"COLLABORATIVE FEDERALISM IN AN
ERA OF GLOBALIZATION"

NOTES FOR AN ADDRESS TO
THE INSTITUTE OF PUBLIC ADMINISTRATION OF CANADA

OTTAWA, ONTARIO

APRIL 22, 1999

I have been a member of your association ever since I was a graduate student, and have had the honour, in my other life as a political science professor, of preparing presentations for your national conferences, without ever having the pleasure of going myself, owing to a lack of funding!

Who knows, perhaps one of my subconscious motivations for getting into politics three years ago was to snag a free invitation? In any event, it’s worked: this is the second time in three years that I have the pleasure of speaking to you.

I am especially pleased to have been invited today, considering the quality of the speakers and the topic of the Conference. You are examining the Canadian style of governance, and I have been asked to look at it from the angle of how our federation works, in other words, in terms of intergovernmental relations, which is somewhat my bailiwick.

As I understand it, the main hypothesis which guides your work is that governance is evolving toward less hierarchical forms, based more on cooperation and mutual trust. You can see such trends within governmental institutions, in relations between governments and the private and voluntary sectors and also in relations among governments themselves.

It is interesting that the Auditor General notes the same trend in the report he has just tabled: "Collaborative arrangements, also called partnering, are increasingly being used in federal program and service delivery as a management tool and to share power and authority with the government’s partners in making decisions. In our view, they have the potential to be an innovative, cost-effective and efficient way of delivering programs and services."

I share this point of view. Our federation is evolving toward greater cooperation and consensus-building, while respecting the constitutional jurisdictions of each order of government, rather than toward extensive centralization in favour of the federal government or extensive decentralization in favour of the provincial governments.

And Canadians want this greater intergovernmental cooperation. According to an EKOS poll conducted in November 1997, an absolute majority of Canadians (58%) prefer closer cooperation between governments without major transfers of power, compared with 25% who would like to see a major decentralization to provincial governments and 15% who want a major shift of activities to the federal government. Even in Quebec, supporters of intergovernmental cooperation (50%) outnumber supporters of either decentralization (39%) or centralization (7%).

I must tell you, however, that your position in favour of cooperation, which I share and which, as we have just seen, is popular among Canadians, is being challenged. It is being challenged, for example, by the proponents of centralization, by those who believe that the Government of Canada ought to regain a greater role in a number of areas that are now in the hands of the provincial governments.

After briefly reviewing these arguments in favour of centralization, I will show how the Government of Canada is not following this course of action. Its approach, in fact, is cooperation and consultation with the provincial and territorial governments. I will be looking at this issue from four angles: a) budgetary policy, b) new policies introduced by the federal government in recent years, c) the social union framework agreement, and d) foreign policy.

1. Is the federation too decentralized?

It has long been said that Canada is too decentralized, that the power of the provincial governments is excessive and is a barrier to rational governance. This criticism of the decentralized nature of our federation is adapted to the flavour of the month, to the concepts in fashion in the market of ideas, but it is always there, its presence is always felt.

In the 1960s, in the heyday of the Keynesian movement, it was said that provincial autonomy was preventing Canada from adopting rational economic planning.

Today, the concept currently in fashion is globalization, meaning the internationalization of markets, the importance of international agreements, supranational management. The proponents of centralization are now saying that the commercial, cultural and environmental issues currently being negotiated on the international scene are playing an increasingly extensive and important role, and are increasingly cutting across provincial jurisdictions. In this context, the Canadian government is seemingly between a rock and a hard place: it must centralize, which means taking over responsibilities now under provincial jurisdiction.

To illustrate this theory, I could refer to a federalist author who advocates centralization, but instead, I will use a more paradoxical case, that of former Quebec Premier Jacques Parizeau.

Unlike other spokespersons of the independence movement, Mr. Parizeau does not subscribe to the untenable thesis that Canada is supposedly of a centralized nature. He acknowledges that Canada is decentralized. In his statement of February 28, 1999, for example, he affirmed that: [TRANSLATION] "Canadian federalism is about the most decentralized in the world, along with Switzerland." It seems to me that on a few occasions I’ve said much the same thing myself...

