AND THE CANADIAN FEDERAL SYSTEM
Erin Tolley, Economics Division
William R. Young, Political and Social Affairs Division
Revised February 2001
LEGISLATIVE FOUNDATIONS AND OVERVIEW OF MUNICIPAL
MUNICIPALITIES, PROVINCES AND THE FEDERAL
A HISTORY OF FAILURE: DIRECT FEDERAL INVOLVEMENT
IN URBAN ISSUES
CANADIAN MUNICIPALITIES AND THE CONSTITUTIONAL
NEGOTIATIONS OF THE LATE 1970s
REACTION TO THE MUNICIPALITIES' INTERVENTION
THE CONSTITUTIONAL NEGOTIATIONS
TRENDS AND DEVELOPMENTS
Lobbying for Specific Goals
B. Increased Intergovernmental
C. Downloading and Tri-level
D. Charter Cities
E. Federal Government
Interest in Urban Affairs
AND THE CANADIAN FEDERAL SYSTEM
The following historical
overview discusses the place of municipalities in the Canadian federal
system with a particular emphasis on various attempts to gain constitutional
recognition for municipal governments.
The major discussion points
and conclusions relevant to a revival of any constitutional initiative
The provinces will jealously
guard the constitutional arrangements that give them exclusive control
over their municipalities. Any injection of the municipal question
into national constitutional discussions has, in the past, provoked
a reaction that has jeopardized even the ad hoc relationship
between the federal and municipal governments.
quest for constitutional recognition has been largely motivated by
their search for practical ways and means to meet the increasing demands
upon their fiscal resources. They are not inherently interested
in constitutional recognition (unlike aboriginal people), but see
it as one means to solve their financial problems. Municipalities
have, however, given clear signals that they would be just as happy
to deal with their fiscal situation outside the constitutional debate.
As a result of their
lack of focus on constitutional issues, the municipalities have never
been able to formulate a comprehensive and specific set of constitutional
proposals. In the past, municipalities demands have remained
vague and have not dealt with the need to differentiate between constitutional
recognition and constitutional powers.
Discussions have not
even explored the question of whether constitutional provisions for
municipalities might add another dimension of inflexibility to the
Canadian federal system.
Until June 1991, the
Federation of Canadian Municipalities (FCM), the national lobby organization,
had not become involved in the current constitutional discussions.
The FCM is exploring various options that might contribute to the
debate, with much of the activity focused on encouraging provincial
municipal associations to become involved with provincial legislative
committees on the Constitution.
One case for involving
municipalities in constitutional discussions is based on the argument
that their exclusion ignores the following facts: the vast majority
of Canadians live in cities; and the problems of Canadas large
cities are no longer merely local or municipal.
LEGISLATIVE FOUNDATIONS AND OVERVIEW OF MUNICIPAL
The debate over the need
for constitutional recognition of the status of municipalities pre-dates
Confederation. In fact, in his report of 1839, Lord Durham argued
in favour of an organized system of municipal institutions on the basis
of the need for people to settle their local problems and learn to become
interested and involved in central issues. He argued that unless
municipal institutions were guaranteed by the Constitution, the
legislature would never agree to renounce the taxation powers necessary
for the establishment of municipal institutions.(1)
Although Durhams contentions
have been periodically echoed up to the present, his recommendation has
never been embodied in Canadas constitutional law. The Constitution
Act, 1867 established the parameters of current federal and provincial
relationships with municipalities. Section 92 of the Act
sets out the exclusive powers of provincial legislatures in 16 areas,
with section 92(8) giving the legislature of each province exclusive responsibility
for making laws relating to that provinces municipal institutions.
Of the other sections of the Constitution Act, 1867 with implications
for municipalities, section 92(2) grants the provinces the power to impose
direct taxes to carry out provincial responsibilities. Because local
governments are legally subordinate to provincial governments, the only
sources of authority and revenue available to municipalities are those
that are specifically granted by provincial legislation.
The scope of provincial
control over municipalities is largely unfettered, and municipal responsibilities
can be altered by votes of the provincial legislature. Although
some cities have a separate legislative provision establishing their jurisdiction,
most municipalities get their powers from a provincial municipal Act that
applies to all local entities within a province. The provinces can
alter municipalities boundaries or powers, as well as their financial
resources, and can abolish individual municipalities. This was the
case when Ontario established a regional government in the Halton-Peel
region, and more recently when it amalgamated the Ottawa-Carleton region
into the new city of Ottawa, as well as the Greater Toronto Area into
the mega-city of Toronto. Most municipal borrowing requires
provincial approval by a provincially appointed board. At the same
time, municipal activities result from the delegation of provincial responsibilities
in the areas of local works, education, justice, hospitals and taxation.(2)
Up to now, municipalities
have been allowed sole occupancy of the field of real property taxation,
but, apart from convention, there is no constitutional prohibition against
entry to this field of taxation by either the federal or the provincial
Furthermore, the regressive
and restrictive nature of the property tax means that municipal revenues
do not necessarily keep pace with economic growth or inflation as do income
taxes or even sales taxes. Property taxes include levies both for
general municipal purposes and also for schools.
the other source of municipal revenues are given with strings attached
in the form of conditions that govern how the money will be spent.
