The Myth of the Power-Hungry Centralizers
The Empire Club of Canada Addresses (Toronto, Canada), 19 Feb 1981, p. 247-262
Fleming, The Honourable Jim, Speaker
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Canadian federalism: a historical perspective reviewing, among other, the following issues: the "compact theory;" provincial autonomy; the BNA Act with regard to federal government power; jurisdictional powers; the principal of monarchy; the richer and poorer provinces and their struggle for power. A detailed history of Canada with regard to federalism/provincialism. A discussion of issues that have changed and issues that remained essentially the same. The Canada Act. A recognition of the need for a federal system that includes a method of resolution when conflicts occur between levels of government. A province's self-interest vs. national policy. The rights of the Parliament of Canada.
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19 Feb 1981
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FEBRUARY 19, 1981
The Myth of the Power-Hungry Centralizers
CHAIRMAN The President, Reginald Stackhouse


Ladies and gentlemen: The late Marshall McLuhan made us aware of how we live in an age dominated by the challenge of communication, and how the media are major forces of our society. But this is not new. As far back as the eighteenth century, their significance was anticipated by Edmund Burke when he coined the term, Fourth Estate, saying that Parliament had three estates, but in the Reporters' Gallery there sat a fourth estate, the most important of them all. A generation later, Thomas Carlyle could wonder at the scope of the press and what he called its "world-wide influences" that no eye could take in. William Thackeray could refer to it as the "Corporation of the Goosequill," and comment:

There she is--the great engine--she never sleeps. She has her ambassadors in every quarter of the world, her courtiers upon every road. Her officers march along with armies, and her envoys walk into statesmen's cabinets.

And all that a century and a half before Marshall McLuhan! Isn't it curious, then, that in view of the expansion of the media in numbers and scope, so few men and women of the press have sought public office, and still fewer have succeeded in obtaining it?

The Honourable James Fleming's active and successful career in politics is therefore all the more impressive. After graduating from the University of Toronto with a B.A. in political science in 1962, he spent several years in newspaper, radio and television journalism, becoming senior news analyst for CHFI. He then entered active politics, becoming executive assistant to the leader of the opposition in the Ontario legislature, and in 1972 winning York West for the federal Liberal party. He has been re-elected three times.

As an MP, he held several important posts in the House of Commons--chairman of the Toronto and Ontario Liberal caucuses, parliamentary secretary to the Minister of Communications, and the Minister of Environment and Fisheries. He acted also as cochairman of the Canadian European Parliamentary Group and was a vice-president of the Canadian Federal Branch of the Commonwealth Association.

After the 1980 federal election, he was appointed Minister of State for Multiculturalism, but not surprisingly has been asked by the Prime Minister to work also on improving the Government of Canada's communication system, as well as continuing as chairman of the political communications committee of the Liberal caucus and party.

He brings to government the gifts of perception and articulation characteristic of the effective communicator he is. The Empire Club of Canada is privileged to welcome the Honourable James Fleming.

THE HONOURABLE JAMES FLEMING: Ladies and gentlemen: Canada was once described by an American political scientist as the only country in the world where you can buy a book on federalism at an airport--clearly a commentary on how important our federal system is to us. Yet after 113 years that federal system and the constitution it's based on--the British North America Act--is still misunderstood.

In our debate on the constitution, several provincial premiers have dusted off the old "compact theory." According to this theory, the provinces signed a treaty or "compact" to delegate some of their powers to the federal government. The federal government is therefore "the creature of the provinces," so it cannot take any action to amend the constitution without the unanimous consent of all its parents.

The compact theory supports the claim that the aim of Confederation was to safeguard provincial autonomy, to make Canada a community of communities, and the champions of autonomy often accuse the federal government of perverting this aim by, as one premier has put it, "violating the spirit and letter of the BNA Act" in order to become the dominant partner.

This myth of the power-hungry centralizers seems to be founded on the fact that several speakers in the Confederation debates referred to a "treaty" or "pact," words that obviously were used loosely, for lack of a better term, because as colonies none of the provinces had treaty-making powers, nor any sovereign powers to delegate. As soon as Confederation's opponents saw they couldn't prevent the union, they tried to weaken it by creating a base of support for provincial autonomy. Provincial autonomy was a second line of defence for the anti-unionists, and the arguments, in essence, haven't changed. Our Fathers of Confederation would recognize them, though they couldn't foresee the social forces that would keep the conflict alive.

