 2009 Ontario passed its Green Energy and Green Economy Act, which was tied to the province’s Feed-in Tariff (FIT) program requiring a percentage of Ontario goods or labour for any awarded contracts. The following year Japan launched a WTO challenge, arguing that domestic content rules violated numerous sections of the previous GATT framework as well as the WTO’s Agreement on Subsidies and Countervailing Measures and its Agreement on Trade Related Investment Measures (TRIMs). The European Union and the United States soon joined consultations related to this challenge, and the EU launched its own formal complaint against Ontario’s FIT program in 2011. In December 2012 the WTO replied to both complaints in a single ruling finding Ontario’s practices in violation of Article 2.1 of the TRIMs and Article III:4 of the GATT (1994). Subsequent Canadian appeals were rejected, and after several mutually agreed upon extensions Canada announced it had complied with the WTO’s findings in June 2014. Specifically, Ontario ended local requirements on large renewal energy procurement contracts and lowered similar provisions on smaller wind and solar electricity contracts awarded as part of the ongoing FIT program. Japan and the EU continue

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to monitor Ontario’s procurement practices in this sector (Timmins, Wagner, and Sahadev, 2013; World Trade Organization, 2015). A number of provincial policies have also been targeted under the investment provisions of NAFTA’s Chapter 11. In 2010 the international forest company Abitibi-Bowater launched a $500 million challenge related to Newfoundland and Labrador’s decision to expropriate the company’s water and timber rights and its hydroelectric holdings in the province, without compensation, after announcing its decision to close its final mill in Grand Falls-Windsor. In an effort to avoid a lengthy Chapter 11 dispute, the federal government agreed to pay a $130 million settlement to Abitibi. To date this award has not been repaid by the government of Newfoundland and Labrador. In another complaint, US-based Windstream Energy successfully challenged provisions of Ontario’s FIT program related to various wind projects and received $475 million in damages from the Canadian government. These costs were fully reimbursed to Ottawa by Ontario. Another $66 million in damages was awarded to Mobil Investments Inc. regarding its challenge of regulatory performance requirements in Newfoundland and Labrador. Finally, Bilcon challenged an environmental review process related to a basalt quarry and marine terminal project in Nova Scotia, with the Delaware company claiming $500 million in damages. The panel also ruled against Canada, and the final award of damages was yet to be determined in early 2020. Four other NAFTA Chapter 11 challenges also focus on provincial practices. Lone Pine Resources, ongoing in mid-2019, involves an American company that was blocked from exploring oil and gas projects in Quebec due to Bill 18 suspending all exploration in that sector in 2011. Two recent victories for Canada include Mesa Power Group in which Ottawa was awarded $2.9 million in damages regarding a dispute over ownership of four Ontario wind farms. In British Columbia, Mercer International unsuccessfully claimed that the BC Utilities Commission, the province’s Ministry of Energy and Mines, and the Crown Corporation BC Hydro all failed to develop a consistent policy of treatment for pulp mills and related facilities with self-generated power capacity. This resulted in an award of $9 million, although Mercer has requested a Supplementary Decision. These cases are in addition to another unsuccessful challenge, Centurion Health, that centred on provincial regulatory provisions in BC that delayed a private surgical services facility, focusing on cosmetic and general surgery in Vancouver (Government of Canada, 2019).



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These GATT, NAFTA, and WTO disputes are important for three reasons. First, they demonstrate Ottawa’s commitment to the evolving norms of this regime both in terms of the dispute process and in the central government’s deference to panel decisions, even in the face of sub-federal resistance. Second, these cases have, at times, established guidelines for future government policy, at both levels of government, as well as for other negotiated settlements. Further, these disputes and rulings can also serve as a “preventative regulatory regime” causing governments to reconsider policy options. During the 2003 provincial election in New Brunswick, for example, the high cost of automobile insurance was a key campaign issue, but Premier Bernard Lord’s Conservative government abandoned it, fearful of the province’s exposure under NAFTA’s Chapter 11. Ontario backed away from legislation mandating blank cigarette packaging in 1995 for similar reasons (Kukucha, 2008: 193–7; Physicians for Smoke-Free Canada, 2008). Questions of sub-federal effectiveness related to implementation, as well as the potential stagnation of second-generation rules-based trade agreements, have also caused some provincial bureaucracies to re-­evaluate internal organizational structures, with an emphasis on compliance, notably in the form of advising governments on international commitments, as well as litigation and trade disputes. During CETA, for example, Quebec and British Columbia eliminated internal and international trade distinctions for provincial officials. The CUSMA and Bombardier disputes also sparked a reorganization of responsibilities in Québec’s Politique Commerciale Division in the Ministère de l’Économie de la Science et de l’Innovation. One branch, Accords Commerciaux, is now responsible for the negotiation of international trade agreements, but a second, Litiges Commerciaux, was created to focus on trade disputes. Officials in BC’s Trade Policy and Negotiations branch (Ministry of Jobs, Trade and Technology) have also expanded job requirements, with representatives developing individual expertise on specific internal and international trade issues, disputes, and outreach. Other provinces are also considering using in-depth knowledge of tariff schedules to assist sub-federal business interests in cost savings associated with cheaper imports for production. It is important to note, however, that several other provincial governments continue to organize officials on the basis of internal and international trade responsibilities, with compliance issues typically falling to line departments, such as energy and agriculture.21

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Despite these changes, the incremental evolution of intergovernmental relations in this policy area does raise questions regarding the need for a formalized institutional role for sub-federal governments in trade negotiations. Some analysts, such as Anthony VanDuzer and Melanie Mallet (2016), have called for agreements to promote provincial/territorial compliance in implementing trade deals that touch on their areas of jurisdiction. On a similar note, Patrick Fafard and Patrick Leblond (2013) have suggested a greater role for non-governmental commercial interests in negotiations to ensure coordinated trade-offs during bargaining. Quebec, unlike other Canadian sub-federal governments, has an implementation procedure for international agreements requiring new laws, regulations, or financial obligations. This process, however, only occurs after ratification by the government of Canada, limiting the province to simply accepting or rejecting agreements, a possibility Quebec is considering with the CUSMA (Paquin and Marquis, 2019). While there are valid arguments to formally institutionalize sub-federal governments into the negotiation, ratification, and implementation of international trade commitments, it is unlikely in the current climate of Canadian federalism, as this discussion suggests (VanDuzer, 2013).

LEGITIMACY: PROVINCE, REGION, SECTORAL GROUPS, AND CIVIL SOCIETY Historically, Canadian non-governmental actors linked to international trade represented Canada’s corporate and business interests, usually in the form of sectoral organizations, such as the Canadian Cattlemen’s Association, or as umbrella groups representing numerous sectors, such as the Business Council of Canada. Advocacy think tanks, such as the Fraser Institute and C.D. Howe Institute, also exist in Canada, prioritizing free markets, limited regulation, and other pro-business issues (Abelson, 1995a, 1995b). Today, deep linkages and networks exist between all sectoral, umbrella, and think tank organizations, enabling ongoing and organized conversations reinforcing neo-liberal narratives and priorities (Carroll and Shaw, 2001). The role of diaspora communities in Canada has also influenced Canadian foreign trade relations, especially in the pursuit of specific trade agreements such as with India and the Canada– Ukraine Free Trade Agreement (CUFTA) (Carment and Landry, 2015).



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For the most part, however, these groups focus their advocacy efforts on the federal level of government. In contrast, “critical” societal groups are fewer and often less organized. Contemporary civil society groups, such as the Canadian Centre for Policy Alternatives and the Council of Canadians, emerged during the 1980s as part of a wave of mobilization around CUSFTA and NAFTA, as did the Pro-Canada Network, a coalition of these and other groups. Although their advocacy efforts focused on Ottawa, these groups did impact the political discourse and platforms of New Democratic parties at all levels of government (Macdonald and Ayres, 2016: 338). During the past decade, these groups also pursued the expansion of existing pan-Canadian and transnational linkages. The Council of Canadians and the Canadian Centre for Policy Alternatives, for example, played a role in establishing the Trade Justice Network in 2010, consisting of environmental, social justice, and Indigenous groups challenging a lack of dialogue and transparency related to CETA. The Trade Justice Network would later expand to include several Canadian municipalities and a range of similar like-minded societal groups in Europe (Trew, 2013). Civil society organizations’ activity at the sub-federal level in Canada, however, varies in scope and impact from region to region. In Ontario, most societal engagement focuses on contentious issues, such as services or trade and the environment. Pressure, however, is not usually directed at the Ministry of Economic Development and Growth (MEDG), which is responsible for foreign trade policy, but at other line departments such as the Ministry of Environment and Climate Change (water) and the Ministry of Education (services). In some cases, MEDG will meet with civil society groups, such as the CCPA, but these interests do not define provincial negotiating positions (Kukucha, 2015b). Quebec, on the other hand, has a corporatist tradition that does not exist in other provinces, with a high degree of labour involvement and non-governmental engagement. Unlike other provinces, Quebec civil society also benefits from “peak associations” such as the larger trade unions or the Fédération des Femmes du Québec, which draw together groups with similar interests (Montpetit, 2003). In matters of foreign trade policy, however, contact is again typically made with line departments and information is then passed to other relevant officials within the provincial bureaucracy. In response to pressure

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from civil society before and after the OAS Summit of the Americas in Quebec City, the Parti Québécois (PQ) also created a formal panel, the Quebec Observatory on Globalization, in the fall of 2001, although it failed to produce any meaningful engagement. Jean Charest’s Liberal government ended these efforts, relying instead on specialized think tanks and university groups for its non-governmental input (Kukucha, 2015b). The current Quebec government also continues to prioritize relations with universities, which have developed a series of co-operative partnerships across the province, facilitated by groups such as the Bureau de coopération interuniversitaire, especially in Montreal and Quebec City.22 As in Quebec, British Columbia has a long legacy of societal engagement with labour, environmental groups, and First Nations. Environmental issues in BC gained prominence during NDP governments in the 1990s, as did consultation with First Nations due to judicial land claims and the Nisga’a Treaty, although these groups did not have a significant interest in foreign trade policy (Hoberg, 2001: 24–7). Labour, on the other hand, has influenced BC positions, such as the province’s decision to adopt observer-only status during the original NAFTA negotiations and its stance on WTO labour standards and services. Not surprisingly the relevance of societal groups declined during the Liberal governments of Gordon Campbell and Christy Clark, with the exception of several proposed pipeline projects (Kukucha, 2015b). This changed, however, under the current John Horgan NDP government, which has prioritized outreach to First Nations and women’s groups, as well as other underrepresented interests, on international trade concerns, especially in lower-wage sectors such as the service industry.23 For the most part, societal activity in other provinces mirrors realities in Ontario and BC. In Manitoba access to government typically depends on the party in power, with Conservatives favouring agriculture and business and the NDP focusing on organized labour. In other provinces, such as Saskatchewan, provincial interaction with societal groups, especially in the area of international trade, is dominated by industry associations and limited to a small range of line departments. In Atlantic Canada, consultation with industry occurs within a small range of departments and contact typically takes place within larger federal consultations. Not surprisingly, many of these industry groups are tied to the region’s resource-based economy, especially fisheries, offshore oil,



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and hydroelectricity. Historically, there are close ties between merchants and political elites, especially in Newfoundland and Labrador, but these ties have declined as competing sectoral and labour associations have emerged (Kukucha, 2015b). Canadian civil society organizations engaged provinces and territories during CETA and TTP/CPTPP negotiations. As early as 2008, the COC initiated a sub-federal communication campaign focusing on international trade. NDP governments in Manitoba and Nova Scotia were also targeted, as were governments in Ontario and Quebec given concerns related to procurement, supply management, and liquor distribution boards. In Quebec, other groups, such as the Réseau Québécois sur l’Intégration Continentale (RQIC) and union and labour organizations, also met with provincial officials, as did the CCPA and the Trade and Investment Research Project in Ontario. The Canadian Union of Public Employees also commissioned a legal opinion on potential provincial vulnerabilities related to CETA and services (Trew, 2013). For CUSMA, BC initiated email consultation with specific interests, typically followed by a meeting or roundtable. The province also continued to “piggyback” on federal consultative efforts, especially those related to the new Liberal Progressive Trade Agenda, although these efforts tended to be educational given the complexity of trade issues addressed.24 Ultimately, however, civil society groups had mixed opinions of the effectiveness of consultations. Although some provinces were open to meeting and receiving unsolicited reports, others were less receptive. Quebec groups were initially optimistic about the PQ government that replaced the Charest Liberals in 2012 but were ultimately disappointed. Frustrated by a lack of progress with provincial officials, these groups soon refocused efforts on consultations at the municipal level and the Trade Justice Network. The goal also shifted from influencing federal and provincial negotiating positions to a formal public review of CETA, which did not occur (Trew, 2013; Kukucha, 2015b). The Trade Justice Network remained active during the renegotiation of NAFTA, with Canadian representation from the Council of Canadians, Canadian Centre for Policy Alternatives, Canadian Labour Congress, the Canadian Union of Public and General Employees, the National Farmers Union, and the Public Service Alliance of Canada. Sub-federal representation included the British Columbia Teachers Federation, Quebec’s Fonds de solidarité (FTQ), and the RQIC. For the most

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part, however, these groups had limited impact owing to the speed of the negotiations. The possible exception is labour, especially the automotive sector, which is represented by Unifor, Canada’s largest private-sector union.

CONCLUSION Sub-federal involvement in the negotiation and implementation of international trade commitments can be evaluated with measures of system, process, effectiveness, and legitimacy. Systemically, constitutional considerations initially removed provincial and territorial governments from this policy area, although this changed as foreign trade commitments intruded into areas of sub-federal jurisdiction, creating a need for broader intergovernmental relations to successfully negotiate and implement these obligations. Sub-federal involvement peaked with CETA negotiations but, for the most part, provinces and territories demonstrated effectiveness in protecting their offensive and defensive interests in the absence of formal participation in negotiations and through differential periods of co-operation. As such, this process of policy continuity suggests limited changes in the institutional or ideational realities of intergovernmental relations in matters of foreign trade policy. At the same time, however, problems of effectiveness do exist, as evident with numerous international trade disputes highlighting a lack of sub-federal compliance, and selective willingness to reimburse Ottawa for damages awarded in specific cases. As noted, this area of Canadian federalism also suffers from deficits in legitimacy, especially related to civil society groups and Indigenous interests.

NOTES 1 2 3 4 5

Personal interview, May 14, 2013. Personal interview, May 14, 2013. Personal interview, May 14, 2013. Personal interview, March 24, 2014. Telephone interview, April 14, 2016.



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6 Personal interview, May 14, 2013. 7 Personal interview, March 24, 2014. 8 Telephone interview, April 14, 2016. 9 Personal interview, May 9, 2013. 10 Personal interview, May 14, 2013. 11 Personal interview, March 24, 2014. 12 Personal interview, March 24, 2014. 13 Personal interview, March 24, 2014. 14 Personal interview, December 6, 2018. 15 Personal discussion for background, March 22, 2019. 16 Personal interview, September 17, 2018. 17 Personal interview, December 6, 2018. 18 Personal interview, December 6, 2018. 19 Telephone interview, April 14, 2016. 20 Personal interview, September 17, 2018; Personal interview, December 6, 2018; Personal discussion for background, March 22, 2019. 21 Personal interview, September 17, 2018; Personal interview, December 6, 2018; Personal discussion for background, March 22, 2019. 22 Personal discussion for background, March 22, 2019. 23 Personal interview, September 17, 2018. 24 Personal interview, September 17, 2018. GLOSSARY Glossary definitions, for the most part, are paraphrased from World Trade Organization, https://www.wto.org/index.htm. anti-dumping code  A rules-based agreement negotiated during the Kennedy and Tokyo GATT Rounds providing criteria for determinations of dumping, injury, and imposing duties. This code was in response to trade distortions related to dumping, a practice where firms sell goods for a lower price in import markets than home markets, or at less than production cost, for the purpose of gaining market share and driving out competition. Canada–US Free Trade Agreement (CUSFTA)  A trade agreement between Canada and the USA that came into effect in January 1989 and aimed at eliminating barriers to trade in goods and services between the two countries over a ten-year period. It also set up procedures to resolve trade disputes between Canada and the United States. Trade between Canada and the USA accelerated after the agreement came into effect. countervailing measures  Retaliatory action when a government investigating authority determines injury has been caused by imported goods benefiting from subsidies. customs valuation  The procedure for determining the customs value of an imported good crossing a border.

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Christopher J. Kukucha defensive interests  Efforts by trade negotiators to exclude or limit liberalization in international commitments due to political considerations or the lack of a perceived economic comparative advantage. General Agreement on Tariffs and Trade (GATT)   Founded to promote international trade, it successfully concluded several rounds of multilateral negotiations that reduced world tariffs. By 1995, when it was replaced by the World Trade Organization, it had over 100 members. hybrid lists  Combine elements of both positive and negative lists. import licensing  A procedure where exporters must apply for a licence from a government administrative body prior to the importation of goods. NAFTA Chapter 11 Investment Panels  A mechanism for foreign investors in Canada, the US, and Mexico to seek financial compensation for government policies, laws, and regulations that limit international investment opportunities. NAFTA Chapter 19 Panels  A dispute resolution process for governments seeking rulings on anti-dumping and countervailing cases outside of domestic courts and other institutional mechanisms. national treatment  A core aspect of post-war international trade agreements, seeking equal treatment for goods and services crossing borders comparable to those of domestic interests. negative lists  Technical language in trade agreements that call for the nondiscriminatory movement of all goods and services, unless specifically excluded in a list of reservations, annexes, or appendixes. North American Free Trade Agreement (NAFTA)  An agreement among Canada, the United States, and Mexico to eliminate tariffs and other barriers to trade. It protected intellectual property rights. When it came into effect in January 1994, it superseded CUSFTA. Trade among the three countries increased substantially in the post-NAFTA period. offensive interests  Efforts by trade negotiators to liberalize rules and norms in international commitments due to political considerations or a perceived economic comparative advantage. positive lists  Technical language in trade agreements that extend coverage only for issues voluntarily included by signatories in international trade agreements, with everything excluded that is not listed. procurement  Goods and services purchased by government agencies for public services and other tasks where discrimination can occur due to preferential treatment for domestic suppliers or a lack of transparency on available contracts and bidding processes. rules of origin  Laws, regulations, and policies that determine a product’s point of origin, typically based on a subjective measure of substantial transformation, although governments also add other considerations to meet thresholds. sanitary and phytosanitary measures  Similar to technical barriers, SPS factors focus on domestic regulations and laws designed to protect the health of humans, animals, and plants.



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services  An increasingly dominant aspect of global trade relations defined in the WTO’s General Agreement on Trade in Services as one of four modes of supply: cross-border, consumption abroad, commercial presence, and the movement of natural persons. subsidies  Government assistance to firms or individuals to reduce production costs using various means, such as tax allowances, cash grants, or soft loans, with the goal of increasing economic competitiveness or providing a perceived social or political gain. technical barriers  Regulations and standards used by governments to protect legitimate domestic interests, such as human health, safety, and the environment, but which can also create discriminatory barriers to trade. REFERENCES Abelson, Donald. 1995a. “Environmental Lobbying and Political Posturing: The Role of Environmental Groups in Ontario’s Debate Over NAFTA.” Canadian Public Administration 38, no. 3: 352–81. https://doi.org/10.1111 /j.1754-7121.1995.tb01054.x. ———. 1995b. “From Policy Research to Political Advocacy: The Changing Role of Think Tanks in American Politics.” Canadian Review of American Studies 25, no. 1: 93–126. https://doi.org/10.3138/CRAS-025-01-05. Cairney, Paul. 2012. Understanding Public Policy: Theories and Issues. New York: Palgrave Macmillan. Carment, David, and Joe Landry. 2015. “Civil Society and Canadian Foreign Policy.” In Readings in Canadian Foreign Policy, edited by Duane Bratt and Christopher J. Kukucha, 277–89. 3rd ed. Don Mills, ON: Oxford University Press. Carroll, William K., and Murray Shaw. 2001. “Consolidating a Neoliberal Policy Bloc in Canada, 1976–1996.” Canadian Public Policy 27, no. 2: 1–23. https://doi.org/10.2307/3552197. Collins, David A. 2015. “Globalized Localism: Canada’s Government Procurement Commitments under the CETA.” Journal of Transnational Dispute Management 2: 1–11. https://doi.org/10.2139/ssrn.2568629. Doern, G. Bruce, and Brian Tomlin. 1991. Faith and Fear: The Free Trade Story. Toronto: Stoddart Publishing. European Commission. 2014. CETA: Summary of the Final Negotiating Results. http://trade.ec.europa.eu/doclib/docs/2014/december/tradoc_152982.pdf. Fafard, Patrick, and Patrick Leblond. 2013. “Closing the Deal: What Role for the Provinces in the Final Stages of the CETA Negotiations?” International Journal 68, no. 4: 553–9. https://doi.org/10.1177 /0020702013509319. Government of Canada. 2013. Opening New Markets in Europe, Creating Jobs and Opportunities for Canadians. Ottawa: Public Works and Government Services Canada.

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Christopher J. Kukucha ———. 2014. Canada-Korea Free Trade Agreement: Creating Jobs and Opportunities for Canadians: Provincial and Territorial Benefits. Ottawa: Public Works and Government Services Canada. ———. 2018. Canada-United States-Mexico agreement (CUSMA). https:// international.gc.ca/trade-commerce/trade-agreements-accords -commerciaux/agr-acc/cusma-aceum/text-texte/toc-tdm.aspx ?lang=eng. ———. 2019. NAFTA – Chapter 11 – Investment. https://www.international .gc.ca/trade-agreements-accords-commerciaux/topics-domaines/disp-diff /mercer.aspx?lang=eng. Hart, Michael M. 1998. Fifty Years of Canadian Tradecraft: Canada at the GATT 1947–1997. Ottawa: The Centre for Trade Policy and Law. Hoberg, George. 2001. “Policy Cycles and Policy Regimes: A Framework for Studying Policy Change.” In In Search of Sustainability: British Columbia Forest Policy in the 1990s, edited by Benjamin Cashore et al., 3–30. Vancouver: University of British Columbia Press. Kukucha, Christopher J. 2005. “From Kyoto to the WTO: Evaluating the Constitutional Legitimacy of the Provinces in Canadian Foreign Trade and Environmental Policy.” Canadian Journal of Political Science 38, no. 1: 129–52. https://doi.org/10.1017/S000842390505002X. ———. 2008. The Provinces and Canadian Foreign Trade Policy. Vancouver: University of British Columbia Press. ———. 2015a. “Internal Trade Agreements in Canada: Progress, Complexity and Challenges.” Canadian Journal of Political Science 48, no. 1: 195–218. https://doi.org/10.1017/S0008423915000232. ———. 2015b. “Lacking Linkages: Labour, Civil Society, and Sub-Federal Trade Policy in North America.” In Building without Architecture: Understanding the New North America, edited by Greg Anderson and Brian Bow, 110–29. New York: Routledge. ———. 2016. “Provincial/Territorial Governments and the Negotiation of International Trade Agreements.” Insights 10 (October): 1–16. Montreal: Institute for Research on Public Policy. Lilly, Meredith B. 2018. “International Trade: The Rhetoric and Reality of the Trudeau Government’s Progressive Trade Agenda.” In Justin Trudeau and Canadian Foreign Policy, edited by Norman Hillmer and Philippe Lagasse, 125–44. New York: Palgrave-Macmillan. Lysenko, Dmitry, and Saul Schwartz. 2015. “Does Canada Need Trade Adjustment Assistance?” Study 57 (December): 1–32. Montreal: Institute for Research on Public Policy. Macdonald, Laura C., and Jeffrey Ayres. 2016. “Civil Society and International Political Economy.” In International Political Economy, edited by Greg Anderson and Christopher J. Kukucha, 329–42. Don Mills, ON: Oxford University Press. Madner, Verena. 2017. “A New Generation of Trade Agreements: An Opportunity Not to Be Missed?” In Mega-regional Trade Agreements: CETA, TTIP, and TiSA:



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New Orientations for EU External Economic Relations, edited by Stefan Griller, Walter Obwexer, and Erich Vranes, 307–14. Oxford: Oxford University Press. Montpetit, Éric. 2003. Misplaced Distrust: Policy Networks and the Environment in France, the United States, and Canada. Vancouver: University of British Columbia Press. Morrow, Adrian, Barrie McKenna, and Stephanie Nolen. 2018. “How Canada Won, and Lost, a Trade Deal.” Globe and Mail, October 6, 2018: B-1. Paquin, Stéphane. 2013. “Federalism and the Governance of International Trade Negotiations in Canada: Comparing CUSFTA with CETA.” International Journal 68, no. 4: 545–52. https://doi.org/10.1177 /0020702013509318. Paquin, Stéphane, and Laurence Marquis. 2019. Federalism and Trade Negotiation: A Defacto Shared Practice. Montreal: Groupe d’études et de recherche sur l’international et le Québec, École nationale d’administration publique. Peta, Conner. 2018. Managing Competing Interests: The Provinces and the Institutionalization of Canadian Trade Policy. Edmonton: University of Alberta. Physicians for Smoke-Free Canada. 2008. The Plot Against Plain Packaging. http://www.smoke-free.ca/pdf_1/plotagainstplainpackaging-apr1%27.pdf. Poirier, Johanne, Cheryl Saunders, and John Kincaid. 2015. Intergovernmental Relations in Federal Systems. Don Mills, ON: Oxford University Press. Skogstad, Grace. 2012. “International Trade Policy and the Evolution of Canadian Federalism.” In Canadian Federalism: Performance, Effectiveness and Legitimacy, edited by Herman Bakvis and Grace Skogstad, 203–22. 3rd ed. Don Mills: Oxford University Press. Skogstad, Grace, and Vivien A. Schmidt. 2011. “Introduction: Policy Paradigm Development, Transnationalism and Domestic Politics.” In Policy Paradigms, Transnationalism and Domestic Politics, edited by Grace Skogstad, 3–35. Toronto: University of Toronto Press. Stephens, Hugh. 2018. “Canada’s Progressive Trade Agenda and a Free Trade Agreement with China: Are They Incompatible?” SPP Briefing Paper 11, no. 27: 1–13. University of Calgary School of Public Policy. Timmins, Thomas J., Wendy J. Wagner, and Neeta Sahadev. 2013. The WTO Decision: What It Means for Ontario FIT 1.0 and 2.0 Projects. https:// www.gowlings.com/KnowledgeCentre/article.asp?pubID=2910. Trew, Stuart. 2013. “Correcting the Democratic Deficit in the CETA Negotiations: Civil Society Engagement in the Provinces, Municipalities, and Europe.” International Journal 68, no. 4: 568–75. https://doi.org /10.1177/0020702013509313. VanDuzer, J. Anthony. 2013. “Could an Intergovernmental Agreement Increase the Credibility of Canadian Treaty Commitments in Areas within Provincial Jurisdiction?” International Journal 68, no. 4: 536–44. https:// doi.org/10.1177/0020702013509315.

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Christopher J. Kukucha VanDuzer, J. Anthony, and Melanie Mallet. 2016. “Compliance with Canada’s Trade and Investment Treaty Obligations: Addressing the Gap between Provincial Action and Federal Responsibility.” Alberta Law Review 54, no. 1: 89–139. https://doi.org/10.29173/alr462. Verheul, Steve. 2010. “Testimony.” House of Commons Standing Committee on International Trade, 15 November. Ottawa: Parliament of Canada. World Trade Organization. 2015. Canada: Measures Related to the Feed-in Tariff Program. https://www.wto.org/english/tratop_e/dispu_e/cases_e /ds426_e.htm. ———. 2019. Canada and the WTO. https://www.wto.org/english/thewto_e /countries_e/canada_e.htm.

CHAPTER TEN

Fiscal Federalism: The Importance of Balance Douglas M. Brown

It is often said that fiscal federalism is the glue that keeps Canada together. But issues about fiscal arrangements are highly political and controversial. Do different orders of government have the fiscal capacity to fulfill their constitutional obligations? Does each province or region get its fair share in transfer payments or tax allocation? What does “fair” mean? Can the federal government afford to fund increasing transfer costs? Who pays for redistribution to poorer provinces, and how much redistribution should there be? Do fiscal transfers do enough to promote national standards in programs such as healthcare? These are some of the questions governments will face in the 2020s. Fiscal federalism is the evolving system of financial arrangements between the federal and provincial orders of government. It is essential to how Canada’s federal system works. This chapter begins by outlining the structure of Canadian fiscal federalism: constitutional powers, tax structure and harmonization, intergovernmental transfers, and the fiscal relations process. Then it surveys the evolution of fiscal federalism over the past sixty years, emphasizing the important role played by fiscal relations in building Canada’s welfare state, and how the balance, both between the two orders of government and between the values of equity and efficiency, has shifted in the past twenty years. The chapter concludes with a review of the issues that have been most significant in the past few years, or anticipated in the near future, as the federation seeks a new balance.

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Fiscal federalism also has a role to play in all three of the areas that are the focus of this book: the performance of the federation, policy effectiveness, and political legitimacy. First, the federation’s performance depends in no small part on its ability to be flexible and to adapt to changing conditions. Fiscal relationships provide a key means to achieve such change, as well as to maintain the integrity of federal principles. Second, fiscal federalism contributes to policy effectiveness by underpinning two key economic goals: equity and efficiency. The balance between these two has shifted over time. Fiscal relations are also a means to more specific policy ends involving such fields as healthcare, post-secondary education, labour mobility, or economic development. Finally, with respect to political legitimacy, intergovernmental fiscal relations are marked by secrecy, complexity, and, sometimes, muddled accountability; therefore, they do lack full legitimacy. But even if the technical discussions involved in fiscal federalism continue to take place behind closed doors, the underlying issues are well aired in public.

THE STRUCTURE OF CANADIAN FISCAL FEDERALISM Fiscal relations among governments in Canada are shaped by the rules and practices that make up the Canadian Constitution. The allocation of expenditure and revenue functions is among the more important of these constitutional features. But in many respects, it is fiscal federalism that gives shape to the Constitution, not vice versa. Formal constitutional powers would have little relevance if revenues could not be collected and expenditures made. And Canada’s Constitution would have been obsolete long ago if not for the flexible instruments of fiscal federalism. For example, governments used intergovernmental fiscal arrangements to respond to the rise of the modern welfare state – ­and more recently to its partial retrenchment and adaptation to global economic integration. Federal constitutions are notoriously difficult to amend, and ours is no exception. However, fiscal arrangements change frequently and thus provide opportunities for system-wide adaptation. Four features of the structure of Canadian fiscal federalism are important. They are (1) the constitutional division of legislative, taxation, and expenditure powers; (2) the evolved pattern of allocation, sharing, and



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harmonization of taxes; (3) the system of intergovernmental transfers to bridge the gap between revenue and expenditure responsibilities; and (4) the process through which fiscal arrangements are made by the federal and provincial governments.

Constitutional Powers The constitutional allocation of powers affects fiscal relations in the Canadian federation in three ways. First, the Canadian Constitution emphasizes exclusive fields of jurisdiction, as opposed to the scheme of concurrent, or legally shared, powers typical of other federations, more self-rule than shared rule as noted in chapter 2. Exclusivity of jurisdiction, the hallmark of what Keith Banting in chapter 11 calls the classic model of federalism, means that the central government has relatively little opportunity to legislate specific conditions and funding formulae for programs to be delivered by the provinces (Watts, 1999). In Canada, fiscal mechanisms must respect the jurisdictional autonomy of the provinces in major expenditure fields. This characteristic has taken on greater significance since the mid-twentieth century because most of the fields key to the welfare state (e.g., social assistance, healthcare, and education) are under provincial jurisdiction. Moreover, the fiscal transfer program called equalization is specifically designed to ensure that all provinces have a similar fiscal capacity to exercise their autonomy, and thus reinforce their exercise of exclusive jurisdictions under the Constitution. The requirement to provide equalization payments is explicitly made in section 36(2) of the Constitution Act, 1982. The second important feature of this country’s constitutional arrangements is that, unlike other federations, Canada gives the two senior levels of government full access to the most important and most broadly based sources of taxation. Both the federal and provincial orders of government can levy not only income taxes (personal and corporate) but also general sales or consumption taxes, as well as payroll taxes for specific purposes such as unemployment insurance, healthcare, and pensions. The constituent units of other federal systems are more restricted in their ability to pay for their expenditure responsibilities from their own revenue sources. Thus the vertical fiscal gap (defined more fully below) has been considerably less in Canada than in Germany or Australia, for example. On the other hand, governments at both levels must pay

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attention to tax harmonization to ensure that taxpayers are not subjected to conflicting demands and overwhelming tax burdens. The third important feature is the constitutional allocation of what is known as “the spending power”: the constitutional right of the federal Parliament to spend its revenues in any field, as it sees fit. This power has been controversial, particularly among those Canadians, especially in Quebec, who insist on strict adherence to the principle of the provinces’ autonomy in their exclusive jurisdictions. Nonetheless, the spending power has been the means by which the federal government has promoted a national (pan-Canadian) approach to social programs, including direct payments to individuals and organizations, for redistributive purposes. The courts have upheld the spending power, so long as the granting of money does not constitute regulation by other means. And in 1999 the federal government and nine provinces (all but Quebec) signed the Social Union Framework Agreement, establishing some general principles for the use of the federal spending power where provincial jurisdiction is concerned. These rules, in general, have affected the shape not only of such major transfers as the Canada Health Transfer (CHT) and the Canada Social Transfer (CST) but also of new intergovernmental initiatives in the social policy field. Finally, although there is no declared provincial “spending power” per se, the provinces have a residual power to spend wherever they see fit, including in areas outside their formal field of legislative power, such as the funding of international trade offices (Hogg, 1996: 151–2), providing, again, that such spending is not a backdoor attempt to regulate a federal area of jurisdiction. These three sets of constitutional powers – i­ n the areas of regulation, taxation, and expenditure – h ­ ave interacted over the course of Canada’s history to produce dramatically different responses to the needs of the day.

Tax Structure and Harmonization As just noted, Ottawa and the provinces share the most important and broadly based sources of revenue, including income taxes; in 2011 the federal government took 60 per cent of personal income tax (PIT) and 62 per cent of corporate income tax (CIT) (Treff and Ort, 2013: Table A1). In addition, all provinces except Alberta collect a retail sales tax, and the federal government levies the Goods and Services Tax (GST), a general consumption tax that is fully harmonized with the sales tax in



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some provinces (i.e., Newfoundland and Labrador, Nova Scotia, New Brunswick, PEI, and Ontario) and nearly so in Quebec (see Bird, 2001). Overall, federal and provincial shares of these general sales taxes in 2009 were 40 per cent and 60 per cent respectively (Treff and Ort, 2013). The federal and provincial governments also share revenues from taxes on gasoline and other motive fuels, as well as taxes on alcohol and tobacco. The remaining tax sources of the federal and provincial governments are more exclusive. Only the federal government can impose customs and excise duties, and since the provinces own almost all the natural resources, they levy almost all of the resource royalties and related rents. Resource revenues have been especially important to Alberta because of historically high prices for its large petroleum reserves, but they are also important to a number of other provinces. The past sixty years have seen a steady trend towards decentralization in the overall revenue split between the federal and provincial governments. In 1950, when Ottawa exercised strong central control over revenue generation, the federal government levied about 65 per cent of total taxes. By 1991 this figure had declined by over one-third to 44 per cent, and in 2018 it was 39 per cent. As Table 10.1 shows, the provinces and territories raise the most revenues of any order of government from their own sources (i.e., excluding grants from other governments). They collected 48 per cent of total Canadian own-source revenues in 2018, while local governments collected 13 per cent. The main reason for the shift to provincial dominance in own-source revenue was the provinces’ need for a greater share of tax revenues to meet their spending responsibilities in areas (e.g., health) where costs were rising much more quickly than they were in areas of federal responsibility (e.g., defence). To help meet provinces’ revenue needs, the federal government ceded considerable “tax room” on corporate and personal income to the provinces in the 1950s, 1960s, and 1970s. At the same time, tax sources – ­both big and small – ­have proliferated at the provincial level. In any federal system, decentralized tax allocation can erode the goals of economic integration (i.e., the creation of a common market) by placing different burdens on individuals and companies depending on where they are located. Moreover, decentralized revenue generation creates a gap between those provinces with lucrative sources of tax revenues and those provinces whose yield from tax sources is far less. It is to address this

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Douglas M. Brown Table 10.1.  Canadian Governments – Own-Source Revenues ($ millions/%)

1991 2001 2011 2018

Federal

Prov./Terr.

Local

Total

126,868 (44.4%) 198,054 (44.6%) 229,938 (35.8%) 299,867 (38.9%)

122,493 (42.8%) 196,490 (42.8%) 315,029 (50.7%) 366,411 (47.6%)

36,475 (12.7%) 49,262 (11.1%) 83,248 (13.4%) 102,746 (13.4%)

285,836 (100%) 443,806 (100%) 621,215 (100%) 769,024 (100%)

Source: Author’s compilation drawn from Fiscal Reference Tables (Canada, 2018).

type of fiscal imbalance, or inequity, resulting from such decentralization that equalization programs become necessary (see discussion below). Harmonization of taxes is also important to ensure that similarly situated taxpayers are treated similarly, and to facilitate the movement between provinces of capital, labour, goods, and services (Brown, 2001). One of the most successful means of ensuring harmonization has been the Tax Collection Agreements (TCAs), under which the federal government agrees to collect taxes on behalf of any province or territory. TCAs are in place for federal PIT collection in all provinces and territories except Quebec, and for CIT in all except Ontario, Alberta, and Quebec. Under these arrangements the federal government absorbs the collection costs, and in return the provinces agree to a common definition of the tax base and a common approach to tax enforcement and allocation. Harmonization through unified collection is somewhat less advanced for consumption taxes. On July 1, 2010, the two large provinces of Ontario and British Columbia harmonized their sales tax with the federal sales tax for the first time (to create a combined Harmonized Sales Tax, or HST), though BC withdrew from the arrangement in 2013. Economists claim that this harmonization contributes to more efficient business conditions and smoother economic integration within Canada (Boadway and Shah, 2009). In Quebec the GST is collected by the province on behalf of the federal government, not vice versa.

Intergovernmental Transfers Public-finance analysts refer to two kinds of fiscal relationships: vertical and horizontal (Boadway, 2005; Anderson, 2010; Boadway and Shah, 2009). Vertical relations are those between different levels or orders of government: not only federal–provincial or federal–territorial, but also



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provincial–local, federal–Indigenous, even federal–local. In all federations there is a natural gap between the central or federal government and the constituent governments or provinces. Central governments, by virtue of their authority over the entire country, are able to tax economic resources – ­wealth, profits, income, consumption – ­wherever they occur. Thus from an efficiency perspective it makes sense that the federal government has a greater fiscal capacity than the federation’s constituent parts. States or provinces usually have neither the full legal power nor the practical means to tax national wealth in order to fund their expenditures. The result is a vertical gap between federal revenues and provincial expenditure that should be closed. There are four ways to close this gap. The first and most common way is to transfer cash, on an annual basis, from the federal government to the provinces. A second way is to reallocate or transfer a share of taxes (also called tax room) from the federal to the provincial level, which the province would then levy on its citizens. Yet a third way is to shift an entire tax field to the provinces, permanently reducing the federal government’s fiscal capacity. And a fourth way is simply to transfer the spending responsibility upwards from the provincial to the federal level. All four methods have been used in Canada at one time or another, with cash transfers being the most common. A vertical fiscal imbalance (compared to a gap) is said to exist when a province’s revenues are still not sufficient to meet its needs, even after federal transfers are taken into account. How does one determine what those expenditure needs are, whether provincial revenues (or the ability to raise revenues) are in fact inadequate, and exactly how insufficient are the federal transfers? The answers to these questions involve significant differences in interpretation and not a small amount of political posturing. Suffice it to say that “vertical fiscal imbalance” (VFI) is a loaded term (Lazar, St-Hilaire, and Tremblay, 2004). We return to this issue below in the discussion of the Harper Conservative government’s approach to fiscal federalism. The term horizontal imbalance refers to distinctions at the provincial or territorial level: more specifically, the differing fiscal capacities of the various provinces and territories to fund their own expenditure responsibilities. These differences are primarily due to regional economic disparities: differences in economic activity and accrued wealth among

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the constituent units – f­or example, the fact that Alberta’s economy is richer than New Brunswick’s. In virtually all federations, some way is found to even out these horizontal imbalances, for two reasons. One is a matter of general equity, to ensure a measure of fiscal equality across the country; the other has a constitutional purpose, to ensure that every unit within the federation can manage the responsibilities allocated to it. In some federations, such as Germany, the richer provinces make direct payments to the poorer ones, but more commonly the federal government uses its fiscal capacity to redistribute wealth regionally, through intergovernmental grants and, in some cases, transfers to individual persons through programs such as employment insurance. Since transfers from the federal level are the chief means of bridging horizontal gaps, the federal level would still need to have a larger revenue capacity than the provinces even if, on average, provincial expenditure responsibility and revenue capacity were evenly matched (no VFI). Intergovernmental transfer payments are also an important means through which the federal government can build national programs while leaving their delivery to the provincial governments. In so doing, the federal government can choose to require that the provinces follow central policy objectives and program design, or it can leave those decisions to the provinces. Thus transfers come in two basic types: conditional and unconditional. Conditional transfers are payments made for specific purposes, often to introduce new social programs with similar entitlements across the country. Unconditional transfers have no strings attached, but are still guided by specific formulae determining which provinces get what proportions of funds. Transfers from the federal government to the provinces and territories are now largely unconditional with, it can be argued, fewer conditions imposed on federal monies than in any other federal system. The three largest programs, accounting for about 95 per cent of all federal transfers in recent years, are the Equalization Program, funded in 2017–18 at $18.4 billion, and the Canada Health and Social Transfers (CHT and CST), funded in 2017–18 at $50.9 billion (see Tables 10.2 and 10.3). The equalization program is wholly unconditional, while the CHT and CST come with only a few general conditions. The conditions on the CST and CHT are discussed in chapters 11 and 12, respectively. They amount to national principles and leave considerable room for provincial interpretation.



Fiscal Federalism: T   he Importance of Balance

Table 10.2.  Major Federal Cash Transfers to Provinces and Territories (selected years 1992–3 to 2017–18/$ millions)a 1992–3 1997–8 2002–3

2007–8

2012–13 2017–18

Social Program Transfersb Equalization Territorial Funding Formula

18,396 7,784

12,500 9,738

19,100 8,859

31,065 12,925

40,428 15,423

50,898 18,354

1,076

1,229

1,616

2,313

3,111

3,682

Total

27,256

23,467

29,575

46,303

58,962

72,934

Source: For 1992–3 to 2002–3, Canada (2006: Annex 3, Tables A3.1–A3.3); for 2007–8, Canada (2008); for 2012–13, Canada (2015); for 2017–18, Canada (2017a). a Dollar amounts are nominal; and reflect actual transfer amounts in the years indicated. b Social program transfers, 1982–3 to 1992–3, consist of the EPF and CAP cash transfers; since 1997–8 they consist of the CHT/CST cash transfer.

Moreover, both the CHT and CST are block grants, intended to cover a broad range of program expenditures in areas from health to social assistance to post-secondary education. Block grants are the amalgamation of previously more specific cost-shared programs. Thus block grants are transferred without reference to explicit provincial expenditures, whereas specific program grants are matched to actual expenditures according to a formula (e.g., 50–50). Canadian governments still maintain some cost-shared programs, including economic and regional development agreements and federal–provincial–municipal infrastructure agreements (Vaillancourt, 2000). But in dollar terms they are much less important than the big two transfers – a­ lthough the infrastructure and related conditional funding programs were increased significantly from 2008–9 to 2010–11 as a means to stimulate the economy during the major recession (see discussion below). Canada is notable among federations for the large percentage (about 95 per cent) of its intergovernmental transfers that take the form of block payments. The most unconditional of the transfer programs, equalization, is intended to sustain the provinces’ constitutional autonomy by ensuring that each province has the capacity to deliver comparable services at comparable rates of taxation. Initiated in 1957, equalization brings provinces with a fiscal capacity below the national average up to a national standard. Except indirectly, through the redistributive effects of the federal tax system, equalization does not take funds from the richer provinces: the latter are not equalized down to the national level, it is only the poorer

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Douglas M. Brown Table 10.3.  Major Federal Cash Transfers to Provinces and Territories (estimated entitlements, 2018–19, $ millions) CHT

CST

Equalization

TFF

Offshore Accords

Total

NL

548

201

PEI

161

59

419

Nova Scotia

996

366

1,933

New Brunswick

792

291

1,874

Quebec

8,791

3,226

11,732

23,749

Ontario

14,964

5,492

963

21,420

2,037

Manitoba

1,410

518

Saskatchewan

1,224

449

750 638 (95)

3,201 2,956

3,965 1,673

Alberta

4,504

1,653

6,157

BC

5,066

1,859

6,925

Nunavut

40

15

1,579

1,637

NWT Yukon

46 40

17 15

1,256 950

1,319 1,006

38,584

14,161

All Prov. & Terr.

18,958

3,785

(95)

75,393

Source: Author’s compilation based on tables for fiscal entitlements of each province and territory, as found in Finance Canada website pages for Major Transfers (Canada 2017b). http://www.fin.gc.ca/access/fedprov-eng.asp, updated to December 2017.

provinces that are equalized up. The funds for this purpose come wholly from the consolidated revenue fund of the federal government. The latter is collected throughout the country and individual taxpayers in the poorer provinces contribute, according to their income, the same as individual taxpayers in the richer provinces. There are no direct transfers between provincial governments. (See discussion below of the misrepresentation by some political leaders and commentators of how the equalization program works.) Provincial fiscal capacity is measured using a national standard based on tax yield from five different categories of revenue sources, an approach referred to as the “representative tax system.” Each province’s actual fiscal capacity is measured against this standard to determine the extent of its entitlement. Currently five of the ten provinces receive funds to bring them up to the national standard of fiscal capacity. Unlike equalization schemes in some other countries (e.g., Australia, South Africa), the Canadian system is designed only to determine differences



Fiscal Federalism: T   he Importance of Balance

in fiscal capacity; it does not attempt to measure differences in the costs of providing provincial services or in the need for specific program expenditures (see Brown, 1996; Béland et al., 2017). For a brief period in 2004–7, following a decision of Paul Martin’s Liberal government, all of this complex determination of equalization entitlements was essentially abandoned. Instead the federal government made payments based on the recent past with an incremental increase each year. That approach came under considerable criticism for departing from rational principles and a transparent formula. In 2007 Stephen Harper’s Conservative government restored the program to a principles-based formula but, as discussed below, it revised those principles significantly to limit the future growth of the program. The federal government also transfers funds to the governments of the Northwest Territories, Yukon, and Nunavut. These territorial governments are responsible for nearly the same range of expenditures as the provinces. Yet their needs and per capita costs are greater because of their huge land mass, northern isolation, and sparse populations; furthermore, they lack the full range of provincial taxing powers (resource revenues are shared with the federal government) and their fiscal capacity is much less than that of even the poorest province. Thus, the territorial governments depend on federal transfers for the major portion of their revenues; in fiscal year 2019–20, the Territorial Funding Formula (TFF) and other federal transfers amounted to 85 per cent of Yukon revenues, 81 per cent for the Northwest Territories, and 80 per cent for Nunavut. As noted, these transfers are provided mainly by the TFF; in addition, territorial governments receive the CHT and CST, but these payments are deducted from their TFF entitlements. From 1985 to 2004, TFF amounts were determined according to an expenditure-based formula, adjusted for population, which reflected the special expenditure needs of the territories. The TFF did not escape fiscal restraint; the grants were frozen in 1995–6, and further reduced by 5 per cent in 1996–7. In 1998 a ceiling on future increases was imposed, and since 2004 the actual payments have been delinked from the need-based formula. In 2017–18 the three northern territories received a combined total of $3.6 billion from the TFF. Finally, intergovernmental transfers play a crucial role in funding First Nations governments (the more than 600 Indian Band Councils) and other Indigenous governments and organizations. These governments

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are not part of regular fiscal federalism (federal–provincial–territorial) arrangements, and do not receive either equalization or CHT and CST payments. Instead, their funding comes from the federal government’s Indigenous Services Canada (ISC) and other specific federal programs. According to federal estimates, ISC will transfer $11.5 billion to Indigenous governments and organizations in 2019–20. Indigenous governments differ from the other governments in the federation constitutionally, economically, and fiscally (see chapter 15). Some Indigenous governments have limited taxing power, but few have much fiscal capacity (i.e., the ability to obtain revenues from economic activity as opposed to the legal power to levy taxes), and none has the broad-based taxing powers of the provinces. Also, the politics and policy discussions surrounding Indigenous finances tend to take place on a separate track and under the auspices of different executive institutions than discussions at the federal–provincial–territorial level (Prince and Abele, 2005).

Fiscal Relations Process The preceding structural outline may seem bloodless and technical, but the decision-making process through which Canadian fiscal arrangements are made is anything but. As W.A.C. Bennett, the long-serving BC premier, once purportedly told his fellow first ministers: “Let’s get down to the real business of Canada and divvy up the cash.” Almost everything governments do requires money, and it seems that there is never enough – p ­ olicy issues and decisions very often come down to financial requirements. Thus fiscal arrangements are at the heart not only of federal–provincial (and provincial–municipal and federal–Indigenous) relations, but also the budget-making process in every government. They are among the most hotly contested issues in politics, reflecting real ideological differences and regional interests. Intergovernmental relations on financial matters suffer from all the defects of other executive federalism processes – ­and more. Although the fiscal battles between Ottawa and the provinces, and among the provinces themselves, have become highly public, the details of fiscal arrangements are so complex that governments leave them to a handful of technical experts who meet in private. The resulting lack of transparency makes accountability difficult to trace – ­a characteristic often



Fiscal Federalism: T   he Importance of Balance

exploited by governments eager to avoid taking the blame for cutbacks in funding or program entitlements. Decisions about fiscal arrangements, particularly the final amounts to be transferred to the provinces, are rarely made jointly. Rather, the different levels of government tend to hold frequent meetings, argue their positions, agree on some general approaches and principles, and then leave the final decisions to each government. Consistent with this practice (Burns, 1980; Lazar, 2000), two of the most dramatic changes in fiscal arrangements in recent times, the introduction of the Canada Health and Social Transfer (CHST) in 1995 and the major changes announced in the federal budget of 2007, were made by the federal government alone, following consultation with the provinces (Greenspan and Wilson-Smith, 1997). Negotiations with the provinces shape the options facing the federal government, and a decision taken against the wishes of all the provinces can backfire politically. In the end, though, Ottawa’s allocation of the cash is a political act, and considerations other than the interests of the provinces can have a big say, particularly when the money is to be directed at social programs. Finally, the tendency to leave the big budgetary decisions to individual governments is reinforced by two institutional features. First, both the federal Parliament and the provincial legislatures want to protect their power to appropriate funds every year (even if budgetary decisions are initially made by the finance minister or the cabinet). Thus no legislature will consent to be bound by multi-year intergovernmental agreements. Second, Canada’s intergovernmental machinery does not function well when it comes to taking final, substantive, and binding decisions (Painter, 1991; Brown, 2002). It is simply too cumbersome for governments to have to agree collectively, at least on a regular basis, on financial matters. Nonetheless, issues of accountability, transparency, and decision-making are all of current concern to Canadian citizens and their governments.

FISCAL FEDERALISM 1950–2015: THE SHIFTING BALANCE Fiscal relationships in Canada are subject to frequent change, but the changes themselves are usually incremental. Therefore, a long sweep of time is required to understand and evaluate the effect of fiscal federalism

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in Canada. Before turning to the current issues facing fiscal relationships, it is vital to see where we have been. Harvey Lazar wrote in 2000: Until the late 1970s or early 1980s, Canadian fiscal federalism had a “mission statement.” Its sense of purpose mirrored the post-war consensus about the role that the state could play, through programs of redistribution and macroeconomic stabilization, in building a fair and compassionate society and a prosperous and stable economy. [Since then] the golden age of consensus had eroded badly.... Fiscal federalism has also lacked a strong sense of purpose. (Lazar, 2000: 4)

The post-war consensus was that fiscal policy should strike a balance between social and regional equity on one hand, and the efficiency of the national economy on the other. Interpersonal or social equity was pursued through a progressive income tax system, the social security system, and other universal social programs such as healthcare and education. Inter-regional equity was pursued through fiscal equalization, unemployment insurance, and regional development programs. As Banting documents in chapter 11, key aspects of the welfare state in Canada could be delivered effectively (and constitutionally) only by the provinces. Thus, beginning in the 1950s, the federal government used cost-shared programs to induce provincial spending in the areas of social assistance, vocational training, universities, social services, and hospital and medical insurance plans, among others. And after 1957, Ottawa began making separate payments to poorer provinces for fiscal equalization. This era was the pinnacle of what Banting calls shared-cost federalism. The era of shared-cost, co-operative federalism came to an end by 1976, as economic growth and thus federal revenues slowed and the federal government entered a period of chronic budgetary deficits that did not end until 1998. In response to its tighter fiscal position, Ottawa decided it would no longer match whatever the provinces spent and thus have its spending driven by rising provincial costs and commitments. Instead, in 1977 federal legislation combined transfers for health and post-secondary education into a block grant called the Established Programs Financing (EPF). And in 1990 it put a ceiling on payments to the richer provinces from the Canada Assistance Plan (the transfer for social assistance, i.e., welfare). As a result of these and other changes,



Fiscal Federalism: T   he Importance of Balance

the provinces were obliged to fund an ever-larger proportion of social programs from their own revenues. Federal transfers to the provinces as a share of total government spending peaked around 1982. In that year, as part of the effort to patriate and amend the Constitution, Canadian governments and legislatures made a commitment to the equality of regional economic opportunity and to the principle of equalization payments in section 36 of the Constitution Act, 1982. This constitutional commitment has been crucial in sustaining the political commitment to equalization. As can be seen in Table 10.2, equalization payments were spared the relentless cuts in either the growth rate or the actual cash of intergovernmental transfers after 1981 (see Brown, 2007). The 1990s saw even more dramatic changes as fiscal relations in Canada responded to economic and political upheavals. In this decade of globalization and market liberalization, governments reformed the welfare state to suit the more competitive international economy. All governments eliminated their budgetary deficits and began to reduce their accumulated debts; they balanced their budgets, and many were eventually able to accumulate substantial surpluses. Tax reform and tax cuts were responses to Canadian taxpayers, of whom the majority now expected less of government and trusted government less when it came to spending their money wisely. The key milestone occurred in 1995 with the introduction of the CHST as part of the federal budget and its dramatic plan to restore federal fiscal budgetary balance. The CHST began as a way of cutting provincial transfers; then, after 1998, it was the way for the federal government to restore those cuts. Since 2004 the government of Canada has treated the CHST as two programs: the Canada Health Transfer and the Canada Social Transfer (the latter being earmarked for both social assistance and post-secondary education). The CHT and CST inherited two sets of conditions from the CAP and EPF programs (which the original CHST combined): that no province restrict the eligibility for welfare of residents arriving from other provinces, and that all provinces meet the five broad principles of the Canada Health Act (see discussion in chapter 12 on healthcare) in the design and delivery of their health services. The federal government invited the provinces to work with it to develop shared principles and objectives for the new transfer. But the most important intergovernmental discussions revolved solely around

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the money: how much there would be and how it would be allocated among the provinces and territories. For a decade the federal government and the provinces engaged in a tug of war over the CHT and CST, culminating in the 2004 healthcare accord signed by all the first ministers, which largely restored the 1995 cuts to provincial transfers (Lazar and St-Hilaire, 2004). In the meantime, however, the provinces and territories squeezed their budgets, especially in education and welfare programs, to pay for ever-increasing healthcare costs. The issue of the allocation of CHST funds across provinces was even more complicated. The historic patterns of cost-sharing under previous, pre-CHST programs treated each province differently depending on its needs or expenditure record. After the 1995 cuts, however, the richer provinces began demanding equal per capita shares of the CHT and CST funds.1 The 1996 federal budget reduced the interprovincial per capita disparity by 10 per cent per year, cutting it in half over five years. The issue of “equal shares” of healthcare and other federal payments have continued to vex the federal government. During its term in office from 2006 to 2015, the Conservative federal government led by Prime Minister Stephen Harper sought to find a new equilibrium between the competing pressures of equity and efficiency, as well as between decentralization and local initiative on the one hand and national (federal) objectives and control on the other. There were a number of fiscal conflicts among governments, but on the whole the scene was much calmer than in the decade of 1995–2005. In terms of tax structure, during the Harper years the federal government significantly reduced its personal and corporate income taxes, and also lowered the GST by two percentage points. These tax changes, amidst new spending commitments, limited the ability of the federal government to reduce vertical or horizontal imbalances to the extent that some provinces may have wished. However, the Harper government strengthened the tax collection system by bringing key provinces into the harmonized sales tax regime and by encouraging more harmonization of corporate income tax (Canada, 2006: 70; Canada, 2007: 44). Most notable were the agreements with Ontario and British Columbia to harmonize their provincial retail sales taxes with the federal GST on July 1, 2010.2 The extension of HST regimes to these two large provinces was a major but short-lived policy achievement. In British Columbia the



Fiscal Federalism: T   he Importance of Balance

public continued to resist the harmonized tax and, following a referendum, the HST agreement was rescinded in 2013. In terms of major intergovernmental transfers, the Harper government did not introduce any new federal social programs requiring transfers, but it did honour the 2004 accord on healthcare; put equalization and TFF back on a more predictable, formula-driven track; and renewed funding for cities and infrastructure (the latter accelerated significantly by its anti-recession economic stimulus program of 2008–11). At the beginning of Prime Minister Harper’s term in office, the terms “fiscal balance” and “fiscal imbalance” had clearly entered the Canadian political discourse. The provinces argued that the strong federal surplus combined with the net provincial deficit would only get worse unless corrected (see Gagné and Stein, 2006: 62–8). Solutions proposed to tackle the VFI included transferring all proceeds of the GST to the provinces (Séguin, 2002); further transfer of income tax points to the provinces (Séguin, 2002); significant increases to the CHT for healthcare (Romanow, 2002; Gagné and Stein, 2006); and increases in federal equalization and TFF payments, even if these do not benefit all provinces (Canada (Senate), 2002; Gagné and Stein, 2006; O’Brien, 2006a, 2006b). While the provinces as a whole were clearly in favour of reducing the VFI, they differed sharply on the best solution. The only unambiguous proponent of tax transfers was Alberta. Quebec supported tax transfers until it became clear that it could not afford them without some form of “associated equalization”: either equalized tax points, as in 1977, or an enhanced general equalization program. The idea of equalized tax points was opposed by the richer provinces. The other provinces have also been open to a combination of tax and cash solutions, and most of them have also shared Quebec’s position regarding equalization. Ontario took a hard line against enhanced equalization at the expense of correcting its own particular VFI.3 In sum, the point at issue was balance, with the appropriate point of equilibrium being in the eye of the beholder. The March 2007 budget tabled by Finance Minister Jim Flaherty made significant strides towards fiscal balance, as the Conservative government defined the problem. It re-engineered many aspects of the fiscal arrangements (excepting the 2004 healthcare accord). The Conservatives put the equalization and territorial funding formulae back on a long-term, transparent, and principled basis. It responded to concerns about fiscal balance by broadening the standard for equalization, yielding an initial

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increase of $1 billion in entitlements. It also increased social program spending under the CST and put that transfer on a long-term legislated basis, as well as extending funding for municipalities from the federal gasoline tax and for infrastructure, among others. In summary, the Conservatives tried to maintain a relatively steady state of transfers to social programs while seeking more fiscal balance through changes in the equalization program. However, as a quid pro quo for the richer provinces who do not receive equalization, it continued to accelerate the movement in the CST and CHT formulae for equal per capita shares. This move stripped some equalization features that had been in place for over thirty years and pushed the system as a whole further away from the concepts of differential need and regional redistribution. Finally, there were a variety of hard-fought controversies related to equalization during the Harper years that illustrate key fault lines about fiscal federalism and wealth sharing in Canada. Although all of the recipient provinces formed a common front on the need for a better system, the sharpest controversy surrounded the complaints of the provinces of Newfoundland and Labrador, Nova Scotia, and Saskatchewan that failed to benefit when equalization was clawed back because of their oil and gas revenues. In partial response to these concerns, the Martin government had reached agreements with Nova Scotia and Newfoundland and Labrador on protecting their revenues from offshore resources. Other provinces, notably Ontario and Quebec, criticized these bilateral arrangements as subverting the logic and purpose of the existing equalization program. These provinces also opposed any general measure to enhance the equalization program, which essentially has a redistributive or even zero-sum character to it. The challenge facing the Harper government was to achieve an acceptable trade-off between fixing the vertical and the horizontal imbalances. Common ground was achievable on healthcare in 2004, the main fix on the vertical imbalance, because all provinces and territories got the same share of a growing fiscal pie. But fixes to equalization involve, at least to an extent, zero-sum politics. In the 2007 federal budget, Finance Minister Flaherty hoped to restore intergovernmental harmony on the equalization issue. But, while all provinces and territories were better off financially, some benefited more than others. Largely by virtue of its population size, Quebec received the lion’s share of total cash in the improved equalization program. Ontario and Alberta benefited



Fiscal Federalism: T   he Importance of Balance

the most from social program transfer improvements because of the significant policy change to make cash entitlements equal per capita. Provinces receiving equalization payments and increasing nonrenewable resource revenues from oil and gas – ­as did Saskatchewan, Nova Scotia, and Newfoundland and Labrador until recently – ­lost ground as the new principles imposed a more punitive approach.4 (See below a discussion of the concerns of the resource recipient provinces since 2015.)

Responding to the 2008–2009 Recession The deep recession of 2008–9 played havoc with public finances in Canada and had the potential to destabilize fiscal federalism. Indeed, the recession was a major test of our intergovernmental and fiscal systems. On the whole the outcomes for fiscal relations were not severe. There remained sufficient intergovernmental coordination of macroeconomic policy, and the recession did not fundamentally alter the intergovernmental balance of power in Canada.5 Canada’s economy is heavily integrated globally and continentally, so the effects of the financial crisis of 2008 were felt in Canada. The decline in international commodity prices and international trade (especially with the USA) drove down employment, profits, investment, and, of course, government revenues (Cross, 2010). The overall economy declined by 3.6 per cent over three quarters, the lowest drop among G-8 countries, and unemployment rose from 5.5 per cent in late 2007 to 8.1 per cent in late 2010, over half in the manufacturing sector. While all parts of Canada felt the effects, the downturn was most severe in Alberta (due in part to a sharp drop in oil prices) and in Ontario, particularly in the automobile manufacturing sector (Cross, 2010; Canada, 2009). And of course, the recession had an immediate impact on public finances due to declining revenues and rising costs related to unemployment and welfare, an overall loss of about $20 billion (TD Economics, 2009). The federal government did most of the heavy lifting in the Canadian response to the international crisis, such as its efforts to sustain financial sector liquidity and to grant loans to the automobile industry. However, it became clear very quickly that all governments would have to be involved in economic stimulus – ­the spending of funds to halt growing unemployment and to maintain some degree of consumer demand. Even so, when added to the $20 billion hole the recession had already

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punched into public finances, such expenditures contributed to a substantial deterioration in budget balances. One can make three observations to summarize the impact of the recession and recovery on fiscal federalism. First, the recession reversed a hard-won position of all governments from financial surpluses to budgetary deficits. In August 2010 TD Economics forecast a deterioration of the federal budgetary position in just two years from +$9.5 billion in 2007–8 to −$53.8 billion in 2009–10, and a deterioration of the net position of all the provinces and territories from +$11.3 billion to −$26.8 billion over the same period (TD Economics, 2010). Among the provinces, historic debt legacies combined with the recession to produce significant differences. Quebec’s debt was nearly 50 per cent of GDP, while Alberta had no debt at all. Ontario was in the most serious ongoing budgetary position (the highest annual deficit as a percentage of GDP, approaching 3.5 per cent). Nonetheless, Canada’s deficit and debt hangover from 2008–9 is among the least burdensome among OECD countries. Clearly the difficult choices made in the 1990s contributed to a stronger fiscal position going into the recession (IMF, 2010; TD Economics, 2010). All governments committed to restore their budgets to a balanced position within two to four years, but in reality most of them, including the federal government, remained in a deficit position six years after the recession. Second, the measures taken to restore a budgetary surplus meant a substantial degree of program expenditure restraint at all levels – in some respects, a return to the difficult years of the early 1990s. The axe did not fall primarily on intergovernmental transfers, and when one considers the extra funds put into infrastructure programs, transfers were still increasing overall in 2010–11. The main austerity impact came a few years later when the Harper government announced that the growth rate in CHT payments would be capped at 3 per cent starting in 2017. Third, and on a happier note, the recession demonstrated a generally co-operative and functional relationship among the governments. Perhaps because all regional economies were impacted by the downturn, there was no evidence of discord on the overall macroeconomic stance to be taken. All provinces undertook a similar degree of counter-cyclical budgeting in sync with the federal position, and all participated readily in a major acceleration of existing infrastructure programs to stimulate the construction and related sectors. The provinces may not have been thrilled with the conditional nature of the federal funds, but seemed to swallow their objections (Young, 2009).