These grants are made not only to further certain municipal objectives
but can include money earmarked for schools and social services.
The conditions on provincial money mean that municipalities are limited
in their ability to spend their grants for locally determined purposes
but must make choices that meet provincial policy goals. Interestingly,
about 90% of provincial transfers to municipalities are specific purpose
transfers, while roughly 50% of federal transfers to municipalities are
for a specific purpose.(3)
This situation has become
increasingly difficult for municipalities because they are restricted
in their ability to run a deficit budget and must obtain provincial approval
before undertaking long-term budgeting. If provincial priorities
or federal funding suddenly change, a municipality has very little room
to manoeuvre between its existing financial obligations and the need to
provide new services or to maintain existing services with reduced funds.
For many years, municipalities
have complained about the restrictions on their decision-making, local
autonomy, and revenue, and have tried to find alternatives.
MUNICIPALITIES, PROVINCES AND THE FEDERAL
The level of urbanization
appears to serve as the barometer for provincial attitudes towards municipal
institutions. Except in extreme circumstances, such as the municipal
default on loans during the Depression of the 1930s, provincial governments
generally took a laissez-faire attitude to their municipalities
from 1867 to 1960. In provinces with lower percentages of urban
inhabitants, local governments were allowed to go their own way and generally
provided their citizens with a minimum level of services, particularly
in rural areas. Since then, however, in provinces where towns and
cities have grown rapidly, the demand for services (and for money to pay
for them) has led to increased provincial involvement and caused upheavals
in local government systems.
As the growing urban centres
came to play a more important role in the life of the nation, municipalities
felt increasingly fettered by the unilateral control of the provinces.
By the time of the 1996 census, for example, approximately 23 metropolitan
areas had a larger population than the province of Prince Edward Island;
four of Canadas largest metropolitan areas each had more citizens
than any of the four Atlantic Provinces; and 78% of Canadians lived in
urban areas. Of all the provinces, only Ontario, Quebec and British
Columbia had populations exceeding those of Montreal and Toronto.
At the same time, none of the municipalities, whether large or small,
could exercise any real fiscal or legislative autonomy.(4)
Although in the recent past,
provincial governments have increasingly exerted their control over municipal
activities (location of hospitals and provision of social services, for
example), the provinces have consistently resisted any direct and formal
federal involvement with their subordinate level of government, even though
the federal government through joint federal-provincial programs
has been putting up money for services ultimately delivered by
the municipalities. Provinces have particularly opposed the establishment
of any federal department or agency with a mandate to deal specifically
and directly with municipal governments. Apart from the grants that
the federal government pays directly to municipalities in lieu of property
taxes, federal funds are channelled to municipalities almost entirely
through federal-provincial agreements. Even through the Canada Infrastructure
Works program, which is described as a bottom-up approach,(5)
the agreements and funding allocations are cooperative ventures between
all levels of government.
Because of the broad range
of federal activities that impinge on local areas, however, the provinces
have not been able to prevent at least ad hoc contact between federal
departments and the municipalities. Historically, such linkages
have followed informal and functional lines. For example, federal
transportation specialists deal directly with municipalities about bridges
over level crossings of railroads and roadways. It is also important
to note that local governments are subject to various federal actions
that can affect municipal options and significantly alter the physical
and social fabric of urban centres. One example of this might be
the impact of federal immigration policy on larger cities, such as Toronto,
Montreal or Vancouver. A second example might be the impact that
federal cuts to social programs, such as Employment Insurance, may have
on homelessness and poverty. The federal government can also exert
some control over municipal activities by means of the conditions it attaches
to grants to the provinces.
Lack of coordination between
ad hoc federal activities and relationships and the rapidly expanding
municipalities began to cause problems in the 1960s. It became evident
the solutions to local problems often had more than a local impact and
that federal projects could have undesirable environmental or developmental
consequences for municipal governments. For example, the Canada
Mortgage and Housing Corporations financing of residential construction
near the Toronto International Airport in the 1960s pre-empted any plans
by the federal Department of Transport to expand that facility.
In the late 1960s, programs administered by 27 federal agencies had
some influence over urban development plans. Other federal actions
had unintended consequences for urban life. For example, the Income
Tax Act deduction for businesses providing parking spaces to employees
contributed to urban street congestion.
