CH. 4: Federalism
What is Federalism?
• Unitary vs. federal government
o Unitary: all sovereign authority of the nation resides in one governing
body: the national government.
o Federal: division between two levels of government: state & national.
Canada deals with 3: national, provincial, and municipal.
Why a Federal Union?
• In the 1860s, British North America consisted of 6 colonies:
o British Columbia
o New Brunswick
o Nova Scotia
o Prince Edward Island
o Province of Canada (Now Ontario and Quebec)
• Each territory had its own colonial government. The gov of Province of Canada
was a failure, so they were eager to reform.
o Most logical solution seemed to unite the British colonies in NA under one
Breakinging the deadlock in the favor of the Englishspeaking
Allow for productive, coordinated legislation for national
Security for smaller colonies.
• English speakers wanted a unitary system, Quebeckers wouldn’t have it.
The Original Design of the Federal Union
• Parliament has exclusive jurisdiction over trade & commerce.
• Residual power (anything not reserved by provincial power) is given to the
o Powers of the provincial governments are designed to be subordinate to
the federal gov.
Federal government can veto provincial legislation, this is called
The Historical Development of Federalism in Canada
• Canada is decentralized because of how the provinces & federal government have
managed their responsibilities.
1) Quasi Federalism: Strong national government, unimportant provincial
2) Classical Federalism: More equal relationship between federal & provincial levels
under the Liberal Party and a Quebecker President. Each level of gov. is sovereign
in its duties. 3) Emergency Federalism: Power in hands of federal government because of need
for strong leadership.
4) Cooperative Federalism: Growing provincial financial power, responsibility,
accountability, and jurisdiction.
Financing Government and FederalProvincial Relations
1) Balance must exist between handling Federal responsibilities and maintaining
a. The federal government’s ability to afford its own actions constitutes its
b. The Canadian federal system was intentionally imbalanced in order to
favor the authority of the federal gov. over individual provinces.
i. As provinces struggled with finances, stress on the federal
government necessitated the creation of fiscal federalism (3 parts):
a. CA 1867: federal gov. was given both a much greater ability to raise
revenues and the ability to spend money within provincial jurisdiction,
giving them clear financial authority.
b. The federal gov can raise money “by any mode or system of taxation”
(section 92.2), written when people were primarily taxed indirectly.
i. Indirect tax – through merchants
ii. Direct tax – payed directly to federal gov.
c. Because the federal government was first to establish fields of taxes, it
was difficult for the provincial governments to tax the people on top of
what they already paid toward the federal tax. This struggle is called tax
2) Federal Spending Power
a. Its financial supremacy over provincial governments allow the federal gov
to transcend its jurisdiction outlined in the federal division of powers, and
become involved in provincial matters like healthcare.
b. The federal government will attach conditions as to how the money it
gives to the provincial governments (to do what provincial governments
ought to be doing) is spent. This is called a conditional grant.
i. In response to pressure received from provinces regarding
conditional grants, the federal government has moved toward
unconditional grants, which are just large transfers of funds to each
province, allowing them more discretion as to how it is spent.
1. Accomplished through the Canada Health Transfer (CHT)
& the Canada Social Transfer (CST). For 2010, the total
transfer to the provinces through unconditional grants was
approx. $37 billion.
3) Equalization Payments
a. Fed gov is responsible to aiding provinces who fall below the na