Fiscal Federalism: T   he Importance of Balance

FISCAL FEDERALISM TODAY: FINDING A NEW BALANCE? Fiscal federalism issues were not at the top of the public agenda in Canada during the first term of the Trudeau Liberal government in 2015–19. However, as discussed below, fiscal issues have been part of the evolving controversy over the health of the western resources economy (mainly oil) and environmental concerns that figured prominently in the 2019 federal election. During the period of the first Trudeau government, there were a few new wrinkles on the tax harmonization and sharing front. Since British Columbians voted in a referendum to reject a harmonized sales tax, the federal government has not been pushing the harmonization agenda any further. However, two new federal taxes implicate the provinces and territories. First is the negotiation and implementation of revenue sharing on cannabis sales following Parliament’s legalization and the provincial roll-out of regulated cannabis provision. Federal Finance Minister Morneau had proposed 50–50 revenue sharing with the provinces and territories for the proposed excise tax (levied in addition to HST/PST on cannabis sales), but the provinces sought a bigger share due to projected cannabis-related expenditures dealing with health, policing, and related matters. Morneau and the provinces agreed on a 25 (federal)–75 (provincial/territorial) split in December 2017 (see Thompson, 2018). Second was the introduction of a carbon pricing scheme (or tax) by the federal government, effective July 2019, and applicable in those provinces without an equivalent set of carbon pricing measures, which were, in 2019, Ontario, Alberta, Manitoba, and New Brunswick (see also chapter 14). The tax yield from the carbon pricing regime has been estimated at $2.63 billion in 2019–20 by the Parliamentary Budget Office (PBO), and rising to $6 billion in four years (PBO, 2019). Of course, the two overall issues – cannabis legalization and climate change/carbon pricing – are central to the Justin Trudeau government record and, with respect to the carbon tax at least, highly divisive. Nonetheless, from a fiscal federalism perspective, neither is as yet significant enough to have a big impact on the overall fiscal balance. As for intergovernmental transfers, again the Trudeau government has adopted the major policy outlines set down by the Harper government. They have not returned to the Martin government’s destabilizing removal of formula approaches, instead seeing the wisdom of continued stability

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through the multi-year, transparent, and formula-driven regime in place since 2007. The main action has been in healthcare. The 2015 Liberal platform promised to continue with a long-term accord on the Canada Health Transfer, but with an additional focus on home care, mental health, and prescription drugs. Meanwhile the provinces had anticipated that the federal government would lift the cap of 3 per cent annual growth that the Harper government had imposed on the CHT and CST, planned to start in 2017. Within a year of the election, however, the new federal government held firm on the 3 per cent cap, angering the provinces who see their healthcare expenditures rise much more quickly and who sought a 5.2 per cent annual increase instead (see Brown, Bakvis, and Baier, 2019: 166, fn 7). The Trudeau government eventually agreed with provinces to exceed the cap, but not before reaching a series of individual agreements with each province on the terms for providing additional funding. It also increased its leverage by promising to provide $5 billion over ten years in supplementary funding for home care and mental health. Finally, there is equalization. In terms of outcomes there has been little change since the Harper government. The basic parameters of the formula for what to equalize and how to allocate funds have not changed since 2007. The result is that six provinces continue to receive entitlements, even if Ontario is very close to the margin of being a non-recipient. And the overall program continues to grow, reaching $19.8 billion for 2019–20. The four provinces of British Columbia, Alberta, Saskatchewan, and Newfoundland and Labrador do not receive funds from the program, as a result of the formula determining that their fiscal capacity (if not actual revenues) exceeds the national average. Discontent with equalization has been brewing, as the three oil-­ producing provinces in particular have suffered major revenue losses and large budgetary deficits in recent years due to lower petroleum prices.6 They argue the equalization program should take into account their revenue losses and compensate them for their actual budgetary declines as opposed to theoretical fiscal capacity. Their arguments have often been extended to suggesting that taxpayers in their provinces do not get sufficient return on their federal taxes, sometimes implying (falsely) that Alberta, Saskatchewan, and other non-recipient provinces make direct payments to the recipient provinces. In June 2018 Premier Moe of Saskatchewan called for “50–50” equalization reform, whereby half of the existing equalization funds would be distributed on an equal per



Fiscal Federalism: T   he Importance of Balance

capita basis to all provinces, regardless of fiscal capacity (Baxter, 2018). And, as part of his successful election campaign in 2019 as leader of the United Conservative Party in Alberta, Premier Jason Kenney promised a referendum in Alberta on equalization as a way to catalyze change to the national system (Mertz, 2019). Thus far the other provinces have rejected these positions. Nor has the federal government budged from its commitment to the current formula, and indeed in 2017 it passed legislation to extend the existing program by another five years. It remains to be seen whether the Alberta referendum proposal initiative is intended as leverage, as some suggest, to get more favourable action from federation partners, including Quebec, on the development of pipelines to ease market conditions for Alberta oil sands production. These issues have taken on more urgency since the outcome of the October 2019 federal election, in which the Liberal government was returned with a minority, but without any seats in Alberta or Saskatchewan. Both the campaign and its results laid bare fault-lines between parties and regions on the interrelated issues of greenhouse gas emissions, carbon pricing, pipelines, and declining resource prices and revenues. Premier Kenney of Alberta, in particular, has set out new demands to the federal government for resolving some of these issues, one of which is that the federal government amend the rules for a little-known program of fiscal stabilization. Under this program the federal Department of Finance provides payments to provinces to partially overcome major year-over-year revenue shortfalls. Kenney has pushed for expansion of the parameters of that program so that Alberta and Saskatchewan can get a larger share of compensation and for retroactive payments for the previous four to five years. Significantly, this position was endorsed by all Canadian premiers at a meeting in December 2019 (Tasker, 2019). No doubt this support came in part because Kenney had couched the demand in terms of the fiscal stabilization program rather than an overhaul of the equalization program, for which there would have been no consensus. In late 2019, the time of writing, it is too soon to know how these particular fiscal issues will be resolved. Regardless of the outcomes in the coming years, one can reliably predict that these and other major economic and fiscal changes will force a degree of change in the system. The potential change drivers include international trade patterns, including protectionism; a recession; major changes in natural resource prices; higher interest rates or inflation; and the impact of new taxes. Any

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significant changes to the base or relative economic and fiscal positions of the provinces will put pressure on governments to respond with reform to their fiscal relationships. This is normal, and a medium-term degree of flexible response helps ensure successful adaptation to change in the federation.

EVALUATING CANADIAN FISCAL FEDERALISM We may now come to some judgments about fiscal federalism as a whole, as determined by the three criteria set out at the beginning of this chapter. On the performance of the federation, fiscal federalism gets good grades. Its flexibility has enabled the system to transform gradually (though not without conflict) from the heavily centralized framework of the 1940s to the markedly decentralized framework of the late 1990s. The transfer of tax points, the removal of conditions on grant programs, and the maintenance of equalization payments have enabled more provincial autonomy than in most other federal systems. Since the 1950s fiscal federalism has been generally consistent with federal principles, including respect for unity and diversity and provincial autonomy, although Quebec’s concerns about the use of the federal spending power remains an important and occasionally serious problem. As noted, the arrangements have shown considerable flexibility, contributing in turn to workable intergovernmental relations. The major exception, even if it is part of the pattern, came with the unilateral cuts of 1995, which undermined intergovernmental trust for many years (Inwood, Johns, and O’Reilly, 2004). The Harper government’s approach to long-term, predictable, transparent, and principled funding was consistent with federal principles and with a more classical view of federal–provincial responsibilities. This approach, with some relatively minor changes, has been left intact by the Trudeau Liberals. On policy effectiveness, the system’s remarkable flexibility is also an asset, although judgment on outcomes depends on the beholder and the specific policy program in question. After all, fiscal relations are usually a means to an end, not an end in themselves. The discussions of social program funding elsewhere in this book provide fuller answers on policy effectiveness. As for equalization and territorial financing, there



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remains some debate about the economic effects of alleged dependency on such transfers7 as well as the more recent concerns about the program’s inability to respond to fiscal downturns faced by non-recipient provinces such as Alberta and Saskatchewan. However, both programs have worked effectively to achieve their stated purposes of closing the fiscal capacity gap across the provinces and territories: Without Equalization payments, the fiscal capacity of the least well-off province was between 58 and 68 per cent of the national average. With Equalization, the fiscal capacity of that province was raised to between 91 and almost 100 per cent of the national average. (O’Brien, 2006a: 30)

The Territorial Funding program is also clearly effective in terms of its simple objective to close the gap between expenditure needs and ownsource revenues, although the full adequacy of that funding has been debatable (O’Brien, 2006b: 32–3). The focus in the 2000s on correcting the fiscal balance does not imply abandoning the emphasis on equity considerations. But the size and distribution of the increased equalization payments announced in the 2007 budget (and scaled back barely two years later) must be measured against other changes, such as the relentless move to equal per capita cash shares (and thus less interregional redistribution) in all other federal transfers. Finally, on the criterion of political legitimacy, one significant trend in the past three decades has been the erosion of mutual trust among the governments. As a key 2006 independent report on fiscal relations with the provinces found, the government of Canada has too often been perceived as a “rule-breaker, non-negotiator, [and] unapologetic ­unilateralist” – the very traits that the federal government itself condemns in international contexts (Gagné and Stein, 2006: 90). While that report is now over ten years old, there is no evidence to suggest that the situation has improved. Thus, the provinces and territories continue to call for more formal, deliberate, and predictable fiscal relations. While it would be unfair to characterize fiscal relations under the successive federal governments as wholly unilateral, often they have had to impose solutions in the absence of an intergovernmental consensus. Mutual trust has been improved in the more stable, predictable, fair, and transparent arrangements. Also, the ten-year agreement on healthcare

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funding agreed upon in 2004 (and extended since) clearly reduced intergovernmental conflict in that area. A second set of legitimacy considerations relates to accountability. Here the focus is more on citizens’ expectations than on governments’ needs, although the trend in public management to greater transparency and simpler, more direct and quantifiable accountability structures has permeated government agendas as well. Being notoriously complex, fiscal federalism is not especially transparent. Yet policy effectiveness often requires complex responses to the widely varying circumstances across a diverse federation, and flexible rather than rigid formulas for responding to often rapidly changing economic, social, and fiscal conditions. In other words, good policy in this area probably should be complex. That said, the very complexity of fiscal federalism has made it easy for governments at both levels to avoid direct accountability, each often blaming the other for perceived failings. Issues of legitimacy and accountability turn in part on changing norms of democratic input and deliberation. Some Canadians have asked why momentous fiscal federalism issues should be decided behind closed doors by first ministers, finance ministers, and technocrats when other major intergovernmental policy issues seem to be more open to the media and hence to the public. One partial answer, as noted already, is that they are not. Most of the broad issues surrounding fiscal relations are debated in the media and are matters for Question Period in the House of Commons and the broader political community. Even when tied into budgetary planning, the discussion of fiscal federalism is b ­ ecoming more open and transparent. As we look forward to the 2020s, a broad public debate is inevitable, one in which public opinion and electoral support will go a long way towards determining what can and cannot be achieved.

NOTES 1 During the inaugural year of the CHST, 1996–7, per capita entitlement ranged from $825 for Alberta to $993 for Quebec and $1,018 for the Northwest Territories. 2 As an illustration of the difficulties in negotiating a series of bilateral deals for tax harmonization, the terms of the agreements with BC and Ontario



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Fiscal Federalism: T   he Importance of Balance led to demands for similar funding compensation to Quebec for its harmonization in place since the 1990s. Ontario increasingly made a special case (MacKinnon, 2005a and 2005b; Ontario, 2006; Canada, 2006: 118–22). It claimed a chronic shortfall of at least $23 billion (in 2005) from the federal government (notwithstanding the still enormous net economic advantages it reaps from the Canadian economic union; see Page, 2002). Two new measures, both recommended by the O’Brien report of 2006, placed brakes on fiscal improvement in these provinces. These were the inclusion of 50 per cent of natural resource revenues in the formula for calculating fiscal capacity, and the cap on entitlements if they exceed the fiscal capacity of a non-recipient province (i.e., Ontario). While the new policy claims to respect the Offshore Accords signed in 2005 with the Nova Scotia and Newfoundland and Labrador governments, the federal government clearly sought to quarantine such bilateral arrangements by making their continued operation more difficult. For an overview of how Canadian federalism affects macroeconomic management, see Brown, Bakvis, and Baier (2019: 177–81). See Béland et al. (2017: 46–8) for a brief discussion of arguments made by Alberta and Saskatchewan leaders since 2000. See Courchene (1995); Boessenkool (1996); PTMF (1998); Banting (1995); Milne (1998).

GLOSSARY block grants or transfers  Programs bundling previously separate transfers into a single large transfer, often with more general conditions attached. conditional grants or transfers  Payments made, usually on an annual or quarterly basis, from one government to another for a specified purpose and according to conditions normally established by legislation. Unconditional grants or transfers are payments made, usually on an annual or quarterly basis, from one government to another for general purposes, without specific conditions. equalization  A federal government program designed to bring the fiscal capacity of the poorer provinces closer to a national average so that they can fully meet their constitutional and program spending obligations. See also horizontal fiscal balance. fiscal capacity  The ability of a government (federal or provincial) to raise revenues within its jurisdiction. Each government’s fiscal capacity depends on the level and nature of economic activity, as well as the amount of wealth and its distribution within its borders. horizontal fiscal balance or imbalance  Refers to the relative fiscal positions among the provinces (states, etc.) in a federation. Imbalances reflect the differing fiscal capacities of these units to carry out similar constitutional

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Douglas M. Brown and program spending responsibilities. Balance is achieved by redistributing fiscal resources to the poorer provinces. This is done in Canada through the equalization program. tax allocation Refers to the division of tax revenues among the jurisdictions in which they have been generated. tax base Refers to the part of the economy that is explicitly covered by the tax in question. tax harmonization Refers to the effort to make tax structure and its implementation similar across the provinces, to ensure that individuals and firms can move freely and do business in all parts of the federation (i.e., the economic union). Harmonized tax structures need not be identical, but key features such as the tax base will be identical or very similar. tax room  Provides – usually through a transfer of percentage points of tax share – ­“room” for the provinces to collect a greater share of a given tax base, while the federal share is correspondingly reduced. vertical fiscal gap  Refers to a situation in which the central government’s revenues exceed its expenditure needs and the provinces’ revenues do not exceed theirs. In most federations the central government reduces the gap by transferring some of its surplus to the provinces. vertical fiscal imbalance  Occurs when the vertical fiscal gap is not sufficiently reduced by transfer payments from the federal government, and provinces claim a chronic inability to meet their expenditure responsibilities with their own revenues. REFERENCES Anderson, G. 2010. Fiscal Federalism: A Comparative Introduction. Don Mills, ON: Oxford University Press. Banting, K.G. 1995. “Who ‘R’ Us?” In The 1995 Federal Budget: Retrospect and Prospect, edited by J. Courchene and T.A. Wilson, 173–81. Kingston, ON: John Deutsch Institute for the Study of Economic Policy, Queen’s University. Baxter, D. 2018. “Saskatchewan Premier Scott Moe Pitches New 50–50 Equalization Formula.” Global News, June 20, 2018. https://globalnews .ca/news/4285836/saskatchewan-premier-scott-moe-pitches-new-50-50 -equalization-formula/. Béland, D., A. Lecours, G.P. Marchildon, H. Mou, and M.R. Olfert. 2017. Fiscal Federalism and Equalization Policy in Canada: Political and Economic Dimensions. Toronto: University of Toronto Press. Bird, R.M. 2001. “Sales Tax Harmonization Issues.” In Tax Competition and the Fiscal Union in Canada, edited by D. Brown, 93–9. Conference Proceedings / Working Paper Series. Kingston, ON: Institute of Intergovernmental Relations, Queen’s University.



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Boadway, R. 2005. “The Vertical Fiscal Gap: Conceptions and Misconceptions.” In Canadian Fiscal Arrangements: What Works, What Might Work Better, edited by H. Lazar, 51–80. Kingston, ON: Institute of Intergovernmental Relations, Queen’s University. Boadway, R., and A. Shah. 2009. Fiscal Federalism: Principles and Practice of Multiorder Governance. Cambridge: Cambridge University Press. Boessenkool, K. 1996. The Illusion of Equality: Provincial Distribution of the Canada Health and Social Transfer. Toronto: C.D. Howe Institute. Brown, D., H. Bakvis, and G. Baier. 2019. Contested Federalism: Certainty and Ambiguity in the Canadian Federation. 2nd ed. Don Mills, ON: Oxford University Press. Brown, D.M. 1996. Equalization on the Basis of Need in Canada. Reflections Series No. 15. Kingston, ON: Institute of Intergovernmental Relations, Queen’s University. ———, ed. 2001. Tax Competition and the Fiscal Union in Canada. Conference Proceedings / Working Paper Series. Kingston, ON: Institute of Intergovernmental Relations, Queen’s University. ———. 2002. Market Rules: Economic Union Reform and Intergovernmental PolicyMaking in Australia and Canada. Montreal: McGill-Queen’s University Press. ———. 2007. “Integration, Equity and Section 36.” Supreme Court Law Review 37: 285–315. Burns, R.M. 1980. The Acceptable Mean: The Tax Rental Agreements, 1941–62. Toronto: Canadian Tax Foundation. Canada. 2006. Restoring Fiscal Balance in Canada, Budget Paper 2006. Ottawa: Department of Finance. ———. 2007. Restoring Fiscal Balance for a Stronger Federation, Budget 2007. Ottawa: Department of Finance. ———. 2008. The Budget Plan, 2008. Ottawa: Finance Canada. ———. 2009. Canada’s Economic Action Plan, Budget 2009. January 27. Ottawa: Department of Finance. ———. 2015. The Budget Plan, 2015. Ottawa: Finance Canada. ———. 2017a. The Budget Plan, 2017. Ottawa: Finance Canada. ———. 2017b. Major Transfers. Ottawa: Department of Finance. www.fin.gc.ca. ———. 2018. Fiscal Reference Tables, 2018. Ottawa: Department of Finance. https://www.fin.gc.ca/frt-trf/2018/frt-trf-18-eng.pdf. Canada (Senate). 2002. The Effectiveness and Possible Improvements to the Present Equalization Policy, Report of the Standing Committee on National Finance. Ottawa: Senate of Canada. Courchene, T.J. 1995. Redistributing Money and Power: A Guide to the Canada Health and Social Transfer. Observation No. 39. Toronto: C.D. Howe Institute. Cross, P. 2010. “Year End Review of 2009.” Canadian Economic Observer (Statistics Canada) 23, no. 4 (April): 3.1–3.13. Gagné, R., and J. Stein, co-chairs. 2006. Reconciling the Irreconcilable: Addressing Canada’s Fiscal Imbalance, Report of the Advisory Panel on Fiscal Imbalance. Ottawa: Council of the Federation.

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Douglas M. Brown Greenspan, E., and A. Wilson-Smith. 1997. Double Vision: The Inside Story of the Liberals in Power. Toronto: McClelland and Stewart / Seal Books. Hogg, P.W. 1996. Constitutional Law of Canada. 4th student ed. Toronto: Carswell. International Monetary Fund (IMF). 2010. Fiscal Monitor. May 14, 2010. Washington, DC: IMF. Inwood, G., C.M. Johns, and P.L. O’Reilly. 2004. “Intergovernmental Officials in Canada.” In Reconsidering the Institutions of Canadian Federalism: Canada, the State of the Federation, 2002, edited by J.P. Meekison, H. Telford and H. Lazar, 249–84. Kingston, ON: Institute of Intergovernmental Relations, Queen’s University. Lazar, H. 2000. “In Search of a New Mission Statement for Canadian Fiscal Federalism.” In In Search of a New Mission Statement for Fiscal Federalism: Canada: The State of the Federation, 2000, edited by H. Lazar, 3–39. Kingston, ON: Institute of Intergovernmental Relations, Queen’s University. Lazar, H., and F. St-Hilaire, eds. 2004. Money, Politics and Health Care: Reconstructing the Federal-Provincial Partnership. Montreal: Institute for Research on Public Policy. Lazar, H., F. St-Hilaire, and J.-F. Tremblay. 2004. “Vertical Fiscal Imbalance: Myth or Reality?” In Money, Politics and Health Care: Reconstructing the FederalProvincial Partnership, edited by H. Lazar, 135–87. Montreal: Institute for Research on Public Policy. MacKinnon, D. 2005a. Fairness in Confederation: Fiscal Imbalance, Driving Ontario to “Have-Not” Status, Phase One Report for the Ontario Chamber of Commerce. Toronto: Ontario Chamber of Commerce. ———. 2005b. Fairness in Confederation: Fiscal Imbalance, A Roadmap to Recovery, Phase Two Report for the Ontario Chamber of Commerce. Toronto: Ontario Chamber of Commerce. Mertz, E. 2019. “Alberta Election: Fact Check, Equalization Referendum.” Global News, April 3, 2019. https://globalnews.ca/news/5113104/alberta -election-fact-check-equalization-referendum/. Milne, D. 1998. “Equalization and the Politics of Restraint.” In Equalization: Its Contribution to Canada’s Economic and Fiscal Progress. edited by R. Boadway and P. Hobson, 175–203. Policy Forum (Series No. 36). Kingston, ON: John Deutsch Institute for the Study of Economic Policy, Queen’s University. O’Brien, A., chair. 2006a. Achieving a National Purpose: Putting Equalization Back on Track. Report of the Expert Panel on Equalization and Territorial Formula Financing. Ottawa: Department of Finance. ———, chair. 2006b. Achieving a National Purpose: Improving Territorial Formula Financing and Strengthening Canada’s Territories. Report of the Expert Panel on Equalization and Territorial Formula Financing. Ottawa: Department of Finance. Ontario. 2006. Strong Ontario: Seeking Fairness for Canadians Living in Ontario. http://www.strongontario.ca/english/.



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Page, M. 2002. Provincial Trade Patterns, Agricultural and Rural Working Group Series No. 58. Ottawa: Statistics Canada. Painter, M. 1991. “Intergovernmental Relations in Canada: An Institutional Analysis.” Canadian Journal of Political Science 24: 269–88. https:// doi.org/10.1017/s0008423900005084. Parliamentary Budget Office. 2019. Fiscal and Distributional Analysis of the Federal Carbon Pricing System. April 25, 2019. https://www.pbo-dpb.gc.ca /en/blog/news/Federal_carbon_pricing. Prince, M., and F. Abele. 2005. “Paying for Self-Determination: Aboriginal Peoples, Self-Government and Fiscal Relations in Canada.” In Reconfiguring Aboriginal-State Relations in Canada (Canada: The State of the Federation, 2003), edited by M. Murphy, 237–63. Kingston, ON: Institute of Intergovernmental Relations, Queen’s University. PTMF—Provincial/Territorial Ministers of Finance. 1998. Report to Premiers: Redesigning Fiscal Federalism—Issues and Options. (mimeo). Romanow, R. 2002. Final Report of the Commission on the Future of Health Care in Canada. Ottawa: Health Canada. Séguin, Y. 2002. Report: A New Division of Canada’s Fiscal Resources. Quebec: Commission sur le déséquilibre fiscal/Commission on Fiscal Imbalance. Tasker, J.P. 2019. “With National Unity under Stress, Premiers Back a Budget Fix to Help Oil-Rich Provinces.” CBC News, December 2, 2019. https:// www.cbc.ca/news/politics/premiers-budget-fix-national-unity-1.5381166. TD Economics. 2009. “Priming the Fiscal Pump.” TD Economics Special Report, April 28, 2009. ———. 2010. “Canada’s Fiscal Exit Strategy.” TD Economics Special Report, August 3, 2010. Thompson, A. 2018. “Selling and Taxing Marijuana: Plans from Ottawa and the Provinces.” CPAC, March 2018. http://www.cpac.ca/en/cpac-in-focus /taxing-marijuana-read-watch/. Treff, K., and D. Ort. 2013. Finances of the Nation 2012. Toronto: Canadian Tax Foundation. Vaillancourt, F. 2000. “Federal-Provincial Small Transfer Programs in Canada, 1957–1998: Importance, Composition and Evaluation.” In In Search of a New Mission Statement for Fiscal Federalism: Canada: The State of the Federation, 2000, edited by H. Lazar, 189–212. Kingston, ON: Institute of Intergovernmental Relations, Queen’s University. Watts, R.L. 1999. The Spending Power in Federal Systems: A Comparative Study. Kingston, ON: Institute of Intergovernmental Relations, Queen’s University. Young, R. 2009. “Panel Comments on ‘Subnational Governments and the Stimulus Packages in Canada and the United States.’” Meeting of the American Political Science Association, Toronto, September.

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CHAPTER ELEVEN

The Three Federalisms and Change in Social Policy Keith G. Banting

Canadians develop their social programs in the context of a vibrant federal state, with strong governments at both the federal and provincial levels. While the primary factors that influence social programs emerge from the economic and political environment, the structures of federalism also shape the social programs that governments adopt. The imprint of our complex federal system on social programs can be seen most clearly by comparing the policy implications of the three federalisms that co-exist within the country. Canada has never adopted a single approach to federalism. Rather, we have chosen to live with three distinct models of federalism – three federalisms in one country – each with its own decision rules and intergovernmental processes. Social policy reflects all three models particularly well. Throughout the history of the Canadian welfare state, federal and provincial governments have designed different social programs according to different intergovernmental rules and processes. At critical historical moments, the same federal and provincial governments were shaping different social programs according to different models of federalism, with differing policy outcomes. Canada therefore constitutes a natural laboratory in which to analyze the policy implications of different models of federalism. The distinctive incentives and constraints inherent in the different models help explain a number of puzzles about the Canadian welfare state, including the striking contrast between the limited nature of the country’s income security programs and the more universalist character of its healthcare.



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Moreover, in recent decades, the three models help explain the highly uneven impact of successive cycles of policy change – retrenchment in the 1990s and reinvestment in the 2000s – on different social programs. This chapter develops these themes in four sections. The first section describes the federal–provincial division of jurisdiction in social policy and the three models of federalism. The second section examines the impact of the three federalisms on the construction of the welfare state in the middle decades of the twentieth century, while the third section examines their impact on the politics of retrenchment and then reinvestment in more recent decades. A final section pulls together the threads of the argument.

THE THREE FEDERALISMS AND SOCIAL POLICY In formal terms, authority over social policy is divided between the federal and provincial governments in ways that make Canada one of the most decentralized welfare states among OECD countries. From the outset, the Constitution Act, 1867 gave the provinces a central role in social policy, with specific sections granting them authority over education, hospitals, and related charitable institutions. In addition, the courts extended the provincial role by subsuming social policy under provincial powers over “property and civil rights” and “matters of a local or private nature.” In a key decision in 1937, the courts struck down a federal social insurance program as intruding on provincial jurisdiction. Despite the centrality of provincial jurisdiction, the federal government also has a significant presence in social policy. Amendments to the Constitution in the middle of the twentieth century gave federal authorities full jurisdiction over unemployment insurance and substantial jurisdiction over contributory pensions. Federal tax powers also represent a powerful tool of social redistribution, especially with the growing use of the tax system to deliver social benefits such as refundable tax credits. The final cornerstone of the federal role is the spending power. According to constitutional convention, “the federal Parliament may spend or lend its funds to any government or institution or individual it chooses, for any purpose it chooses; and it may attach to any grant or loan any conditions it chooses, including conditions it could not directly legislate” (Hogg, 2001: 6.8a). This convention has been challenged both politically and

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judicially. Nevertheless, court decisions repeatedly sustained the federal position, and historically the spending power provided the constitutional footing for a number of central pillars of the welfare state. It has helped sustain federal benefits paid directly to citizens, such as child benefits, and it provides a constitutional basis for the shared-cost programs through which the federal government supports provincial social programs. With federal and provincial governments both engaged in social policy, much depends on the mechanisms through which they manage their interdependence. It is here that the three models of federalism emerge sharply. Each of these models posits a different set of relationships between federal and provincial governments. Each model generates its own decision rules, altering the range of governments in the process, the power of different governments at the table, and the level of intergovernmental consensus required for a decision. As a result, each model has different implications for policy outcomes.

Classical Federalism Federal and provincial governments deliver a number of major social programs acting independently within their own jurisdiction: unemployment benefits, child benefits, non-contributory old-age pensions at the federal level; programs such as workers’ compensation at the provincial level. This model involves unilateral decisions by both levels of government, with minimal efforts at coordination even when decisions at one level have a serious impact on programs at the other level. In the classical model, the federal and provincial governments behave in their own domain much as unitary governments would do. Decisions are more flexible, requiring no elaborate intergovernmental consensus, and policy can shift dramatically with changes in the political party in power, interest-group pressures, or public opinion. At the federal level, policy-makers are still sensitive to different regional interests in a program such as unemployment benefits, but provincial governments have no formal role in the decisions.

Shared-Cost Federalism Under this model, the federal government offers financial support to provinces that operate specific social programs that meet basic conditions



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or broad principles established by the federal government. This instrument underpinned the development of major sectors of the welfare state, including healthcare, post-secondary education, social assistance, and social services. The shared-cost model generates an intermediate level of constraint on government action. In formal terms, each government makes separate decisions: the federal government decides when, what, and how to support provincial programs, and each provincial government must decide whether to accept the money and the federal terms. In practice, however, the substance of new programs tends to be hammered out in intergovernmental negotiations. This process increases the range of governments and political ideologies represented at the table, and opens more channels for new ideas to enter the process. But, because there are no formal decision rules for this process, agreements depend on a broad intergovernmental consensus or – in some cases – acquiescence. The pressures for consensus in this model fall between the other two models of federalism. In comparison with joint-decision, which is discussed next, the pressures for consensus in shared-cost federalism are not absolute. Governments retain the right to act unilaterally, as became clear when the federal government began to cut its financial commitments to provincial programs in the 1990s. However, the political scope for unilateralism is still more constrained than in the purely classical model. As long as the two levels of government remain committed to the policy sector, they both have stakes in the programs and are held accountable by the electorate. Governments tend to push back politically against unilateralism at the other level, generating pressures over time for a return to quasi-consensus decision-making. Over the decades, as a result, the pattern has been a fluctuating cycle of co-operation, unilateralism, and pushback, leading to uneasy co-operation, all of which inclines the sector towards a more incremental, evolutionary pattern of policy change, with less radical shifts than are possible in the classical model.

Joint-Decision Federalism In the joint-decision model, the formal agreement of both levels of government is required before any action is possible. Unilateralism is not an option here. The major example is the Canada Pension Plan, which is operated by the federal government but can be altered only on the basis of an intergovernmental super majority. Changes require formal

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approval by the federal government and seven provincial governments representing two-thirds of the population of the country. This amending formula is more demanding than the formula governing changes in most parts of the Canadian Constitution. As in the case of shared-cost federalism, the joint-decision model increases the range of governments and ideologies at the table. However, the formal requirement for a strong intergovernmental majority sets the bar especially high in terms of intergovernmental consensus and makes policy change much more difficult. As a result, the joint-decision model creates buffers against the shifting currents of democratic politics. Thus, the politics of Canadian social policy provide a unique opportunity to dissect the impact of federalism on public policy. During important historical moments such as the 1960s, the same federal government expanded different social programs at the same time and in the same political context, but according to different decision rules, and the policy outcomes differed. Similar patterns emerged during subsequent cycles of policy change. In the late 1980s and 1990s, governments retrenched social programs, often dramatically; in the 2000s, governments began to reinvest in social programs, sometimes substantially. In each of these cycles, the same governments, facing the same political pressures, made their choices according to the different decision rules embedded in the three federalisms. As we shall see, these rules mattered. The next section highlights the consequences during the post-war development of the welfare state.

THE THREE FEDERALISMS AND BUILDING THE WELFARE STATE: 1940s–1970s Canada constructed its welfare state between the 1940s and the mid-1970s. As in other countries, the primary pressures for social reform came from changes in the political economy of the country: the emergence of an industrial economy, the steady urbanization of the population, the unionization of the labour force, the mobilization of left-wing political parties in the form of the CCF–NDP, and the ideological conversion of policy elites to Keynesian economics. In Canada, however, reformist pressures were refracted through federal institutions. The early post-war years were a period of unparalleled



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political dominance by the federal government. The war centralized power dramatically, bequeathing federal authorities with a highly professional bureaucracy and – most importantly – dominance of the primary tax fields. Over time, provincial governments, led by Quebec, fought to recapture tax room to finance education, health, and social services on their own terms, and federal fiscal dominance eroded steadily. Nevertheless, in the early days Ottawa controlled the purse strings. Even then, however, federal action was channelled along the three separate models of federalism.

Classical Federalism and Income Transfer Programs In comparison with the other models of federalism, the classical model frees governing political parties to act on their own political ideologies, policy enthusiasms, and electoral strategies. Governments certainly face other sorts of constraints, including interest-group pressures, regional interests, and the potential wrath of voters. However, they do not need to establish an intergovernmental consensus for action. The classical model structured the construction of the major federal income security programs. Since the Liberals formed the government continuously from 1935 until the end of the 1970s, with the exception of a short interregnum from 1957 to 1963, income security was shaped by the centrist orientation of the Liberal Party, which supported income transfers but on relatively modest terms. The more ambitious social-democratic perspective of the CCF–NDP had some impact during periods of Liberal minority government, such as 1963–8, but was decidedly a secondary influence on program design. As a result, the programs that emerged were more limited than those developed in many other Western democracies. The first step came in 1941, with the introduction of unemployment insurance (UI). By comparative standards, the Liberals’ plan was limited. It excluded workers in agriculture, fishing, and domestic service, and all public employees; and the benefit replacement rate was set at only 50 per cent of wages. In 1944, the federal government introduced Family Allowances, a modest universal, flat-rate payment to all families with children, funded from general tax revenues. Quebec objected to the federal plan in principle, but the province had no formal role in the process, and its attack “soon decreased as the political danger

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of fighting such a popular measure became clear” (Jean, 1992: 403; Guest, 1997). Pensions represented the final step. The 1951 Old Age Security (OAS) was a universal, flat-rate pension of $40 per month for elderly individuals, funded through general tax revenues. In 1966, the program was extended by the Guaranteed Income Supplement (GIS), an income-tested supplement added to the OAS payment for the elderly with low and middle incomes. These exclusively federal programs, unencumbered by intergovernmental constraints, remained responsive to the shifting currents of federal politics. During the post-war era, these currents flowed largely in an expansionist direction, and federal political parties entered election campaigns armed with promises to raise benefits. From the 1950s until the 1980s, promises to increase pensions featured in virtually every federal election. After its introduction in 1965, the GIS emerged as a particular favourite in this process, and the program was repeatedly enriched in real terms, usually just before or after an election. Similarly, the federal government was free to expand UI on its own terms. In 1971, legislation finally broadened the program to include all employees, increased the replacement ratio to 66 per cent of wages, introduced extended benefits in regions with high levels of unemployment, and covered unemployment resulting from sickness and temporary disability. The legislation also introduced maternity benefits. All of these changes came with remarkably little consultation with provincial governments; even the regional features of the plan represented “the federal government’s own policy priorities in regional development,” and “were not pressed upon Ottawa by the provinces” (Pal, 1988: 161). The freedom to change course was perhaps best illustrated by Family Allowances, where Liberal governments zigzagged with abandon. In 1970, the Liberals proposed transforming the universal benefit into an income-tested Family Income Supplement, analogous to the GIS, in order to target resources on low-income families. However, during the 1972 election Liberal MPs encountered resistance to the idea of taking the Family Allowance away from middle-income families, and the government promptly changed direction after the election, maintaining the universal program and tripling the payment, thereby restoring most of its original purchasing power. In 1978, however, the Liberals returned to income testing in an incremental way, introducing a refundable child tax credit, financed in part through a reduction in the universal Family Allowance.



The Three Federalisms and Change in Social Policy

All of these shifts had major implications for provincial social assistance programs, but the provinces had no formal role in the decisions.

Shared-Cost Federalism and Health Insurance The second model, shared-cost federalism, structured federal–­provincial relations in the fields of healthcare, post-secondary education, and ­social assistance. In contrast to the classical model, the shared-cost model broadens the range of governments and ideologies influencing policies, but in contrast to the joint-decision model, the shared-cost model does not give a veto to any particular province. These differences in decision rules reshuffled the opportunities and constraints facing individual governments at the table, with significant implications for the ideological compromises that needed to be struck to develop new policies. The impact is best illustrated by the case of health insurance. In the early days, federalism slowed progress towards public health insurance. In 1937, the courts struck down federal social insurance legislation as ultra vires, and in 1945 the provinces rejected federal proposals for post-war reconstruction that included health insurance. In the wake of paralysis at the federal level, however, federalism created opportunities for innovation at the provincial level, which the political left used to establish a universal system as the leading option for the country as a whole (Maioni, 1998). In 1947, the social-democratic CCF government of Saskatchewan implemented universal hospital insurance, and two other western provinces followed in quick succession. These provinces demanded federal funding for their programs and pushed Ottawa to build a national approach. In 1957, the federal government introduced a universal hospital insurance program, which shared the costs of provincial programs. All the provinces had joined it within four years. A similar cycle extended health insurance to physician services. In 1962, the NDP government of Saskatchewan again took the lead, introducing a medicare plan, despite a bitter three-week doctors’ strike. Key elements in the settlement that ended the strike became the starting point for national debate: universal and comprehensive coverage, the right of patients to choose their own doctor, and the preservation of fee-for-service payment for physicians. The Saskatchewan experience demonstrated that a universal approach was feasible in administrative and political terms, giving ammunition to reformist forces in national politics.

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Conservative provincial governments mounted fierce resistance. Governments in Ontario, Alberta, and British Columbia were committed to private coverage for the majority of the population, with public programs limited to the “hard to insure,” such as the elderly and the poor. However, in 1966, the federal Liberal government opted for a universal model and passed legislation providing federal funding for provinces operating a universal program. The conservative provincial governments were caught in a vice. The federal proposal was popular with their electorates; if they refused to join, their residents would still have to pay federal taxes to support the program in other provinces. The premier of Ontario denounced medicare as “one of the greatest frauds that has ever been perpetrated on the people of this country” (Taylor, 1987: 375). However, Ontario lacked the veto that gave it leverage over contributory pensions, which were being debated at precisely the same time, as we will see below. By 1971, all provinces had universal medicare programs in place. In the years that followed, the federal government defended the medicare model, resisting the growth of user fees and other forms of private financing in core health services. During the early 1980s, a growing number of doctors began charging patients a supplementary fee in addition to the payment they received from the provincial medical plan, a practice known as “extra-billing.” At the same time, a number of provinces began to flirt with the idea of hospital fees for patients. The federal Liberal government opposed both practices as inhibiting equal access to healthcare. Just before the 1984 election, it passed the Canada Health Act (CHA) to prohibit user fees and all charges at the point of service. The CHA was opposed by all provincial governments. But it was immensely popular with the electorate and passed unanimously in both the House of Commons and Senate. Shortly after, the federal government proceeded with penalties, withholding a total of $247 million from provinces that allowed charges. However, the real sanctions were political. Provincial electorates supported the principles of the CHA, and they were upset when their provincial governments were declared to be in violation of its terms. In moving to comply, provinces faced difficult negotiations with the medical profession, which demanded compensation for the banning of extra-billing. Ontario endured a twenty-five-day strike by its doctors, and Saskatchewan doctors held rotating one-day strikes. The doctors made important financial gains



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in a number of provinces, costs that the provinces alone had to absorb. By the late 1980s, however, all provinces were largely in compliance (Tuohy, 1994). The mid-1990s witnessed a repeat of this cycle, this time focused on private clinics providing specialized medical services, such as cataract surgery, and charging a “facility fee.” The federal Liberal government challenged such fees in 1995, and provinces grudgingly moved largely into compliance by banning them. The same dynamics did not emerge in all shared-cost programs. For example, the federal government never sought to establish a powerful national framework for provincial social assistance programs. Ottawa did provide shared-cost funding in the post-war era, and supported a major expansion of social assistance and social services at the provincial level (Struthers, 1994; Canada, Health and Welfare Canada, 1991). The federal Canada Assistance Plan did require provinces to support all persons in need, maintain appeals machinery, and not adopt residency requirements for social assistance. Within these general constraints, however, the federal approach left lots of room for provincial programs to evolve along distinctive trajectories, and provincial benefits went through cycles of convergence and divergence over the years (Boychuk, 1998). Nevertheless, federalism did play a distinctive role in the politics of health insurance. Although jurisdictional issues delayed action in the early years, the federal system created room for a reformist province to implement health insurance on social democratic principles, and federal action transformed this regional initiative into a national program. Federal–provincial interaction launched health insurance on a social democratic trajectory that contrasts sharply with the contributory pensions developed at the same time by the same governments.

Joint-Decision Federalism and the Canada Pension Plan Joint-decision federalism represents the third and most demanding model of intergovernmental decision-making. The introduction of contributory pensions in 1965 and subsequent changes to them required a super majority, posing a high hurdle for advocates of change. The roots of joint decision-making lie in the complexities of constitutional jurisdiction in the field of contributory pensions. The federal government has the authority to enact contributory pensions provided they do not displace a provincial program. When the issue arose in the

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mid-1960s, Quebec chose to operate its own plan, and a dualist pattern was established: the Quebec Pension Plan (QPP) operates in that province, and the Canada Pension Plan (CPP) operates generally throughout the rest of the country. Although other provinces were content with a federally delivered plan, they wanted control over it. A constitutional amendment was required to include survivor and disability benefits in the plan, and the provinces insisted on joint decision-making in return for agreeing to the amendment. Hence the requirement that any changes be approved by a super majority, including the federal government and two-thirds of the provinces representing two-thirds of the population of the country. The combination of dualism and joint decision-making creates complex veto points. First, to avoid the administrative and political headaches that would emerge if the two plans diverged sharply, pension planners accept that the Canada and Quebec plans should remain broadly parallel, with neither side making significant changes alone. Second, the formula for provincial consent to changes in the CPP means that Ontario alone, or a variety of possible combinations of other provinces, has a veto. In effect, then, the CPP rules and the pressure for parallelism between CPP and QPP create a system of multiple vetoes: Ottawa, Ontario, Quebec, or several combinations of other provinces can all stop change. The introduction of the C/QPP plans in the 1960s illustrates the dynamics well. The Liberal government elected in 1963 was committed to a contributory pension plan. Many provinces preferred the private-sector approach advocated by the Conservative government of Ontario, which preferred to require employers above a certain size to provide occupational pensions. However, the federal proposal was popular with voters. The Ontario government accepted that contributory pensions of some sort were probably inevitable, but held out for a limited plan that left ample scope for private pensions and minimized redistribution by relating individual contributions and benefits quite closely. In contrast, the Quebec government announced that its plan would have more generous benefit levels and a more redistributive funding formula. A final round of secret negotiations between Ottawa and Quebec City produced a compromise plan, which was more expansive than Ontario initially wanted but less redistributive than Quebec’s preferred model. The Ontario government and the insurance industry were not happy and felt that Ottawa “had used Quebec to turn the tables on them” (Kent, 1988: 286). However, in the end, they accepted the need for parallelism with the Quebec plan.



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The new CPP was a relatively modest program, more modest even than the federal government’s initial intentions. In combination, the OAS and the maximum C/QPP benefit replaced approximately 40 per cent of earnings for the average wage earner, a low rate by European and even US standards (Béland and Myles, 2005). In many other countries, including the United States, electoral politics led to the expansion of contributory benefits after their introduction (Derthick, 1979). In Canada, however, multiple vetoes blocked expansion. For example, in 1975 the Canadian Labour Congress and social groups launched a “Great Pension Debate,” urging a doubling of CPP benefits. The federal Liberals were initially sympathetic to some expansion, but wider provincial support was lacking. The campaign’s momentum slowed, and the historic moment passed. It was to take another forty years before expansion became a real prospect again. As we have seen, electoral pressures from elderly voters for better pensions were deflected to the GIS, a more limited program but one that the federal government could change at will. The contrast between pensions and health insurance is striking. The pension architecture carefully left substantial room for the private sector to offer private savings vehicles to the broad middle classes. In contrast, public health insurance displaced the private insurance industry completely from core hospital and medical services. Decision rules were not the only difference between the sectors. But they were critical.

Summary Three models of federalism thus left their imprint on the new Canadian welfare state. The same governments, operating in the same political climate, developed different programs under three different sets of rules. The classical model, avoiding as it does the need for formal intergovernmental agreement, gave full scope to the centrist politics of successive Liberal governments in the design of major income security programs, which emerged on relatively modest premises. In contrast, the shared-cost model expanded the range of ideologies powerfully positioned in the process, giving opportunities to social-democratic forces to shape health insurance, which emerged as Canada’s most ambitious universal program. Finally, joint decision-making, with its requirement of a super majority, constrained the initial strength of contributory pensions and delayed their subsequent expansion for several generations.

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THE THREE FEDERALISMS AND CYCLES OF POLICY CHANGE: 1990s–2000s The 1970s represented the high-water mark of the post-war welfare state. In the decades that followed, successive political cycles led to distinct waves of change in social programs. In the late 1980s and 1990s, governments focused on retrenchment, cutting core programs, sometimes deeply. Retrenchment in Canada was driven by the same forces reshaping the welfare state in other countries: the slowing of economic growth, globalization, and the ascendency of conservative political parties and philosophies. In the Canadian case, the fiscal problems of governments were also critical. The ratio of public debt to GDP rose steadily: by the mid-1990s fully 35 per cent of all federal revenues went to interest payments on federal debt, and several provinces faced problems placing their bonds in financial markets. In this context, public opinion became more critical of some social benefits. This was Canada’s neo-conservative moment. The mid-1990s in particular saw deep cuts at both levels of government, especially in unemployment benefits and social assistance. As it turned out, the political window for dramatic retrenchment remained open for only a few years. By the early 2000s, governments began, hesitantly at first, to reinvest in social policy, expanding some programs in major ways. This expansionist cycle reflected an amalgam of factors. The federal budget had moved back into surplus by the end of the 1990s, undercutting demands for further retrenchment. More importantly, during the first two decades of the twenty-first century, economic pressures unleashed by globalization, technological change, and tax cuts generated striking levels of inequality between the rich and the rest of the population, and a sense of economic insecurity began to seep into the broad middle class. Political parties increasingly competed to tap into their anxieties, and the governments they formed began to reinvest in the social sector. Particular attention was paid to programs benefitting the middle mass of society, including healthcare and pensions (Banting and Myles, 2013, 2016). The impact of these cycles of retrenchment and subsequent reinvestment varied enormously from one program to another. Some programs were better insulated than others from the chill winds of the 1990s and better positioned for the reinvestments of the 2000s. Once again, much depended on the model of federalism in play.



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Classical Federalism and Change in Income Security Programs Classical federalism offered no buffers against retrenchment. Federal decision-makers were unconstrained by intergovernmental relations in cutting benefits in their own jurisdiction. They still faced other constraints, especially the possible anger of voters and client groups in poor regions. However, in these politics, provincial governments were reduced to the role of lobbyists, not decision-makers. Pensions escaped virtually unscathed. In 1985, the Conservative government of Brian Mulroney proposed the partial de-indexation of OAS, but backed down quickly in the face of angry elderly voters. A decade later, the Chrétien Liberal government sought to replace the OAS and GIS with an integrated income-tested Seniors’ Benefit, but abandoned the idea in the face of attacks from the left by women’s groups and the NDP and from the right by investment brokers worried about eroding the incentive to save for retirement. The only change that survived was a more stealthy measure to “claw back” OAS from high-income seniors through the tax system. However, the measure affects barely 5 per cent of the elderly. In contrast, unemployment benefits suffered deep cuts that came relentlessly, one slice after another. The replacement rate was reduced from the peak of 66 per cent established in 1971 to 57 per cent in 1993, 55 per cent for some workers in 1994, and 50 per cent for repeat beneficiaries in 1996 (although offset in part for some recipients by a slightly increased family supplement). By 1996, the replacement rate for the now renamed employment insurance (EI) resembled that in 1940. In addition, increasingly restrictive eligibility requirements contributed to a dramatic decline in the proportion of unemployed individuals who were actually receiving benefits. By the late 1990s, only about 40 per cent of unemployed individuals were in receipt of unemployment benefits. In many countries, proposals to reduce unemployment benefits pit politicians against organized labour. In Canada, the most effective opponents of cutbacks are politicians from poor regions. A ritualized political dance was repeated many times during the years of retrenchment: successive federal governments proposed reductions; backbench MPs from Atlantic Canada and Quebec mounted fierce resistance; and the government had to decide whether to soften the impact in poor

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areas. If governments did not compromise, they paid a political price. For example, in the 1997 election the Liberal Party suffered significant losses in Atlantic Canada and eastern Quebec, in part because of its cuts in unemployment benefits. The government learned its lesson: just before the 2000 election, it reversed aspects of the new rules that hit eastern Canada. Over time, the regional sensitivity of the EI program has generated dramatic variation in the incidence of EI benefits, with twice as many unemployed persons in Atlantic Canada receiving benefits than in the central and western regions of Canada (Banting, 2012). As federal finances improved in the late 1990s and early 2000s, the balance between retrenchment and reinvestment began to shift. During the reinvestment cycle, historic differences between political parties re-emerged, with Liberal governments embracing wider expansionist agendas and Conservatives combining expansionist moments with continuing retrenchment. Families with children were favourites for all governments, but different political parties pushed the benefits system in different directions. The Liberal governments led by Jean Chrétien and Paul Martin consolidated the historic Family Allowances and child tax exemptions into a single child tax benefit, an income-tested payment delivered through the tax system to low- and middle-income families with children. In advancing this agenda, the Liberals initially departed from the unilateralism that normally characterizes classical federalism, and tried to coordinate increases in the child benefit with related changes in provincial social assistance and social services. However, coordination proved uneven, and such efforts quickly ran out of steam. Then in 2006, the newly elected Conservative government of Stephen Harper pushed the income-security system in a different direction, which reflected their distinctive approach to child care. They introduced a Universal Child Care Benefit, a payment for all families with young children, including families in which one parent stayed at home to provide child care. However, in 2016, the new Trudeau Liberal government changed course again, redesigning the child benefit system by eliminating the Conservative’s universal benefit and several small tax credits and introducing a much-enlarged Canada Child Benefit, which significantly enhanced benefits for lower- and middle-income families. Changes in EI also reflected the party in power. The Harper Conservatives temporarily extended benefit periods during the recession of



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2008–9. But in 2012, they returned to a more stringent policy, introducing tougher rules governing the search for “suitable employment,” requiring recipients to expand their job search geographically and to accept lower wages than in the past (Banting, 2012: 27–8). Once again, the changes were unpopular, especially in Atlantic Canada. In this case, the government did not blink, and in the 2015 federal election, the Conservatives lost all their seats in Atlantic Canada. The Trudeau government quickly reversed direction. They adopted a substantial array of enhancements in EI, eliminating the Conservatives’ stricter search requirements, easing the rules for people re-entering the workforce, reducing the waiting period before new benefits start, allowing people to work part-time while on claim, enhancing maternity/paternity benefits, and introducing a new family caregiver benefit. In short, once again, the classical model freed federal governments from intergovernmental constraints. Policy change, especially in the reinvestment cycle, was highly responsive to the political ideology and electoral calculations of the party in power. Although changes in these programs might have implications for provincial programs, provincial governments had no formal role in the process.

Shared-Cost Federalism and Change in Healthcare The most intense federal–provincial politics in recent years have centred on shared-cost programs. In contrast to the free play of political choices in the classical model, the politics of shared-cost federalism continued to reflect the enduring interests of governments as governments. Federal governments of all political persuasions worry about the lack of visibility of their contributions, and provincial governments resist federal efforts to attach conditions to new money. The overall pattern has been one of unilateralism at the federal level, relentless pushback from the provinces, and eventual reinvestment by the federal government. These intergovernmental dynamics have generated considerable intergovernmental political friction. However, given the participation of both conservative and progressive governments in the process, the shared-cost model has probably also contributed to relative stability in the basic policy model in the core sectors of healthcare. The stage for greater conflict was set as far back as 1977, when block funding was introduced in response to frustrations with the traditional

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form of cost-sharing. The federal government became concerned that its open-ended commitment to pay half the cost of expensive provincial programs reduced its control over its own budget. Provincial governments complained that shared-cost programs distorted provincial priorities and locked them into endless arguments about whether specific projects qualified for federal support. After extensive negotiations, the two levels agreed to shift to a block grant for health and post-secondary education, known as the Established Programs Financing. The federal government gained greater control over its finances and provincial governments gained greater freedom. Although the formal conditions attached to the federal health programs remained in place, provinces were able to allocate federal funding as they saw fit. Indeed, there was no explicit requirement that the funding be devoted to health and post-secondary education. Over time, provinces were to pay a high price for the additional flexibility, as the federal government was no longer committed to paying half the costs of provincial programs. An early harbinger of the future was the way in which the federal government could pose as the gallant defender against user fees, as discussed above. Under the block grant system, the federal treasury was not affected by changes in provincial health expenditures and, therefore, did not bear any of the financial costs associated with the defence of the universal approach. Federal health ministers were therefore freer to defend the principles of universality and equality of access. Indeed, they did so even as their colleague, the minister of finance, was reducing transfers to the provinces. As federal deficits grew in the 1980s and 1990s, Ottawa repeatedly made unilateral cuts. The biggest cut came when the 1995 budget reduced the overall cash payment to provinces dramatically and replaced Established Programs Financing with a single block transfer known as the Canada Health and Social Transfer (which in 2004 was split into the Canada Health Transfer and the Canada Social Transfer). These changes, conceived in secrecy and imposed without warning, provoked a bitter reaction among provinces and seriously eroded the legitimacy of the federal role in their eyes. In the aftermath, the provincial governments other than Quebec pressed for a stronger set of decision rules and a dispute resolution mechanism, an effort in effect to shift closer to a joint-decision model. However, the federal government refused to constrain itself in that way. As a result, the potential for unilateralism



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is still part of shared-cost federalism in the 2000s, and the basic model remains highly contested. Unilateralism, however, was not the entire story. Provincial governments were squeezed between growing health costs and declining federal transfers. They, in turn, squeezed health spending, reducing expenditures by an average of 2 per cent each year between 1992 and 1997 (Fierlbeck, 2001). Not surprisingly, the public was upset. The provinces quickly pushed back, mounting protracted public campaigns blaming Ottawa for the erosion of healthcare and demanding federal reinvestment. With the return of federal fiscal health in the late 1990s, Ottawa did reinvest, significantly increasing its funding in 1999, 2000, 2002, and 2004. In particular, the 2004 Health Accord, which was hammered out in intense intergovernmental negotiations, provided a major injection of cash immediately and established a ten-year plan with a generous annual escalator of 6 per cent for increasing the federal transfer for the duration of the agreement. In effect, the federal cuts of the 1990s were reversed, slice by slice. In the shared-cost model, which political party is in power at the federal level is less central. Indeed, there was considerable continuity between Liberal and Conservative governments on the big decisions about the size of the health transfer to provinces. The Martin Liberals signed the generous ten-year accord in 2004, and the Harper Conservatives, elected to a minority government two years later, honoured its terms. After winning a majority government in 2011, however, the Conservatives adopted a more forceful approach in determining what would follow the ten-year accord. Avoiding serious federal–provincial negotiations and thereby angering the provincial governments, they simply announced that annual increases in the health transfer would fall from 6 per cent to 3 per cent. The Conservatives did delay the termination of the accord, and it fell to the Trudeau Liberals to finalize the future size of the health transfer. After some initial bargaining, they too simply opted for a 3 per cent escalator. The provinces were angry and initially established a united front to reject the federal proposal, insisting that the escalator had to be increased and that any additional funding should flow through the block transfer. At that point, the Trudeau government adopted a divide-and-conquer strategy, striking bilateral deals with willing provinces. Over time, they managed to establish bilateral agreements with all provinces (Marchildon, 2016).

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Which party is in power in Ottawa does matter at the margins. For example, the Harper Conservatives were much less prone to try to steer provincial health priorities with supplemental funding envelopes outside of the CHT. They did honour the funding commitment, embedded in the 2004 Health Accord, to help provinces reduce wait times for certain surgeries. Thereafter, however, the Conservatives were unsympathetic to the idea that the federal government should try to “buy change” in provincial programs through supplementary funding. However, in 2015–16, the Trudeau Liberals returned to a more activist conception of the federal role, establishing supplementary funding for mental health services and home care. These fields were already priorities for most provinces, but the supplementary federal money probably augmented the resources allocated to them. Parties also differ in the vigour with which they seek to enforce the principles in the CHA, especially the prohibition on extra-billing and user fees. The role of the private sector re-emerged in 2004 with the opening of private clinics offering MRI and other diagnostic services. However, the Harper Conservatives imposed no new penalties on provinces during their term in office. In contrast, in 2015, the Liberal government reactivated its historic approach, with significant deductions from the federal CHA transfer to British Columbia and Quebec beginning in 2016–17. In both cases, the provinces undertook action to return to compliance with the CHA, and the federal government reimbursed them for the penalties (Canada, 2019). The Liberal health minister has also set in motion a wider examination of the growing role of private diagnostic services, to culminate in 2020. This could be an intergovernmental flashpoint. In response to the federal initiative, the new premier of Quebec announced that “People prefer to enter the private system for certain exams – it’s going to stay like that.... With healthcare, we have the jurisdiction. We will manage our healthcare system the way we want. The federal government is not going to start telling us how to manage it” (Richter, 2018). Despite the Quebec premier’s view that healthcare is an exclusively provincial jurisdiction, shared-cost federalism has locked the two levels of government in a mutual embrace characterized by patterns of unilateralism, pushback, and accommodation. This embrace has probably buffered the core of healthcare from pressures for dramatic change. The buffering effects are hardly absolute, and change remains possible. Nevertheless, shared-cost federalism tends to incline the country towards



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a more evolutionary process, requiring a higher level of consensus for change in the country as a whole. The next challenge to this evolving balance may well come from the proposal for a national pharmacare program issued by a federal advisory council in June of 2019 (Health Canada, 2019). These buffering effects depend fundamentally on the commitment of both levels of government to healthcare and the public’s expectation that both levels should support this sector. Shared-cost funding did not create such dynamics in other sectors of social policy that enjoy less public support. For example, social assistance saw a straightforward decentralization during the retrenchment cycle. In 1995, the federal government eliminated the Canada Assistance Plan, rolling its support for social assistance, post-secondary education, and social services, including early childhood development and child care, into the Canada Health and Social Transfer (the Canada Social Transfer after 2004). In addition, the 1995 changes eliminated the requirements that provincial social assistance programs respond to all persons in need and maintain appeals procedures. Provincial governments quickly utilized their enhanced control. In 1996, a newly elected Conservative government in Ontario cut benefits by 20 per cent, and benefits declined more incrementally elsewhere (Boychuk, 2006), stabilizing at the lower levels in the 2000s (National Council of Welfare, 2010). Eligibility for benefits also tightened. Beneficiaries were under increasing compulsion to participate in employability programs; Ontario introduced liens on home equity; and for several years, British Columbia imposed time limits, restricting employable people without children to two years of support in any five-year period (Béland and Daigneault, 2015). The CAP would have prevented all of these eligibility provisions. In effect, social assistance shifted from shared-cost federalism to classical federalism, with considerable variation in benefits reflecting the relative balance of conservative and progressive political forces in each province (Haddow, 2014).

Joint-Decision Federalism and Changes in the Canada Pension Plan During both the retrenchment and reinvestment cycles, the consensus-driven logic inherent in joint decision-making constrained change in the C/QPP, protecting the program from serious retrenchment in the 1990s

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but also delaying expansionist efforts in the 2000s until a super majority surprisingly emerged in 2016. During the 1990s, actuarial reports raised questions about the long-term financial status of the plans, triggering extensive political rhetoric about unsustainability. Yet the final adjustments agreed by the governments largely served to stabilize the program. Joint decisionmaking was not the only factor at work. The electoral sensitivity of pensions, which was so evident in the case of OAS/GIS, was undoubtedly important here as well. Yet contributory pensions create opportunities for subtle adjustments that are largely invisible to the electorate in the short term but have major effects in the long term (Myles and Pierson, 2001). The fact that these opportunities were exploited primarily to stabilize rather than weaken the program was due in part to the need for intergovernmental consensus. An intergovernmental review was launched in 1996 with the release of a joint discussion paper on reform options (Canada, 1996). From the outset, however, negotiations focused on a narrow range of options, and radical changes were never considered seriously. The province of Quebec announced that it would not consider solving the sustainability issue through big benefit cuts, a position supported by NDP governments in Saskatchewan and British Columbia. In the end, the federal and provincial governments agreed to increase contribution rates over a ten-year period, and to invest the enhanced revenues in equities in the hope of further strengthening the long-term funding of the plan. There was a modest trimming of some benefits, and the two NDP governments refused to sign the final agreement. However, governments did not even try for more dramatic retrenchment, and the final changes largely stabilized the role of contributory pensions in the retirement income system (Little, 2008; Béland and Myles, 2005). In the 2000s, the political cycle turned again in an expansionist direction. But once again, joint decision-making slowed change. New evidence made it clear that lower-middle-income Canadians were not saving enough for their retirement, and that private pensions and personal savings, which governments had hoped would fill the gap, were not doing so. If anything, their role was shrinking. The response was another drive to expand C/QPP, which unfolded in the first decade of the 2000s. Initially, the proposal seemed to have the support of the federal government and a majority of provinces, but Alberta adamantly



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opposed expansion from the outset. Just before the key intergovernmental meeting on the issue in late 2010, six provinces issued a joint statement supporting the CPP expansion, but two other provinces joined Alberta in opposing action. As a result, the federal finance minister “surprised his colleagues” by abandoning “an idea that he had personally championed for six months,” citing the lack of intergovernmental consensus (Curry and Howlett, 2010). The outcome reflected the unique decision rules of joint-decision federalism. If CPP had been governed according to the classical model, the federal government could have acted on its own. If CPP had been governed by the norms established for sharedcost programs, the support of the federal government and six provinces would have been sufficient for action. Under joint-decision federalism, however, a super majority is required, and it was lacking. Unexpectedly, electoral shifts a few years later suddenly produced the elusive super majority. In 2014, the Ontario Liberals led by Kathleen Wynne made pension reform a central plank in their provincial election campaign and won decisively. Their government announced that if the CPP was not expanded, it would implement an Ontario Retirement Pension Plan, which would supplement CPP for workers who do not have a workplace pension and was more ambitious than previous proposals for CPP expansion. The federal Conservative government of Stephen Harper fought the plan vigorously, refusing to allow Ontario to use the administrative structures of CPP to deliver their plan. In 2015, however, the Trudeau Liberals swept to power at the federal level. The new government was strongly aligned with their Ontario counterparts and was committed to an expansion of CPP that would make the Ontario plan unnecessary. Much more surprising, however, was an electoral revolution in Alberta, which had been governed by the Progressive Conservatives continuously since 1971. In October 2015, the Alberta NDP won the provincial election, removing the most determined opponent of CPP expansion. In this unusual political moment, the intergovernmental alignments fell into place quickly. By the summer of 2016, to the surprise of observers accustomed to repeated failures, the federal government and eight provinces announced an agreement to expand the CPP (Lee, 2016). They agreed to increase gradually the CPP replacement rate from 25 per cent to 33.3 per cent, and incrementally raise the payroll contributions and the maximum earnings limit as well. Quebec was one of the two dissenting provinces, but after a public consultation within the

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province, the government decided to amend the QPP in parallel with the CPP (Béland and Weaver, 2018). The expansion of CPP, first advocated in the mid-1970s, finally happened. It is worth noting how fleeting the political moment was. By early 2019, conservative governments were back in power in Ontario and Alberta, and later in that year the Alberta government struck an advisory panel to assess, among other things, whether Alberta should withdraw from the Canada Pension Plan and, like Quebec, establish its own plan.

Summary As in the post-war era, the new politics of social policy had to flow through the three distinctive institutional filters, which help explain the uneven impact of retrenchment and subsequent reinvestment on different social programs. The classical model exposed income security programs to the changing ideologies and electoral choices of the party in power in Ottawa, resulting in repeated changes in direction in child benefits and unemployment benefits. In contrast, in the field of health insurance, shared-cost federalism locked governments with different political philosophies into a cycle of unilateralism and negotiation, which over time helped buffer the basic model of healthcare. Finally, the joint-decision model of federalism tended to insulate contributory pensions from political pressures for change, frustrating advocates of retrenchment in the 1990s and blocking expansionist pressures in the 2000s until the unexpected emergence of a fleeting super majority.

