(Notes for remarks to the POL 3570A students, University of Ottawa – January 26, 2015)
When Professor Gaspard asked me to speak to your seminar and address issues related to the Canadian constitutional reform process in the federal-provincial context, it did not take me long to settle on an approach to this fairly broad topic.
The five years of vigorous public debate over both the Meech Lake and Charlottetown constitutional accords leading up to the Charlottetown Referendum in October 1992 are where I cut my teeth as both a young constitutional lawyer and citizen activist. It was an exciting experience, and one that entrenched in me a deep respect for the power of citizens and our democracy that has only strengthened over the years. We considered the defeat of the Charlottetown Accord in the referendum to be a constitutional revolution of sorts – an end to the discredited old elite accommodation model of constitutional politics in favour of long-overdue popular sovereignty – a new era of ever-stronger democratic structures and more power to the people.
Nothing prepared me therefore for the extent to which citizens have since disengaged from electoral politics, the relentless increase of cynicism and distrust of politicians, the equally relentless increase in executive power, and the steady decline in coherent national leadership out of Ottawa. Now we find our democracy under unprecedented siege, and our political elites dangerously and ironically out of sync with our 21st century world of instantaneous communication and advanced means of strengthening democratic participation.
Ever the optimist, however, I am confident that the Canadian people can once again rise up to take back Canada and establish new constitutional and political structures to better safeguard our representative democracy and strengthen what I call One Canada for all Canadians.
Tonight I will discuss possible avenues for moving forward – for strengthening citizen engagement and our democracy while creating a more functional federation. I will look first at constitutional reform options, and then non-constitutional changes.
Options For Constitutional Reform
The constitutional aversion clearly articulated by our timid federal political elites arises from a self-serving misinterpretation of the legacy of the Meech Lake and Charlottetown debates. Our elites generally argue that the debates over the constitutional accords demonstrate the difficulty and controversy associated with constitutional reform, which is therefore something to be avoided at all costs.
In fact, however, the constitutional debates and the Charlottetown Referendum, in particular, simply established the precedent that there can be no significant constitutional change without meaningful consultation with the people, and some sort of popular ratification. The Constitution is a document that belongs to the people of Canada. Constitution-making is no longer a process that can be controlled by the political elites or political parties, which is why, perhaps understandably, today’s politicians, who prefer to manipulate and control outcomes, will avoid consulting the people at all costs and seek non-constitutional means to achieve certain ends.
It is true that the formal constitutional amending formula in the Constitution Act, 1982 excludes any reference to citizens and people. When the constitution was patriated in 1982, we were just coming off 115 years of the British North America Act of 1867 in which the British Parliament had ultimate responsibility for amending our Constitution. Over these years whenever federal-provincial struggles over the division of powers led to a constitutional amendment – there were some twenty-two amendments made to the BNA Act in this period – all had the consent of the federal government acting on behalf of the whole country and some acceptable level of provincial government consensus.
Not surprisingly, therefore, in the 1981 Patriation Reference, the Supreme Court of Canada upheld the federal principle and indicated that patriation would have to have the consent of the federal government and a substantial consensus of the provincial governments. Hence the eventual entry into force of the Constitution Act, 1982 without the express consent of the Quebec legislative assembly then led by the separatist premier René Lévesque, but with the consent of the other provincial legislatures and a majority of the federal Quebec representatives elected to Parliament. The Constitution Act, 1982 amending process requires resolutions of the two Houses of Parliament, and of either a two-thirds majority of provincial legislatures representing 50% of the population (the 7-50 rule), or in some cases, all the provincial legislatures (the unanimity rule).
In entrenching a formal amending formula that was entirely an intergovernmental mechanism requiring the resolutions of various combinations of provincial legislatures together with the House of Commons and the Senate, patriation sidestepped the question of sovereignty in the fundamental constituent ownership sense. Regrettably, this encouraged the governments, as formal parties, to believe that the most basic questions of politics in this country – those that required constitutional change – could be reduced to negotiations in the labour relations model between politically independent First Ministers.
This elitist view that the most important constitutional guidelines (even the amending formula) were simply affairs of governments not people, ignored the fact that the entry into force of the Canadian Charter of Rights and Freedoms as part of the Constitution Act, 1982 had changed everything. The Charter irreversibly transformed the political context within which the politicians, who thought they were running the country, operated. Finally, the rights of the people were placed above the rights of governments. In other words, the people are sovereign, not governments or First Ministers. (I will set aside for another discussion the anomalous insertion of the so-called notwithstanding clause.)