Our Fathers of Confederation were keen students of American federalism, the first modern system for

dividing power between two levels of government. They knew that no other type of government would be acceptable to either French Canadians or Maritimers. But they also knew the dangers of federalism. The loose Swiss and German confederations had ended in civil war (in 1529 and 1866), and the initial American attempt to confer autonomy on each state was a classic failure.

Speaking during the Confederation debates, Sir John A. Macdonald said: "The United States began at the wrong end. They declared by their Constitution that each state was a sovereignty in itself ... Here we have adopted a different system. We have strengthened the General Government. We have given the General Legislature all the great subjects of legislation . . . all the powers which are incident to sovereignty." The BIVA Act gave the federal government power over tariffs, banking and currency, weights and measures, patents and copyrights, postal service and interprovincial transportation--steamships, canals, railways and telegraphs. It had criminal law, for uniformity across the country; fisheries, to defend Canadian waters against American poachers; it shared jurisdiction over farming and immigration, with the federal government paramount in a dispute.

The provinces were given matters of purely local concern: roads, lands, bridges, piers, courts, local patronage. They had control over minerals, which were then insignificant; education, which at that time meant grade school; welfare, which was only what anyone wanted to give to the poor; and "property and civil rights," to protect Quebec's legal system.

The main source of government income then was customs tariffs and excise taxes. These were given to the federal government, along with "the raising of Money by any Mode or Means of Taxation." The provinces were confined to royalties in the thenminor field of resources; to direct taxes, which hadn't yet won public acceptance; and federal subsidies.

Federal authority was further ensured by three overriding powers. One: control over "such works as, although wholly situate within the province, are ... declared by the Parliament of Canada to be for the general advantage of Canada." Two: the right to make laws for "Peace, Order and good Government," the usual British phrase to give a colonial government a full range of legislative power. And three: the appointments of provincial lieutenant-governors, paid by the federal government to keep Ottawa informed about laws passed by the provinces, which Ottawa had the power, within one year, to disallow. In fact, in an early draft of the BIVA Act, the lieutenantgovernor was called the superintendent. How could there be any doubt about what was intended? The system was based on the principle of monarchy. Authority flowed from top to bottom, from London to Ottawa to the provinces. The intent, as Sir John A. declared, was to "make the Confederation one people and one government, instead of five peoples and five governments ... one united province, with the local governments and legislatures subordinate to the General Government and Legislature."

Then as now, the politicians of the richer provinces wanted to keep the revenues raised in their regions for their own use. They were led by Ontario, which claimed to contribute from two-thirds to three-quarters of all revenues and to get back less than one-half. They challenged the federal government on patronage, boundaries, water rights and residual powers that the BNA Act gave the federal government--any powers, that is, not spelled out in the Act. They demanded larger subsidies and more power for their lieutenant governors, which moved Sir John A. Macdonald to write, in a letter to the governor general: "It is difficult to make the local legislatures understand that their powers are not so great as they were before the Union."

The provinces fought, above all, against the federal power of disallowance. Macdonald used disallowance forty-six times, but by the time he died in office in 1891, its use had become infrequent and it was used only after a province had had a chance to repeal or amend its act. The principle of its use, as defined by Sir John, was that a provincial act could be "disallowed" where the act was illegal, or where it clashed with federal legislation or "the general interest of the Dominion." This put it in the bailiwick of the courts.

But then Canada's right to set up its own Supreme Court was blocked three times by Quebec, and only finally won in 1875. The provinces could still go to the judicial committee of the British Privy Council: three or more lords in morning coats sitting around a U-shaped table in a corner room at Downing and Whitehall streets in London, England, hearing appeals from all over the world.

The world depression ended in 1896, the year that Sir Wilfrid Laurier became Prime Minister. Macdonald's time had been an era of national political growth. Laurier's was an era of economic nationalism: national banks, a second and third national railway, later merged in the CNR. Wheat, gold and silver made Canada the world's fastest growing country, and prosperity had the same odd effect it would have some seventy years later. Instead of reducing federal-provincial conflict, it increased it.

In the first four years of the boom, Canada sent the judicial committee in London only eight per cent of all the disputes sent in from the Empire. In the last four years of the boom, 1906 to 1910, Canadian cases were more than fifty per cent of the total.

The most influential lord of appeal in the 1880s and '90s was Lord Watson, and for much of the following three decades, his protegé Lord Haldane. As Scots and reformers, both sympathized with the pluralism of the provinces, and for almost forty years after Macdonald's death, they whittled away at the power of the federal government.