CONCLUSIONS The Canadian federation embraces three distinct models of federalism, each of which alters the range of governments at the table, redistributes power among them, and requires different levels of intergovernmental consensus for action. At important historical moments, during both the years of expansion and the years of retrenchment, the same federal and provincial governments operating in the same political environment



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were shaping different programs according to different rules. The three federalisms at work in Canada provide powerful evidence for the proposition that political institutions and the decision rules implicit in them matter for policy outcomes. Certainly, the three federalisms have left their imprint on the Canadian welfare state. Because they act as institutional filters through which wider political and economic pressures flow, it is difficult to isolate precisely their independent influence on policy outcomes. It is, however, possible to identify the incentives and constraints embedded in each model and determine the direction of its influence. At a minimum, the three models of federalism remain an essential part of explanations for the different ideological trajectories of income security and healthcare and the uneven impact of both restructuring and reinvestment in recent decades. Evaluating the three federalisms in light of the normative criteria adopted in this volume – performance, effectiveness, and legitimacy – produces a mixed report. The classical model, almost by definition, comes closest to meeting traditional federal principles. It presumably scores highest on issues of effectiveness in responding to regional diversities. The issue has always been whether this model establishes the right balance between the claims of social citizenship – the belief that all Canadians should be entitled to a comparable set of social rights and benefits irrespective of where they live – and the belief that a federation should enhance the scope for regional variation in social benefits. In comparative terms, the Canadian welfare state leans towards giving greater scope to regional variation; virtually all other federal states among advanced democracies give more weight to the equal treatment of citizens (Banting, 2006; Obinger, Leibfried, and Castles, 2005). Greater regional variation results primarily because the federal government plays a smaller role in social policy, and more programs fall in the exclusive purview of provincial governments. But regional variation in benefits also reflects the tendency for regionalism to creep into the design of some federal programs. The most troublesome failure of the classical model is undoubtedly the federal employment insurance program. A basic rationale for central delivery of a program in any federation is to ensure that citizens in similar circumstances are treated similarly, irrespective of where they live. By that standard, the federal unemployment program fails spectacularly.

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At the other extreme, the joint-decision model can also be seen as a strong version of another model of federalism. As we have seen, the effect has been to buffer the C/QPP from the pressures for change inherent in democratic politics. Defenders of the model might note that over time the frustrations generated by joint decision-making have been visited equally on advocates and opponents of the welfare state. In the post-war decades, advocates of expansion regarded the formula with despair; in the era of retrenchment, advocates of privatization have faced similar disappointments; in the 2000s, the frustrations were initially visited on expansionists until an unusual combination of electoral shifts in 2015 led to reform, four decades after the “Great Pension Debate” of the 1970s. Defenders of joint decision-making might also argue that privileging stability makes sense in the field of pensions, where policies require long-term horizons. The actual formula is undoubtedly too exacting; there is no reason that contributory pensions should be more difficult to change than most sections of the Constitution. Nevertheless, the model does generate intergovernmental legitimacy, and the plans governed by it enjoy strong public support. Our greatest difficulties haunt the domain of shared-cost federalism. The legitimacy of this model has been under growing challenge, particularly in healthcare. Federal intervention in healthcare is less pervasive and less detailed in Canada than in any other advanced federation, including the United States and Switzerland, yet its intervention generates more intergovernmental resentment (Banting and Corbett, 2002). The country is paying a high price for the lack of agreed federal–provincial decision rules, the ruptures of the 1990s, and the unpredictability of federal decisions about growth in the CHT since then. Undoubtedly, the balance among the three models of federalism will evolve in the future, as it has in the past. The shared-cost model may play a smaller role in the years to come. Nevertheless, as long as Canadians look to both levels of government to respond to the social problems they confront, it is difficult to envisage any of the three models disappearing completely from the world of social policy. It seems likely that pressures for change in the Canadian welfare state will continue to flow through three distinctive institutional filters, each with its own implications for the future.



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GLOSSARY de-indexation  The removal of an automatic increase in benefit levels to compensate for the effects of inflation. income-tested  A benefit program in which the size of the payment declines as the other income of the recipient increases. An example is the Guaranteed Income Supplement received by low- and middle-income elderly Canadians. social assistance  Often referred to as “welfare,” this is a benefit provided to individuals without adequate income from all other sources. In Canada, social assistance is provided by provincial governments (in Ontario with the assistance of municipalities). social insurance program  A contributory program in which the eligibility for benefit and the level of benefit depend on contributions made during employment by the individual and their employers. Leading examples are employment insurance and the Canada Pension Plan. tax benefit  An income-tested payment to individual beneficiaries delivered through the taxation system. An example would be the Canada Child Benefit. REFERENCES Banting, K. 2006. “Is a Federal Welfare State a Contradiction in Terms?” In Democracy and Devolution, edited by S. Greer, 44–66. London: Palgrave/ Macmillan. ———. 2012. “Introduction: Debating Employment Insurance.” In Making EI Work: Research from the Mowat Centre Employment Insurance Task Force, edited by K. Banting and J. Medow, 1–34. Montreal: McGill-Queen’s University Press. Banting, K., and S. Corbett. 2002. “Health Policy and Federalism: An Introduction.” In Health Policy and Federalism: A Comparative Perspective on Multi-Level Governance, edited by K. Banting and S. Corbett, 1–38. Montreal: McGill–Queen’s University Press. Banting, K., and J. Myles. 2013. Inequality and the Fading of Redistributive Politics. Vancouver: University of British Columbia Press. ———. 2016. “Framing the New Inequality: The Politics of Income Redistribution in Canada.” In Income Inequality: The Canadian Story, edited by D. Green, C. Riddell, and F. St.-Hilaire, 509–36. Montreal: Institute for Research on Public Policy. Béland, D., and P.-M. Daigneault, eds. 2015. Welfare Reform in Canada: Provincial Social Assistance in Comparative Perspective. Toronto: University of Toronto Press. Béland, D., and J. Myles. 2005. “Stasis Amidst Change: Canadian Pension Reform in an Age of Retrenchment.” In Ageing and Pension Reform Around

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Keith G. Banting the World: Evidence from Eleven Countries, edited by G. Bonoli and T. Shinkawa, 252–73. Cheltenham, UK: Edward Elgar. Béland, D., and K. Weaver. 2018. “Federalism and the Politics of the Canada and Quebec Pension Plans.” Journal of International and Comparative Social Policy 35, no. 1: 25–40. https://doi.org/10.1080/21699763.2018.1526698. Boychuk, G. 1998. Patchworks of Purpose: The Development of Provincial Social Assistance Regimes in Canada. Montreal: McGill–Queen’s University Press. ———. 2006. “Slouching Toward the Bottom? Provincial Social Assistance Provision in Canada, 1980–2000.” In Racing to the Bottom? Provincial Interdependence in the Canadian Federation, edited by K. Harrison, 157–92. Vancouver: University of British Columbia Press. Canada. 1996. An Information Paper for Consultations on the Canada Pension Plan Released by the Federal, Provincial and Territorial Governments. Ottawa: Department of Finance. Canada, Health and Welfare Canada, Program Audit and Review Directorate. 1991. Evaluation of the Canada Assistance Plan. Ottawa: Health and Welfare Canada. Canada, Health Canada. 2019. Canada Health Act Annual Report 2017–2018. https://www.canada.ca/en/health-canada/services/publications/health -system-services/canada-health-act-annual-report-2017-2018.html#s8. Curry, B., and K. Howlett. 2010. “Pensions Dominate Summit Agenda.” Globe and Mail, December 20, 2010: A1. Derthick, M. 1979. Policymaking for Social Security. Washington, DC: Brookings Institution. Fierlbeck, K. 2001. “Cost Containment in Health Care: The Federalism Context.” In Federalism, Democracy and Health Policy in Canada, edited by D. Adams, 131–78. Montreal: McGill–Queen’s University Press. Guest, D. 1997. Emergence of Social Security in Canada. 3rd ed. Vancouver: University of British Columbia Press. Haddow, R. 2014. “Power Resources and the Canadian Welfare State: Unions, Partisanship and Interprovincial Differences in Inequality and Poverty Reduction.” Canadian Journal of Political Science 47 no. 4: 717–39. https:// doi.org/10.1017/S0008423914001036. Health Canada, Advisory Council on the Implementation of National Pharmacare. 2019. A Prescription for Canada: Achieving Pharmacare for All. Ottawa: Health Canada. Hogg, P. 2001. Constitutional Law in Canada. Toronto: Carswell. Jean, D. 1992. “Family Allowances and Family Autonomy.” In Canadian Family History, edited by B. Bradbury, 401–41. Toronto: Copp Clark Pitman. Kent, T. 1988. A Public Purpose: An Experience of Liberal Opposition and Canadian Government. Montreal: McGill–Queen’s University Press. Lee, I. 2016. “Canada Pension Plan Enhancement: Issues and Unexpected Outcomes.” In How Ottawa Spends, 2016–17, edited by G.B. Doern and C. Stoney, 267–86. Ottawa: Carleton University Press.



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Little, B. 2008. Fixing the Future: How Canada’s Usually Fractious Governments Worked Together to Rescue the Canada Pension Plan. Toronto: University of Toronto Press. Maioni, A. 1998. Parting at the Crossroads: The Emergence of Health Insurance in the United States and Canada. Princeton, NJ: Princeton University Press. Marchildon, G. 2016. Bilateral Health Agreements between the Federal and Provincial/ Territorial Governments in Canada. Montreal: Institute for Research on Public Policy. http://irpp.org/research-studies/insight-no13/. Myles, J., and P. Pierson. 2001. “The Comparative Political Economy of Pension Reform.” In The New Politics of the Welfare State, edited by P. Pierson. Oxford: Oxford University Press. National Council of Welfare. 2010. Welfare Incomes 2009. Ottawa: National Council of Welfare. Obinger, H., S. Leibfried, and F. Castles, eds. 2005. Federalism and the Welfare State: New World and European Experiences. Cambridge: Cambridge University Press. Pal, L. 1988. State, Class, and Bureaucracy: Canadian Unemployment Insurance and Public Policy. Montreal: McGill–Queen’s University Press. Richter, J. 2018. “‘We Will Not Be Dictated To’: Legault Warns as Ottawa Threatens Quebec over Health Care.” CBC News, November 15, 2018. https://www.cbc.ca/news/canada/montreal/quebec-ottawa-private -health-care-transfer-payments-1.4906507. Struthers, J. 1994. Limits of Affluence: Welfare in Ontario, 1920–1970. Toronto: University of Toronto Press. Taylor, M. 1987. Health Insurance and Public Policy in Canada. 2nd ed. Montreal: McGill–Queen’s University Press. Tuohy, C. 1994. “Health Policy and Fiscal Federalism.” In The Future of Fiscal Federalism, edited by K. Banting, D. Brown, and T. Courchene, 189–212. Kingston: Queen’s University, School of Policy Studies.

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Federalism and Universal Healthcare: A Question of Performance and Effectiveness Herman Bakvis

For most Canadians, universal healthcare or medicare is one of the more valued features of Canada’s social safety net, if not the most valued. A 2012 Environics survey found that 81 per cent of Canadians ranked their healthcare system as the symbol very important to them as part of their Canadian identity, ranking healthcare well above the flag, the anthem, and the Charter of Rights and Freedoms. Healthcare also represents the largest single expenditure item of provinces. Ranging from 30 to 46 per cent of provincial budgets, it typically dwarfs most other items (Canadian Institute for Health Information [CIHI], 2016). Among federal transfers to the provinces and territories, the Canada Health Transfer (CHT) looms by far as the largest single transfer. It amounted to $40.37 billion in 2019–20, more than double the federal transfer for equalization ($19.84 billion) and almost three times the $14.59 billion for the Canada Social Transfer (CST). Yet despite the esteem in which medicare is held and the amount spent on it by both levels of government, all is not well. As former federal minister of health Jane Philpott (2015–17) describes it, “We pay some of the highest costs in the world for health care and we’ve got a middle-of-the-road health-care system” (quoted in Galloway and Grant, 2016). Philpott was referring to a report issued by the Commonwealth Fund, a US health think tank, which ranked Canada near the bottom on healthcare performance of eleven developed countries (Davis et al., 2014).



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Her statement came during a series of heated exchanges between Ottawa and the provinces over the renewal of the healthcare accord originally struck with the provinces back in 2004 by the Paul Martin Liberal government. The accord provided for annual increases of 6 per cent in the CHT transfer. It was largely left in place by the Harper government until late 2011 when then minister of finance Jim Flaherty announced the annual rate of increase in the federal transfer would be reduced to 3 per cent starting in 2017. It was left to the Liberal government elected in 2015 to decide whether to proceed with the planned reduction or to negotiate a somewhat richer agreement, albeit with the hope of extracting a commitment from the provinces for a greater degree of reform than had hitherto occurred. In voicing the concerns noted above, Dr. Philpott was echoing the analyses and critiques not just by the Commonwealth Fund but several other bodies and researchers as well. She was also very likely expressing the deep frustration of many close observers at the seeming inability of the Canadian federation to engage in any kind of meaningful reform of Canadian universal healthcare even while most other systems, both federal and unitary, have done so. It was this absence of change that led Harvey Lazar and his colleagues (Lazar et al., 2013) to coin the term “frozen paradigm.” Despite considerable changes in medical technologies and delivery, especially with respect to the use of prescription drugs, the basic features of the medicare system launched more than fifty years ago are still in place. To what extent can the configuration of federal institutions and practices in this area be held responsible for the “frozen” nature of the healthcare system? In dealing with this question we will look at the constitutional responsibilities for healthcare and the institutions and institutional dynamics involved (“performance”); the policy consequences, both outputs and outcomes (“effectiveness”); and how the less than stellar performance of the system affects its current and future legitimacy. These three categories – performance, effectiveness, and legitimacy – are discussed in chapter 1. It is worth noting that while all three criteria are somewhat subjective, the assessment is somewhat more straightforward in the case of healthcare because there are considerable hard data. A good case can be made that the healthcare delivered to Canadians is subpar compared to many other advanced industrial democracies. As for performance, it will be argued that intergovernmental relations in healthcare take the

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form of a two-level game involving a highly public multilateral process on the one hand and a quiet bilateral process, involving mainly unelected officials, on the other. This two-level game can be seen as responsible in good part for keeping the paradigm in the deep freeze.

OVERVIEW: CANADA’S TEN SINGLE-PAYER HEALTH INSURANCE SYSTEMS Among the advanced industrial democracies with universal healthcare, Canada and Britain are the only countries that rely on a single-payer system to ensure universal coverage. Under this model, there is only a single source of payments to healthcare providers, with the payer (the government) determining the amount of the payment. The medical provider is not allowed to receive additional payments from patients or from other sources for what are called medically necessary services. The single-payer system allows for a high level of control over monies spent and reduced administrative costs. Typically, there are gaps in what the government (the single payer) is willing to cover: non-medically necessary medical procedures and prescription medications prescribed outside of a hospital setting, for example. These optional services can be paid for by non-government payers, such as private drug plans, or out of the patient’s own pocket. The term single-payer is actually a bit of a misnomer insofar as each provincial government constitutes a separate single payer, each with their own list of medically necessary services. This system reflects the fact that Canada is a federation where the provinces have primary responsibility for healthcare delivery. Having each province as a single payer allows for considerable variation in practices and outcomes. The Canada Health Act (1984) specifies five principles or conditions that provincial/territorial governments must meet in order to receive federal funding in support of healthcare: accessibility, universality, public administration, comprehensiveness, and portability. However, these conditions are defined in very broad terms. Since the provinces are responsible for defining what constitutes a medically necessary service, a concept that lies at the core of the five principles, there can be considerable variation in both what services are covered and what providers – physicians, for example – receive in the way of remuneration for a particular service. The result is considerable



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variation in the amount spent by provinces on healthcare on a per capita basis, ranging from $5,822 in Quebec to $7,256 in Newfoundland and Labrador (CIHI, 2016: 37). There are also differences in the way medical practitioners are regulated. In some provinces, like Ontario, all practitioners fall under the financial remuneration scheme and in effect must have a billing number or be paid a salary with no option for practicing outside of the scheme. In other provinces, for example BC and Quebec, practitioners can practice outside the scheme and directly bill patients who then pay out of their own resources. There are also variations in outcomes, for example, as measured with respect to wait times for treatments (Barua and Moir, 2019; CIHI, 2019). The greatest variation can be found in coverage for prescription drugs. In most provinces the majority of citizens have a drug plan through their employer, have their own private insurance plan, or simply pay out of their own pocket. However, in Quebec everyone is required to have an insurance plan through their employer and, if that is unavailable, participate in a government-sponsored plan. Other provinces provide coverage to those on social assistance and to a lesser extent to those below a certain income level or to senior citizens. All provinces have some sort of plan to cover hugely expensive drugs for rare or highly complex diseases. But here too there is variation, with some drugs covered in certain provinces but not in others. A person suffering one of these diseases in one province may be fortunate to have their treatment covered while someone else with the identical disease in another province may be out of luck. This kind of variability in coverage is often cited as one of the flaws of federalism. At the same time, as with differences in overall spending on healthcare, federalism can also be seen as a positive feature that allows provincial populations to decide what package of services best serves their particular needs. Another positive aspect is the role of provinces as innovators, which was certainly the case in the genesis of universal healthcare. Beginning with universal hospital insurance in the 1940s, the province of Saskatchewan extended coverage to physicians’ services in 1962, a model that subsequently served as a template for the country as a whole. A Royal Commission on Health Services struck by the Progressive Conservative government of John Diefenbaker in 1961 delivered its report in 1964 recommending the Saskatchewan model for the rest of the country. The minority Liberal government of Lester Pearson, with strong support from the NDP in Parliament, accepted the recommendation

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and in 1966 passed the Medical Care Act with implementation beginning in 1968. The role played by Saskatchewan is an interesting example of policy innovation and diffusion in a federal system. It also underscored the challenges faced by provincial governments in being on the front line in the delivery of healthcare: upon the launch of medicare in 1962 the province’s doctors went on strike, leaving a bitter legacy for a number of years thereafter (Badgley and Wolfe, 1967). The Saskatchewan strike notwithstanding, the introduction of medicare did not necessarily represent a sharp break with the past. Prior to the Second World War provinces had studied the issue of health insurance through commissions and the like. During the 1930s, Alberta and BC actually passed health insurance legislation, although neither enacted it. Ottawa in turn had financially supported the construction of hospitals, public health initiatives, and professional training through shared-cost programs since the 1940s. In 1957 the federal Hospital Insurance and Diagnostic Services Act provided for 50/50 cost-sharing for provincial and territorial hospital insurance plans. This legislation was in effect extended in 1966 to cover physicians’ services. At about the same time the federal equalization program for the have-not provinces was enriched by incorporating into the formula a wider range of provincial revenue sources for purposes of calculating the fiscal capacity of the have-not provinces. This new formula increased the amount of money that these provinces could put towards healthcare, thereby increasing their capacity to match federal funding under cost-shared programs (Simeon and Miller, 1980). Still, the richer provinces were in a better position to take advantage of these funding arrangements, and so inequalities between provinces in healthcare spending capacity remained. In 1977 cost-sharing was replaced by block-funding under an arrangement called Established Programs Financing (EPF). It provided provinces with a fixed sum every year, based on the 1976–7 allocation with annual adjustments for inflation. There was one additional feature: rather than 100 per cent cash, half of the transfer would be in cash and the other half in the form of tax points; that is, Ottawa would reduce its personal income and corporate tax rates so that the provinces could increase their tax rate to the equivalent of the funds that they previously received in cash. This tax point transfer technique had already been used by Ottawa as part of opting-out arrangements with Quebec in the 1960s. The tax points, however, were clearly more valuable to “have” provinces



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such as Alberta and Ontario, whose tax bases were much more lucrative. To make the tax-transfer acceptable to the have-not provinces, the tax points in question were “equalized” to make them more valuable with the additional money tied directly to the equalization scheme. Additional transitional payments were also negotiated as part of the bargaining to get the provinces to buy in. This shift from cost-shared to block grants and the use of tax points became the starting point of a narrative that has played a key part in later conflicts between Ottawa and the provinces. For many years as part of its annual budget statements, Ottawa duly calculated the healthcare transfers (along with those for post-secondary education) as including the value of the tax points. The provinces in turn took into account only the cash portion. In subsequent years they focused mainly on the fact that while Ottawa once covered 50 per cent of healthcare costs in cash, it was now covering only 25 per cent or less in cash. When asked about the tax points the not atypical provincial response was “Tax points, what tax points?” In the following years some changes were made in the way the block grants were labelled and structured. Initially EPF covered both healthcare and post-secondary education (PSE) with no formal distinction between the two, although the assumption was that the bulk of funding would be allocated to health, consistent with the pattern of cost-shared transfers prior to 1977. Provinces were free to spend as little or as much as they wished of their block grants on health and PSE as long as they adhered to the five principles. In fact, they could divert EPF monies to areas other than health and PSE if the five conditions were met. The initial period from 1977 to the early 1980s saw significant increases in the EPF entitlements. The amounts were more than the provinces, especially the have-not provinces, were anticipating, in part because of the various transition payments and other sweeteners offered by Ottawa to entice the provinces into participating. However, one of Ottawa’s objectives in moving to block funding was not being met. Under EPF, it hoped to cap the amount being transferred, something it had been unable to do with the open-ended nature of the previous cost-sharing regime and the requirement to match provincial funding even if it meant contributing more than anticipated. Rather than saving, the federal government was spending more than projected under EPF. It is estimated that in 1982 the EPF transfer, including both the cash and

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tax point components, represented 52 per cent of eligible program costs for health and PSE (Madore, 1997). Thus in 1982, with greater than anticipated expenditures, Ottawa started to crank back the rate of increases. In 1995, it actually reduced the overall transfer for health, PSE, and the Canada Assistance Plan (CAP) and then combined the three into a single block transfer called the Canada Health and Social Transfer (CHST). CAP had been the last remaining sizeable cost-shared social transfer. A number of conditions associated with the old CAP were dropped so that provinces could now reallocate a good portion of what used to be CAP money to health. In 2006 the CHST was divided into two separate blocks entitled the Canada Health Transfer (CHT) and the Canada Social Transfer (CST) for PSE and social assistance. In 1977 there were only the five basic conditions, cast in very general terms. The requirement for the “public administration” of healthcare delivery, for example, even before the era of outsourcing and new public management, was rather ambiguous. The one problematic area was extra-billing. For several years many physicians would collect a relatively small additional fee from each patient. By the 1980s, however, in certain specialties this extra-billing became quite substantial. By 1984 Parliament passed the new Canada Health Act (CHA), supported by both government and opposition parties, which included a ban on extra-billing and the proviso that any amount of extra-billing would be clawed back from the province’s block funding entitlement. The following decades saw healthcare agreements between Ottawa and the provinces and territories in 1999, 2004, and 2016–17 concerning wait-lists and the like, but above all funding. None of these agreements altered the Canada Health Act. It remains the last piece of federal legislation to intervene directly into provincial healthcare responsibilities.

PERFORMANCE: INSTITUTIONS, PROCESSES, AND FLEXIBILITY As pointed out in chapter 11, the healthcare area is a classic example of self-rule where the two main orders of government often proceed on the basis of unilateral action without bothering to coordinate with one another. Under section 92(7) of the Constitution the provinces are responsible for and have jurisdiction over “The Establishment,



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Maintenance, and Management of Hospitals, Asylums, Charities, and Eleemosynary Institutions in and for the Province, other than Marine Hospitals.” Coupled with section 92(13) on property and civil rights and section 92(16) on matters of a merely local or private nature, these sections of the Constitution Act, 1867 have been accepted by the courts and federal and provincial governments as providing the basis for primarily provincial jurisdiction in this field. The federal government in turn has depended over the years on the criminal law power (section 91(27)), its responsibility for Indigenous people (section 91(24), “Indians, and Lands reserved for the Indians”), and, above all, its spending power (see Watts, 1999, and discussion in chapters 10 and 11). Over the years the spending power has been one of the more powerful policy instruments available to Ottawa to influence provincial policies, not just in healthcare but in a host of social and economic policy fields. It was used to set conditions as part of cost-shared transfers for hospital construction and insurance in 1953 and later with medicare in 1968. Specific conditions were largely dropped in 1977 with the arrival of EPF. However, in 1984 Ottawa backtracked by passing the Canada Health Act; it reinforced the principle of universal access by banning extra-billing with the specific proviso that any such fees would be subtracted from the provincial health transfer. But in general Ottawa was reluctant to use such specific measures, if only because of their sensitivity to Quebec. Instead, Ottawa’s general strategy was to try to extract commitments from the provinces on issues like wait-list reductions by using the promise of additional funding. The exceptions were in 1982 and 1995 when Ottawa unilaterally reduced funding; the provinces were understandably not in a mood to entertain such requests. Not too long before the 1997 federal election, the Liberal government began to restore some of the cuts made in 1995–6. That year also saw the beginning of a pattern whereby, with the exception of the Harper government (2006–15), Ottawa reached agreements or at least understandings with the provinces following multilateral negotiations. Starting in 1999, as part of the social union framework (SUFA) negotiations, Ottawa and the provinces reached a five-year accord on health funding that restored most of the previous cuts and provided for a basic CHST floor that would rise over time (Boismenu and Graefe, 2004). Provinces made a commitment to greater accountability and new forms of healthcare delivery. However, notwithstanding Ottawa’s push for a more robust reporting

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regime, there were no formal requirements imposed on provinces for reporting on results other than to their own citizens. In 2003 Ottawa and the provinces reached agreement on a $34.8 billion healthcare renewal accord over five years with almost half the money focused on primary healthcare, home care, and catastrophic drug coverage (Fafard, 2013:  36). The accord included additional commitments for reporting and the development of further performance indicators. These provisions were consistent with the recommendations of the 2002 Commission on the Future of Health Care in Canada (Canada, 2002, generally referred to as the Romanow Report), which had urged that increased health transfers be linked to greater transparency and accountability. In 2003, the Health Council of Canada, composed of representatives appointed by the provincial and federal governments, was created and tasked with reporting on the implementation of the 2003 and later the 2004 accords, including the performance indicators. Alberta and Quebec declined to participate in the Council. Likely the most important agreement of the decade was the 2004 Martin health accord. It featured a “10-Year Plan to Strengthen Health Care” (Canada, 2004) with a federal commitment to boost the health transfer to the provinces and territories annually by 6 per cent over the ten-year period plus a Wait Times Reduction Fund of $4.5 billion over six years. The 2004 accord was more explicit on the issue of performance indicators with a commitment by all parties to develop specific indicators on wait times. There was one other feature worth noting: Quebec was given more latitude in how the additional transfers could be spent and how the performance indicators were to be interpreted. This preferential treatment of Quebec, agreed to not only by Ottawa but also by the other provinces and territories, reflected the province’s unique asymmetrical position in the healthcare field. After the 2006 federal election the Harper government maintained the Martin health accord, including its 6 per cent escalator. Indeed, in the 2007 budget the Conservative government provided an extra $612 million to help provinces implement more quickly the wait time guarantees in the Martin accord. However, as Fafard (2013) notes, Ontario was the only province to implement anything remotely resembling a wait time benchmark with a protocol allowing patients to complain. The Health Council, the third-party agency ostensibly tasked with overseeing the implementation and monitoring of performance measures,



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including those for wait times, was left in the dark as to definitions and expectations pertaining to these guarantees. After the 2008 election it became clear that the Harper government had little or no interest in holding the provinces’ feet to the fire regarding wait times or even the basic provisions in the Canada Health Act. In March 2014 the Health Council of Canada was abolished. One adjustment made by the Harper government, in the name of “equality,” was to make the annual cash transfer payment to each province identical on a per capita basis. In doing so, however, it ignored the original rationale for the differential in the per capita amounts. As noted earlier, it had reflected in part the tax points allocation under the original 1977 EPF arrangement, where it was recognized that these tax points were worth more to well-off provinces and less to the fiscally weaker provinces. These “equalized tax points” resulted in the less well-off provinces receiving more cash in their per capita payments. With the putative disparity in the per capita health transfers eliminated, the province of Alberta saw its payments jump by approximately 50 per cent whereas most other provinces, and especially the smaller provinces, saw their payments remain static (Wingrove, 2012). Since these latter provinces had older populations and more challenging conditions, the move to equal per capita payments effectively undermined the potential for even a partially needs-based transfer system (Marchildon and Mou, 2014). Although the Harper government left the 2004 Martin agreement intact, it was a different story when it came to negotiating a successor agreement. In fact, there were no negotiations at all as the Harper government reverted back to unilateralism. In December 2011, during a federal–provincial meeting of finance ministers, the federal minister of finance handed each provincial minister an envelope containing a summary of the amount in CHT transfers their province could count on over the next decade. While the specific sums varied for each province, the basic message was the same: maintenance of the 6 per cent escalator till 2016–17; thereafter it would be reduced to either 3 per cent or the rate of increase in nominal GDP, whichever was greater. It was also made clear that the offer was non-negotiable. The entities most surprised at the unilateral reduction in the annual CHT increase were not the provincial governments but the various advocacy groups seeking to protect and enhance medicare. They were hoping to use the renewal negotiations as an opportunity to lobby for improved federal oversight

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of medicare as well as more stringent conditions or, alternatively, for a greater role by the private sector. The reaction from the provinces was varied. Then Liberal premier of Ontario Dalton McGuinty stated his willingness to accept more conditions from Ottawa if the 6 per cent was maintained (CBC, 2012). The BC premier, Christy Clark, on the other hand, while regretting the reduction in the escalator, noted that Ottawa was essentially “vacating the policy field for premiers.... To me, this is really a huge opportunity for premiers to step up and to take the reins on health care” (quoted in Kennedy, 2012). The opportunity to which Premier Clark alluded was the Harper government’s willingness to ignore the various provisions of the CHA, particularly those on extra-billing. As Harper himself noted in 2009, “I don’t lecture the provinces publicly on how they should be running their health care systems” (quoted in Fafard, 2013: 40). At the same time, when it became apparent that the Harper government was unlikely to budge, the premiers began to adjust to a new fiscal reality, both on their own and through the Council of the Federation (CoF). One area was generic drugs, where Canadian prices are among the highest in the world. The CoF struck a Health Care Innovation Working Group. Chaired by the premiers of PEI and Saskatchewan, its task was to examine generic drug outlays as well as clinical practice, team-based healthcare, and health human resource management initiatives with the view to achieving better outcomes at lower costs. Their efforts led to the launch of the “Pan-Canadian Competitive Value Price Initiative for Generic Drugs” covering a limited number of generics, fourteen by 2015. The result has been major reductions in what provincial plans pay for generics (i.e., plans funded directly by provincial governments for seniors or those on social assistance). However, there is considerable variation from province to province. In some but not all provinces the cap on pricing applies to private plans as well. And some provinces, BC for example, allow exemptions for certain generics (Lexchin, 2015). The Justin Trudeau Liberal government assumed office in 2015 having campaigned on striking a new health accord with the provinces that would “make home care more available, prescription drugs more affordable, and mental health care more accessible” (Liberal Party of Canada, 2015). The party had promised a long-term agreement on funding and an investment of $3 billion over four years into “more and better home care.” It also signalled an intention to help improve access to



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prescription medications while stopping short of promising pharmacare. It further stated that collaborative leadership and sunny ways, the factor “missing during the Harper decade,” would be the critical ingredients in bringing about the new accord. Negotiations between the new federal minister of health, Jane Philpott, and her provincial counterparts proceeded on a positive note, facilitated by the provinces’ anticipation of a more flexible and generous approach to funding by Ottawa. It became apparent, however, that the Trudeau government’s position was actually much closer to Harper’s 3.0 per cent escalator than the provinces’ requested 5.2 per cent. The Trudeau government’s offer was subsequently bumped up to 3.5 per cent, coupled with additional targeted funding for home care and mental health. Negotiations hit a low point when the premiers, at their CoF meeting in the summer of 2016, issued statements voicing their traditional complaint about Ottawa grossly underfunding healthcare. Quebec was particularly concerned over conditions that Ottawa was planning to impose on the targeted funds for home care and mental health. All provinces were firm that they were best positioned to decide how federal health dollars should be spent. On the eve of a meeting with her provincial counterparts in October, federal health minister Philpott, in turn, stated that Canada had a middle-of-the-road healthcare system for which it paid “some of the highest costs in the world.” The prime minister himself told Le Devoir that “Canadians expect that any new money invested in health by the federal government is actually spent on health by the provinces and not on tax cuts or I-don’t-know-what [other] programs” (quoted in Yakabuski, 2016), implying that provinces were redirecting federal health transfers for other purposes. Ultimately there was no agreement. The Ontario health minister spoke of a “declining partnership” with Ottawa, and the Quebec health minister stated that the provinces now faced an imminent “cut of $60 billion of funding from the federal government over the next 10 years” (Harris and Zimonjic, 2016). The latter calculation was presumably based on the assumption of the escalator continuing at 6 per cent over that period. The premiers failed to put the issue of healthcare on the agenda of the first ministers’ meeting called by the prime minister to discuss the proposed Pan-Canadian Framework on Climate Change (see chapter 14). Trudeau indicated healthcare issues would be discussed at the

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ministerial meeting of finance ministers later that month. The territories and nine of the provinces did sign off on the communique announcing adoption of the “Pan-Canadian Framework on Clean Growth and Climate Change” – with the note at the end that “Saskatchewan is not adopting the Pan-Canadian Framework” (Canada, 2016). Manitoba declined to sign the communique, with its premier stating that his refusal was tied explicitly to the proposed 50 per cent reduction in the healthcare transfer escalator (Kirkup, 2016). The promised renewed healthcare talks did take place at the December meeting of finance ministers, joined by the health ministers, where the federal minister of finance bumped his offer of targeted funding for home care and mental health up to $11.5 billion in addition to the earlier announced 3.5 per cent annual escalator. This increased offer, however, was not enough for the provinces, who termed it an unacceptable ultimatum. The meeting ended with federal finance minister Morneau, flanked by the federal health minister, announcing that the offer was off the table and that the escalator would simply revert to 3 per cent as per the original Harper government proposal with no extra targeted funding (Tasker, 2016). The united front presented by the provinces was not all that it seemed, however. A few days after the December meeting, the New Brunswick minister of finance indicated her province would be interested in a bilateral agreement (Tasker, 2016) and, indeed, three days later consummated a deal with Ottawa. Within two months all the remaining provinces and territories save Manitoba reached bilateral agreements as well. Then in August of 2017 Manitoba announced it had an agreement, protesting that it had had little choice in light of the other provinces having forsaken the united front (CBC, 2017a).

A Two-Level Game? The speed with which these bilateral agreements were concluded, coupled with the fact that each of the agreements was tailored to individual provinces, suggests that detailed negotiations on these agreements had long been underway before the collapse of the multilateral phase. In other words, all the signs point to the presence of an ongoing two-level game: on the one hand, the two sides cling to their narratives both in public statements and in multilateral meetings of health and finance



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ministers; on the other hand, officials are quietly working away on assembling detailed packages that include additional monies beyond the 3 per cent escalator allocated to areas that are of particular importance to each province (e.g., home care, drug addiction, or mental health). The total value of these packages is difficult to estimate since the monies for the areas beyond those covered by the 3 per cent escalator are being phased in at different stages with most of the funding arriving later in the agreement rather than at the beginning. Nonetheless, the individual agreements appear to be worth between 4.6 and 4.8 per cent, short of the 5.2 per cent demanded by the premiers but well above the 3.0 per cent that the Harper government had ordained. However, the additional monies for drug addiction and the like are not considered part of the 3.0 per cent escalator under the CHT; the latter only covers costs related to physician services, diagnostic procedures, and hospitalization. If one measure of performance is the capacity of the system to produce agreements and maintain communication among governments, then the system can be said to be reasonably successful. However, as Inwood, Johns, and O’Reilly (2011) point out, the amount of energy consumed in getting to these agreements, which simply boil down to how much money will be transferred to the provinces, means there is “little time and energy for any major restructuring projects within the health sector. And while provinces and territories argued that any restructuring of the sector falls under their jurisdiction alone, it is not clear they have the capacity to engage in such a large scale project” (301). Even from the perspective of maintaining the status quo – and assuming that the status quo includes the penalties for extra-billing embedded in the CHA – the system is woefully inadequate. The problem here is illustrated by the 2017 bilateral healthcare agreement with Saskatchewan. Since March of 2016 the Saskatchewan government has allowed private clinics to provide MRIs to patients on a self-pay basis with the proviso that the clinics would provide a “free” MRI to a patient on the public wait-list for each sold privately (Mason, 2017). Federal health minister Philpott, in a November 2016 letter to the Saskatchewan health minister, stated that this practice was “bad policy” and “bad medicine” and in violation of the Canada Health Act (Star-Phoenix, 2016). The Saskatchewan government nonetheless vowed to continue the practice. Less than two months later Ottawa and Saskatchewan concluded a healthcare agreement that, in addition to the 3 per cent escalator, will see additional monies

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for healthcare and mental health. Almost simultaneously the Saskatchewan government announced that it had also reached a separate deal whereby Ottawa agreed that the province would be allowed to continue its “twofers” MRI policy for an additional year, “giving the province time to prove that private MRIs don’t hurt the public health-care system” (CBC, 2017b). Three years later the province not only had its twofer policy still in place but was actively recruiting a private clinic to expand the service to the city of Saskatoon. Since the bilateral agreements were struck, the federal minister of health periodically alerts provinces of possible violations of the CHA. Delivered in the form of public letters and in the annual reports on the Canada Health Act published by the federal Department of Health, these alerts do not always have the desired effect. For several years a number of physicians across the country but particularly in BC have been extra-billing through private clinics by charging consultation fees and the like. Up to 2016–17 BC had been penalized by the federal government for extra-billing, amounting to a little less than $1 million a year, despite extra-billing entailing amounts several times that number (Tomlinson, 2017). In 2017–18 the amount penalized went up to $15 million and in 2018–19 to $16 million, the change coinciding with the election of an NDP government in 2017, which appears more conscientious in reporting instances of extra-billing to Ottawa. Ottawa is entirely dependent on the provinces for data on extra-billing; it has no monitoring capacity of its own. In 2018 BC announced that it would fully implement and enforce the province’s Medicare Protection Act (British Columbia, 1996, but never implemented), which parallels the Canada Health Act with respect to billing practices and the like. However, in the spring of 2019 the NDP government delayed enforcement of the act. One of the reasons was that many of the private clinics in question were also delivering surgical services under contract with the provincial health authorities for medicare patients. These surgical services would have been jeopardized, since the fees received from private patients effectively subsidized the contracts with the health authorities. In brief, in a number of provinces at least, informal arrangements and practices surrounding billing and extra-billing, often tolerated by governments, have become embedded in the healthcare delivery system over time. Serious disruptions to healthcare services would likely occur if efforts are made to alter those practices.



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EFFECTIVENESS Despite the public acrimony, and with the exception of the Harper period – when there was little engagement between Ottawa and the provinces and territories on social policy – for close to three decades the two orders of government have generally been able come to some sort of agreement on healthcare, on either a multilateral or a bilateral basis. If performance is assessed in terms of the capacity to reach agreements and maintain communication, then intergovernmental healthcare merits at least a qualified “good” rating. Moreover, even though relations between federal and provincial ministers are often fraught, at the level of officials the all-important trust ties appear to be intact, as witnessed by how quickly the bilateral agreements were put together after the multilateral phase of the negotiations broke down in 2016. Note that the officials in question were not just those in departments and ministries of health but also those in finance and treasury departments, given that the ultimate concern for governments is the amount of money that ends up being transferred. Moving from outputs (performance) to outcomes (effectiveness), however, the picture looks rather different. While initially the current paradigm provided close to universal coverage, this is far from the case today given the numerous developments in healthcare delivery, particularly with respect to the use of pharmaceuticals, the cost of which now exceeds that for physician services. Among the top eleven OECD countries providing universal healthcare, Canada is the only country that lacks universal coverage for prescription drugs. Further, while Canada ranks above the mean in terms of per capita healthcare expenditures, it only ranks tenth out of eleven OECD countries examined by the Commonwealth Fund (Davis et al., 2014; see also CIHI, 2016; Picard, 2017; and Tuohy, 2013) on measures such as access and quality. One of the points stressed by the healthcare journalist André Picard (2017) is that in Canada it is not quality of care as much as access to it that is the culprit. Wait-lists for common surgeries and diagnostic procedures and difficulties in finding a family physician are well-known concerns, and subpar performance in these respects is confirmed by comparative data. In other areas of access Canada also scores surprisingly low. For example, with only 0.4 rural physicians per 1,000 population, it is well below the ratio of 1.3 for the next lowest country (Germany) and the overall mean ratio of 2.1 (Papanicolas, Woskie, and Jha, 2018: 1037).

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Two impacts of the lack of healthcare access noted earlier are (1) a number of clinics and physicians extra-bill directly or indirectly for improved access to wait-lists, and (2) patients seek ways to bypass wait-lists, sometimes to the extent of going abroad for medical treatment. Both practices have become part and parcel of the healthcare delivery system with the tacit acceptance of both levels of government. Although the fact that the overall proportion of patients affected is relatively low and concentrated mainly in the western provinces and in certain subspecialties, this may be cold comfort to those affected patients who pay several thousands of dollars for medical care because they see little alternative. Access to prescription drugs is far more complex and problematic. The main issues are the cost of pharmaceuticals and insurance coverage, and the absence of a universal pharmacare plan.1 As noted earlier, full or partial access to publicly funded prescription medications varies from province to province, but overall it tends to be restricted to seniors, the working poor, and those on social assistance. The only exception is Quebec, where everyone is required to have insurance and a government plan is available for those lacking an employer-provided plan. Most Canadians and their families obtain coverage through private, mainly employer-provided plans. Approximately 20 per cent of Canadians pay out of their own pocket for prescribed drugs. One major gap affecting most Canadians is the cost of and access to drugs for rare, orphan diseases where pharmaceutical companies either have developed new, highly specialized treatments or have a lock on a medication that effectively allows them to charge monopoly prices. The area of greatest concern is the arrival of biologics: drugs created through biological processes in living cells for treatment of diseases such as arthritis and colitis. Biologics are very expensive, in part due to pharmaceutical companies understandably wishing to recoup their considerable investments in them and to maximize their pricing power. Virtually all provinces are subsidizing biologic and orphan disease drug costs, which can easily reach seven figures, for patients deemed to need them. Drug companies have reached pricing agreements with most provincial governments that in some cases include not only the drug but also the infrastructure for delivering it to patients, such as infusion clinics and equipment installed in doctors’ offices. These arrangements, however, raise a host of problems. In particular, the required confidentiality of pricing agreements with respect to these drugs can stymie the



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efforts of provinces to co-operate on bulk purchases, including via the pan-Canadian Pharmaceutical Alliance (pCPA) formed in 2012.2 Critically, the vacuum resulting from the lack of a systematic funding regime for these drugs means that provincial governments often end up heavily subsidizing the infrastructure developed by these companies at a cost much higher than if the governments simply purchased and delivered the comparable biosimilars directly (Grant, 2018a, 2018b). The government of Canada has jurisdiction over pharmaceuticals; its authority over criminal law allows it to regulate the sale of drugs, medical devices, and related products through the Food and Drugs Act, the Controlled Drugs and Substances Act, and the Criminal Code. Essentially, the Department of Health in the government of Canada evaluates all drugs and, once approved, regulates their sale, including pricing. Thus, the government of Canada is responsible for drug prices, both generic and brand-name, and thus for the fact that they tend to be much higher in Canada than in other countries (except the United States). In 1987, the federal government created the Patented Medicines Prices Review Board (PMPRB) as an arms-length quasi-judicial agency, making it responsible for setting a ceiling on prices charged for patented drugs using the listed retail price.3 One of the key yardsticks used by the PMPRB in setting its ceiling price is the price for the same medicine in other countries (Canada, 2018). As of July 2020, with the aim of substantially reducing the costs of brand-name drugs (Canada, 2019b), changes effected by the government of Canada expand the number of comparator countries and no longer include the two countries with the highest pharmaceutical drug prices. Although two provinces – Ontario and Quebec – voiced concern that these changes would hurt their provinces’ pharmaceutical industry and reduce access to new drugs (Lampert and Martell, 2019), other provinces, like BC, publicly welcomed the changes. The quiescence of other provinces likely reflected the fact that since provinces bear the major burden of funding prescription drugs, they were happy to see the clampdown on costs. The example of the PMPRB reducing the ceiling on pharmaceutical pricing shows the paradigm is not completely frozen; some change is possible. The challenge, however, will come with the national pharmacare scheme promised by the Liberals in the October 2019 federal election campaign and subsequently announced in the Throne Speech in November 2019. The Liberal government’s announcement also

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endorses the recommendation of the Report of the Advisory Council on the Implementation of National Pharmacare (Canada, 2019a). Appointed by the federal government in 2018, the advisory council recommended the establishment of a universal, single-payer, public pharmacare system consistent with the five principles of the Canada Health Act. The Hoskins Report (named after its chair) recommended the creation of a single arms-length agency, reporting to both Ottawa and the provinces, responsible for first creating a national formulary and, subsequently, negotiating with drug manufacturers. For their part, the provinces have long signalled their opposition to a single, national pharmacare plan and agency. Most provinces already have at least partial pharmacare schemes in place, and Ottawa itself has no infrastructure at all for delivery of such a program. Furthermore, many question whether Ottawa has the capability to build and run such a system. At the annual Council of the Federation meeting in 2018, premiers indicated that they reserve the right to opt out of any national scheme that Ottawa introduces: that is, they reserve the right to run their own plan but at the same time collect their share of the monies Ottawa would otherwise spend on the scheme (McGregor, 2018). For Quebec, a national plan subsuming the current Quebec plan would be a non-starter. In December 2019 the Council of the Federation repeated its stance that provinces should have the right to opt out of any national pharmacare scheme. Furthermore, notwithstanding the bilateral healthcare agreements they signed two years earlier, complete with extra funding for home care and the like, the premiers reverted to their initial demand of 2016 that Ottawa increase the annual healthcare transfer escalator from 3.0 per cent to 5.2 per cent. Furthermore, the provinces have now staked out this increase as a basic precondition for engaging in any discussions of pharmacare (Picard, 2019).

LEGITIMACY As noted at the outset of this chapter, Canadians rank universal medicare at the pinnacle of those government institutions and programs they value most highly. Public opinion polls show that a strong majority of Canadians find that “medicare embodies Canadian values” (Lazar, 2013: 17). Thus, its very existence yields a high level of legitimacy in and of



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itself. But one needs to be mindful of the irony recognized by Monique Bégin, a former federal health minister, that medicare has become so powerful a symbol as to restrict opportunities for meaningful changes. In other words, there may be too much legitimacy for medicare’s own good (Lazar, 2013). To say Canadians place a high value on the idea and existence of medicare is not to say healthcare possesses process legitimacy and output legitimacy. Public opinion data collected over the years show varying levels of satisfaction on both those dimensions. Mathew Mendelsohn (2002), in a careful review of polling responses to the question “What is the most important issue facing Canadians?” found that while healthcare as an issue barely registered in the early 1980s, by 2000 it regularly appeared at or near the top of “most important” issues in various polls. In 2019 polls showed healthcare vying with the economy and climate change on the “most important issue” question. Data over the past decade on specific aspects of healthcare show concerns over wait-lists and access to doctors trending upwards year over year (McGill University, 2018). These more specific data coincide with findings that Canada compares poorly with other countries on access and that the gap is widening. Certainly, when it comes to output legitimacy, healthcare is well below average compared to other policy and program areas (see chapter 17). Process legitimacy is much more complex. The term primarily denotes the extent to which groups and citizens feel able to participate in the deliberations of government that shape policies in the area. In many ways the healthcare sector has provided plenty of participation opportunities, as over the years both levels of government have organized numerous task forces, inquiry commissions, and Royal Commissions, which have been open to groups and citizens to submit briefs or make an appearance at hearings. Yet in the main these commissions and task forces have had little impact, as governments have either ignored their recommendations or felt unable to act upon them. The renewal of federal–provincial healthcare accords has also been an opportunity for advocacy groups to lobby the governments involved. However, the 2011 surprise unilateral announcement on funding levels denied the opportunity for broader citizen input. There is considerable polarization among advocacy groups, and this polarization is much greater than found in the population at large (Lazar, 2013). In his review of public opinion data, Mendelsohn (2002)

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found that Canadians had a reasonably nuanced view of what they could expect by way of reform. They were, for example, ready to see more care delivered by private-sector providers, as long as government was still controlling and paying the fees. Advocacy groups, however, divide on this question, tending to favour either sole public delivery or allowing private providers to charge additional fees beyond what government pays. As noted above, the various commissions and the resulting studies, as well as participation by groups and citizens, have resulted in little change.

UNFREEZING THE PARADIGM? The Canadian federation’s proclivity for self-rule rather than shared rule (see chapter 2) is particularly evident in the healthcare field, and the result is arguably that Canada has not been well served by its current healthcare system. Despite spending about the same amount of money as peer countries on a per capita basis, Canada’s healthcare lags behind other countries on a number of key indicators, particularly those related to access. Part of the blame can be attributed to the state of Canadian federalism in this particular policy domain. Insofar as the bulk of healthcare jurisdiction resides with the provinces and the spending power is the only meaningful lever available to the federal government, the federal government has relatively little capacity either to manage the healthcare system or to shape its direction. For their part, provinces have little incentive to move away from the status quo. The decade of the 2010s saw two developments of significance. First was the 2011 announcement of the reduction in the CHT escalator from 6 to 3 per cent. It led provincial governments not only to warn their citizens about reducing their expectation regarding medical services but also to move with greater alacrity in seeking cost reductions in the cost of prescription medications. Second was the change in the PMPRB regulations governing the cost of medications, and the resulting likelihood of further reductions in the cost of medications. In the 2020s, two further possible developments are in the offing. First is the legal challenge in the BC courts to one of the core features of medicare: namely the ban on extra-billing in the challenge by Cambie Surgeries Corporation against the BC Ministry of Health and the BC Attorney General. Should the case ultimately succeed, not only in the



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BC Supreme Court but also in the Supreme Court of Canada (SCC), it could fundamentally alter the healthcare system. In one sense the likelihood of the case succeeding is low since, in the earlier 2005 Chaoulli case (Chaoulli v. Attorney General of Quebec), the SCC has already decided (against) many of the issues at stake in Cambie Surgeries. On the other hand, according to Gerald Baier (chapter 4), the courts currently appear to be more receptive to the Charter arguments being made in the Cambie challenge, so the case may well have some impact. The second development, the introduction of universal pharmacare, would represent a significant expansion of what constitutes universal healthcare in Canada. However, given the extensive provincial objections, its implementation might take up to a decade (Picard, 2019). Some change to healthcare policy is still possible, as illustrated by the regulatory changes introduced by the PMPRB and the earlier creation of the Pan-Canadian Competitive Value Price Initiative for Generic Drugs (as well as the broader Pan-Canadian Pharmaceutical Alliance), sparked in part by the Harper government’s reduction in the healthcare transfer escalator. These changes are marginal but still of some value. In the case of universal pharmacare, the next decade will likely see protracted discussions and negotiations, their outcome likely turning on three main factors: the partisan composition of governments; the effectiveness of the narratives deployed by the two orders of government to sway public opinion, particularly by the federal government, which has long been outmanoeuvred by the provinces in these respects; and how the two-level game is played. With respect to the last, bilateral negotiations between Ottawa and individual provinces and territories are more likely to facilitate agreement than is a multilateral negotiation, which will be played out in good part in public, aimed at a single agreement whose terms apply to all provinces. The most likely outcome of a successful negotiation is unlikely to be a single, national agency or plan. Almost certainly, Quebec will have its own agency, with federal funding. So too will at least some of the other provinces. A national agency could provide a coordinating role and possibly directly serve some of the have-not provinces. The overall savings are unlikely to be on the scale that most healthcare analysts are expecting or hope for (e.g., Morgan et al., 2015), and the scheme will likely fall short in other areas. But the odds are that in another ten to fifteen years there will be publicly funded pharmaceutical coverage for

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all Canadians, at which point the healthcare system will be truly universal even while the basic healthcare paradigm remains largely intact.

NOTES 1 On why pharmacare has been such a difficult sell politically over the years, see Boothe (2013). 2 See Grant (2018a) for a detailed examination of the marketing of one such biologic, Remicade (infliximab), and its marketing in Canada by its manufacturer, Janssen, including how it disregarded requests from the pCPA not to approach provinces with side deals. 3 Prior to 1987, the federal government relied on a compulsory licencing scheme to control drug prices, under which any manufacturer could make and sell a copy of a patented drug but paid a proportion of the revenues to the patent holder.

GLOSSARY Canada Health Act  Passed in 1984 by the federal Parliament, it outlines the five principles of universal healthcare (accessibility, universality, public administration, comprehensiveness, and portability) and sets out the limited conditions the provinces and territories must meet in order to receive funding through the federal Canada Health Transfer, with the prime condition being that the recipient units are not permitted to allow extra-billing by physicians, clinics, or hospitals for medically necessary services. Canada Health Transfer  The annual transfer from the federal government to the provinces and territories to support healthcare delivered by the provinces to their citizens. It is given as a block grant with the amount calculated on an equal per capita basis. For 2019–20 the per capita amount was $2,096. The value of the transfer for each province can be reduced by the amount generated by extra-billing in that province since extra-billing is not permitted under the Canada Health Act. Previously part of the Canada Health and Social Transfer (CHST), it became self-standing as the CHT in 2004. medicare  The common albeit informal term used in Canada to refer to publicly funded universal healthcare. In the US, Medicare is the formal title of publicly funded healthcare for those over sixty-five. Patented Medicines Prices Review Board (PMPRB)  Created in 1987 as an arms-length agency, the PMPRB is responsible for setting the factory gate price (a form of retail pricing) for patented medications. For thirtythree years the board used a yardstick based on pricing regimes in seven



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countries including two, Switzerland and the US, which generally have the highest prices for determining the maximum price at which a patented drug can be sold. While drugs in Canada were priced lower than in the US, they were still significantly higher than in most countries. In 2020 the board moved to a yardstick based on eleven countries, a set that excluded Switzerland and the US but now included a number of new countries with much lower prices. pharmacare  A general term denoting a publicly funded drug plan that would cover all citizens rather than just those who enjoy coverage through an employer-sponsored plan or who fall into a category of citizens deemed to be in special need, such as the elderly or those on social assistance. The absence of such a universal public plan in Canada is seen as a major gap and makes Canada unique amongst virtually all OECD countries where some variant of universal pharmacare is seen as the norm. single-payer system  A model for financing healthcare that relies on having a single entity, in Canada’s case the government, pay for medically necessary services and procedures to the exclusion of other entities such as private insurers. Its chief benefit is low administrative costs and a strong capacity for controlling costs. In Canada it is seen as the cornerstone of universal healthcare. It is not a prerequisite for universal healthcare, however; other countries have achieved universal healthcare using means other than single-payer. The UK is the only other country that uses a single-payer model, though in the US a number of Democratic aspirants for the 2020 presidential nomination championed a single-payer system. REFERENCES Badgley, R.F., and S. Wolfe. 1967. Doctors’ Strike: Medical Care and Conflict in Saskatchewan. Toronto: Macmillan. Barua, B., and M. Moir. 2019. Waiting Your Turn: Wait Times for Health Care in Canada, 2019 Report. Vancouver: Fraser Institute. Boismenu, G., and P. Graefe. 2004. “The New Federal Tool Belt: Attempts to Rebuild Social Policy Leadership.” Canadian Public Policy 30, no. 1: 71–89. https://doi.org/10.2307/3552581. Boothe, K. 2013. “Ideas and the Limits on Program Expansion: The Failure of Nationwide Pharmacare in Canada Since 1944.” Canadian Journal of Political Science 46, no. 2: 419–53. https://doi.org/10.1017 /S000842391300022X. British Columbia. 1996. Medicare Protection Act. [RSBC 1996]. Canada. 2002. Building on Values: The Future of Health Care in Canada. Ottawa: Commission on the Future of Health Care in Canada. ———. 2004. “10-Year Plan to Strengthen Health Care.” Ottawa: Health Canada. ———. 2008. “The Budget Plan 2008: Responsible Leadership.” Ottawa: Department of Finance.

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Herman Bakvis ———. 2016. “Communiqué of Canada’s First Ministers.” December 9. Ottawa. ———. 2018. “Patented Medicine Prices Review Board: Compendium of Policies, Guidelines and Procedures – Updated February 2017.” http:// www.pmprb-cepmb.gc.ca/view.asp?ccid=492&lang=en. ———. 2019a. Final Report of the Advisory Council on the Implementation of National Pharmacare. Ottawa: Health Canada. ———. 2019b. “Government of Canada Announces Changes to Lower Drug Prices and Lay the Foundation for National Pharmacare.” August 9. Ottawa: Health Canada. Canadian Institute for Health Information (CIHI). 2016. National Health Expenditure Trends, 1975 to 2016. Ottawa: CIHI. ———. 2019. Access Data and Reports. https://www.cihi.ca/en/access-data-and -reports. CBC. 2012. “McGuinty Wants Conditions on Health Transfers: Federal Government Should Set National Standards, Ontario Premier Says.’ January 9, 2012. http://www.cbc.ca/news/canada/toronto/mcguinty -wants-conditions-on-health-transfers-1.1143022. ———. 2017a. “Manitoba Final Province to Sign Health-Care Pact with Feds.” August 21, 2017. http://www.cbc.ca/news/canada/manitoba/funding -health-manitoba-1.4255391. ———. 2017b. “Saskatchewan and Federal Government Reach Deal on Health Care.” January 17, 2017. http://www.cbc.ca/news/politics /saskatchewan-health-care-mris-1.3939611. Davis, K., K. Stremikis, D. Squires, and C. Schoen. 2014. “Mirror, Mirror, on the Wall: How the Performance of the U.S. Health Care System Compares Internationally.” Commonwealth Fund, June. https://www.commonwealthfund .org/sites/default/files/documents/___media_files_publications_fund _report_2014_jun_1755_davis_mirror_mirror_2014.pdf. Fafard, P. 2013. “Intergovernmental Accountability and Health Care: Reflections on the Recent Canadian Experience.” In Overpromising and Underperforming: Understanding and Evaluating New Intergovernmental Accountability Regimes, edited by P. Graefe et al. 31–55. Toronto: University of Toronto Press. Galloway, G., and K. Grant. 2016. “Ottawa Won’t Boost Provincial Health Transfers without Reform Plan: Philpott.” Globe and Mail, October 17, 2016. Grant, K. 2018a. “How a Blockbuster Drug Tells the Story of Why Canada’s Spending on Prescriptions Is Sky High.” Globe and Mail, October 20, 2018. ———. 2018b. “How a Little Known Agency Reveals the Web of Influence between Patient Advocates and Big Pharma.” Globe and Mail, December 13, 2018. Harris, K., and P. Zimonjic. 2016. “Health Ministers Wrap Tense Talks with No Agreement on Federal Health Funding: Ottawa Plans to Reduce Annual Increases in Health Transfers.” CBC, October 18, 2016.



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Inwood, G.J., C.M. Johns, and P. O’Reilly. 2011. Intergovernmental Policy Capacity in Canada: Inside the Worlds of Finance, Environment, Trade, and Health. Montreal: McGill-Queen’s University Press. Kennedy, M. 2012. “Premiers Divided over Harper’s Approach to Medicare.” National Post, January 15, 2012. Kirkup, K. 2016. “Manitoba Refuses to Sign Climate Framework over Health Spending Concerns.” Canadian Press, December 9, 2016. Lampert, A., and A. Martell. 2019. “Ontario and Quebec Pushed Back Against Ottawa Proposal to Crackdown on Drug Price.” Globe and Mail, July 30, 2019. Lazar, H. 2013. “Why Is It So Hard to Reform Health-Care Policy in Canada?” In Paradigm Freeze: Why Is It So Hard to Reform Health-Care Policy in Canada?, edited by H. Lazar, J.N. Lavis, P-G. Forest, and J. Church, 1–21. Montreal: McGill-Queen’s University Press. Lazar, H., J.N. Lavis, P-G. Forest, and J. Church, eds. 2013. Paradigm Freeze: Why Is It So Hard to Reform Health-Care Policy in Canada?. Montreal: McGillQueen’s University Press. Lexchin, J. 2015. “Drug Pricing in Canada.” In Pharmaceutical Prices in the 21st Century, edited by Z.-U.-D. Babar, 25–41. New York: Springer. Liberal Party of Canada. 2015. “A New Health Accord.” https://www.liberal .ca/realchange/a-new-health-accord/. Madore, O. 1997. “The Transfer of Tax Points to Provinces under the Canada Health and Social Transfer.” Background Paper BP-450E. Ottawa: Library of Parliament, Parliamentary Research Branch. Marchildon, G., and H. Mou. 2014. “A Needs-Based Allocation Formula for Canada Health Transfer.” Canadian Public Policy 40, no. 3: 209–23. https:// doi.org/10.3138/cpp.2013-052. Mason, G. 2017. “In Brad Wall’s Deal, Clues for Medicare’s Future.” Globe and Mail, January 20, 2017. https://beta.theglobeandmail.com/opinion /in-brad-walls-deal-clues-for-medicares-future/article33677239/?ref=http:// www.theglobeandmail.com&. McGill University. 2018. “Health Care in Canada Survey.” https://www.mcgill .ca/hcic-sssc/hcic-surveys/2018. McGregor, J. 2018. “Premiers Call for ‘Voluntary’ Pharmacare Program Funded by Ottawa: Quebec Confirms It Will Opt Out of Federal Drug Plan.” CBC News, July 20, 2018. https://www.cbc.ca/news/politics /premiers-health-friday-1.4754762. Mendelsohn, M. 2002. Canadians’ Thoughts on Their Health Care System: Preserving the Canadian Model through Innovation. Ottawa: Commission on the Future of Health Care in Canada. Morgan, S.G., D. Martin, M.A. Gagnon, B. Mintzes, J.R. Daw, and J. Lexchin. 2015. Pharmacare 2020: The Future of Drug Coverage in Canada. Vancouver: Pharmaceutical Policy Research Collaboration, University of British Columbia.

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Herman Bakvis Papanicolas, I., L.R.Woskie, and A.K. Jha. 2018. “Health Care Spending in the United States and Other High-Income Countries.” JAMA 319, no. 10: 1024–39. https://doi.org/10.1001/jama.2018.1150. Picard, A. 2017. “Poor Health-Care Ranking a Sign Our System Needs Fixing.” Globe and Mail, July 17, 2017. ———. 2019. “Is a National Pharmacare Program Any Closer to Reality?” Globe and Mail, December 9, 2019. Simeon, R.E.B., and E.R. Miller. 1980. “Regional Variations in Public Policy.” In Small Worlds: Provinces and Parties in Canadian Political Life, edited by D. Elkins and R. Simeon, 242–84. Toronto: Methuen. Star-Phoenix (Saskatoon). 2016. “Ottawa Slams Saskatchewan over Private MRIs That Let ‘People Jump the Queue’ but Province to Continue 2-for-1 Policy.” November 28, 2016. http://thestarphoenix.com/health/family -child/sask-health-minister-defies-federal-order-to-stop-private-mri-scans. Tasker, J.P. 2016. “Ottawa, Provinces Fail to Reach a Deal on Health Spending: Ottawa Offers $11.5B over 10 years for Targeted Priorities, But Provinces Want Higher Annual Transfers.” CBC, December 19, 2016. Tomlinson, K. 2017. “Paying to End Their Pain.” Globe and Mail, June 10, 2017. Tuohy, C.H. 2013. “Health Care Policy after Universality: Canada in Comparative Perspective.” In Inequality and the Fading of Redistributive Politics, edited by K. Banting and J. Myles, 285–311. Vancouver: University of British Columbia Press. Watts, R.L. 1999. The Spending Power in Federal Systems: A Comparative Study. Kingston, ON: Institute of Intergovernmental Relations, Queen’s University. Wingrove, J. 2012. “Ottawa’s Per-Capita Health Transfers a Windfall for Alberta.” Globe and Mail, January 17, 2012. Yakabuski, K. 2016. “Ottawa’s Gloves Come Off over Health-Care Funding.” Globe and Mail, October 19, 2016.

CHAPTER THIRTEEN

Federalism and Immigration in Canada Mireille Paquet

This chapter explores how immigration is currently managed through Canada’s federal regime.1 As one of only two concurrent jurisdictions in the 1867 British North America Act, immigration directly and indirectly involves the federal government and the provinces. Section 95 of the original 1867 BNA Act (now the Constitution Act, 1867) states that provincial legislatures have the power to make immigration laws as they pertain to the province and that “the Parliament of Canada may from Time to Time make Laws in relation ... to Immigration into all or any of the Provinces” (Canada, 1982). In cases where provincial laws conflict with federal law, section 95 gives preponderance to acts of the Parliament of Canada.2 Despite being a matter of concurrent jurisdiction under the Constitution, immigration only really started to be acted on as a shared jurisdiction in the late 1990s. This chapter discusses and documents how Canada has moved, since the late 1990s, from a regime dominated by Ottawa to a regime in which the federal government and the provinces are both involved through a rich web of intergovernmental relations, institutions, and programs. This move corresponds to a federalization process: the emergence of new actors or the modification of the status of those that already have institutional or political legitimacy within a federal regime. In the case of Canada’s immigration policies, federalization is the process through which all provinces have emerged as legitimate actors in the governance of immigration (Paquet, 2019).