Along came the Meech Lake Accord in 1987 just as this increasingly democratic and rights-sensitive political culture was consolidating. While Canadians now viewed the Constitution as principally an affair of citizens, not governments, the Accord architects acted throughout as if they were engaged in an ordinary set of federal-provincial negotiations. The prime minister of the day decided it was time to respond to the so-called five demands of the Government of Quebec. He convened the First Ministers around a negotiating table and drafted the Accord in secret. ‘Rights’ debates were treated as minor rhetorical obstacles to be overcome. The transfer of federal powers that Quebec was demanding – from immigration to the spending power to appointments to the Supreme Court – was simply generalized and dealt out to all the provinces. Hence the argument I once made to an American audience that if Canada were to draft an accurate preamble to our Constitution, it would start with “We the premiers” instead of “We the people”.
Both the Meech Lake Accord and the subsequent Charlottetown Accord were enormously complicated documents, containing changes to virtually every part of the Constitution – division of powers, federal spending power, mechanisms of executive federalism (First Ministers’ conferences), Aboriginal self-government (at first thoughtlessly left out of the Meech Lake Accord), senate reform, and special status for Quebec (distinct society). Both documents, however, despite the illusion of public debate, were presented to Canadians by their executive leaders as fait accomplis – take it or leave it propositions. And when our governments provided no outlet for the intensifying concern about the direction the Accords would permanently take our country, Canadians fought back and found every outlet possible to protest – from municipal council resolutions, to civil society groups, to individual presentations before the numerous parliamentary and legislative committees that were held over the life of both the Accords.
Ultimately, after three long years of endlessly frustrating debate over the Meech Lake Accord, the premier of Newfoundland and Labrador, Clyde Wells, and the lone Aboriginal member of the Manitoba legislature, Elijah Harper, became national heroes as they stood on principle and prevented the Accord from passing. Subsequent consultations in the so-called Canada Round in the period 1990 to 1992 leading to the Charlottetown Accord – Spicer Commission, Beaudoin-Dobbie hearings, and the Clark constitutional fora – were as frustratingly superficial as those during Meech. So the surprising decision to call a national referendum on the Charlottetown Accord was a welcome and valuable concession to the depth of public concern and interest that had built up once more. (Quebec, Alberta and British Columbia were already committed to holding provincial referenda). Equally surprising was the fact that while there was relatively minimal public discussion of the referendum operating rules – the establishment and roles of yes and no committees, limits on financing, access to media, etc. – the playing field was ultimately reasonably fair. The No committee that I co-founded – Canada for all Canadians – was able to run some modest advertisements. Indeed a $5000.00 deposit paid to the networks entitled our No committee to equitable public broadcasting time alongside the massive federal government machine.
We could not of course compete with the hundreds of thousands of dollars worth of expensive glossy government brochures and other material that every single Canadian received though the mail – this was the pre-Internet era – beyond the ordinary telephone (no mobiles) there was only fax and express post. But the people and voters of Canada were engaged and actively seeking out information from all sides. Community after community held passionate debates; the news world was saturated with constitutional discussion. Nothing seemed off limits – when the Toronto Blue Jays won the world series on the eve of the referendum, the prime minister did not shrink from saying that Canadians were all so proud that we just had to enthusiastically vote yes to Charlottetown and yes to Canada. We on the No side had to immediately counter and say that Canadians were indeed so proud that we were certainly strong enough to stand up for Canada and say no to the Accord that would undermine our national government and the Charter of Rights and Freedoms.
On the technical level, the Referendum was held pursuant to existing federal referendum legislation except in Quebec where the referendum was run under provincial legislation. (Alberta and British Columbia permitted their provincial referenda to be overseen by Elections Canada). The Referendum was consultative only, not binding, since the constitutional amending formula required consent of governments only. But as the results came in across the country, and a majority of those voting in a majority of provinces rejected the Accord, the First Ministers quite properly conceded defeat.
In the over-20 years since the Charlottetown Referendum, Canadians were certainly relieved to have our governments move on to other things. Indeed as much as I found the period 1987 to 1992 exhilarating, I always regretted that so much energy was diverted from other more important matters as the Berlin Wall fell, apartheid ended in South Africa, and environmental matters and Aboriginal concerns increased in importance.
