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BP-379E
NATIONAL STANDARDS
AND SOCIAL PROGRAMS:
WHAT THE FEDERAL GOVERNMENT CAN DO
Prepared by
Jack Stilborn
Political and Social Affairs Division
September 1997
TABLE
OF CONTENTS
PART I: HISTORICAL BACKGROUND
A.
The Era of "Cooperative Federalism"
B.
Programs and Standards as of the Early Seventies
C. Developments since the Early Seventies
1. The EPF Arrangements of 1977
2. The Canada Health Act
3. The Canada Health and Social Transfer
4. Fiscal Trends
5. Standards: Then and Now
PART
II: THE JURISDICTIONAL BASIS
A.
Education
B.
Health
C.
Income Support
1. Social Assistance
2. Social Insurance
PART
III: INTERGOVERNMENTAL PROCESSES
A.
Major Mechanisms
1. Taxation: National Standards through the Back Door
2. The Federal Spending Power: National Standards C.O.D.
3. Shared or Divided Policy Fields: National Standards by
Gamesmanship
4. Charter Rights and Affirmations: National Standards
through
Constitutional Politics
5. Intergovernmental Agreements: National Standards through
Executive Federalism
B. Alternatives to Unilateralism: The Orchestration
of Standards
1. National Standards by Public Demand: The Power of Persuasion
2. National Standards and the "Information Age"
3. National Standards by Interprovincial Consensus
PART
IV: TWO PRACTICAL CONSIDERATIONS
A.
Political Will
1. Intergovernmental Pressures
2. Public Opinion
B.
Money
1. The Provincial Capacity Argument
2. The Effectiveness of Penalties
3. The "Political
Loop" - A Concluding Note
PART V:
GENERAL OBSERVATIONS AND CONCLUSIONS
PART
VI: CONCLUSION
BIBLIOGRAPHY
APPENDIX
I: FEDERAL CAPS AND CUTS, 1972-1995
APPENDIX
II: FURTHER POLL RESULTS
NATIONAL STANDARDS
AND SOCIAL PROGRAMS:
WHAT THE FEDERAL GOVERNMENT CAN DO
In recent years, continuing
federal reductions to transfers to the provinces for social programs have
prompted concerns about whether the federal government can continue to
ensure that these programs adhere to national standards. These concerns,
in turn, represent but one dimension of a broader debate over appropriate
roles for the federal government.
This paper focuses on the
federal capacity to influence the setting of nation-wide standards for
provincial social programs and subsequent provincial adherence to these
standards. This issue is logically distinct from the issue of what the
federal role should be, but conclusions about the federal capacity do
have implications for this broader debate. What is appropriate will be
determined, in part, by what is possible.
Conclusions about the current
capacity of the federal government require the bringing together of the
several different kinds of information that establish the structure of
this paper. Part I provides an historical overview, focusing on the post-war
period during which the modern social safety net was substantially created,
and outlines some long-term trends. Part II examines the respective constitutional
powers of the federal and provincial governments, and their evolving practical
significance. Part III discusses some of the political institutions, practices
and processes through which the federal government interacts with provincial
governments, and which permit greater or lesser degrees of influence.
Part IV gives specific attention to two of the practical factors that
determine the actual impact of historical roles, constitutional powers
and political processes: political will and money. A final section briefly
states some general observations and a basic conclusion about the federal
capacity to influence provincial social programs.
PART
I: HISTORICAL BACKGROUND
A. The Era of "Cooperative Federalism"
Beginning before World War
II, the federal government gradually established a social policy role
as an initiator of national programs and national standards, in some cases
in areas at least partly within the provincial jurisdiction. Examples
of programs that to some extent owe their existence to this role include:
the original old age pensions (1927); social assistance (1927, 1937, 1951,
1954 and, comprehensively through the Canada Assistance Plan, 1966); hospital
insurance (1957); and Medicare (1966). Most accounts of the development
of Canada’s social safety net explain these initiatives and the heightened
role of the federal government that they involved, in terms of three central
factors:(1)
-
First, the traumatic
experiences of depression and war had generated new broadly shared
public expectations and humanitarian ideals, supported by the emergence
of Keynsian economics, all of which favoured a major expansion of
governmental activity in the social policy sphere.
