"Federalism in Argentina and Canada:   
Five criteria for comparison to better learn  
from each other"

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

Faculty of Law
University of Buenos Aires

Buenos Aires, Argentina

May 3, 2001

Check against delivery

          Relations between Argentina and Canada blossomed considerably during the 1990s. Between 1992 and 2000, trade almost tripled, and cooperation developed in the sciences, the arts, culture and many other areas. In light of the diversity of our common interests, it is not surprising that the delegation that is accompanying the Head of State, Her Excellency the Right Honourable Adrienne Clarkson, Governor General of Canada, includes parliamentarians, Aboriginal leaders, academics, artists, scientists and businesspeople. Following the Summit of the Americas that ended in Quebec City on April 22, our two countries are called on to have increasingly close, sustained and productive relations.

          We therefore have an interest in knowing each other better. In this respect, the fact that one of our common traits is federalism will be useful to us. To be sure, our two federations are different in many aspects. But sharing our experience of federalism is certainly one way of learning from each other.

          This is, by the way, the goal of the Forum of Federations, that is to help federated countries forge closer ties on the basis of their common political system. That is why I want to thank the Forum of Federations and the Asociacion Conciencia for organizing this event, here, at the Law Faculty of the University of Buenos Aires. Let us hope that such meetings are repeated often in Argentinian and Canadian universities, and also in the five other federations of our hemisphere: Brazil, Venezuela, Saint Kitts and Nevis, Mexico and the United States.

          It is very true that the countries I have just mentioned, like the 17 other federations in the world, are very different from one another. Some of these federations are among the most wealthy countries, others are developing countries, some span a continent or have huge populations, others are very modest in size or population.

          Nevertheless, the fact that all these countries are federations influences their political life. I will not pretend to be a specialist on Argentina. But I know that one cannot understand Canada if one forgets that it is a federation. The relations between the federal government and the governments of the provinces and territories are undeniably one of the most fundamental aspects of my country. Indeed, I wonder if any country in the world is more marked by its intergovernmental relations than is Canada.

          I see five reasons for this, five reasons that explain why federal-provincial relations exert a fundamental influence on the way my country works. I am going to describe those five reasons to you. They will help me to present Canadian federalism to you, so that you can judge how similar or dissimilar it is to your country's federalism.

          My objective is certainly not to try to determine which of these two federalisms is preferable to the other. Every federation evolves in its own way. I simply want to propose some criteria for comparison that will help you better understand Canadian federalism. Who knows, perhaps it will give you a deeper understanding of your own federalism. In conclusion, I will propose seven principles of action that I believe all federations, above and beyond what may distinguish them, would do well to follow.

1. The strength of our provinces

          In the world of federations, there are few constituent entities more powerful than a Canadian province. Canada's Constitution grants them broad legislative jurisdictions of their own. Article 75 of your reformed Constitution of 1994 assigns to your federal government responsibilities that, in Canada, are constitutional jurisdictions assigned exclusively to the provinces. This is the case with private law, for example. Or education: in Canada, only the provincial governments can legislate in this area, from primary school to university.

          There are very few policies that Canada's federal government can implement on its own without having to cooperate with the provinces. For example, the most difficult federal-provincial negotiations in recent years have been in connection with the establishment of a new financial aid program for students. In modern federations, even those that, like Canada, make education an exclusive provincial jurisdiction, financial aid to students for post-secondary studies is a shared jurisdiction. But in Canada, our provincial governments value their autonomy to such an extent that, when the federal government launched a new student aid initiative, which it called "the millennium scholarships," a number of provincial governments saw it as a threat of encroachment onto their educational jurisdictions. Arduous negotiations were necessary before a program acceptable to all the provincial governments could be put in place.

          Even in the area of foreign policy, Canada's federal government must often obtain the support of the provincial governments. Constitutional jurisprudence very clearly gives the government of each province the latitude to apply or not to apply an international treaty that affects one or more of its fields of jurisdiction. The application of a treaty as vast in scope as one such as the Free Trade Area of the Americas, or the Kyoto Protocol, would inevitably affect provincial jurisdictions. For this reason, the Government of Canada consults the provincial governments thoroughly when negotiating such treaties.

          Another source of power for our provinces, in addition to the extent of their constitutional legislative powers, lies in their fiscal and budgetary weight. Table 1 highlights the contrast between our two federations in this respect. With regard to own-source revenues of the three orders of government (federal, provincial and municipal) - that is, their revenues excluding transfers they receive from other governments - we can see that the provinces' share of revenues is significantly higher in Canada than in Argentina. This is also the case with direct spending - that is, the governments' spending excluding transfers they make to other governments. The fiscal and budgetary weight of Canada's provinces is also strengthened by the fact that they are less dependent than are Argentina's provinces on federal transfers to finance their activities.

2. The small number of our provinces

          In Canada, there are few provinces. We tally only 10 Canadian provinces (plus three territories), compared with 23 provinces (and one federal district) in Argentina, 23 states in Venezuela, 26 in Brazil, 31 in Mexico and 50 in the United States.

          The relatively small number of Canadian provinces is not without consequence for our political life. It contributes in at least three ways to making the provinces major actors in the Canadian federal system. First, it makes it less complicated to build interprovincial cohesion. A simple conference call, for example, is still practical with 10 people; it becomes impractical with 20 or 30.

          Second, this small number makes it possible to hold frequent interprovincial or federal-provincial meetings, and this, in all fields: economic, social, environmental, agricultural. Rarely a week goes by without at least one such meeting. It is in large part through the impetus of these exchanges between ministers or senior officials that Canadian federalism evolves.

          Third, the small number of our provinces prevents provincial power from becoming too thinly spread. The largest provinces, Ontario and Quebec, but also British Columbia and Alberta, have political and administrative structures of appreciable size in relation to that of the federal government.