But constitutions are living trees and it was inevitable that some day we would have to turn to constitutional reform, albeit fortunately not in the context of Quebec separation. That day has certainly come with respect to the now thoroughly-discredited Senate.
So it is time for Canadians to say enough! with the moans and groans from our political leaders and the chattering classes about the dangers of constitutional change and a scary quagmire of federal-provincial negotiations. Constitutional reform is entirely legitimate in the life of a vibrant democracy. The Canadian Senate either needs serious reform or it should be abolished, and whether we like it or not, this requires changes to our Constitution. And this in turn should trigger interest in the critical need to update the anachronistic amending formula, and our very uninspiring constitutional preamble.
In refusing to engage the people in constitutional reform, our leaders forget that the Constitution belongs to the people of Canada, not to the federal and provincial governments. They betray an all-too-familiar fear of a healthy democracy, while protecting their executive power at the expense of the people.
There is no reason why we cannot proceed with overdue constitutional changes while, at the same time, continuing the day-to-day governance of the country. And there is no reason why the constitutional reform process needs to degenerate into an unprincipled free-for-all among provincial governments demanding more and more powers.
In the 21st century, there should be no hesitation in establishing a manageable constitutional change agenda that brings the people of Canada into the centre of the process. This means acknowledging that constitutional reform is not dictated by the self-interested demands of governments, but requires direct input from the citizens of Canada and our consent or dissent at least through a consultative referendum. Indeed, bringing direct democracy to the constitutional change process is an essential component of any credible plan to reduce the dangerous concentration of executive power that is insidiously undermining our representative democracy.
Here is a simple message for our politicians, whatever their political stripe: Trust the people. Give us open, transparent debate on straightforward subjects and we will get it right. But discuss each subject separately. As the Charlottetown Accord definitively demonstrated, it is confusing to undertake multiple constitutional reforms at the same time and in the same document. Linking different reforms can be unprincipled and deprive people of a chance to decide each on its own merits. If discussions proceed simultaneously on different subjects, there should be a separate referendum question on each.
And above all, remember that constitutional change is about people not governments. It is not all about the powers of the Quebec or other provincial governments. Canadians are looking for national leadership to make the clear case to all Canadians that constitutional amendments – whether relating to matters of Senate reform, a new amending formula or eventually a new constitutional preamble – are essential to strengthening Canada and our democratic structures. And the legitimacy of these reforms depends on the direct assent of the people of Canada even if, until we amend the constitutional amending formula, the signatures on the formal constitutional document are those of the government executives acting in accordance with our wishes as determined in a referendum.
Let me just say a few words about the Senate and a constitutional preamble.
Reform of the Canadian Senate is long overdue. A respected second house of Parliament is needed now, more than ever, to ensure that diverse regional concerns are well-articulated and integrated into coherent national action.
As the Supreme Court of Canada reference decision last year confirmed, the Conservative government has wasted years misleading Canadians into believing that mere tinkering with a Senate structure dating back to the 19th century – establishing nine-year term limits and à la carte elections – would be sufficient. The decision of the Liberal Party of Canada to cut all formal partisan ties with Liberal senators and commit to implementing a non-partisan advisory process to guide future appointments is an interim step at best. The NDP and some provincial premiers suggest that outright abolition of the Senate is preferable but have no plan about how to determine whether there is a popular consensus in support of this option.
In refusing to confront the need for constitutional reform, both the government and opposition are dumbing down a very important debate affecting the fundamental nature of the Canadian federation and our coherence as a nation. The choice between a partially reformed Senate and no Senate is really not a choice at all: Both options lead to an increasingly dysfunctional and discredited Parliament.
Senate reform is too important a component of any serious plan for improving the functioning of Canadian democracy to be left to the legislative fiat of shortsighted politicians. Rather, the people of Canada must be directly engaged in the debate over this vital issue, and must ultimately be consulted through a national referendum.
The debate could be exciting. Among other things we could re-imagine a robust elected Senate playing a valuable role in representing regional concerns in a more innovative and truly democratic way.