-
Second, Ottawa retained
a degree of policy leadership, at least during the late forties and
early fifties. The federal government was able to employ the policy
development strength of the federal public service (relatively greater
than that of most provinces) to develop proposals for innovative social
programs and standards; these responded initially to the demands of
reconstruction as well as to more basic shifts in expectations about
the role of government.
-
Third, the federal government
employed its greater fiscal strength to persuade the provinces, through
conditional grants, to cooperate with federal initiatives that would
otherwise have exceeded provincial fiscal capacities. The role of
federal-provincial cooperation during this period (notably in the
creation of the social safety net) has led it to be widely portrayed
as the era of "cooperative federalism," in contrast to subsequent
eras more strongly characterized by conflict and, in some policy sectors,
competition.
While this overview captures
essential relationships, it is misleading unless qualified by the following
key points:
-
Federal-provincial cooperation
was not always easily attained, and in some cases was not attained
at all. For example, the major package of reconstruction proposals
and initiatives (including ambitious shared-cost programs in the health
and social policy sectors) presented by the federal government to
the provinces in 1945 was rejected over the course of two years of
discussions. Ontario and Quebec took the lead in criticizing the proposals
on the grounds that they would place the provinces in a subordinate
position within areas of their own jurisdiction.(2)
-
Federal policy leadership
was relatively transitory. While this leadership was amply apparent
in the early fifties, the growth of provincial governments during
this period (stimulated in part by early conditional grant programs)
rapidly translated into stronger provincial policy capacities and
assertiveness. Beginning with hospital insurance in 1957, which was
modelled on plans already in operation in Saskatchewan and British
Columbia, a shift took place in the role of federal legislation away
from that of establishing federally developed programs and towards
that of ensuring the national application of models pioneered, to
a greater or lesser extent, by individual provinces.(3)
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There was growing provincial
dissatisfaction with conditional grant arrangements as the fifties
proceeded. Increasingly, provincial governments were resistant to
specific federal conditions for assistance. As well, conditional grants
were seen as distorting the activities of provincial governments and
channelling scarce funds away from areas in which the federal government
was not fostering activity, to areas in which provincial spending
was required in order to obtain the federal grants. In Quebec, the
hostility of Duplessis to the trend towards interventionist government
enabled him to limit these distortions through the only available
expedient, non-participation in some of the programs and the forgoing
of grants.
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Following the 1960 election
of the Lesage government, Quebec pressed Ottawa to vacate the fields
in which shared-cost programs had been established in the fifties,
arguing that the programs were now well established, and that public
support provided a sufficient guarantee of their continuation. Federal
legislation permitting provinces to "contract out" of various
social programs and receive a tax abatement in lieu of federal grants,
was passed in 1965. Quebec subsequently opted out of all the major
shared-cost programs. While other provinces did not follow suit (in
some cases because of concerns that the new arrangement would not
provide adequate resources), they did continue to resist what they
perceived as excessive federal conditions attached to the shared-cost
programs.
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By the mid-1960s, as
the final pieces of the modern safety net were being put in place,
the federal government was already explicitly renouncing the level
of federal influence that had characterized the conditional grant
era. A 1966 statement by the Hon. Mitchell Sharp, Minister of Finance,
affirmed that governments should be accountable to their own electors
for taxing and spending decisions, and recognized that the cumulative
effect of shared cost programs in areas of provincial jurisdiction
was to distort provincial priorities and erode the fiscal responsibility
of provincial governments.(4)
Consequently, standards in new programs (e.g., Medicare) were couched
in terms of general principles rather than the detailed administrative
requirements of, for example, the hospital insurance program.
B. Programs and Standards as of the Early Seventies
As of the early seventies,
the major federal-provincial social safety net programs were as follows:
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Canada Assistance
Plan: Established in 1966
to consolidate earlier programs into an expanded program providing
assistance (welfare, work activity programs, nursing homes, home care
and a range of other services) to persons in need or likely to become
in need, the plan was funded on a 50/50 federal-provincial cost shared
basis.
Standards:
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left provinces free
to administer programs, including establishment of levels of assistance,
eligibility criteria, comprehensiveness and delivery methods;
-
precluded provinces
from establishing residency requirements for eligibility; and
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required provinces
to establish, by law, an appeals procedure.
