On the Issues

A Shifting Relationship

The parties differ on the nature of the federation

Mary Janigan November 27 2000
On the Issues

A Shifting Relationship

The parties differ on the nature of the federation

Mary Janigan November 27 2000

A Shifting Relationship

On the Issues

The parties differ on the nature of the federation

Mary Janigan

There was never much doubt about the kind of country Sir John A. Macdonald wanted. Appalled by the bloodshed of the U.S. Civil War, he tried to craft a constitution that would allow Ottawa to enforce strict control over errant provinces. His scheme was doomed to failure: the nations regional and religious differences were too deep. The 1867 Constitution—and all future constitutional acts—established a precarious and evershifting balance between competing visions of the relationship between Ottawa and the provinces. Are they partners? Is there a superior? Should there be strict separation between areas of jurisdiction—or should Ottawa be free to use its spending power in areas of provincial responsibility?

A century and a third later, the federal parties are still struggling with that seemingly eternal debate.

The bitter conflict about health policy is really a dispute over how each party views Ottawa’s role. The Canadian Alliance would disentangle Ottawa from areas of exclusive provincial responsibility such as education—although it would support the principles of the Canada Health Act. And it would transfer tax points so provinces could pay for the delivery of those services. National standards would be set joindy, by both levels of government. The Liberals, in contrast, would reserve the right to spend in areas of provincial responsibility. The central government would set the standards in health care—and enforce the financial penalties.

Those divergent approaches are complicated by the fact that the world has changed so much since Confederation. Then, the central government took the big-ticket responsibilities like defence—and left piddling matters like hospitals to the provinces. Today, most

provincial areas of jurisdiction, such as health care, mean far more to the average voter than foreign policy. The provinces have also become fiscal powerhouses. As the Canadian Tax Foundation notes, the combined spending of the 10 provinces in 1999 was 14.8 per cent larger than Ottawa’s spending of $172.5 billion. (In 1965, provincial spending was almost 29 per cent less than Ottawa’s $8.5-billion budget.) Ottawa may retain its right to spend in areas of provincial jurisdiction, which it exercised in 1998 when it unilaterally devised the $2.5-billion Canada Millennium Scholarship Foundation. But it was eventually forced to consult with the provinces—to ensure that those scholarships dovetailed with provincial grant programs.

Most important, Ottawa’s clout waned during the 1990s because it cut back transfers: cash transfers to Newfoundland may equal about 35 per cent of provincial revenues, but they represent a mere seven per cent in Alberta. As Ottawa now increases funding, does it have the right to reassert its views? Or have the provinces earned the right to scorn its interference?

For the voters, there is a clear choice. Do they want the government with the responsibility to deliver the service to set the standards and raise most of the funds? Or are they more comfortable with Ottawa’s role as the champion and enforcer of cross-Canada standards— and distributor of much of the funding? “The Alliance wants a decentralized federation in which one jurisdiction does not meddle in the other very much,” notes University of Toronto political scientist David Cameron. “The Liberals would be inclined to think the way the system has worked has not been all that bad.” The irony is that the gulf is as deep as the divide of 1867.