Keep in mind that representing regional concerns is not the same as provincialism. Regionalism, at its best, reflects the fact that, in such a large and geographically diverse country as Canada, and with such a highly uneven population distribution, national policies will only be effective if regional concerns are acceptably integrated into a workable national framework. And this process of developing national policies and frameworks is best carried out in an open, transparent parliamentary forum committed to the best interests of Canada as a whole, and accountable to all Canadians. This is a crucial supplement to the existing ad hoc mechanisms for federal-provincial executive consultations involving the Prime Minister and provincial premiers.
To engage Canadians, we must take the Senate reform debate to the people, and away from the day-to-day operations of Parliament. A non-partisan commission of informed Canadians should be tasked with holding hearings across the country to listen to Canadians, explain the issues at stake, and discuss possible options for reform.
The commission would be mandated to – within a reasonable time-frame – come up with a serious reform proposal that involves a Senate, however elected or independently selected, with a new distribution of seats and new powers. In the current Senate, for example, the western provinces are significantly underrepresented, and the Atlantic provinces are significantly overrepresented. A much more acceptable regional equilibrium is required if the Senate is to better represent regional concerns, and to work with the House of Commons to produce feasible national action plans and national standards for everything from climate-change strategies (a national carbon price finally?) to health care, from infrastructure investment to clean energy.
The constitutional preamble
We are building one of history’s most fascinating, diverse and cosmopolitan societies. And yet, Canadians still have not had a vigorous national debate about the essence of Canada. In 1982, when our Charter of Rights and Freedoms was adopted, we settled for a threadbare, placeholder preamble that is almost laughable: “Whereas Canada is founded upon principles that recognize the supremacy of God and the rule of law”.
For better or for worse, politicians at the time did not consider it possible to have the kind of extended debate needed to write something more inspiring. No one is entirely clear as to how this particular wording came about. Fortunately, given the fundamental principle of the separation of church and state, constitutional scholars and judges generally accord little or no legal meaning to it. Indeed, Pierre Trudeau is on record as stating at the time that “I don’t think God gives a damn whether he’s in the constitution or not”.
The Canadian Charter is now viewed as a model for many other nations, but the preamble is not surprisingly ignored as a quaint curiosity. So, while South Africa’s 1996 Constitution certainly reflects a Canadian influence, it opts for a stirring preamble starting with “We the people of South Africa…..”
A national debate around a new constitutional preamble is long overdue. We need an inspiring and inclusive preamble that accurately describes our great nation, that celebrates what we share in common and our core values of justice, equality and diversity, and expresses our collective aspirations for our future.
A new preamble is where we could also address the constitutional recognition of Quebec as a distinct, free and democratic society in accordance with the principles of both the Canadian and the Quebec Charters, and with a unique contribution to Canada’s constitutional identity. Most federalists in Quebec, including the Quebec premier, Philippe Couillard, advocate the recognition of Quebec’s distinctiveness in some way in the Constitution before a vote in the National Assembly in Quebec endorsing the Constitution Act, 1982. Such a vote is not legally necessary, but is certainly politically desirable.
It should be obvious that I would enjoy nothing better than to engage Canadians in constructive energetic debates over Senate reform, the constitutional amending formula, and a new preamble. This is not just because I am a constitutional lawyer. It is because constitutional debate inevitably requires us to look at the long-term, over the horizon, at our vision of the kind of country we are building. And this kind of thinking is desperately lacking on the part of our self-absorbed political classes today who are focused only on the next election.
Constitutional debate and change does take time and commitment, and is of course limited to very specific areas of fundamental concern to the nation of Canada. Sadly citizen disengagement is now so far advanced that it is urgent to undertake significant non-constitutional changes to strengthen our increasingly weak representative democracy. So let me turn now to discuss some non-constitutional initiatives required toeliminate the corrosive concentration of executive power in Ottawa, return power to Parliament and the people, and strengthen our national coherence.
What is at the root of the extreme citizen disengagement from national politics? I submit that in large measure it is the extraordinary concentration of power in the executive branch of the Government of Canada, namely, the Prime Minister’s Office (PMO). The exercise of this executive power by the PMO is subject to none of the checks and balances essential to a vibrant democracy. Neither the House of Commons nor the hapless Senate provide any meaningful legislative oversight of the executive on any of the issues of the day,from health-care regulations to investment deals to spying both at home and abroad, to name just a few.