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In 2017, 286,479 international immigrants became permanent residents of Canada (Canada, 2018). For the purpose of this chapter, international immigration refers to the process through which individuals change their country of residence, either in the long term or in the short term (International Organization for Migration, 2017: 15). In Canada, the management of international immigration occurs through border control initiatives, immigrant selection mechanisms, and naturalization procedures. It also includes several immigrant settlement and immigrant integration policies. Immigrant integration is broadly defined as the process through which international immigrants adapt themselves to their new country of residence. Integration policies may focus on short-term transitional issues for new immigrants (e.g., finding housing), medium- and long-term issues for immigrants (e.g., getting educational credentials recognized), and may also target host societies (e.g., build capacity for welcoming immigrants). Because Canada is a settler state – a country built on the permanent settlement of international arrivals and the colonial oppression of Indigenous peoples (Stasiulis and Yuval-Davis, 1995) – successive Canadian governments have always been quite active in recruiting newcomers and have remained anxious about their geographic settlement patterns. As Canada gained more independence from the United Kingdom, the relationship between immigrant integration and national identity became an important concern. Canadian governments became increasingly involved in the provision of immigrant integration policies and in the promotion of Canadian citizenship for nation-building (Jenson, 1997). The result has been a pattern of rich government involvement in immigration-related matters. This involvement operates through the concurrent immigration jurisdiction but also through other areas of jurisdiction such as education, healthcare, or labour market management. Several of these areas of jurisdiction are provincial but some, such as border control, remain unquestionably federal. Thus, immigration governance in Canada requires a considerable amount of coordination and collaboration between orders of governments. The next pages explore the sources of this federalized immigration regime and the challenges and opportunities associated with contemporary immigration governance in Canada. The first section describes the different ways in which immigration interacts with federalism in Canada, while the second section documents existing institutions and



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intergovernmental practices in this policy sector. The last section evaluates these federalized arrangements and their operations from the standpoint of performance, effectiveness, and legitimacy.

IMMIGRATION AND FEDERALISM IN CANADA As described in chapter 1, Canadian federalism is shaped by, and functions as, a response to structural cleavages of Canadian society, political forces, and political institutions, including the Constitution. When it comes to the management of immigration, these structural and political factors are especially visible. Immigration brings to the forefront the reality that Canada is a federal society marked by social, economic, and geographic heterogeneity (Cairns, 1977). One of the main embodiments of this diversity is the uneven distribution of international immigrants across the country’s provinces, territories, and cities. As Table 13.1 shows, most of the permanent international immigrants that settled in Canada in 2018 were concentrated in four provinces. In 2018, consistent with a long-standing trend, Ontario received about 43 per cent of total permanent immigration. Quebec was the ­second-largest destination in Canada, with 16 per cent of total newcomers settling in the province. The same year, British Columbia’s share of immigration was about 14 per cent, while Alberta’s was about 13 per cent. Manitoba, Saskatchewan, Newfoundland and Labrador, as well as the Atlantic provinces received much smaller intakes. As Table 13.1 demonstrates, the population size of different provinces varies. As a result, while the annual immigration intake of some provinces appears small when compared to that of Ontario or Quebec, smaller provinces often welcome a larger share of newcomers in relation to their population base. Provinces also receive different types of immigrants. Figure 13.1 shows the composition of each province’s immigration intake according to the three main administrative categories of the national immigration program. The economic category includes all immigration programs in which candidates are assessed on the basis of their skills, education, credentials, and work experience and in relation to the demands of the Canadian labour market. The family category comprises individuals that come to Canada to join their family, spouses, and relatives, most of the time through some form of sponsorship. The

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Mireille Paquet Table 13.1.  Permanent Immigrants in Relation to Population Size, per Province in 20183 Total Permanent Immigration Intake

Total Provincial Population

Newfoundland and Labrador Prince Edward Island

1,530 2,135

525,604 153,584

Nova Scotia

5,965

959,500

New Brunswick

4,610

770,921

Quebec

51,130

8,387,632

Ontario

137,430

14,318,545

Manitoba

15,225

1,353,403

Saskatchewan

15,510

1,162,978

Alberta

42,025

4,300,721

British Columbia

44,870

5,001,170

320,430

36,934,058

Total

Source: Canada, 2019b; Statistics Canada, 2019.

last category combines protected persons, refugees, and individuals gaining permanent residence in Canada for humanitarian concerns. It is important to note that these categories are far from representing the realities of immigrants settling in Canada. For example, it is misleading to conclude that only immigrants selected through the economic category contribute to Canada’s labour market. Moreover, immigrants admitted to Canada under the economic class often also comprise close family members (spouse and underage children) of a principal applicant. Nonetheless, these categories are useful heuristics to map how provinces benefit and use particular immigration programs differently. As Figure 13.1 demonstrates, some provinces rely more heavily on economic immigration than others. As explained in the next section, for provinces like Prince Edward Island, Nova Scotia, or Saskatchewan, attracting economic immigrants occurs mainly through provincial selection activities, especially via the Provincial Nominee Program. Figure 13.1 also highlights that some provinces receive more family migrants and more vulnerable immigrants, as refugees, protected persons, and humanitarian immigrants. As these populations use services provided by provinces through their areas of jurisdiction (e.g., healthcare or education), these differences can have important fiscal consequences.



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Figure 13.1.  Proportion of Administrative Categories with the Share of Permanent Immigrants per Province in 2018a British Columbia Alberta Saskatchewan Manitoba Ontario Quebec New Brunswick Nova Scotia Prince Edward Island Newfoundland and Labrador 0%

10%

Economic

20%

Family

30%

40%

50%

60%

70%

80% 90% 100%

Resettled refugee and protected pperson in Canada

Source: Canada, 2019b. a Excludes immigrants counted under the administrative category “All other immigration.”

This uneven distribution reflects the overall pattern of population distribution across Canada. It is also reinforced by dynamic processes of internal migration, by which individuals move from one province to another at any given point in time. Section 6 of the Canadian Charter of Rights and Freedoms compounds this process by providing citizens and permanent residents with mobility rights within Canada’s territory. Anecdotal evidence suggests that international immigrants arriving in smaller provinces and in Quebec are prone to leave their first destination during the first three years of settlement and that most of these secondary migrants tend to settle in Ontario (Ostrovsky, Hou, and Picot, 2008). A majority of international immigrants enter Canada as economic immigrants: that is, on the basis of their skills, experience, education, and language capacity (Canada, 2018). The high proportion of economic immigrants reflects an official policy objective of the government of Canada of using international immigration as a resource for economic growth. Yet, the uneven distribution of immigrants across Canada ­amplifies the differences between labour markets and economies across the Canadian federation. While some provinces are able to benefit by gaining a large number of potential workers, others struggle to attract

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and retain immigrants. Moreover, the economic criteria through which immigrants are selected do not always reflect the particular needs of provincial or local labour markets. International immigration thus reinforces central cleavages that exist within Canada as a federal society. As with economic development (­Savoie, 1992), some provinces can be labelled as “have” provinces when it comes to immigration (Ontario, British Columbia, and Quebec) while others are definitely “have-not” provinces (Atlantic provinces). This cleavage is compounded by the fact that demography plays a central role in fiscal redistribution mechanisms in Canada. Thus, for some provinces, welcoming immigrants is as much about reinforcing their economy and their labour market as about ensuring a large enough population base to fund their core governing functions. Political actors play a central role in making these cleavages salient, through their interests and ideas. Until recently, Canadian federal and provincial governments of all parties have not been heavily polarized when it comes to modern immigration management. Instead, their views and policies tend to cluster around the idea that immigration is a positive contributor to Canadian society and the economy, and to support strong state intervention on the matter. This consensus contrasts with the type of politics visible in the United States, Australia, and Western Europe, where parties and governments can often be differentiated by their proand anti-immigration positions (Grande, Schwarzbözl, and Fatke, 2018). Instead of ideology and party alignment, two other forces have shaped modern immigration intergovernmental relations in Canada. One is Quebec’s mobilization for increased immigration powers in recognition of its specific linguistic realities. The other is English-speaking provinces’ demands for increased input into the management of economic immigration. Owing to its high fertility rate, the province of Quebec was able to maintain a strong population base with limited international immigration until the 1960s (Pâquet, 1997). The Quiet Revolution of the 1960s coincided with demographic changes to make immigration not only an important lever of development for modernizing Quebec but also a site of contention with the federal government. Indeed, for Quebec’s political elites, immigration represented a potential threat to Quebec’s francophone character insofar as newcomers adopted English as the language in which to live and work in the province. To address this challenge,



Federalism and Immigration in Canada

Quebec negotiated with Ottawa a series of intergovernmental agreements, starting in 1971 (Kostov, 2008). The intergovernmental bargaining over these issues unfolded during a period in which Ottawa was expanding its immigrant integration programming and Quebec nationalism was considered a threat to national unity (Jenson and Paquet, 2019). The Canada–Quebec agreements allowed Quebec to inform potential immigrants of the francophone character of the province, to have a say in the immigrants selected abroad by the federal government, and to become more involved in the provision of immigration integration services. Despite these gains, immigration powers remained part of the constitutional demands of the province of Quebec in the 1970s and 1980s (Paquet, 2019). After the failure of the Meech Lake constitutional accord project – which featured a clause offering every province more opportunities to be involved in immigration – Quebec and the federal government signed the 1991 Canada–Quebec Accord relating to Immigration and Temporary Admission of Aliens. Known as the Canada– Quebec Immigration accord, this bilateral agreement provided Quebec with unprecedented powers to select international immigrants (Becklumb, 2008). The agreement also made the government of Quebec entirely responsible for the delivery of immigrant integration services within the province of Quebec. With the goal of ensuring the provision of equivalent services across Canada and in order to compensate Quebec, the accord also ensured financial support for Quebec’s integration programs. This financial compensation takes the form of a transfer, attached to two conditions: (1) that Quebec’s settlement and integration services be similar and equivalent to the ones delivered by the federal government and (2) that Quebec’s services be accessible to all of the immigrants who reside in the province, whether they were selected by Ottawa, Quebec, or another province (Béchard, 2018). The annual amount of the transfer is calculated using a sum base of $90 million, which is multiplied by an indexing factor that takes into account ­Quebec intake of international immigrants in relation to the population of Canada, Quebec’s intake of non-francophone immigrants, and the ­increase of total federal program expenditures. This generous transfer is made unique by the fact that the Canada–Quebec Immigration Accord stipulates that the amount given to Quebec for integration services cannot decrease. In 2018, Quebec received $490 million through this agreement (Béchard, 2018).

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As a direct consequence of the 1991 Canada–Quebec Immigration Accord, most immigrants to Quebec are now selected based on criteria designed by the provincial government and settle in the province with the help of provincial services only. The gains associated with the ­Canada– Quebec Immigration Accord have effectively neutralized ­Quebec’s immigration demands to Ottawa and limited intergovernmental conflict in this area since the 1990s (Paquet, 2019). The Canada–Quebec Immigration Accord has often been criticized as asymmetrical and, as a result, seen as unfair (Banting, 2012). Central to these criticisms is the fact that Quebec receives more money to integrate every individual immigrant residing in the province than Ottawa spends per capita on newcomers in the rest of the country. The tensions over this discrepancy have become more salient at different points since 1991; it was a central point of contention just after 1991, rose on the agenda around 2003 when Ontario started to negotiate a new immigration agreement with Ottawa, and has become an issue again with the growing number of irregular crossings since 2015. Criticisms have also focused on the selection powers granted to Quebec and not to other provinces. Other provincial governments have sought more say in immigration. Beginning in the late 1990s, English-speaking provinces, most notably Manitoba, started to demand increased input into Canada’s immigration program as a way to respond to local labour market needs (Paquet, 2014; Lewis, 2010; Paquet, 2017). Their demands rested on the idea that the federal immigrant selection program favoured workers with skills that did not match the regional economic specificities and needs. The federal immigration program was also criticized for being incapable of attracting workers in less traditional destinations, with the result of chronic labour market shortages in some provinces (Paquet, 2014). These realities have been reinforced by the transfer of labour market policy responsibilities to Canadian provinces starting in the 1990s (Haddow and Klassen, 2006). As my research on the development of provincial immigrant policies has documented, provincial demands for greater input into Canada’s immigration policy took the form of a modern type of province-building (Paquet, 2019). Provincial governments claimed they were better situated than the government of Canada to ensure economic development and growth, and that immigration policy was a way to help them and Canada achieve economic growth. To back these claims, provinces established



Federalism and Immigration in Canada

administrative units and departments responsible for immigration. They also created immigration strategies and official policies. Premiers spoke of immigration positively and were keen on arguing about the importance of immigration for their province. These demands led to changes in the government of Canada’s ­immigration policy that still impact immigration intergovernmental ­relations and immigration policy to this day. Provincial requests for input into immigrant selection led to the creation of the Provincial Nominee Program (PNP). This program allows provincial governments to select a portion of the economic immigrants entering their province. Provinces select immigrants on the basis of criteria they design and in relation to their labour market needs and other regional concerns. Since the late 1990s, PNPs operate simultaneously with federal selection programs and the Quebec selection mechanism. This federal–provincial overlap means that, outside of Quebec, immigrants settling in a province may have been selected through criteria defined either by the province or by the federal government. In 2017, 49,724 individuals entered Canada as provincial nominees. While they represented about 30 per cent of all of the economic immigrants into Canada that year (Canada, 2018), provincial nominees represented from 60 per cent to 96 per cent of all of the economic immigrants coming into the “have-not” immigration provinces of Prince Edward Island, Manitoba, Saskatchewan, New Brunswick, Newfoundland and Labrador, and Nova Scotia (Canada, 2017d). Besides the PNP, provincial demands for more say in immigration policy have led to changing intergovernmental practices in the form of more consultations and more horizontal coordination between governments (Schertzer, 2015). These political forces and societal cleavages have grounded the evolution of intergovernmental relations and federal institutions in this policy area. Immigration was defined as a concurrent jurisdiction in 1867 in recognition of pre-Confederation settler recruitment activities of individual British colonies (Vineberg, 1987). These activities focused on attracting Europeans to North America and were often conducted by agricultural departments or in collaboration with leading regional economic actors. Incrementally, after 1867 these activities became centralized and provinces withdrew from immigration activities. Federal leadership became the norm and was welcomed by provinces, who feared the costs and political consequences of being involved in immigration (Paquet, 2014). As a result, especially after the Second World War, Ottawa

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independently developed the basis of Canada’s modern immigration program, including the selection schemes associated with the point system and general immigration integration programs. Over time, however, Ottawa’s dominance in immigration has been challenged by provinces. They demanded increased selection powers, more clout on the definition of national immigration objectives, better funding for immigrant integration programs, and a clear recognition of their specific circumstances, having to do with language and with economic development. These demands have led to a process of federalization of immigration in Canada. As I have defined elsewhere (Paquet, 2014: 522), federalization “corresponds to the emergence of new institutional actors and/or to modifications to the status of actors who have a strong legitimacy inside an institutional or federal regime.” Federalization highlights the fact that Canadian federalism can evolve substantially in the absence of formal institutional changes, such as constitutional reform. In the case of immigration, federalism and intergovernmental relations have been transformed through a series of bilateral agreements but especially in relation to the evolution in the practices of both orders of government. As a result, provinces have become central players in the governance of immigration in Canada.

FEDERALIZED IMMIGRATION GOVERNANCE IN CANADA The federalized regime of immigration governance in Canada rests on the solid foundations of the Constitution. Besides section 95, the Constitution Act grants other powers related to immigration to both orders of government. Section 91 makes the federal government responsible for protecting Canada’s borders, for arranging quarantine, and for naturalization. Immigrant integration, however, is not an area of jurisdiction listed in the Canadian Constitution. At the time of Confederation, integration was not considered a matter of state responsibility but, instead, a private matter and something that could be helped through charitable action. In practice, both orders of governments contribute to immigration integration despite this silence. Through the areas of jurisdiction listed in sections 92 and 93, provinces provide healthcare, education, and social services to immigrants. At the same time, Ottawa has made use of its spending power and non-listed powers to develop



Federalism and Immigration in Canada

Canada’s settlement and integration programs, leading the way in how immigrants and refugees are supported in their first years in the country.

Canada’s Immigration and Refugee Protection Act Beyond the Constitution, a majority of immigration powers and responsibilities in Canada flow from the Immigration and Refugee Protection Act of Canada (IRPA). This law is framework legislation that provides the Governor in Council with the authority to make regulations about immigration (Elgersma, 2015). IRPA establishes the main administrative bodies responsible for immigration management, defines in general terms admissibility, and sets out parameters for decision-making on issues associated with international immigration. Provinces are mentioned more than forty times in the law, beginning with section 3 on general objectives. Indeed, IRPA starts by recognizing that Canada’s “immigration goals [are to be established] by the Government of Canada in consultation with the provinces” and that Ottawa must “work in cooperation with the provinces to secure better recognition of the foreign credentials of permanent residents and their more rapid integration into society” (Canada, 2001). Other sections of IRPA also affect the intergovernmental relationship in immigration. Among them, three are especially important. Section 8 enables Ottawa to enter into immigration agreements with provinces and territories. Section 9 sets out the powers of provinces to select immigrants and their granting of permanent residency by Ottawa, within the conditions of a given bilateral intergovernmental immigration agreement. Section 10 creates an obligation for the minister responsible for immigration to consult with provinces annually. These consultations have to do with “the number of foreign nationals in each class who will become permanent residents each year, their distribution in Canada taking into account regional economic and demographic requirements, and the measures to be undertaken to facilitate their integration into Canadian society” (Canada, 2001).

Intergovernmental Immigration Agreements Following section 8 of IRPA, thirteen bilateral immigration agreements are active as of 2019. These agreements clarify the roles of each order of government for immigration management, identify specific areas of

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collaboration, and give provinces the capacity to select international immigrants, either through a Provincial Nominee Program or through Quebec’s unique selection powers (Canada, 2018). With the process of federalization, bilateral agreements have spread to all provinces and become more sophisticated. They provide provinces and territories with more tools to engage in development through immigration while also, in some cases, providing them with increased resources to respond to the needs of immigrants (Seidle, 2010). Yet they are not without considerable limits. For one thing, these agreements do not set out the number of immigrants each province should receive and are silent on annual PNP allocations. This means that provinces must constantly negotiate with Ottawa about the maximum number of immigrants they are allowed to nominate annually. These negotiations occur through bilateral and multilateral relations as well as through regular consultations on immigration levels. In addition, with the exception of Quebec’s 1991 immigration accord, a framework agreement can be modified or cancelled at any point by either of the governments that are party to it.4 These two features demonstrate that, despite federalization, Ottawa still has the potential to drive policy decisions unilaterally.

Settlement and Integration Services The biggest share of Canada’s immigration spending goes towards services for immigrants (Canada, 2019a). Most of the country’s settlement and integration programs are funded by the federal government, through contribution agreements with service providers (immigrant-serving agencies, NGOs, schools, and other public bodies). Provinces fund immigrant integration services through their immigration departments and through their education, social assistance, culture, and economic development policies (Praznik and Shields, 2018). In relation to these services, some current and past immigration agreements have had financial components. Because of Ottawa’s complete withdrawal from immigrant integration services in Quebec following the 1991 accord, the province of Quebec receives an annual grant from Ottawa. The components of Quebec’s financial agreement have earlier been discussed. Upon signature of the 2017 Canada–Ontario Immigration Agreement, Ottawa agreed to increase the funding Ontario receives to help integrate immigrants (Canada, 2017c). As opposed to the Quebec



Federalism and Immigration in Canada

case, however, Ontario’s funding is not part of the written agreement and remains ad hoc. Between 1997 and 2014, Manitoba and British Columbia were also parties to bilateral agreements transferring to them the administration of settlement services on their territory (Leo and August, 2009). While these agreements were in operation, the federal government withdrew from delivering these services and provinces received funding from Ottawa. They administered these resources based on their local needs and funded equivalent services through contributions agreements. In 2012, these agreements were terminated unilaterally by the federal government (Fourot, 2018). Then citizenship, immigration, and multiculturalism minister Jason Kenney stated Ottawa’s unilateral cancellation of the agreements was to ensure that “immigrants have access to a more consistent level of service regardless of where they choose to settle in Canada” (Canada, 2012). Provinces, especially Manitoba, expressed deep frustration with this change but were not able to get the decision reversed. This episode highlighted how former prime minister Harper’s immigration reform agenda was often in conflict with harmonious intergovernmental relations, especially as the government moved resolutely away from the precepts of “open federalism” (Paquet and Larios, 2018).

Intergovernmental Institutions Prior to the early 2000s, immigration rarely featured in peak intergovernmental venues. With the exception of the peripheral discussions over immigration as part of constitutional talks, provinces’ lack of interest in the issue limited the need for sustained and structured relations (Vineberg, 1987). Most interactions were bilateral and often at the administrative level. With the process of federalization, which coincided with the rise of the issue of immigrant geographic distribution on the federal agenda (Abu-Laban and Garber, 2005), both orders of governments started to engage more continuously. They did so first through ad hoc meetings of federal, provincial, and territorial ministers responsible for immigration. As provinces grew their administrative capacity and as immigration became a more important portfolio in their jurisdiction, these meetings became institutionalized. In 2002, the Forum of Ministers Responsible for Immigration (FMRI) was established. All provinces and territories participate in the FMRI,

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with Quebec acting as an observer (Forum of Ministers Responsible for Immigration, 2019). This permanent venue includes four executive permanent tables: the Federal, Provincial, and ­Territorial (FPT) ­ministers table, the FPT deputy ministers table, the FPT assistant deputy minister table, and the FPT policy and planning table. In relation to the establishment of the FMRI and following provinces’ and territories’ desire to share their practices amongst themselves, a p ­ rovincial–­territorial secretariat was also created around the same time. It is hosted on a rolling basis by a different province and territory. It aims at supporting communications among governments and at ­providing policy analysis related to immigration. At the ministerial level, the forum has met ­annually since its creation, but meetings of other tables are reported to be much more frequent (Schertzer, McDougall, and Skogstad, 2016). The continued operation of the FMRI and the constant participation of all provinces demonstrates the emergence of a “multilateral institutional structure for IGR” for immigration governance (Schertzer, ­McDougall, and Skogstad, 2016, 17). This development occurs alongside the ­episodic appearances of immigration on the agenda of regional bodies (such as the Conference of Western Premiers) and of the Forum of the Federation.

A New Challenge: Irregular Border Crossings Current intergovernmental relations in immigration are now being tested by new migration dynamics. Since Justin Trudeau became prime minister in 2015, the rise of irregular border crossings and the associated growth in inland asylum claims have tested the effectiveness of existing immigration arrangements. The migration across the US–Canadian border shows that the unintended effects of Canada’s relationship with the United States is a source of system-wide disruptions for federalism (Schertzer and Paquet, 2019). Following the implementation of ­anti-immigration policies in the United States, claimants have crossed the border outside of regular ports of entry, notably via Quebec’s Roxham Road. The pattern of crossing outside of regular ports of entry results from the procedures set out by the Safe Third Country Agreement (STCA) between Canada and the United States. The STCA makes it mandatory that individuals claim asylum in the first safe country of ­arrival and makes it impossible for individuals who landed in the



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United States to claim asylum in Canada, and vice versa. By crossing outside of regular ports of entry (ports, official border crossings, and airports), individuals are able to evade this regulation. In 2017, 20,953 individuals used this method to cross the Canada–United States border; over 90 per cent of these irregular border crossings occurred in Quebec (Schertzer and Paquet, 2019). Ottawa and the provinces have used existing FPT institutions and inter-administrative networks to respond to these irregular movements. In 2017, the federal government and Quebec also established an Ad Hoc Intergovernmental Task Force on Irregular Migration to increase information sharing, operational coordination, and collaborative initiatives geared to the Canadian public. Participants include the federal ministers of public safety; immigration, refugees, and citizenship; and national defence as well as members of Parliament for affected ridings. The Quebec and Ontario ministers responsible for immigration and, later on, the mayor of Toronto, were also members of the task force (­Canada, 2017a). The membership of the task force is in line with Trudeau’s approach to federal–provincial relations, but also reflects the complex nature of the issue at hand. From an operational standpoint, the arrangements to deal with irregular border crossings of recent migrants have yielded strong policy outcomes: governments have effectively managed these new arrivals and have generally been able to maintain public trust in Canada’s immigration system. Policy outcomes are more complex to evaluate because the process of refugee determination is complex and because little is known about the needs of these populations. Irregular border crossings represent a considerable stress on the federalized immigration system. For one thing, until 2017 most provinces focused their attention on economic immigration and were not involved in directly assisting refugee claimants. Their non-involvement can be explained by the fact that the refugee determination process is entirely conducted by the federal government, which also covers the perceived costs associated with refugees. The new cross-border movements have forced provinces to become engaged in this policy subsector, even while their limited expertise and reluctance to become involved reinforce existing legacies and power imbalances in this subsector. These arrivals also challenge Trudeau’s multilateral ­impulses, as only three provinces are directly affected by these movements: Quebec, Ontario, and, to a lesser extent, Manitoba. The

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geographical concentration of the irregular border crossers reinforces already existing imbalances in the distribution of immigration and of immigration-related resources within the federation. Soon after the increase in border crossings, Quebec and Ontario ­demanded that Ottawa compensate them for the costs associated with caring for these new migrants (Valiante, 2018). In Ontario, these ­demands have contributed to tense relations with the federal government; after he was elected in June 2018, Premier Doug Ford withdrew from collaborating with Ottawa on these issues (Benzie, 2018). While ad hoc funding has temporarily allowed the federal government to ease tensions, cross-border migration has made provinces more aware of not only the benefits but also the costs associated with immigration. As a result, ­future negotiations over fiscal federalism, especially in the case of social spending, could become more fraught.

FEDERALIZED IMMIGRATION GOVERNANCE IN CANADA Performance One of the central consequences of the process of federalization has been to align immigration governance in Canada more with the principles of federalism. As provinces became more interested in immigration, they highlighted that an immigration system dominated by the federal government failed to create a balance between unity and diversity. With the practical recognition of provinces as full members of the federation when it comes to immigration, Canadian intergovernmental relations have provided new venues for the expression of diverse regional needs. Through institutions such as the FMRI, provinces have become more involved in setting national immigration policy goals. The creation of programs such as the PNP, which coexist with pan-Canadian federal immigration programs, have also provided provinces with direct levers to address place-based challenges while also benefiting from national programs. The emerging system and web of intergovernmental relations have generally proven capable of producing results, from setting up ­national policy objectives (Schertzer, McDougall, and Skogstad, 2016) to responding to a rapid intake of Syrian refugees in 2015 (Canada, 2016)



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and providing an operational response to the new irregular arrivals from the United States. From that general standpoint, the intergovernmental institutions associated with the policy area are performing more effectively and have increased their capacity to produce results that take into account the needs of all governments. In assessing this performance, however, two caveats must be taken into account. First is the fact that intergovernmental forums and federalization are a recent development in this policy sector, and their future continuity is thus uncertain. As described in this chapter, provinces have been slow to become involved in this issue. Quebec started mobilizing for more immigration powers in the 1960s, and other provinces became resolutely more interested in economic immigration in the late 1990s and early 2000s. As a result, for most of Canada’s history, immigration intergovernmental relations in Canada were limited, and Ottawa developed immigration policies following an independent model of federalism. Under this model, consultations were sparse and coordination very limited. As described in this chapter, this model satisfied provinces and did not create open conflicts between governments. The current pattern of intergovernmental relations in immigration policy departs strongly from this earlier pattern. Yet, institutionalized intergovernmental relations remain nascent when compared to other policy areas in which Canadian governments have interacted, fought, and collaborated for more than 150 years. Set in contrast with the political development of Canadian federalism, the institutions, policies, and practices that resulted from the federalization of immigration remain new and potentially open to drastic change, based on the evolution of the interests and ideas of political actors. A second caveat is that current intergovernmental relations in immigration are best described as following a model of unequal coordination; that is, they are far from being coordinated between equals. Ottawa and the provinces generally and increasingly work together to “develop mutually acceptable policies and objectives” (Bakvis and Skogstad, chapter 1). Yet this coordination remains limited by several imbalances between governments that make the determination of joint policy objectives and the application of agreed-upon standards uneven, at best. Despite the concurrent immigration jurisdiction and the growing recognition of provinces in federal immigration legislation and programs, Ottawa still holds much more capacity to make and implement immigration

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policies. Constitutionally, this is the result of the paramountcy of f­ ederal immigration legislation and a function of the other federal powers ­associated with immigration (e.g., border control). Federal power in this area is also a consequence of Ottawa’s greater fiscal capacities, which have allowed it to develop, finance, and manage a national immigrant settlement program independently of provincial funding and to use the federal spending power in immigration. This imbalance is also the result of policy legacies. Provinces’ historical lack of interest in immigration has meant, for the most part, that elected officials and provincial public administrations lacked knowledge and policy capacity in this policy area. In becoming more involved in immigration, provinces have had to rely on the expertise and the policy infrastructure of the federal government, a dependence that has often generated unequal intergovernmental ­interactions. While provinces have tremendously increased their political, policy, and intergovernmental capacities in this policy area since the 1990s, they remain far from being on an equal footing with the federal government. These inequalities are partially expressed through competitive federalism in the area of immigration. Central to this competition is the contest over which order of government is best positioned to defend the interests of its political community when it comes to immigration. As with other policy areas, Quebec and Ottawa went through an intense period of competition between the 1960s and 1980s. In relation to the Quiet Revolution, successive governments defended the position that only the Quebec state could protect the French language and ensure provincial economic and social development in relation to immigration. This position, which led to demands for increased powers, coincided with the heyday of federal activism in nation-building, through the development of national social programs, cultural institutions, and the contemporary immigration program (Jenson and Paquet, 2019). During this period, immigration was part of Quebec’s constitutional demands and, concurrently, the federal government resisted the idea of an increased provincial role in this sector. This era came to an abrupt end with the signing of the 1991 Quebec–Canada Immigration Accord. The devolution of immigration powers to Quebec neutralized competition between governments, with the province maximizing its resources as well as its capacity to defend its interest and to claim credit in this policy sector.



Federalism and Immigration in Canada

Competitive federalism has also supported the process of immigration federalization and remained a feature of contemporary Canadian immigration federalism. Outside of Quebec, provinces engaged in p ­ rovince-building using immigration as a tool for economic and demographic development. Besides the development of state capacity, ­province-building has led provincial political actors to include immigration in their platforms and policy proposals. It has also emboldened elected officials to demand more resources in this policy area and allowed them to claim credit for positive immigration outcomes in their respective provinces. In this ­iteration of province-building, as opposed to the situation with Quebec, economic development is the central point of contention, as opposed to language. Through this competitive process, Ottawa and the provinces fight not only over jurisdictional powers but also over credit and legitimacy in the face of the economic stakeholders of immigration in the country (employers, large firms, economic development agencies). The decision by the Harper government to repatriate settlement services from Manitoba and British Columbia can also be attributed to this competitive dynamic. Besides objectives of service harmonization, it also signalled the Harper government’s discomfort with these provinces being the only ones able to claim credit for helping immigrants to integrate on their territory (Paquet, 2019).

Effectiveness From the standpoint of federalism, current intergovernmental relations in immigration have generated positive policy outputs. Governments have been able to adapt to new irregular arrivals as of 2017 and avoid a race to the bottom in the area of asylum by co-operating in an ad hoc task force and through federal spending. Federalization and the increased coordination of governments in this policy sector have also led to better information sharing and given rise to new programs that respond to local needs. Several indicators support this assessment. Governments’ continued participation in the FMRI hints at the fact that the forum generates normative and substantive results that benefit them (Schertzer, McDougall, and Skogstad, 2016). Provinces’ commitment to the Provincial Nominee Program signals that the program serves their policy objectives and yields results that are generally coherent with their interests. A recent review by the federal Department of Immigration,

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Refugees and Citizenship concluded that the program allows provinces to fill particular labour market needs and remains “a key component of [their] economic and demographic strategies” (Canada, 2017d: 7). This assessment is shared by provincial governments and by research on the challenges of persuading immigrants to settle outside of large cities and beyond traditional immigration provinces. The policy outcomes of these changes remain harder to evaluate. From the standpoint of the geographic distribution of immigrants across Canada, there is reason to believe that increased coordination and provincial input into the system give better results. A central outcome has been that the distribution of immigrants has shifted in Canada, with the number of immigrants settling outside of Ontario, Quebec, and British Columbia rising from 10 per cent in 1997 to 34 per cent in 2017 (Canada, 2018). At the same time, it remains very hard to isolate the impact of the PNP and of particular policies on the regionalization of immigration in Canada, let alone on patterns of secondary movement within Canada. Yet, the support of officials and economic actors for the PNP make it the current best solution to respond to the diversity of provincial needs when it comes to immigration. Focusing on the immigrants themselves, general analyses demonstrate that provincial nominees are often slightly less educated than immigrants selected through the skilled federal program. At the same time, because they are selected on the basis of the needs of provincial labour markets, provincial nominee immigrants tend to integrate more quickly into the Canadian workforce (Canada, 2017d). Critics of the PNP have pointed to the fact that it reinforces the already strong market-based tendencies of Canada’s immigration program. They have also documented how it contributes to reproducing gendered, racial, and class exclusion in immigrant selection (Lewis, 2010; Dobrowolsky, 2011). More recently, data show that PNPs have become a major pathway to gain temporary resident status in Canada. In 2015, 76 per cent of the provincial nominees admitted already had a temporary status in Canada (Canada, 2017d). This figure indicates that provincial involvement in immigration contributes to the establishment of a two-step immigration system in Canada. These outcomes, openly discussed and debated in intergovernmental relations, provide governments with a chance to learn from their own and others’ respective experiences. While increased collaboration,



Federalism and Immigration in Canada

benchmarking, norm-setting, and information sharing are important tools to address some of these outcomes, the idea of removing provinces from immigration governance in Canada is not considered as a solution to some of the negative consequences listed above. Not only would the political costs associated with federal patriation be too high, but the shared consensus now established about the superiority of multilateralism in immigration governance in Canada would be undermined (Schertzer, 2015).

Legitimacy Democratic legitimacy has always been the weak side of Canada’s immigration regime. Federal policy-making is increasingly characterized by executive dominance, and transparency remains an issue. These trends are reproduced in the federalized immigration regime, in which executive federalism and closed-door high-level administrative tables are the norm. Current bilateral agreements include procedures for information sharing and accountability, but these transactions mostly operate ­between orders of governments (Seidle, 2010). Citizens, service providers, and other stakeholders are excluded from decision-making venues and often cannot access information. This lack of access and transparency is accompanied by limited accountability of provincial governments to their electorate when it comes to immigration spending and program administration. While the federal government has established more accountability mechanisms and evaluation frameworks since 2012, their lack of transparency remains problematic. In addition, attempts at increasing accountability are also creating intergovernmental tensions, as demonstrated during the immigration reform frenzy of the Harper government, when provinces perceived calls for program integrity reinforcement and evaluations processes as indirect ways to control them. Nonetheless, the regime is increasingly legitimized when it comes to the inherent social, political, and economic diversity of the federation. The 1991 Canada–Quebec Immigration Accord recognizes the specific needs of the province in this policy area. Other bilateral immigration agreements and the PNP provide provinces with mechanisms to respond to their particular situations, while new intergovernmental institutions allow for the incorporation of their interests into federal policy. In the

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case of immigration, the legitimacy of federal arrangements remains dependent on asymmetry, something that most Canadian governments now accept. Despite growing legitimacy, however, the comparative exclusion of other actors from intergovernmental relations remains problematic. This is particularly the case for Canadian cities and for minority francophone communities, which both face particular immigration challenges. Under prime ministers Stephen Harper and Justin Trudeau, some limited advances have come on this front. The 2017 Canada–Ontario Immigration Agreement includes the city of Toronto as a stakeholder, and Trudeau’s government has implemented the Atlantic Immigration Pilot (Canada, 2017b), which allows employers in the region to recruit francophone migrants. Yet, these innovations are far from making these governments and communities into full-fledged participants in immigration intergovernmental relations.

CONCLUSION As of 2020, immigration governance is managed through a federalized regime. Provinces and the federal governments are engaging in policy coordination, with both orders of government defending their interests in immigration and attempting to balance unity and diversity. Federalization demonstrates that Canada’s federal regime is capable of adapting to political, social, and economic change. It also shows that the evolution of Canadian federalism is not contingent on formal institutional changes, but more often on the evolving behaviour and interests of political actors. The federalized immigration regime is a good start, but it is far from perfect. As this chapter documents, there are considerable imbalances in immigration policy in the power, capacity, and resources of governments at the two orders. This imbalance keeps the threat of unilateral action by Ottawa a constant shadow in intergovernmental relations. It also reinforces other vertical and horizontal imbalances, notably fiscal imbalances, that already structure Canadian federalism. Moreover, the current system remains dominated by executive federalism, with immigration policy-making in Canada highly centralized in the hands of the federal executive. So, while federalization has brought immigration governance more in line with the federal principle, a lot more changes



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are needed to make intergovernmental relations in this sector truly democratic and accountable.

NOTES 1 In this chapter, territories are excluded from the discussion for two reasons. First, because while they participate in intergovernmental relations in this policy sector, they do so in a much less intensive way than provinces. Second, they receive only a very small portion of international immigrants annually. 2 With the exception of conflicts over anti-Asian and racist immigration acts in the late 1800s and early 1990s (Ryder, 1991), legal conflicts between governments in this policy area have been extremely limited. 3 In 2018, the Northwest Territories welcomed 260 permanent immigrants whereas 30 permanent immigrants settled in Nunavut and 305 settled in the Yukon (Canada, 2019b). 4 The Canada–Quebec Immigration Accord is distinct, insofar as it can only be amended or cancelled if both orders of government agree to a given change. GLOSSARY framework legislation  A general law that acts as an enabling statute for some government authorities. Framework legislation gives the power to specific institutions or authorities to create policies using regulations. immigrant integration  The process through which international immigrants adapt themselves to their new country of residence. international immigration  The process through which individuals change their country of residence, in either the long term or the short term. internal migration  The process through which individuals change their region of residence within the same country over time. REFERENCES Abu-Laban, Yasmeen, and Judith A. Garber. 2005. “The Construction of the Geography of Immigration as a Policy Problem: The United States and Canada Compared.” Urban Affairs Review 40, no. 4: 520–61. https://doi.org /10.1177/1078087404273443. Banting, Keith. 2012. “Canada.” In Immigrant Integration in Federal Countries, edited by Christian Joppke and Leslie Seidle, 79–111. Montreal: McGillQueen’s University Press. Béchard, Julie. 2018. Immigration: The Canada–Quebec Accord. Ottawa: Library of Parliament of Canada.

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Mireille Paquet Becklumb, Penny. 2008. Immigration: The Canada-Quebec Accord: BP-252E, edited by Parliament of Canada. Ottawa: Library of Parliament of Canada. Benzie, Robert. 2018. “Don’t Look to Ontario for Help with Refugees, Ford Tells Trudeau.” Star Metro, July 6, 2018. Cairns, Alan C. 1977. “The Governments and Societies of Canadian Federalism.” Canadian Journal of Political Science 10, no. 4: 695–725. https:// doi.org/10.1017/S0008423900050861. Canada. 1982. The Constitution Act 1982. Ottawa: Queen’s Printer for Canada. ———. 2001. Immigration and Refugee Protection Act (S.C. 2001, c. 27). Ottawa: Justice Canada. ———. 2012. “Government of Canada to Strengthen Responsibility for Integration of Newcomers ‘Integration Services Are About Nation Building,’ Says Kenney.” https://www.canada.ca/en/news/archive/2012 /04/government-canada-strengthen-responsibility-integration-newcomers -integration-services-about-nation-building-says-kenney.html. ———. 2016. Rapid Impact Evaluation of the Syrian Refugee Initiative. Ottawa: Immigration, Refugees and Citizenship Canada. ———. 2017a. “Ad Hoc Intergovernmental Task Force on Irregular Migration Meet to Discuss Latest Developments in Addressing the Influx of Asylum Seekers Entering Canada.” https://www.canada .ca/en/immigration-refugees-citizenship/news/2017/10/ad_hoc _intergovernmentaltaskforceonirregularmigrationmeettodiscu.html. ———. 2017b. “Atlantic Immigration Pilot.” https://www.canada.ca/en /immigration-refugees-citizenship/services/immigrate-canada/atlantic -immigration-pilot.html. ———. 2017c. “Canada, Ontario to Cooperate on Maximizing the Benefits of Immigration.” Canada NewsWire, November 24, 2017. http://www .newswire.ca/en/releases/archive/November2017/24/c5313.html. ———. 2017d. Evaluation of the Provincial Nominee Program. Ottawa: Research and Evaluation Branch Immigration, Refugees and Citizenship Canada. ———. 2018. “2017 Annual Report to Parliament on Immigration.” https:// www.canada.ca/en/immigration-refugees-citizenship/corporate/ publications-manuals/annual-report-parliament-immigration-2017.html. ———. 2019a. Immigration, Refugees and Citizenship Canada Departmental Plan, 2018–2019. Ottawa: Immigration, Refugees and Citizenship Canada. ———. 2019b. “Permanent Residents – Monthly IRCC Updates (Open Data).” https://open.canada.ca/data/en/dataset/f7e5498e-0ad8-4417 -85c9-9b8aff9b9eda. Dobrowolsky, Alexandra. 2011. “The Intended and Unintended Effects of a New Immigration Strategy: Insights from Nova Scotia’s Provincial Nominee Program.” Studies in Political Economy 87, no. 1: 109–41. https://doi.org /10.1080/19187033.2011.11675022. Elgersma, Sandra. 2015. Immigration Policy Primer. Ottawa: Library of Parliament.



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Forum of Ministers Responsible for Immigration. 2019. “About.” https:// www.fmri.ca/about. Fourot, Aude-Claire. 2018. “Does the Scale of Funding Matter? Manitoba and British Columbia Before and After the Federal Repatriation of Settlement Services.” Journal of International Migration and Integration 19, no. 4: 865–81. https://doi.org/10.1007/s12134-018-0572-2. Grande, Edgar, Tobias Schwarzbözl, and Matthias Fatke. 2018. “Politicizing Immigration in Western Europe.” Journal of European Public Policy 26, no. 10: 1444–63. https://doi.org/10.1080/13501763.2018.1531909. Haddow, Rodney, and Thomas R. Klassen. 2006. Partisanship, Globalization, and Canadian Labour Market Policy: Four Provinces in Comparative Perspective. Toronto: University of Toronto Press. International Organization for Migration. 2017. World Migration Report 2018. Geneva: International Organization for Migration (IOM). Jenson, Jane. 1997. “Fated to Live in Interesting Times: Canada’s Changing Citizenship Regimes.” Canadian Journal of Political Science 30, no. 4: 627–44. https://doi.org/10.1017/S0008423900016450. Jenson, Jane, and Mireille Paquet. 2019. “Canada’s Changing Citizenship Regime through the Lens of Immigration and Integration.” In Federalism and the Welfare State in a Multicultural World, edited by Elizabeth GoodyearGrant, Richard Johnston, Will Kymlicka, and John Myles, 175–201. Montreal: McGill Queen’s University Press. Kostov, Chris. 2008. “Canada-Quebec Immigration Agreements (1971–1991) and Their Impact on Federalism.” American Review of Canadian Studies 38, no. 1: 91–103. https://doi.org/10.1080/02722010809481822. Leo, Christopher, and Martine August. 2009. “The Multilevel Governance of Immigration and Settlement: Making Deep Federalism Work.” Canadian Journal of Political Science 42, no. 2: 491–510. https://doi.org/10.1017 /S0008423909090337. Lewis, Nathaniel M. 2010. “A Decade Later: Assessing Successes and Challenges in Manitoba’s Provincial Immigrant Nominee Program.” Canadian Public Policy 36, no. 2: 241–64. https://doi.org/10.3138 /cpp.36.2.241. Ostrovsky, Yuri, Feng Hou, and Garnett Picot. 2008. “Internal Migration of Immigrants: Do Immigrants Respond to Regional Labour Demand Shocks?.” Ottawa: Statistics Canada. Pâquet, Martin. 1997. Toward a Quebec Ministry of Immigration, 1945 to 1968. Ottawa: Canadian Historical Association. Paquet, Mireille. 2014. “The Federalization of Immigration and Integration in Canada.” Canadian Journal of Political Science 47, no. 3: 519–48. https:// doi.org/10.1017/S0008423914000766. ———. 2017. “Wicked Problem Definition and Gradual Institutional Change: Federalism and Immigration in Canada and Australia.” Policy and Society 36, no. 3: 446–63. https://doi.org/10.1080/14494035.2017.1361638.

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Mireille Paquet ———. 2019. Province Building and the Federalization of Immigration in Canada. Toronto: University of Toronto Press. Paquet, Mireille, and Lindsay Larios. 2018. “Venue Shopping and Legitimacy: Making Sense of Harper’s Immigration Record.” Canadian Journal of Political Science 51, no. 4: 817–36. https://doi.org/10.1017/S0008423918000331. Praznik, Jessica, and John Shields. 2018. An Anatomy of Settlement Services in Canada: A Guide. Toronto: Ryerson University. Ryder, Bruce. 1991. “Racism and the Constitution: The Constitutional Fate of British Columbia Anti-Asian Immigration Legislation, 1884–1909.” Osgoode Hall Law Journal 29: 619–76. Savoie, Donald J. 1992. Regional Development: Canada’s Search for Solutions, 2nd ed. Toronto: University of Toronto Press. Schertzer, Robert. 2015. “Intergovernmental Relations in Canada’s Immigration System: From Bilateralism towards Multilateral Collaboration.” Canadian Journal of Political Science 48, no. 2: 383–412. https://doi.org/10.1017/S000842391500027X. Schertzer, Robert, Andrew McDougall, and Grace Skogstad. 2016. Collaboration and Unilateral Action Recent Intergovernmental Relations in Canada. IRPP Study, No. 62. Montreal: Institute for Research on Public Policy. Schertzer, Robert, and Mireille Paquet. 2019. “Federal and Provincial Governments Need to Find Common Ground to Manage the New Normal of Asylum Seekers Coming to Canada.” Policy Options (blog), February 21, 2019. https://policyoptions.irpp.org/magazines/february-2019/lot-riding -manage-asylum-seekers/. Seidle, Leslie. 2010. “Immigration Agreements and Public Accountability.” Policy Options (July–August 2010): 49–53. Stasiulis, Daiva, and Nira Yuval-Davis. 1995. Unsettling Settler Societies: Articulations of Gender, Race, Ethnicity and Class. London: Sage. Statistics Canada. 2019. “Population Estimates on July 1st, by Age and Sex.” https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1710000501. Valiante, Giuseppe. 2018. “Quebec Pushes Federal Government for More Help with Asylum Seekers.” The Star, April 18, 2018. https://www.thestar .com/news/canada/2018/04/18/quebec-pushes-federal-government -for-more-help-with-asylum-seekers.html. Vineberg, Robert. 1987. “Federal-Provincial Relations in Canadian Immigration.” Canadian Public Administration 30, no. 2: 299–317. https://doi.org/10.1111 /j.1754-7121.1987.tb00085.x.

CHAPTER FOURTEEN

Federalism and Canadian Climate Change Policy Mark Winfield and Douglas Macdonald

INTRODUCTION As a participant in the international climate change regime established by the 1992 United Nations Framework Convention on Climate Change (UNFCCC), Canada, like other countries, makes periodic commitments to reduce total greenhouse gas (GHG) emissions. Were Canada to actually keep any of those commitments, an enormous strain would be placed on the workings of Canadian federalism. The reason is that different regions are going down very different climate change policy tracks. Emissions are increasing in Alberta and Saskatchewan, which together account for close to half of total Canadian emissions, while declining elsewhere. Alberta and Saskatchewan are implicitly saying that in order for Canada to keep the commitment it made in Paris in 2015 to reduce emissions to 30 per cent below the 2005 level by 2030, other provinces will have to make the major cuts in GHG emissions which they are unwilling to make. The portending high-stakes territorial conflict over the coming decade will test to the limit the ability of Canadian federalism to generate effective policy. Unfortunately, it also offers to Canadian policy-makers, yet again, the almost irresistible temptation to miss an international commitment, sacrificing policy effectiveness to preserve national unity. The subject of this chapter is the workings of Canadian climate change federalism with respect to reduction of GHG emissions (adaptation policy is not considered) since Prime Minister Brian Mulroney made Canada’s

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first commitment to reduce GHG emissions in 1990. Climate change, like the regulation of toxic substances, has been treated by governments as an area of shared jurisdiction, in which both the federal and provincial governments have constitutional authority to govern. (The court actions by Saskatchewan and Ontario in 2018 and Alberta in 2019 to test federal authority are discussed below.) Since both orders of government are acting in the same policy field, there is a need for them to coordinate their activities. An even more important need for coordination, if Canada is to achieve the 2030 target, is the necessity of reconciling the divergent policy paths set out above. While coordination is essential, it has not always been attempted. There are two reasons why. The first is that during the period 2006 to 2015, the federal Conservative government of Stephen Harper had no interest in acting itself or leading coordinated federal–provincial policy. To the extent coordination existed, it was on a subnational, cross-border basis, primarily through provincial participation in the Western Climate Initiative led by California (Winfield and Macdonald, 2012; VanNijnatten, 2016). The second factor explaining a lack of full coordination is that, even during the periods when they were working to develop coordinated national policy, governments at both orders have also acted independently. Provincial governments have set reduction targets without regard for coordinated effort, and federal governments have taken independent action; examples of the latter are the plans by the Chrétien and Martin governments for federal regulation of industrial emissions and, more recently, the Justin Trudeau government’s federal backstop carbon pricing system. For these reasons, this chapter examines both coordinated and independent government actions. The subject of climate change necessarily also includes intergovernmental politics and policies respecting proposals to build new pipelines to carry Alberta oil to foreign markets, which, because they cross provincial or international borders, require regulatory approval from the federal government. Although not an issue in the initial attempts to develop coordinated policy, pipeline politics have bedevilled the Pan-Canadian Framework program led by the Justin Trudeau government. In keeping with the other chapters in this volume, the purpose here is three-fold. First, the chapter describes the workings of Canadian climate federalism. A second objective is to evaluate national policy-making to date using the three criteria of performance, effectiveness, and



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legitimacy. The third objective is to explain these outcomes, which is done in the penultimate section by providing analysis of why Canadian national climate change policy has followed its particular evolutionary path since 1990. The chapter discusses the unique nature of the climate change issue and the context within which Canadian policy-making takes place. With respect to the first, given the need to change the use of fossil fuels, one must remember that climate change overlaps closely with energy policy. The result is that the differing economic interests of the oil-and-gasproducing regions relative to other parts of the country inevitably come into play and do so in a salient, high-stakes manner. Beyond these regional differences, climate change is also marked by ideological differences, with citizens and political parties on the centre-left far more likely to act on the issue than are those on the right.

DESCRIPTION: HISTORICAL OVERVIEW 1990 TO 2019 As can be seen in Figure 14.1, total Canadian GHG emissions generally moved upward from 1990 until the onset of the recession in 2008, dipped because of the recession, and since then have been more or less constant, at a level well above the 2030 target of 513 megatonnes (Mt). While the trend in overall emissions has been largely one of increase followed by stability, the trends for emissions from different forms of economic activity vary. Use of fossil fuels for extracting and transporting oil and gas (27 per cent of total Canadian emissions) and transportation (24 per cent) are the two sources that have seen increases in recent years; other sources, such as electricity (10 per cent) and heavy industry (less than 12 per cent), have declined (Environment and Climate Change Canada [ECCC], 2019c: 58). Transportation is spread approximately evenly across the country on a per capita basis, and so all parts of the country have seen similar increases in emissions from that source. The oil and gas industry, on the other hand, operates only in some regions. For that reason, plus differences in policies implemented, emissions have been increasing in some provinces while decreasing in others in recent years. The oil-producing provinces of Alberta and Saskatchewan have seen GHG emission increases over the

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Mark Winfield and Douglas Macdonald Figure 14.1. Total Canadian GHG Emissions, 1990 to 2017

800

745 721 742 732 716 714 716 688 744 682 700 700 732 725 723 724 716 704 652 696 694 707 614 673 596 635 600 613 603 500

513

400 300 200 100

Source: ECCC, 2019c. Note: 2030 Paris target = 513 Mt.

period 2005 to 2017 of 18 per cent and 14 per cent, respectively. This compares with decreases in emissions from Ontario (22 per cent) and Quebec (9.8 per cent) during the same period, due to a combination of economic restructuring and policy measures such as the Ontario elimination of coal-fired electricity generation and the Quebec cap-and-trade program (ECCC, 2019c). Emissions from oil and gas activity are expected to continue to increase, in part due to anticipated increases in production from the Alberta oil sands. Oil sands emissions were estimated to be 77 Mt in 2018 (Pembina Institute, 2018). If all the oil sands projects that have already received regulatory approval come on line, emissions will increase to 131 Mt (Pembina Institute, 2018). The Rachel Notley NDP government elected in Alberta in 2015 took significant action to reduce the rate of increase in Alberta emissions. Its measures included a carbon tax, an end to coal-fired electricity, and a cap of 100 Mt, with exceptions, on oil sands emissions. Those actions worked only to reduce the rate of increase in Alberta emissions, rather than bring about a net reduction. In 2018, the Alberta government forecast that its emissions would be higher in 2030

20

30

0 19 9 19 0 9 19 1 9 19 2 9 19 3 9 19 4 9 19 5 9 19 6 9 19 7 9 19 8 9 20 9 00 20 0 20 1 0 20 2 0 20 3 0 20 4 05 20 0 20 6 0 20 7 0 20 8 0 20 9 1 20 0 1 20 1 1 20 2 1 20 3 1 20 4 1 20 5 1 20 6 17

MEGATONNES of CO2 EQUIVALENT

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than they were in 2010 (Alberta, 2018). The Jason Kenney-led United Conservative Party, elected in April 2019, immediately scrapped the Notley carbon tax (which, in turn, led to imposition of the federal tax); by early 2020, the fate of the other Notley policies was not yet clear. Nevertheless, Premier Kenney is fully committed to the long-standing Alberta government goal of maximizing oil sands production. In 1990, 1997, and again in 2010 the government of Canada, as it has participated in the international climate change regime, gave commitments for reductions in total Canadian emissions. All three targets were missed. Whether or not Canada is able to achieve the current Paris target depends very much on whether the country continues to go down two different policy tracks, or instead is able to use the intergovernmental policy-making system so that all parts of the country are moving in the same direction of declining emissions.

Failure to Develop Effective Coordinated National Policy, 1990 to 2015 In 1990, the Progressive Conservative government of Brian Mulroney, having previously helped to put the issue on the international policy agenda by co-hosting the 1988 “Toronto conference,” set the target of stabilizing emissions at the 1990 level by the year 2000. It started to work with the provinces to develop coordinated policy to achieve that goal. That was done for the next twelve years, without use of effective policy instruments such as law or tax. Not surprisingly, emissions continued to increase. Throughout that period, the government of Alberta played a veto role, lobbying against adoption of the 1990 target; lobbying in favour of voluntary instruments; and successfully pushing for a two-year pause after the 1997 Kyoto summit, during which governments did planning instead of policy implementation (Macdonald, 2009). In 2002, the Canadian government led by Liberal Prime Minister Jean Chrétien ratified the 1997 Kyoto Protocol. The fact it did so over the objections of Alberta and all other provinces brought the effort to develop coordinated policy to an end. Earlier that year, Alberta and Ottawa began to move in different policy directions. Alberta adopted a reduction target significantly weaker than the existing national target and initiated the policy it still follows today, of a net increase in provincial emissions, even while the country as a whole is seeking to reduce

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emissions. For its part, Ottawa gave up on working with the provinces and started to develop independent plans to regulate industrial emissions (Winfield and Macdonald, 2012). Those plans for independent federal regulation were continued by Paul Martin’s Liberal government from 2003 to 2005. The government fell, however, in December 2005 before the regulations were put into effect. The Conservative Harper government, in office from 2006 to 2015, then essentially ignored the issue. It made no effort either to work with the provinces to develop coordinated policy or to implement its own emissions-reduction policy (Toner and McKee, 2014). Instead, it worked to harmonize Canadian federal policy with that of the US federal government (Winfield and Macdonald, 2012). However, that alignment lasted only until it became apparent that the Obama administration intended to take action on industrial emissions even without new legislation from Congress. During this period, some provinces began to independently implement effective policy. The most notable examples are the 2008 British Columbia carbon tax, the phasing out of coal-fired electricity in Ontario (due initially to concerns for health effects of smog, rather than climate change), the joint Quebec–California cap-and-trade system (which Ontario joined in 2016 but then abandoned in 2018 after the Wynne Liberal government was replaced by the Doug Ford Progressive Conservative government), and legislated reductions from electricity generation in Nova Scotia. As noted, the Rachel Notley NDP government reversed Alberta climate change policy by enacting significant measures to reduce emissions. At the same time, Premier Notley, like previous Alberta governments, lobbied for federal approval of new pipelines that would allow continued increase in oil sands production. By fall 2015, independent governments had been acting unilaterally for nine years, making no attempts to develop coordinated Canadian policy. Cross-border subnational coordination, which had seemed promising a decade earlier (Winfield and Macdonald, 2012), had not borne fruit, other than the Quebec–California partnership. Analysis done a few years earlier showed that the sum of the independent actions being taken would not be sufficient to meet the 2020 target (National Round Table on the Environment and the Economy [NRTEE], 2012), indicating that uncoordinated provincial action, with no leadership from the federal government, cannot achieve a Canadian commitment. That



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federal leadership reappeared, however, when Justin Trudeau’s Liberal government was elected on October 19, 2015.

The Pan-Canadian Framework and Pipelines, October 2015 to February 2020 The change of government in 2015 brought about a sea change in federal–provincial climate policy. Unlike its predecessor, the new Liberal government was committed both to acting itself on the issue and to working with the provinces to develop coordinated policy. Furthermore, the Alberta government, whose participation is essential for any national program given that it is responsible for 38 per cent of Canadian emissions (ECCC, 2019c), had moved under Premier Notley from the veto role it had played during the national efforts of the 1990s to one supporting coordinated national action. That support, however, came at a price: one that would significantly complicate the intergovernmental process. Alberta would only participate in a new national program if the Justin Trudeau government approved a new pipeline to tidewater. Since the late 2000s, the oil industry and successive Alberta governments have been strongly committed to seeing new pipelines built both to the US and to either the west or east coast of Canada, from which point oil could be shipped to Asia or other parts of the world. The Harper government aided those efforts, as has the Trudeau government since it was elected in 2015, albeit with the difference that Trudeau linked his support for pipelines to his policies to reduce Canadian greenhouse gas emissions. The industry and Alberta’s push for new pipelines was driven by a combination of a weakening US market, due to the increasing availability of low-cost “fracked” oil, and opposition to pipeline expansions by the Obama administration in the US, particularly in light of the Harper government’s climate policies. These dynamics made regulatory approvals for new pipelines, which used to be largely invisible and almost automatic, very visible and highly politicized. The American environmental movement, frustrated by the inability of the Obama administration to get climate change legislation through Congress, had adopted a new objective of stopping the Keystone XL pipeline. It had begun working with Canadian environmentalists on a strategy of “land locking” Alberta oil – making investment in the oil sands less attractive because of difficulties in getting the product to market (Hoberg, 2013).