Insofar as municipalities
are concerned, recent social and economic developments have conclusively
demonstrated that a major argument for changing either government structures
or the Constitution is that:
the problems of
our large cities are no longer merely municipal or local problems.
The Canadians whom our provincial and federal governments serve are
now predominantly urban Canadians. The national goals of high
employment, high growth, stable prices, viable international payments
balance, the equitable distribution of rising incomes must now be primarily
accomplished within our cities.(6)
A HISTORY OF FAILURE: DIRECT FEDERAL INVOLVEMENT
IN URBAN ISSUES
Although the constitutional/jurisdictional
position of the provinces prevented direct federal intrusions in an area
of exclusive provincial jurisdiction, the federal government has made
sporadic efforts to rationalize its ad hoc linkages with the municipalities.
Initially, this was accomplished through the Canada Mortgage and Housing
Corporation (CMHC), the federal agency with the closest relationship to
urban and municipal issues.(7)
The contacts between the
CMHC and the municipalities evolved over time. In 1949, amendments
to the National Housing Act (originally passed in 1938) authorized
joint federal-provincial programs to provide low-priced homes for sale
or rent. The amended Act authorized cost-sharing by the federal
and provincial governments for land assembly and servicing (75% was paid
for by the federal government). Municipalities were allowed to participate
in this program if their province passed legislation authorizing local
administration of the provincial aspects of these housing activities.
A further series of amendments to the National Housing Act in 1964
created more comprehensive programs aimed at overall urban renewal and
not just housing. As a result, the federal government could authorize
a 50% contribution towards the preparation of plans, the acquisition of
land and buildings, and the installation of municipal services in urban
renewal plans. The federal government could also make loans to the
provinces and municipalities to finance up to two-thirds of their costs.
Until the end of the 1960s,
the provinces generally went along with these activities, in large part
because the condition in the cost-sharing agreements gave them considerable
control and also because, as a Crown corporation, CMHC developed its policies
with relative autonomy and without direct control by the federal cabinet.
The Corporation also established functional relationships with
municipalities and interest groups which also tended to minimize cabinet
intervention in its affairs.
The intense constitutional
discussions of the late 1960s produced a set of circumstances that ultimately
altered this relationship but did not satisfy either the municipalities
or the federal government. The Canadian Federation of Mayors and
Municipalities intervened in the constitutional debate to state its position
but the municipalities consistently related their vaguely expressed constitutional
propositions directly to their very specific financial difficulties.
The Federation established
a Joint Municipal Committee on Intergovernmental Relations (JMCIR) to
elaborate its views throughout the constitutional debate. In 1971,
JMCIR presented a brief to the Special Joint Committee of the Senate and
the House of Commons on the Constitution. However, the only clear
conclusion that emerged from the municipalities submissions appeared
to be that there should be some form of tripartitism either
in the division of powers or, more commonly, in a consultation process.
For example, the JMCIR proposed that federal-provincial conferences should
become trilateral meetings. Constitutional recognition of Federal-Provincial-Municipal
Conferences would mean that the municipalities would still be subject
to provincial law but this would be modified by their right to be consulted
and to be heard, a right which would be formally recognised and would
no longer be a matter of provincial sufferance
The Trudeau government tried
unsuccessfully to marry the municipalities concept
of tripartitism (although not enshrining it in the Constitution)
with the pragmatism of the historical links between the federal
and municipal governments. In theory, not only could this avoid
the constitutional hurdles but it would rationalize federal-municipal
relations and establish greater political control at the federal level.
Accordingly, in March 1971, Prime Minister Trudeau appointed a Minister
of State for Urban Affairs, who took on responsibility not only for CMHC
but also for a new Ministry of State for Urban Affairs (MSUA). Given
the inescapable constitutional limitations, this ministry had no program
responsibilities but had a mandate to: plan, coordinate and develop
new urban policies; integrate federal urban priorities with other federal
policies and programs; and develop coordinating intergovernmental relationships.
Given this mandate and its lack of funds for programs, the MSUA had to
rely on the clout and persuasive powers of its Minister to achieve its
The federal urban initiative
had a mixed reception. Hoping that the federal action might help
to liberate them from some of the constraints imposed by the provinces,
municipalities across the country hailed the formation of the MSUA and
welcomed federal support of any action that might give them access to
greater financial resources. The provinces, particularly Quebec,
remained sceptical of the new agency and wary even of practical adjustments
that might lead to intrusions into their jurisdiction.
The true municipal agenda
remained the belief that a constitutionally enshrined role would mean
little unless it led to new financial arrangements for sharing revenue
between the federal, provincial and municipal governments. This
meant that the municipalities involvement in the constitutional
debate ultimately challenged provincial pocketbooks and eventually led
to the downfall of Trudeaus intervention in federal-municipal relations.