This consolidation of executive power is not something that started with Stephen Harper; it began with a succession of Liberal majority governments, and intensified relentlessly with occasional respites during periods of minority government. But Mr. Harper has perfected it. Both before and since obtaining his majority in 2011, Mr. Harper has made a mockery of parliamentary democracy, using the PMO to micromanage public affairs and elevating the use of bullying tactics and the suppression of dissent to an unprecedented degree.
What do Canadians see in Ottawa? We see annual omnibus budget bills containing hundreds of pages and amending multiple pieces of legislation passed with little or no parliamentary oversight, huge numbers of communication and information officers who carefully massage the government’s message to reflect PMO dictates, and automaton MPs reciting malicious and untrue talking points off their iPads. Little wonder, then, that we turn away from, or ridicule our Parliament.
Yet this citizen disengagement simply accelerates the dangerous concentration of executive power. Our more fulfilling, targeted civil society activities may certainly enable us to stop the construction of a gas plant here or an oil pipeline there; but unless we take on the executive political class on its own partisan turf, we will win some battles but lose the war to save representative democracy. Since the real power and influence in every political party revolves around the Leader’s Office, whether in government or opposition, the more citizens disengage from partisan party politics, the easier it is for party leaders to accumulate and concentrate even more executive power. And the weaker the party base, the more unlikely it is that any leader elected to a majority government will voluntarily choose to give up such expansive executive powers.
What can be done to end debilitating, leader-centred politics and restore healthy checks and balances to our democratic system? How do we move beyond the worn-out bromides and clichés about making our vote count, more civility and less partisanship, more openness and transparency?
Here are some critical areas and specific suggestions for transformative change and restoration of public confidence in our democratic processes:
- Reform the first past the post electoral system.
- Impose legal limits on executive power and the PMO, and restore power to Parliament and the people.
- Create a new administrative forum, a Council of Canadian Governments, to facilitate coordinated action required by all levels of government – federal, provincial, territorial, municipal and Aboriginal.
- Establish a Canadian economic union.
- Restructure our convoluted, unaccountable system of federal-provincial transfers, including equalization.
- Reform the First Past The Post electoral system.
Most Canadians are now thoroughly disillusioned with the first-past-the-post electoral system that too often results in majority governments with less than 40% of the popular vote. We welcome the necessity to build coalitions and consensus that proportionately-elected Parliaments will require.
A parliamentary committee should be established to consult Canadians on the range of options – forms of proportional representation or preferential balloting, mandatory voting, a lower voting age. Then implement the necessary legislation as expeditiously as possible in the next Parliament. We can always attach sunset clauses as appropriate to legislation to require, for example, an assessment of the success or lack of success of any new electoral initiative.
- Impose legal limits on executive power and the PMO, and restore power to Parliament and the peopl
The Reform Act recently introduced by Conservative backbencher, Michael Chong, while undoubtedly spurring important debate over the relative power of party leaders and their caucuses, fails to address many other essential parliamentary and political reforms. These are comprehensively canvassed in the excellent 2011 publication Democratizing the Constitution: Reforming Responsible Government by Peter Aucoin, Mark D. Jarvis and Lori Turnbull.
Essential reform steps include the following: limits on the PM’s power to shut down Parliament by prorogation (requirement for a two-thirds majority vote in the House of Commons); new rules for the summoning (within 30 days of the date of an election) and dissolution of Parliament (fixed election dates – implemented but ignored to date by the Conservative government); transference of the power of the PM to appoint deputy ministers, associate deputy ministers, members of boards and commissions, and ambassadors, to an arms-length Public Appointments Commission, together with a fully-independent appointment process for judicial and quasi-judicial appointments, subject to a meaningful parliamentary confirmation process.
We also need limits on the PM’s power to appoint a seemingly infinite number of political staffers, and to manipulate and sidestep the vital work of parliamentary committees as the “primary forums for legislative review, administrative scrutiny and accountability.” This means restricting the PM’s power to appoint the chairs of committees and to undermine committee effectiveness by constantly changing government members and refusing adequate resources. A significant increase in the staff (and budget) of the independent Library of Parliament is also critical to support the revitalized legislative process.
- Create a new administrative forum, a Council of Canadian Governments, to facilitate coordinated action required by all levels of government – federal, provincial, territorial, municipal and Aboriginal.
