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IV. Canadian Federalism

The economic theories of federalism and of comparative law ought to serve to explain differences between federations. In order to further that comparison, I offer in this section a very brief over-view of Canadian federalism for the purpose of contrasting its institutions and trends with those in the United States.

A. The Constitution Acts, 1867, and 1982

The Dominion of Canada is a federation of 10 provinces and two territories. Each province retains some sovereignty and delegates some sovereignty to the federal government in Ottawa.1 There is no founding document of this federation that is equivalent to the United States Constitution. However, there are two statutes that serve to define Canadian federal relations. The first is the British North America Act, 1867, which was renamed the Constitution Act, 1867 in 1982. The second is the Constitution Act, 1982.

The B.N.A. Act (as it is called) united the provinces of Canada, Nova Scotia, and New Brunswick into a confederation2 called the "Dominion of Canada." The Act established a bi-cameral national Parliament, in which elected representation in the lower chamber—the House of Commons—was proportional to population and appointed representation in the upper chamber—the Senate—was by region. The Act also stated the responsibilities of the federal and provincial governments, as we shall see, but there were some gaps in the B.N.A. Act. For example, it did not contain a general amending clause, which implied that amendments to the Canadian constitution would have to enacted by the United Kingdom (imperial) Parliament, a role that Parliament played until 1982.3 Nor did the Act mention the mechanisms of what is called "responsible government"—that is, cabinet government. The Act did not speak of a Prime Minister, a cabinet, or of the dependence of the cabinet on the support of a majority in the House of Commons. Finally, the Act authorized, in § 101, the establishment of a supreme court but did actually create that court. Apparently, the framers of the Act were content to leave final appellate authority in the hands of the Judicial Committee of the Privy Council in England, where such authority had long resided for British North America and other colonies. Even when Canada established a Supreme Court in 1875, it still retained the right of appeal to the Privy Council, a right that was not finally abolished till 1949.

The Constitution Act, 1982 filled these gaps in the B.N.A. Act and some other gaps in the Canadian constitutional structure. First, it established a purely domestic amending clause for the Canadian constitution. Second, it ended the United Kingdom (imperial) Parliament's authority over Canada. Third, it adopted the Canadian Charter of Rights and Freedoms as a constitutional provision.4

B. Substantive provisions of Canadian federalism

Professor Hogg asserts that the framers of the B.N.A. Act intended the Canadian federation to have a strong central government and relatively weak provincial governments.5 The Act enumerates the powers that the provinces have, generally leaving the residual powers to the central government. (This is precisely the opposite of the situation in the United States Constitution.) Moreover, where the Act specifies powers to the central government, it generally confers powers that the United States Constitution reserves to the states. For example, § 91(2) of the B.N.A. Act gives the Canadian federal Parliament the power to regulate, without qualification, "trade and commerce." The Commerce Clause of the U.S. Constitution qualifies Congress' power to regulate "commerce with foreign nations and among the several states and with the Indian tribes."6 Additionally, the B.N.A. Act gave the federal government exclusive regulatory authority over banking (§ 91(15)), marriage and divorce (§ 91(26)), criminal law (§ 91(27)), and penitentiaries (§ 91(28))Call of which powers are state powers in the United States federation. In matters of taxation, the federal Parliament could levy direct or indirect taxes (§ 91(3)), but the provinces could levy only direct taxes (§ 92(2)).

In certain ways, the Act made the provincial governments explicitly subordinate to the federal government. For instance, § 90 gave the central government the power to disallow provincial statutes; § 58 gave the federal government the power to appoint the Lieutenant Governor of each province; and §§ 91(29) and 92(10)(c) gave the federal Parliament the power to bring local public works within exclusive federal legislative jurisdiction by declaring them to be "for the general advantage of Canada."