Mr. Parizeau, however, maintains that Canada must become centralized, because decentralization is a form of governance that has become irrational and ineffective, ill-adapted to modern constraints. He has been defending that idea since the late 1960s. It was in his famous speech in Banff on October 17, 1967, that he brought it up for the first time.

At that time, he described Canada as having turned into a "blind alley" because decentralization had "in any case gone much too far." The excessive power of the provinces was preventing the federal government from enforcing "rational planning": "A country should not be allowed to balkanize decision-making to the extent that exists now."

One can thus see a striking parallel between this advocate of Quebec independence and the pro-Canada advocates of centralization, who mistakenly see the strength of our provincial governments as a hindrance to rational governance.

In 1967, the idea in fashion that supposedly made centralization such an urgent necessity was economic planning. Three decades later, it is quite clear that events have proved this prophecy wrong: Canada did not centralize, yet it continued to perform strongly.

Because if Canada is a country that doesn’t work, I’d like to see a country that does! Of course we have serious problems to solve: poverty, pollution, economic weaknesses in some sectors. But let us compare. Canada is currently ranked first in the world by the UN human development index, third in terms of business climate by the Economist Intelligence Unit, fifth in terms of economic competitiveness by the World Economic Forum, fifth in terms of government efficiency by the National Bureau of Economic Research, and sixth in terms of honesty of commercial and governmental practices by Transparency International. Not bad for a federation doomed to deadlock because of decentralization!

But this won’t last, the centralizers keep telling us. Centralization is coming, this time for good, driven by globalization. Here once again is Mr. Parizeau, who very recently repeated in almost the same words his bleak diagnosis of 1967. This time, however, he tied it to globalization rather than economic planning when he said:

[TRANSLATION] "If the federal government is to be able to retain the powers of a genuine government and to set policies, it is imperative that it centralize what is an extraordinarily decentralized federation." (28-02-99)

Canada will either centralize or it will whither. Such is the message of the prophets of centralization, which has remained unchanged and unchanging for decades, albeit adapted to the flavour of the month. It will be proved as wrong in the future as it has been in the past. In fact, the ability of our governments to work together will be enhanced. Our decentralized federation, based on solidarity of its citizens and cooperation among its governments, is perfectly equipped to take on the issues of what we refer to as globalization.

2. The budgetary policy

The Government of Canada believes in the virtues of our decentralized federation. In the last two Martin budgets, its first targets for reinvestment have been transfers to the provincial governments. Thirty-eight per cent of new spending in the 1998-1999 budget was allocated directly to the provinces, as was 68% of the 1999-2000 budget.

In fact, during the period of cuts, from 1993-1994 to 1998-1999, the Finance Minister made smaller reductions to cash and tax point transfers to the provinces (7.4%) than to direct spending by the federal government (10.8%). Equalization payments were spared any reduction, which helped the less wealthy provinces.

Rather than centralization, the evolution of our budgetary federalism reflects the will of the Government of Canada to provide the provincial and territorial governments with financial assistance so that they can enhance their capacity to take action and implement their own policies.

3. The new policies put in place by the federal government

The federal government is determined to implement flexible policies that make it possible to pursue Canada-wide objectives, while taking into account the diversity of the country. The Infrastructure Program has thus been a model of federal-provincial-municipal cooperation. The National Child Benefit was designed to allow the federal government to help the provincial governments design different policies, rather than forcing them all to do the same thing. The new, more stringent measures regarding young offenders set out in the Act in respect of criminal justice for young persons will be optional, available to those attorneys general who wish to use them. The legislation on electronic commerce and the protection of personal information will complement, rather than replace, the provincial laws in provinces where similar legislation will be passed, as is the case today in Quebec.

The framework for negotiating job training agreements allows the provincial governments to choose between co-management models and more extensive autonomy. The environmental harmonization agreement promotes cooperation in a sector where both orders of government have very weighty responsibilities.

Even the much-discussed Millennium Scholarships program cannot be described as a measure toward centralization. The Government of Canada has long been helping Canadians financially so as to give them better access to provincial educational institutions, without interfering in education in any way. Mr. Mulroney’s government, for example, of which Mr. Bouchard was a member, introduced the Canada Scholarships. In the United States, 75% of public student assistance comes from the federal government, and in Germany it is 65%.