Canadians need to be convinced that our national government can once again be a creative and unifying force in our nation, building a more balanced and sustainable economy that fairly benefits all Canadians. A centerpiece of such transformative change should be a firm commitment to deliver greater coordination and collaboration across different levels of government – federal, provincial, territorial, municipal and Aboriginal – ensuring coherent action to strengthen our economic fundamentals, eliminating wasteful redundancy and absurd delays. Most Canadians see our governments working constantly at cross-purposes: municipal mayors fighting with provincial premiers over infrastructure funding; workers finding that their training credentials or experience from one province are not recognized in other provinces; or health care services more and more a patchwork across the country.
As the one government elected by, and answering to, all Canadians, the national government should play the central role in encouraging the intergovernmental collaboration needed by Canadians. Australia has a model that Canada could follow to create a more collegial and collaborative federalism. The 10-member Council of Australian Governments consists of the prime minister, the state and territorial leaders, and the head of the Australian Local Government Association. Established in 1992, the Council fosters cooperation on policies and issues of national importance. It is generally well accepted and has enabled Australia to eliminate much of the inter-level wrangling with which Canadians are so familiar.
A Council of Canadian Governments would be chaired by the prime minister and would include provincial premiers, territorial leaders, the head of the Federation of Canadian Municipalities, and a representative of Aboriginal leadership. It would not be a formal part of the legislative process, nor would it have any governmental powers or constitutional status. The Council’s role would be to initiate, develop, and monitor the implementation of policy reforms that are of national significance and require action by all Canadian governments. The Council would supplement First Ministers’ conferences currently held only at the whim of the prime minister, as well as the provinces-only Council of the Federation, which seems to have become nothing but an institutional vehicle through which to complain about the federal government.
The focus on collaboration would bring more direction and coherence to governance. Full information about Council meetings, agendas, proposed initiatives, agreements, and so forth would be made public. Council meetings could be open to the public when appropriate, and the Council could call on experts to present information. The high degree of transparency would permit Canadians to demand much greater accountability from their leaders for progress on matters requiring national attention and action, and to engage more constructively in the political process. The provincial and federal legislatures would still be accountable for any laws or regulations they make that follow up on the Council’s work.
Many policy areas that have impacts in more than one jurisdiction would benefit from getting coordinated attention and effort, leading to coherent national responses. Obvious examples are criminal justice, environment and energy, transportation and infrastructure, federal-provincial fiscal relations, securities regulation, health and safety regulations, interprovincial barriers to employment and trade, employment insurance, health care, and pensions. The Council could also be a forum where all levels of governments can engage in constructive discussions of matters relating to the negotiation of international treaties and trade agreements.
Establishing a Council of Canadian Governments to promote a more collegial and collaborative federalism would acknowledge the 21st-century reality that most issues of concern to Canadians inevitably involve more than one level of government. The Council would provide the opportunity for our political leaders to dial back the partisan rhetoric and cooperate seriously with their counterparts for the benefit of all Canadians.
- Establish a Canadian economic union.
Our internal economic union – the rules that govern business transactions and the movement of workers between provinces – is extraordinarily disconnected and inefficient. Despite some recent progress, Canada still has more internal barriers to trade than the twenty-seven countries of the European Union. In one absurd example, since 1928 it had been a federal offence to bring wine across provincial borders. This federal law was changed recently, but many provincial restrictions remain. The Canadian Chamber of Commerce says internal barriers to trade are consistently among the top 10 barriers to improving Canada’s international competitiveness.
The Agreement on Internal Trade (AIT), which came into force in 1995, was a first step in breaking down barriers in certain sectors of the Canadian economy. It was signed by all governments and set out some principles and goals. But a succession of federal governments took so little interest in the AIT that not much was accomplished. The AIT was generally considered cumbersome and ineffectual. More recently some provinces have worked effectively in pairs to reduce barriers. Alberta and British Columbia concluded the bilateral Trade, Investment and Labour Mobility Agreement (TILMA), which came into effect in 2007. Ontario and Quebec finally worked out arrangements to allow construction workers to work on both sides of the Ontario-Quebec border in 2006, and concluded the Ontario-Québec Trade and Cooperation Agreement in September 2009.
Successive federal governments have generally failed to facilitate intergovernmental collaboration to build a true economic union. Often they have made the situation worse by playing one provincial government against the other, paternalistically doling out localized incentives and special deals. This is why we still have no consistency in the structure of sales taxes. British Columbia (until April 2013), Ontario, Nova Scotia, New Brunswick, and Newfoundland and Labrador have the HST: a harmonized federal-provincial sales tax. Prince Edward Island, Saskatchewan, and Manitoba collect separate provincial sales taxes and the federal goods and services tax (GST). Alberta collects federal GST only. Quebec has a sales tax (QST) that applies on top of the federal tax and collects the federal GST on behalf of the federal government.