This brief account of the Canadian division of powers between the federal and provincial governments indicates a federation that appears to differ from that of the United States in one major regard—namely, that the member-state (provincial) governments are markedly less powerful than the federal government. Before we turn to the issue of whether or not we can explain this seemingly significant difference between the United States and Canadian federations by economic factors, we need first to explore how the provisions of the Canadian constitution for the division of powers between the federal and provincial governments have worked out in practice.7

C. Canadian federalism in practice

The framers of the B.N.A. Act meant for the central government to be strong and the provincial governments to be weak, and in the early years of the Dominion, that is how the governments behaved. Professor Hogg says that the federal government "exercised a control over the provinces not at all unlike that of an imperial government over its colonies."8 However, over time relations between the federal and provincial governments in the Canadian federation have changed so much that today the Canadian federation "is less centralized than that of either the United States or Australia. ... The present federal-provincial financial arrangements give the Canadian provinces more financial autonomy than is enjoyed by the states of the United States or Australia."9 The federal government's power to disallow provincial statutes was one that was vigorously exercised in the early years of the dominion but has not been used since 1943. Its exercise today would provoke intense resentment on the part of the provinces. The federal government's power to appoint Lieutenant Governors in the provinces is one that is still exercised. However, the Lieutenant Governor is not the federal government's agent, as was apparently envisioned by the framers of the B.N.A. Act. The Lieutenant Governor has the power under that Act to withhold approval of an act passed by the provincial legislature and to "reserve" the act for federal government consideration. But this power is no more exercised than is the power of the federal government to disallow provincial legislation. Finally, the federal government's power to "take" local public works for exclusive federal jurisdiction upon declaration that the project is "for the general advantage of Canada" is a power that is almost never exercised.10

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1 See Peter Hogg, Constitutional Law in Canada (2d ed 1992). 2 Professor Hogg says that "confederation" usually means an association of independent states in which the central government is subordinate to the state governments but that in Canadian usage "confederation" means "federation" in the same sense as in the United States and almost every other federal system: that the state governments are generally, but not always, subordinate to the central government. 3 Hogg, supra n. 68 at 5. 4 The Canadian Parliament enacted the Canadian Bill of Rights in 1960 as a federal statute. The inclusion of this Bill of Rights in the Constitution Act, 1982 made those rights amendable only through the constitutional amending procedure and applicable to provincial and federal laws. The Charter contains the famous "notwithstanding" clause, which allows the federal Parliament or provincial legislatures to designate an act as operative even though it might clash with a provision of the Charter. This sort of opt-out provision is almost inconceivable in the United States federation. 5 Hogg, supra n. 68 at 108. The Canadian provinces have power over education, hospitals, and provincial property and civil rights. 6 As we saw in the discussion of the recent Lopez case, the Commerce Clause clearly limits what the United States federal government may regulate. There is, of course, much litigation in Canada on the division of regulation between the provinces and the federal government. See Paul Weiler, In the Last Resort: A Critical Study of the Supreme Court of Canada ch. 6 (1974). 7 I leave to one side the thorny issue of whether or not some of the Canadian provinces should have a special status within the federation. Many of the provinces came into the federation under terms that are unique to that province, but the issue of special status has most recently been associated with the possibility that Quebec would remain within the Canadian federation only if constitutional change conferred special privileges on that province. The Meech Lake Constitutional Accord of 1987 and the Charlottetown Accord of 1992 were attempts to reconcile Quebec to the terms of the Constitution Act, 1982. For example, the Meech Lake Accord made provision for "(1) the recognition of Quebec as a distinct society, (2) a provincial role in immigration, (3) a provincial role in appointments to the Supreme Court of Canada, (4) a limitation of the federal spending power and (5) a veto for Quebec over some kinds of constitutional amendments." (Under current practice the Supreme Court of Canada has ten justices—a chief justice and ten puisne (associate) justices, three of whom must come from Quebec.) Hogg, supra n. 68 at 103. The "distinct society" provision was the one that led to the rejection of the Accord by Manitoba and Newfoundland in 1990. The Charlottetown Accord contained some of the same provisions as the Meech Lake Accord. The support of business and political leaders notwithstanding, the Charlottetown Accord was defeated in a nationwide referendum in October, 1992. 8 Hogg, supra n. 68 at 110. 9 Hogg, supra n. 68 at 108 and 112. 10 Professor Hogg says that the federal government used this declaratory power to acquire local railways as part of its establishment of a national railway system. Hogg, supra n. 68 at 115.