CCA Bulletin 50/06

Ottawa, November 30, 2006

"Advantage Canada" Poised To Stir Up Jurisdictional Issues - What could this mean for arts and culture?

Just the Facts

Last week the Minister of Finance, the Honourable James Flaherty, presented his economic update to Parliament. Under the title "Advantage Canada : Building a Strong Economy for Canadians", Minister Flaherty introduced his Government's long-range financial plans for managing our nation's finances.

"Advantage Canada " contains a commitment to pay off Canada 's net debt by 2021. This plan includes debts held by the provincial and territorial government, and diligent management of the Canada Pension Plan and the Quebec Pension Plan. And, to sweeten the deal for Canadians, the Minister commits to dedicate the interest savings from debt repayment to personal income tax deductions. If the Government realizes unanticipated surpluses, it will accelerate debt and personal income tax reductions. Translation : there will be no new financial investment over and above current planned spending, and future reallocation exercises will determine how federal dollars shift according to government priorities.

To accomplish this objective the Government will "be focused on what it does best. It will be responsible in its spending, efficient in its operations, effective in its results, and accountable to taxpayers". The Government will also "limit the use of the federal spending power and focus new spending on areas of federal responsibility". The Minister repeats the commitment to focus on areas of federal responsibility throughout the "Advantage Canada " document, which has been described by some as the most comprehensive financial plan for Canada in decades.

The restricted use of the spending power and the emphasis on areas of federal responsibility is a potential prelude to a much larger discussion about where the ongoing policy and fiscal commitments of the Government of Canada will be focused at the federal level in the years to come. Over time, subsequent federal governments have used the federal spending power to direct funding to areas that are in provincial, or in shared, jurisdictions. In the 1990s, during the various national debates on Constitutional Affairs, the Progressive Conservative government also offered to restrain the federal spending power and devolve responsibilities it had undertaken in areas of provincial jurisdiction back to the provinces and territories.

"Advantage Canada " raises some interesting questions concerning the involvement of the federal government in arts and culture. Given the low priority traditionally given to the sector, and if all new money is to come from redirections from within a dwindling federal budget, what is the likelihood of getting adequate funding for the Canada Council, the CBC, the museums, etc.? These questions are even more disturbing when coupled with a philosophy based on small central government, on devolution to the provinces, and on marked preference for tax measures over direct investment.

Tell Me More

In order to meet the many undertakings in "Advantage Canada ", it is clear that spending will be given a serious examination. Decisions will be made on a case-by-case basis, through a new Expenditure Management System where new expenditures will be reviewed by both Cabinet and Treasury Board: every funding program will be reviewed first by its Department, then these evaluations will be assessed by Treasury Board and finally subjected to a systematic review by Cabinet "to ensure that all spending is aligned with Canada's priorities and effectively and efficiently delivers on the Governments' responsibilities." The Government also commits to keeping the rate of program spending, on average, below the rate of growth of the economy.

What may all of this mean for the Canadian arts and cultural sector? Any discussion about areas of federal responsibility sends us directly to the British North America Act - the Canadian Constitution. In that cornerstone document, the areas of responsibility for the federal government are enumerated in Section 91 while those of the provincial governments are found in Section 92. Other areas of federal jurisdiction, such as the signing of international agreements, have also been determined by later decisions of the Supreme Court of Canada.

In reading these sections of the Act, one is struck by the fact that culture is not mentioned. The federal responsibility for broadcasting, copyrights, and patents of invention and discovery are included, but nowhere does one find the arts, heritage and other areas where the federal government has invested financial resources over the years.

The important question is how will the government deal with the issue of the arts, culture and heritage? Will it continue to defend an ongoing role for the federal government in the promotion and support of these important areas or will it relegate them to the care of the provinces? These are issues the Canadian Conference of the Arts (CCA) will keep a close eye on as the Expenditure Management System and " Advantage Canada " develop further.

In the meantime, the CCA will continue to monitor the situation and study constitutional interpretations to ensure that any eventual devolution or vacation of responsibilities to the provinces is consistent with the best interests of the cultural rights of Canadians. And we will of course use every opportunity to further our agenda concerning adequate funding of arts and culture through a variety of necessary mechanisms, whether it is through direct funding, taxation measures, regulation, or domestic ownership considerations.

What Can I Do?

Minister Flaherty has announced online consultations (that close on December 18 th of this year!), asking Canadians to comment on the plans to "create five Canadian advantages that will help us improve our quality of life and succeed on the world stage."   

The CCA will obviously intervene in this democratic process and we certainly encourage all our members and supporters to do the same and to make their opinions known. We should publish the CCA intervention early enough for you to use it in your own. So, martial your arguments for an ongoing federal role in the arts, culture, and heritage areas, and keep your powder dry: we may be living soon in very interesting times indeed! This is a "heads up!" not an "incoming!" type of communication regarding the broader question of ongoing federal fiscal and policy support for arts, culture and heritage in Canada.