Although the provinces agreed to send delegations to the first tri-level
meeting organized by the MSUA in November 1972, the provinces viewed the
tri-level process suspiciously. They saw the meetings as one means
of providing de facto recognition to the municipalities as a third
order of government with a legitimate relationship to the federal government.
For their part, the municipalities even when they attempted to
downplay their constitutional aspirations at the first tri-level conference
and to concentrate on national solutions to urban problems such as housing
and transportation again raised the spectre of linkage.(9)
The first and second tri-level
meetings confirmed that the municipalities and the federal government
had become allies against the provinces. When the delegates from
all three levels of government agreed to set up a task force on all levels
of public finance, even Alberta and Ontario (the only provinces to support
it) soon withdrew their approval. They believed that the task force
would not adequately protect the provincial positions in its fact-finding
and recommendations. When the task force reported, it confirmed
that the system of public finance in Canada prevented municipalities from
meeting their responsibilities. The Canadian Federation of Mayors
and Municipalities issued a polemical response, Puppets on a Shoestring,
that directly blamed the provinces for the financial problems of local
governments. After the provinces refused to attend a third tri-level
meeting scheduled for August 1976, the conference was cancelled, and the
tri-level process ended.
As a result, by threatening
not to cooperate with the federal government in programs of interest to
the municipalities, the provinces gained even greater power at the expense
of the other two levels of government. Ontario refused to accept
CMHC money for a new town in Pickering rather than share planning authority
with the MSUA. In view of the Departments lack of credibility
and the governments desire to cut expenditures, the MSUA was abolished
on 31 March 1979. In that year, the federal government also moved
to consolidate provincial control over funds for urban redevelopment.
CMHCs money for the Neighbourhood Improvement Program, for land
assembly (the Municipal Incentives Program) and services (the Municipal
Infrastructure Program) was put into a single block-funding program (Community
Services Contribution Program). As a result, the provinces were
able to allocate funds to the three program areas according to provincial
CANADIAN MUNICIPALITIES AND THE CONSTITUTIONAL
NEGOTIATIONS OF THE LATE 1970s
participation in the round of constitutional talks which began in the
late 1970s demonstrated that they again had no clear suggestions.
Their position appeared, as before, to be founded on the belief that mentioning
municipalities in the Constitution would help them to solve the problem
of how to finance the services imposed upon them by more senior levels
of government. The Federation of Canadian Municipalities rejected
the argument that local government
is the level of government
responsible for the basic needs of people. We believe it is essential
to enlarge and enhance the role of local governments in any new constitutional
framework and to ensure its autonomy.(10)
The Resource Task Force
on constitutional reform, which assisted the FCM in preparing a resolution
for the annual meeting, recognized that municipalities would remain under
provincial jurisdiction, but asked that the Constitution of Canada
expressly recognize and protect Municipal government and further,
that the Constitutions of the Provinces expressly recognize and
protect autonomy of Municipal government.(11)
On 20 November 1980, the
FCM made a presentation to the parliamentary Joint Committee on the Constitution
based on the Resource Task Force Report. In its presentation, the
FCM sought the recognition of municipalities as a distinct level
of government under the new constitution and moreover, that the
constitution assign certain powers to the municipal level of government.(12)
In the opinion of the FCM, municipalities should be responsible for local
issues, such as housing, job opportunity programs, fire protection,
education, public health, social welfare, air quality, water services,
sewage service and treatment, policing, environmental protection, and
An analysis of the FCM position
suggests that the municipalities were as much interested in constitutional
recognition as in constitutional powers. After the First Ministers
constitutional talks in September 1980, the FCM statement set out the
objective of recognition as an additional legislative level. The
president chose to amplify this by offering examples of recognition, such
as the federal governments decision to accord official observer
status to representatives of the FCM at the First Ministers meetings
and the inclusion of municipal representatives in the delegations from
Nova Scotia and Ontario. He expressed the wish that all provinces
should follow suit.(14)
Essentially, however, the
statements of the FCM suggest that municipalities had a greater concern
with entrenched financial resources than with entrenched legislative powers.
As a representative of the FCM told the Joint Committee on the Constitution
with regard to municipal requests for entrenchment of their power to tax:
I think that what we are
talking about when we are asking for income tax is a clear defined portion
of the income tax settled upon by the provinces and by the federal government,
that we could rely on as an added income to the municipality so that
we could release the burden of property tax.(15)
REACTION TO THE MUNICIPALITIES' INTERVENTION
The federal government had
learned from its tri-level experiments of several years before
and took a safe position. On 9 October 1978, Prime Minister
Trudeau wrote to the FCM agreeing to consider municipal recognition in
a revised Constitution, provided that this recognition did not interfere
with provincial powers. He stated that:
The federal government
thinks it would be desirable to consider whether a new Constitution
should not recognise specifically the existence, and the need for existence,
of the third level of government
Provided that the ultimate
responsibility of the provinces is not in question, there could be merit
in trying to describe in the Constitution the role which the third
level plays in the total fabric of Canada. It could also
be useful to try to spell out the basic kinds of services that are traditionally
provided by the third level.
