Pols 2300: Chapter 7: Federalism 26/01/2013
What is Federalism?
In a federal system of government the constitutional authority to make laws and to tax is
divided between a national government and some number of regional governments.
Neither the national government acting alone nor the regional governments acting together
have the authority to alter the powers of the other level of government.
Citizens in a federal state are members of two political communities, one national and the
other coinciding with the boundaries of the province, the name given to the regional units of
a federal state vary between countries.
Federalism is a legal term, and its existence is based on constitution, Federalism is chiefly a
property of constitutions, not of societies.
The sociological approach to federalism argues that the essence of federalism lies not in the
constitutional or institutional structure but in the society itself and declares federalism is a
function of societies.
The constitutional approach is preferred because it involves the dynamic of state of power, a
federal constitution institutionalizes regional divisions by associating them with different
Federalism divides political authority along territorial lines, important policy making and
administrative powers may be exercised at the regional level even in an unitary state. The
extent to which these activities are decentralized i.e. placed in the hands of regional
officials, or remain centralized at the national level is determined by the particular social,
geographic, and political conditions of a country
Unitary form of government: even when there is administrative or legislative
decentralization, sovereignty resides exclusively with the central government and regional
government are legally and politically subordinate to it. Federal form of government: sovereignty is distributed between central and provincial
governments so that within a single political system nether order of government is legally
subordinate to the other, and each order is elected by and exercises authority directly on
Confederal form of government: even when there is a considerable allocation of
responsibilities to central institutions the ultimate sovereignty is retained by the member
state government and the central government is legally subordinate to them.
Economic Association: when it has common organizing institutions, is a confederal type of
government in which the functions assigned b the participating states to the common
institutions are limited mainly to economic co-operation and co-ordination
The Origins of Federal States
The benefits of being part of the union exceed whatever costs membership may impose. A
federal state is based, on a consensus of regions.
Pierre Trudeau said it is an attempt to find a rational compromise between the divergent
interest groups which history has thrown together; but it is a compromise based on the will
of the people.
Some argue that the reason that leads to federal union or that sustains it may indeed be in
the self-interest of some groups, but that federalism may not be reasonable from the
standpoint of other groups self interest.
The origins of federal democracy lies in compromise, some may enter only because of
despair at the lack of viable alternatives. Further, it is sustained by a sense of political
Political nationality means that Canadians as such have reciprocal moral and legal claims
upon one another that have no precise counterparts in their relations with others, and that
Canadians as such have a continuing determination to carry out a significant number of
important common activities together. In short, a sense of political community that
transcends regional, ethnic, and linguistic identifications. The strength of political nationality is determined by regional inequality, if the citizens of a
particular region feel strongly that existing federal structures discriminate against their
interests economically and politically this places a strain on the sense of political nationality.
Nationalism is usually accompanied by territorial claims, what distinguishes nationalism
from regionalism is that nationalism makes its demands on behalf of both a territory and a
community that shares some ethnic, linguistic, or other cultural traits.
The Origins of Canadian Federalism
The strongest opposition came from Quebec, Cartier insisted on constitutional protection for
their cultural community. The other opposition came from Maritimers that had developed
strong local identities that they were unwilling to see submerged under unitary government.
Commercial interests, particularly railroad promoters wanted unification because their ability
to raise investment capital abroad was linked to Canada’s creditworthiness, If expansion
into the sparsely populated region between Ontario and British Columbia was to be
accomplished. Tugging in the opposite direction were the facts of cultural dualism and the
existence of colonial administrations and regional societies that were unwilling to be
completely submerged in a unitary state that would inevitably be dominated by Ontario and
Quebec. Federalism was a necessary compromise between these contradictory tendencies.
The agreement the founders reached gave powers and sources of public revenue to the
federal government. Ottawa was given authority over trade and commerce, shipping
fisheries, interprovincial transportation, currency and banking. Responsibility for
immigration and agriculture was divided between the federal and provincial governments,
but in the event of a conflict Ottawa’s legislation would prevail. The federal government was
also assigned the duty to build an intercolonial railway connecting Montreal to Halifax. The
confederation agreement also established the practice of federal money transfers to the
provinces. The agreement also included provisions described as quasi-federal, appearing to
establish a colonial relationship between Ottawa and the provinces by permitting the federal
government to disallow laws passed by provincial legislature.
Section 92(10c) gives the federal government the authority to intervene in a provincial
economy by declaring that the construction of a public work ‘this could be anything from
road work to an oil field is in the national interest. Section 93(3)(4) actually gives Ottawa
the power to pass laws respecting education, an area of provincial jurisdiction. The supreme court of Canada’s ruling in the 1981 reference declared that arguments from
history do not lead to any consistent view or any single view of the nature of the British
North America Act.
Both the compact and contract theories of federalism maintain that the federal bargain
cannot be changed without the mutual consent of those who agreed to it. In the case of
compact theory, Quebec should have veto over any constitutional change that affects either
the federal distribution of powers or the relative weight of Quebec in parliament and on the
A contract claims that each of them has the right to veto constitutional change that affects
provincial powers or national representation.