The right of the national government to pass laws for "Peace, Order and good Government" was cut back and back until it could only be used in a national crisis. The role of the lieutenant governor was altered by a ruling that in matters of provincial jurisdiction the office is responsible, not to the governor general, but directly to the Crown, neatly circumventing federal control. Provincial jurisdiction over "property and civil rights" was broadened. Federal jurisdiction over "trade and commerce" was narrowed. Federal control over labour was restricted. All this was determined by three lords in London.

Canada's political structure was being redefined and changed by men who had never lived in Canada or under a federal form of government. For example, the judicial committee had to decide in 1892 if the New Brunswick government had the prerogative of the Crown in collecting debts ahead of ordinary creditors. The British lords said yes, that the BNA Act had not changed the relationship between the Crown and the provinces. And from this highly dubious premise they went on to state that "The object of the BNA Act was neither to weld the provinces into one, nor to subordinate provincial governments to a central authority . . ." As historian Arthur Lower would later comment: "A plainer misstatement of what everyone in 1867 had said was the object of the Act could hardly be made."

After the Klondike gold rush, mining became increasingly important, a chain reaction with each find financing the next. Pulp and paper and hydro-power were developing at the same time. And this unforeseen growth in resources broadened provincial jurisdiction and reinforced the growing power of the provinces.

War restored some of the balance. Under the 1914 War Measures Act, the federal government assumed control of all the country's resources, and imposed, for the first time, a federal income tax. The provinces had had an income tax since 1876 and a corporation tax since 1882. Then the British lords of appeal made a generous postwar ruling on what comprised direct taxation--any tax where the main impact fell within the province. This enabled the provinces to put sales taxes on cars, gasoline and liquor, and gave the provinces more financial clout.

The depression underlined what is again becoming clear: a weakened national government unsupported and often opposed by strong provincial governments cannot do what needs to be done. The Right Honourable Joe Clark told you a week ago, "the Canadian federal system when run by reasonable governments has produced agreements on hospitals and medicare, on a Canada pension plan and equalization, on highways and energy." But Prime Minister R.B. Bennett was without federal authority to deal with unemployment, the loss of markets, the lack of credit, drought, debt and the collapse of western agriculture. But finally pressure from every important group in the country forced him to try.

Bennett tried in 1934 to set up a national marketing board. Provinces objected and the lords of appeal declared it unconstitutional. He brought in acts to introduce Canada-wide unemployment insurance, to operate unemployment offices across the country, to set minimum wages and hours of work, to extend debts and give credit, to regulate prices and unfair competition. All were contested by one or more provinces and struck down by the lords of appeal.

The scuttling of Canada's New Deal brought a storm of criticism. Dr. Eugene Forsey called the British lords of appeal "the wicked stepfathers of Confederation" who had "turned our constitution inside out and upside down." And another well known constitutional expert, Professor Norman Rogers, said the growth of a vigorous nation had been arrested by the claims of imperial unity and provincial autonomy. It was the purpose of the first, he suggested, "to keep Canada a colony," and "the tendency of the other to make us a league of provinces."

The British appeal lords had their Canadian defenders, but national sentiment now was running against them. In 1939 the Senate set up a committee to compare the BNA Act with their rulings. It reported that "Many pronouncements of the judicial committee . . . are materially in conflict with ... the Act." Then World War II intervened, and it wasn't till 1949 that the government of Canada, under Prime Minister Louis St. Laurent, amended the BNA Act to end appeals to the British court and make the Canadian Supreme Court our court of last resort. The need to mobilize men and resources for war made Canada a more centralized state. The unemployed were soon absorbed by industry or the forces. Production doubled with little foreign investment. Inflation was kept under control. With the provinces pulling together the federal government proved that it could achieve what was later called an economic miracle.

But the postwar prosperity fostered by unity once again nurtured disunity, with Quebec now leading the fight for provincial autonomy. In other developed countries, national governments were shifting from considering the welfare of business to considering the welfare of all. Welfare in Canada was a provincial responsibility but pressure from the left was making social reform a necessity. And Canadians were becoming so mobile that benefits had to be portable, and, therefore, to be practical as well as fair, reasonably uniform all across the country.

The federal government had little choice: it had to initiate social services, sharing the costs fifty-fifty with the provinces. But as the cost of these services mounted, so did complaints from the provinces. They complained that the federal government was using its spending power to invade their jurisdictions, to increase centralization. They said the shared-cost programs were fouling up their planning--they couldn't set priorities, yet they couldn't afford to pass up the money, money collected in part from their own regions.