Given this guarded statement
from the federal level and their own earlier experience, even the municipalities
were unwilling to tackle the provinces head on. One of the main
barriers to a constitutional amendment that would enhance the powers of
the municipalities was obtaining approval from the required number of
provincial legislatures. Mayor Dennis Flynn of Etobicoke, a member
of the FCM national executive, told the Joint Committee on the Constitution
on November 1980 that the FCM understood the provinces reluctance
to have municipalities talk directly to the federal government.
As such, he stated that the FCM would consider other options, including
the establishment of provincial charters that would give municipalities
autonomous areas of power as long as that was folded in the Canadian
constitution as a whole.(16)
Commentators at the time,
as well as later analysts, have agreed that constitutional recognition
of municipalities became a dead issue in light of provincial opposition.
The analysis prepared for the Macdonald Commission stated that it
is out of the question that the legislative assemblies of such a majority
of provinces would agree to this loss of power.(17)
Experts have often raised
another problem: What would be the long-term effect of another constitutional
tier of government? They have concluded that, given the difficulties
already inherent in federal-provincial relations, constitutional recognition
of the municipalities might only add another combatant and increase the
existing inflexibility and complexity.
If local governments were
to have their way, they would likely ask for constitutional standing
as equal partners in Confederation. Ideally this recognition would
provide the legislative and fiscal autonomy which local governments
require to meet the demands for local goods and services. But,
if this were done, how successful would it be? Federal-provincial
relations are defined by the Constitution, yet the extent of federal-provincial
discord is well known. Provincial governments criticize the intrusion
which they see the federal transfers of expenditure powers making into
their areas of responsibility. In some ways, the delineation of
authority provided by the constitution has impeded a rational reallocation
of responsibilities over time as conditions changed from those of the
nineteenth century. Might a constitutional standing for local
government impose another element of inflexibility while protecting
and enhancing local government?(18)
AND THE CONSTITUTIONAL NEGOTIATIONS
Since the enactment of the
Constitution Act, 1982, the question of constitutional status for
local governments seems to have faded from the limelight. The municipalities
did not address the issue in any presentations to the various parliamentary
committees that held hearings on the 1987 Meech Lake Accord, much to the
surprise of at least some commentators:
It seems curious that
4,500 municipalities large and small have not taken this opportunity
to assert themselves and enter the debate and thereby assure themselves
of a legitimate and constitutionally confirmed place in Confederation.(19)
Moreover, during the Meech
Lake negotiations and the studies that resulted in the Charest and Edwards-Beaudoin
Committee reports, the FCM did not take public positions.
This situation began to
change when the Municipality of Metropolitan Toronto made a public submission
to the Citizens Forum that called for a new arrangement for
large urban centres such as Toronto, Montreal, Vancouver if not for all
local governments. Metropolitan Toronto again raised the call
for constitutional recognition of municipalities as a means of meeting
the problems of municipal financing, service delivery and planning.(20)
Following this, as Canadian
municipalities began to consider how to ensure their participation in
the constitutional debate, they moved cautiously in order not to arouse
provincial opposition. In June 1991, the FCM adopted an emergency
resolution at its annual meeting in St. Johns and presented
it to Constitutional Affairs Minister, Joe Clark, who attended the meeting.
The resolution reiterated the municipalities concern with fiscal
matters and their desire to be recognized in a renewed constitution.
Also in 1991, the FCM submitted
a brief to the Special Joint Committee on a Renewed Canada, asking that
the status of municipal governments be redefined and that the Constitution
be amended to recognize municipal governments. Provincial, territorial
and federal governments refused to add these proposals to the constitutional
TRENDS AND DEVELOPMENTS
Since the 1960s,
the issue of constitutional status for municipalities has received little
or no press or academic attention. Indeed, despite the efforts of
municipalities to secure constitutional recognition, the possibility of
achieving this goal seems doubtful. The FCM itself recognizes this
reality, noting in its 2000 policy statement that achieving constitutional
recognition for the role that municipal governments already play
in the nations political and economic spheres is a long-term
Lobbying for Specific Goals
As such, since the mid-1980s,
the municipalities and their organizations have concentrated on lobbying
for practical and specific services. The FCM reorganized and began
to look for partners in joint ventures. For example, in 1985, an
agreement with the Department of Regional Industrial Expansion established
the Municipal Economic Development Program to strengthen the ability of
local governments to promote economic development. The FCM has also
established a series of task forces to devise a municipal point of view
on national issues that affected its members. These task forces
and their yearly policy statements assist the FCM in lobbying the government
on an issue-by-issue basis with the relevant federal authority.
