"Municipalities and the Federal Government"

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

Annual General Meeting

Banff, Alberta

May 26, 2001

Check against delivery

          This is the second time that you have done me the honour of inviting me to your annual general meeting. The first time was in Calgary, in 1996; I was very new to political life at that time, having been a minister for only five months and an MP for only two! On that occasion, you gave me not only a warm reception, but also a new leather knapsack, to replace the old one I had as an academic. It bears the inscription: FCM, Calgary '96. I take it with me wherever I go. We have both had our share of knocks and scratches, but we are still going strong. In fact, we cannot be separated, just like Canada!

          We have all seen tremendous changes in the past five years, some of 
which have been closer to home than others. For example, my riding 
of Saint-Laurent-Cartierville still exists, but Ville Saint-Laurent, for its part, will disappear as of January 2002, as it has been caught up in the wave of amalgamations that will sweep away so many of our municipalities. So it 
is not without a touch of sadness that I note the presence of my mayor, Dr. Bernard Paquet, and his delegation. I will miss the municipality 
of Saint-Laurent, but I will certainly do everything in my power to help the new borough of Saint-Laurent.

          The Canadian federation has also evolved quite dramatically, which has helped foster better cooperation between governments while respecting the jurisdictions of each. We have seen major federal-provincial agreements on the social union, labour market development, health, environmental harmonization, children, infrastructure, and more. An historic debate on the rules of secession has brought clarity which strengthens our national unity and consolidates the fundamental principles of democracy.

          Our Canadian municipalities have evolved as well. Taking this evolution into consideration, the Prime Minister of Canada, the Right Honourable Jean Chrétien, just recently, as you know, established a task force on urban issues made up of 13 Liberal MPs and senators. You will hear more about this from my colleague Bryon Wilfert later on during your conference. The mission of the task force, as set out in the press release issued when it was created on May 9, is to explore with citizens, experts and other orders of government "how we can work more collaboratively, within our federal jurisdiction, to strengthen quality of life in our large urban centres."

          "Within our federal jurisdiction": that phrase raises two questions. First of all, why is it so important that the federal government stick to its own jurisdiction? And second, what can the federal government do to help you, within its jurisdiction? I will try to answer each of these questions before concluding on the relevance of creating a task force on urban issues at this time.

I) Why is it so important that the federal government stick to its own jurisdiction?

          The Constitution! In my experience, it is not a very popular topic with mayors or municipal councillors, no matter what province or territory they come from. If there is one sentence you do not like to hear us say, it is this one: unfortunately, the federal government cannot intervene in this area because it falls under provincial jurisdiction.

          Some people will point out that rural and urban problems have become so large that the last thing we should do is worry about constitutional considerations when we try to resolve them. But to that we must of course respond that our Constitution must be respected, or else neither legal order nor well-ordered government will be possible to maintain.

          Well all right, some will say, we have to respect the Constitution, but why don't we amend it, giving more constitutional powers to the third order of government so that it has the tools it needs in today's world? They will point out that our Constitution of 1867 was not designed with today's realities in mind. They deplore the fact that the Constitution makes municipalities "creatures" of the provinces, according to that pejorative established expression, and maintain that this state of affairs is more and more of an anachronism in this era of globalization.

          There is no denying that our municipal life has changed a great deal since Confederation. At the time of the first census, in 1871, only 18% of Canadians lived in communities of more than one thousand inhabitants; that figure is now 80%. The size of some of our major cities is increasingly outstripping that of many provinces, a phenomenon that is accentuated by recent or future amalgamations. The municipality of Toronto alone has more inhabitants than do six of our provinces. It will be the same for the future City of Montreal, enlarged by amalgamations. The mayors of these large cities are becoming increasingly important figures, both nationally and internationally. Within the provinces themselves, large cities have taken on a tremendous weight: 55% per cent of Manitobans live in Winnipeg, 37% of Nova Scotians live in Halifax and 28% of Albertans live in Calgary. As well, 25% of Quebecers will live in the future City of Montreal.

          It is sometimes said that these realities impel constitutional recognition of the municipal order of government and its emancipation from the provincial order. And yet, you know full well that the Constitution clearly establishes that municipal affairs fall under provincial jurisdiction, and that the provinces are determined to keep it that way. This aspect of the Constitution cannot be amended without their consent.

          I would urge you instead to draw on the flexibility and adaptability of our Constitution. The Constitution has not prevented our federation from evolving toward a more decentralized framework, where decentralization is defined by the budgetary weight and the importance of the responsibilities of the provincial order of government in comparison with the federal one. In the same way, there is nothing in the Constitution preventing the provinces from giving their municipalities greater means and responsibilities.

          Incidentally, I have here a table that suggests that there is some flexibility in this regard. It compares Canada with the United States with respect to the division of governments' own-source revenues. It shows that, while our provinces have an appreciable fiscal weight in comparison with American states, this is not the case with our municipalities when compared to their Southern counterparts.

          Those in Canada who accuse our federal government of being centralizing are missing the mark. If there is a centralizing force in Canada, it is not coming from the federal government, it is coming from the provincial governments. At least, that is what a comparison with the U.S. suggests.

          There is nothing in our Constitution to prevent this state of affairs from changing. Indeed, it has allowed for a wide variety of situations from province to province in terms of the taxing powers and responsibilities of our municipal governments.