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Two other factors compound the challenge faced by industry and the government of Alberta. The first is a series of court rulings flowing from section 35 of the Constitution Act, 1982 requiring substantive and meaningful consultation with Indigenous peoples where proposed pipelines and other projects may affect their Aboriginal and treaty rights on treaty, traditional, or unceded territories (Haida, 2004). At the same time, pipelines have the inherent effect of imposing costs on some and benefits on others, since the majority of the benefits flow to Alberta industries and governments while costs, in the form of risk from spills, are borne by those in the other provinces through which the pipelines pass. Local politicization of these risks led Quebec municipalities to object to the now cancelled Energy East pipeline. It has also led to the major dispute between British Columbia and Alberta over Kinder Morgan’s plans to build a new line on the route of the existing Trans Mountain pipeline from Edmonton to Burnaby on the Pacific coast. Although Prime Minister Justin Trudeau was clearly committed to climate change action, he had been elected on a platform of support for both environmental protection and building some new pipelines. Prior to the election Trudeau had publicly expressed support for Keystone XL but not Northern Gateway and said nothing about the Kinder Morgan expansion (Campion-Smith, 2015). Trudeau and Notley were in basic agreement. This “balanced” approach, however, was to cause the prime minister considerable headaches as he attempted to stitch together a new, federal–provincial climate change policy. That process started when the prime minister and premiers met on November 23, 2015, immediately prior to the Paris summit. A number of premiers then accompanied Prime Minister Trudeau and his environment minister to Paris, where they and other members of the Canadian delegation, for the first time in many years, spoke strongly in favour of international action. By the early spring of 2016 it had become clear that the primary objective of the Trudeau government was to ensure that a price was put on carbon in all parts of the country, with “price” defined as either an explicit tax or a trading system that achieved a comparable reduction. The central instrument was a federal “backstop” price. Originally planned to start at $10 a tonne in 2018, it would rise to $50 by 2022. (In fact, the federal tax was first imposed in 2019, at $20.) Ottawa would itself impose that price within the borders of any province that had not



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introduced a tax or trading program. All resulting revenues would be returned to the province in question. Whether given directly to citizens or firms or instead to the provincial government was not specified at the time. In 2018, it became clear the tax would be returned to citizens, over the heads of objecting provincial governments. The fact that the four largest provinces – BC, Alberta, Ontario, and Quebec – already had pricing programs in place and so were only asked to agree to the 2022 $50 price made achieving the federal pricing objective that much easier. Saskatchewan, which had no pricing program and was relying primarily upon technological development of carbon capture and storage to achieve future reductions, objected to the federal proposal. So too did Nova Scotia. It had reduced its per capita emissions by more than any other province, but without use of a carbon tax or trading system; reductions were due to declining demand for electricity, legislated caps on Nova Scotia Power, and a subsidy for renewable-source electricity (Doelle, 2018).1 Federal and provincial environment ministers met on January 29, 2016, followed by a meeting of first ministers in Vancouver on March 2–3. Some premiers objected to the prime minister’s insistence that provincial pricing be done only by means of a tax or trading program. Faced with this resistance, the prime minister acquiesced, and as a result the meeting communiqué said that all governments would act “by adopting a broad range of domestic measures, including carbon pricing mechanisms, adapted to each province’s and territory’s specific circumstances” (Vancouver Declaration on Clean Growth and Climate Change, March 3, 2016). Saskatchewan and Nova Scotia interpreted this as meaning their programs would exempt them from the federal backstop price. It seemed that governments were working in a collaborative mode, as equals developing national policy together. By early fall, however, things had changed considerably, with collaboration giving way to unilateral federal action. In September, federal environment minister Catherine McKenna stated that the minus 30 per cent target, which had previously been presented as a “minimum,” was in fact the Canadian target (Payton, 2016). On September 21, 2016, McKenna stated that provincial action had to be in the form of a tax or trading system (CBC News, 2016a). This was perhaps correctly perceived by some provinces as breaking the Vancouver agreement on “carbon pricing mechanisms.” On October 3, 2016, the prime minister formally

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announced the backstop price in the House of Commons, showing a surprising lack of diplomatic finesse, since on that same day federal and provincial environment ministers were meeting to develop the national plan. The Saskatchewan, Newfoundland and Labrador, and Nova Scotia ministers walked out of the ministers’ meeting in protest. Premier Wall of Saskatchewan called the federal announcement a “betrayal” of the Vancouver agreement (CBC News, 2016b). For her part, Alberta premier Rachel Notley said publicly her province would only participate in the national program if the federal government approved a new pipeline. Prime Minister Trudeau gave Alberta what it wanted on November 29, 2016, when his government rejected the Northern Gateway pipeline but approved the Kinder Morgan Trans Mountain and the Alberta-to-Wisconsin Line 3 pipeline renewal and expansion. These pipelines would significantly increase the quantity of oil Alberta could export daily, both to the US and to the Pacific west coast. Although subsequently running into difficulties, these approvals made possible the agreement reached at a first ministers’ meeting in Ottawa on December 9, 2016, when all governments except Manitoba and Saskatchewan signed on to the Pan-Canadian Framework on Clean Growth and Climate Change (PCF). Manitoba refused to sign because of an unrelated dispute over healthcare spending. Saskatchewan, which had inherited from Alberta the mantle of chief Ottawa opponent, both refused to sign and promised to challenge the federal backstop price in court. Nova Scotia, on the other hand, dropped its opposition, agreed to bring in a cap-and-trade system, and signed on to the PCF in exchange for federal agreement that it could operate its coal-fired electricity plants past the year 2030. Since then, Ottawa has proceeded to implement those parts of the program that fall fully within its jurisdiction. The Trudeau government enacted its greenhouse gas pollution pricing legislation (authorization for the federal backstop price) as part of the 2018 federal budget. On October 23, 2018, the prime minister announced that four provinces (Saskatchewan, Manitoba, Ontario, and New Brunswick) had not implemented carbon pricing. Since they had not met the federal standard, the federal tax would be applied there, with resulting revenues returned to citizens in each province. Federal regulations on hydrochlorofluorocarbons (HFCs), substances that both deplete the ozone layer and contribute to climate change, came into effect in October 2017, and draft federal regulatory requirements to end coal-fired electricity generation by 2030



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(with exemptions given to Saskatchewan and Manitoba) were published in 2018 (ECCC, 2018b: 7). Federal regulations to reduce methane emissions from oil and gas, with provisions for provincial equivalency agreements, were published in 2018. Consultations on development of the federal clean fuel standard, intended to reduce the carbon intensity of liquid, gas, and solid fuels by means of federal law, continued. Work with the provinces in the form of shared-cost programs for projects leading to emission reductions also proceeded. By December 2018 $1.1 billion of the $1.4 billion federal funding for the PCF Low Carbon Economy Leadership Fund had been approved (ECCC, 2018b). Joint programs had been agreed to with eight provinces – all except Manitoba and Saskatchewan, who having not signed the PCF were not eligible (Government of Canada, 2019). As discussed below, Ontario under the Doug Ford government cancelled its participation in all the federal shared-cost programs (Government of Canada, 2018). In response, the Trudeau government said it would look for options to provide funding to Ontario organizations (ECCC, 2018a). In the same way, federal funding has been supplied to bodies within the province of Saskatchewan, such as the City of Regina, despite the provincial government’s ineligibility (ECCC, 2019d). The path of implementation for the PCF in other areas, however, has not been smooth. Two major challenges have emerged. One is the difficulties surrounding the Trans Mountain expansion pipeline: the price of Alberta participation in the PCF. The second is the partisan, ideological opposition to the federal backstop carbon price on the part of Conservative premiers and the leader of the federal opposition, Conservative Party leader Andrew Scheer. In July 2017 the NDP, led by John Horgan and supported by the three Green Party members, replaced Christy Clark’s Liberals as the government of British Columbia. Five years earlier, Clark’s government had announced it would only support a new heavy-oil pipeline crossing its territory from Alberta to the west coast if five conditions were met. They included upgraded marine spill response capacity to be provided by Ottawa and a “fair share” of the associated financial benefits (BC, 2012). The tensions that BC’s conditions created with Alberta were eventually resolved by an agreement between the two provinces signed on November 5, 2013. Under the agreement, Alberta accepted the BC conditions and both parties agreed that BC would seek financial compensation from

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the relevant pipeline company, rather than Alberta (Alberta, 2013). After negotiations, Kinder Morgan agreed to pay the BC government a minimum of $25 million a year for twenty years. In exchange, the Clark government issued regulatory approvals for the Trans Mountain line, complementing the prior federal approval. The NDP government, however, did not feel bound by this agreement and, true to its election platform, announced it would try to stop construction of the new Trans Mountain line. In January 2018 the Horgan government announced plans to introduce new legislation giving it authority to regulate increases in the quantity of heavy oil shipped through British Columbia. The Alberta and federal governments condemned BC’s action as being beyond the province’s jurisdiction. In late February, Premier Horgan announced he would seek a court ruling on the constitutionality of his proposed regulations; in January 2020 he got his answer when the Supreme Court unanimously found the British Columbia law to be unconstitutional. In early April, Kinder Morgan announced it had temporarily halted work on pipeline construction and would abandon the project altogether if it did not have regulatory certainty by May 31 (Ferrerase and Mertz, 2018). Faced with this threat of capital flight, the governments of Alberta and Canada accepted the deadline and vowed to do what was needed to ensure the pipeline was built. The federal and Alberta governments entered into secret negotiations with Kinder Morgan. They culminated in an announcement on May 29, 2018, that Ottawa had agreed to buy the existing pipeline for $4.9 billion and planned to spend another $7 billion to build the new line, in the hopes of then selling both to private investors. Alberta had promised another $2 billion if needed. On August 30, 2018, however, the Federal Court of Appeal overturned the federal approval of the pipeline expansion, given in November 2016, on the grounds that the National Energy Board (NEB) had not considered impacts of increased tanker traffic on endangered killer whales in the ocean waters off British Columbia and that the federal government consultation with Indigenous peoples had been inadequate. The Trudeau government did not appeal the decision. Instead, it ordered the NEB to reconsider the project application (this time with the federal government as owner and proponent) and launched a new series of Indigenous consultations. On February 22, 2019, the NEB released its Reconsideration Report, recommending approval. Although the report stated that the



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Kinder Morgan project will have adverse effects on the whales, the project was still justified in light of its economic benefits (NEB, 2019). On June 18, 2019, the Trudeau government again approved the pipeline and shortly afterward new court actions were launched to stop it. In response, the Federal Court of Appeal ruled that consultation with Indigenous peoples was adequate this time, allowing construction to continue; that decision may be appealed to the Supreme Court. Responding to the August 30, 2018, court decision, Alberta Premier Rachel Notley announced that her government was opting out of the PCF “until the federal government gets its act together” (CBC News, 2018b). Premier Notley’s announcement was interpreted as a suspension of Alberta’s participation in the PCF until new regulatory approvals for the Trans Mountain expansion were in place and construction had started. Premier Notley did not, however, cancel the Alberta carbon tax, which had increased to $30 a tonne in 2018. Instead, she decreed that Alberta would not comply with the federal backstop by increasing the Alberta tax to $40 in 2021 and then $50 in 2022. (The federal government deemed Alberta to be in compliance with the backstop price in 2019.) Nor yet did Alberta withdraw from participation in PCF programs.2 For instance, the PCF second annual report, issued in December 2018, three months after Premier Notley’s announcement of opting out, said that “Alberta continues ... engagement on the federal Clean Fuel Standard development” (ECCC, 2018a: 55). It seems that the Alberta withdrawal from the PCF, at least prior to the Alberta election in the spring of 2019, was more rhetorical than actual. While the Trudeau–Notley alliance between two centre-left governments survived more or less intact, relations between the Trudeau government and conservative provincial governments became visibly hostile. Brian Pallister, Progressive Conservative leader in Manitoba, joined the PCF in February 2018 and began planning to introduce carbon pricing. Pallister then abruptly cancelled those plans later in the year (Lambert, 2018), with the result that the federal tax was applied in that province. Scott Moe, who had replaced Brad Wall as Saskatchewan premier, continued that province’s vocal opposition to the federal tax. Saskatchewan’s court action to declare the tax unconstitutional went to a hearing in February 2019. Shortly after he was elected Ontario premier on June 7, 2018, Doug Ford cancelled the Ontario cap-and-trade program and Ontario’s participation in shared-cost programs and initiated legal action against the

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federal tax. The Saskatchewan and Ontario Courts of Appeal subsequently found in split decisions the federal backstop carbon pricing regime to be constitutional. Both provinces have appealed to the Supreme Court of Canada. However, in February 2020, the Alberta Court of Appeal ruled in favour of the province in a split decision. The Alberta minister of justice conceded that the Supreme Court of Canada will have the final say but asked that in the meantime the federal government stop collecting the tax and return all monies collected so far to Alberta. On November 29, 2018, the Ford government introduced a new climate change plan. It made no reference to a carbon tax or trading but instead contained vague plans to use government spending to induce industrial emission reductions. The plan scaled back the Ontario 2030 target. For his part, federal Conservative leader Andrew Scheer made attacks on the federal backstop carbon price central to his critique of the Trudeau government. The Trudeau–Notley alliance ended with Jason Kenney’s election victory in Alberta in April 2019, an event that further weakened the PCF. During the campaign, Kenney had promised an end to Notley’s willingness for Alberta to co-operate with the federal Liberals, as well as cancellation of her climate policies. Like the Ford government, Premier Kenney moved quickly to keep that promise (at least in part), eliminating Notley’s carbon tax paid by individuals (the NDP regulations on industry were kept in a modified form). The federal government announced its backstop price on fuels would apply in Alberta as of January 1, 2020. In June 2019, the Alberta government announced plans to challenge the federal carbon price in court. At the federal level, Conservative leader Andrew Scheer released his climate change plan in June 2019, immediately before the election period. Like that of the Ford government, his plan made no use of carbon pricing and was equally vague except on one point: if elected, the Conservatives would scrap the federal carbon tax. In the October 21, 2019, election, the Conservatives won all but one of the seats in Alberta and Saskatchewan and received the greatest number of votes. Since the Liberals were re-elected, albeit with a minority of seats in the House of Commons, the federal carbon tax survived. While the tax survived, Canadian climate change policy moved to a new level of complexity and difficulty following the election. The Trudeau government had no choice but to increase its level of effort:



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the Liberals had run on a platform of more effective action, almost two-thirds of voters had supported parties promising increased action, and the minority Liberals were dependent for support upon parties demanding increased action. This push for greater effort, however, collided head-on with the demands of Alberta and Saskatchewan for both new pipelines and changes to the federal regulatory regime. Those demands would allow increased oil and gas exports which, barring an unprecedented technological breakthrough, would also increase GHG emissions from those provinces. The new level of complexity arises from premiers Kenney and Moe framing their demands as matters of national unity. Without representation in the Liberal cabinet, ignored during the federal campaign (since everybody knew their citizens would vote Conservative), and with undeniable economic and job-loss wounds, the two provincial governments drew upon a century’s worth of western alienation and flirtation with separatism to demand a new deal, not just for energy and climate policy, but also with respect to the equalization program (see chapter 10) and increased provincial autonomy. Where does all this leave the Pan-Canadian Framework program? Given the provincial opt-outs discussed above (although after the federal election New Brunswick brought in its own tax on fuels and so effectively rejoined the program), it is difficult to call the PCF a “national” program. Furthermore, with Alberta and Ontario, which together account for about 60 per cent of Canadian GHG emissions, both opting out of the PCF while also scaling back their climate policies, other provinces will have to do much more. Given the unlikelihood of the latter, achieving the Paris target becomes more remote. Rather than a national program, the PCF is best thought of as a program relying primarily upon federal legislation and spending, with some provincial participation but also opposition from four provinces. The PCF represents a considerable advance over the national programs of the 1990s, which never involved the use of effective policy instruments such as law or tax, and also an advance over the lack of any federal leadership by the Harper government. However, the PCF cannot be characterized as a collaborative exercise in developing coordinated federal–provincial policy. Instead, it is a federal program in which some provinces have agreed to participate and others have declined. Nor does it address the basic problem, presented at the outset of this chapter, of rising emissions in some parts of the country and declining emissions

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elsewhere. Indeed, the PCF institutionalizes that dichotomy, by accepting that Alberta emissions will increase through to 2030 and by being based upon federal action to expand pipeline capacity and thereby enabling Alberta’s emissions to increase. In the wake of the October 21, 2019, election, only one thing can be said with certainty: the PCF and, with it, federal climate change policy are certain to undergo major transformations as the Trudeau Liberals search for a pathway through the thorny maze of new, unmistakable demands by Canadian citizens for more effective action. The issue of climate change dominated the 2019 election in a way no environmental issue had ever done in a previous election. Demands for effective climate action clash with those to ameliorate western regional discontent, and the latter has reached a level of anger not seen since Pierre Trudeau’s hated and reviled National Energy Program.

EVALUATION This section evaluates the workings of Canadian climate change federalism, including both coordinated and independent government actions, since 1990.

Performance: Institutions, Processes, and Results The first item to be examined here is consistency with federal principles: do governments recognize the proper role and autonomy of other governments? Is there a balance between unity and diversity? By and large, since 1990 governments developing climate policy, alone or together, have respected the role (jurisdiction) and autonomy of other governments. The only possible exception has been the Trudeau government’s backstop carbon price, which is exceptionally assertive federal action. That said, whether it violates norms of federalism is less clear. On the one hand, it could be argued that the policy violates norms of respect for provincial governments’ autonomy in two ways. First, it entails the government of Canada telling a provincial government that has explicitly said it does not want its citizens and businesses to be subjected to some form of carbon pricing that they will indeed be subject to a carbon price. Such action by Ottawa could be seen as unwarranted interference. Second,



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the specific case of Nova Scotia suggests undue federal interference. As discussed, the province had reduced its GHG emissions more than any other province and yet was told by Ottawa that it would nevertheless have to introduce some form of pricing. On the other hand, one could argue that the federal backstop does not reduce autonomy because provincial governments are still free to put in place any other climate change policies or to altogether refrain from acting on the issue. With respect to Nova Scotia, Ottawa allowed the province to choose its form of carbon pricing (tax or trading systems). Moreover, national consistency and the risk of “carbon leakage,” where economic activities move from provinces that do price carbon to those that do not, requires that some form of comprehensive pricing be introduced in all provinces. There has not been a balance between unity and diversity. Since 1990, given the ineffective nature of the two 1990s national processes, the emerging problem of provincial legal challenges to the PCF, and the large number of autonomous provincial programs, diversity has been the norm. Because the Conservatives, with their promise to cancel the federal carbon tax, were not elected in 2019, the prospects for unity in the form of carbon pricing in each jurisdiction now rests on a Supreme Court finding that the federal tax is in fact constitutional. Have we seen “workability”? That is, do forums exist for consultation, negotiation, and coordination of governments? The complex intergovernmental processes of the 1990s provided many venues for consultation, coordination, and negotiation, but these opportunities did not translate into effective policy. During the 2003–5 period, workability prevailed in the form of the Martin government pursuing a strategy of bilateral engagement with the provinces individually. Since the PCF signing in 2016, there have been no further first ministers’ meetings specifically focused on climate change (although climate and energy policy were discussed at the December 7, 2018, FMM) or meetings of environment ministers specifically devoted to the PCF. (Ministers meet annually under the auspices of the Canadian Council of Ministers of the Environment.) Instead, the multilateral process that generated the PCF has been replaced by a series of Ottawa–provincial bilateral discussions. Can governments produce results by agreeing on policy? Again, no such agreement was possible during the period when no intergovernmental process was in place. Governments engaged in intergovernmental processes have agreed on climate policy on two occasions. The first was

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during the 1990s, which saw agreements, but only for voluntary action. The second was on December 9, 2016, when all but two governments signed the PCF. Governments could not reach agreement in 2002, when Ottawa launched its own unilateral policy, then ratified Kyoto in the face of provincial resistance, and attempts at coordination came to an end. Nor were they able to reach agreement in 2018 when some provinces opted out of the carbon pricing system and took legal action, hoping to have it declared unconstitutional. While agreement was reached by signing the December 2016 PCF, the fundamental policy difference between Alberta, with its policy of steadily increasing emissions, and other provinces implementing reduction policies was papered over. Has Canadian climate change federalism since 1990 shown a capacity to pull conflicting objectives into one coherent whole, thereby managing political cleavages? The answer is no. The fossil-fuel provinces of Alberta and Saskatchewan have moved steadily in the direction of increasing oil and gas production, which has meant rising emissions, while other provinces have reduced their emissions. None of the intergovernmental processes has brought about a change in this interprovincial cleavage. Nor has the PCF been able to address the ideological cleavage between right-wing governments vehemently opposed to carbon pricing and others that are successfully implementing pricing. Has decision-making been consensual? Do rules promote accountability of governments to their citizens and to one another? The three intergovernmental processes have relied only on consensus (that is, unanimity) with the associated right of governments to opt out. That is, no consideration has ever been given to such things as qualified majority voting (to be adopted, a decision must be approved by more than 50 per cent of participants or some other formula). Even had such a system been used for the December 2016 adoption of the PCF, absent some effective enforcement mechanism, provinces would still have had the ability to subsequently opt out (as Ontario did after its 2018 election). Canada’s accountability to the international UNFCCC regime is achieved through the requirement that, like all participating countries, it file annual reports on progress. During the 1990s’ intergovernmental processes, there was no reporting by governments to their citizens. The PCF, however, has generated two annual reports on progress, in 2017 and 2018 (ECCC, 2017, 2018b). In addition, in an unprecedented move auditors general of all jurisdictions worked together to produce a joint



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report for Canadians in March 2018 on the collective progress being made (or not) by governments to achieve climate change goals (Auditor General of Canada, 2018). The accountability of governments to one another in the PCF is diminished by the lack of regularly scheduled meetings of first ministers and energy/environmental ministers to review progress and plan next steps. To the extent it exists, accountability flows only from provinces to Ottawa in the form of the federal backstop price should provinces not act, arrangements governing shared-cost programs, and bilateral discussions.

Effectiveness: Policy Outcomes As discussed, the most effective policies have been those implemented by Canadian provinces acting autonomously, without regard to what other Canadian governments were doing. Intergovernmental processes, by contrast, have been ineffective. The combination of autonomous provincial actions and intergovernmental processes have resulted in failure to meet the first three national targets, and the PCF is on track to miss the fourth, the 2030 Paris target. The federal government reported in 2019 (ECCC, 2019b) that, with both existing policies and policies still being developed, emissions were forecast to be 19 per cent (rather than 30 per cent) below the 2005 level by 2030. Furthermore, the reductions achieved by some provinces acting alone have been overwhelmed by the emission increases in free-riding provinces. Canadian climate policy, that which is intergovernmental as well as that which is unilateral, has been ineffective because it has been unable or unwilling to address that basic problem. In the face of this failure, Canadian governments have used all policy instruments available to them, including fiscal incentives, law-based regulation, tax and cap-and-trade, public outreach and education, to promote policies to reduce GHG emissions. They have also innovated, most especially in the 2016 federal backstop price. Canadian climate policy has imposed at least marginal costs upon powerful actors. In energy extraction and production, companies are subject to tax or trading programs. The coal industry in Alberta, while being compensated for the decision by the Alberta government to end coal-fired electricity generation by 2030, has still lost that market. However, generous arrangements have been made to accommodate large

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industrial emitters. An example is free allowances provided in the initial phases of the Ontario and Quebec trading systems. The federal backstop price imposed on industry is designed to reduce costs to trade-exposed industries. The costs to trade-exposed industries was further reduced, potentially to zero in many cases, by changes to the system announced by the Trudeau government in August (McCarthy, 2018) and December 2018 (Vigliotti, 2018). This meant that industry’s share of the total costs of the reductions brought about through federal carbon pricing is reduced relative to the share paid by citizens though fuel purchases (for which they receive a rebate). Have policy outcomes allowed asymmetry where it is needed and warranted? Certainly, climate policy since 1990 has been marked by the basic asymmetry that is a major theme of this chapter, between regions with rising emissions and those where emissions are falling. Is that warranted? Perhaps it is, if national unity is the major criterion applied; it is not, when seen through the lens of policy effectiveness. This asymmetry is the underlying explanation for the fact of policy failure to date.

Legitimacy Polling data indicate that about half of Canadians express support for the federal backstop price (Angus Reid, 2018). About 60 per cent of Canadians also want governments to do more than at present to address the climate issue (CBC News, 2018a). While presumably most Canadians want the country to keep its international commitments, a significant minority of them do not see action on the issue, or the particular policy instrument of a carbon price, as being legitimate or needed. Public opinion in Quebec is consistently the most favourable towards government action on environment and climate change. Quebec government officials are supportive of the federal backstop price, since it helps to address their concern that other provinces will not match Quebec’s level of ambition, or that Quebec’s economy will be undercut by competition from competing jurisdictions that do not price carbon (HEC Montreal and York University, 2015). The issue of climate policy legitimacy in the eyes of Indigenous peoples is complex and cannot be fully addressed here. Court decisions enforcing the Crown’s duty to consult with Indigenous peoples prior to major project approval have meant that Indigenous peoples and their



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governments are now a new, powerful actor in the domain of climate and energy politics. As noted, they were successful in derailing the Trans Mountain expansion in 2018 and will certainly play a central role in future developments respecting energy infrastructure. However, Indigenous peoples do not speak with one voice. Some benefit financially from oil and gas exports and tend to be supportive, while others take the opposite position. In summary, the performance of Canadian federalism in this policy field has generally been in keeping with federalism norms. That has only been possible, however, by sacrificing policy effectiveness to avoid damage to national unity. By and large, climate policy has been seen to be legitimate, but that is because Canadians do not have an overwhelming desire for fully effective policy. That perception may shift in the face of the increasingly evident impacts of climate change in the forms of extreme weather events, flooding, and wildfires (ECCC, 2019a). Two other summary points are made. First, the experience since the signing of the PCF, with governments withdrawing because of electoral change or a court decision, shows the basic problem of ensuring policy continuity in a federal–provincial climate change program designed to stretch over a considerable period. The death of the 1987 Meech Lake Accord because governments changed is another example of the problem. The Trudeau government, for its part, never expected its carbon pricing backstop to become the primary mechanism for implementing carbon pricing in Canada. Indeed, until June 2018 it seemed likely that it would only be applied, and even then only partially, in one province: Saskatchewan. Second, experience since 1990 on the climate file does point to one strength of Canadian federalism. Coordinated action may not have been effective, but the autonomy given to governments for policy experimentation and independent action has meant that total greenhouse gas emissions are not as high today as they would have been without that diversity.

EXPLANATION Explanation is offered here of two related phenomena. The first is the pattern of Canadian climate federalism since 1990, in terms of coordinated and independent government actions. The second is the inability

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of Canadian governments to put in place effective climate change policy that can bring about a reduction in total Canadian emissions sufficient to achieve a national target. In terms of the first, the pattern of Canadian climate federalism is summarized as follows: 1990–2002

•  coordinated action with Alberta veto role

2003–5

• federal unilateral action plus some bilateral federal–provincial agreements

2006–15

• no federal action, no attempt at coordinated action • provinces acting independently, generating some effective policy • some attempts at cross-border subnational coordination

2015–20

• federal unilateral action plus leadership of coordinated action; weakened by provinces opting out

How do we explain that pattern, which begins and ends with attempts to develop coordinated policy? Presumably one explanation is that coordinated action is the default option, given that Supreme Court decisions have confirmed that both levels of government share jurisdiction with respect to environment. Given this starting point, the question becomes: how do we explain the instances of divergence from coordinated action, by both levels of government? For the provinces in the 2006–15 period, independent action is explained by the simple fact there was no intergovernmental process available to them had they wished to work in concert with others. Driven by their own circumstances, such as the nature of their economies and the ideology of the governing party, they acted or did not. Independent action by provinces during periods of coordinated policy-making, such as adoption of provincial targets unrelated to the national effort or the Ontario cap-and-trade cancellation, is explained by the weak ability of the Canadian intergovernmental relations process to bind participating governments. An explanation of the first instance of unilateral action by Ottawa has been provided by David Anderson, minister of environment in the Chrétien government in the spring of 2002 when that government decided to move from coordinated action to unilateral regulation. He



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and the prime minister had become convinced the existing voluntary approach was ineffective, they wanted to move to a policy instrument closer to law-based regulation, and they sensed that the business community was also becoming frustrated by the ambiguities inherent in the voluntary approach (Macdonald, Houle, and Patterson, 2011). Anderson told the news media at the time that if that change of policy instrument meant Ottawa had to work alone, without the provinces, so be it (McCarthy, 2002). The independent action of the Harper government – the decision to not act on the issue itself or to lead coordinated action – can be explained by that prime minister’s view of federalism and of the climate issue. Harper was convinced each government should act within its own jurisdiction and had no interest in coordinated national programs in any policy area. Nor did he believe climate change required significant government action. Independent action in the form of the Trudeau government’s backstop carbon price seems also to be explained by Trudeau’s view of federalism. Unlike Harper, he clearly does believe in coordinated action but also believes Ottawa should play a role in establishing minimum national standards. In a pre-election speech given in Calgary on February 6, 2015, Trudeau compared his approach to federal– provincial climate policy to the minimum standards found in healthcare (Trudeau, 2015). How do we explain the failure of Canadian climate policy to reduce total emissions? A review done in 2008 of the explanations offered by analysts for the failure of Canadian climate change policy up to that date found four explanations: (1) the magnitude of the Canadian challenge, flowing from geography (long distances, hot summers, and cold winters) plus population increases; (2) political action by industry and Alberta seeking to delay or weaken policy; (3) the related issue of differing regional economic interests; and (4) internal conflict within the federal government between the Environment and Natural Resource departments (Macdonald, 2008). In that same year, Winfield and Macdonald (2008) argued that Canadian federalism was able to generate at least somewhat effective coordinated policy respecting toxic substances (using the 1998 Environmental Harmonization Accord) but not respecting greenhouse gas emissions because the cost of action – and associated conflict among regions – was so much higher for the latter. Ten years

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later, those explanations are still largely valid, although the internal federal conflict has disappeared from public view. Contextual factors, such as Canadian geography and the high degree of reliance upon the US as an export market, which leads Canadian business to push for harmonization of Canadian climate policy with that of the US, are clearly part of the explanation. Far more significant, though, is the factor pointed to above: differing regional economic interests flowing from the geographic location of oil and gas reserves and associated political action. The Rachel Notley government of Alberta introduced new climate change policy in 2015 but did not deviate from the objective of its predecessors: wealth creation by means of fossil fuel export, for which additional pipeline capacity is needed. Nor yet was it willing to bring about a net reduction of Alberta emissions prior to 2030. The two tracks of decreasing and increasing provincial emissions, with the latter cancelling out the former, explain the Canadian failure. However, the explanation lies not just in action by Alberta and Saskatchewan to protect their economic interest, since the federal government has always supported their efforts. The fact that Canada is an oil and gas exporting nation has always influenced federal policy. The Liberal Chrétien, Martin, and Trudeau governments have moved with varying degrees of enthusiasm to implement climate policy themselves and to lead a search for coordinated federal–provincial action, but never at the expense of reducing oil and gas exports. Most recently, Justin Trudeau’s “balanced” approach of a carbon price and a new pipeline demonstrate his government’s willingness to accept a national program that includes Alberta emission increases through to 2030. The second explanation is the ideology of the governing party. As noted, climate change has become a highly polarized issue with the result that Liberal or NDP governments are far more likely to act than are Conservative governments. Although they ultimately failed to implement effective measures, the Liberal Chrétien and Martin governments recognized the climate change problem and demonstrated a willingness, either in co-operation with the provinces or acting alone, to try to meet Canada’s international commitments. The Justin Trudeau government has implemented a backstop carbon pricing system. The Harper Conservatives, on the other hand, repudiated the Kyoto commitment and made no efforts at federal–provincial coordination or



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co-operation. In fact, they were openly critical of those provinces that acted independently. What actions they did take (vehicle emission and fuel economy standards) were effectively forced by the actions of the Obama administration in the US. At the provincial level, the Alberta government brought in effective climate policies when an NDP government ended some forty years of Conservative rule. British Columbia moved from accepting the Trans Mountain pipeline to opposing it because an NDP government was elected there, while Ontario ended its cap-and-trade program and partnership with Ottawa in the PCF because a Progressive Conservative government was elected in that province. Ideology, however, only explains so much. As shown by the bitter conflict between the two NDP governments of British Columbia and Alberta, the dominant factor distinguishing provincial climate policy is differences in provincial economies.

CONCLUSION In addressing the challenge of climate change mitigation, Canadian federalism has seen federal and provincial governments use both coordinated and independent policy action. Independent policy, such as the Ontario decision to end coal-fired electricity generation, has been more effective than coordinated policy. That said, the Pan-Canadian Framework signed in 2016 is a more effective attempt at coordinated policy than were any of the 1990s’ federal–provincial programs. The PCF’s future is uncertain, however, due to conflicts over pipelines and increasing provincial opposition, particularly as a result of provincial election outcomes in 2018 and 2019. Nor has it been able to address the basic problem of climate policy going down two different tracks, with emission increases in the oil-exporting provinces cancelling out reductions made elsewhere. Indeed, the Trudeau government has enabled that two-track situation, by introducing carbon pricing but also buying a pipeline. By and large, coordinated climate policy has been implemented within the norms of Canadian co-operative federalism. Norms of co-operative federalism have prevailed because federal governments have asked almost nothing of provinces, except for Justin Trudeau’s backstop carbon price. Working within federalism norms helps to explain the failure to

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date of Canadian climate policy. Addressing the two-track problem might require heavy-handed federal action and certainly runs the risk of bitter, high-stakes, regional conflict. Perhaps not surprisingly, governments have so far shied away, preferring national peace and harmony over policy effectiveness. An effective federal–provincial program would bring about emission reductions in all parts of the country and would thereby be able to meet an international commitment such as the Paris target. Whether our federal system can achieve such ends remains an open question.

NOTES 1 Personal communication by email from B. Haley to D. Macdonald, February 20, 2019. 2 Personal communication by email from J. Bertrand of Environment and Climate Change Canada to D. Macdonald, December 11, 2018. GLOSSARY carbon price  The application of a cost to each tonne of GHGs emitted. Pricing can take two forms. The first is a carbon tax, applied on the basis of the GHG content of a fuel. The second is in a cap-and-trade system. There, emitters of GHGs must purchase permits authorizing emissions. Permits are purchased from governments or other emitters through markets established for that purpose. greenhouse gas (GHG)  Gases, such as carbon dioxide and methane, that accumulate in the upper atmosphere. In excessive concentrations they cause climate change. National Energy Board (NEB)  Canada’s national energy regulator, recently re-named the Canadian Energy Regulator. Pan-Canadian Framework on Clean Growth and Climate Change (PCF)  A December 2016 agreement among the federal government and most provinces on approaches to meeting Canada’s GHG emission reduction target commitments. United Nations Framework Convention on Climate Change (UNFCCC) The global agreement to combat climate change that underlies international climate change negotiations and commitments. Western Climate Initiative  An initiative launched in 2007 by several US states and Canadian provinces to coordinate approaches to fighting climate change.



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REFERENCES Alberta. 2013. Alberta and British Columbia Reach Agreement on Opening New Markets, November 5, 2013. https://news.gov.bc.ca/releases/2013PREM0116-001670. ———. 2018. Climate Leadership Plan: Implementation Plan 2018–19. https:// open.alberta.ca/dataset/da6433da-69b7-4d15-9123-01f76004f574/resource /b42b1f43-7b9d-483d-aa2a-6f9b4290d81e/download/clp_implementation _plan-jun07.pdf. Angus Reid Institute. 2018. “Carbon Pricing.” http://angusreid.org/carbon -pricing-rebate/. Auditor General of Canada, with provincial and territorial auditors. 2018. Perspectives on Climate Change Action in Canada – A Collaborative Report from Auditors General. http://www.oag-bvg.gc.ca/internet/English/parl_otp _201803_e_42883.html. BC Government News. 2012. “British Columbia Outlines Requirements for Heavy Oil Pipeline Consideration.” July 23, 2012. https://news.gov.bc.ca /stories/british-columbia-outlines-requirements-for-heavy-oil-pipeline -consideration. Campion-Smith, B. 2015. “Liberal Leader Justin Trudeau Talks Pipeline Politics.” Toronto Star, September 10, 2015. https://www.thestar.com/news /canada/2015/09/10/liberal-leader-justin-trudeau-talks-pipeline-politics .html. CBC News. 2016a. “A Carbon Tax or Cap-and-Trade: Liberals Suggest Every Province Must Choose.” September 21, 2016. http://www.cbc.ca/news /politics/cap-trade-carbon-tax-provinces-1.3773285. ———. 2016b. “Sask., N.S and N.L. Ministers Walk Out of Climate Talks after Trudeau Announces Carbon Price.” October 3, 2016. http://www.cbc.ca /news/politics/federal-provincial-environment-ministers-meeting-1.3789134. ———. 2018a. “Nearly a Third of Canadians Don’t Believe Humans, Industry ‘Mostly’ Cause Climate Change: Poll.” April 4, 2018. https://www.cbc.ca /news/politics/poll-abacus-carbon-tax-1.4603824. ———. 2018b. “Premier Rachel Notley Pulls Alberta Out of Federal Climate Plan over Trans Mountain Ruling.” August 30, 2018. https://www.cbc.ca /news/canada/edmonton/alberta-jason-kenney-political-reaction-rachel -notley-kinder-morgan-pipeline-1.4805224. Doelle, M. 2018. “Toward a Principled Design of Carbon Pricing Systems: Lessons from Nova Scotia’s Proposal to Meet the Carbon Pricing Requirement in the Pan-Canadian Framework for Climate Change.” Journal of Environmental Law and Practice 31: 293–303. https://doi.org /10.2139/ssrn.3006264. Environment and Climate Change Canada. 2017. Pan-Canadian Framework on Clean Growth and Climate Change: First Annual Synthesis Report on the Status of Implementation. https://www.canada.ca/content/dam/themes/environment /weather/climatechange/PCF-FirstSynthesis_ENG.pdf.

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Mark Winfield and Douglas Macdonald Environment and Climate Change Canada. 2018a. “News Release: Government of Canada to Support Energy Efficiency and Climate Action in Ontario.” November 8, 2018. https://www.canada.ca/en/environment-climate -change/news/2018/11/government-of-canada-to-support-energy-efficiency -and-climate-action-in-ontario.html. ———. 2018b. Pan-Canadian Framework on Clean Growth and Climate Change: Second Annual Synthesis Report on the Status of Implementation. December 2018. http://publications.gc.ca/collections/collection_2018/eccc/En1 -77-2018-eng.pdf. ———. 2019a. Canada’s Changing Climate Report. https://changingclimate.ca /CCCR2019/. ———. 2019b. Canada’s Environmental Sustainability Indicators: Progress towards Canada’s Greenhouse Gas Emission Reduction Target. https://www.canada.ca /content/dam/eccc/documents/pdf/cesindicators/progress-towards -canada-greenhouse-gas-reduction-target/2019/progress-towards-ghg -emissions-target-en.pdf. ———. 2019c. National Inventory Report 1990–2017: Greenhouse Gas Sources and Sinks in Canada. Part 1. http://publications.gc.ca/collections/collection _2019/eccc/En81-4-2017-1-eng.pdf. ———. 2019d. “News Release: Government of Canada Supports Climate Action by City of Regina.” February 12, 2019. https://www.canada.ca /en/environment-climate-change/news/2019/02/government-of -canada-supports-climate-action-by-city-of-regina.html. Ferrerase, J., and E. Mertz. 2018. “Kinder Morgan Halts Trans Mountain Pipeline Expansion amid B.C. Opposition.” Global News, April 8, 2018. Government of Canada. 2018. “News Release: Government of Canada to Support Energy Efficiency and Climate Action in Ontario.” November 8, 2018. https://www.canada.ca/en/environment-climate-change/news /2018/11/government-of-canada-to-support-energy-efficiency-and-climate -action-in-ontario.html. ———. 2019. The Low Carbon Economy Fund: News Releases, February 22, 2019. https://www.canada.ca/en/environment-climate-change/services /climate-change/low-carbon-economy-fund.html. Haida Nation v. British Columbia (Minister of Forests), [2004] 3 S.C.R. 511. HEC Montreal and York University. 2015. Ontario, Québec, Electricity and Climate Change: Advancing the Dialogue. http://sei.info.yorku.ca/files/2013/03 /Advancing-the-Dialogue-Final-Report-071415-Translated-1.pdf. Hoberg, G. 2013. “The Battle over Oil Sands Access to Tidewater: A Political Risk Analysis of Pipeline Alternatives.” Canadian Public Policy no. 39: 3, 371–91. https://doi.org/10.3138/CPP.39.3.371. Lambert, S. 2018. “Manitoba Backs Out of Planned Federal Carbon Tax.” Globe and Mail, October 3, 2018. https://www.theglobeandmail.com /canada/article-manitoba-backs-out-of-planned-carbon-tax/.



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Macdonald, D. 2008. “Explaining the Failure of Canadian Climate Policy.” In Turning Down the Heat: The Politics of Climate Policy in Affluent Democracies, edited by H. Compston and I. Bailey, 223–40. New York: Palgrave Macmillan. ———. 2009. “The Failure of Canadian Climate Change Policy: Veto Power, Absent Leadership, and Institutional Weakness.” In Canadian Environmental Policy and Politics: Prospects for Leadership and Innovation, edited by D.L. VanNijnatten and R. Boardman, 152–66. Don Mills, ON: Oxford University Press. Macdonald, D., D. Houle, and C. Patterson. 2011. “L’utilisation du volontarisme afin de contrôler les émissions de gaz à effet de serre du secteur industriel.” In Politiques environnementales et accords volontaires: le volontarisme comme instrument de politiques environnementales au Quebec, edited by J. Crête, 75–104. Quebec: Les Presses de l’Université Laval. McCarthy, S. 2002. “Ottawa May Shun Provinces to Implement Kyoto.” Globe and Mail, May 20, 2002. ———. 2018. “Ottawa Cuts Carbon Tax to Ease Competitiveness Concerns.” Globe and Mail, August 1, 2018. National Energy Board. 2019. “News Release: NEB Releases Reconsideration Report for Trans Mountain Expansion Project.” February 22, 2019. http:// www.neb-one.gc.ca/bts/nws/nr/2019/nr04-eng.html. National Round Table on the Environment and the Economy. 2012. Reality Check: The State of Climate Progress in Canada. http://www.collectionscanada .gc.ca/webarchives2/20130322165455/http:/nrtee-trnee.ca/reality-check -the-state-of-climate-progress-in-canada. Payton, L. 2016. “Liberals Back Away from Setting Tougher Carbon Targets.” CTV News, September 18, 2016. https://www.ctvnews.ca/politics/liberals -back-away-from-setting-tougher-carbon-targets-1.3075857. Pembina Institute. 2018. The Oilsands in a Decarbonizing Canada. https://www .pembina.org/pub/oilsands-decarbonizing-canada. Toner, G., and J. McKee. 2014. “Harper’s Partisan Wedge Politics: Bad Environmental Policy and Bad Economic Policy.” In How Ottawa Spends 2014–2015: The Harper Government – Good to Go?, edited by G.B. Doern and C. Storey, 108–21. Montreal: McGill-Queen’s University Press. Trudeau, J. 2015. “Justin Trudeau Pitches a Medicare Approach to Fighting Climate Change.” Speech at the Calgary Petroleum Club, February 6, 2015. https://www.liberal.ca/justin-trudeau-pitches-medicare-approach-to-fight -climate-change-in-canada/. Vancouver Declaration on Clean Growth and Climate Change. 2016. Communiqué issued by First Ministers. March 3, 2016. https://itk.ca/wp-content/uploads /2016/04/Vancouver_Declaration_clean_Growth_Climate_Change.pdf. VanNijnatten, D. L. 2016. “The Push and Pull of North America on Canadian Environmental Policy.” In Canadian Environmental Policy and Politics, edited by D.L. VanNijnatten, 181–96. Don Mills, ON: Oxford University Press.

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CHAPTER FIFTEEN

Nation to Nation? Canadian Federalism and Indigenous Multi-level Governance Martin Papillon

Through local, national, and global protests and activism, court challenges and engagement in the policy process, Indigenous peoples are today challenging the foundations of Canadian federalism.1 It is arguably no longer possible for Canadian authorities to ignore Indigenous claims for justice and recognition. The Indigenous rights movement is now a global phenomenon, with the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) progressively imposing itself as the new international standard against which state actions on matters of relevance to Indigenous peoples are measured (Lightfoot, 2016; Barelli, 2016). In Canada, the 2015 final report of the Truth and Reconciliation Commission (TRC) made a compelling case for the interconnectedness of fundamental equity issues and the lack of proper recognition of Indigenous peoples’ legal and political status (TRC, 2015). It called for a fundamental overhaul of the institutions governing Indigenous–settler relations, based on the principles set forth in the UNDRIP and renewed ­nation-to-nation relationships. The more recent report of the National Inquiry into Missing and M ­ urdered Indigenous Women and Girls (NIMMIWG, 2019) similarly called on Canada to respect its international commitments and address the injustice gap resulting from past and ongoing colonial policies. To its credit, the federal government under Prime Minister Justin Trudeau recognized the importance of these developments and chose to put reconciliation with Indigenous peoples at the top of its government

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agenda following both the 2015 and 2019 elections (PMO, 2015; Governor General of Canada, 2019). Attempts at recasting our relationships have, at least so far, produced few tangible results (Rodon and Papillon, 2019; King and Pasternak, 2018). Ongoing tensions in relation to oil and gas infrastructures, including controversial pipelines crossing traditional Indigenous territories where rights and titles remain unsettled, further contribute to a sense that reconciliation is rather quickly pushed aside when economic interests are at play (Starblanket and Green, 2020). That being said, the simple fact that Indigenous issues are now so prominent on the national political agenda is, in itself, a significant development. Building on the conceptual framework of the present volume, this chapter assesses the performance, effectiveness, and legitimacy of our federal system in addressing the challenges associated with Canada’s colonial legacy. How, and to what extent, have the institutions and processes of Canadian federalism responded to Indigenous claims for justice, well-being equity, and recognition of their rights and political status? Can Canadian federalism be reconciled with Indigenous peoples’ own inherent sovereignty and make space for the type of nation-to-nation relationships most of them strive for? There are significant obstacles to a fundamental transformation of the federation in light of Indigenous claims. Federalism, as a system of self-rule and shared rule, should in principle be amenable to the recognition of Indigenous peoples’ political status and jurisdictional autonomy. However, deeply embedded assumptions about state sovereignty, the existing division of powers between federal and provincial authorities, as well as institutions and practices inherited from our colonial past have proven highly resistant to change. The diversity in socio-economic and demographic conditions of Indigenous communities, not to mention the particularities of each nation’s historical relationship with the Canadian state, also make any consensus on institutional reforms difficult to achieve. That being said, some changes have taken place over the past few decades in the everyday dynamics of Indigenous, federal, provincial, and territorial relations. As is often the case in Canada’s federal system, the courts have been a major driver of these changes. The emergence of the duty to consult and other developments related to Aboriginal title have transformed how governments and industry actors interact with



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Indigenous communities in the context of land and natural resource governance. The implementation of modern treaties and self-government agreements is also reconfiguring intergovernmental dynamics in northern regions of the country. Less visible but nonetheless important changes have also taken place in the everyday dynamics of policy-making. Indigenous organizations are playing a growing, although still limited, role in Canada’s intergovernmental system. Federal and provincial authorities also increasingly seek to strengthen the legitimacy and effectiveness of their policies through collaborative bilateral processes involving Indigenous organizations and governing authorities. To be fair, these changes are more incremental than transformative in nature. They do not alter the fundamental power structures in Canadian federalism, nor do they recast what remains a profoundly unequal relationship built on the legacy of colonialism. But they have nonetheless led to the development of a complex and highly diverse system of multi-level governance that coexists with, without replacing, the structures and processes of Canadian federalism. This chapter documents this emerging multi-level system of governance and concludes with an assessment of its implications for Canadian federalism.

INDIGENOUS PEOPLES AND CANADIAN FEDERALISM: FACING THE LEGACY OF COLONIALISM Like all colonized societies, Indigenous peoples in Canada were forced into a system of governance that was imposed by external powers, who simply assumed sovereignty and claimed exclusive jurisdiction over their lands and communities. In the process, they were absorbed into the dominant settler political order without their consent. The final reports of the Royal Commission on Aboriginal Peoples (RCAP, 1996) and the more recent Truth and Reconciliation Commission (TRC, 2015) document this process of internal and permanent colonization, from the initial stage of diplomatic alliances and treaty making to the processes of land confiscation, forced cultural assimilation, and dismantlement of traditional forms of government. The impact of these colonial policies is still felt today.

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A Multi-Faceted Reality According to the 2016 Census, 1,673,785 individuals self-identify as Indigenous people in Canada, accounting for 4.9 per cent of the total population (Statistics Canada, 2017). Of this population group, 58 per cent identify as a member of a First Nation (or North American Indian), another 35 per cent self-identify as Métis, and 4 per cent as Inuit, the three groups formally recognized under section 35(1) of the Constitution Act, 1982. Beyond these statutory distinctions, there are more than 60 Indigenous nations in Canada today (RCAP, 1996, vol. 2), each with its own traditions, history, language, and sense of collective identity. While they are distributed across the country, 52 per cent of individuals who identify as members of an Indigenous group or nation live in urban areas. Indigenous groups only form a significant proportion of the population in the northern territories and, to a lesser extent, Saskatchewan and Manitoba (Figure 15.1). Their capacity to mobilize the traditional institutions of majoritarian democracy outside some very specific regions of the country is therefore limited. Table 15.1 presents a comparative snapshot of Indigenous well-being compared to that of all Canadians. These aggregated statistics hide significant regional and in-group variations, but they are nonetheless telling.2 The average income of Indigenous families is 28 per cent lower than the Canadian average. While they account for only 7 per cent of all children aged 0–4, Indigenous children account for 51.2 per cent of all foster children in this age group. These conditions are compounded by demographic trends; the Indigenous population is younger and growing faster than the Canadian average. A chronic housing crisis and a lack of basic infrastructure, such as sewage and drinking water, also affect the living conditions in many Indigenous communities. The statutory relationship between Indigenous peoples and the Canadian state also varies. According to section 91(24) of the Constitution Act, 1867, the federal government inherited responsibility over “Indians and the Lands reserved for the Indians.” Federal authorities have historically interpreted this responsibility through the Indian Act, which regulates reserved lands and establishes status rules regulating who can live on reserves and benefit from certain federal programs and exemptions. While most First Nations are still to this day governed under the Indian Act, Inuit, Métis, and members of First Nations who have lost their federal



Canadian Federalism and Indigenous Multi-level Governance

Figure 15.1.  Geographic Distribution of the Indigenous Population 90 80 70 60 50 40 30 20 10

es

C

m

Q

N O

L N

AB

BC

SK

B M

YK

T W

M

ar

iti

N

N

U

0

% of Indigenous people in the population Distribution of population reporting Indigenous identity across Canada Source: Statistics Canada (2017).

Table 15.1.  Comparing the Well-being of the Indigenous and Canadian Populations Indigenous Population

Overall Canadian Population

Average age

32.1

40.9

Employment rate (aged 24–65)

63%

76%

No high school diploma (aged 24–65)

29%

12%

Crowded housing

18%

8%

Single-parent families

34%

17%

Children living below poverty threshold

38%

16%

Women victims of violence

23%

9%

Sources: Statistics Canada (2017, 2018); MacDonald and Wilson (2016).

status (non-status Indians) are not. As I discuss below, the Supreme Court recently confirmed that federal responsibilities under section 91(24) apply equally to all Indigenous groups, including Métis and non-status Indians (Daniels, 2016). These statutory distinctions nonetheless continue to shape both federal policy and political identities among Indigenous peoples. It is also important to recognize the role of treaties in structuring Indigenous–Crown relations. Most First Nations in Ontario and the Prairies have signed historic treaties that settled their title to the land, but

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in large swaths of British Columbia, Quebec, Atlantic Canada, and the northern territories, no land cession treaties were signed. In the latter regions, a number of far more complex comprehensive land claims and self-government agreements were more recently negotiated, while the claims of many other nations simply remain unsettled. These different land and governance regimes create different institutional opportunities and constraints for Indigenous peoples to engage in key policy sectors, including land and natural resources management.

The Constraining Nature of Canadian Federalism Clearly, there is not one single Indigenous reality to be addressed with a single set of solutions. Indigenous peoples also face significant challenges related to the institutions of Canadian federalism themselves. Although the Royal Proclamation of 1763 recognized the status of Indigenous nations, no Indigenous representatives were invited to the Charlottetown and Quebec conferences of 1864, where the legal and political foundations of the Canadian federation were established. As a result, they never consented, explicitly or implicitly, to the division of authority over the land that resulted from the Constitution Act, 1867 (Russell, 2017). The institutions of Canadian federalism thus have very little, if any, legitimacy from Indigenous peoples’ perspective. Their exclusion from the federal partnership has very concrete implications to this day. I briefly underscore four of them here: (1) it constrains their aspirations for self-rule; (2) it limits their representation in the shared-rule institutions of the federation; (3) it entrenches conflicts with provinces; and (4) it reinforces their second-class status in terms of access to the services and programs associated with Canadian citizenship. First, and perhaps most significantly, while authority in a federation is divided between orders of governments, the doctrine of state sovereignty is still deeply entrenched in the British-inspired Canadian parliamentary system. There is therefore paradoxically – for a federal system – no space in the Canadian federation for the expression of political authority outside the two constitutionally recognized orders of government.3 As a result, from a strictly positivist constitutional perspective, Indigenous governments’ self-rule authority can only be delegated from the federal and provincial parliaments. This restrictive conception of sovereignty is the source of major conflicts with Indigenous peoples, most notably in



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the context of land and natural resources management. It leaves limited space for Indigenous nations to exercise what they consider their inherent jurisdiction on the land, as politically organized peoples predating the creation of the federation (Borrows and Coyle, 2017; Asch, 2014). As will be discussed below, the recognition and protection of “Aboriginal and Treaty rights” under section 35 of the Constitution Act, 1982, did instill a new dynamic in Indigenous–federal–provincial relations, but Canadian courts have so far been reluctant to recognize jurisdictional rights in their interpretation of section 35. Indigenous peoples therefore have little option but to unilaterally assert their jurisdiction or negotiate delegated autonomy on a case-by-case basis with federal and provincial authorities. Second, without formal status as federal partners, Indigenous peoples also have no statutory voice in the shared-rule institutions of the Canadian federation. Indigenous organizations and governing institutions have historically had only limited access to the important mechanisms of “interstate federalism” associated with the growing web of intergovernmental processes and institutions that characterize the Canadian federation. National Indigenous organizations are increasingly invited to multilateral intergovernmental meetings, but their status remains somewhat ad hoc and their influence in the decision-making process limited. Part of the challenge is one of representativeness. National Indigenous organizations like the Assembly of First Nations represent the interests of segments of the Indigenous population, but they are not the rights holders and title holders. Their legitimacy and authority as governmental actors therefore remain limited. Indigenous representation in the mechanisms associated with “intrastate federalism” also remain to this day contingent on the political context. There is no rule requiring minimal Indigenous representation in the House of Commons, the Senate, or the Supreme Court. The absence of Indigenous judges on the highest tribunal is particularly striking given the central role of the Supreme Court in interpreting Indigenous rights and arbitrating conflicts between those rights and federal and provincial jurisdictions. The 2015 federal election saw an unprecedented eleven Indigenous candidates elected to the House of Commons; this number was reduced to ten in the 2019 election. There were another eleven Indigenous senators (out of 105) at the time of writing. The appointment of Jody Wilson-Raybould as minister of justice in the Trudeau cabinet sent a strong message for Indigenous representation at the executive level.

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But as she herself conceded in the aftermath of her highly mediatized resignation from cabinet, Indigenous ministers, MPs, and senators can only have so much influence in a majoritarian system dominated by party discipline and cabinet solidarity (Canadian Press, 2019). Third, the division of powers in the Canadian federation also contributes to often tense relations between Indigenous peoples and provinces. Especially relevant in the Canadian context is provincial authority over public lands and natural resources. Provinces have both fiscal and political incentives to maximize regional economic development through natural resource extraction. They have historically done so without much regard for Indigenous rights and interests, which were seen as a matter of federal jurisdiction. In recent years, highly visible conflicts over hydroelectric developments, mining, oil and gas, or forestry, as well as housing developments on public lands for which the title is still contested by an Indigenous group, have made headlines in Canadian media. These conflicts, which often end up in court, contribute to a high degree of mistrust between the Indigenous peoples and provincial authorities. Finally, and not insignificantly, Indigenous people have long been, and continue to be, collateral victims of the competitive nature of Canadian federalism, especially with regards to the provision of social programs and services. Again, the conflict revolves around the interpretation of section 91(24) of the Constitution Act, 1867. In Daniels v. Canada (2016), the Supreme Court clarified that federal responsibilities under section 91(24) apply to all Indigenous peoples, including Métis and non-status Indians. This declaratory judgment was significant as it potentially limits the federal government’s practice of differentiating Indigenous peoples based on their status for programming and funding purposes. However, Daniels is silent on the specific content of federal responsibilities under section 91(24) (Isaac and Hoekstra, 2019). Debates over who should do what therefore remain as acute as before. The federal government still considers its funding of most Indigenous programs and services to be a matter of policy rather than a constitutional obligation. Provinces, on the other hand, have historically been reluctant to extend their social programs to the Indigenous population. The result is a complex maze of policies and programs under which it is not always clear who is accountable for the funding and provision of services taken for granted by other Canadian citizens.



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In healthcare, for example, First Nations, Inuit, and Métis historically access basic medicare services through their province or territory of residence. These services are funded through federal–provincial cost-sharing agreements, as they are for every other Canadian. However, provinces initially refused to extend to status Indians health programs that fall outside of the narrow definition of medicare in the Canada Health Act (Marchildon et al., 2017). The federal government compensated by directly funding and running a range of health programs for First Nations. These include the delivery of community-based health programs, home care, prescription drugs, and vision and dental care, among others. While Inuit have access to similar programs, Métis and non-status Indians do not – a situation that is arguably no longer sustainable following Daniels. The federal government also still directly funds and delivers some primary health services on remote reserves and Inuit communities where provincial or territorial services are not readily available. Similar dynamics are at play in education, child welfare, social assistance, and many other basic services (Papillon, 2019; Blackstock, 2016). This complex policy architecture creates blurry accountability structures and a tendency for blame shifting, sometimes with dramatic consequences. In a scathing decision from 2016, the Canadian Human Rights Tribunal concluded that the gap in federal services and funding for child and family services on reserves, compared with what other Canadians receive from their provinces, amounted to a form of systemic discrimination (First Nations Child and Family Caring Society et al., 2016). It called for significant reinvestments in federal services, but also for better coordination among federal, provincial, territorial, and Indigenous authorities in managing overlaps in responsibilities, including the full implementation of Jordan’s Principle.4 In addition to lacking legitimacy as a result of Indigenous people’s exclusion from the original federal compact, Canadian federalism has therefore not performed well as a system of governance and is not particularly effective at addressing the numerous legacies of colonialism, including ensuring Indigenous individuals receive the same basic services most Canadians take for granted. In fact, the institutions and processes of Canadian federalism have exacerbated conflicts with Indigenous peoples and have contributed significantly to the reproduction of the system of exclusion inherited from the colonial period. Not surprisingly, a number of Indigenous advocates and intellectuals argue a profound

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transformation of our federation is necessary to break with colonialism (Borrows, 2017; Henderson, 1994; Ladner, 2009).

A Renewed Nation-to-Nation Partnership? The redefinition of Canadian federalism in order to properly recognize the political status of Indigenous nations has been the object of many theoretical reflections over the years. While some have argued that Indigenous peoples could form a province, the small size, territorial dispersion, and diversity of communities make such a proposal ­impractical.5 In the context of Indigenous–settler relations, treaty federalism (Henderson, 1994), or treaty constitutionalism (Tully, 2008; Borrows, 2017; Ladner, 2009), is generally considered the alternative to the status quo most consistent with Indigenous visions of nation-to-nation relations. The insistence on nation-to-nation relations stems from the principle that Indigenous peoples were organized as political societies well before the arrival of Europeans, who themselves recognized this fact through the negotiation of military and economic alliances and treaties. To be sure, those early diplomatic relations were never egalitarian in nature. Europeans were convinced of their moral, cultural, and technological superiority and used treaties to circumvent the military threat posed by Indigenous nations, who at the time were numerically superior. But these agreements were nonetheless negotiated between nations. European powers recognized the political status and authority structures of the Indigenous peoples with whom they were negotiating (Russell, 2017). Indigenous peoples continue to this day to see treaties not as acts of subjection but as acts of mutual recognition, constitutive of lasting relationships between distinctive but interrelated and interdependent nations (Borrows, 2017). The revitalization of this original nation-to-nation relationship can take different forms. For the Royal Commission on Aboriginal Peoples, Indigenous governments should be recognized as a third order of government within the Canadian federation (RCAP, 1996: 215). Others argue instead for a treaty-based confederal model under which Indigenous governing institutions should be fully recognized for what they are: the expression of distinct constitutional orders that today continue to exist in parallel to Canada’s own Constitution (Borrows, 2017). While there are nuances in their respective positions, advocates



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of this stronger model of constitutional pluralism invite us to rethink Canada as a double federation, governed simultaneously through the 1867 division of powers and through the constitutional regime established progressively through treaties between the Crown and the original inhabitants of the land. Far from being subordinated to the 1867 order, for its advocates treaty constitutionalism constitutes the pillar on which the legitimacy of the Canadian state rests (Borrows, 2017; Ladner, 2009; Russell, 2017). Treaty-based federalism and constitutional pluralism propose sophisticated approaches for recasting settler–Indigenous relations on a nation-to-nation basis. These theoretical models nonetheless pose numerous practical challenges. Most significantly, it is not clear how shared-rule institutions would operate in a nation-to-nation model. While the assumption in theories of treaty constitutionalism is that Indigenous peoples should interact with Canada as a whole, it is simply impossible to ignore the growing importance of relations with provinces and territories. Should every single Indigenous nation have its own bilateral relationship with both federal and provincial governments? Would Indigenous peoples also be represented in the existing institutions of the federation, including federal and provincial legislatures? Who would arbitrate conflicts of jurisdictions – the Supreme Court of Canada or a distinct and autonomous judicial body? Moreover, as Alan Cairns (2000) argued twenty years ago in his critique of the RCAP model, it is not self-evident how one can reconcile a treaty-based, nation-to-nation association with a substantive conception of shared citizenship, a necessary condition to foster a sense of solidarity and co-operation across communities that are bound to live together in a common territory. Finally, these models assume some degree of fiscal autonomy for Indigenous governments. As history shows, equality in status means little without some balance in resources. To avoid the cycle of dependency on federal transfers, Indigenous governments would require own-sources revenues. In most cases, these revenues would come from economic activities on the land. While provinces may be willing to pursue greater natural resources revenue sharing with Indigenous communities, they are very unlikely to accept a significant transfer of lands and natural resources ownership. These obstacles are not insurmountable, but they illustrate the challenges in moving from ethical standards to more concrete institutional reforms.

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FROM THEORY TO PRACTICE: CHANGING RELATIONSHIPS BETWEEN INDIGENOUS PEOPLES AND CANADIAN FEDERALISM Theories of treaty federalism and constitutional pluralism offer enticing but idealized visions of a decolonized Canada. It is safe to say resistance to such profound transformations remains strong. As shown in the first section of this chapter, the institutional foundations and principles guiding Canadian federalism are not particularly conducive to the recognition of Indigenous nations as distinct sources of jurisdictional authority on the land. Powerful and well-entrenched political and economic interests also favour the status quo, especially within the provinces. The diversity and complexity of Indigenous realities also mean change is more likely to take multiple trajectories. Faced with the slow pace of reforms and deep-seated power structures, Indigenous peoples are no longer waiting for settler institutions to change. They are now increasingly and sometimes unilaterally reaffirming their decision-making authority and developing their own institutions of governance, including through the regeneration of their ancient but never extinguished legal orders and constitutional systems (Borrows, 2019). The situation of Indigenous peoples in Canada is also attracting increasing international attention, thanks to Indigenous activism on the global stage and the international resonance of the Truth and Reconciliation Commission and the more recent report of the National Inquiry on Missing and Murdered Indigenous Women and Girls, both of which have used the word genocide to qualify the legacy of colonialism in Canada.6 The United Nations Special Rapporteur on the Rights of Indigenous Peoples has repeatedly urged Canada to commit to the principles established in the United Nations Declaration on the Rights of Indigenous Peoples and, among others, address the well-being gap facing Indigenous peoples and the question of unsettled land claims (Anaya, 2014). Canadian federalism and the Canadian political community more broadly are not immune to such internal and external pressures. The Trudeau government publicly endorsed the UNDRIP in 2016 and supported a private member’s bill that would have committed Canada to review its laws and policies to comply with the principles established in the Declaration.7 The 2019 Speech from the Throne, opening Canada’s 43rd Parliament, further committed the government to “take action to



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co-develop and introduce legislation to implement the United Nations Declaration on the Rights of Indigenous Peoples in the first year of the new mandate” (Governor General of Canada, 2019). To various degrees, provincial governments are also committing to implementing the ­UNDRIP.8 While it is too early to assess the impact of the UNDRIP on the workings of Canadian federalism, it certainly creates a new standard against which the performance of its institutions will be measured. This section documents how and through which channels the institutions and mechanisms of Canadian federalism are adapting to Indigenous claims for justice and growing assertiveness in establishing their status and their jurisdictional authority. As it will become clear, none of these developments alters the foundations and structures of Canadian federalism. These changes are therefore best described as adaptive rather than transformative. That being said, their cumulative impact over time should not be neglected. Without disappearing entirely, hierarchical systems of authority are increasingly layered with more collaborative models of multi-level governance, under which Indigenous actors have a growing, if not equal, role in decision-making.9 I briefly highlight four developments that contribute to the emergence of this system of multi-level governance: (1) the implementation of land claims and self-government agreements; (2) the evolution of the Supreme Court’s jurisprudence on Aboriginal and treaty rights, especially related to the duty to consult; (3) the growing (but still relative) role of Indigenous organizations in the machinery of intergovernmental relations; and (4) the emergence and rapid growth of bilateral collaborative governance processes between Indigenous organizations and federal and provincial governments.

Modern Treaties and Self-Government Agreements Long considered a thing of the past, treaties re-emerged in the Canadian landscape in the aftermath of the Calder case of 1973. The Nisga’a Nation of British Columbia went all the way to the Supreme Court to have their governing rights on their traditional lands recognized in Canadian law. While the Nisga’a lost their case over a technical question, a majority of judges recognized for the first time the possibility that an Indigenous title on the land could have survived unilateral assertion of Crown sovereignty in areas of the country where no historic treaties were negotiated.

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The James Bay and Northern Quebec Agreement, signed in 1975, was the first in a series of negotiated agreements to address the question of unsettled claims. At the time of writing, twenty-five Comprehensive Land Claims Agreements (CLCAs), or modern treaties, had been negotiated and ratified in the northern territories, British Columbia, Labrador, and Quebec. The implementation of modern treaties has direct implications for Canadian federalism. Unlike their historic predecessors, modern treaties are detailed legal documents that, among other things, establish new land tenure regimes as well as co-governance and self-governance arrangements for their Indigenous signatories. Modern treaties vary in scope, and their impact on federal, provincial, and territorial authorities is not uniform. Although early treaties mostly created administrative regimes of delegated authority, some of the more recent ones recognize both exclusive and concurrent jurisdictions to Indigenous signatories in a number of policy areas, such as environmental stewardship, education, child care, culture, infrastructures, or the administration of justice. Most modern treaties also establish co-management rules for land and natural resources governance. While most co-management regimes are consultative only, some afford Indigenous peoples a direct say in the decision-making process (White, 2002; Rodon, 2003). The implementation of land claims and self-government agreements therefore gave rise to a vast array of structures and mechanisms for coordinating policies across levels of government. Wilson, Alcantara, and Rodon (2020) offer a rare comparative analysis of the impact of these multi-level governance processes and structures in three Inuit regions governed under a modern land claims settlement: Nunavik, Nunatsiavut, and the Inuvialuit settlement area. They conclude the capacity of Inuit to shape policies is significant in all three regions, but it varies from one institutional context to another and across policy sectors. While their impact is undeniable, modern treaties remain controversial. Negotiations can drag out over decades, and some Indigenous nations with unsettled claims simply refuse to engage in the negotiation of modern treaties. Those who have agreed to a modern treaty are also often struggling to have their agreement properly implemented (Fenge, 2015). Many treaty signatories end up in court defending their treaty rights against government agencies unwilling to fulfill their part of the deal or because of unclear divisions of responsibilities between the



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signatories. Part of the challenge is ideational in nature and has to do with the purpose of these agreements. Indigenous peoples tend to see modern treaties through the prism of nation-to-nation relations: these agreements are political compacts that should fundamentally recast their relationship with the state. For federal, provincial, and territorial authorities, modern treaties are seen more prosaically as legal transactions aimed at securing access to the land for economic development purposes. The primary objective for Canadian governments is “to obtain certainty respecting ownership and use of lands and resources” (Aboriginal Affairs and Northern Development Canada, 2014). The federal government has used different formulae over time to guarantee this legal certainty, but it generally requires that Indigenous signatories suspend or limit the exercise of their inherent rights in exchange for the rights and benefits defined in the treaty. This approach is obviously not consistent with a nation-to-nation vision of treaties as agreements between co-equal sovereigns. Indigenous peoples who enter the modern treaty process are effectively accepting a trade of their inherent authority on the land for a more limited – although potentially significant – recognition within the Canadian constitutional regime. Not all Indigenous nations are willing to make that choice, especially in light of recent court decisions that open alternative avenues for establishing their inherent jurisdiction on the land.