This is the case
with the FCMs affordable housing strategy, which was presented as
part of a brief during the federal governments pre-budget consultations
in 1999.(23) Other groups including the Tenants
Rights Action Coalition, the National Coalition on Housing and Homelessness,
and the Ontario Non-Profit Housing Association also submitted briefs
urging the federal government to set aside funds for social housing.(24)
It is interesting, and somewhat telling, that these organizations have
concentrated their efforts on the federal government, given that housing
is predominantly a local issue. It appears that municipalities and
other organizations now recognize that federal support is essential for
completing many projects which, at first glance, would seem purely local.
Nonetheless, some have pointed
out that federal support for these types of projects has not been overwhelming.
It could be argued that, as a result of the constitutional division of
powers, the federal government views local issues such as social
housing and urban crime as matters of provincial jurisdiction and
thus, they have traditionally chosen not to become involved.
B. Increased Intergovernmental
on some matters of local concern (particularly on infrastructure issues)
has been increasing. Graham et al. argue that federal-municipal
infrastructure cooperation dates back to the winter works programs implemented
during the Great Depression.(25) The
principle vehicle for this cooperation is regional development grants,
which [wind] their way from a succession of federal departments
concerned with regional affairs . . . through the channel of federal-provincial
agreements, to provide funds for the construction of water mains, sewers,
and roads in various urban centres.(26)
Consistent with this history
of intergovernmental cooperation on infrastructure projects, Canada Infrastructure
Works was introduced in 1993 as a job creation initiative. The
program which was renewed and expanded by the federal government
in Budget 2000 provides funding to municipalities for water, sewer,
and transportation projects, as well as for construction or improvement
of community facilities and other special projects. All three levels
of government have played important roles in this program, with the costs
being shared among them. As Caroline Andrew and Jeff Morrison point
out, the program could be described as a federal-provincial-municipal
program because the provinces had given their approval and because municipalities
had initiated it.(27) The federal government itself describes the program
as a bottom-up approach.(28)
In 1994, federal, provincial,
and municipal governments produced the National Action Plan to Encourage
Municipal Water Use Efficiency, which was based on six fundamental
principles; three of these leadership, partnership, and harmonization
addressed the need for intergovernmental cooperation and consistent,
cross-Canada regulations for water use efficiency.(29) The action plan provided objectives and
a timeline, but not a funding component.
Municipalities have, in
recent years, also called on the federal government for military support
during natural disasters. In January of 1998, the Canadian Forces
were dispatched to assist during the ice storm that ravaged eastern Ontario
and parts of Quebec. The Treasury Board reimbursed the Armed Forces
for the $60 million that it spent on its relief efforts.(30) In January of 1999, the Canadian Forces were dispatched
to again assist with municipal relief efforts, this time in Toronto, after
a massive snowstorm crippled the city.(31)
C. Downloading and
This is not to suggest that
relations between the municipalities and the federal and provincial governments
are always amicable. Since 1986, the provinces have been faced with
cuts to federal funds and, as a result, they have tended to push the burden
downwards to the municipalities, which in turn pass the costs on to the
consumers. This practice is often referred to as downloading.
Graham et al. argue that downloading may occur through one of two
ways: either the government mandates that another level of government
provide a specific service and does not provide compensation for doing
so; or the government simply discontinues the provision of a service leaving
another level of government to fill the gap.(32)
Municipal governments have interpreted the Government Expenditure Restraint
Act (S.C. 1991, c.9), which was passed in 1991, as the most visible
and symbolic downloading exercise. Under the Act, the federal government
was able to impose limits on payments provided to the provinces under
Established Programs Financing provisions, money traditionally spent on
health care and education. This freeze was passed on to the municipalities.
The most severe example
of downloading occurred in January of 1997 when Ontarios Progressive
Conservative government initiated massive changes to the governing
and funding arrangements for education, welfare, and a wide range of other
urban services, consulting neither the municipalities nor their associations.(33)
The province withdrew its funding from a number of areas, including social
housing, public transit and ambulance services, while maintaining control
over the design and implementation of those programs. As a result,
municipalities were burdened with new responsibilities, but no additional
funding or real political autonomy.(34)
Similar, although less drastic,
examples can be found in almost every Canadian city. In response
to downloading, municipal organizations have attempted to negotiate with
provincial governments to reduce the effects of downloading. In
addition, as Graham et al. point out:
in Nova Scotia, Ontario, Alberta, and British Columbia have proposed
the establishment of a municipal charter . . . [which would]
enshrine the notion of partnership in the relations between municipalities
and other levels of government. This implies significant intergovernmental
consultation before provinces re-align responsibilities and fiscal arrangements
Some municipalities have
chosen to lobby the provincial governments in an effort to more clearly
establish the position of municipal governments. For example, in
September 1991, the Nova Scotia Union of Municipalities urged the Nova
Scotia Working Committee on the Constitution to consider provincial
legislation that spells out in broad terms, the rights of municipalities
and enabling provincial legislation that gives municipalities the
practical ability to manage their day-to-day affairs. Mayor
Gordon Campbell of Vancouver presented a similar program to the Union
of British Columbia Municipalities.(36)
Some cities have moved beyond
this approach, advocating Charter city status for themselves.