          By the same token, our Constitution in no way prohibits the federal government from having productive relations with the municipalities, while fully respecting provincial jurisdiction. While it is clear that the federal government has no role to play in municipal affairs, and that it is not its place to decide on the specific roles, powers or organization of municipal governments, it is equally clear that the federal government's activities in the areas of the economy, immigration, foreign affairs, employment and so on have a profound impact on our cities and towns. So an important distinction needs to be made between municipal affairs-which are absolutely not under federal jurisdiction-and rural and urban issues in a broader sense-which the federal government needs to address through its activities.

          When federal actions influence the quality of life of our cities and towns, their competitiveness, their social and demographic character, it would be a real anomaly not to have direct and intense relations between federal and municipal leaders. The absence of such relations would be inconceivable in any federation in the world. Not only can federal-municipal interaction be established while fully respecting the provinces, it can be done with their participation, so that the three orders of government establish a maximum synergy among themselves. This is the goal of the Government of Canada. Let's look at a few illustrations.

II) Municipal Issues and Federal Priorities

          The best example of federal-provincial-municipal cooperation is undoubtedly the infrastructure program. It was designed as a temporary measure when Mr. Chrétien established it in 1993, but it proved to be so useful and so popular that you convinced him to renew it in 1997, and then again in 2000!

          For the Government of Canada, it was essential that the municipalities be partners in this program, because experience has taught that it is difficult to make the right decisions on these matters without including local 
decision-makers. But at the same time, the prerogatives of the provinces had to be respected as well. That is why we developed a flexible model in which municipalities participate in the federal-provincial Management Committee in each province in a variety of ways, either as full members, observers, or through an advisory committee. The federal government worked hard to ensure municipal involvement, but that involvement varies from province to province, with some provinces, such as Ontario and Quebec, maintaining a more centralized decision-making model, and others, such as Alberta, allowing municipalities a much more direct and active role in decision-making.

          One can see another example of federal-provincial-municipal cooperation in the search for a solution to homelessness. It is hard not to see that this social challenge calls upon all three orders of government, when you think that in the Toronto region, for example, more than 30,000 homeless people, including 6,200 children, used shelters in 1999.

          To tackle this alarming problem, the Prime Minister mobilized Claudette Bradshaw. She went back and forth across the country, meeting with one provincial minister and official after another, with mayors and councillors, with community workers and volunteers, as well as hundreds of homeless people themselves. All these cooperative efforts resulted in a $753-million federal program conceived not only to better reflect the diverse needs across the country, but mostly to be centred upon local communities, who are best placed to devise effective strategies to both prevent and reduce homelessness.

          I could mention many other examples of intergovernmental cooperation, such as the cooperation that underpins our environmental policy. Our Constitution is silent on the subject of the environment. Moreover, pollution does not stop at borders, be they municipal, provincial or even national. So intergovernmental cooperation is essential to any effective environmental action. But I think I have made my point: in addressing rural and urban challenges, all three orders of government must work together, mindful of their respective jurisdictions.

Conclusion

          Back in 1996 when I first spoke to you, an international study by the Swiss Corporate Resources Group, showed that in terms of quality of life, our cities ranked very well. Out of 118 cities, Vancouver came in second place, Toronto, fourth, and Montreal, seventh.

          Well, I can say the same thing today. A recent international study of twice as many cities (World-Wide Quality of Life Survey 2000, by consulting firm William M. Mercer Consultants) shows that, in 2000, in terms of quality of life, Vancouver came in first place out of 215 cities, while Toronto and Montreal both came in 19^th place.

          There is no denying that our cities are jewels. This finding leads me to two conclusions.

          First of all, Canada works; we need to keep it. We will be more successful if we stay together and work in the spirit of partnership I have tried to describe.

          Second, we must certainly not rest on our laurels. Our problems, such as those I mentioned with respect to infrastructure, poverty and pollution, will get worse if we become complacent.

          One way to ensure we don't rest on our laurels is to challenge the way we do things. This is something that is very important to the Prime Minister. That is why, for example, he recently gave me the responsibility of coordinating our official languages policies, in order to review the ways we work in this area. In that same spirit, he created the Caucus Task Force on Urban Issues.

          In 1998, our government sponsored a dialogue with over 7,000 Canadians in rural and isolated regions. This initiative contributed to the integration of a "rural perspective" in the development of federal policies and programs. In the same manner, we now need to incorporate an "urban perspective" into federal efforts. This is what the new task force will be doing in order to make sure that our federal policies better respond to the needs of our municipalities.

          This is as true for our current policies as it is for those we are planning, such as the two following initiatives mentioned in the Speech from the Throne. The first is housing, where the target will be to create 60,000 to 120,000 new affordable rental units over four years. The second is urban transit: in the Speech, the government promised to "co-operate with provincial and municipal partners to help improve public transit infrastructure".

          But whether we are talking about our current policies or our future ones, there is no doubt that the future of Canada, our quality of life, our social harmony, our cultural dynamism and our economic competitiveness are intimately linked to our municipalities. They will be at the heart of federal priorities. Prime minister Jean Chrétien and his whole government count on your continued help and creativity in order to successfully meet the challenge.

Sources:

Canada: Statistics Canada (National Revenue and Expenditure Accounts)
United-States: U.S. Census Bureau (Statistical Abstract of the United States 2000)