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Equalization:
Expanded in 1967 to provide provinces having relatively weak revenue-raising
capacities with annual grants determined by a formula based on a 10-province
average, the program aimed to ensure that all provinces could provide
citizens with reasonably comparable levels of public services at reasonably
comparable rates of taxation.
Standards:
- unconditional formula, no specific
service or service levels specified.
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Hospital Insurance:
This was established to provide nation-wide coverage for in-patient
services at the ward level in an active treatment hospital, hospital
for the convalescent, or hospital for the chronically ill. Federal
legislation setting out requirements and cost-sharing arrangements
was passed in 1957; between 1958 and 1961, provinces either integrated
previously existing plans or established new plans. Under the federal
legislation, provinces received an annual per capita grant for in-patient
services equal to 25% of their national per capita cost and 25% of
their provincial per capita cost.
Standards:
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universal coverage
(residency defined in federal regulations/no waiting periods);
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uniform terms and
conditions (i.e., no means testing, subsidies or additional charges
for high-risk groups);
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provision of specified
services at specified charges (with provinces having the option
to include a range of additional services);
-
adequate service
standards, backed up by provincial licensing, inspection and supervision
of hospitals;
-
public administration,
specified to include:
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establishment of
provincial hospitals planning division;
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provincial approval
of hospital budgets;
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provincial approval
of purchases of furniture and equipment;
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other requirements
as specified in federal regulations; and
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authorized charges
to patients permitted in a province (but with subtraction of equivalent
amounts from the federal transfer to that province).(5)
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Medicare:
Established in 1968 under 1966 legislation to create a nationwide
system of health insurance, Medicare was federally funded on a per
capita basis at 50% of the national average cost of insured medical
services; these included medically necessary hospital care, including
meals, supplies, tests and many outpatient services; medically necessary
physician care; and surgical-dental services requiring a hospital.(6)
Standards:
- Legislative requirements as follows:
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coverage of all
medically required services provided by medical practitioners,
as recognized by the province, on uniform terms and conditions;
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eligibility subject
to a residency requirement of no more than three months (members
of the Canadian Forces, R.C.M.P. and prisoners not eligible);
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at least 95% of
the eligible residents of the province to be entitled to payments
(at least 90% during the first two years of the plan);
-
reasonable access
to insured services to be provided on the basis of an authorized
schedule of payments that:
-
enables reasonable
compensation to practitioners; and
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does not require
charges to insured persons or create other barriers that would
impede reasonable access;
-
full portability
of benefits elsewhere in Canada; and
-
public administration
of medical services (either by government or by a fully accountable
non-profit agency).(7)
-
Post-Secondary Education
(PSE): A federal-provincial
post-secondary education transfer replaced federal grants to universities
in 1967, responding to funding requirements generated by the arrival
of the baby boom cohort at the post-secondary education level. The
transfer involved a combination of tax points and cash, with the federal
contribution equal to either 50% of total post-secondary education
operating costs in a province, or a per capita grant of $15 (approximately
50% of national post-secondary operating costs).
Standards:
- Unconditional formula, no federal standards.(8)
C. Developments since the Early Seventies
The greater flexibility
achieved in the social programs of the mid-sixties did not dispel underlying
provincial pressures for greater independence. These pressures were reflected,
for example, in the arrangements established by the Family Allowances
Act of 1974 which (in addition to dramatically increasing benefits)
allowed the provinces to define their own family entitlement regimes,
based on the age and number of children.
During the early and mid-seventies,
there were a number of major attempts at social policy reform, culminating
in the federal-provincial Social Security Review of 1973 to 1976. These
initiatives were largely unproductive of significant reform, however.
The decreased capacity of the two levels of government to reach agreements
reflected constraints on the fiscal capacity of the federal government
that resulted from the economic problems of the seventies: oil shocks,
"stagflation," lagging national productivity and rising unemployment.