A Charter city is defined as a city that operates under its own stand-alone
legislation, or Charter, designed to meet the particular needs of that
city and provide for powers and responsibilities not contained in the
municipal acts of general application.(37) In a May 2000 report, entitled Towards
a New Relationship with Ontario and Canada,(38)
the City of Toronto argues that it requires Charter status because of
its unique position as the largest city in the country and as the economic
centre of Canada. Further, the report contends that Toronto must
compete with nearby North American cities and thus, it needs different
tools than other municipalities. Moreover, Charter legislation would
allow the province to consolidate the large volume of special legislation
that currently applies to Toronto. The report proposed that the
Charter would be custom-built to meet Torontos needs, but could
be achieved within the existing legal framework that currently governs
municipalities in Canada.
Recent arguments for a municipal
bill of rights at the provincial level or Charter city status have the
advantage of simplicity and flexibility but may not solve the municipalities
complaints about lack of autonomy. Such a bill or Charter might
be subject to the same regular legislative procedures for amendment or
repeal that currently apply to the provincial municipal Acts.(39) In addition, bills of rights and Charter
cities could lead to the fragmentation of the current standard forms of
municipal administration, thereby creating a patchwork of municipal governmental
structures across the country.
Government Interest in Urban Affairs
Although not formally
discussing constitutional recognition or guarantees of legislative autonomy,
the federal government does appear more interested in urban matters.
Indeed, speculation that the federal government would create an urban
affairs portfolio has never really died. In late 2000, media reports
suggested that Prime Minister Jean Chrétien would appoint a Secretary
of State for Urban Affairs in the 37th Parliament.(40) However, in a minor cabinet shuffle shortly after the
election, no new portfolios were announced. Given the historical
resistance to federal encroachment on provincial responsibilities in Quebec
and the growing resistance in Alberta and Ontario, the political feasibility
of such a move is not known. Moreover, if history is instructive,
a federal urban affairs portfolio may not be the best tool for achieving
greater municipal autonomy and fiscal security, which is what municipalities
recognition remains a goal, municipalities seem to have adopted a more
flexible and diverse approach to the current constitutional circumstances.
Perhaps this is related, in some ways, to the federal and provincial governments
relative reluctance to re-open constitutional negotiations. As such,
municipalities have chosen instead to lobby the federal government for
greater fiscal support, and the provincial governments for legislative
changes to the provincial-municipal relationship. However, it is
not likely that calls for constitutional recognition of municipalities
and guarantees of fiscal security are going to die down in the near future.
Indeed, given the increasing incidences of downloading and its effects
on municipalities, as well as a growing awareness of the extent of urban
problems, such as crime and homelessness, it is highly probable that these
calls will crescendo. However, as the size of urban centres grows
and the number of urban Canadians increases, it is possible that municipal
concerns will receive greater attention.
Jacques LHeureux, Municipalities and the Division of Powers,
in Richard Simeon, ed., Intergovernmental Relations, Royal Commission
on the Economic Union and Development Prospects for Canada, No. 63, Toronto:
University of Toronto Press, Toronto, pp. 199-200.
Harry M. Kitchen and Melville L. McMillan, Local Government and
Canadian Federalism, in Richard Simeon, ed., Intergovernmental
Relations, Royal Commission on the Economic Union and Development
Prospects for Canada, No. 63, Toronto: University of Toronto Press,
1985, p. 220.
Karin Treff and David B. Perry, Finances of the Nation, Toronto:
Canadian Tax Foundation, 1999, p. 8:13.
LHeureux, 1985, p. 199-200; Dr. A.J.R. Smith, Chairman of the Economic
Council of Canada, quoted in The Financial Post, 13 February
Treasury Board Secretariat, Infrastructure Canada About Us,
To help ease the temporary wartime housing shortage, in 1944 the federal
government created a Crown Corporation, the Wartime Housing Corporation,
to spend federal money creating housing in urban centres during the Second
World War. Under the War Measures Act, the constitutional
prohibitions that restrained federal involvement in provincial jurisdiction
were loosened and the federal government began to build housing in areas
where shortages inhibited the production of essential defence projects.