Judicial Interpretation of Aboriginal and Treaty Rights and the Duty to Consult Courts play a central role in arbitrating conflicts in Canada’s federal system. They also are key players in defining the parameters of relations with Indigenous peoples. This is especially true since the recognition of Aboriginal and treaty rights in section 35(1) of the Constitution Act, 1982. Section 35 rights operate as a constitutional shield setting partial limits on federal and provincial authority to regulate or impact Indigenous activities inherent to their cultures and traditional practices, most notably in the context of land, wildlife, and natural resources management. There is no space here to provide a comprehensive review of the Aboriginal rights jurisprudence (see Wilkins, 2018). I nonetheless want to briefly underscore three developments with particular relevance to Canadian federalism.

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First is the progressive displacement of section 91(24) of the Constitution Act, 1867 to the profit of section 35(1) of the Constitution Act, 1982 as the primary constitutional anchor for defining relationships between Indigenous peoples and Canadian federalism. As discussed, section 91(24) assigns to the federal government exclusive jurisdiction over “Indians and the Lands reserved for the Indians.” This was until recently assumed to establish a privileged and unique relationship between the federal Crown and Indigenous peoples. With some exceptions, provincial laws were presumed invalid when interfering with exclusive federal jurisdiction over “Indians” under the doctrine of interjurisdictional immunity. I have already discussed the jurisdictional confusion created by this division of powers based on status and identity rather than policy sectors. In a series of recent decisions, the Supreme Court has progressively displaced the centre of gravity of Indigenous–Crown relations by limiting the reach of federal exclusivity under section 91(24) and by increasing the role and responsibilities of provinces under section 35(1). While the court confirmed in Daniels that federal jurisdiction under section 91(24) applies to all Indigenous peoples, it also refused to define the scope of this responsibility. Instead, in a number of recent cases it insisted on expanding provincial responsibilities and limiting the application of the doctrine of interjurisdictional immunity in the context of infringement on Aboriginal and treaty rights, notably in relation to the duty to consult (see especially Grassy Narrows, 2014, and Tsilhqot’in, 2014). The long-term implications of this shift away from the doctrine of interjurisdictional immunity could be profound for Indigenous peoples, who can no longer pretend to have an exclusive relationship with the federal Crown (Isaac and Hoekstra, 2019; Borrows, 2017). The second jurisprudential development to underscore is the emergence of the (federal and provincial) Crown’s duty to consult and, when necessary, to accommodate Indigenous peoples when the exercise of their rights might be affected by a government decision or conduct (Haida, 2004). This duty to consult is having a major impact on the governance of lands and natural resources in Canada. Indigenous peoples now have a legal anchor to demand a greater role in the regulatory processes associated with the authorization of resource extraction projects on their traditional territories. Faced with the potential economic costs of protracted legal challenges, governments and private promoters are now



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forced to establish an array of mechanisms to consult, accommodate, and in some cases negotiate with Indigenous peoples over the environmental and social impact of projects, as well as share their economic benefits (Papillon and Rodon, 2017). The implementation of this jurisprudential doctrine is proving controversial and complex. The court has thus far defined the modalities of the duty to consult on a case-by-case basis, using a spectrum approach under which the scope of the Crown’s obligation depends on the nature of the project and its potential impact on Aboriginal rights. This approach has created a high degree of uncertainty as there are few criteria to clearly establish the level of required consultation and accommodation measures. Conflicts surrounding the Trans Mountain extension pipeline illustrate the perils in minimizing consultation with Indigenous peoples in the name of political and economic expediency. A group of Indigenous nations successfully challenged the federal process for approving the pipeline at the Federal Court of Appeal. The court ultimately quashed the cabinet authorization of the project and required a new round of more substantive consultations with affected Indigenous communities (Tsleil-Waututh Nation, 2018). While the duty to consult is arguably changing the way governments approve natural resource extraction and transportation projects in Canada, it remains a second-best alternative for Indigenous peoples who seek to assert their jurisdiction on the land. The Supreme Court is very clear that Indigenous peoples do not have a veto on government decision-making processes. The Crown (both federal and provincial) remains ultimately responsible for the final decision (Haida, 2004: 42). The duty to consult also remains grounded in a relatively limited conception of Indigenous participatory rights, especially compared to the principle of free, prior, and informed consent (FPIC) emphasized in the United Nations Declaration on the Rights of Indigenous People (see especially articles 19 and 32). The third key development directly concerns Indigenous jurisdictional rights on the land. In its 2014 Tsilhqot’in decision, the Supreme Court recognized for the first time an existing Aboriginal title, that of the Tsilhqot’in Nation, over 1,750 square kilometres of land in central British Columbia. The Aboriginal title, the court specified, is a proprietary right that includes ownership of surface and subsurface

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rights. From this declaration of Aboriginal title, the court added, follows the requirement to obtain Tsilhqot’in consent to economic activities on their lands. Again, this is not an absolute veto; the Crown can infringe on the Aboriginal title for a “compelling and substantial public purpose,” but this decision is arguably as close as it gets in terms of recognizing an Indigenous jurisdiction on the land. The possibility that other Indigenous nations could see their title declared in court is also a game changer in areas like British Columbia and parts of Quebec and the Atlantic provinces, where no land cession treaties were signed. While it is subject to a number of limitations, the declaration of title creates an additional judicial lever for Indigenous peoples to establish their legitimacy as decision-making actors in land and resources management. It also offers an alternative to the lengthy and costly process of negotiating land claim agreements.

Indigenous Participation in the Processes of Executive Federalism As was noted earlier, a central element compounding the limited legitimacy of Canadian federalism for Indigenous peoples has been their exclusion, as political entities, from its institutions and processes. The growing presence of Indigenous organizations in intergovernmental forums is undoubtedly an important development in this respect, even if their role remains for the moment limited and their participation governed by rather vague rules. The inclusion of Indigenous organizations in the mechanisms of Canadian intergovernmental relations (IGR) is not new. It dates back to the constitutional negotiations of the 1980s and early 1990s. Between 1983 and 1987, national Indigenous organizations were directly involved in the intergovernmental negotiations dedicated to the definition of ­Aboriginal rights under section 35(2) of the Constitution Act, 1982. Despite its ultimate failure, this process allowed the organizations involved to gain legitimacy and significant experience in dealing with the intricacies of intergovernmental negotiations. With the demise of mega-constitutional negotiations, Indigenous organizations lost some of their leverage and their participation in the various mechanisms of intergovernmental relations became more sporadic.



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Figure 15.2.  Indigenous Issues and Indigenous Participation in Ministerial IG Forums 30 25 20 15 10 5 0

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Indigenous participants

Source: Data collected by author with help from the Canadian Intergovernmental Conference Secretariat.

In recent years, Indigenous organizations have become more assertive and effective in putting Indigenous issues on the intergovernmental agenda. This shift can be traced back to the 2005 Kelowna Accord, a multilateral (federal–provincial–territorial–Indigenous) intergovernmental agreement proposing a five-year plan to foster socio-economic development in Indigenous communities. While the accord was never implemented by the newly elected Conservative government of Stephen Harper, it created a precedent for Indigenous representation in intergovernmental forums dealing with social and economic issues. Indigenous representation in IGR forums is now a common practice at all levels of the intergovernmental system, from administrative meetings to political summits among elected officials. While Indigenous participation in IGR is hard to measure, Figure 15.2 presents one way to quantify the change in recent years. It traces the number of publicly available intergovernmental press releases that mention Indigenous issues and those explicitly mentioning the presence of Indigenous representatives between 2012 and 2017. The data are only available for certain meetings at the ministerial level, but we can confidently suggest

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the pattern is reproduced at the administrative level, where most of the daily work of intergovernmental coordination is actually taking place (Gauvin and Papillon, 2020). Indigenous organizations are also active at the interprovincial level. A one-day session between national Indigenous organizations and premiers in advance of the annual meeting of the Council of the Federation (CoF) has been a routine practice since 2004. Some Indigenous organizations have been boycotting this pre-meeting in recent years, arguing they should be considered full-fledged members of the CoF instead of simply guests in a side meeting (Wesley, 2017). At the ministerial level, a permanent Aboriginal Affairs Working Group was established in 2009 for Indigenous organizations and provincial officials to work on common issues. In 2016, the federal government formally joined the group, which was renamed the Federal-Provincial-Territorial-Indigenous Forum (FPTIF). While it is becoming routinized, Indigenous participation in the IGR system is still not entirely institutionalized. Nor is the impact of this participation all that clear. The status of Indigenous organizations in such meetings is variable. Although they are sometimes full participants, they are more often simply observers or guests with a more limited role in discussions, as is the case for the CoF. While there are exceptions, Indigenous organizations also generally have a limited role in setting the agenda of meetings. As such, if they are certainly more than stakeholders, they are still not full-fledged partners in the machinery of executive federalism. There are obvious structural challenges to a stronger Indigenous role in IGR forums. With the multiplication of meetings comes a risk of overstretching the resources of what are relatively small organizations. But even if resources were sufficient, there are limits to the representational capacity and legitimacy of national Indigenous organizations. National Indigenous organizations like the Assembly of First Nations or the Inuit Tapiriit Kanatami represent the interests of segments of the Indigenous population, but they are not governments or nations in themselves. Their legitimacy and authority as governing actors therefore remain limited, as does their capacity to commit their respective membership to a particular position or to negotiate the necessary political compromises involved in intergovernmental policy-making, especially on matters affecting the rights of their constituents. Without changes to the structure of these organizations to ensure their representativeness and their capacity to act on behalf of their constituents, their role in intergovernmental forums will remain limited.



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Collaborative Policy-Making and Bilateral Forums The developments discussed thus far concern fairly high-profile aspects of the relationship between Indigenous peoples and Canadian federalism. Some fundamental, though less visible, changes are also taking place at the level of policy-making. Faced with a growing legitimacy deficit and increasing coordination challenges linked to the complex web of constitutional rights, treaties, and self-governance institutions that have emerged over time, federal, provincial, territorial, and municipal authorities increasingly engage in collaborative policy-making with Indigenous organizations and governing authorities. These collaborative governance exercises take multiple forms. Some are trilateral (federal–provincial/territorial–Indigenous). Some are bilateral. Some are formalized through agreements while others are more ad hoc and limited in time. Their scope and effectiveness also vary considerably. While some processes lead to successful collaboration and innovative policies, others produce little more than time-consuming meetings with little to show for it. Producing a comprehensive and accurate portrait of these mechanisms is an almost impossible task. I limit myself here to the description of some recent developments at the federal level and discuss some of the implications of growing bilateral relations between Indigenous peoples and the provinces.10 After years of difficult relations under the Conservative government of Stephen Harper, the Trudeau Liberals sought to instill a new collaborative culture with Indigenous peoples. In its first mandate, the Trudeau government notably established a series of bilateral and multilateral mechanisms to facilitate dialogue and jointly develop the new policies and legislative initiatives associated with its reconciliation agenda. In addition to an annual cabinet meeting with key Indigenous organizations, bilateral mechanisms were created with Inuit, Métis, and First Nations, alongside numerous sectoral tables, including education, health, child welfare, treaty implementation, self-government funding, and justice reforms (CIRNA, 2018b). Eighty specific tables were also established to negotiate new governance and funding arrangements directly with Indigenous communities, groups, and nations (CIRNA, 2018a). This model of collaborative policy development is certainly potentially more consistent with a nation-to-nation view of the relationship, but the real test remains in the Indigenous representatives’ ability to influence

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government decisions. These developments are still ongoing, but so far, some of these discussion tables have resulted in a real policy co-development process, including on funding for self-governing Indigenous governments (Nicol et al., 2020), while others remain more contentious. For example, the collaborative process to develop a Recognition and Implementation of Indigenous Rights Framework designed to replace the existing comprehensive land claims and self-government negotiation policies was marred by conflict and, at time of writing, remains in a stalemate (King and Pasternak, 2018). In other cases, the federal government chose to go ahead with policy reforms without full Indigenous support, such as with the Indigenous languages legislation and child and family welfare reforms adopted in 2019. While potentially innovative in their approach, the performance of these collaborative tables in creating the conditions for true policy co-development and in addressing the most pressing issues facing Indigenous peoples is therefore mixed at best and highly contingent. A comprehensive comparative review would be required to assess the factors leading to their success or failure, as well as the true influence of the Indigenous organizations that participated in these processes. While much attention is given to policy-level collaboration at the federal level, provinces, territories, and municipalities are also more than ever seeking collaborative processes with Indigenous authorities. In the case of provinces, which have long resisted the formalization of their relationships with Indigenous peoples, the change is remarkable and is intimately tied to the judicial developments concerning Aboriginal and treaty rights discussed above. Until the early 2000s, only a handful of provinces had a dedicated ministry or secretariat for relations with Indigenous peoples. Now, all provinces and territories do. The staff and budget for these units is variable and very much contingent on the government of the day, but the overall pattern is towards deeper and more systematic, if not necessarily always more constructive, engagement. A search limited to provincial government websites reveals close to 500 bilateral, trilateral, or multilateral political and administrative governance agreements were negotiated with Indigenous governments and organizations between 2000 and 2017 (Figure 15.3).11 The growth post-2005 corresponds to judicial developments concerning the duty to consult, which as mentioned forced provinces to systematically engage with Indigenous peoples over land and resources management issues. While the latter constitute by far the most prominent policy area for



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Figure 15.3.  Indigenous–Provincial Agreements 2000–17

NUMBER OF AGREEMENTS

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Source: Author’s compilation based on publicly available data from provincial governments.

provincial–Indigenous agreements (45 per cent), other agreements cover ­areas such as economic development (14 per cent), social policy (10 per cent), justice (7 per cent), and infrastructure (8 per cent). A ­significant number of “relationship” agreements (17 per cent) also seek to define the principles guiding bilateral relations and/or establish formal coordination channels at the political or administrative levels. British Columbia is by far the most active province in negotiating agreements with Indigenous peoples (more than 200 in the past fifteen years). The jury is still out on these multiple agreements and processes. Not all are equivalent in scope, nature, and impact. Some are simply joint statements establishing the groundwork for future arrangements, while others create more substantial responsibilities. Even in the case of more substantial agreements, the status of the Indigenous partner in resulting governance arrangements and decision-making processes can vary considerably, from a relatively limited consultative role to a central position in the decision-making process. Again, British Columbia arguably is the most innovative jurisdiction in Canada in this respect (Hudson, 2018). Recent agreements in the context of natural resources management recognize the principle of Indigenous consent and commit the province to unique forms of joint impact assessment and joint decision-making (Curran, 2019). British Columbia also successfully collaborated with

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Indigenous organizations to develop a legislative framework committing the province to implement the UNDRIP (British Columbia, 2019). Like multilateral IGR, the multiplication of bilateral processes, tables, negotiations, and follow-ups can also put a severe strain on the already limited resources of small Indigenous governments and organizations. Very few have the capacity to negotiate, let alone ensure the implementation of all these agreements. Anecdotal evidence in assessing the performance of these governance mechanisms, based on a limited number of interviews, suggests a good number of bilateral agreements are simply not implemented, thanks to a lack of follow-up mechanisms or inadequate resources and expertise on either side. Moreover, as with all other developments documented in this section, bilateral and trilateral policy processes, tables, and agreements do not, in and of themselves, change the status of Indigenous governments within the Canadian federal system. They nevertheless constitute a relatively effective innovation to compensate for the lack of legitimacy of classic federal institutions and mechanisms. They also allow Indigenous authorities (at least those recognized by the Canadian state) to engage more directly in policy development to address some pressing issues without jeopardizing their broader jurisdictional claims. If anything, through these multi-level agreements and processes, federal and provincial authorities de facto recognize the essential role Indigenous governments and organizations play in ensuring the legitimacy and effectiveness of their own policy processes.

CONCLUSION: A MOSAIC OF MULTI-LEVEL GOVERNANCE RELATIONS The relationship between Indigenous peoples and Canadian federalism remains uncertain and tentative. Their initial exclusion from the federal compact still looms large today, affecting not only the legitimacy but also the performance and effectiveness of the institutions and processes of Canadian federalism. While it is now part of the political vernacular among politicians and the mainstream media, the nation-to-nation or government-to-government model advocated by a large majority of Indigenous leaders, intellectuals, and advocates remains more theoretical than real. Multiple factors work against a significant reform of Canadian federalism to that effect, most significantly the institutional resilience of existing practices and conceptions of state sovereignty and governmental authority. The multi-layered political



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structures and profound diversity in the demographic and socio-economic conditions of Indigenous peoples also compound these difficulties. That being said, significant shifts have taken place in the everyday workings of Canadian federalism. Although they remain firmly anchored in the Canadian constitutional regime, modern treaties and self-government agreements provide their Indigenous signatories with unprecedented leverage to chart their own course on internal matters and develop multilevel governance capacities. The duty to consult on matters affecting Aboriginal and treaty rights and the legal uncertainty resulting from title claims also create new levers for Indigenous engagement in the policy process in the context of natural resource development. The growing participation of Indigenous organizations in the mechanisms of executive federalism is another significant development. While it raises its own set of issues in terms of legitimacy and accountability, Indigenous participation in executive federalism suggests a de facto recognition that Indigenous peoples should have a say in the definition of the intergovernmental agenda of the federation. The growing use of bilateral and multilateral collaborative policy processes at the federal and provincial levels similarly suggests that pragmatic adjustments are being made to make room for Indigenous agency in defining the policy agenda. Last, but not least, the United Nations Declaration on the Rights of Indigenous Peoples is progressively becoming the new standard against which the actions of Canadian governments are measured. While UNDRIP implementation remains contentious in Canada, its potential to shape our normative landscape should not be underestimated. The cumulative effect of these changes to the institutions and processes of Canadian federalism is hard to assess. As I have noted, these developments are so far more incremental than transformative; they do not alter the foundations of the Canadian federal system and are unlikely to address its fundamental lack of legitimacy from Indigenous peoples’ perspective. Are these new institutions and mechanisms performing well in facilitating reconciliation and a more collaborative approach to policy-making? Anecdotal evidence suggests substantive policy changes are limited and conflicts are still significant. Still, these developments point to an important trend: the multiplication of sites and actors engaged in Indigenous-related policy-making. While long the sole domain of federal jurisdiction, Indigenous policy is now a multi-actor and multi-level affair. Indigenous band councils, tribal

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councils, and self-governing bodies, as well as a vast array of local, regional, provincial, and national Indigenous organizations, are now increasingly engaged at various stages of the policy process. But Indigenous actors are not alone. I have underscored the growing role of provinces in this chapter, but territories and municipalities are also increasingly proactive at developing their own approaches and mechanisms to facilitate relations with Indigenous people. Corporate actors in the natural resource extraction sector are also increasingly proactive at developing private arrangements with Indigenous communities. Indigenous governance is becoming a much more complex and more crowded field as a result. This emerging system of multi-level governance is far from uniform. The political clout of Indigenous nations varies considerably according to their demographic and geographic situation, as well as their legal and institutional resources. There are also significant variations across policy sectors, which I could not explore in detail here. It is therefore perhaps more accurate to talk of a mosaic of multi-level governance relations, each with its own institutional framework and evolving dynamics. While these multi-level governance relations do not replace the old colonial order with a new nation-to-nation regime, they nevertheless change, for better or worse, how Indigenous peoples interact with the institutions of Canadian federalism. Only time will tell whether such incremental adaptations eventually lead to more legitimate and more constructive relationships between the Canadian federation and Indigenous peoples.

NOTES 1 Following the recent practice in the Canadian context, the term “Indigenous peoples” is preferred to the formally recognized term “Aboriginal peoples,” except when referring to official policies or laws. Canada formally recognizes three “Aboriginal” groups: Métis, Inuit, and First Nations (still often referred to as Indians). Distinctions are made between these three groups and ­between specific nations and communities whenever relevant in the text. 2 Unless otherwise specified, data in this section are from Statistics Canada (2018). 3 According to the oft-repeated doctrine established by the Judicial Committee of the Privy Council, “whatever belongs to self-government in Canada belongs either to the Dominion or to the provinces, within the limits of the British North America Act” (A.G. Ontario [1912]).



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4 Jordan’s Principle is a child-first approach to jurisdictional disputes that requires the government of first contact to fund health and social services to First Nations children that are normally provided to other Canadian children and to address payment issues later. It is named after Jordan River Anderson, a five-year-old boy from Norway House First Nation who died in a hospital while federal and provincial authorities in Manitoba argued over their responsibilities for the costs of his home care treatments. See Blackstock (2016). 5 The obvious exception here is Nunavut, where Inuit form a majority on a significant territory. 6 The TRC qualifies the term, using the concept of “cultural genocide,” while the NIMMIWG simply uses “genocide.” Without engaging in a complex debate on the appropriateness of these terms, it is safe to say they have powerful resonance in the international context and cast Canada in an unusual position in terms of its human rights record. 7 Bill C-262, An Act to Ensure that the Laws of Canada Are in Harmony with the United Nations Declaration on the Rights of Indigenous Peoples, died on the Senate’s order paper at the end of the Spring 2019 parliamentary session following Conservative senators’ delaying tactics. 8 At the time of writing, British Columbia was the only jurisdiction to have formally adopted the UNDRIP though legislation (British Columbia, 2019). 9 I use multi-level governance (MLG) here to describe processes and mechanisms of governance involving a variety of state and non-state actors across jurisdictional scales (local, regional, national, etc.) engaged in joint or collaborative policy-making and policy implementation. Unlike much of the literature on MLG, I do not assume these processes are non-hierarchical. For more detailed conceptual discussions of MLG in the context of Indigenous–federal–provincial relations in Canada, see, among others, Papillon (2015) and Alcantara, Broschek, and Nelles (2015). 10 For a discussion of relations with municipalities, see Alcantara and Nelles (2016). 11 This is an approximation. Many administrative agreements are not publicly listed. The search was conducted using provincial websites, annual reports, and estimates. GLOSSARY constitutional pluralism  The idea that Canada’s Constitution includes not only the 1867 and 1982 Constitution acts (and their amendments), but also Indigenous constitutional laws and traditions that predate the imposition of British rule. The coexistence of multiple constitutional orders should be regulated through treaties between the Crown and Indigenous peoples.

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Martin Papillon duty to consult  The obligation on federal and provincial governments to consult, and, when necessary, accommodate Indigenous peoples when the exercise of their rights might be affected by a government decision or conduct. free, prior, and informed consent (FPIC)  As defined in the United Nations Declaration on the Rights of Indigenous People, it commits governments to seek (and under certain circumstances obtain) the consent of Indigenous peoples in advance of a legislative measure or an executive decision that may affect their rights and traditional territories. It notably empowers Indigenous peoples to participate more actively in the decisionmaking process concerning natural resource extraction projects on their ancestral lands. non-status Indian  A person of First Nations descent who is not registered under the Indian Act. Royal Proclamation of 1763  Sets out governmental arrangements for the colonies that Britain had acquired from France and Spain with the end of the Seven Years’ War. It also states the British Crown’s commitments to “Indian nations or tribes” whose lands lay to the west of Quebec. It acknowledged that Indians possessed the lands they lived on. treaty federalism  (also referred to as treaty constitutionalism) A concept that explicitly identifies negotiated agreements between Indigenous peoples and other sovereign actors (governments) as constitutional documents. Treaty federalism recognizes a nation-to-nation relationship between Indigenous peoples and Canadian provincial and federal governments. United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP)  Adopted in 2007 at the UN General Assembly, this nonbinding but highly influential declaration charts the fundamental principles that should guide relations between states and Indigenous peoples. It notably recognizes the right of Indigenous peoples to selfdetermination. Canada initially voted against the UNDRIP in 2007 but has endorsed it since. At the time of writing, the Legislative Assembly of British Columbia is the only jurisdiction in Canada to have adopted UNDRIP implementation legislation. The Trudeau government committed to table similar legislation in Canada’s Parliament within the first year of its second mandate. REFERENCES Aboriginal Affairs and Northern Development Canada (AANDC). 2014. Renewing the Comprehensive Land Claims Policy: Towards a Framework for Addressing Section 35 Aboriginal Rights (Interim Policy). https:// www.aadnc-aandc.gc.ca/eng/1408631807053/1408631881247. Alcantara, Christopher, Jörg Broschek, and Jen Nelles. 2015. “Rethinking Multilevel Governance as an Instance of Multilevel Politics: A Conceptual



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Strategy.” Territory, Politics, Governance 4, no. 1: 33–51. https://doi.org /10.1080/21622671.2015.1047897. Alcantara, Christopher, and Jen Nelles. 2016. A Quiet Evolution: The Emergence of Indigenous-Local Intergovernmental Partnerships in Canada. Toronto: University of Toronto Press. https://utorontopress.com/ca/a-quiet -evolution-4. Anaya, James. 2014. Report of the Special Rapporteur on the Rights of Indigenous Peoples: The Situation of Indigenous Peoples in Canada. United Nations Human Rights Council. A/HRC/27/52/Add.2. Asch, Michael. 2014. On Being Here to Stay: Treaties and Aboriginal Rights in Canada. Toronto: University of Toronto Press. Barelli, Mauro. 2016. Seeking Justice in International Law: The Significance and Implications of the UN Declaration on the Rights of Indigenous Peoples. New York: Routledge. Blackstock, Cindy. 2016. “The Complainant: The Canadian Human Rights Case on First Nations Child Welfare.” McGill Law Journal 62, no. 2: 285–328 https://doi.org/10.7202/1040049ar. Borrows, John. 2017. “Canada’s Colonial Constitution,” In The Right Relationship: Reimagining the Implementation of Historical Treaties, edited by John Borrows and Michael Coyle, 17–38. Toronto: University of Toronto Press. ———. 2019. Law’s Indigenous Ethics. Toronto: University of Toronto Press. Borrows, John, and Michael Coyle. 2017. The Right Relationship: Reimagining the Implementation of Historical Treaties. Toronto: University of Toronto Press. British Columbia (Indigenous Relations and Reconciliation). 2019. Joint Statement on B.C. Indigenous Human Rights Legislation Passing Unanimously, November 26, 2019. https://news.gov.bc.ca/releases/2019IRR0061 -002283. Cairns, Alan. 2000. Citizens Plus: Aboriginal Peoples and the State. Vancouver: University of British Columbia Press. Canadian Press. 2019. “Feds Not Interested in Indigenous Reconciliation, Wilson-Raybould Says.” April 24, 2019. https://bc.ctvnews.ca/feds-not -interested-in-indigenous-reconciliation-wilson-raybould-says-1.4393866. Crown-Indigenous Relations and Northern Affairs Canada (CIRNA). 2018a. About Recognition of Indigenous Rights and Self-Determination Discussion Tables. https://www.rcaanc-cirnac.gc.ca/eng/1511969222951/1529103469169. ———. 2018b. New Permanent Bilateral Mechanisms. https://www.rcaanc-cirnac .gc.ca/eng/1499711968320/1529105436687. Curran, Deborah. 2019. “Indigenous Processes of Consent: Repoliticizing Water Governance through Legal Pluralism.” Water 11, no. 3: 571. https:// doi.org/10.3390/w11030571. Fenge, Terry. 2015. Negotiating and Implementing Modern Treaties between Aboriginal Peoples and the Crown. In Keeping Promises: The Royal Proclamation of 1763, Aboriginal Rights, and Treaties in Canada, edited

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Martin Papillon by Terry Fenge and Jim Aldridge, 105–37. Montreal: McGill-Queen’s University Press. Gauvin, Jean-Philippe, and Martin Papillon. 2020. “Intergovernmental Relations in Canada: Still an Exclusive Club?” In Canadian Federalism and Its Future: Actors and Institutions, edited by Alain-G. Gagnon and Johanne Poirier. Montreal: McGill-Queen’s University Press. Governor General of Canada. 2019. Moving Forward Together: Speech from the Throne to Open the First Session of the Forty-third Parliament of Canada, December 5, 2019. https://www.canada.ca/en/privy-council/campaigns /speech-throne/speech-from-the-throne.html. Henderson, James Youngblood. 1994. “Empowering Treaty Federalism.” Saskatchewan Law Review 58: 241–330. Hudson, Michael. 2018. “British Columbia-Indigenous Nation Agreements.” IRPP Insight, no. 20: 29. Isaac, Thomas, and Arend Hoekstra. 2019. “Identity and Federalism: Understanding the Implications of Daniels v. Canada.” Supreme Court Law Review 81, no. 3: 27–51. King, Hayden, and Shiri Pasternak. 2018. Canada’s Emerging Indigenous Rights Framework: A Critical Analysis. Yellowhead Institute. https:// yellowheadinstitute.org/wp-content/uploads/2018/06/yi-rights-report -june-2018-final-5.4.pdf. Ladner, Kiera. 2009. “Take 35: Reconciling Constitutional Orders.” In First Nations, First Thoughts: The Impact of Indigenous Thought in Canada, edited by Annis May Timpson, 279–300. Vancouver: University of British Columbia Press. Lightfoot, Sheryl. 2016. Global Indigenous Politics: A Subtle Revolution. New York: Routledge. MacDonald, David, and Daniel Wilson. 2016. “Shameful Neglect: Indigenous Child Poverty in Canada.” Toronto: Canadian Centre for Policy Alternatives. https://www.policyalternatives.ca/sites/default/files /uploads/publications/National%20Office/2016/05/Indigenous _Child%20_Poverty.pdf. Marchildon, Gregory P., Caroline A. Beck, Tarun R. Katapally, Sylvia Abonyi, James A. Dosman, and Jo-Ann Episkenew. 2017. “Bifurcation of Health Policy Regimes: A Study of Sleep Apnea Care and Benefits Coverage in Saskatchewan.” Health Care Policy 12, no. 4: 69–85. https://doi.org /10.12927/hcpol.2017.25097. National Inquiry into Missing and Murdered Indigenous Women and Girls (Canada), Canada, and Privy Council Office. 2019. Reclaiming Power and Place: Final Report of the National Inquiry into Missing and Murdered Indigenous Women and Girls. http://epe.lac-bac.gc.ca/100/201/301/weekly_acquisitions _list-ef/2019/19-23/publications.gc.ca/collections/collection_2019/bcp -pco/CP32-163-2-1-2019-eng.pdf.



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Nicol, Rosanna, Adam Perry, Bobby Clark, and Martin Papillon. 2020. “A New Relationship? Reflections on the Collaborative Federal Fiscal Policy Development Process.” Northern Public Affairs 6, no. 2: 34–40. http://www .northernpublicaffairs.ca/index/wp-content/uploads/2020/01/Pages -from-NPA_Vol_6_SPECIAL_ISSUE_2019_pg34-40.pdf. Papillon, Martin. 2015. “The Promises and Pitfalls of Aboriginal Multilevel Governance.” In The State of the Federation 2013: Aboriginal Multilevel Governance, edited by Martin Papillon and André Juneau, 3–26. Montreal: McGill-Queen’s University Press. ———. 2019. “Segmented Citizenship: Indigenous Peoples and the Limits of Universalism.” In Universality and Social Policy in Canada, edited by Daniel Béland, Gregory P. Marchildon, and Michael J. Prince, 137–54. Toronto: University of Toronto Press. Papillon, Martin, and Thierry Rodon. 2017. “Indigenous Consent and Natural Resource Extraction. Foundations for a Made-in-Canada Approach,” IRPP Insight, no.16, 2–26. Prime Minister’s Office (PMO). 2015. Minister of Indigenous and Northern Affairs Mandate Letter. https://pm.gc.ca/eng/minister-indigenous-and-northern -affairs-mandate-letter_2015. Rodon, Thierry. 2003. En partenariat avec l’état: l’expérience de cogestion des Autochtones du Canada, Quebec: Presses de l’Université Laval. Rodon, Thierry, and Martin Papillon. 2019. “Renewing the Relationship with Indigenous Peoples: An Ambitious Discourse, Limited Accomplishments.” In Assessing Justin Trudeau’s Liberal Government: 353 Promises and a Mandate for Change, edited by Lisa Birch and François Petry, 179–92. Quebec: Presses de l’Université Laval. Royal Commission on Aboriginal Peoples (RCAP). 1996. Report of the Royal Commission on Aboriginal Peoples, 5 vols. Ottawa: Communication Group Publishing. Russell, Peter H. 2017. Canada’s Odyssey. A Country Based on Incomplete Conquests. Toronto: University of Toronto Press. Starblanket, Gina, and Joyce Green. 2020. “What Is Happening on Wet’suwet’en Territory Shows Us That Reconciliation Is Dead.” Globe and Mail, February 17, 2020. https://www.theglobeandmail.com/opinion /article-what-is-happening-on-wetsuweten-territory-shows-us-that/. Statistics Canada. 2017. “Aboriginal Peoples in Canada: Key Results from the 2016 Census.” The Daily, October 25, 2017. https://www150.statcan.gc.ca /n1/en/daily-quotidien/171025/dq171025a-eng.pdf?st=FmYxZ_OD. ———. 2018. “First Nations People, Métis and Inuit in Canada: Diverse and Growing Populations.” http://publications.gc.ca/collections/collection _2018/statcan/89-659-x/89-659-x2018001-eng.pdf. Truth and Reconciliation Commission of Canada. 2015. Honouring the Truth, Reconciling for the Future: Summary of the Final Report of the Truth

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Martin Papillon and Reconciliation Commission of Canada. http://www.deslibris.ca /ID/218849. Tully, James. 2008. Public Philosophy in a New Key (Ideas in Context). Cambridge: Cambridge University Press. Wesley, Jared. 2017. “Three of the Five National Aboriginal Organizations (NAOs) Did Not Attend This Year’s Council of the Federation. Were They Justified in Their Boycott?,” Policy Options, August 16. White, Graham. 2002. “Treaty Federalism in Northern Canada: AboriginalGovernment Land Claims Boards.” Publius: The Journal of Federalism 32, no. 3: 89–114. https://doi.org/10.1093/oxfordjournals.pubjof.a004961. Wilkins, Kerry. 2018. Essentials of Canadian Aboriginal Law. Toronto: Carswell. Wilson, Garry, Christopher Alcantara, and Thierry Rodon. 2020. Nested Federalism and Inuit Governance in the Canadian Arctic. Vancouver: University of British Columbia Press. CASES A.G. Ontario v. A.G. Canada, [1912] A.C. 571. Calder et al. v. Attorney-General of British Columbia, [1973] S.C.R. 313. Daniels v. Canada (Indian Affairs and Northern Development), [2016] S.C.R. 12. First Nations Child and Family Caring Society of Canada et al. v. Attorney General of Canada (for the Minister of Indian and Northern Affairs Canada), [2016] CHRT 16. Grassy Narrows First Nation v. Ontario (Natural Resources), [2014] 2 S.C.R. 447. Haida Nation v. British Columbia (Minister of Forests), [2004] 3 S.C.R. 511. Tsilhqot’in Nation v. British Columbia, [2014] 2 S.C.R. 256. Tsleil-Waututh Nation v. Canada (Attorney General), 2018 FCA 153.

CHAPTER SIXTEEN

Municipalities in the Federation Jack Lucas and Alison Smith

INTRODUCTION The conceptual toolbox that political scientists have assembled to explain Canadian federal–provincial relations is like that of a high-end motorcycle mechanic: tall, deep, and full of precision instruments. Even so, these tools need recalibration for use in the municipal sector. This is not because the tools themselves are inappropriate; indeed, we will suggest that this book’s three core concepts – performance, effectiveness, and legitimacy – are entirely applicable to municipal intergovernmental relations. Instead, the tools need recalibration simply because municipalities are different from federal and provincial governments: different in their institutions, their policy responsibilities, their constitutional position in the federation, and their enormous variety across space and time. In this chapter, we describe municipal intergovernmental relations (IGR) in Canada in light of these differences, focusing on three questions: how are municipal–provincial, municipal–federal, and municipal–­ provincial–federal relations actually performed in Canada? How effective are these intergovernmental arrangements in producing good policies? And how legitimate are they in the eyes of political elites and the general public? To answer these questions, we rely on two main data sources. The first is a survey of more than 100 mayors and councillors across Canada, which we carried out in the summer of 2018 as a qualitative follow-up to a larger survey on multi-level policy involvement in Canada (Lucas and

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Smith, 2019a). The survey, closer to a structured interview than a forcedchoice questionnaire, consisted of a series of open-ended questions about municipal IGR; the resulting data provide rich new information about the details of intergovernmental interaction in the municipal sector. Second, we rely on a systematic review of more than 150 refereed books, chapters, and journal articles published in the past decade on subjects related to Canadian municipal IGR. Our aim is to provide an accurate survey for non-specialists and to identify new avenues of research for those who wish to explore the municipal sector in more depth. To aid in this further exploration, both of the data sources we use here – the survey responses and a summary table of the systematic literature review – are available online for use by other researchers.1

MUNICIPALITIES AND MUNICIPAL IGR Canada has one federal government, ten provinces, three territories – and some 3,700 municipalities (Taylor and Bradford, forthcoming). Ranging from tiny places like Star City, Saskatchewan (population 387) to global cities like Toronto (population 2.7 million), the governance structures and policy priorities of these municipalities vary profoundly. Nevertheless, a few foundational features are widely shared. First, unlike provincial or federal governments, municipalities enjoy no constitutional protection. In a legal sense, municipalities are “creatures of the provinces,” meaning that provincial governments have the constitutional authority to reform, restructure, and even eliminate municipalities as they see fit. In addition to what municipalities legally are – corporations whose shape and authority are outlined in provincial statutes and regulations – it is also important to be aware of what municipalities do. While exceptions abound, Canadian municipalities are generally active in four policy domains: protection and servicing of local property (e.g., fire, police, water, waste, sewage); provision of services tailored to local residents (e.g., public libraries, transit and local roads, parks and recreation); attracting individuals and businesses (e.g., economic development, tourism); and regulating local land development and use.2 Municipal governments interact with provincial and federal governments on all of these issues, along with other issues (such as immigrant settlement



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or homelessness) for which place-specific knowledge is an important ingredient in policy success. Canadian municipalities rely on a number of revenue sources to fund their activities in these areas of policy-making. In general, about half of municipal revenue is drawn from taxes on residential and non-residential (commercial) property, though this amount varies by province from a low of about 32 per cent in Saskatchewan to more than 60 per cent in Nova Scotia and Quebec.3 While some economists argue that this heavy reliance on the property tax is generally appropriate (Kitchen, Slack, and Hachard, 2019), it does create substantial challenges for municipalities during periods of economic downturn, especially when – as in Calgary in recent years – an economic downturn has geographically concentrated effects on property values within specific parts of a municipality. Some also see the property tax as regressive because it can disproportionately affect low-income households that are least able to afford it; for this reason, raising property taxes to generate new municipal revenue is controversial (Johal, 2019). Criticism of property taxes as a source of revenue for municipalities has thus been a common source of intergovernmental interaction between municipalities and provincial or federal governments. Aside from property taxes, about a quarter of municipal revenue consists of user fees, including charges on utilities such as water and sewers, license and permit fees, public transit fares, and entry fees for local recreation facilities or museums. Much of the remaining revenue – on average, about 20 per cent of municipal revenue in Canada – comes from provincial and federal grants. This dependence on provincial and federal grants for municipal operating and especially capital spending means that municipal interaction with provincial and federal governments on issues related to local finance is a consistent priority for municipalities. Adding another layer of complexity, the local arena is also home to thousands of special purpose bodies: public agencies with a narrow policy focus that operate at arm’s length from municipal councils, such as police commissions and library boards (Lucas, 2016). These special purpose bodies often involve intergovernmental interaction; examples include airport authorities (municipal, federal, and private-sector appointees), conservation authorities (municipal and provincial appointees), and waterfront redevelopment authorities (municipal, provincial, and

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federal appointees). These special purpose bodies play an important role in enabling intergovernmental activity at the local level.

Sources of Variation in Municipal IGR Despite similar corporate structures and policy responsibilities, the Canadian municipal sector is one of extraordinary variety: thousands of municipalities, alongside thousands more special purpose bodies, in ten distinct provinces, each local environment slightly different from the next. While this should not dissuade us from seeking out general patterns in the municipal sector, three particular dimensions of variation are especially crucial to keep in mind as we describe and assess Canadian municipal IGR. The first is size. Canadian municipal populations range from dozens to millions. Unsurprisingly, the character of intergovernmental interaction across these municipalities varies profoundly. In some large cities, city staff are devoted to intergovernmental relations full-time; in smaller places, despite substantial interest in intergovernmental interaction and advocacy, councillors told us that they simply “do not have the capacity” for ongoing IGR engagement or staff. This size-based variation is especially important because the policy interests of large and small municipalities also vary. In all Canadian municipalities, a core set of “bread and butter” issues, such as economic development and transportation infrastructure, are important regardless of population size. In big cities, however, a cluster of additional issues are layered atop the bread and butter issues, the most significant of which is public transit (Lucas and Smith, 2019b). Thus both the capacity of municipalities to engage in intergovernmental interaction and the issues on which those municipalities hope to engage vary substantially by population size. Municipal intergovernmental relations also vary profoundly by policy domain. In some domains, such as emergency management, municipalities generally “run the show” unless an emergency is serious enough to require provincial or federal assistance. In other domains, such as public health, a top-down approach is more common. Local intergovernmental relations in Canada are probably best envisioned not as a single distinct sector, but as a set of intersecting policy fields – education, health, transportation, and so on – each with its own patterns of intergovernmental interaction (Bradford, 2016; Lucas, 2016).



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Finally, we need to be aware of variation by province. Unsurprisingly, given that municipalities are a matter of provincial jurisdiction, municipal institutions and IGR vary across provinces. In general, however, these differences are less substantial than we might expect. Some provinces are certainly more “hands off” in their approach to municipalities than other provinces, and distinctive federal–provincial relations in particular provinces (especially Quebec) also shape the ways that municipalities engage with other governments. But trajectories of municipal reform and IGR have also converged in the past three decades such that variation within provinces is often as important as variation across provinces (Sancton and Young, 2009; Smith and Spicer, 2018). We must be attentive to variation in municipal IGR by province, but we may discover that this variation is often less substantial than variation by population size or policy domain. Despite similar institutional foundations and policy responsibilities, municipal IGR varies markedly by municipal population size, policy domain, and province. For practical purposes, three questions will often help a researcher scale down to a manageable level of complexity: What is the population size of the municipality we are investigating? What is the policy domain under consideration? And which province are we dealing with? Clear answers to these questions allow researchers not only to orient themselves to the relevant literatures, but also to undertake fruitful case studies and comparative analyses within and across these three dimensions of variation.

PERFORMANCE Performance is about how governments interact with one another: the constitutional division of powers, intrastate mechanisms of interaction, and intergovernmental mechanisms of interaction. Provided that we replace “constitutional division of powers” with “statutory/regulatory allocation of powers,” this breakdown also works nicely for outlining intergovernmental relations in the municipal sector.

The “Division of Powers” in the Municipal Sector Across most provinces, the past twenty-five years have been a period of increased policy-making authority for Canadian municipalities.4 Many

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provinces have amended their municipal statutes to widen the policy and governance authority of their municipalities, shift from a “laundry list” of permitted areas of municipal policy-making to a more expansive “spheres of authority” model, and in some cases add explicit recognition of municipalities as a democratically legitimate order of government. Some provinces have also made formal commitments to consult with the municipal sector before introducing major changes to municipal governing arrangements (Young, 2009). Alongside these general statutory reforms has been a growing recognition that additional fiscal and policy-making authority is appropriate for Canada’s largest cities. Nowhere has this movement been more prominent than in Toronto, where an imposed amalgamation and fiscal downloading in the late 1990s produced a movement for municipal autonomy whose rhetoric still occasionally resonates today. In 2006, the movement’s advocacy bore fruit in the City of Toronto Act, a statute that was far from the dreams of urban autonomy advocates but nevertheless provided the city with new revenue tools and more authority over municipal governance. While the extent to which statutes like the City of Toronto Act have meaningfully increased local autonomy remains a matter of debate, there is little doubt that cities do enjoy more room for action today than they did for much of the post-war period (Sancton, 2016; Smith and Spicer, 2018; Young, 2012). While distinctive big-city statutes have generally been welcomed in the Canadian municipal sector, their consequences have been complex. In Toronto, Mayor David Miller’s use of two new fiscal tools provided important new revenue but also fuelled a new rhetoric about “out of control spending” and “excessive taxation” in Toronto. These new fiscal tools can also complicate intergovernmental relations when cities seek funding from their provinces without having exhausted the tools at their disposal (Sancton, 2016). The enactment of big-city statutes, once largely the realm of urbanists and municipal policy wonks, is now a matter of macro-political debate; in Alberta, for example, the Canadian Taxpayers Federation campaigned against city charters for Edmonton and Calgary on the slogan “See Charter, Think Tax.” At one level, of course, vigorous debates about new municipal taxes are quite appropriate; it is good for municipal governments to be responsible for their revenue decisions, and provincial or federal transfers can create unpredictability, inefficiency, and clouded accountability



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(Slack and Tassonyi, 2017). But these debates are also likely to complicate future advocacy for municipal revenue tools, shape the revenue tools that cities do seek from their provinces, and make municipal mayors and councillors more aware than they once were that revenue-side “autonomy” may carry a new and hotly contentious fiscal politics in its wake.5 While provinces were restructuring the provincial–municipal “division of powers” in the 1990s and 2000s, important changes were also taking place in the relationship between municipalities and the federal government (Stoney and Graham, 2009). The most durable of these changes is in the area of infrastructure investment, which was initiated under Prime Minister Jean Chrétien and expanded under Prime Minister Paul Martin to include new institutions (e.g., Infrastructure Canada) and major new revenue sources (e.g., the federal Gas Tax Fund) to support placebased infrastructure investment (Adams and Maslove, 2014; Bojorquez, Champagne, and Vaillancourt, 2009). Stephen Harper’s Conservative government rebranded these initiatives as part of “Canada’s Economic Action Plan” amidst the 2008 recession, but the federal government’s underlying commitment to infrastructure investment continued (Champagne, 2014). Federal infrastructure investment has now persisted with remarkable consistency through several changes of government and party leadership, suggesting that this area of federal action has now become durably enmeshed within the Canadian intergovernmental system (Spicer, 2010). Alongside infrastructure, an evolving mix of federal place-based policy initiatives has also emerged over the past three decades (Taylor and Bradford, forthcoming). Regional development agencies, created in the 1980s to encourage investment and identify regional needs, are one important point of origin for these initiatives; this is especially true in the west, where Western Economic Diversification Canada initiated tri-level urban development agreements in Winnipeg, Vancouver, and other cities (Bradford and Wolfe, 2013; Leo and August, 2009). The National Homelessness Initiative, initiated in the late 1990s amidst a growing homelessness crisis, was another important instance of federal place-based intervention. In contrast to infrastructure, these initiatives have been more vulnerable to changes in government; urban development agreements, for example, were terminated in 2010 after a change in government in 2006 and despite plans to extend them to Toronto and

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other cities (Doberstein, 2011). We will discuss the success and failure of these initiatives in more detail below. To summarize: the Canadian municipal sector has witnessed substantial changes in patterns of intergovernmental interaction and statutory authority since the 1990s. At the provincial level, these changes have involved new statutes providing municipalities with somewhat wider policy-making authority, “city charters” providing additional autonomy to big cities, and commitments to consult with municipalities on further changes. At the federal level, interventions in the “cities and communities” sector, ranging from new funding streams to bold experiments with tri-level governance, make the federal government a more important presence in the lives of municipalities than they once were. From the municipal perspective, questions of policy autonomy and responsibility will always play out primarily in relation to the provinces, which have the power to shape every detail of their formal authority and with whom municipalities are deeply entangled in nearly every area of policy-making (Coté and Fenn, 2014). However, federal interest in place-based policy issues, and the federal–provincial relationships through which those interests are filtered, also affects policy priorities and opportunities in municipalities across Canada.

Intrastate Relations and Canadian Municipalities Scholars of federalism have long noted the absence of intrastate mechanisms for the management of regional and provincial cleavages in Canada, as well as the effects of this absence on the role of premiers as provincial representatives. But does the same pattern apply at the municipal level? In our survey, we asked mayors and councillors to explain how they interact with provincial and federal governments, and one of the most striking findings in their responses was the frequency with which they mentioned their local MLAs and MPs.6 Again and again, mayors and councillors told us that a good relationship with their provincial or federal representatives was vital for successful intergovernmental relations. “Our municipal government,” wrote one respondent, “depends on a strong relationship politically with our sole MP.” Other respondents agreed, listing “coffee with MP,” “regular contact with MLAs,” and “regular meetings between council and our MPs” as a key municipal–provincial



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and municipal–federal connection. Thus one of the roles of provincial and federal legislators in the Canadian intrastate system – a role that has largely gone unnoticed – is to champion the interests of their local municipalities. This intrastate dimension of municipal–provincial and municipal–­ federal relations has several important consequences for municipal IGR. First, because Canadian legislatures are structured by political parties into government and opposition benches, municipal politicians have a special interest in building connections with government MLAs and MPs – while also maintaining relationships with opposition MLAs and MPs who may one day form government themselves. One survey respondent, after listing “phone calls and contacts with MLA” as an important element of municipal–provincial relations, added a caveat: “unfortunately not on government side.” Another told us that “the [federal–municipal] relationship was easier when the federal government was Conservative and the municipality was represented by a Conservative MP. But today we have NDP MP [name removed]. To get a response is a lot more effort and a waiting game.” Since municipal politicians are largely interested in policy action – funding, statutory amendments, regulatory changes, and so on – they have a particular interest in making connections on the government side of the legislature, where the policy-making action resides. A second consequence of the intrastate role of MPs and MLAs in municipal IGR is that patterns of provincial and federal electoral competition have important spillover effects on the municipal policy priorities of higher-order governments. For example, many observers have noted that the Martin government’s New Deal for Cities and Communities emerged partly because “many Liberal MPs have seats based in Ontario’s big urban centres ... In Toronto alone, the Liberal Party has a large number of MPs, many of whom have marginal seats” (Stoney and Graham, 2009: 374–5; also Doberstein, 2011; Young and McCarthy, 2009). Other researchers have noticed the similar potential for federal place-based policy attention to shift toward suburban regions as they become key electoral battlegrounds in Canadian federal and provincial elections (Taylor, 2018). Municipalities in these electoral battleground regions may find that provincial or federal political parties are especially sensitive to their needs.

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Intergovernmental Relations and Canadian Municipalities We now turn to more familiar terrain: intergovernmental interaction among municipalities and provinces, municipalities and the federal government, and, occasionally, all three at once. Compared with ­federal–provincial relations, intergovernmental interaction in the municipal sector is generally much less formalized, more closely resembling the “fluid, problem-driven, task-specific interaction” (Horak, 2012a: 341) that is characteristic of Hooghe and Marks’ “Type II” multi-level governance (Hooghe and Marks, 2003). In this environment, personal relationships and networks of reciprocity and trust are often vital for success (De Belleval, 2011). Still, formal interaction does occur in the municipal sector, and a number of important and innovative intergovernmental arrangements have emerged in the past several years. For municipalities, the most deeply institutionalized mechanism for interaction with other governments is the annual municipal conference. Held at both the provincial and federal levels, these conferences are a vital “cog in the system” of Canadian municipal IGR (Young, 2009: 491). To the extent that something like “executive” interaction has become recurrent and institutionalized in Canada, it has done so primarily by means of these conferences.7 Annual municipal conferences play two main roles in Canadian IGR. The first is the opportunity for municipalities to pass resolutions calling upon provincial or federal governments for specific action. These range from the general to the specific, but all are important; as Alison Shott explains, “municipalities draft resolutions with the knowledge that, if they are passed, they will be seen and responded to by the relevant government ministry” (Shott, 2017: 119–20). Across Canada, resolutions passed at annual conferences provide a vital mechanism for municipal governments to place issues on the provincial or federal agenda. The second important intergovernmental role of the annual municipal conference is to provide an opportunity for mayors and councillors to interact directly with provincial and federal cabinet ministers. While some of our survey respondents felt that “bear pit sessions” with ministers at



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annual conferences are more theatre than substance, many respondents suggested that scheduled and informal meetings with ministers were vitally important for their municipalities. In most provinces, attendance by the minister of municipal affairs is fully institutionalized, and attendance by other ministers, along with the premier, is also common. Aside from annual conferences, municipal intergovernmental engagement across Canada is much more variable, particularly along each of the dimensions we outlined above: city size, policy domain, and province. In our follow-up survey, we asked mayors and councillors to describe a municipal policy domain that involved high levels of intergovernmental interaction, and then asked if there were established venues for interaction on those files. In some cases, our respondents mentioned venues such as staff-level relationships, regular committees, or scheduled meetings at annual conferences. In many other cases, however, respondents noted a need for more established communication channels even in the areas they identified as involving high levels of interaction, such as policing. In general, the intergovernmental relationships described in these responses were informal, ad hoc, and short-lived. In some cases, however, municipal intergovernmental relations are embodied in formal institutions, often special purpose bodies with appointees from multiple levels of government. In health policy, for example, municipal and provincial representation on local and regional bodies has been common, though the provincialization of the public health system in many provinces has reduced the number of these institutions (Church and Smith, 2008). Other examples include airport commissions, conservation authorities, regional transit authorities, and economic development agencies. In some cases, politicians sit as members of these bodies themselves, while in other cases, civil servants or appointees represent their respective governments (Doberstein, 2013). While they are rare, formal tri-level governance structures, involving representation from municipal, provincial, and federal actors, also exist in Canada, and they have received considerable recent attention from Canadian scholars. Originating with short-lived tri-level conferences under the Pierre Trudeau Liberals in the 1970s, tri-level interaction surged into prominence again in the 1990s and early 2000s. Urban development

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agreements – tri-level agreements “created with the purpose of tackling complex and intersecting social and economic problems in an urban context” (Doberstein, 2011: 530) – are one good example. Harbours and waterfronts are another area in which tri-level governance structures have arisen in Canada; the latter include Halifax Harbour Cleanup, the Lachine Canal Revitalization, the Winnipeg Forks Corporation, and Waterfront Toronto (Eidelman, 2013). In the larger scheme of Canadian municipal IGR, formal tri-level governance remains rare, but these examples serve as a reminder of the possibility of tri-level arrangements in Canada and often serve as a source of inspiration for those in the municipal sector who hope to pursue innovative tri-level arrangements in their own policy domains. One final variant of municipal intergovernmental relations is what we might call “supervisory” or “regulatory” IGR. While most provinces govern their municipalities with a lighter hand today than in the past, provincial supervision of municipal activity remains pervasive. In land-use planning, provincial quasi-judicial bodies can be significant constraints on local development policy. Municipal finance in Canadian provinces is overseen by provincial bodies such as the Commission municipal du Quebec. In Ontario, local public health authorities are intensively monitored by the Ministry of Health and Long-Term Care. Several provinces have imposed mandatory municipal benchmarking and performance measurement schemes on their municipalities; Ontario was the first jurisdiction in North America to do so (Schatteman, 2010). While the extent of this supervisory activity varies by province, it is present everywhere, and examples abound of local issues in which the supervisory hand of the province weighs heavily on local outcomes.

EFFECTIVENESS Nearly everything that municipalities do, and practically every place-based policy enacted by any level of government in Canada, depends in some way on successful intergovernmental activity. In this section, we focus on just a few examples of complex and high-profile policy outputs that have resulted from intergovernmental interaction in recent years. We also consider whether intergovernmental policies and initiatives have



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been successful – recognizing that success to one order of government may well look like failure to another – and identify some factors that have led to those successes.

Municipal IGR and Policy Outputs Perhaps the most important outcome of municipal intergovernmental relations in recent decades is a new commitment by both provincial and federal governments to place-based infrastructure investment. After years of strenuous advocacy by the Federation of Canadian Municipalities, big city mayors, and urban MPs within the federal Liberal caucus, programs such as the federal Gas Tax Fund (GTF) have provided funding for thousands of infrastructure projects across the country (Dahlby and Jackson, 2015). Under the GTF, the federal government transfers funds to provinces or municipal associations, which then distribute those funds to municipalities.8 Some have expressed concerns about clouded accountability, inefficiency, and distorted priorities that can result from federal and provincial funding for local infrastructure, but within the municipal sector, many see the GTF as a successful example of municipal issues being taken seriously by the federal government (Adams and Maslove, 2014; Stoney and Graham, 2009). Another important result of intergovernmental interaction has been the Homelessness Partnering Strategy (HPS).9 Through the HPS, the federal government bypasses provinces and transfers funds directly to local actors (both municipalities and non-profit organizations) for projects that meet the immediate needs of the homeless population.10 One of the main objectives of the HPS for the federal government was to build local capacity in addressing homelessness, an objective that was quickly achieved (Klodawsky and Evans, 2014). From the local perspective, however, the success of the program is less clear. Local actors were seeking permanent and long-term solutions to homelessness, an objective that was not met by funding and timelines associated with the Homelessness Partnering Strategy (Doberstein, 2016; Smith, unpublished manuscript). Across Canada, tangible policy outcomes resulting from municipal intergovernmental interaction are commonplace. In many cases, the intergovernmental interaction involved in these policy outputs is minimal: a municipal application for funding from the federal government;

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approval of a municipal policy decision by a provincial oversight body; an informal phone call between a mayor and a provincial minister of municipal affairs to clarify the details of an upcoming regulatory change. As intergovernmental interaction becomes more intensive, however, frustration among municipal officials with the process also mounts. When we asked mayors and councillors in our survey if there are any areas in which intergovernmental initiatives are particularly difficult, some respondents provided long lists of policy issues, and one simply responded, “most.” Complex policy files, such as the environment, transit, housing, and homelessness, were especially common in these responses. Thus it might be most appropriate to characterize municipal intergovernmental policy outputs in Canada on two tracks: ordinary day-to-day interaction, which works reasonably well, and intensive interaction on complex files such as homelessness and climate change, where there is still much room for improvement.

Success and Failure in Intergovernmental Policy-Making Unsurprisingly, policies and actions resulting from municipal intergovernmental interaction in Canada vary widely in their effectiveness. Still, scholars have identified several factors that appear to increase the likelihood of success: agenda alignment, institutionalization, and coordination among governments. Intergovernmental policy development is more likely to lead to effective policy outcomes when the agendas and interests of the actors ­involved are aligned. This alignment occurred with the Gas Tax Fund, for example. While the GTF was designed to meet the infrastructure needs of municipalities, the federal government was also able to use the transfer to meet some of its own interests as well, such as attempting to meet Kyoto Protocol targets (Adams and Maslove, 2014). Similarly, urban development agreements emerged in western Canada when local needs aligned with the activist federalism and strategic electoral priorities of the federal Liberal Party. Despite ongoing local interest in the urban development agreements program, the Harper government’s very different federalism agenda meant that the program was terminated in 2010 (Doberstein, 2011). Our survey respondents also emphasized the importance of agenda alignment. One respondent indicated that governments, as well as private



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and non-profit sectors, have different goals and interests when it comes to homelessness policy-making, which has prevented the development of long-term solutions. Another respondent explained, “changes in government are the most difficult ... When they start to undo everything and change the directions, priorities and policies of the previous government, municipalities suffer.” Since agenda alignment can be fleeting, institutionalization of intergovernmental interaction is another important ingredient in policy effectiveness. Regular and formalized interaction among governments has been an element in policy success in immigrant settlement policy in Ontario (Andrew and Hima, 2019; Bradford, 2016; Good, 2009), and the successes and failures of waterfront redevelopment policy in Toronto are partly related to the institutionalization (and de-institutionalization) of waterfront governance institutions (Eidelman, 2013). Within these more institutionalized environments, Doberstein (2013) has suggested that institutionalized governance networks overseen primarily by bureaucrats rather than elected officials are more likely to persist through time. A final and closely related ingredient in successful intergovernmental outcomes is coordination among the activities of the governments involved. For example, despite a mixed track record overall, Waterfront Toronto’s successes resulted from carefully coordinated action among governments (Eidelman, 2013: 19). Much the same is true in immigrant settlement policy (Good, 2009). Coordination between local actors and the provincial government has also led to responsive and effective local economic development policy (Klein, Tremblay, and Fontan, 2014). Equally clear in the literature are the negative consequences of a lack of coordination among actors. The City of Vancouver has been a leader in its efforts to fight climate change, but its efforts have been weakened by a lack of coordination with provincial and federal governments (Jones, 2012). Other recent case studies – ranging from federal land development in Halifax (Finbow, 2012) to homelessness in Montreal (Smith, 2018) – make similar arguments about the need for more coordination with municipalities. Coordination must take place not only between but also within governments. Horak (2012a) finds that governments that are more internally coherent, with departments and agencies coordinating and planning with one another, tend to be more effective partners on the

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intergovernmental stage and produce more effective policies. Internal organization has also been identified as an important factor leading to effective policy outcomes with respect to immigrant settlement (Good, 2009) and local economic development (Ircha and Young, 2013).

LEGITIMACY The legitimacy of Canada’s municipal intergovernmental arrangements is a matter of ongoing concern and frustration for municipal elected officials. Local actors often believe that they are not included in, and are even actively excluded from, important policy debates and discussions by their provincial or federal counterparts. Despite important changes in the municipal sector, many municipal elites, especially those in big cities, continue to feel frustrated by their limited involvement in policy areas that affect their communities.

Municipal Exclusion from Decision-Making Examples of municipal frustration about the legitimacy of intergovernmental arrangements are abundant in the literature. In Ontario, residents and municipal planning professionals feel ignored on important decisions about wind turbines (Christidis and Law, 2012). In public safety, municipalities are treated “as appendages of the provinces” and are thus “deprived of voice and resources” (Hataley and Leuprecht, 2014: 522). In public health, municipalities were excluded from intergovernmental decision-making in the aftermath of the SARS outbreak; one leading public health professional complained that local public health authorities were treated as “invisible and irrelevant” (Juillet and Koji, 2014: 54). Similar complaints have arisen in the area of federal land development (Summerville, Wilson, and Young, 2013), and in Toronto, local actors remain frustrated about having been “pushed out” of regional transit network planning processes (Tremblay-­ Racicot, 2018). Despite some intergovernmental success stories in recent years, municipal actors across a range of policy domains continue to have serious concerns about their role in the Canadian intergovernmental system. Our survey respondents expressed many of the same sentiments. “I sometimes have the impression,” one councillor wrote, “that ... senior orders of government make decisions and impose them on us.” Another



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respondent wrote that “we only wish they would listen and act on more of our ideas.” While more specific survey responses about particular policy domains were often more positive and optimistic in tone, the responses reflect a continued sense that municipal elites are not adequately respected in the intergovernmental arena.

The Value of Municipal Voices Municipal concerns about powerlessness are often coupled with the argument that municipalities are local experts whose knowledge should not be ignored. Local actors do not always argue they should lead in policy development, and they rarely insist on sole policy responsibility. But they do believe, often passionately, that they have an important role to play and valuable contributions to make in policy development and implementation, a role that is not always taken seriously by senior governments. “While it is certainly worthwhile to work with the senior levels of government,” one survey respondent explained, “it is obvious that policies are often crafted without input from the region. This can be very frustrating and makes life difficult when you have (particularly provincial) programs that are counterproductive to the economic and social well-being of the region.” Another respondent suggested that “we are made to make our project fit what they are willing to offer.” In big cities, where municipal policy-making capacity is at its highest, these concerns are especially pronounced. One senior official in Toronto recalled how the city attempted to become more involved in housing policy development, in part by highlighting the expertise and experience city officials had in the domain. “One of the things I said is ‘Toronto is Canada’s biggest landlord. How can you have a conference on housing without having the biggest landlord there?’” (Smith, unpublished manuscript). These efforts were rebuffed by senior governments, and city officials were denied even observer status at annual meetings of provincial housing ministers. Despite these frustrations, examples of genuine municipal involvement in provincial and federal policy-making processes appear to be increasing. In Northern Ontario, Charles Conteh (2013) has found that municipalities “have been assuming greater policy responsibility and attendant policy autonomy and discretion, including the governance of local economic development” (1419–20), resulting in a less hierarchical and more collaborative relationship between municipalities and

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the province. Provincial governments across Canada have made genuine efforts to respect municipal interests and involve municipalities in ­policy-making processes (Lesage and McMillan, 2009; Smith and Stewart, 2009; Garcea and Story, 2012). Many of our survey respondents noted that efforts to build strong relationships with senior governments are difficult and time-consuming, but in some policy areas, at least, their perspectives are heard and efforts to collaborate are indeed worthwhile.