Quebec led the revolt. It opted out of one program after another, and the federal government made up the money thus lost by giving the provinces a larger share of the tax on incomes. Step by step the federal government reduced its share of income taxes while cutting the strings on its transfers of money, now totalling, in terms of current tax yields, about fourteen billion dollars. Its last such decentralizing move was made in 1977, when cost-sharing programs for education and health care were replaced with a lump sum, which the provinces can decide how and where to spend. One result: in 1975-76 in Ontario, just before cost-sharing was dropped, the federal government put up forty-six per cent of post-secondary education costs while the Ontario government paid thirty-four per cent. By last fiscal year Ontario's share had fallen to twenty per cent while the federal government share soared to sixty-one per cent. Yet the federal government has no policy input.

The provinces control most of the major institutions: the universities, colleges and schools, the nursing homes and hospitals, the trades and professions, the stock markets. They share responsibility for business, fishing and farming. They are involved in immigration at both policy and working level. Increasingly, they are consulted on international trade and foreign investment. They have become almost semi-sovereign political entities.

A great many concerned Canadians agree that our country is about as decentralized as a country can get. The BNA Act gives the national government "the regulation of trade and commerce"--clearcut unrestricted control. Yet no national government in the world shares so much control over commerce. The provinces have taxing and regulatory power in the fields of finance, insurance, manufacturing, stocks and bonds, retail and service trades. Decentralization has gone so far that the Parti Quebecois' finance minister, who only a few years back was denouncing Ottawa's power, now claims the country is too decentralized to work.

The federal spending of tax revenues after transfers to the provinces dropped between 1959 and 1979 from more than half of the total to one-third. Yet some provinces want a still larger share of the tax dollar. And the more autonomy they win, the more taxing power they take for themselves, the more disparity there is between the richer and poorer provinces. The Fathers of Confederation started out with a clear-eyed view of the need for a strong national government. But they had no crystal ball to reveal that direct taxes, once negligible, would become the main source of our public income. They could not foresee that education and welfare, once insignificant, would grow into huge provincial bureaucratic empires, or that minerals then undiscovered would so expand provincial power. And they did not contemplate the effect on Canada's constitution of the pluralist views of two British lords of appeal sitting at Downing and Whitehall streets in London.

Looking back, there's considerable irony in the fact that the American and Australian federal governments were given few legislative powers with the main powers going to the states, while Canada's federal government had almost complete legislative power and the provinces only a few unimportant ones. Today, that situation is reversed. The American and Australian governments gradually gained power as they needed it. The Canadian government lost the power that it needs.

Without question, we have to recognize the claims of regionalism: our geographic and cultural diversity, the necessity to consult and consider opinion in all regions. We have every reason to build strong provinces--strong parts make a stronger whole--but no reason whatever to believe that a strong nation can emerge from the current drive for provincial autonomy. On the contrary, provincial autonomy has been hampering the achievement of an effective industrial strategy, efficient manpower planning, energy self-sufficiency, common educational standards, and now, the constitution itself.

Here we are, trying to bring home Canada's constitution with an attached charter of rights and a method of changing the Act when necessary, and we find ourselves opposed by six provinces and an opposition party which accuses us of acting illegally, of acting unilaterally, and depriving the provinces of power.

There's never been any question that the Canadian Parliament has the legal authority, under section 91 of the BNA Act, to ask the British government to amend the Act and send it back to us. The premiers have no mandate, individually or jointly, to govern the country. Only the Canadian Parliament represents Canadians in all provinces. The Manitoba Court of Appeal has now confirmed this, noting that out of fifteen important amendments to the Act, only four had the unanimous consent of the provinces--not out of necessity but out of courtesy--and that on all but one of the others the provinces weren't even consulted.

On the matter of acting unilaterally, two federal ministers spent most of the summer negotiating with the ministers of the provinces. Then, in September, we tried to get the first ministers to agree and I don't have to tell you how that ended. Since 1927, there have been eighty-one meetings during ten attempts to patriate the constitution, and each one has ended in the same way: with one or more of the provinces withholding consent in order to wring more concessions from the federal government, a government now strapped from its past concessions.

So we tabled our resolution to patriate the constitution with the charter and the amending formula. We debated it for almost a month, and then it went into committee, twenty-five members of Parliament representing the three national parties, the four main regions, both sexes, and most of our major ethnic groups. They have spent almost three months and more than a million dollars studying and arguing its substance. They have listened to constitutional experts and groups from all parts of the country representing civil liberties, lawyers, churches, women, ethnics, francophones, natives, and two Torontonians who want to include civil liberties for trees. The government made a number of changes, the committee debated each clause, and the resolution is now getting further discussion in the House, where two out of three national parties support it.