In 1946, the assets of this Crown Corporation passed to the Central
Mortgage and Housing Corporation, later the Canada Mortgage and Housing
Corporation, to carry on the stimulation of housing construction by providing
mortgage money at favourable rates.
Canadian Federation of Mayors and Municipalities, Joint Municipal Committee
on Intergovernmental Relations, Presentation to the Special Joint Committee
of the Senate and the House of Commons on the Constitution, 2 March 1971,
The municipalities based their presentation on the argument that the municipal
tax base should not be eroded for the provision of education, which seriously
reduced the amount that was available for strictly municipal purposes.
(10) Federation of Canadian Municipalities,
Brief to the Task Force on Canadian Unity, 20 June 1977.
(11) Federation of Canadian Municipalities,
Resource Task Force on the Constitution, Municipal Government in
a New Canadian Federal System, Ottawa, 1980.
(12) Parliament, Special Joint Committee of
the Senate and the House of Commons on the Constitution of Canada, 20
November 1980, 9:10.
(13) Federation of Canadian Municipalities,
Presentation to the Special Joint Committee of the Senate and the House
of Commons on the Constitution, 20 November 1980, p. 9.
(14) Forum, Vol. 4, No. 12, October
1980, p. 1.
(15) Minutes of the Special Joint Committee
of the Senate and the House of Commons on the Constitution, 1980, 9:12.
(16) Ibid., 9:13, 20.
(17) LHeureux, 1985, p. 201.
(18) Kitchen and McMillan, 1985, p. 245.
(19) H. Peter Oberlander, Preface,
Meech Lake: From Centre to Periphery, University of British
Columbia, 1988, p. 3.
(20) Quoted in Evelyn S. Ruppert, Municipalities
and a Changing Canadian Federalism: A Background Paper Prepared
for Delegates to the 1991 AMO Conference, Association of Municipalities
of Ontario, August 1991.
(21) Federation of Canadian Municipalities,
The Future Role of Municipal Government, policy statement,
Ottawa: Federation of Canadian Municipalities, June 2000, p. 4.
(22) Ibid., p. 1.
(23) Minutes of the Standing Committee on Finance
pre-budget consultation, 17 November 2000, 16:00.
(24) Minutes of the Standing Committee on Finance
pre-budget consultation, 23 November 1999, 14:40; Minutes of the Standing
Committee on Finance pre-budget consultation, 19 November 1999, 9:40;
and Minutes of the Standing Committee on Finance pre-budget consultation,
9 November 1999, 16:40.
Katherine Graham, Susan D. Phillips and Allan M. Maslove, Urban Governance
in Canada, Toronto: Harcourt Brace, 1998, p. 187.
Graham et al., p. 186.
Caroline Andrew and Jeff Morrison, Canada Infrastructure Works:
Between Picks and Shovels and the Information Highway,
How Ottawa Spends 1995-96: Mid-Life Crises, Susan D. Phillips,
ed., Ottawa: Carleton University Press, 1995, p. 112.
Treasury Board Secretariat, Infrastructure Canada About Us,
Canadian Council of Minister of the Environment, National Action Plan
to Encourage Municipal Water Use Efficiency, Winnipeg: Canadian
Council of Ministers of the Environment, 1994, p. 2.
Forces Reimbursed, Calgary Herald, 26 March 1998, p.
Basem Boshra, Toronto storm snow job of the year: Lastmans
appeal to army rates as top weather story of 1999, The Montreal
Gazette, 24 December 1999, p. A1.
See Graham et al., p. 174 and p. 287.
Ibid., p. 181.
Ibid., p. 282.
Ibid., p. 184.
Union of Nova Scotia Municipalities, Submission of the Union of Nova
Scotia Municipalities to the Working Committee on the Constitution,
September 1991; Gordon Campbell, Local Government and the Constitutions:
Outline for a Presentation to the Union of B.C. Municipalities 1991 Convention.
Further information on existing Charter cities in Canada can be found
at City of Toronto, Corporate Services Legal Division, Powers of Canadian
Cities: The Legal Framework, June 2000, http://www.city.toronto.on.ca/ourcity/citycharterrep1.pdf.
See the City of Torontos website for this and other reports on Charter
city status at
Amendment might be made more difficult by, for example, replacing the
requirement for a simple majority with a requirement for agreement of
60% of the members of the legislature.
See Ken Gray, Federal government ponders creating urban affairs
portfolio, Ottawa Citizen, 9 January 2001, p. D1; Susan
Riley, It looks as if the upcoming parliamentary session will be
a sleepy one, The Sault Star, 10 January 2001, p. A4; James
Travers, Changes to cabinet will be few, The Kitchener-Waterloo
Record, 5 December 2000, p. A9.