3. The role of our second chamber

          Canadian senators are not elected. They are chosen by the federal executive branch. This has two consequences for our federal system.

          First, these unelected senators are not in a position to compete with the provincial premiers as spokespersons for the provinces. The situation is different in the United States, for example, where senators are at least as much a force to be reckoned with as are state governors in terms of who speaks for the states.

          Second, since our senators are appointed by the federal executive branch, rather than the executive branches or legislatures of the constituent entities, intergovernmental relations in Canada consequently take place between executive branches that are clearly distinct and that are not institutionally linked through Parliament. We do not have a federal chamber of the provinces along the lines of the German Bundesrat, for example.

          In Argentina, you used to have the German model: you will now have the American model. Your senators were formerly chosen by the provincial legislative assemblies: they will now be elected directly by the population. It will be interesting to see the effects this change will have on your federation.

4. The strength of the executive branch in relation to the legislative branch

          There are 24 federations in the world. Only four of them combine a parliamentary system and a simple majority vote electoral system: Canada, India, Malaysia and St. Kitts and Nevis. This combination tends to produce governments, at both the federal and provincial levels, that are formed by a single party which is usually able to pass the legislation it proposes. As a result, intergovernmental relations are conducted between strong governments. When the Prime Minister of Canada and the provincial premiers sign an agreement, each of them usually has the capacity to ensure it is implemented, without having to negotiate with a parliamentary coalition.

          In comparison, the federations with a presidential system, such as Argentina, Brazil, Venezuela, Mexico and the United States, as well as those with a proportional representation electoral system, tend to have intergovernmental relations that are more diffuse and deeply marked by the balance between the executive and legislative branches and among party coalitions.

          In the United States, the relationship between the White House and Congress attracts the most attention. In Canada, it is the relationship between the Prime Minister of Canada and the provincial premiers. In a number of other federations, the thing to watch for in particular is the interplay of parliamentary coalitions. What is the situation in Argentina?

• The existence of a minority group in the country that constitutes a majority within one of the constituent entities

          Usually, when a federation has ethnic, cultural, linguistic or religious minorities, they tend to identify themselves particularly with the federal government or federal institutions in general. They tend to see the federal authority as protector. I do not know whether this is the case for your minorities, but it is a phenomenon that is often observed.

          The situation is different, however, if a minority forms the majority within one of the provinces. In such a case, the minority tends to identify itself particularly with the province and its institutions, because it forms the majority within the province.

          Canada has two official languages, English and French. Francophones make up 24% of the population, but 86% of them are concentrated in one province, Quebec, where they make up 82% of the population. So it is not surprising that Francophone Quebecers, in addition to identifying with Canada, also identify themselves strongly with their province and its own institutions.

          If one of the large states in the U.S. were made up of a population that was 80% Hispanic, the dynamic of the American federation would undoubtedly be altered. In Canada, Quebec is the largest province by size and the second largest by population. The Government of Quebec plays a key role in promoting provincial autonomy in Canada. Moreover, the presence in this province of a separatist party in power or in opposition over the last three decades has often imparted an existential nature to intergovernmental relations that is unknown in the other federations.

Conclusion

          These are the five factors that I feel fundamentally explain the exceptional importance of intergovernmental relations in Canada. No other federation combines all five of them. The United States has none of these characteristics. Australia, for its part, has two: the small number of constituent entities (with only six states) and the relative strength of the executive branch in comparison with the legislative branch. But Australia's states have substantially less power and autonomous means than do Canada's provinces, the Australian senate is elected, and Australia does not have a national minority that forms the majority within one of its states.

          I may be mistaken, but it seems to me that only one of these characteristics applies, at least in part, to Argentina: the strength of the executive branch. Otherwise, our two federations differ in more than one way. We need to bear that in mind if we want to know each other well and learn better from each other.

          I believe that this mutual understanding between federations is necessary, because I think that beyond what distinguishes them, their ability to function effectively depends on respecting certain basic principles. I believe there are seven such principles, which I will quickly conclude by listing.

          1. The Constitution must be respected. Infringement of legislative jurisdictions creates confusion which damages the quality of public policy.

          2. Cooperation is essential. More often that not, it is necessary to cooperate, because government jurisdictions touch on each other in almost all sectors of activity.

          3. Governments' ability to act must be preserved. The capacity for initiative and innovation must be promoted within each autonomous sphere of activity.

          4. The federation must be flexible. The quest for joint action must take into account the diversity of the country.

          5. The federation must be fair. Federations must encourage redistribution among their constituent entities, so that even the less wealthy among them are able to provide their citizens with services of acceptable quality.

          6. The exchange of information is essential. It allows governments to compare their performance, assess their respective initiatives and establish among themselves a healthy emulation.

          7. The public must be aware of the respective contributions of the different governments. Citizens have the right to know what their governments are there for and they must be able to assess their performance.

          The importance of these principles in Canada strikes me as evident. I am not saying that we Canadians fully succeed in respecting these principles. I am saying we must try our best.

          Are these principles valid in the context of Argentina and the other federations in the Americas? I tend to think they are, but I will let you be the judge. What I wish above all is that you, Argentinian students, have the opportunity to share your thoughts with young Canadians, Mexicans and Brazilians, because I am sure that we all stand to gain a great deal from this mutual apprenticeship of federalism.

Source: Argentina: Ernesto Rezk (2000) (data for 1997).

Canada: National Accounts of Canada (data for 1999).

Notes:

¹ Total revenues minus transfers from other governments.

² Total spending minus transfers to other governments.

³ Transfers from other governments as a percentage of total revenues.

⁴ For Argentina, provincial revenues from revenue sharing ("coparticipation" revenues) are treated as own-source revenues.

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