After all this, after producing a strictly made-inCanada Act, we believe it would be unthinkable for the British government to accept the recommendations of a British parliamentary committee, a committee with no official mandate, that represents only itself, a group of backbenchers ready to turn a Canadian controversy into a British-Canadian conflict for the sake of the headlines that conflict generates. Or perhaps some British Members of Parliament--and I spent eight years in the back benches -are enjoying normally scant attention because provincial representatives have gone hat in hand to London to lobby them as if they were latter-day lords in morning coats passing judgement on the colonies. That's not what they are and not what the vast majority of them would wish to be.

Although it's been much used, "unilateral" seems to me to be a very odd word to apply to the Canada Act and its method of amendment. It enables the provinces to discuss and agree on an amending formula, and in case of deadlock with the federal government it enables the citizens of Canada to decide. This is the method used in Australia, and because it calls for a double majority--a majority in each of the four main regions as well as a majority nation-wide--there's no way that any one party or region can impose their will on the others.

The Canada Act is a purely Canadian document, democratically forged by thousands of participants in Canada, including, paradoxically, members of the party that opposes it. We have debated this reform at greater length and in greater depth than any constitutional issue since Confederation, but we don't think that the premiers should attempt to hold the charter hostage to try to gain unrelated powers that our national Parliament needs to survive.

Some premiers say that the act takes power from the provinces. They don't say it also takes power from the federal government. It doesn't change the federalprovincial balance of power; it does give more to the people and the courts.

Some premiers claim that transferring power to the courts is undemocratic. In fact it's precisely the opposite. It protects unpopular or minority opinion by defining the limits of majority power, and unless we protect minority rights we aren't protecting any. No majority in Canada has ever been oppressed; only, at various times, Chinese, Japanese, French, English, religious and political minorities. I find it curious that the premiers should go to court to protect what they say are their rights while declaring that their citizens shouldn't have that same protection.

At the core of the controversy, of course, is the 113-year-old drive for provincial advantage, provincial power, provincial autonomy. The debate continues the long dispute about what kind of country this is. Is it just the sum of its parts or is it more? Is it just a league of provinces or is it a nation?

The problem that faced Macdonald is still with us. The Old Chieftain was well aware that our geographic and cultural diversity is no argument for provincial autonomy, that indeed this very diversity calls for the opposite. His aim was not to preserve but to be rid of provincial autonomy, except in matters of what he called "local concern." If indeed there was a compact it was clearly to ensure a strong central government.

Our Fathers of Confederation seemed to realize more clearly than we that a federal system that cannot act till it gets agreement from competing provinces is unworkable. Where we have conflicts of interest we must have some method of resolving them. Where a province's self-interest opposes national policy, there must be some reasonable means to override it. Supremacy must lie somewhere. There must be some overall authority.

I believe that authority is the Parliament of Canada. With all its imperfections, it is still a magnificent institution. It is there, in our national forum, that the diverse parts of Canada must come together to work out our destiny, and today that means to debate and decide where our constitution will dwell, how it may be reasonably amended, and what limits will be set to prevent any government in Canada from violating our individual rights and freedoms.

Those who propagate what I call the myth of the power-hungry centralizers, those who say that Ottawa is "violating the spirit and letter of the BNA Act," are not only distorting the facts of history, they are denying the Canadian Parliament's right to speak for all of Canada; they are denying our heritage of nationhood. They are asking us to accept a concept of Canada very different from the one our forefathers intended. They are suggesting that we become "a community of communities," a concept based on a very odd conclusion, a kind of Alice-in-Wonderland proposition: that the more our society comes unglued the less glue we need.

The thanks of the club were expressed to Mr. Fleming by the Honourable Barnett Danson, a Director of The Empire Club of Canada.

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The Myth of the Power-Hungry Centralizers

Canadian federalism: a historical perspective reviewing, among other, the following issues: the "compact theory;" provincial autonomy; the BNA Act with regard to federal government power; jurisdictional powers; the principal of monarchy; the richer and poorer provinces and their struggle for power. A detailed history of Canada with regard to federalism/provincialism. A discussion of issues that have changed and issues that remained essentially the same. The Canada Act. A recognition of the need for a federal system that includes a method of resolution when conflicts occur between levels of government. A province's self-interest vs. national policy. The rights of the Parliament of Canada.