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"Federalism and Diversity: The Canada Experience"

Notes for an address by the
President of the Privy Council and
Minister of Intergovernmental Affairs
the Honourable Stéphane Dion

at El Colegio de Mexico

Mexico City, Mexico

October 1, 1999

 

As a Canadian minister, I am very honoured by this invitation to talk about federalism at the prestigious Colegio de Mexico. It is a natural topic, in my opinion, since North America is the only continent formed solely of federations, which are closely linked together through a dynamic trade agreement, as well as through many other political and personal linkages.

It's no accident that the three heads of government, Messrs. Zedillo, Clinton and Chrétien, will be in Canada, at Mont-Tremblant to be exact, from October 5 to 8, for a major international conference where the world's federations will come together to share their experiences.

Federalism is a system of government that has a number of advantages in terms of governance, management of the economy, democratic life, and influence on the international scene. The world's largest democracies are federations, as are many of the most prosperous countries. But the true genius of this form of government lies in its ability to reconcile diversity in unity. And it is this ability that I want to talk about today.

Because federalism is flexible and can adapt to different contexts, our countries have obviously developed different approaches and mechanisms. I don't claim to be a specialist on your federation, so I will limit my remarks to describing how we in Canada try to reconcile diversity in unity. I will leave it to you to determine which ideas are applicable and which are not to the very different context of Mexico. I hope you will find my remarks to be of some relevance in your search for what you call the New Federalism in Mexico.

Unity in diversity the Canadian way has two dimensions: first, the guarantees we give to individual rights and freedoms, and second, our federal system. Yesterday, at an international conference in Puebla on The Americas in Transition: Challenges of a New Millennium, I spoke mainly about the first dimension: the very Canadian way in which the primacy of individual rights is established while taking account of collective identities. Today, I will talk about the second dimension. I will show how our flexible federalism enables provinces which are equal in status to express their own personalities.

Federalism and diversity

Most federations have significant differences in the character of their constituent states: size, wealth, language, ethnic or religious make-up. This is true of Mexico and of Canada as well. At the same time, the best established federations tend to give their constituent units roughly the same constitutional powers. This is true of the United States, Australia, Germany, Switzerland. Despite huge differences, for example, between Alaska and California, or between Quebec and Prince Edward Island, the constitutional powers of these state or provincial governments are essentially the same.

Of course, it is not inconceivable that a federation could have some asymmetries in the basic powers assigned to different states or provinces. But the functional significance of such asymmetries would depend on the extent of the differences, the political weight of the state or states with the extra powers and the possibility of other states having the extra powers if they so chose.

Spain, for example, has experimented with asymmetries, and there appears to be a tendency for units that have had fewer powers to seek the greater powers of the bigger states.

Inevitably, an extremely asymmetric regime gives rise to questions about the role that elected representatives from different states play at the centre. If the federal government is responsible for education in some states but not others, must the federal Minister of Education be from a state where it has this responsibility? Should representatives from all states vote on federal educational matters? Can very differentiated roles for representatives at the centre be sustained over time? These issues go to the heart of the representative nature of the central federal institutions.

Thus while some asymmetries may fit particular circumstances, there is room for deep scepticism about a federal architecture which is too asymmetric.

This raises the question: how can very different constituent units be content with the same constitutional status? How can federalism be flexible enough to respect both the principle of equality and that of diversity?

Federations use three methods to achieve this end. The first is financial asymmetry. This consists in establishing intergovernmental transfer mechanisms that are specifically designed to assist the less wealthy components of the federation. The objective is to ensure that, despite the inequality of their autonomous revenues, the components are more equal in actual fact.

The second method is constitutional asymmetry. In this case, the Constitution recognizes certain specific arrangements that meet the needs of some of the federation's components without challenging the equality among them.

The third method may be called optional asymmetry, which stems from the different relations that develop between the federal government and the other governments within the federation. Some may choose to exercise all of their constitutional responsibilities, while others prefer to assign some of them to the federal government.

Compared with other well established federations, Canada practises these three forms of asymmetry to a considerable extent (Ronald Watts, Comparing Federal Systems in the 1990s, Queen's University, 1998, p. 100). Our country does so while respecting the equality of status of the provinces.

1. Financial asymmetry

The Canadian federation has an intergovernmental financial redistribution mechanism that is undoubtedly unequalled in scope in any other federation. Section 36 of the Constitution Act, 1982 commits the federal government to help equalize the field so that all provinces have "sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation."

This principle, which has been called a "pillar of modern Canadian federalism" (D. Milne, "Equality or Asymmetry: Why Choose?", in Options for a New Canada, University of Toronto Press, 1991, p. 295), is an overt recognition of the natural differences (such as size, population, wealth, etc.) that exist among the constituent units of our federation. It is strongly and consistently supported by Canadians from have and have-not provinces alike.