The economic crisis of 2008 provided the incentive for a brief flash of federal leadership to strengthen the economic union. Prime Minister Harper hosted a rare First Ministers’ conference in January 2009, and the leaders agreed to “enhance full labour mobility by recognizing, across all jurisdictions, any worker certified for an occupation by a regulatory authority of one province or territory.” This initiative led to a burst of activity by the provinces that have resulted in some progress in synchronizing the standards of nine professions, with six more in the works. But so much remains to be done (more than 440 bodies regulate 51 professions in Canada), not just for Canadians who want to expand their businesses or seek employment across the country but also for the many immigrants whose ability to work is stalled by complications in recognizing their foreign professional credentials. (The First Ministers made a commitment – still unfulfilled – to develop a common framework to recognize foreign credentials by September 2009.)
- Restructure our convoluted, unaccountable system of federal-provincial fiscal transfers, including equalization.
Unless Canadians are fully confident that our tax dollars are fairly and efficiently spent on strengthening the social and economic fundamentals of our nation, ensuring equal access to opportunities as well as comparable public services, no amount of constitutional, legislative or administrative changes will reverse the death spiral of democratic politics.
Every year, Ottawa channels billions of dollars to the provinces and territories to reduce inequities among Canadians. This goal is so fundamental to our way of life that one form of redistribution, called equalization, is entrenched in the Constitution. It commits our governments to providing “reasonably comparable levels of public services at reasonably comparable levels of taxation.” Other federal contributions to provinces are primarily in the form of transfer payments specifically designated for health care, post-secondary education, social assistance, and social services. Together these arrangements are called “fiscal federalism.”
It has become increasingly difficult to measure whether fiscal federalism shares the financial burden fairly and does what it is meant to do to promote national objectives. Governments too often create short-term ad hoc deals that make calculation of who’s up and who’s down next to impossible. The lack of meaningful scrutiny of intergovernmental transfers by the House of Commons is a serious failure of accountability and transparency. And if we look at our progress toward clear objectives such as ensuring comparable public services, building and maintaining high-quality infrastructure or eliminating Third World living conditions among Aboriginal Canadians, it is apparent that the collective impact of all this spending falls well short.
We urgently need to bring coherence, consistency, and accountability to the perverse jumble of federal contributions to provinces so that it does not divide governments and erode Canadians’ ties to one another. For example, because of its natural resource wealth, Alberta is the biggest contributor to equalization, and some Alberta politicians question why enormous sums are being sent to Quebec to allow that province topay for services that others cannot afford such as substantially subsidized electricity and child care, and the lowest post-secondary tuition fees in the country. Meanwhile, significant differences continue and are even growing from province to province and municipality to municipality in everything from pensions and health care to infrastructure. What can we do?
A permanent non-partisan independent advisory commission, similar to Australia’s Commonwealth Grants Commission, could scrutinize and manage fiscal federalism. This Canadian Commission on Fiscal Transfers would examine how every province is doing based on a giant balance sheet of GDP in each jurisdiction, taking into account all revenue sources, measuring the effectiveness of programs, and charting improvements in equity. The current equalization formula, among other things, would be replaced. And the Commission should also be involved in some way with fiscal transfers to Aboriginal governments, after we urgently repeal the anachronistic Indian Act and establish a genuine partnership with Aboriginal Canadians.
The Commission – experienced officials and academics appointed by Ottawa – would submit an annual proposal to Parliament and the federal government for appropriate equalization and other adjustments to fiscal transfers that better promote our national goals of greater equity and equality of opportunity for all Canadians, regardless of residence. It should work in conjunction with the Council of Canadian Governments to examine such difficult issues as whether and which transfers should be made on a per capita basis or according to “fiscal need,” given the disparities among provinces. The Commission’s reports to Parliament and recommendations to the minister of finance would make the system of federal contributions to other levels of government more transparent and much less political. Its findings would inform intelligent debate on longer-term national objectives, thereby building stronger ties among Canadians and greater confidence in the fairness of the system of fiscal federalism.