Business in the Canadian Context
ADMS1010 – Summer 2012 – Troy Young
Lecture 3 – Defining Canada – May 24 2012
Definition of Federalism
- Distribution of power in a federation between the central authority and the
constituent units (as states or provinces) involving the allocation of significant
lawmaking powers to those constituent units
- A system of government in which power is divided between a national (federal)
government and various regional governments.
What is the State?
- For the purposes of our discussion, the state is a geographically defined entity
that exists under one political structure without being subject to another political
- The term state is often used interchangeably with the term government.
- Is Canada a state? Is Ontario a state? Is the City of Toronto a state?
Examples of Federalism
- Canada is a federalist state, with three levels of government
- The United States is also a federalist state with three levels of government
- Federal government in both examples exerts strong central authority, yet leaves
significant decisions and powers up to the regional constituencies.
Differences between US and Canada
o All powers not specifically reserved for the provinces are allotted to the
- United States
o All powers not specifically reserved for the Federal government are
allotted to the States.
The Unitary State: An Alternative to Federalism
- Power is located in one central authority.
- Local authorities are subordinate to the central power.
- The legislature may remove the power granted to it by the central government.
- Example: Municipalities are subordinate to the provinces in Canada. Their
decisions can be overruled by the provincial legislature that they are under.
- Great Britain is an example of a Unitary state
When Federalist Becomes Unitary
- In times of great crisis, a unitary state can evolve from a federalist one
o During World War II, the federal government assumed powers that were
previously in the hands of the provinces; this went back to normal after the
war What Determines a Federal State?
- There is a legal guarantee of authority to each of the regional authorities.
- This justifies the coordination and cooperation with the central authority.
Dual Challenge of Federalism
- A federal state must attempt to build a national strategy.
- Develop a transfer payment policy that redistributes Canada’s wealth fairly.
- A federal state must attempt to appease regional interests.
- Example: Canada must help poorer areas of the country with tax dollars
generated in Alberta, British Columbia, Saskatchewan and Newfoundland.
- Result: Alberta, British Columbia, Saskatchewan and Newfoundland send more
money to Ottawa than they receive in services.
Federalism in Practice
- This arrangement not only allows provincial governments to respond directly to
the interests of their local populations, but also serves to check the power of the
- The federal government determines foreign policy, with exclusive power to make
treaties, declare war, and control imports and exports; Provincial governments
oversee the provision of education, health care, social services and the creation
- Neither level of government can subordinate or overrule the authority of the
- The power of the central authority (i.e. the federal government) extends
throughout the country and is “higher” than the power of each regional authority
- In the event of inconsistency between federal law and a provincial law, it is the
federal or national law that prevails.
The Government of Canada: An Evolution
- France was the first European nation to colonize Canada.
- France ceded its Canadian possessions to Great Britain after the Seven Years
- The English left much of the religious, political and social culture of the early
inhabitants in place.
- Many more English arrive after the American Revolution in the form of United
- Canadian identity begins to emerge after the War of 1812, mainly due to mistrust
towards our American neighbours.
- Canada becomes a nation unto itself with the British North America Act, 1867
Development of Canadian Federalism
- The ultimate aim was to found a transcontinental nation in the form of a
constitutional monarchy under the British Crown.
- A strong central government was desired and if a legislative union was
impossible because of the peculiarities of Quebec and its desire to retain these,
then a strong and highly centralized federal union would be the answer. - Fathers of Confederation felt that the American government had given the
individual states too much power and did not want to repeat these mistakes.
- Federalism is suited for independent regional entities that find it necessary to
address issues that they could not deal with individually – defence is a good
- Quebec at that time saw the development of a federal Canadian state as a way
to continue to guarantee the preservation of their unique culture.
- Increasingly it was worried that the Canadian colonies were the targets of
- There were economic benefits for the individual colonies to come together as
- A country's constitution defines the powers and limits of powers that can be
exercised by the different levels of government.
- The British North America Act, 1867, by which the British colonial provinces of
Canada (Upper and Lower), Nova Scotia and New Brunswick were united to
create the Dominion of Canada, served as our constitution until 1982.
- The BNA Act did little more than provide for confederation, not even having the
inclusion of an amending clause.
- Until 1982 any necessary amendments to the BNA Act were enacted by the
Parliament in England.
- The Constitution sets out the basic principles of democratic government in
Canada. It also defines the powers of the three branches of government: the
executive, the legislative and the judicial
Division of Powers in Canadian Federalism
- Selected Federal Powers
o The Public Debt
o The Regulation of Trade and Commerce
o Postal Service
o The Census and Statistics
o Militia, Military and Naval Service, and Defence
o Sea Coast and Inland Fisheries
o Currency, Coinage and Legal Tender
o Natives, and Lands reserved for the Natives
o Naturalization and Aliens
- Selected Provincial Powers