1. Federalism and the Canadian Federal System D. Brown / Pol Sci 220 St Francis Xavier November 2007

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 Governing a large territory effectively and democratically Creating a larger economic space Creating a larger economic space Defence against potential enemies Defence against potential enemies Idealist reasons: Accommodating diverse groups, nations Accommodating diverse groups, nations Sharing power Sharing power Creating competing power centres 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 Defense of British North America and better organization of imperial interests Fenian raids cause concern Effect of US civil war and potential aggression Creating a continental economy 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 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 – CartierCreation of the Conservative coalition in Canada: Macdonald – Cartier The “Great Coalition” to include “Grits” creates a bipartisan agreement to push for a federal unionThe “Great Coalition” to include “Grits” creates a bipartisan agreement to push for a federal union Bringing Maritimes in: Charlottetown conference, July 1864Bringing Maritimes in: Charlottetown conference, July 1864 Reaching a settlement: Quebec City conference, October 1864Reaching a settlement: Quebec City conference, October 1864

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

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

11. The Deal at Quebec City 2 An appointed Senate (some wanted elected) An appointed Senate (some wanted elected) Senate representation: “sectional” equality: Ontario (24), Quebec (24) Nova Scotia (10) New Brunswick (10) Senate representation: “sectional” equality: Ontario (24), Quebec (24) Nova Scotia (10) New Brunswick (10) Minority Rights: decentralized, not universal: 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 Anticipating Newfoundland, PEI and British Columbia Expectations re Rupert’s Land and Northwest Territory 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. Deal at Quebec City --Powers Federal Peace, Order and Good Government Peace, Order and Good Government Trade and Commerce Trade and Commerce Control over Indians and their lands, the Northwest Control over Indians and their lands, the Northwest Transportation and communications Transportation and communicationsProvincial Property and Civil Rights Matters of a Local and Private Nature Ownership & regulation of natural resources Education, health and social services

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. Executive Federalism Describes how intergovernmental relations are dominated by elected and bureaucratic executives Response to interdependence in federal system Executive dominance comes from “Westminster” form of government Bigger role due to poor degree of regional representation in central institutions

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

17. Your list of Current Issues F=feds; P=prov’s; Auto insurance – P Canadian dollar – F Ownership and regulation of oil – P Gasoline prices – f/P Health care: public/private – P/F International trade – F/p Environment – F/P

18. 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 Correspondence, emails, phone calls, bilateral meetings

19. 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 Poor accountability to legislatures Limited nature of representation -- “white men in suits” Limited nature of representation -- “white men in suits” Secretive, bureaucratic, overly technical Secretive, bureaucratic, overly technical

20. Fiscal Federalism Constitutional Powers Exclusive provincial powers, but feds have “spending power” Exclusive provincial powers, but feds have “spending power” Both feds and provinces have access to important taxes Both feds and provinces have access to important taxes Tax Structure and Harmonization Shared revenues: personal and corporate income tax, sales taxes, alcohol, tobacco and fuels Shared revenues: personal and corporate income tax, sales taxes, alcohol, tobacco and fuels Tax collection agreements for some taxes Tax collection agreements for some taxes Intergovernmental Transfers Conditional and unconditional Conditional and unconditional Equalization, Canada Health Transfer are two biggest Equalization, Canada Health Transfer are two biggest

21. Intergovernmental transfers Vertical fiscal gaps: met with cash and tax transfers Horizontal fiscal inequities: 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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