Public Opinion on Legitimacy in Canadian Municipal IGR As in other areas of Canadian IGR, public opinion data on the legitimacy of municipal intergovernmental relations and the municipal role in the Canadian intergovernmental system are limited. Survey data from Toronto and other large Canadian cities suggest that Canadians see their municipalities as important and influential for their daily lives, and municipal voters appear to differentiate among levels of government when judging their incumbents’ economic performance (Anderson et al., 2017). As for intergovernmental relations more specifically, a recent analysis of the Doug Ford government’s last-minute reforms to Toronto’s ward boundaries found that Torontonians are generally not supportive of the idea that the Government of Ontario should have the power to make changes to Toronto’s municipal government. However, these attitudes vary strongly by partisanship; Toronto Conservatives were much less concerned than were others about Ford’s intervention in Toronto’s civic affairs (McGregor, 2018). Additional survey research on a wider array of issues will help to clarify how Canadians feel about the municipal role in the intergovernmental system and how much their attitudes are shaped by the partisanship of the provincial or federal governments involved in intergovernmental relations.

CONCLUSION Our aim in this chapter has been to provide a broad survey of Canadian intergovernmental relations from the municipal perspective. We first outlined profound changes regarding the performance of municipal intergovernmental relations involving both provincial and federal governments over the past twenty-five years. These changes have generally resulted in



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increased policy authority for municipalities, increased provincial and federal attention to place-based issues, and new sources of funding for local infrastructure and other programs. Our survey of local councillors and literature review revealed the importance of informal mechanisms, such as a good relationship between city councillors and their provincial or federal representatives, to the performance of municipal IGR. Importantly, however, provincial and federal municipal association meetings allow for more formal intergovernmental interactions as well. Intergovernmental policy-making arrangements that have resulted from these changes range from those considered quite successful to mixed successes to areas of ongoing frustration and even failure. The effectiveness of municipal IGR thus varies widely. In some instances, such as place-based infrastructure investment, we found that intergovernmental relations worked well and led to effective policy outputs. We also found instances in which intergovernmental relations failed to produce effective policies, notably with respect to climate change adaptation. As policy issues become more challenging, intergovernmental interactions tend to become more difficult; in light of these challenges, we have suggested that agenda alignment, the institutionalization of IGR, and the coordination of actions are particularly important for effective intergovernmental interaction and policy outputs. Local actors expressed a great deal of frustration regarding their role in IGR, claiming that their voices are not solicited, heard, or included in the development of policies that affect and involve them. While examples of genuine municipal involvement in the policy process are increasing, these sentiments remain widespread and damage the legitimacy of those interactions. Future research on the changing character of provincial–municipal relations, more comparative research across policy domains, and largescale quantitative research including surveys of municipal residents, councillors, and mayors will further illuminate patterns of intergovernmental performance, effectiveness, and legitimacy in the Canadian municipal sector. While there remains much room for improvement in Canadian municipal IGR, decades of advocacy by the Canadian municipal sector, combined with profound and ongoing post-war demographic and economic change, have produced an intergovernmental environment in which municipalities (especially big cities) play an important role in policy advocacy, development, and implementation.

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Jack Lucas and Alison Smith NOTES 1 See https://doi.org/10.5683/SP2/5LIELB. 2 See Sancton (2009) for a more comprehensive overview. 3 These figures are for 2018 and are drawn from Statistics Canada Table 10-10-0020-01. 4 It is worth noting, however, that the 1990s and early 2000s were also a period in which top-down amalgamations of municipal governments were also common. See Sancton (2000). 5 New municipal authority for other provisions, such as inclusionary zoning, may add further heat to these debates. 6 More than half of our respondents in the follow-up survey mentioned MPs in their discussion of municipal–federal relations, and more than onethird mentioned MLAs/MPPs/MNAs in their discussion of municipal– provincial relations. 7 Well over half of our follow-up survey respondents mentioned provincial and/or federal conferences as an important arena for intergovernmental interaction. 8 An important exception is in Quebec, where the province contributes matching funds and requires that municipalities do so as well. 9 Called the National Homelessness Initiative from 1999 to 2006. 10 As with the GTF, the HPS operates differently in Quebec. The authors would like to thank James Ankers for his excellent research assistance. We are also grateful to the University of Toronto for financial support. GLOSSARY big-city statutes or city charters  Legislation or regulations that confer on a specific city powers (with respect to raising money or policy-making) that other municipalities in the same province do not share. intrastate dimension of municipal–provincial and municipal–federal relations  Refers to the representation of municipal officials’ concerns by elected members of the provincial and federal governments. special purpose bodies  Boards, agencies, and commissions entrusted with a specific policy task and that operate at arm’s length from elected officials. They often include appointees from more than one order of government (federal, provincial, municipal) as well as private-sector appointees. supervisory or regulatory IGR  The role of provinces in monitoring and constraining municipal activity, including with mandatory benchmarking and performance measurement schemes. Type II multi-level governance  Occurs when more than one order of government interacts to perform a task or deliver a public service. It differs from Type I multi-level governance in which each jurisdiction is expected to restrict its activities to its formally defined responsibilities.



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REFERENCES For a more comprehensive database of academic sources related to Canadian municipal intergovernmental relations published in the past decade, please see https://doi.org/10.5683/SP2/5LIELB. Adams, Erika, and Allan M. Maslove. 2014. “The Federal Gas Tax Cession: From Advocacy Efforts to Thirteen Signed Agreements.” In Canada in Cities: The Politics and Policy of Federal-Local Governance, edited by Caroline Andrew and Katherine A. Graham, 113–35. Montreal: McGill-Queen’s University Press. Anderson, Cameron, R. Michael McGregor, Aaron A. Moore, and Laura B. Stephenson. 2017. “Economic Voting and Multilevel Governance: The Case of Toronto.” Urban Affairs Review 53, no. 1: 1–31. Andrew, Caroline, and Rachida Abdourhamane Hima. 2019. “Federal Policies on Immigrant Settlement.” In Immigrant Settlement Policy in Canadian Municipalities, edited by Robert Young and Erin Tolley, 58–81. Montreal: McGill-Queen’s University Press. Belley, Serge, Laurence Bherer, Guy Chiasson, Jean-Pierre Collin, Pierre Hamel, Pierre J. Hamel, and Mathieu Rivard. 2009. “Quebec.” In Foundations of Governance, edited by Andrew Sancton and Robert Young, 70–137. Toronto: University of Toronto Press. Bojorquez, Fabio, Eric Champagne, and François Vaillancourt. 2009. “Federal Grants to Municipalities in Canada: Nature, Importance and Impact on Municipal Investments, from 1990 to 2005.” Canadian Public Administration 52, no. 3: 439–55. https://doi.org/10.1111/j.1754-7121.2009.00091.x. Bradford, Neil. 2014. “The Federal ‘Communities Agenda’: Metagovernance for Place-Based Policy in Canada?” In Canada in Cities: The Politics and Policy of Federal-Local Governance, edited by Caroline Andrew and Katherine A. Graham, 21–44. Montreal: McGill-Queen’s University Press. ———. 2016. “Ideas and Collaborative Governance: A Discursive Localism Approach.” Urban Affairs Review 52, no. 5: 659–84. https://doi.org/10.1177 /1078087415610011. Bradford, Neil, and David A. Wolfe. 2013. “Governing Regional Economic Development: Innovation Challenges and Policy Learning in Canada.” Cambridge Journal of Regions, Economy and Society 6, no. 2: 331–47. https:// doi.org/10.1093/cjres/rst006. Carter, Tom. 2009. “Manitoba.” In Foundations of Governance, edited by Andrew Sancton and Robert Young, 223–81. Toronto: University of Toronto Press. Champagne, Eric. 2019. “Tracking the Growth of the Federal Municipal Infrastructure Program under Different Political Regimes.” In Canada in Cities: The Politics and Policy of Federal-Local Governance, edited by Caroline Andrew and Katherine A. Graham, 175–97. Montreal: McGill-Queen’s University Press.

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Jack Lucas and Alison Smith Chenier, John A. 2009. “The Evolving Role of the Federation of Canadian Municipalities.” Canadian Public Administration 52, no. 3: 395–416. https:// doi.org/10.1111/j.1754-7121.2009.00089.x. Christidis, Tanya, and Jane Law. 2012. “Annoyance, Health Effects, and Wind Turbines: Exploring Ontario’s Planning Processes.” Canadian Journal of Urban Research 21, no. 1: 81–105. Church, John, and Neale Smith. 2008. “Health Reform in Alberta: The Introduction of Health Regions.” Canadian Public Administration 51, no. 2: 217–38. Conteh, C. (2013). “Changing Trends in Regional Economic Development Policy Governance: The Case of Northern Ontario, Canada.” International Journal of Urban and Regional Research, 37, no. 4, 1419–37. https://doi.org /10.1111/j.1468-2427.2012.01183.x. Coté, André, and Michael Fenn. 2014. “Approaching an Inflection Point in Ontario’s Provincial-Municipal Relations.” IMFG Perspectives 6: 1–9. Dahlby, Bev, and Emily Jackson. 2015. “Striking the Right Balance: Federal Infrastructure Transfer Programs, 2002–2015.” SPP Research Papers 8, no. 36: 2002–15. De Belleval, Denis. 2011. “Le système de gestion municipale à Québec sous Jean-Paul L’Allier.” In Les défis de la gouvernance multi-niveaux, edited by Jean-François Savard and Jean-Patrick Villeneuve, 33–53. Quebec: Presses de l’Université du Québec. Doberstein, Carey. 2011. “Institutional Creation and Death: Urban Development Agreements in Canada.” Journal of Urban Affairs 33, no. 5: 529–48. https://doi.org/10.1111/j.1467-9906.2011.00566.x. ———. 2013. “Metagovernance of Urban Governance Networks in Canada: In Pursuit of Legitimacy and Accountability.” Canadian Public Administration 56, no. 4: 584–609. https://doi.org/10.1111/capa.12041. ———. 2016. Building a Collaborative Advantage. Vancouver: University of British Columbia Press. Eidelman, Gabriel. 2013. Three’s Company: A Review of Waterfront Toronto’s Tri-Government Approach to Revitalization. Toronto: The Mowat Centre. Eidelman, Gabriel, and Zack Taylor. 2018. “Municipal Affairs: Transition Briefing.” Ontario 360: 30 on 30. https://on360.ca/30-30/municipal-affairs-transition -briefing/#_ftn1. Finbow, Robert. 2012. “Submerging the Urban: Halifax in a Multilevel Governance System.” In Sites of Governance: Multilevel Governance and Policy Making in Canada’s Big Cities, edited by Martin Horak and Robert Young, 73–103. Montreal: McGill-Queen’s University Press. Garcea, Joseph, and Donald Story. 2012. “Policy Making in Saskatoon in a Multilevel Context: The Link Between Good Governance and Good Public Policy.” In Sites of Governance: Multilevel Governance and Policy Making in Canada’s Big Cities, edited by Martin Horak and Robert Young, 162–97. Montreal: McGill-Queen’s University Press.



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Good, Kristin. 2009. Municipalities and Multiculturalism: The Politics of Immigration in Toronto and Vancouver. Toronto: University of Toronto Press. Hataley, Todd, and Christian Leuprecht. 2014. “Asymmetric Decentralization of the Administration of Public Safety in the Canadian Federal Political System.” Canadian Public Administration 57, no. 4: 507–26. https://doi.org /10.1111/capa.12091. Hooghe, Liesbet, and Gary Marks. 2003. “Unraveling the Central State, but How? Types of Multi-Level Governance.” American Political Science Review 97, no. 2: 233–43. https://doi.org/10.1017/s0003055403000649. Horak, Martin. 2012a. “Conclusion: Understanding Multilevel Governance in Canada’s Cities.” In Sites of Governance: Multilevel Governance and Policy Making in Canada’s Big Cities, edited by Martin Horak and Robert Young, 339–70. Montreal: McGill-Queen’s University Press. ———. 2012b. “Multilevel Governance in Toronto: Success and Failure in Canada’s Largest City.” In Sites of Governance: Multilevel Governance and Policy Making in Canada’s Big Cities, edited by Martin Horak and Robert Young, 228–62. Montreal: McGill-Queen’s University Press. Ircha, Michael C., and Robert Young. 2013. “Conclusion.” In Federal Property Policy in Canadian Municipalities, edited by Robert Young and Michael C. Ircha, 157–80. Montreal: McGill-Queen’s University Press. Johal, Suhil. 2019. “The Case for Growing the Gas Tax Fund.” Federation of Canadian Municipalities. https://fcm.ca/sites/default/files/documents /resources/report/the-case-for-growing-the-gas-tax-fund.pdf. Jones, Stephen. 2012. “A Tale of Two Cities: Climate Change Policies in Vancouver and Melbourne – Barometers of Cooperative Federalism?” International Journal of Urban and Regional Research 36, no. 6: 1242–67. Juillet, Luc, and Junichiro Koji. 2014. “Reforming the Multilevel Governance of Emergencies: Municipalities and the Discursive Politics of Canada’s Emergency Management Policy.” In Canada in Cities: The Politics and Policy of Federal-Local Governance, edited by Caroline Andrew and Katherine A. Graham, 50–82. Montreal and Kingston: McGill-Queen’s University Press. Kitchen, Harry, Enid Slack, and Thomas Hachard. 2019. “Property Taxes in Canada: Current Issues and Future Prospects.” IMFG Perspectives, November. https://tspace.library.utoronto.ca/bitstream /1807/98034/1/Perspectives-27-Kitchen-Slack-Hachard-Property-Tax -Issues-Prospects.pdf. Klein, Juan-Luis, Diane-Gabrielle Tremblay, and Jean-Marc Fontan. 2014. “Social Actors and Hybrid Governance in Community Economic Development in Montreal.” In Governing Urban Economies: Innovation and Inclusion in Canadian City Regions, edited by Neil Bradford and Allison Bramwell, 37–57. Toronto: University of Toronto Press. Klodawsky, Fran, and Leonore Evans. 2014. “Homelessness on the Federal Agenda: Progressive Architecture but No Solution in Sight.” In Canada in Cities: The Politics and Policy of Federal-Local Governance, edited by Caroline

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Jack Lucas and Alison Smith Andrew and Katherine A. Graham, 50–82. Montreal: McGill-Queen’s University Press. Leo, Christopher, and Martine August. 2009. “The Multilevel Governance of Immigration and Settlement: Making Deep Federalism Work.” Canadian Journal of Political Science 42, no. 2: 491–510. https://doi.org/10.1017 /s0008423909090337. LeSage, Edward C., and Melville L. McMillan. 2009. “Alberta.” In Foundations of Governance: Municipal Government in Canada’s Provinces, edited by Andrew Sancton and Robert Young, 384–452. Toronto: University of Toronto Press. Levi, Ron, and Mariana Valverde. 2006. “Freedom of the City: Canadian Cities and the Quest for Governmental Status.” Osgoode Hall Law Journal 44, no. 3: 409–59. Lucas, Jack. 2016. Fields of Authority: Special Purpose Governance in Ontario, 1815–2015. Toronto: University of Toronto Press. ———. 2017. “Patterns of Urban Governance: A Sequence Analysis of Long -Term Institutional Change in Six Canadian Cities.” Journal of Urban Affairs 39, no. 1: 68–90. https://doi.org/10.1111/juaf.12291. Lucas, Jack, and Alison Smith. 2019a. “Multilevel Policy from the Municipal Perspective: A Pan-Canadian Survey.” Canadian Public Administration 62, no. 2: 270–93. https://doi.org/10.1111/capa.12316. ———. 2019b. “Which Policy Issues Matter in Canadian Municipalities? A Survey of Municipal Politicians.” SPP Research Papers 12, no. 8: 1–25. https://doi.org/10.11575/sppp.v12i0.56964. McGregor, Michael. 2018. “Partisanship and Attitudes Towards City Council Redistricting in Toronto.” The New Spirit, November 26, 2018. https:// thenewspirit.ca/2018/11/26/partisanship-and-attitudes-towards -city-council-redistricting-in-toronto/. Miller, Byron, and Alan Smart. 2012. “Calgary in the Multilevel Governance Drama.” In Sites of Governance: Multilevel Governance and Policy Making in Canada’s Big Cities, edited by Martin Horak and Robert Young, 26–52. Montreal: McGill-Queen’s University Press. Sancton, Andrew. 2000. Merger Mania. Montreal: McGill-Queen’s University Press. ———. 2009. “Introduction.” In Foundations of Governance, edited by Andrew Sancton and Robert Young, 3–19. Toronto: University of Toronto Press. ———. 2016. “The False Panacea of City Charters? A Political Perspective on the Case of Toronto.” School of Public Policy SPP Research Papers 9, no. 3. https://doi.org/10.11575/sppp.v9i0.42564. Sancton, Andrew, and Robert Young, eds. 2009. Foundations of Governance: Municipal Government in Canada’s Provinces. Toronto: University of Toronto Press. Schatteman, Alicia. 2010. “The State of Ontario’s Municipal Performance Reports: A Critical Analysis.” Canadian Public Administration 53, no. 4: 531–0. https://doi.org/10.1111/j.1754-7121.2010.00137.x.



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Shott, Alison. 2017. “The Composition of Municipal Associations and Policy Requests to Provincial Governments: Selected Cases.” Canadian Public Administration 60, no. 1: 111–34. https://doi.org/10.1111/capa.12204. Siegel, David. 2009. “Ontario.” In Foundations of Governance, edited by Andrew Sancton and Robert Young, 20–69. Toronto: University of Toronto Press. Slack, Enid, and Almos Tassonyi. 2017. “Financing Urban Infrastructure in Canada: Overview, Trends, and Issues.” In Financing Infrastructure: Who Should Pay?, edited by Richard M. Bird and Enid Slack, 21–53. Montreal: McGill-Queen’s University Press. Smith, Alison. 2018. “Mirror Image: The Fight against Homelessness in Calgary and Montreal.” In Accountability and Responsiveness at the Municipal Level: Views from Canada, edited by Sandra Breux and Jerome Couture, 200–22. Montreal: McGill-Queen’s University Press. ———. “Multiple Barriers: The Multilevel Governance of Homelessness in Canada.” Unpublished manuscript (under revision). Smith, Alison, and Zachary Spicer. 2018. “The Local Autonomy of Canada’s Largest Cities.” Urban Affairs Review 54, no. 5: 931–61. https://doi.org /10.1177/1078087416684380. Smith, Patrick J., and Kennedy Stewart. 2009. “British Columbia.” In Foundations of Governance, edited by Andrew Sancton and Robert Young, 282–313. Toronto: University of Toronto Press. Spicer, Zachary. 2010. “Institutional Policy Learning and Formal FederalUrban Engagement in Canada.” Commonwealth Journal of Local Governance 7: 99–119. https://doi.org/10.5130/cjlg.v0i7.1892. Stoney, Christopher, and Katherine A.H. Graham. 2009. “Federal-Municipal Relations in Canada: The Changing Organizational Landscape.” Canadian Public Administration 52, no. 3: 371–94. https://doi.org/10.1111 /j.1754-7121.2009.00088.x. Summerville, Tracy, Gary N. Wilson, and John F. Young. 2013. “Federal Property in British Columbia: Dynamic Changes and Perennial Issues.” In Federal Property Policy in Canadian Municipalities, edited by Michael C. Ircha and Robert Young, 37–61. Montreal: McGill-Queen’s University Press. Taylor, Zack. 2018. “Suburbanization and Politics.” In The Future of the Suburbs: Policy Challenges and Opportunities in Canada, School of Public Policy Research Paper Series 11, no. 23: 13–17. Taylor, Zack, and Neil Bradford. Forthcoming. “Governing Canadian Cities.” In Canadian Cities in Transition, edited by Markus Moos, Ryan Walker, and Tara Vinodrai, eds. 6th ed. Toronto: Oxford University Press. Tremblay-Racicot, F. 2018. “The Responsiveness Issue and the Blurry Lines of Accountability in Regional Transportation Planning, Governance, and Finance: The Case of Metrolinx.” In Accountability and Responsiveness at the Municipal Level: Views from Canada, edited by Sandra Breux and Jerome Couture, 200–22. Montreal: McGill-Queen’s University Press.

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CHAPTER SEVENTEEN

Conclusion: T   aking Stock of Canadian Federalism Grace Skogstad and Herman Bakvis

The chapters in this book have documented the complexity of Canadian federalism, revealing its multiple faces, in a particular policy field over time and across policy fields at a given point in time. Appraisals of the performance, effectiveness, and legitimacy of Canadian federalism thus likewise depend, as several authors have noted, not only on our evaluative criteria, but also on the point in time at which we are evaluating Canadian federalism. In this concluding chapter, we summarize what we have learned about the relationship between different models of Canadian federalism, on the one hand, and its performance, effectiveness, and legitimacy, on the other. We close the chapter by highlighting a number of factors that are likely to affect future possible paths of Canadian federalism.

THE FACES OF CONTEMPORARY FEDERALISM The multiple faces of Canadian federalism are revealed in Table 17.1. While authors of chapters in this text have sometimes used other names to describe models of federalism, the six models identified in Table 17.1 are generally in wide usage. They are, first, an independent governments (self-rule) model in which the two orders of government work independently on policy matters within their assigned jurisdictions; second, a collaborative shared-cost model in which both orders of government contribute to the costs of social programs via transfer payments or tax

Child care (1970– 2005)a

Child benefits (2006–2015)

Immigration (pre-1971)

Social assistance (1966 cap)

Healthcare (1960s– mid-1980s; 2004–)

Collaborative Shared-Cost

Old-age income security (OAS/GIS)

Employment insurance

Independent Governments

Social assistance (since 1995)

Healthcare (1986– late 1990s)

Unilateral Shared-Cost

Table 17.1.  Models of Federalism and Programs/Policy Fields

Income tax collectionb

Immigration (post-1971)

Collaborative Regulatory Contributory pension plans: CPP/ QPP

Joint-Decision

Income tax collection

Revenue-resource sharing (2004–)

Immigration (post-1971)

Healthcare (2004)

CPP/QPP

Asymmetrical

b

a

Post-secondary education (as part of EPF)

Cities: Homelessness Partnering Strategy

Cities: placebased infrastructure investment

Climate change (1990–2002; 2015–)

International trade policy (1990s–)

Canada Free Trade Agreement (2018–)

Early Childhood Development Agreement, Multilateral Framework Agreement. Except for corporate income taxes in Quebec, Ontario, and Alberta, and personal income taxes in Quebec.

Cities

Indigenous peoples

Climate change (2006–)

Equalization

Monetary policy

Economic development

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points; third, a unilateral shared-cost model in which the autonomous activity of one order of government (invariably the government of Canada) imposes conditions on the other, distorting the latter’s priorities (Lazar 2006); fourth, a collaborative regulatory model in which governments voluntarily coordinate their rules and regulations, for example, on how markets can function; fifth, a joint-decision (shared-rule) model in which formal rules of intergovernmental agreement require a super-majority, or even unanimity, for a decision to be taken; and sixth, asymmetrical federalism, in which one constituent unit (province) has a different status than other units in the federal system, either constitutionally or by virtue of special administrative arrangements. As has become clear throughout this text, these various models of intergovernmental relations reflect the practice of federalism – that is, governments’ behaviour – as distinct from what the Canadian Constitution stipulates. Table 17.1 identifies programs and policy areas discussed in this volume that illustrate the different models of intergovernmental relations. Other policy areas not examined in this text could be added. For example, to the “independent governments” column could be added defence and international diplomacy at the federal level, and education (primary through secondary) at the provincial level. Similarly, the asymmetrical federalism column could also include labour-market training (Schertzer, McDougall, and Skogstad, 2018), the participation of Quebec and New Brunswick in La Francophonie, and Quebec on its own representing itself at UNESCO. Table 17.1 also highlights a number of features of intergovernmental relations in Canada. First is the multiple approaches to federalism at any given point in time. Collaboration in one policy domain can coexist with unilateralism and/or conflict in another. Second is the persistence of the arm’s-length “independent governments” model. This model is consistent with the Canadian Constitution’s privileging of self-rule at the expense of shared rule (see Broschek, chapter 2). In the recent past, it was prominent while the Harper Conservatives formed the government of Canada (2006–15). Third is the prevalence of collaborative federalism, a model whose emergence was noted in the first edition of Canadian Federalism (2002). Notwithstanding Stephen Harper’s preference for unilateralism and limited engagement with the provinces, collaborative federalism nonetheless continued to function during his tenure in important policy domains, like immigration, agriculture, and the labour



Conclusion: T   aking Stock of Canadian Federalism

market (Schertzer, McDougall, and Skogstad, 2018). An interesting new variant of the collaborative regulatory model is its functioning at the subnational level. For example, some (but not all) provinces collaborated on climate change policy without participation from the federal Conservative government over the period 2006–15. Provinces’ co-operation to reduce interprovincial barriers to the internal Canadian common market via the 1994 Agreement on Internal Trade and, more recently, the 2018 Canadian Free Trade Agreement is another example. Fourth is the importance of asymmetrical federalism. It undoubtedly owes much to Quebec’s political leaders and its intellectual elite, who have long championed asymmetry as an essential feature of a well-­ performing federation (Laforest, 2010). Although de jure recognition of Quebec’s special status is the ultimate goal, Quebec’s federalist premiers have also pressed hard for de facto asymmetry in intergovernmental administrative arrangements. Quebec continues to benefit from the success of that effort with respect to the federal government’s spending power in the province. The Health Care Accord signed in September 2004 explicitly recognized the principle of asymmetrical treatment of Quebec, as Antonia Maioni (2008: 169) has observed. But de facto asymmetry is not confined to Quebec. As Mireille Paquet documents in chapter 13, although Quebec was the first province to carve out a distinct role for itself in immigration in the early 1970s, several other provinces have struck bilateral deals with the government of Canada in immigration policy since then. Fiscal federalism (chapter 10) also provides examples of asymmetry. Nova Scotia and Newfoundland and Labrador bargained successfully in 2004 for their natural resource revenues to be excluded from calculation of their equalization payments. More generally, when efforts at establishing multilateral agreements involving all provincial/ territorial governments break down, the alternative of bilateral agreements widens the scope for asymmetrical federalism. Besides child care under the Paul Martin government and healthcare under the Justin Trudeau government, examples of asymmetry in the form of bilateral agreements extend to policy areas not investigated here, including programs to support farm incomes (Schertzer, McDougall, and Skogstad, 2018). Fifth is variation in models of federalism not only, as already noted, across policy spheres at a given point in time, but also within a single policy sphere over time. Table 17.1 shows, for example, that healthcare and social assistance policies haves shifted between unilateral shared-cost

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federalism and collaborative shared-cost federalism. Unilateralism and coordination have both characterized climate change policy, but the balance has shifted over time: coordination from 1900 to 2002; federal unilateralism and bilateral engagement between 2003 and 2005; an absence of federal action accompanied by independent provincial action and some attempts at cross-border subnational coordination between 2006 and 2015; and, since then, federal unilateral action but also coordination with some but not all provinces. Sixth is steps towards restructuring relations between cities and both federal and provincial governments. The constitutional status of municipalities has not changed; municipalities remain creatures of the provincial governments that have the constitutional authority to reform, restructure, and even eliminate them as they see fit. Still, as chapter 16 documents, the statutory and policy-making authority of cities has grown in some policy domains over the past twenty-five years as their relationships with federal and provincial governments have undergone substantial changes. What determines the form that intergovernmental relations take in a given policy area? And, as a corollary question, why does the pattern of relations vary so much over time? Four factors in combination are especially important to explain the model of federalism and the pattern of intergovernmental relations. They are, first, the nature of constitutional jurisdiction; second, the ideas and interests of the executives at both levels; third, the history of intergovernmental relations in the sector concerned; and fourth, the broader international context within which Canadian politics unfolds. Canada’s Constitution, as interpreted by the courts, is consequential to the pattern of intergovernmental relations that arises in a policy sector. The Constitution’s impact is felt not only in its assignment of jurisdictional authority (including fiscal) but also, as David Cameron and Robert Schertzer observe in Chapters 3 and 7, respectively, in shaping understandings of relations between parties to Confederation. The “independent governments” model of federalism reflects instances in which the Constitution has unambiguously assigned exclusive jurisdiction to one order of government: for example, cities to the provinces and unemployment insurance to the federal government. The “jointdecision” and “collaborative federalism” models are found in areas where both orders of government have been assigned jurisdiction in whole



Conclusion: T   aking Stock of Canadian Federalism

(pensions, immigration) or in part (international trade) for a subject matter, so that neither can achieve its goals without collaborating with the other. As chapter 4 notes, the courts have urged governments to pool and coordinate their legal authority when the division of jurisdiction impedes effective problem solving on a nation-wide basis. Contributory pensions, immigration, the environment, and international trade are examples where concurrent or divided jurisdiction has led to joint-decision and collaborative federalism models. Both federal and provincial governments share jurisdiction over contributory pensions; their goal of a coordinated pension plan across the country has led them to accept a joint-decision-making model of federalism, as Keith Banting documents in chapter 11. A concurrent jurisdiction since Confederation, the selection and integration of immigrants has become a fully shared area of intergovernmental activity since the late 1990s (chapter 13). Although Canada’s Constitution is silent on the environment, court decisions have confirmed it is a matter of shared jurisdiction, making coordinated action the default model on climate change. The exception was during the Harper government (2006–15) when there was no available intergovernmental process. Divided jurisdiction over international trade has also led to collaboration in policymaking. While the government of Canada has the exclusive legal a­ uthority to negotiate and ratify international treaties, the provinces alone have the legal authority to implement provisions in those treaties that fall under the matters assigned to them. The failure of the government of Canada to elicit provincial support for terms of international trade agreements that fall under provincial jurisdiction would impair its subsequent ability to honour those agreements. To avoid this outcome, as chapter 9 documents, a collaborative model of federalism has evolved in international trade policy. Like international trade, criminal justice provides an example of divided jurisdiction, albeit one where the legal authority of governments has become blurred in the absence of formal coordination. Alone among designated subjects under Canada’s Constitution, legal authority with respect to making and enforcing criminal justice is explicitly divided between the two orders of government. The government of Canada has exclusive authority to make criminal law, but the provinces have the power to enforce it. As Dennis Baker elaborates in chapter 5, the courts have diminished this functional division over time by allowing

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the provinces to essentially legislate criminal law and the government of Canada’s criminal enforcement powers. Canada’s Constitution also affects models of federalism by its imbalance in the assignment of legal powers relative to fiscal capacities across the orders of government. Jurisdictional powers under the Constitution do not always line up with the financial resources needed to act on them. The vertical fiscal imbalance between Ottawa and the provinces/ territories and the horizontal fiscal imbalance across richer and poorer provinces have justified not only fiscal federalism (as Douglas Brown explains in chapter 10), but also shared-cost federalism, both unilateral and collaborative. These jurisdictional imbalances have played a major role in the emergence of the federal spending power and the subsequent transformation of virtually every area of social policy into a potential case of shared-cost jurisdiction. Still, it is important not to make too much of constitutional jurisdiction; it is not an accurate guide to who does what. Three other broad factors are needed to account for these variations in patterns of intergovernmental relations across policy fields and in the same policy area over time. They are the ideas and interests of political executives at both orders of government, the history of intergovernmental relations in the affected sector, and the broader international context of the Canadian political economy. Beginning with ideas and interests of elected politicians, Robert Schertzer (chapter 7) argues that political elites have had at least three competing visions about the very nature of the federation and how it ought to be organized: a pan-Canadian, provincial equality, or multinational vision. Moreover, these different visions of federalism can be associated with the dominance of different models of intergovernmental relations over time. The multinational federalism vision – that is, of Canada as constituted by three national groups of English Canada, Québécois, and Indigenous peoples – is associated with the collaborative governance model that has emerged since the 1990s (Bakvis and Skogstad, 2008: 382, 384). However, insofar as models of intergovernmental relations are not well institutionalized in Canada – in terms of both norms about how governments ought to work together and established venues and processes to enable them to do so – political elites usually have considerable latitude to abandon past models and pursue their own strategies and preferences. At the system-wide level, a potent example is the different federalist visions of



Conclusion: T   aking Stock of Canadian Federalism

Stephen Harper and Justin Trudeau. Harper’s avowed commitment to open federalism – that is, to restricting federal intervention to federal areas of jurisdiction and not using the federal spending power in areas of provincial jurisdiction – stemmed the tide of collaborative federalism to some degree and nudged the federation in the direction of watertight compartments for federal/provincial jurisdictional responsibilities. By contrast, Justin Trudeau came to office on a platform aligned with a more collaborative (“sunny ways”) approach, as evidenced in his nation-tonation approach to Indigenous peoples and early effort to work with the provinces to lower Canada’s greenhouse gas (GHG) emissions. At the sectoral level, immigration policy provides an example of how federalist visions can shift models of intergovernmental relations over time. As Mireille Paquet documents (chapter 13), Quebec premiers’ vision of their province’s distinct status as a minority nation within Canada created the pressure to shift immigration policy away from an independent federal government model to a coordinated intergovernmental model more consistent with federal principles. The scope for first ministers to act on their own vision of federalism and preferred model of intergovernmental relations also means that electoral incentives and policy and partisan goals of politicians play an increasingly important role in shifting patterns of intergovernmental relations (see chapter 6). Chapters dealing with social policy, climate change, and, to some extent, fiscal federalism illustrate how partisan politics and ideological divides can result in discontinuity in pattern of intergovernmental relations. As well, the different electoral cycles operative at the federal and provincial levels can throw previous collaborative arrangements into disarray, as noted by Winfield and Macdonald (chapter 14). There is also some evidence that intergovernmental collaboration is facilitated when governments at the two orders share political party affiliation, as shown by the case of the Canada–Quebec Pension Plan enhancement in 2016 where the federal Liberal government saw eye to eye with the Ontario Liberal government on pension reform. Even so, shared policy goals and electoral incentives can also result in continuity of intergovernmental models across governments of different partisan stripes. The federal government’s approach to cities provides an example. Although the Harper government terminated the tri-level urban development agreements initiated by the preceding Liberal governments, it continued the infrastructure investment agreements with

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cities. Its willingness to continue to transfer the federal Gas Tax Fund to cities undoubtedly had much to do with the significance of vote-rich large cities to any federal political party’s electoral fortunes. The result, say Lucas and Smith (chapter 16), is that the federal commitment to infrastructure investment “has now become durably enmeshed within the Canadian intergovernmental system.” This last observation brings us to another factor that affects patterns of intergovernmental relations over time in a given sector: historical policy legacies. Notwithstanding the examples of flux over time in the model of intergovernmental relations prevailing in a given policy sector, there is also little doubt that some models are products of historical patterns. The joint-decision model associated with the Canada and Quebec pension plans is a good example. These plans were implemented in the mid-1960s with rules requiring substantial agreement but not complete unanimity for any program changes. Even when formal decision-making rules do not dictate intergovernmental models, widely held norms may do so. Models of asymmetry in terms of Canada–Quebec relations and of shared-cost federalism in universal healthcare are both rendered durable by norms consistent with multinational and pan-Canadian visions of federalism, respectively. A final factor that helps to account for the shifting patterns of federalism models is the broader international context. Current features of this context are the integration of Canada’s economy into competitive regional and global markets, and Canada’s membership in international organizations whose rules prescribe appropriate conduct for states and best practices in specific policy domains. These internationalizing features are having some effect on intergovernmental relations, but the effects are uneven, giving rise to models of both collaborative federalism and independent governments. On the one hand, goals of market-opening and integration into global supply chains are encouraging greater intergovernmental collaboration in international trade policy, in both the negotiation of trade agreements and adjusting policies to conform with the provisions of international commercial agreements. For example, having opened their local procurement markets to foreign businesses under the Canada–European Union Comprehensive Economic and Trade Agreement (CETA), provinces now have added incentives to work co-operatively to reduce or harmonize their policies that impede Canadian capital, labour, services, or goods moving freely across provincial



Conclusion: T   aking Stock of Canadian Federalism

borders. On the other hand, membership in international environmental treaties to promote climate change mitigation has often given governments incentives to act unilaterally. Although Prime Minister Chrétien initially adopted a collaborative model of federalism to meet Canadian commitments under the international environmental regime, that model broke down when the prime minister unilaterally raised Canadian targets and provinces refused to come on board with those targets. During the nine years it held federal office, the Conservative Harper government made no attempt to develop a coordinated Canadian climate change policy – but it did explicitly tie its climate change approach to that of the US federal government. After 2015, the Justin Trudeau government adopted a mixture of collaboration and unilateralism in an effort to meet Canada’s international GHG emission targets. The impacts of the international context on Canadian federalism are usually experienced in conjunction with other factors noted above, and most especially the ideas and goals of political executives, including especially first ministers.

HOW IS CANADIAN FEDERALISM FARING? The criteria by which to appraise Canadian federalism throughout this text have been its performance, effectiveness, and legitimacy. In terms of performance, the relevant questions of the various models of Canadian federalism – and Canadian federalism as a whole – have been the following: Is there a balance between vesting the central government with sufficient power to unite the country on common purposes and entrusting provincial leaders with the authority to express the values of their distinct political communities? Do institutional forums provide a setting for discussion and negotiation between governments and facilitate agreement, or at least understanding, on major issues in a manner that respects the positions of both levels of government? Or, alternatively, are governments at the two orders competitive and adversarial to the point of being dysfunctional? In addressing these questions, chapters have examined (1) the decision rules and norms prevailing in their policy area; and (2) the capabilities of governments to set and maintain priorities among conflicting demands, coordinate conflicting objectives into a coherent whole, manage political cleavages, and maintain international

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commitments. An assessment of performance also includes appraisal of whether/how decision rules and norms affect the accountability of governments to one another when their exercise of their legal authority spills over to affect other governments. In terms of effectiveness, the relevant question has been whether the institutions of Canadian federalism are enabling problems to be addressed in a timely, effective, and efficient fashion. Assessments of effectiveness revolve around whether federalism models enable policy innovation when old policies have failed (including by imposing losses on powerful groups), whether they marshal and target resources to where they will be most effective, and whether they allow policies to be implemented once they have been decided upon. And in terms of legitimacy, the question has been whether the governing arrangements and policy outcomes associated with the various models of federalism are perceived as appropriate and acceptable by Canadian citizens and policy stakeholders. As further elaborated below, the appraisal of legitimacy turns on subjective perceptions: in the case of process legitimacy, on whether federalism models incorporate various constituents’ understandings of their own roles and status in the federation; in the case of output legitimacy, on the appropriateness of the substantive outcomes of federalism modes. As compared to “effectiveness,” which is an evaluation of the problem-solving capacity of federal institutions, output legitimacy captures satisfaction with program/policy outcomes. Assessing federalism’s performance, effectiveness, and legitimacy is admittedly a challenging and subjective exercise; assessments inevitably vary depending upon the perspective of the assessor. Appraising the federation as a whole within these criteria is arguably even more difficult, yet such holistic views of Canadian federalism are of fundamental importance insofar as they permeate policy-making in various policy arenas and affect the stability of the system as a whole. We begin with some appraisals of federalism as a whole before turning to the evaluations in various policy domains. For many Quebec citizens and many, perhaps most, of the Québécois political elite, the Canadian federal experience is, in David Cameron’s words (chapter 3), “deeply flawed, a story of continuing failure so far as Quebec is concerned.” This negative judgment of the failure to respect federal principles is based on, among other things, Ottawa’s aggressive use of its spending power in areas of provincial jurisdiction, and the



Conclusion: T   aking Stock of Canadian Federalism

passage of the 1982 Constitution, to which Quebec is subject but to which it is not a consenting party. In Cameron’s view, however, the Canadian federal system has performed fairly effectively over the years in relation to Quebec, providing the framework within which French Canada has survived, changed, and now flourishes. In his words, “French-speaking Canadians have used their majority status in Quebec to shape the provincial government and public policy very substantially to suit their needs, and Quebec as a federal actor has profoundly influenced the character and operation of Canadian federalism.” At the same time, Cameron recognizes that the Canadian federation suffers a problem of legitimacy in Quebec, where a significant portion of the population believe the 1982 Constitution is illegitimate in that it lacks the consent of the Quebec people. Besides many Québécois, Indigenous peoples also view Canadian federalism negatively. Their negative assessments go beyond their direct experience with particular public institutions or public policies – such as their unfair treatment in the criminal justice system (chapter 5) – to the very origins and structure of the Canadian federal system. As Martin Papillon (chapter 15) observes, the initial exclusion of Indigenous peoples as parties to Confederation has had a deleterious impact on their perceptions of the legitimacy of Canadian federalism. It has also impaired the performance and effectiveness of the institutions and processes of Canadian federalism when it comes to serving the needs of Indigenous peoples. Indigenous peoples have “no statutory voice” in the institutions of intrastate federalism (Parliament). Although Indigenous organizations’ participation in intergovernmental relations is growing, and federal and provincial governments accept in principle the inherent right of Indigenous peoples to self-government, it is Papillon’s conclusion that these developments are unlikely to address the fundamental lack of legitimacy of the Canadian federal system from Indigenous peoples’ perspective. Table 17.2 provides a report card of the performance, effectiveness, and legitimacy of Canadian federalism and intergovernmental relations, as based on the various assessments presented by chapter authors. There are several points to keep in mind while reading the table. First, as noted above, assessments of Canadian federalism are subjective. Different appraisers, viewing federalism through different visions of what it ought to be (Schertzer, chapter 7) and/or valuing different outcomes differently, are likely to arrive at different assessments.1 Fiscal

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federalism and regional development policies provide two examples of how scores on performance can differ depending upon different visions of what the federal principle entails and how intergovernmental relations ought to be conducted. Brown’s assessment of the performance of fiscal federalism (chapter 10) is positive. He credits the transfer of tax points, the removal of conditions on grant programs, and the maintenance of equalization payments with enabling provinces to maintain their autonomy. Yet this assessment is at odds, as Brown notes, with the damning critique of fiscal federalism by an expert advisory panel to the Council of the Federation (2006), the forum representing provincial governments. In the view of the advisory panel, the processes of fiscal federalism are deeply flawed: lacking principles or rules, and with agreements subject to change or termination by Ottawa. Provincial economic development policies that give preference to residents also get different assessments on the criterion of performance. For businesses seeking to maximize their profits through economies of scale, these measures are inconsistent with the federal intention to create a common economic union. Yet others see interprovincial barriers as consistent with the federal principle of provincial governments representing the distinct preferences of their local communities. Assessments of output legitimacy also reflect different value judgments of assessors. For example, the erosion of benefits since the abolition of the Canada Assistance Plan in 1995 is viewed more positively by conservatives than by liberals and social democrats; the former applaud the incentive of shifting possible recipients of social assistance into the labour market while the latter decry it. Second, Table 17.2 records a composite score that may not fully capture the developments in dynamic policy areas. Both cities and Indigenous affairs are illustrative examples. In terms of cities, the annual municipal conference with provincial and federal officials has emerged as an important institution, and there appears to be an increase in examples of genuine municipal involvement in provincial and federal policy-making processes. Still, formal tri-level governance remains rare; relations between municipal political actors and those at the federal and provincial levels are characterized by informal, ad hoc, and short-lived interactions (chapter 16). Accordingly, an overall score of “fair” appears fitting for cities’ performance dimension. With respect to Indigenous people, Papillon states that there have been significant shifts in the everyday workings of Canadian federalism with Indigenous organizations’

a

Good

Poor Fair Poor

Good

Poor Good Fair

Good

Fair Fair Poor/ Fair

Good

Good

Poor Good Good Fair

Fair Fair

Good Good

2019

Poor Fair Poor

Good

Good

Good

Fair

Good

Good Poor

2008

Poor Fair Poor

Good

Good

Fair

Fair

Good Poor

Fair Poor

2011

Fair Fair Poor

Good

Good

Fair Good Good

Good Poor

Good Good

2019

Effectiveness

Poor Poor Fair

Fair

Good/ Poor Good

Fair

Fair

Fair Poor

Poor Poor Poor

Fair

Good

Poor

Fair

Good Poor

Fair Poor

2011

Fair Fair Poor

Good/ Fair Fair

Fair Good Fair

Good Fair

Fair Good

2019

Process Legitimacy 2008

A slash score (i.e., Good/Poor) indicates different scores for different constituencies.

Economic development Climate change Cities Indigenous peoples

Fair

Poor

Good

Poor Poor

Poor

Good

Good Good

Fair Good

Fiscal federalism Canada Pension Plan/Quebec Pension Plan Social assistance Employment insurance Healthcare Child benefits Immigration Criminal law and justicea International trade

2011

2008

Policy Area

Performance

Table 17.2.  Policy Areas: Performance, Effectiveness, and Legitimacy

Poor Fair Poor

Good

Good/ Poor Good

Fair

Poor

Fair Good

2008

Poor Fair Poor

Good

Good

Fair

Fair

Poor Poor

Fair Fair

2011

Fair Fair Poor

Good

Good

Fair Good Good

Poor Poor

Fair Good

2019

Output Legitimacy

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growing participation in bilateral and multilateral policy processes at the federal and provincial levels. Indigenous policy, writes Papillon, “is now a multi-actor and multi-level affair” (chapter 15). Nonetheless, a score of “poor” or at best “fair” appears warranted given Papillon’s caution about whether the new institutions and mechanisms are performing well in facilitating reconciliation and a more collaborative approach to policy-making. Third, the evaluative criteria are in tension to some extent. Schertzer observes in chapter 7 that its inherent complexity makes it difficult for Canadian intergovernmental relations to both perform well and be effective and legitimate at the same time. Consistent with this observation, Winfield and Macdonald (chapter 14) find a trade-off between performance and effectiveness in climate policy whereby good performance in terms of adhering to federal principles and thereby fostering national unity has meant sacrificing policy effectiveness in climate policy. Brown suggests there is a trade-off between performance and process legitimacy in fiscal federalism (chapter 10). However, in other cases, such as child benefits, international trade, and C/QPP, good performance in 2019 equates with good effectiveness and good process and output legitimacy. Fourth, federal institutions and norms interact with other institutions – most importantly, the executive dominance of parliamentary government. The scores in Table 17.2 on process legitimacy may therefore be as much an indictment of the executive dominance inherent in the Westminster parliamentary system as they are of patterns of intergovernmental relations. The concentration of authority in the prime minister and cabinet in the Westminster system is also implicated in policy effectiveness, enabling governments to shift course abruptly and often before policies have had time to achieve their goals. At the same time, the difficulty of changing employment insurance is arguably more the result of the influence of regional (Atlantic) politics in the makeup of the government of Canada than it is of federalism, suggesting that the federal government can be just as regionally focused as any provincial government. Fifth, the effectiveness of intergovernmental relations in one policy area may be dependent upon developments in an ancillary area. A good example is social assistance and employment insurance. Both respond to the same clientele: the unemployed. Yet, there is no mechanism for integrating them, and people are caught in gaps and contradictions between the two programs. Only some sort of intergovernmental process



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could repair what many describe as a broken system, and one that results in one of the weakest levels of income support for the unemployed in OECD countries (chapter 10). Table 17.2 compares evaluations of federalism’s performance, effectiveness, and legitimacy across three periods of time, contrasting the scores of authors in this edition with those of authors in the second and third editions of Canadian Federalism published in 2008 and 2012, respectively. In terms of performance, a score of “good” indicates that constitutional jurisdiction and the federal balance are respected; intergovernmental processes are workable in facilitating the consultation, negotiation, and coordination necessary to produce results over time; and intergovernmental processes foster governments’ accountability to one another and, if appropriate, to external governments. In the case of classical federalism spheres, it is possible for independent action by the order of government with exclusive authority to result in “good” performance when the federal principle is upheld and intergovernmental norms do not entail coordination. Both child benefits and economic development are examples. A score of “fair” is awarded when some, but not all, of these conditions are met. Criminal justice, for example, receives a “fair” score because both orders of government have trespassed on one another’s authority in a policy domain where a good performance requires maintaining the division of functions between the federal Parliament’s power to make criminal law and the provincial legislature’s power to enforce it (chapter 5). Climate change, to cite another example, receives a “fair” score for current overall performance because some of the elements of good performance have been achieved in the Pan-Canadian Framework (PCF) as it had evolved by 2019. Jurisdiction has been respected, with the possible exception of the carbon tax (although two court decisions to date have stated that jurisdiction was respected); five provinces, the territories, and Ottawa are in agreement and working together, in particular through shared-cost programs; and accountability, both to Canadians and to the international regime, does exist. The PCF is certainly marked by acrimony (criterion for a “poor” rating) but has not completely broken down. At the same time, a “good” rating is not warranted because intergovernmental processes have failed to come up with a coherent Canada-wide policy that manages internal political cleavages around energy and the environment and secures the agreement of all provinces. A score of “poor” is recorded where intergovernmental relations tend to break

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down, be riddled with acrimony and distrust, or are non-existent when intergovernmental coordination is needed for resolution of problems and accountability relationships are weak or non-existent. Social assistance is an example where, despite the demonstrated need for coordination and accountability, these features are absent and there is no expectation of balancing federal and provincial interests. In terms of policy effectiveness, a score of “good” means that intergovernmental institutions and processes generally do address substantive problems in a timely and cost-effective fashion, allow for asymmetry as warranted, provide scope for policy innovation and adjustment to changing circumstances, and allow Canada to meet its international commitments. A score of “fair” means that intergovernmental relations and processes achieve only a minority of these goals. In climate change, the current PCF does not fully address the problem since it will not meet the 2030 GHG reduction target. However, because of the PCF we have carbon pricing in all provinces; without the PCF, there would have been no carbon pricing in Alberta, Saskatchewan, Manitoba, Ontario, or New Brunswick in 2019. A “fair” rating seems warranted in comparison to the 2008 and 2011 ratings, when there was carbon pricing in only British Columbia. A score of “poor” indicates both policy failure and failure to meet most of the above criteria. Output legitimacy scores are closely related to policy effectiveness scores with one important difference: output legitimacy gets at perceptions of the appropriateness of outcomes. A score of “good” on output legitimacy indicates that the policy outcomes of intergovernmental relations receive the approbation of a broad constituency; “fair” means that some but not all stakeholders/citizens view policy outcomes as appropriate; and “poor” means that the outcomes are opposed by virtually all significant members of the policy/political community. It is possible for policy effectiveness and output legitimacy scores to diverge because policies can be ineffective in addressing problems or meeting international commitments but still reflect the preferences and values of some political communities. For example, Winfield and Macdonald (chapter 14) state that climate policy has been seen by most Canadians to be legitimate “because Canadians do not have an overwhelming desire for fully effective policy.” Finally, ratings on process legitimacy reflect the degree to which policy-making processes conform to expectations of different Canadians regarding adherence to democratic norms of accountability and



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representation. In Table 17.2 a “good” ranking indicates respect for democratic norms of accountability to citizens, transparency to public scrutiny, and opportunities for citizen input. A score of “fair” means that some, but not all, of these democratic criteria are met; for example, there may have been some opportunities for citizen/stakeholder input, but processes have generally been non-transparent and accountability weak. A “poor” rating on procedural legitimacy means that none of these democratic criteria has been met. A slash score – for example, “good/ fair” or “fair/poor” – indicates a divergence of views across the Canadian public and affected stakeholders. For example, while most Canadians have a favourable (good) view of the Canadian justice system, racial minority groups and Indigenous peoples are far more likely to view it as poor in terms of meting out justice for them. The legitimacy of Canada’s international trade policy is also viewed quite differently by the business sector, which has had ample opportunities to influence Canadian trade policy, and civil society and Indigenous organizations that have been frustrated in their lack of meaningful opportunities to participate. Table 17.2 shows an uneven distribution of “fair,” “poor,” and “good” ratings across the policy areas examined in this book. However, as compared to previous years, there are more “fair” and “good” ratings across the board. What explains the discrepancy of evaluations of federalism’s performance, effectiveness, and legitimacy across policy areas? And what relationship, if any, do these ratings have with the model of federalism in play in the policy area? To address these questions, it is helpful to first distinguish policy domains where ratings of “good” predominate as compared to those characterized by “poor” or “fair” ratings. Policy domains where “good” ratings predominate are contributory pensions, immigration, international trade, and economic development. (Criminal justice is a borderline case.) These policy areas receive “good” ratings for both performance and effectiveness, and a mixture of “fair” and “good” on process and outcome legitimacy. Policy domains where “poor” or “fair” ratings predominate are climate change, Indigenous peoples, and employment insurance. These policy domains receive a “poor” rating on one or both of performance and effectiveness, and poor ratings on the legitimacy criteria. A distinguishing feature of policy domains in which federalism models get good ratings is that they are fields in which the federal government cannot engage in unilateral action. In immigration and contributory

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pensions, federal unilateralism is constrained by concurrent jurisdiction; in international trade, by divided jurisdiction. Insofar as neither order of government can fully realize its goals without co-operating with governments at the other order, the result has been a collaborative model to address policy matters. In these policy domains, intergovernmental policy-making is underpinned by decision rules that require consensus though not outright unanimity. The high threshold of agreement needed to change the Canadian Pension Plan/Quebec Pension Plan (the federal government plus two-thirds of the provinces representing two-thirds of Canada’s population) has thwarted but not prevented change to these programs. In contrast to the collaborative (shared-cost and regulatory) models in the above policy domains, economic development, which also gets high ratings, fits within the independent governments/classical federalism model. As documented in chapter 8, both monetary policy (an exclusive matter for the government of Canada) and economic development policies more generally (matters of both federal and provincial jurisdiction) fit into the independent governments model of federalism. Federal and provincial economic development and adjustment policies are largely uncoordinated, with no forum within which Canadian governments can plan development measures jointly, and each level of government typically pursues its preferred policies after limited consultation with the other. Yet, this situation did not prevent a coherent intergovernmental response to the 2008–9 financial crisis. Moreover, it has had the largely salutary effect of reducing, although not entirely limiting, the intergovernmental conflict that historically resulted from charges of regional favouritism/discrimination that surrounded federal efforts to devise Canada-wide economic policies. A second distinguishing feature of the policy domains that are characterized as “good” examples of functioning federalism models is that a failure for governments to act co-operatively in these fields is likely to have negative consequences for both governments and their respective bases of electoral support. Turning to the cases where federalism models get “poor” or “fair” ratings, some of these matters, such as climate change, Indigenous relations, and employment insurance, are ones where institutions and mechanisms of intergovernmental coordination are underdeveloped. As efforts to strengthen their institutionalization in recent decades have



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come up short, so have problems been left unaddressed, and the overall legitimacy of the Canadian federal system been diminished. Other policy domains where “fair” or “poor” scores appear are healthcare and social assistance, domains in which the government of Canada has used its spending power to intervene in matters assigned to the provinces under the Constitution. Healthcare (chapter 12) has often been described as a dysfunctional area of federalism, characterized for several years by tension between governments, blame avoidance, and “a frozen paradigm” that stymies innovation (in part because of federal government prohibitions on private healthcare). Does healthcare thus demonstrate how unilateral federal action can jeopardize the functioning of Canadian federalism? Perhaps. However, most Canadians place a high value on a publicly funded single-payer system that provides reasonably high-quality care with a high level of accessibility at costs far below those of the US system – and, to the extent that the system relies on both governments financing its delivery, they also expect collaboration from their governments. As with evaluations of the performance and effectiveness of Canadian federalism, perceptions of the legitimacy of operative federalism models get mixed responses. The argument that executive federalism/intergovernmental relations “freeze out” citizens and civil society groups is long-standing (Simeon, [1972] 2006). Indeed, several chapters have observed that civil society groups often have poorer evaluations of the legitimacy of intergovernmental relations models than do organized economic actors. At the same time, as long as the executives who are party to intergovernmental relations represent the best interests of their citizens and answer to them regularly through their elected legislatures and periodically via elections, then democratic norms of legitimacy in representative democracies are upheld. Even matters that are as technically complex as fiscal federalism, and that are hammered out between governments behind closed doors, become transparent through debate in the media and Question Period in Parliament (chapter 10).

LOOKING AHEAD Where is Canadian federalism headed? Will it continue to follow its current path of multiple models of federalism, or will one of these emerge

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as more prominent? In addition, is it possible that there will be major institutional and constitutional reforms in Canadian federalism? Previous editions of Canadian Federalism (2002, 2008, 2012) have answered these questions by suggesting some possible alternate scenarios. We take the same approach here. To gauge the plausibility of different scenarios, we outline the likely international, economic, and political context of Canadian federalism over the next five to eight years. First, Canada will continue to be embedded in the international political economy, with its dominant economic sectors depending on accessing foreign markets for their profitability. Although Canada has taken steps to reduce its structural dependence on the American economy, including by signing trade agreements with the European Union and Asia-Pacific countries, access to the US market will continue to be crucial to the well-being of Canadians. This context should continue to create incentives for Canadian governments to collaborate to harmonize and reconcile their domestic policies with one another and with those of Canada’s trading partners. Second, structural differences in the economy of different provinces and regions of Canada will continue to be manifest and impede efforts to devise Canada-wide policies, particularly with respect to fiscal federalism, energy, the environment (especially climate change), and economic development. A prolongation of the global decline in oil prices that began in 2014 will continue to strain relations between the oil-producing provinces of Alberta and Saskatchewan and other provinces as well as the government of Canada. These tensions will heighten pressure for reform of the equalization program in particular. Third, federal and many provincial governments are likely to still face budgetary deficits for the foreseeable future. A recession would test the willingness of the government of Canada not only to bail out indebted provinces (Hanniman, 2019) but also to make up their shortfall in social program spending. It will thereby also affect the effectiveness and legitimacy of the shared-cost model of federalism. Fourth, insofar as most Canadians live in cities, it is reasonable to expect that their problems, including immigration, housing, and climate change adaptation, move higher on the political agendas of federal and provincial governments. In the view of Lucas and Smith (chapter 16), responding to these policy problems does not require a restructuring of the roles and responsibilities of governments at the two orders but



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rather politicians at the municipal, provincial, and federal levels working together within their own spheres of jurisdiction to tackle these issues. Fifth, although electoral outcomes are difficult to predict in Canada’s regionalized and multi-party system, minority governments in Ottawa are a distinct prospect. In the near future, the minority Liberal government returned in the October 2019 election will be able to rely on support from the Bloc Québécois, NDP, and/or Green Party to advance its left-of-centre agenda with respect to Indigenous relations, climate change, and a government-funded pharmaceutical program. Looking further ahead, a minority or majority Conservative government could be expected to curtail or even reverse such an interventionist stance. More broadly, with federal and provincial governments on different electoral cycles, and governments at both orders able to reverse the policies of their predecessors, the federation’s capacity to engage in any kind of long-term decision-making is likely to be very challenging. Based on this reading of the context of Canadian federalism in the years ahead, we posit three distinct scenarios. The first is continuation of multiple models of federalism across different policy spheres and incremental evolution of Canadian federalism through a “muddling through” approach. There is continuity in Canada’s Constitution and political institutions, that is, no formal changes in the division of powers; no constitutional recognition of Quebec’s specificity; and no changes to the role, composition, or function of the Senate to make it an effective chamber of intrastate federalism. Incremental adjustments do not appreciably alter the existing balance of power between the two orders of government; both orders of government are important. Both the government of Canada and the provincial governments continue to be important actors in their own right. Competitive and co-operative elements coexist and the informal pattern of asymmetry continues. In response to the imbalances in federal–provincial and interprovincial revenues, the government of Canada adjusts the equalization formula but not in a significant way. This scenario is most likely under a Liberal majority government in Ottawa or a minority Liberal government supported by the NDP and/or the Green Party. In the second scenario, provincial governments become more ascendant in either an independent governments or collaborative model of federalism. The differences of policy goals across provinces that arise from their disparate regional economies pit the premiers of large and

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wealthy provinces like Alberta and Ontario against Ottawa and weaken support for nation-wide policies, including equalization payments. The devolution of Canadian federalism proceeds without constitutional change and mainly through the transfer of further taxation powers to provinces. This scenario does not rule out intergovernmental cooperation – where it is already established – but expansion of the collaborative federalism model is likely to be via voluntary and ad hoc co-operation among provinces and in response to external pressures. This scenario is most likely under a majority Conservative national government imbued with ideas of small government. Under a third scenario, the devolution of Canadian federalism is accomplished by major formal institutional changes and possibly even constitutional changes. Were this scenario to entail recognition of Indigenous peoples as a third order of government, it would most likely be triggered by a Liberal government in Ottawa. In contrast to the first and second scenarios, we do not view this third scenario as very likely. If something more than the status quo seems necessary to improve the performance, effectiveness, and legitimacy of the federal system, what can be done short of constitutional and major structural changes in the federation? Two reforms could be made within the existing institutional framework. One is to institutionalize the rules of the game of intergovernmental relations. In the third edition of Canadian Federalism, Simeon and Nugent (chapter 4) argued that the absence of rules and norms regarding matters such as the convening of first ministers’ conferences, voting procedures, and alterations to intergovernmental agreements exacerbates conflict in the system. Federalism appears to work better where agreements incorporate explicit rules for amendments to programs as circumstances change. In the interest of enhancing the standing of the federal system on the three dimensions, governments could – and should – make a much greater effort to incorporate decision rules governing amendments to federal–provincial agreements, whether in the area of fiscal federalism or of climate change. Such rules would ideally go beyond the simple right of a government to terminate an agreement after giving notice. As an example of the institutionalization of intergovernmental relations, the Council of the Federation represents a step in the right direction. The full weight of effective and legitimate governing should not be put on the institutions and processes of Canadian federalism. Indeed, if



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it is democratic government that Canadians seek, then analysts suggest there are other institutions besides federalism on which we might more profitably focus our attention (Lane and Ersson, 2005; Norris, 2005). A prime example is the electoral system, which could be reformed to secure a fairer translation of votes into seats (Norris, 2005). Although several provincial governments have held plebiscites on electoral reform in recent years, none has yet secured sufficient public support to result in a change away from the single-member-simple-plurality (SMSP) electoral system. Having promised that the 2015 election would be the last federal election conducted under the SMSP system, the Liberal Party of Canada jettisoned that promise once in office. To conclude, there is room within the existing constitutional framework to reform the practices and norms of executive federalism as well as those of the parliamentary system whose functioning bears so significantly on intergovernmental relations. Whether the political will exists, either among the elites who inhabit the world of executive federalism or within civil society, and what conditions might help foster such political will are important questions. They deserve the consideration of Canadians, their political leaders, and, not least, those who study the country’s federal system.

NOTE 1 The fact that different scholars have authored some of the chapters in the three editions recorded in Table 17.2 may also account for differences in scores over time. REFERENCES Bakvis, H., and G. Skogstad. 2008. Canadian Federalism: Performance, Effectiveness, and Legitimacy. 2nd ed. Toronto: Oxford University Press. Council of the Federation, Advisory Panel on Fiscal Imbalance. 2006. Reconciling the Irreconcilable. https://www.canadaspremiers.ca/wp-content /uploads/2017/09/report_fiscalim_mar3106.pdf. Hanniman, K. 2019. “Is Canadian Federalism Market-Preserving? The View from the Bond Markets.” In New Frontiers in Public Policy: Federalism and the Welfare State in a Multicultural World, edited by Elizabeth GoodyearGrant, Richard Johnston, Will Kymlicka, and John Myles, 49–72. Montreal: McGill-Queens University Press.