2. Constitutional asymmetry

All of our ten provinces have broadly the same constitutional powers. It is true that, in the period from 1905 to 1930, the newly created provinces of Alberta and Saskatchewan did not have the authority over natural resources that resided with the other provinces. This was a significant source of grievance on their part which was only resolved through giving them the same powers as the other provinces. As for our northern territories, vast, with a limited population and very dependant on federal aid, they do not have the constitutional status of provinces.

There are significant "asymmetries" of other types in terms of special provisions for individual provinces within the Canadian constitution. The historic constitutional protection for denominational (that is to say, religious-based) schools, for example, has varied a good deal between provinces, depending on their character and earlier history. And at the provincial level, only the government and legislature of New Brunswick is officially bilingual, while in Quebec and Manitoba, the minority languages of English and French respectively, have some important constitutional protection. Only Quebec uses civil law while the rest of Canada uses common law, and three of the nine seats on the Supreme Court are therefore kept for civil law lawyers from Quebec. In the same vein, the Constitution Act, 1867 addressed the possibility of unifying private law in the common law provinces, which implicitly excluded Quebec and protected its civil law tradition. Under the Constitution Act, 1982 the Government of Quebec has the right to limit access to English schools for as long as it deems this to be desirable in order to better protect the French language in our North American context.

3. Optional asymmetry

Optional asymmetry takes many forms in Canada. These asymmetries have arisen over time, because the provinces have chosen to use their powers in different ways. Some provinces, Quebec first and foremost, have used many more of the possibilities provided for in the Canadian Constitution. A number of federal government policies encourage this flexibility.

For example, most of our provinces have integrated their personal and corporate income tax regimes with the federal regime, but Quebec has kept both distinct and Ontario has a separate corporate tax regime. Similarly, the tax collection arrangements for provincial taxes vary across the country, with the federal government collecting provincial income, corporate or sales taxes in some provinces but not others.

Our immigration regime is managed differently in Quebec than in the other provinces because the government of Quebec has concluded a bilateral agreement with the federal government in this area of joint jurisdiction. Pensions, also a joint jurisdiction, are managed by the federal government outside Quebec while in Quebec the province manages a regime that is closely coordinated with the federal one. Both Ontario and Quebec have their own police forces, whereas the other provinces contract the Royal Canadian Mounted Police to do provincial policing.

Some human resources programs paid for by the federal government have had their management transferred in different degrees to the provinces, depending on the arrangement they have preferred with the federal government. For example, recent job training agreements gave the provinces the choice between extensive autonomy or co-management of programs with the federal government. The Government of Newfoundland opted for co-management, while the Government of Quebec chose autonomy.

Finally, Quebec and New Brunswick have the status of participating governments within the Organisation internationale de la Francophonie, which is not the case for the other Canadian provinces.

The flexibility of Canadian federalism thus allows for extensive optional asymmetry in comparison with what is generally found in other federations. The key point of these asymmetries is that they do not reflect differences in underlying constitutional powers, but demonstrate the flexibility of the federation in terms of the practical use of these powers.

Conclusion

This is the Canadian way of seeking unity in diversity. The result is that the provinces' equal status is not to be confused with uniformity. It is very much in keeping with the pluralist quest for public service quality. This is the ideal of our federation. I am not saying that it has managed to achieve that ideal perfectly. I am saying that pursuit of that ideal is the very essence of our federation.

Canadian federalism is not set in stone. No federalism should be. It is continually evolving, along with the different needs of our populations. A number of the intergovernmental arrangements I have described may vary in the future, and others may be added, but the Canadian federation will always have the same objective: to make it possible to pursue common objectives through diversity of experience. Is this not the objective you are pursuing in Mexico through your New Federalism?

This objective is pursued in Canada through determination and considerable discussion. The debate is often heated. Our Prime Minister, the Right Honourable Jean Chrétien, likes to say that Canadians have two convictions. The first is that Canada is the best country in the world. The second is that their province does not get its fair share within the federation.

These debates, these discussions, this pluralist quest, can all seem complicated and difficult sometimes. But it is precisely from this constant synergy that Canadians draw the vitality that gives them their enviable quality of life. They could not do so in disunity, nor if Canada were a unitary country rather than a decentralized federation. More and more Canadians, particularly Quebecers, are coming to realize this.

Of course, there is no single model of federalism. Our federalism is not the same as Mexican federalism or American federalism, for example, because our contexts and the challenges we face are different. Nevertheless, federalism is likely one of the best responses to ensure that diversity is the very opposite of a problem, a threat or a source of division, and is instead a strength which helps a country to prosper in unity.

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