The important thing is to avoid any unnecessary duplication, in a spirit of consensus-building. The Prime Minister of Canada has said that he is willing to work in accordance with the method proposed unanimously by Quebec’s National Assembly.

4. The social union framework agreement

The social union framework agreement reflects the need for the two orders of government to work together, while respecting their constitutional jurisdictions. It should facilitate the establishment of common objectives for health, postsecondary education and social services, while building on the diversity of experiences.

The agreement commits governments to working together to eliminate harmful or unreasonable barriers to the mobility of Canadians throughout Canada. Governments will exchange knowledge so as to learn more from one another. They will consult one another on their respective priorities and opportunities for cooperation. They will notify one another before implementing major changes, and will strive to avoid duplication while clarifying their roles and responsibilities. They will use a dispute prevention and resolution mechanism based on joint negotiations and the participation of third parties to determine the facts or obtain the services of mediators. They are also committed to cooperating more effectively with Aboriginal peoples throughout Canada.

The framework agreement places new requirements for cooperation and consultation on the federal government in exercising its spending power. Canada, the federation where the federal spending power is already used the least and the resulting transfers to provinces have the fewest conditions, is developing unprecedented mechanisms so as to base that spending power on cooperation among governments.

So how does all of that fit in with predictions of centralization brought about by globalization? On the contrary, it represents a new and promising way to manage interdependence.

5. Foreign policy and intergovernmental consultation

Our provincial, federal and territorial governments cooperate very actively in matters of foreign policy. In all international negotiations, the Government of Canada always ensures that Canada’s negotiating positions reflect the expressed interests of the provincial governments. Mechanisms for consultation with the provincial governments have been in place for many years, work in an exemplary fashion, and may rightly be envied by the members of other federations.

For a number of years now, when meetings deal with issues under their jurisdiction, representatives of the provincial governments have been invited regularly to participate in the Canadian delegations at UN meetings (on the environment, the status of women, and social development, for example), at OECD sectoral meetings, or at general and sectoral UNESCO conferences.

This Canadian intergovernmental cooperation has yielded excellent results on the international scene. Throughout the Uruguay Round negotiations which led to the creation of the World Trade Organization, the Canadian negotiators kept provincial representatives fully informed and consulted them on Canada’s negotiating positions. This cooperative, pragmatic approach enabled our negotiators to secure effective protection for cultural industries under the General Agreement on Trade in Services (GATS).

That same intergovernmental cooperation has allowed Canada to negotiate a host of rights and obligations under the Canada-United States Free Trade Agreement, NAFTA, and the Canada-Chile Free Trade Agreement, including cultural exemptions that allow the federal and provincial governments to maintain or adopt policies to promote our cultural industries.

Conclusion

I am not claiming that everything is perfect in our federation, far from it. We still need to try to improve the way our governments work together, both at home and on the international scene.

All I am saying is that the way Canada manages to express its rich diversity with a single voice is the winning formula as we face what we refer to as globalization.

I am saying that few countries are better positioned than ours to take on this global world. Canada is a country which is respected, with an excellent reputation based on the quality of its diplomats and its vast network of embassies. It is a country which has successfully combined cohesion as a whole with extensive diversity. It comprises provinces and territories with complementary strengths, two official languages that are international languages, and two legal systems, common law and civil law, which enables it to speak the legal language of the vast majority of countries. It has access to Europe, the Americas and Asia, with a multicultural population that opens up opportunities in every corner of the world.

I am saying that we must not reject the decentralized nature of our federation. On the contrary, we must build on our exceptional capacity to pursue common objectives, at home and abroad, strengthened by the diversity of our experiences.

It is true that our federation sometimes produces friction between governments, and headaches for federal and provincial politicians and bureaucrats. In the long run, however, it produces a synergy which allows us to more effectively promote the economic, cultural and other interests of all Canadians, within Canada and around the world.

Globalization is yet another argument in favour of cooperation between governments, in favour of governance the Canadian way.

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