Federalism and the Canadian Federal System

1. Federalism and the Canadian Federal System D. Brown / Pol Sci 221 St Francis Xavier November 2010

2. What is Federalism? • A type of democratic government • A philosophy of co-existence in diverse or multiple societies • The constitutional rule of law • Self rule plus shared rule • Divided and shared sovereignty • Multilevel governance

3. Definitions and Distinctions • Federalism -- the overall theory of shared governance and social co-existence • Federation – two or more orders of government with equal status under a Constitution • Confederation – league of states with delegated central authority (( in Canada, the original act of union in 1867))

4. Why federalism? • Realist reasons: • Governing a large territory effectively and democratically • Creating a larger economic space • Defence against potential enemies • Idealist reasons: • Accommodating diverse groups, nations • Sharing power • Creating competing power centres

5. Five Features of a Federation 1. Combining shared rule and self rule • regional governments for regional matters, laws applicable to residents within their boundaries • central government for general matters, laws applicable to all citizens 2. Constitutionally protected autonomy of each level of government , central and local

6. Five Features, continued 3. A Constitution that distributes power between the orders of government 4. A constitutional amending formula, preventing any one order of government from changing constitution unilaterally 5. Central institutions designed in part to represent the units of the federation.

7. Why did we (in Canada) create a federal union? • Defense of British North America and better organization of imperial interests • Creating a continental economy • British mercantilism ending • Reciprocity Treaty with USA ends 1866 • To Get out of the Political Stalemate and Dysfunction of the 1840 union of Upper and Lower Canada

8. Steps to Getting to a Deal • Creation of the Conservative coalition in Canada: Macdonald – Cartier • The “Great Coalition” to include “Grits” creates a bipartisan agreement to push for a federal union • Bringing Maritimes in: Charlottetown conference, July 1864 • Reaching a settlement: Quebec City conference, October 1864

9. Who Did the Dealing? • Elected politicians from Government and Opposition • 23 at Charlottetown; 33 at Quebec • The British Government (Governors, Colonial Secretary) behind the scenes • Not at the table • Quebec: Dorion and “les Rouges” • First Nations, Métis, Inuit • British Columbia

10. The Deal at Quebec City 1 • Distribution of Powers: • General vs particular and local • Two long lists of exclusive jurisdictions • Central government holds “reserve” of power • Hierarchy of Power-sharing: • Federal appointment of Lt.- Governors • Reservation and disallowance • Most important fiscal powers in central hands • Federally appointed judiciary

11. The Deal at Quebec City 2 • An appointed Senate (some wanted elected) • Senate representation: “sectional” equality: Ontario (24), Quebec (24) Nova Scotia (10) New Brunswick (10) • Minority Rights: decentralized, not universal: language rights in legislature and courts: Quebec, federal denominational rights in education: Quebec, Ontario

12. The Deal at Quebec City 3 • Room to Expand… • Anticipating Newfoundland, PEI and British Columbia • Expectations re Rupert’s Land and Northwest Territory • Government of Red River settlement • Treaties with Indians • Federal lands and resources • Amending the Constitution: left to Imperial Parliament

13. Federal Peace, Order and Good Government Trade and Commerce Control over Indians and their lands, the Northwest Transportation and communications Provincial Property and Civil Rights Matters of a Local and Private Nature Ownership & regulation of natural resources Education, health and social services Deal at Quebec City --Powers

14. The Evolution of Canadian Federalism, 1867-1967 • 1867-1896: a period of “Imperial federal government” • 1880s-1914: the Rise of Provincial Rights • 1896-1939: The era of classical federalism • 1939-66 Centralization and the welfare state • 1967-present: federal-provincial competition and the rise of “executive federalism”

15. Why do we need intergovernmentalrelations ? • To compensate for inadequate or uncertain division of powers • To deal with government interdependence • welfare state • globalization • To promote fiscal efficiency and equity • To provide regional representation • But….some still prefer a more “classical” approach (e.g. Quebec, Stephen Harper)

16. Executive Federalism • Describes how intergovernmental relations are dominated by elected and bureaucratic executives • Executive dominance is rooted in the strong role of the Executive within the Legislature • Provincial Premiers have a bigger role due to poor degree of regional representation in central institutions

17. Where Executive Federalism Happens • First Ministers Meetings • Federal-Provincial-Territorial Ministerial Councils • Seniors officials meetings • Regional meetings of Premiers, etc. • Informal interaction: • Correspondence, emails, phone calls, bilateral meetings

18. Issues with Executive Federalism • Low level of institutional structure: no votes, no constitutional status • Few incentives to agree: a competitive political culture • Democratic deficits: • Poor accountability to legislatures • Limited nature of representation -- “white men in suits” • Secretive, bureaucratic, overly technical

19. Fiscal Federalism • Fiscal federalism is about: • Expenditure responsibilities • Taxation powers • The transfer of funds from one government to another • The Constitution provides both federal and provincial governments with major taxation powers • They share major tax bases: personal and corporate incomes, sales tax (e.g. GST), tobacco, alcohol and fuels.

20. Fiscal Federalism…continued • The Federal government has a “spending power” that enables it to spend (but not regulate) in areas of provincial jurisdiction. • The Federal government transfers funds to overcome imbalances between responsibilities and the funds to meet them (vertical) and to even out differences in fiscal resources (horizontal).

21. Intergovernmental transfers • Vertical gaps: met with cash and tax transfers (e.g. CHT) • Horizontal gaps: met by Equalization program, plus equalizing features of other transfers • Relatively few conditions on transfers compared with other federal systems • Equalization is the key to sustaining provincial autonomy over time

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