Three variants of contract theory:
One would restrict the right of veto to the original signatories (Nova Scotia, New Brunswick,
Quebec, and Ontario)
Two extends it to all provinces, regardless of when they joined Canada
Three takes the position that the unanimous consent of the provinces is not required to
change the federal distribution of powers, but that substantial provincial agreement is
The compact interpretation of Canadian federalism continues to carry weight, the Quebec
governments refusal to agree to the Constitution Act, 1982, was widely viewed as a serious
blow to the constitutions legitimacy.
Mulroney regularly spoke of bringing Quebec into the Constitution. Legally, of course the
1982 reforms applied right across Canada.
Parti Quebecois and the Quebec Liberal Party, insist that Canadian federalism must be
viewed as a compact between founding nations. The contract theory of Canada lives on politically in the idea of the formal equality of the
provinces. Quebec agreed to in 1997, states that ‘all provinces, while diverse in their
characteristics, have equality of status. The declaration also stated that any constitutional
amendment that confers powers on one province must make these powers available to all
provinces. This involves a fundamentally different view of Canadian federalism than that
which flows from the compact theory. The idea that provinces are and ought to remain
formally equal, a contract theory view of federalism is not easily squared with the notion of
Quebec as a distinct society a compact theory perspective of federalism.
The Federal Divisions of Power
The heart of federal division of powers is found in sections 91 and 92 of the Constitution
Act, 1867. Each of these sections contains a detailed list of enumerated powers that belong
exclusively to Parliament (s. 91) or the provincial legislatures (s. 92).
Governments have sometimes found the authority to legislate through powers that are
implied, rather than stated, in the constitution. The most important example of this involves
the federal governments spending power. Ottawa spends billions of dollars annually on
programs that fall under the jurisdiction of provincial and municipal governments.
Ottawa’s constitutional right to spend money for any purpose has never been definitely
established in the courts.
The Courts and Federalism
The judicial decisions that have resulted from these disputes have played an important role
in shaping the evolution of Canadian federalism. The courts interpretation of Ottawa’s
authority to make laws for the peace, order, and good government of Canada (POGG) and
the federal government trade and commerce power have had the greatest impact on the
division of powers.
POGG narrow interpretation on the federal Parliaments general authority to make laws for
the peace, order, and good government of Canada. This has been reduced over time to an
emergency power that can provide the constitutional basis for federal actions in special
Essentially, the JCPC ruled that some national crisis must exist before federal laws can be
based on POGG. Subsequent rulings suggested that POGG was really a wartime power. Not only was the emergency doctrine liberated from war related circumstances, the court
also indicated its reluctance to challenge Parliaments judgment on when emergency
circumstances exist. Ottawa now appeared to have fairly easy access to emergency powers
under this doctrine.
Trade and Commerce
To construe Ottawa’s trade and commerce power otherwise, the JCPC argued would be to
deny the fair and ordinary meaning of s. 92(13) of the Constitution Act, 1867, which assigns
property and civil rights in the province to the provincial governments. The legacy of
Parsons has been that Ottawa’s authority to regulate trade and commerce has been limited
to interprovincial trade, international trade, and general trade affecting the whole of
Parsons provide the basis for federal laws regulating business, Supreme Court laid down five
criteria that must be met before Ottawa may regulate commerce under the ‘general trade’
provision of s. 91(2) of the Constitution. They include the following:
1) the impugned legislation must be part of a general regulatory scheme
2) the scheme must be monitored by the continuing oversight of a regulatory scheme
3) the legislation must be concerned with trade as a while rather than a particular
4) the legislation should be of a nature that the provinces jointly or severally would be
constitutionally incapable of enacting
5) the failure to include one or more provinces or localities in a legislative scheme
would jeopardize the successful operation of the scheme in other parts of the country.
Quebec’s distinctive social and cultural fabric explains why it has made special demands on
Canadian Federalism. The demands of Quebec have had a significant impact on the
evolution of Canadian Federalism. This impact has been experienced on two main fronts:
the constitution and the financial and administrative practices of federalism. Quebec’s influence on the Constitution predates the confederation agreement. Between
1848 and 1867 Ontario and Quebec formed the United Canada’s, which the two colonies
held equal representations. To become law, a bill had to be approved by a majority of
members on both the Ontario and Quebec sides of the legislature. This was Canada’s first
experience with the federal principle of regional representation. Its representatives were
most insistent on a federal constitution of Canada, under which the provincial government
would have authority over those matters considered vital to the preservation of the
language, religion, and social institutions of Quebec.
The constitutional consequences of limiting French Canada to the boundaries of Quebec
became apparent by the middle of the twentieth century. As Ottawa became increasingly
involved in areas of provincial jurisdiction, particularly through its spending power but also
by monopolizing the field of direct taxation between 1947 and 1954 under a tax rental
agreement with the provinces, the Quebec government became more and more protective
when they argued exclusive provincial powers under the Constitution.
Quebec’s resentment towards Ottawa encroachment onto provincial territory matched by
aggressive constitutional demands. The first major indication of this occurred during the
federal provincial negotiations on a public old age pension scheme. The first major
indication of this occurred during the federal provincial negotiations. Ottawa was given the
authority to pass pension legislation if Quebec were able to opt out of the federal plan.