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Index

Page numbers in italic indicate tables and figures. Abitibi-Bowater, 238 Aboriginal Affairs Working Group, 414 Aboriginal and Northern Development Canada, 134n5 Aboriginal peoples. See Indigenous peoples Access to Information Act, 132 Act of Union, 1840, 66 Act Respecting the Laicity of the State, 2019. See Bill 21 (Quebec) Act to Ensure that the Laws of Canada Are in Harmony with the United Nations Declaration on the Rights of Indigenous Peoples (Bill C-262), 421n7 Ad Hoc Intergovernmental Task Force on Irregular Migration, 351, 355 Adult Entertainment Association case, 119, 137 aeronautics and aerospace, 93, 233 Agreement on Internal Trade (AIT), 12, 178, 214–­15, 457 Agreement on Subsidies and Countervailing Measures, 237

Agreement on Technical Barriers to Trade, 233 Agreement on the Application of Sanitary and Phytosanitary Measures (SPS), 233 Agreement on Trade Related Investment Measures (TRIMs), 237 Alberta carbon pricing, 25, 47, 82, 182–­3 coal industry, 381 CPP expansion, 302–­4 energy and mining in, 201–­5, 211 equalization program, 17 fiscal capacity of, 272 greenhouse gas emissions, 94–­5, 367–­9, 375, 386–­7 health insurance in, 290 oil and gas in, 380 oil sands in, 211, 366, 369 policing in, 126 tax transfers, 267 trade agreements, 233 Trans Mountain pipeline, 153, 370–­3 treatment in federalism, 211

480 Index Alberta (continued) veto role in climate-change policy, 384 Alberta Court of Appeal, 94, 376 Alberta-to-Wisconsin Line 3 pipeline, 372 Alcantara, Christopher, 421n9 Alcantara, Christopher (with Nelles) Quiet Evolution, A, 421n10 Alcantara, Christopher (with Wilson and Rodon) Nested Federalism and Inuit Governance ..., 408 Anderson, David, 384–­5 Anderson, Jordan River, 421n4 Annual Premiers Council, 212 Anti-Inflation case, 93–­4, 113 Assembly of First Nations, 173, 401, 414 Assessment Act, 131 Assisted Human Reproduction Act, 119 Atkin, Lord, 118 Atlantic Immigration Pilot, 358 atomic energy, 93 Attorney-General for Manitoba v. Manitoba Egg and Poultry Association, 98 Auditor General of Canada, 380–­1 Australia Constitution of, 134n1 Council for the Australian Federation (CAF), 47 Council of Australian Governments (COAG), 52 High Court of, 48 immigration policies in, 342 one of most centralized federations, 40 one of six classical federations, 36–­7 self-rule federalism in, 52 taxation in, 253 uniformity and harmonization in, 42, 214–­15

Austria institutional entanglement in, 53 one of six classical federations, 36–­7 uniformity and harmonization in, 42 Authority of Parliament in Relation to the Upper House case, 105, 113 automobile industry, 211, 269 Baier, Gerald, 12, 331 Baier, Gerald (with Brown and Bakvis) Contested Federalism, 106, 277n5 Baker, Dennis, 459 Bakvis, Herman, 168, 175 Bakvis, Herman (with Brown and Baier) Contested Federalism, 106, 277n5 Bank of Canada, 199, 216–­17n1 Banting, Keith, 20–­1, 253, 264, 459 Barrie, Doreen, 152 Bateman, T., 105 Bavaria, 37 Beare, M.E. (with Murray) Police & Government Relations, 126 Bégin, Monique, 329 Béland, D. Fiscal Federalism and Equalization Policy in Canada, 277n6 Belgium, 37, 41, 53n6 Bennett, W.A.C., 262 Bennett New Deal, 93 Bertrand, J., 388n2 BHP Billiton, 150, 211 big-city statutes, 432, 446 Bilcon, 238 bilingualism, 67, 84, 86n7, 144, 214 Bill 18 (Quebec), 238 Bill 21 (Quebec), 82, 86n5, 156 Bill 101 (Quebec), 73, 75, 77, 86 Bill C-262, 421n7 Bill of Rights, 144 biologics, 327, 332n2

Black Experience Project, 130 Blais, André, 217n2 Blake, Edward, 125 Blanchet, Yves-François, 82 Bloc Québécois, 13, 82, 138–­9, 146–­9, 155–­6 BNA Act. See Constitution Act, 1867 (BNA Act) Board of Commerce case, 118, 137 Boer War, 125 Boggs case, 119, 137 Bombardier, 239 Boothe, K., 332n1 Borden, Robert, 87, 145 Bouchard, Lucien, 80, 146 Boundaries of Judicial Review (Sossin), 110n1 Bourassa, Robert, 148, 152–­3 Braidwood, Justice Thomas, 127 Brandeis, Justice, 128 Brexit, 225 British Columbia adoption of UNDRIP, 421n8, 422 agreements with Indigenous peoples, 417–­18 carbon tax, 368 extra billing for healthcare in, 324 immigration powers in, 349 Ministry of Jobs, Trade and Technology, 239 at NAFTA negotiations, 242 non-governmental engagement in, 242 Northern Gateway Pipeline, 211 policing in, 126 stance on WTO labour standards and services, 242 trade agreements, 233–­9 Trans Mountain pipeline dispute, 370, 387 Broschek, Jörg, 421n9 Brown, Douglas, 17, 460, 467–­8 Brown, Douglas (with Bakvis and Baier)

Index 481 Contested Federalism, 106, 277n5 Brown, R.B. (with Girard and Phillips) History of Law in Canada, A, 134n2 Brunet, Michel, 86n2 Business Council of Canada, 240 Buy American Agreement, 235 Cairns, Alan, 53n3, 405 From Interstate to Intrastate Federalism, 161 Caisse de dépôt et placement, 72 Calder case, 407, 426 Calgary Declaration, 171 Cambie Surgeries Corporation case, 330–­1 Cambie Surgery Centre, 101, 109 Cameron, David, 12, 24, 86n8, 458, 464–­5 Cameron, David (with Simeon) Language Matters, 86n7 Campbell, Gordon (BC government), 242 Canada Assistance Plan (CAP), 97–­ 8, 264–­5, 291, 301, 316, 467 Canada Assistance Plan case, 97, 113 Canada Child Benefit, 14, 16, 288, 296, 307, 468–­9 Canada-EU Veterinary Agreement, 235 Canada Gazette, 228 Canada Health Accord (CHA), 299 Canada Health Act, 265, 290, 312, 316–­24, 328, 332, 403 Canada Health and Social Transfer (CHST), 263–­6, 276n1, 298, 301, 316–­17, 332 Canada Health Transfer (CHT), 254, 258, 259–­60, 265–­72, 298–­300, 306, 310–­11, 316–­19, 323, 330–­2 Canada Job Grant, 181 Canada-Korea Free Trade Agreement, 233–­5 Canada Lands, 205

482 Index Canada-Ontario Immigration Agreement, 348–­9, 358 Canada Pension Plan (CPP), 21, 25, 72, 144, 182, 285–­6, 291–­3, 307. See also Canada-Quebec Pension Plan (C/QPP); Quebec Pension Plan (QPP) Canada-Quebec Immigration Accord, 343–­4, 348, 354, 357, 359n4 Canada-Quebec Pension Plan (C/ QPP), 9, 16, 49, 151, 154, 301–­5, 461–­2, 468, 472. See also Canada Pension Plan (CPP); Quebec Pension Plan (QPP) Canada Revenue Agency (CRA), 53n2 Canada’s Economic Action Plan, 433 Canada Social Transfer (CST), 254, 258, 259–­60, 265–­8, 272, 298, 301, 310, 316 Canada Temperance Federation case, 93 Canada-Ukraine Free Trade Agreement (CUFTA), 240 Canada-United States-Mexico Agreement (CUSMA), 231, 235–­6, 239, 243 Canada-US Free Trade Agreement (CUSFTA), 223, 226, 241, 245–­6 Canada-Wide Accord on Environmental Harmonization, 12, 178 Canadian Alliance Party. See Canadian Reform Conservative Alliance Party (Canadian Alliance) Canadian Cattlemen’s Association, 240 Canadian Centre for Policy Alternatives (CCPA), 240–­3 Canadian Charter of Rights and Freedoms, The, 75, 82, 101, 107–­9, 129–­32, 144, 173, 310, 341 Canadian Coordinator for Trade Negotiations (CCTN), 226

Canadian Council of Ministers of the Environment, 379 Canadian Energy Regulator, 388. See also National Energy Board (NEB) Canadian Environmental Protection Act, 119 Canadian Free Trade Agreement (CFTA), 12, 215, 217n9, 457 Canadian Human Rights Tribunal, 403 Canadian Labour Congress, 293 Canadian Medical Association, 101 Canadian Reform Conservative Alliance Party (Canadian Alliance), 138, 161 Canadians’ Thoughts on Their Health Care System (Mendelsohn), 329 Canadian Taxpayers Federation, 432 Canadian Trade and Tariffs Committee, 226 Canadian Union of Public Employees (CUPE), 243 cannabis sales, 271 Cannon, Lawrence, 148 cap-and-trade system, 368, 384, 387–­8 carbon pricing (taxing), 17, 91, 94, 110, 153, 166, 171, 182–­4, 271, 366–­83, 387–­8, 469–­70 Cartier, George-Étienne, 168 Carty, R. Kenneth, 141, 145, 153 C.D. Howe Institute, 240 Centurion Health, 238 Century of Criminal Justice, A (Friedland), 133 Chandler, William, 141, 147 Chaoulli, Jacques, 100, 102, 109 Chaoulli v. Quebec case, 100–­1, 109, 112, 331 Charest, Jean, 15, 152, 242–­3 Charlottetown Accord, 13, 25, 75, 92, 99, 173 Charter, the. See Canadian Charter of Rights and Freedoms, The

Charter of Open Federalism, 179 Charter of the French Language, The. See Bill 101 (Quebec) Chatterjee, Robin, 120 Chatterjee case, 119–­21, 137 Chicken and Egg case, 98, 112 children child care, 20, 22, 50, 457 health and social services for, 402–­ 3, 416, 421n4, 426 See also Canada Child Benefit China, 232 Chrétien, Aline, 86n4 Chrétien, Jean (federal government of), 13–­14, 49, 79, 86n4, 99, 138, 147, 150, 295–­6, 364, 367, 384–­6, 433, 463 city charters, 432–­4, 446 City of Toronto Act, 432 Civil Remedies Act (CRA, Ontario), 119, 122 Civil Service Reform Act, 143 Clarity Act, 13, 80, 86–­7, 103, 111 Clark, Christy (BC government of), 242, 320, 373–­4 Clark, Joe (federal government of), 145 climate change, 22–­3, 82, 92, 150, 181, 241, 363–­92, 379, 459 conferences on, 182, 363, 367, 370, 377, 381, 388 convention on, 363 policy change over time, 458, 469–­74 C.N. case, 123, 137 Coalition Avenir Québec (CAQ), 15, 81, 156 Coastal GasLink Pipeline, 126–­7 Combines Investigation Act, 119 Comeau, Gerard, 48, 101, 107, 109 Comeau case. See New Brunswick Beer case Commission on Environmental Cooperation (CEC), 236

Index 483 Commission on the Future of Healthcare in Canada, 318 Committee for North American Free Trade Negotiations (CNAFTN), 226 Committee for the Free Trade Agreement, 226 common market, 197–­200 Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), 230, 235, 243 Comprehensive Economic and Trade Agreement (CETA), 215, 217n7, 222, 225–­35, 241–­4, 462 Comprehensive Land Claims Agreements (CLCAs), 408 Conference of Cantonal Governments (Switzerland), 47 Conference of Western Premiers, 350 Conscription Crises (World Wars I and II), 68, 87 Conservative Party of Canada formation of, 138, 161 (see also Progressive Conservative Party of Canada) Constitution Act, 1867 (BNA Act), 7–­8, 25, 41–­4, 63, 66–­8, 75, 93, 100–­ 2, 107–­10, 126, 170–­1, 198, 222, 283, 400, 405, 420n3, 456–­60, 475 POGG: peace, order, and good government clause, 93, 110–­11, 119, 223 section 36, 253, 265 section 91, 317, 346, 402, 410 section 92, 316–­17, 346 section 93, 346 section 95, 337, 346 section 121, 199–­200 section 122, 199 Constitution Act, 1982, 25, 61, 75, 85, 86nn8, 9, 90–­1, 97–­8, 104, 108, 171, 174, 252–­3

484 Index Constitution Act, 1982 (continued) section 35, 370, 398, 401, 409–­10, 412 section 91, 114–­19, 131–­2, 199–­200, 398–­9 section 92, 114, 118, 120, 122, 124–­5, 129, 132, 200 section 92(A), 205, 217n4 Constitutional Act, 1791, 65 Constitutional Law of Canada (Hogg), 123 Conteh, Charles, 443 Contested Federalism (Brown, Bakvis, and Baier), 106, 277n5 Controlled Drugs and Substances Act, 120–­1, 327 Cooperative Capital Markets Regulator, 106 Co-operative Commonwealth Federation (CCF), 143–­4, 287–­9 cost-sharing agreements, 97, 151, 314–­15 Couillard, Philippe, 15, 81 Council for the Australian Federation (CAF), 47 Council of Australian Governments (COAG), 52 Council of Canadians, 241 Council of the Federation (CoF), 15, 47, 178, 212, 217n7, 227, 231, 320–­1, 328, 414, 467, 476 countervailing measures, 224, 237, 245 Courchene, Thomas, 23 Crerar, T.A., 125, 143 Criminal Code of Canada, 8, 117–­23, 129, 134 criminal law and justice bail practices in, 129 charge screening in, 129 codification of, 117, 134 confidence in system, 130, 133, 471 definitions of, 134 divided jurisdiction over, 459 legal definition of, 117

policy change over time, 469 uniformity in, 117, 129 in United States and Australia, 134n1 See also Criminal Code of Canada Crosbie, John (Newfoundland government of), 146, 149 crown corporation, 205, 217 Crown Zellerbach case, 48, 94, 112 customs union, 197, 200 customs valuation, 224, 245 Cutler, F., 27 Daniels v. Canada case, 402–­3, 410 Day, Brian, 101–­2 defensive interests, 222–­4, 230–­1, 233–­5, 246 de-indexation, 295, 307 Department of Justice, 121 Department of Regional Economic Expansion (DREE), 206 Department of Regional Industrial Expansion (DRIE), 205 Dhillon, S., 134n4 Dickson, Justice, 117 Diefenbaker, John (federal government of), 138, 144–­6, 313 Dominion Police, 124–­5 Dorion, A.A., 60 Duplessis, Maurice (Quebec government of), 68–­70, 76, 88, 106 Dupré, J.S., 6, 12 Durham, Lord, 60, 65–­6, 87 Durham Report, 65, 87 duty to consult, 396, 409–­12, 416, 419, 422 Dyck, Rand, 141 Dyck case, 119, 128, 137 Dziekanski, Robert, 127 education, 23, 50, 241, 253, 265, 315–­16 elections, federal 1958, 157

1984, 157 1993, 146, 148, 155 1997, 296 2000, 147 2006, 148, 152 2008, 148 2011, 139, 148, 155 2015, 149, 156, 477 2019, 149, 153, 156, 273, 475 electoral systems balance theory of, 158 first-past-the-post / singlemember-simple-plurality (SMSP), 145, 161, 477 Employment and Social Insurance Act, 49 Employment Insurance (EI), 99–­ 100, 295–­7, 305–­7, 468, 472. See also Unemployment Insurance (UI) Employment Insurance Act case, 99, 113 Energy East pipeline, 211 environment, 12, 94, 119, 165, 178, 271 Environmental Harmonization Accord, 385 Environment and Climate Change Canada, 388n2 equalization programs, 17, 171, 179, 253, 258, 259–­60, 264–­8, 272–­7, 310, 314, 377, 474 Erk, J., 52 Established Programs Financing (EPF), 264–­5, 298, 314–­19 European Community (EC), 237 European Union (EU), 197–­8, 215, 217n7, 222, 225, 227–­9, 233–­5 Eurosport Auto case, 119, 137 Fafard, Patrick, 240, 318 Fairchuk case, 119, 137 Family Allowances, 287–­8, 296 Family Income Supplement, 288

Index 485 Federal, Provincial, and Territorial institutions (FPT), 350–­1 Federal, Provincial, Territorial Committee on Trade (C-Trade), 226–­8 Federal Condition in Canada, The (Smiley), 140, 152 Federal Court of Appeal, 374–­5, 411 federalism (in other countries) comparative analysis and models of, 31–­58 second chamber in, 6 six cases of, 36, 53n1 See also Australia; Austria; Germany; Switzerland; United States federalism, Canadian Aboriginal and treaty rights in, 409–­12, 416 activist federal and provincial governments in, 204–­6 bilateral intergovernmental agreements in, 46–­7, 322–­4, 343, 346–­8 central Canada domination in, 138, 202–­3, 216, 377 centralizing approach to, 88, 93, 144, 147, 150, 157, 168, 170, 179–­80, 184, 287 children’s services in (see children) cleavage and irresolution in, 33–­4, 40, 54, 66–­73, 166, 342 climate change policy in, 363–­92, 458, 469–­74 (see also climate change) compact theories in, 43 comparative analysis of, 31–­58, 33–­53, 38–­9 competitive elements in, 9–­10, 14–­15, 19, 24, 354–­5, 475 constitutional issues and powers in, 92–­110, 223–­6, 253–­4, 431, 460, 476

486 Index federalism, Canadian (continued) contextual factors of, 4–­5 coordination in, 9, 11, 49–50, 53n4 criminal law and justice in, 114–­37 (see also criminal law and justice) decentralization in, 70, 84, 86n3, 168, 171 decision rules in, 36 declaratory power in, 41 devolution of, 476 dispute resolution in, 90–­113 distinct-society concept in, 73 division of powers in, 34, 35, 45, 90–­113, 116–­24, 158, 179, 431–­4, 475 dualism in, 292 dual list approach in, 43–­4 dynamics of, 31–­2 economic barriers (interprovincial) in, 197, 218 economic development policies in, 23, 72, 195–­207, 208–­16, 209, 224, 252, 269, 342–­8, 355, 402, 409, 430, 433, 441–­3, 467–­74 economic intervention (indirect) in, 208–­11 economic union in, 195–­221 effectiveness of, 18–­19, 26, 49–­53, 59–­85, 107, 115, 133, 184–­5, 197, 213–­15, 222–­3, 232–­40, 244, 252, 274–­5, 305–­6, 311, 325–­8, 355–­7, 381–­2, 418, 427, 438–­42, 445, 464–­65, 466, 467–­73 effect of minority governments on, 151–­2 equal diversity in, 171–­3 equalization programs in (see equalization programs) ethno-cultural diversity in, 84, 165 evolution of, 222–­50, 346 federal and provincial subsidies in, 207, 208, 209 federal challenges to provincial authority in, 8

federal dominance in, 202–­4 federal powers of reservation and disallowance in, 41, 45 federal pressures before, 64–­6 federal-provincial cost-sharing agreements in, 97, 151, 314–­15 federal-provincial diplomacy and negotiations in, 40, 103, 317–­ 18, 321–­2, 379 First Ministers’ conferences (FMCs) and meetings (FMMs) in, 11–­12, 161, 173, 180, 182, 372, 379–­81 first-past-the-post electoral system in, 145 fiscal balance or imbalance in, 258, 271–­8, 354, 475 fiscal federalism in, 35, 251–­81, 262–­70, 352, 460, 467, 473–­4 French fact before, 64–­6 functionalism in, 115–­24 future of, 473–­7 global supply chains in, 195, 217 healthcare in (see healthcare) health insurance in (see healthcare) “holding together” of, 36, 54 ideational complexity and foundations of, 40, 43 ideologies of public and political actors in, 174–­5, 184, 342, 358 ideology and partisan affiliation in, 17 immigration in, 337–­62 (see also immigration) implementation of legislation in, 35, 53n2 income security and transfer programs in, 287–­9, 295–­7, 307 incremental intergovernmentalism in, 226–­32 industrial policies in, 200–­4, 211, 217n3

informalism of, 108 infrastructure investment in, 16, 181–­4, 270, 433, 439 inherited features in, 168 institutional ambiguity and change in, 44–­50, 54 institutional features of, 4–­5 intergovernmental conflict in, 72, 80–­1, 110, 175, 182–­3, 202, 205, 215, 297, 303, 315, 328, 344, 352, 363, 472, 476 intergovernmental institutions in, 349–­51, 441 intergovernmental relations (IGR) in, 10, 35, 37, 49, 90, 97–­ 8, 108–­9, 165–­94, 176, 350–­1, 364, 379–­81, 384, 412, 413, 414, 460, 473, 477 intergovernmental transfers in, 256–­62, 271 international trade, agreements, and disputes in, 15, 22–­3, 50, 178, 222–­50, 459, 462, 468, 471, 474 (see also trade) inter-party coalitions in, 141–­2, 145–­7, 153 interprovincial transport of alcohol in, 101–­2 intrastate dimension in, 44, 48, 105, 146, 149, 161, 402, 446 intrastate vs. interstate in, 141, 161 judicial review of Constitution in, 92–­110 knowledge-based economy in, 197, 208–­11, 218 labour market in (see labour market) legitimacy (process and output) of, 3–­4, 19, 24–­7, 49–­53, 59–­85, 107, 115–­16, 129–­33, 185–­6, 197, 222–­3, 240–­4, 252, 275–­6, 305–­6, 311, 328–­30, 357–­8, 382–­ 3, 400, 412, 418, 427, 442–­5, 464–­65, 466, 467–­73

Index 487 logic of, 62–­4 market economies in, 196, 218 model of: asymmetrical, 8, 25, 42, 172–­3, 318, 344, 358, 382, 454–­ 5, 456–­7, 475 model of: classical, 7, 41, 88, 253, 284–­9, 293, 295–­7, 301–­5 model of: collaborative regulatory, 8, 431, 454–­5, 456–­7, 476 model of: collaborative sharedcost, 49, 91, 109, 174–­81, 210–­ 11, 338, 415–­19, 453, 454–­5, 456–­61, 472–­4 model of: consultation, 9, 11 model of: co-operative, 9, 12, 15, 21, 24, 91, 91–­108, 119, 205, 210, 270, 338, 475–­6 model of: executive, 10–­12, 27, 40, 51, 74, 109, 168, 412–­14, 419, 436, 473, 477 model of: horizontal or administrative, 114 model of: joint decision-making (shared rule) in, 6, 8, 31–­4, 35, 36, 46–­50, 52–­4, 253, 285–­6, 291–­3, 298, 301, 304–­6, 330, 364, 400–­1, 454–­5, 456–­9 model of: nation-to-nation/ government-to-government, 404–­5, 409, 415–­18 model of: open federalism, 179, 184, 187, 223, 227, 349 model of: self-rule or independent (arm’s length) governments, 7, 14–­16, 19–­20, 31–­58, 253, 330, 400–­1, 420n3, 453, 454–­5, 456, 458 model of: shared-cost, 12, 14, 264, 284–­6, 289–­93, 297–­301, 304–­6, 314, 373–­5, 381, 454–­5, 456 model of: unilateral shared-cost, 454–­5, 456–­7, 473 monetary policy in, 199, 216–­17n1 multilateral approach to, 317, 322, 351, 357

488 Index federalism, Canadian (continued) multi-level governance (MLG) in, 395–­426, 421n9, 446 multinational vision of, 40–­3, 172–­4, 187, 460 municipal intergovernmental relations (IGR) in, 26, 427–­52 national coordinated policy in, 364, 367–­9, 383–­4, 387 national unity in, 138–­64 non-governmental engagement in, 240–­4 own source revenues in, 256 pan-Canadian securities regulation in, 106 pan-Canadian vision of, 170–­1, 187, 460 partisan alignment in, 152–­6, 183, 373 pension plans in (see CanadaQuebec Pension Plan (C/ QPP)) performance of, 5–­7, 26, 59–­85, 108–­ 9, 114–­15, 133, 184–­5, 197, 212–­ 13, 252, 274, 305–­6, 311, 316–­25, 352–­5, 378–­81, 418, 427, 431–­8, 444–­5, 463–­65, 466, 467–­73 persistence of, 41 policing in (see police and policing) policy development in, 99–­100, 177, 363, 443–­4 policy legacies in, 462 policy outcomes in, 18–­19, 26, 223, 232–­40, 282–­6, 305, 352, 356, 381–­2, 439–­42, 464, 470 political parties in, 138–­64 (see also political parties) programs and policy areas in, 454–­5, 456 provincial autonomy, 378–­84 provincial challenges to federal authority in, 43, 72, 75, 82–­3, 86n3, 91–­4, 97

provincial economies in, 201 provincial equality vision of, 171, 179, 187, 460 provincial/federal mobility in, 152–­6 provincial “laboratories of democracy” in, 128 provincial policy innovation and diffusion in, 314, 320, 346 public policy in, 286 “quasi-federalism” period in, 41 reasons for, 62–­3 regional and global integration in, 13 regionalism in, 142–­9, 165, 171, 203, 215–­16, 305 regional representation in caucus and cabinet, 159–­60 relationships with Indigenous peoples in (see Indigenous peoples) research and development (R&D) in, 207, 20­9, 210 rights-based vision of, 173 role of Cabinet and Cabinet committees in, 161 role of the courts in, 5, 90–­113 role of the Senate in (see Senate of Canada) roles of participants in, 26 second chamber in, 35, 36, 51 social policy in, 99–­100, 174, 282–­309 social programs (safety net) in, 282–­310 sovereignty association in (see under Quebec) spending power in, 19, 23, 95, 254, 283–­4, 317 sub-federal compliance in, 227–­35, 239, 244 taxation in (see taxation) three federalisms in, 282–­309 tri-level governance in, 434, 437–­8

two-nations theory in, 73 unilateralism in, 14, 19, 35, 47–­51, 180–­5, 285, 296–­300, 304, 316–­ 19, 329, 368, 371, 381, 384, 456–­8, 463, 472 Unitarismus in, 42 unity-diversity balance in, 7, 94, 251, 378–­9 vis-à-vis Quebec, 59–­85 (see also Quebec) visions of, 169–­74 welfare state in, 286–­306 women in (see women) federalism, theories and models of, 167–­8, 453, 454–­5, 456 asymmetrical, 8, 456 “beggar-thy-partner,” 14 classical, 14, 19, 36, 41, 88–­90, 253, 284 collaborative, 9, 12–­14, 16, 19–­21, 35, 42, 177 decentralization in, 84 as a descriptive term, 167 effectiveness of, 18, 115 ethno-cultural diversity in, 84 executive, 10–­12, 27, 40, 51, 74, 109, 168 “federal bargain” in, 140 fiscal, 251 as an ideology, 167 intergovernmental conflict in, 7, 33, 141 intergovernmental relations in (IGR), 168–­9 interstate, 6, 43, 161 intrastate, 6, 10, 44, 48, 53n3, 140, 161 intrastate vs. interstate, 141, 161 joint decision-making (shared rule), 14, 19–­21, 35–­6, 46, 49–­51, 54 multi-level governance (MLG), 168, 187, 436, 446 norms, institutions, and outputs in, 168–­9, 187

Index 489 open, 15, 187 “parties-based theory of,” 139–­42 partisan symmetry-asymmetry in, 140 party systems in, 141 self-rule or independent governments, 3, 5–­7, 31–­58 shared-cost, 9 systems of, 154, 157 three federalisms, 282–­309 treaty or constitutional, 404–­6, 421–­2 unilateral, 14, 19 Federalism and Economic Union in Canada (Norrie, Simeon, and Krasnick), 213 Federalism: Origin, Operation, Significance (Riker), 157 Federal-Provincial Internal Trade Agreement, 171 Federal-Provincial-TerritorialIndigenous Forum (FPTIF), 414 Fédération des Femmes de Québec, 241 Federation of Canadian Municipalities, 439 Feed-in Tariff (FIT; Ontario), 237–­8 financial crisis of 2008–­9, 472 Finlay cases, 98, 112 Firearms case, 94, 113 First Nations, 14 Assembly of First Nations, 173, 401, 414 collaborative policy development, 415–­16 Grassy Narrows case, 410, 426 Haida case, 411, 426 health and social services for children (Jordan’s Principle), 402–­3, 416, 421n4, 426 intergovernmental transfers to, 261–­2 Inuit Tapiriit Kanatami, 414

490 Index First Nations (continued) land title treaties, 399–­400 Nisga’a Treaty, 47, 242, 407 population statistics, 398 referred to as Indians, 420n1 Tsilhqot’in case, 411–­12, 426 Wet’suwet’en Nation, 126 Fiscal Federalism and Equalization Policy in Canada (Béland et al.), 277n6 Flaherty, Jim, 267–­8, 311 Food and Drugs Act, 327 Ford, Doug (Ontario government of), 17, 158, 183–­4, 352, 368, 373–­6, 444 Forum of Ministers Responsible for Immigration (FMRI), 349–­55 Forum of the Federation, 350 framework legislation, 359 Francophones, 3, 24, 42, 45, 59–­61, 68–­70, 73–­4, 77–­9, 86n6, 147, 172, 342–­3, 358 Francophonie, La, 456 Fraser Institute, 240 free, prior, and informed consent (FPIC), 411, 422 Freeland, Chrystia, 225, 230–­2 Freeze, C., 134n4 Friedland, M.L. Century of Criminal Justice, A, 133 From Interstate to Intrastate Federalism (Cairns), 161 functionalism, 115–­24, 134 funding, grants, or transfers federal or provincial to municipalities, 429 federal to provinces, 179, 258–­9, 277, 297–­8, 314–­15, 332 Future of Health Care (first ministers’ meeting), 173 Gagné, R. (with Stein) Reconciling the Irreconcilable, 275 Gagnon, Alain-G., 86n1

Gardiner, J.G. (Jimmy), 143 General Agreement on Tariffs and Trade (GATT), 223–­4, 237, 245–­6 General Agreement on Trade in Services (GATS), 233, 247 General Procurement Agreement, 235 George, Dudley, 131 Germany authority of the Länder in, 45–­6 Bundesrat, 36 horizontal fiscal imbalance in, 258 institutional entanglement in, 53 joint-decision-making model in, 49 mono-national foundation of, 40 one of six classical federations, 36–­7 taxation in, 253 Unitarismus in, 42 Gibbins, Roger, 44, 152 Girard, P.J. (with Phillips and Brown) History of Law in Canada, A, 134n2 Goodyear Tire case, 119, 137 Government Party, The (Whitaker), 161 Graham, George, 125–­6 Grant, K., 332n1 grants. See funding, grants, or transfers Grassy Narrows First Nation case, 410, 426 Great Coalition, the, 172 Great Depression, 21, 93, 126, 203 “Great Pension Debate,” 293, 306 Great Recession, 213 Green Energy and Green Economy Act (Ontario), 237 greenhouse gas (GHG) emissions, 363–­5, 366, 377–­88, 461, 470 Greenhouse Gas Pollution Pricing Act case, 94, 113 Green Party of Canada, 211, 373, 475

gross domestic product (GDP), 201, 270 Guaranteed Income Supplement (GIS), 288, 293–­5, 302, 307 Haddow, Rodney, 213 Haida Nation case, 411, 426 Haldane, Viscount, 118 Haley, B., 388n1 Halifax Harbour Cleanup, 438 Hansen, Ken, 124 Harper, Stephen (federal government of), 15–­16, 49, 80, 95, 103–­5, 139, 148–­52, 158, 166, 175–­80, 184–­7, 211, 223, 227, 261, 266–­74, 296, 299–­303, 311, 317–­23, 331, 349, 355–­8, 364, 368, 377, 385–­6, 413–­15, 433, 440, 456–­63 Harris, Mike (Ontario government of), 147 Hauser case, 123, 137 healthcare abortion, 122 advocacy groups for, 319–­20, 330 Commission on the Future of Healthcare in Canada, 318 common federal-provincial vision of, 178 drug prices and plans, 313, 320, 325–­7, 332–­3 erosion of, 299 First Minsters’ meeting on the future of, 173 for First Nations, Inuit and Métis, 403 funding of, 179–­84, 275–­6 government responsibility for, 165 Health Care Accord, 178, 183, 311, 457 Health Care Innovation Working Group, 320 Health Council of Canada, 318–­19 health insurance, 289–­91

Index 491 home care, 321–­2 Hospital Insurance and Diagnostic Services Act, 314 importance to Canadians of, 329 importance to welfare state of, 253 Medical Care Act, 314 medicare, 20–­3, 144, 151, 154, 171, 174, 289–­91, 310–­36 mental health in, 321–­2 in other democracies, 311, 325, 332–­3 paradigm of intergovernmentalism, 100 pharmacare, 50, 301, 321, 326–­8, 331, 332n1, 333 policy change over time, 457–­8, 473 private provision of services in, 101, 109, 110n2, 300 provincial health cards for, 132 public health authorities, 438, 442 renewal accord, 318 restructuring of, 323 Royal Commission on Health Services, 313 shared costs in, 306, 397–­401 single-payer system, 312–­16, 333 supplementary fee (extra-billing) in, 290–­1, 300, 313, 316–­17, 320, 323–­4, 330–­2 wait-lists for and access to, 325–­6, 330 Wait Times Reduction Fund, 318 Health Care Accord, 178, 183, 311, 457 Health Care Innovation Working Group, 320 Health Council of Canada, 318–­19 Health Insurance Act (Quebec), 100 Hepburn, Mitch (Ontario government of), 153 Higgs, Blaine, 153, 183 Highway Traffic Act, 122 Hilderman, Jane, 149

492 Index History of Law in Canada, A (Girard, Phillips, and Brown), 134n2 Hogg, Peter Constitutional Law of Canada, 123 Homelessness Partnering Strategy (HPS), 433, 439, 446nn9, 10 homosexuality, 121 Honickman, Asher, 122 Hooghe, Liesbet, 436 Horak, Martin, 438 Horgan, John (BC government of), 211, 242, 373–­4 horizontal fiscal imbalance (or balance), 257–­8, 266–­7, 277–­8, 460 Hoskins Report, 328 Hospital Insurance Act (Quebec), 100 Hospital Insurance and Diagnostic Services Act, 314 Howe, C.D., 143 Howe Institute, C.D., 140 Hueglin, T., 53n5 human trafficking, 128 hybrid lists, 224, 246 Hydro-Québec case, 94, 112, 119 Iacobucci Report, 132 Ignatieff, Michael, 151 immigration administrative categories per province, 341 Canada-Quebec Accord on, 343, 348 compensation to Quebec for, 343 economic, 340–­1, 351–­3 federalization of, 345–­6, 352–­8 federalized governance of, 346–­58 gender, race, and class considerations in, 356, 359n2 integration and settlement, 338, 346–­51, 355, 359, 441, 459 intergovernmental relations in, 50, 358–­9 internal migration, 341, 359

international, 338, 342, 359n1 irregular border crossings, 350–­5 multilateralism in, 357 policy change over time, 472 prosecution of offenders in, 123 Provincial Nominee Program (PNP), 345, 348, 352, 355–­7 provincial/territorial ministers of, 349–­51 provincial/territorial powers in, 348–­9, 354, 358 in Quebec, 78, 86n5 regionalization of, 356 in relation to population size per province, 340 shared jurisdiction for, 8 statistics of, 165 success of, 83 two-step system in, 356 Immigration and Refugee Protection Act (IRPA), 347–­8 Immigration and Temporary Admission of Aliens, 343 import licensing, 224, 246 income-tested program, 288, 307 Independent Investigations Office (IIO), 127–­8 India, 230, 240 Indian Act, 398, 422 Indian and Northern Affairs Canada (INAC), 132, 134n5 Indigenous and Northern Affairs, 134n5 Indigenous peoples agreements with provinces by, 417 challenges to CETA by, 241 changing relationship with federalism of, 406–­18 climate-change policy issue for, 382–­3 collaborative relationship with governments (FPTIF) of, 181, 414–­19 conflict with provinces, 400–­2

Constitutional rights of, 109 in criminal justice system, 116, 130–­3, 471 duty to consult, 396, 409–­12, 416, 419, 422 effect of pipeline tensions on, 82–­ 3, 211, 370, 374–­5, 383, 396 effect of Royal Proclamation of 1763 on, 65, 400, 422 effects of colonialism on, 24–­5, 42–­3, 64–­5, 87, 338, 397–­406 federal ministry for, 132, 134n5 as founding peoples of Canada, 172 free, prior, and informed consent (FPIC) from, 411, 422 genocide of, 406, 421n5 geographic distribution of, 399 impact of NWMP on, 125 interjurisdictional immunity for, 410 international attention to, 406 judgment of federalism by, 465, 472 judicial interpretation of treaty rights for, 409–­12, 416 lack of opportunities in international trade of, 471 language legislation concerning, 416 legal and political status of, 395–­ 6, 400 missing and murdered women among, 131, 181, 395, 406, 421n6 modern treaties and selfgovernment agreements with, 407–­9 multi-level governance (MLG) of, 395–­426, 421n9 nation-to-nation vision of federalism of, 404–­5, 409, 415–­18 non-status Indians among, 399, 402, 422

Index 493 participation in ministerial intergovernmental forums by, 413, 414 policy-making and bilateral forums with governments by, 415–­20, 467 population statistics of, 398 protection under the Constitution Act of, 217 recognition under treaty federalism of, 404–­6, 422 representation on Supreme Court by, 104, 401 residential schools for, 131 rights of, 150, 395–­6, 406–­7, 418–­ 19, 421nn7, 8, 422 rise of nationalism in, 173 role and impact of, 223 role in intergovernmental system of, 397, 401 self-rule authority of, 400–­8, 420n3 statutory relationship with Canada of, 398–­9 third order of government recognition of, 476 three formally recognized groups of, 420n1 Truth and Reconciliation Commission recommendations for, 181 underrepresentation in Commons and Senate of, 401 underrepresentation on juries of, 131–­2 well-being of and healthcare for, 398, 399, 403 See also First Nations; Inuit; Métis Indigenous Services Canada (ISC), 262 Infrastructure Canada, 433 Intergovernmental Policy Capacity in Canada (Inwood, Johns, and O’Reilly), 323

494 Index internal migration, 359 international immigration, 359 International Labour Organization (ILO), 236 Intrastate Federalism in Canada (Smiley and Watts), 141 intra vires judgement, 94, 110, 120 Inuit, 398, 408, 414–­15, 420n1, 421n5 Inuit Tapiriit Kanatami, 414 Inuvialuit, 408 Investment Court System, 225 Inwood, G.J. (with Johns and O’Reilly) Intergovernmental Policy Capacity in Canada, 323 James Bay and Northern Quebec Agreement, 408 Janssen Pharmaceuticals, 332n2 Johns, C.M. (with Inwood and O’Reilly) Intergovernmental Policy Capacity in Canada, 323 Johnson, A.W., 154 Johnson, Pierre Marc, 229 Jordan’s Principle, 403, 421 Judicial Committee of the Privy Council (JCPC), 21, 44–­5, 49, 87, 92–­3, 108–­11, 115, 118, 203, 223, 420n3 Judicial Role in a Diverse Federation, The (Schertzer), 187n1 Juries Act, 132 Kasirer, Justice, 105 Kelowna Accord, 413 Kennedy, Paul, 129 Kenney, Jason (Alberta government of), 17, 183–­4, 273, 349, 366, 376–­7 Keshane case, 119, 137 Keynesianism, 204–­6, 218, 286 Keystone XL pipeline, 370

Kinder Morgan pipeline. See Trans Mountain Pipeline (Kinder Morgan extension) Kokopenace case, 132, 137 Korea, 230, 233 Krasnick, Mark (with Norrie and Simeon) Federalism and Economic Union in Canada, 213 Krikorian, Jacqueline, 86n8 Kukucha, Christopher, 15, 22 Kyoto Protocol, 367, 380, 386, 440 Labour Conventions Reference, 47–­8, 96, 112 labour market, 99, 125, 165, 178–­81, 185, 210, 338–­45, 356, 456, 467 Labour Market Development Agreements, 178 Lachine Canal Revitalization, 438 Landry, Bernard, 80 Language Matters (Cameron and Simeon), 86n7 Lapointe, Ernest, 143 Laskin, Bora, 94, 122 Laurier, Wilfrid (federal government of), 41, 142, 148 Lazar, Harvey, 12, 14–­15, 19, 109, 264, 311 Leblanc, Romeo, 146 Leblond, Patrick, 240 legal cases, 112–­13, 137, 402–­3, 407, 410–­12, 426 Legault, François, 15, 183–­4 Lesage, Jean, 72, 106 Lester, John, 209 Lévesque, René (Quebec government of), 73–­4, 78–­9 LGBTQ rights, 236 liberalization, 207–­9, 218 Liberal Party of Canada broker of regional interests, 147 centrist orientation, 287

defeat in 1958 and restructuring, 145 election promise in 2015 of SMSP, 477 electoral priorities, 440 “government party,” 161 losses in 1997 election, 296 Unionists, 142 Lone Pine Resources, 238 long guns registry, 119 Lord, Bernard, 239 Lucas, Jack, 26, 462, 474 Luz case, 123, 137 Macdonald, Douglas, 17, 22, 385, 388n1–­388n2, 461, 468, 470 Macdonald, John A. (federal government of), 5, 41–­3, 60–­2, 86n3, 111, 117, 124, 129, 142, 148, 155, 168 Macdonald Royal Commission, 206, 214 Mackenzie King, William Lyon (federal government of), 87, 125, 143, 145–­7, 152–­3, 155 Maioni, Antonia, 457 Mallet, Melanie, 240 malum in se, 134 malum prohibitum, 134 Manitoba Canada Assistance Plan, 98 carbon pricing, 47, 182, 271 climate change, 322 CPP, 17 French language in, 69 immigration to, 344, 349 international trade, 243 interprovincial trade barriers, 98 natural resources in, 203 policing in, 126 Public Schools Act, 45 Riel Rebellions, 68 schools crisis, 68–­9, 87 trade agreements, 233–­4

Index 495 Manitoba Act of 1870, 87 Manitoba Egg and Poultry Association case. See Chicken and Egg case Manitoba Schools Crisis, 68–­9, 87 Manning, Morris, 118 March West, 125 Margarine case, 118, 137 Marks, Gary, 436 Martin, Paul (federal government of), 16, 151, 183, 261, 268–­71, 296–­9, 311, 318–­19, 368, 379, 386, 433–­5, 457 Massey Commission, 88 Mazankowski, Donald, 146 McClearn, M., 134n4 McEachen, Allan J., 146 McGee, D’Arcy, 124 McGuinty, Dalton, 154, 320 McKenna, Catherine, 371 McLachlin, Chief Justice, 104 McRoberts, Kenneth, 71 Medical Care Act, 314 medicare. See under healthcare Medicare Protection Act (BC), 324 Meech Lake Accord, 13, 25, 75, 99, 173, 343, 383 Mendelsohn, Mathew, 27 Canadians’ Thoughts on Their Health Care System, 329 Mercer International, 238 Merger Mania (Sancton), 446n4 Mesa Power Group, 238 Métis, 398–­9, 402, 415, 420n1 Mexico, 231 Miller, David, 432 Ministry of Economic Development and Growth (MEDG), 241 Ministry of Education, 241 Ministry of Environment and Climate Change, 241 Ministry of Innovation, Science and Economic Development, 217n5 Mobil Investments Inc., 238 Moe, Scott, 272, 375, 377

496 Index monetarist economic theory, 206, 218 monetary union, 198–­9 Morgentaler cases, 122, 137 Morneau, Bill, 271, 322 Mowat, Oliver, 43, 86n3 Mowat Centre, 81 Mulroney, Brian (federal government of), 10, 49, 138, 145–­9, 153, 206, 295, 363, 367 multiculturalism, 83 municipalities amalgamation of, 432, 446n4 benchmarking and performance measurement of, 438 big-city statutes, 432, 446 city charters, 432–­4, 446 contracts with RCMP, 126 coordination with other governments, 441–­2 exclusion from decision-making, 442–­3 federal and provincial intrastate relations with, 434–­5, 446n6 Gas Tax Fund (GTF), 439–­40, 446n8 grants to, 429 IGR and policy outputs, 439–­40 infrastructure investment in, 439 intergovernmental conferences, 436–­7, 446n7 intergovernmental policy-making for, 440–­2 intergovernmental relations (IGR), 427–­52 multi-level governance (MLG) of, 436 policy-making authority of, 431–­2, 446n5, 458, 467 public opinion on the role of, 444 resolutions by, 436 sources of variation (size, policy domain, province) in, 430–­1, 437 supervisory or regulatory IGR in, 438, 446

tri-level governance of, 437–­8 value of their voices, 443–­4 Murray, T. (with Beare) Police & Government Relations, 126 Mutual Reciprocal Agreements, 227 Myers case, 129, 137 Nadon, Marc, 104 Nadon case, 104, 106, 113 NAIRU (non-accelerating inflation rate of unemployment), 206 National Energy Board (NEB), 374, 388 National Energy Program (NEP), 10, 76, 144, 201, 205, 218, 378 National Homelessness Initiative. See Homelessness Partnering Strategy (HPS) National Inquiry into Missing and Murdered Indigenous Women and Girls (NIMMIWG), 131, 181, 395, 406, 421n6 National Policy, 202–­3 national securities regulation, 95–­6, 105 national treatment, 246 negative lists, 224, 246 Nelles, Jen, 421n9 Nelles, Jen (with Alcantara) Quiet Evolution, A, 421n10 neo-liberalism, 13 Nested Federalism and Inuit Governance (Wilson, Alcantara and Rodon), 408 New Brunswick automobile insurance, 239 carbon pricing, 47, 182–­3, 271, 470 Common Schools Act, 45 Energy East pipeline, 211 French language, 68–­9, 456 greenhouse gas emissions, 372, 377 healthcare, 322 immigration, 345

incentives to industry, 204 policing, 126 sales tax, 255 New Brunswick Beer case, 101–­2, 107, 110–­12, 199 New Brunswick Common Schools Act, 45 New Deal for Cities and Communities, 435 New Democratic Party (NDP) medicare plan in Saskatchewan, 289 political discourse and platfoms, 241 regional support, 144 rise and fall in Quebec, 149, 156 social-democratic perspective, 286–­7 success in 2011 election, 139 trade policy, 236 Newfoundland and Labrador cod stocks, 150 energy and mining in, 201 enters Confederation, 63 equalization payments, 268–­9, 272 greenhouse gas emissions, 372 healthcare, 313 immigration, 339, 345 natural resources revenues, 277n4, 457 oil and gas, 205 policing, 134n3 sales tax, 255 trade agreements, 228, 238 new public management, 13 New West Partnership, 214 New World Wine Accord, 227 Nisga’a Treaty, 47, 242, 407 Norrie, Kenneth (with Simeon and Krasnick) Federalism and Economic Union in Canada, 213 North American Agreement on Environmental Cooperation, 227

Index 497 North American Agreement on Labour Cooperation, 227 North American Free Trade Agreement (NAFTA), 213, 218, 224–­7, 230, 235–­9, 241–­3, 246 Northern Gateway Pipeline, 211, 372 North-West Mounted Police (NWMP), 125 North West Rebellion, 87 Northwest Territories economy of, 201 equalization payments to, 261, 276n1 immigration to, 359n3 Notley, Rachel (Alberta government of), 366–­9, 372, 375–­6, 386 Nova Scotia abortion issue, 122 carbon pricing, 371 economy, 201, 204 equalization payments, 268–­9 greenhouse gas emissions, 368, 372, 379 immigration to, 340 natural resources revenues, 457 policing, 126 sales tax, 255 trade agreements, 237–­8, 243 Nugent, Amy, 476 Nunatsiavut, 408 Nunavik, 408 Nunavut creation of, 47 equalization payments to, 261 ethno-national vision of, 172 immigration to, 359n3 Inuit population, 421n5 Obama, Barack, 368–­9, 387 O’Brien, A. Achieving a National Purpose, 277n4 October Crisis, 75 offensive interests, 222, 230–­4, 244 Official Languages Act, 75, 77, 144

498 Index Offshore Accords, 277n4 O’Grady v. Sparling case, 122, 137 oil prices, 216, 271 oil sands. See under Alberta Old Age Security (OAS), 288, 293–­ 5, 302 “One Canada,” 144 Ontario auto bailout, 211 Canada Social Transfer, 301 cap-and-trade cancellation, 384, 387 carbon pricing, 47, 82 challenges to federal government, 94 Civil Remedies Act, 119, 122 CPP expansion, 17, 292, 303 equalization program, 268 green energy, 237–­9 greenhouse gas emissions, 94, 368 healthcare in, 313, 318, 321, 327 health insurance in, 290 immigration to, 339–­52 interprovincial trade barriers, 98 jury rolls in, 131–­2 Ministry of Health and Long-Term Care, 438 municipal measurement schemes in, 438 natural resources, 203 policing in, 124, 127–­8 retail sales tax in, 266 trade agreements, 231–­4 Ontario Court of Appeal, 376 Ontario Health Insurance Plan (OHIP), 132 Ontario Provincial Police, 124, 128, 131 Ontario Retirement Pension Plan, 303 Option for Quebec, An, 73 O’Reilly, P. (with Inwood and Johns) Intergovernmental Policy Capacity in Canada, 323

Organisation for Economic Cooperation and Development (OECD), 33–­5, 208, 270, 325, 469 Organization of the American States (OAS), 242 Pacific NorthWest Economic Region, 227 Pallister, Brian, 375 Pan-Canadian Competitive Value Price Initiative for Generic Drugs, 320, 331 Pan-Canadian Framework Low Carbon Economy Leadership Fund, 373 Pan-Canadian Framework on Clean Growth and Climate Change (PCF), 46–­7, 182, 321–­2, 364, 369–­78, 372, 375–­83, 387–­8, 469 pan-Canadian Pharmaceutical Alliance (pCPA), 327, 331, 332n2 Pan-Canadian Securities Regulation case, 106, 113 Papillon, Martin, 14, 25, 421n9, 465–­8 Paquet, Mireille, 457, 461 parental benefits, 99–­100 Paris Climate Conference, 182, 363, 367, 370, 377, 381, 388 Parizeau, Jacques, 80 Parker, Jeffrey, 46 Parliamentary Budget Office (PBO), 271 Parti Québecois (PQ), 15, 73–­81, 84, 243 Patented Medicines Prices Review Board (PMPRB), 327, 330–­2 Pearson, Lester B. (federal government of), 12, 72, 79, 144, 151–­3, 313 Peta, Conner, 232 Petriccione, Mauro, 229

Petro Canada, 205 pharmacare. See under healthcare pharmaceuticals, 326–­7 Phillips, J. (with Girard and Brown) History of Law in Canada, A, 134n2 Philpott, Jane, 310–­11, 321–­3 Picard, André, 325 pipelines, 17, 82, 91, 110, 131, 216, 364, 369–­78, 396 Alberta-to-Wisconsin Line 3, 372 Coastal GasLink, 126–­7 Energy East, 370 Keystone XL, 369–­70 Northern Gateway, 370 TransCanada, 217n6 Trans Mountain, 153, 211, 217n6 Trans Mountain (Kinder Morgan extension), 370, 372–­5, 411 POGG. See under Constitution Act, 1867 (BNA Act) Police and Government Relations (Beare and Murray), 126 police and policing, 116–­17, 121, 124–­31, 134, 428 political parties brokerage system in, 138, 143–­5, 161 consolidation of, 138 effectiveness of, 139 effect of television on, 144 evolution of, 145–­6 functions of, 138–­9 government party (or natural governing party), 147, 161 integrative capacity of, 155–­7 key figures in, 158 legitimacy of, 139 misleading titles of, 157–­8 “pan-Canadian” approach in, 144 patronage system in, 143, 146 performance of, 139 pork barrel contracts in, 143, 146 regional caucuses and ministers, 149–­51, 155

Index 499 regional fragmentation in, 144–­5 regional protest, 138, 143 systems of, 139–­41, 146–­52 Portraits 2017: A Fresh Look at Public Opinion and Federalism, 81 positive lists, 224, 246 Potash Corporation of Saskatchewan, 150, 211 Prince Edward Island enters Confederation, 63 immigration, 340, 345 incentives to industry, 204 policing, 126 privatization, 207 Pro-Canada Network, 241 procurement, 224, 235, 246 Progressive Conservative Party of Canada collapse of government in 1993, 146 consolidation with Canadian Alliance in 2004, 138, 161 Progressive Party of Canada, 143 Progressive Trade Agenda, 225, 236, 243 Proprietary Articles Trade Association case, 118, 137 prostitution, 122 protectionism, 209, 218 Provincial Nominee Program (PNP), 345, 348, 352, 355–­7 Prussia, 37 Public Schools Act (Manitoba), 45 Quebec appointees to Supreme Court of Canada, 105–­6 asymmetry in IGRs, 457 autonomy of, 254 Bill 18 on oil and gas exploration, 238 Bill 21 on secularization, 82, 86n5, 156 Bill 101 on language, 73, 75, 77, 86

500 Index Quebec (continued) Bloc Québécois, 13, 82, 138–­9, 146–­9, 155–­6 Caisse de dépôt et placement, 72 at CETA negotiations, 229, 239 challenges to carbon pricing by federal government, 94 child-care program, 20 Coalition Avenir Québec (CAQ), 81, 156 Commission municipal du Québec, 438 and conscription crises, 87 constitutional rights of, 67, 107 contribution to Canadian federalism, 83 corporatist tradition in, 241 court cases involving, 13, 92, 100–­3, 109–­13, 119, 137 Court of Appeal, 100, 106 at CUSMA negotiations, 236, 240 decline in birthrate, 71, 86n4 distinct society status of, 173 French language policy in, 73, 76–­ 8, 84, 86n6, 456 Gas Tax Fund (GTF), 446nn8, 10 healthcare or pharmacare in, 100–­1, 300, 318, 321, 326, 328, 331 Homelessness Partnering Strategy (HPS), 446n10 ideas and goals of, 15 immigration powers in, 342–­3, 348–­53, 457, 461 irregular border crossings, 350–­1 judgment of federalism, 24–­5, 43, 464 Liberal Party of, 71, 81 Ministère de l’Économie de la Science et de l’Innovation, 239 at NAFTA negotiations, 231–­2 nationalism and national identity in, 82, 86n6 nation status of, 80–­1

non-governmental engagement in, 241–­2 opposition to co-operative federalism in, 106 opposition to Energy East pipeline, 370 opposition to family allowances plan, 287–­8 opposition to TransCanada pipeline, 217n6 Parti Québécois, 15, 73–­81, 84, 243 place in Canadian federation, 5, 9, 59–­89 policing in, 124, 131 prime ministers from, 79 protection of interests by Supreme Court of Canada, 103–­7 Québécois identity in, 73 Quebec Pension Plan (QPP), 72, 292, 302–­4 (see also CanadaQuebec Pension Plan (C/QPP)) Quiet Revolution, the, 70–­6, 342, 354 reaction to decision on senate reform, 105 rejection of Constitution Act, 1982, 85, 86n8, 465 Réseau Québécois sur l’Intégration Continentale (RQIC), 243 and the Rest of Canada (ROC), 54, 172 securities regulation in, 105–­6 self-representation at UNESCO, 456 social and economic policy matters in, 99–­100 sovereignty-association, 13, 25, 73–­5, 79, 103, 111, 147 support for federal backstop price on carbon, 382 trade disputes, 239 trade partnership with California, 368

traditional character of, 69, 86n2 Union Nationale, 70 unique position in Confederation, 107, 171–­2, 318 value of Canada’s federal system for, 19, 84–­­5, 86n1 veto in constitutional agreements, 172 Quebec Act, 1774, 65 Quebec-California cap-and-trade system, 368 Quebec Observatory on Globalization, 242 Québécois nation motion, 2006, 80–­1 Quebec Pension Plan (QPP), 72, 292, 302–­4. See also CanadaQuebec Pension Plan (C/QPP) Quebec v. Canada case, 119, 137 Quebec Veto Reference, 85 Quiet Evolution, A (Alcantara and Nelles), 421n10 Quiet Revolution, 70–­6, 342, 354 Rae, Bob (Ontario government of), 206 Rand, Justice, 118 Rebellions of 1837, 87 recession of 2008–­9, 269–­70 Recognition and Implementation of Indigenous Rights Framework, 416 Reconciling the Irreconcilable (Gagné and Stein), 275 Red River Rebellion, 87 Reference on Secession. See Supreme Court Reference on Secession Reform Party of Canada, 13, 138, 146–­7, 161. See also Canadian Reform Conservative Alliance Party (Canadian Alliance) Re-inventing Criminal Justice Report, 130

Index 501 Remicade (infliximab), 332n2 Renvoi relatif à la réglementation pancanadienne des valeurs mobilières, 106 Report on the Advisory Council on the Implementation of National Pharmacare, 328 Report on the Affairs of British North America. See Durham Report Réseau Québécois sur l’Intégration Continentale (RQIC), 243 resources, natural, 93, 165–­6 Rest of Canada, the 54, 172 Riel, Louis, 45, 87, 125 Riel Rebellions, 68, 87 Riker, William, 148, 152, 154 Federalism: Origin, Operation, Significance, 139, 157 RJR-MacDonald case, 119, 137 Rocher, François, 61, 173 Rodon, Thierry (with Wilson and Alcantara) Nested Federalism and Inuit Governance, 408 Romanow Report. See Commission on the Future of Healthcare in Canada Rowell-Sirois Report, 88 Roxham Road, 350 Royal Canadian Mounted Police (RCMP), 124–­31, 134n4 Royal Commission of Inquiry on Constitutional Problems. See Tremblay Report Royal Commission on Aboriginal Peoples (RCAP), 397, 404–­5 Royal Commission on Bilingualism and Biculturalism, 144 Royal Commission on Health Services, 313 Royal Commission on the Economic Union and Development Prospects for Canada (Macdonald Commission), 206

502 Index Royal Newfoundland Constabulary, 134n3 Royal Proclamation of 1763, 65, 400, 422 rules of origin, 234, 246 Russell, Peter, 42 Ryan, Claude, 24 Safe Third Country Agreement (STCA), 350–­1 Sancton, Andrew, 446n2 Merger Mania, 446n4 sanitary and phytosanitary measures (SPS), 233–­5, 246 Saskatchewan carbon pricing, 47, 82, 94 challenges to federal government, 94 CPP, 17 energy and mining in, 201 Energy East pipeline, 211 equalization payments, 268, 272, 275 greenhouse gas emissions, 47, 182 model for healthcare plans, 20, 313–­14 natural resources, 203–­5 oil and gas, 205, 380, 383 policing, 126 potash, 150, 211 private MRI clinics in, 323–­4 refuses Pan-Canadian Framework, 322, 386 Riel Rebellions, 87 trade agreements, 232 Saskatchewan Court of Appeal, 376 Saskatoon Police, 131 Sauvé, Paul, 70 Savoie, Donald, 150 Scharpf, Fritz, 51, 53n4, 54 Scheer, Andrew, 373, 376 Schertzer, Robert, 15, 106, 458, 460, 468

Judicial Role in a Diverse Federation, The, 187n1 Schmidt, Vivien A., 232 Scowby v. Glendinning case, 127, 137 Secession of Quebec case, 13, 103, 111, 113 Second World War, 9, 22 Securities case, 95–­6, 105–­8, 113 Senate of Canada, 6, 44–­9, 105, 161, 401, 475 Senate Reform case, 105, 113 Seniors’ Benefit, 295 Service Canada, 53n2 sex offender registry, 128 Sharman, Campbell, 139 Shoyama, Tommy, 154 Simeon, Richard, 15, 476 Simeon, Richard (with Cameron) Language Matters, 86n7 Simeon, Richard (with Norrie and Krasnick) Federalism and Economic Union in Canada, 213 Sinclair, Scott, 217n8 single-payer system, 312–­16, 333 Skogstad, Grace, 12, 168, 175, 227, 232 Smiley, Donald, 44, 100 Federal Condition in Canada, The, 140, 152 Smiley, Donald (with Watts) Intrastate Federalism in Canada, 141, 161 Smith, Alison, 26, 462, 474 Smith, David E., 133, 138 Smith, Jennifer, 27 Smith, Miriam, 173 social assistance, 264, 296, 307, 468 policy change over time, 457–­8, 470, 473 programs (safety net) in, 21, 174, 253, 282–­310, 439 Social Credit Party of Canada, 143 social insurance program, 283, 307

Social Union Framework Agreement (SUFA), 12, 21, 46, 171, 178, 254, 317 Sopinka, Justice, 122 Sossin, L.M. Boundaries of Judicial Review, 110n1 sovereignty-association. See under Quebec Spain, 41 Special Investigations Unit (SIU), 127 special purpose bodies, 429–­30, 437, 446 sponsorship scandal, 147–­8 Stanfield, Robert, 79 Starr v. Holden case, 127, 137 state formation, 31, 54 Statistics Canada, 420n2, 446n3 Stein, J. (with Gagné) Reconciling the Irreconcilable, 275 St. Laurent, Louis, 143, 146–­7 Strategic Innovation Fund, 217n5 subsidies, 224, 237, 247 Superclusters program, 217n5 Supreme Court Act, 104 Supreme Court of Canada (SCC), 48, 85, 90–­113, 110, 115–­23, 129, 132, 200, 223, 331, 374–­6, 384, 399, 402, 407 regional representation on, 104, 106 rulings on Indigenous–­Crown relations, 410–­11 Supreme Court Reference on Secession, 60, 80, 86–­7 Sûreté du Québec, 124, 131 Swinton, Katherine, 97 Switzerland Conference of Cantonal Governments, 47 institutional entanglement in, 53 one of six classical federations, 36–­7 Sonderbundwar of 1847, 42

Index 503 taxation, 253 Gas Tax Fund (GTF), 433, 439–­40, 446nn8, 10 Goods and Services Tax (GST), 254–­6, 266–­7 property taxes, 429 representative tax system, 260 tax allocation, 251, 255, 278 tax base, 256, 278 tax benefit, 20, 296, 307 tax point transfer, 314–­15, 319 tax room, 257, 278, 287 tax structure and harmonization, 254–­6, 271, 276–­7n2, 278 See also carbon pricing (taxing) Tax Collection Agreements (TCAs), 256 TD Economics, 270 Telford, H., 15 “10-Year Plan to Strengthen Health Care,” 318 Territorial Funding Formula (TFF), 260, 261, 267, 275 terrorism, 123 Thatcher, Ross, 153 Thomas, Paul G., 149, 152 Thorlakson, Lori, 45 Tobacco Act, 119 Toronto Conference on the Changing Atmosphere, 367 Toronto Police, 116 trade cap-and-trade system, 368, 384, 387–­8 federal trade and commerce power, 95 free trade, 76, 206–­7, 213–­15, 217n7 international (see under federalism, Canadian) interprovincial, 98, 102, 109, 214, 217n8 services in global trade, 224, 233, 247

504 Index trade (continued) technical barriers to, 224, 233–­5, 246–­7 Trade and Investment Enhancement Agreement, 227 Trade and Investment Research Project (Ontario), 243 Trade Justice Network, 241–­3 Trang case, 123, 137 TransCanada Pipeline, 211, 217n6 Trans Mountain Pipeline, 153, 183, 211, 217n6 Trans Mountain Pipeline (Kinder Morgan extension), 370, 372–­5, 383, 411 Trans-Pacific Partnership (TPP), 230, 243 treaty federalism (or treaty constitutionalism), 404–­6, 422 Tremblay Report, 68–­70, 88 Trudeau, Justin (federal government of), 16–­17, 46–7, 49, 104, 138–­9, 150–­4, 158, 166, 170–­5, 181–­5, 211, 223–­5, 232, 236, 271–­2, 296–­303, 311, 320–­1, 350–­1, 358, 364, 369–­78, 382–­7, 395–­6, 401–­2, 406–­7, 415–­16, 457, 461–­3 Trudeau, Pierre (federal government of), 10–­12, 49, 74, 77–­9, 85, 138, 144–­6, 170, 204–­ 6, 378, 437 Trump, Donald, 231 Truth and Reconciliation Commission (TRC), 181, 395–­7, 406, 421n6 Tsilhqot’in case, 410–­12, 426 Tsleil-Waututh Nation case, 411, 426 Turner, John, 153 Type I and II multi-level governance, 436, 446 ultra vires judgement, 93, 100, 106, 110–­11 Underhill, Frank H., 156

Unemployment Insurance (UI), 287–­8, 458. See also Employment Insurance (EI) Unifor, 244 Unitarismsus, 42 United Conservative Party (Alberta), 273 United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), 395, 406–­7, 411, 418–­19, 421nn7, 8, 422 United Nations Education, Scientific and Cultural Organization (UNESCO), 456 United Nations Framework Convention on Climate Change (UNFCCC), 363, 367, 380, 388 United Nations Special Rapporteur on the Rights of Indigenous Peoples, 406 United States anti-immigration policies of, 350 centralized development in, 42 climate-change policy, 386–­7 Constitution of, 134n1 CUSFTA agreement, 245 electoral campaign techniques, 145 immigration policies in, 342 Interstate Commerce clause, 48 Medicare, 332–­3, 473 NAFTA negotiations, 231 one of six classical federations, 36–­7 party system in, 140 policy on greenhouse gas emissions, 368 self-rule federalism in, 52 Supreme Court in, 48 Universal Child Care Benefit. See Canada Child Benefit Urban Development Agreements, 437–­40

USMCA. See Canada-United StatesMexico Agreement (CUSMA) Vancouver Declaration, 182–­3 VanDuzer, Anthony, 240 Verheul, Steve, 228–­31 Verner, Josée, 148 vertical fiscal gap, 253, 257, 278 vertical fiscal imbalance (VFI), 257, 266–­8, 277n3, 278, 460 Vienna Convention of the Law of Treaties, 223 Vipond, R.C., 44 Wait Times Reduction Fund, 318 Wall, Brad, 183, 372, 375 “Washington consensus,” 208 Waterfront Toronto, 438, 441 Watts, Ronald L., 15 Watts, Ronald L. (with Smiley) Intrastate Federalism in Canada, 141, 161 welfare. See social assistance Wells, Shannon, 159 Westendorp case, 122, 137 Western Climate Initiative (WCI), 364, 388 Western Economic Diversification Canada, 433 Westminster democracy, 31–­2, 37, 40, 44–­50, 147, 157, 468

Index 505 Wetmore case, 123, 137 Wet’suwet’en people, 126 Wheare, K.C., 5 Whitaker, Reginald Government Party, The, 161 Wilder, Matt, 12 Wilson, Garry (with Alcantara and Rodon) Nested Federalism and Inuit Governance, 408 Wilson-Raybould, Jody, 401–­2 Windstream Energy, 238 Winfield, Mark, 17, 22, 385, 461, 468–­70 Winnipeg Forks Corporation, 438 Wolinetz, Stephen, 141, 153 women Fédération des Femmes de Québec, 241 rights of, 150 violence against, 131, 181, 395, 406, 421n6 World Trade Organization (WTO), 13, 224, 233–­7, 246 World Wine Trade Group, 227 Wucherer case, 119, 137 Wynne, Kathleen, 17, 303, 368 Yukon equalization payments to, 261 immigration to, 359n3