Politics of Canada - Federal-provincial Relations

Federal-provincial Relations

In Canada, the provinces are considered co-sovereign; sovereignty of the provinces is passed on, not by the Governor General or the Canadian parliament, but through the Crown itself. This means that the Crown is "divided" into 11 legal jurisdictions; into 11 "Crowns" – one federal and ten provincial.

Federal-provincial (or intergovernmental, formerly Dominion-provincial) relations is a regular issue in Canadian politics: Quebec wishes to preserve and strengthen its distinctive nature, western provinces desire more control over their abundant natural resources, especially energy reserves; industrialized Central Canada is concerned with its manufacturing base, and the Atlantic provinces strive to escape from being less affluent than the rest of the country.

In order to ensure that social programs such as health care and education are funded consistently throughout Canada, the "have-not" (poorer) provinces receive a proportionately greater share of federal "transfer (equalization) payments" than the richer, or "have", provinces do; this has been somewhat controversial. The richer provinces often favour freezing transfer payments, or rebalancing the system in their favour, based on the claim that they already pay more in taxes than they receive in federal government services, and the poorer provinces often favour an increase on the basis that the amount of money they receive is not sufficient for their existing needs.

Particularly in the past decade, some scholars have argued that the federal government's exercise of its unlimited constitutional spending power has contributed to strained federal-provincial relations. This power, which allows the federal government to spend the revenue it raises in any way that it pleases, allows it to overstep the constitutional division of powers by creating programs that encroach on areas of provincial jurisdiction. The federal spending power is not expressly set out in the Constitution Act, 1867; however, in the words of the Court of Appeal for Ontario the power "can be inferred" from s. 91(1A), "the public debt and property".

A prime example of an exercise of the spending power is the Canada Health Act, which is a conditional grant of money to the provinces. Regulation of health services is, under the Constitution, a provincial responsibility. However, by making the funding available to the provinces under the Canada Health Act contingent upon delivery of services according to federal standards, the federal government has the ability to influence health care delivery. This spending power, coupled with Supreme Court rulings – such as Reference re Canada Assistance Plan (B.C.) – that have held that funding delivered under the spending power can be reduced unilaterally at any time, has contributed to strained federal-provincial relations.