These fiscal tensions added to divergencies over policy (reflecting independent
provincial policy development capacities) and continuing jurisdictional
sensitivities (especially in Quebec after the 1976 election of a Parti
Quebecois government).(9)
1. The EPF Arrangements of 1977
Provincial governments became
progressively more dissatisfied with the inflexible requirements of the
hospital insurance agreements, and with the federal audit that determined
shareable costs. At the same time, Ottawa was increasingly concerned about
the fact that its rapidly escalating health and post-secondary education
transfers were essentially beyond its control, being determined by provincial
spending levels. The result was the move from cost-sharing to block funding
achieved in the Established Program Financing (EPF) arrangements set out
in the Federal-Provincial Fiscal Arrangements and Established Programs
Financing Act, 1977.(10)
The EPF replaced 50/50 conditional
grants for Hospital Insurance, Medicare and Post-Secondary Education with
a combination of
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the transfer to the
provinces of 13.5% Personal Income Tax and 1% corporate tax points,
topped up with a transitional cash payment, where needed to bring
the value of the tax points up to the value of the ‘other’
50% of the 1975-76 grant; and
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supplementary elements,
such as a cash grant to compensate provinces for the termination of
the 1972 Revenue Guarantee Program, and the Extended Health Care component,
consisting of an indexed per capita cash grant to cover extended health
care services previously cost-shared 50/50 under the CAP.
Provincial flexibility was
increased because the EPF transfer detached federal funding from provincial
spending for each of the programs involved; thus, the provinces were no
longer obliged to spend in order to get federal money. It is noteworthy,
however, that the federal government retained the ability to withhold
its contribution where a province failed to meet the criteria set out
in hospital insurance and Medicare legislation.(11)
As well, the EPF arrangements contained a provision for federal-provincial
consultations concerning post-secondary education policies with national
implications.(12)
The formal preservation
of the federal government’s capacity to apply penalties did not,
however, forestall debate about whether or not standards were being maintained.
Thus, in hearings of the 1981 parliamentary task force on fiscal arrangements,
it was alleged that a number of provinces were taking advantage of the
fact that federal money was no longer tied to specific programs to divert
funds to programs outside the health and education sectors, and that this
threatened to undermine standards.(13)
2. The Canada Health Act
During the late seventies,
medical practitioners in a number of provinces began to resort to extra-billing
in growing numbers, in an attempt to counter the effect of inflation on
provincially established fees for services. This resulted in growing public
pressure for more effective controls than were provided by hospital and
medical insurance legislation, which did not prohibit user fees or extra
billing so long as they did not compromise "reasonable access."
The federal response, which
prompted strong protests from several provinces, was the Canada Health
Act of 1984. This provided for penalties where provincial hospital
insurance or Medicare systems contravened the following federal requirements:
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universal coverage,
on uniform terms and conditions, to all residents except members of
the Canadian Forces and R.C.M.P., prisoners, and those who have not
met provincial residency requirements (which may not exceed three
months);
The Canada Health Act
specifically provided for dollar-for-dollar reductions to federal EPF
transfers for revenues gained by user charges or money paid for services
subject to extra billing. Substantial public support for the legislation
enabled its passage, in the face of significant opposition from provincial
governments and many doctors.
3. The Canada Health and Social
Transfer
The final significant structural
change in federal-provincial social program transfer arrangements took
place more than a decade after the Canada Health Act. It reflected
a significant worsening, during the early 1990s, of the underlying pressures
that had been shaping social program arrangements for over two decades.
In particular, the failure of the Meech Lake Accord revived and intensified
Quebec nationalism, while the impact of the 1991 recession in Ontario
(the province that in 1990 had generated 47% of federal revenues) heightened
fiscal pressures on the federal government and fostered this province’s
increasingly confrontational "Ontario-first" approach to intergovernmental
affairs.(14) More specifically, it responded to pressures created
by the federal cap on CAP transfers to B.C., Alberta and Ontario (see
Appendix I), which had introduced a progressive disparity into this
transfer.
The Canada Health and Social
Transfer (CHST), established in 1995, combined the EPF and CAP transfers
in a single block transfer. Under the CHST,
The 1996 long-term funding
commitments for the CHST (see Appendix I) respond to the apprehensions
of many social policy analysts that, as introduced in 1995, the CHST would
have seen the federal cash transfer "decline steadily and rapidly
(after the initial cuts) ...to disappear entirely early in the next century."(16)
4. Fiscal Trends
Recent attempts to preserve
some federal leverage based on cash transfers do not reverse the evolution
that the federal role in funding social programs has undergone since the
mid-seventies. While this evolution is suggested by the structural changes
discussed above, it is only fully apparent in the cumulative impact of
the series of de-indexations, caps and cuts applied to federal transfers
over the past three decades. (For a listing of major fiscal restraint
measures, see Appendix I.)
Attempts have been made
to quantify the impact on the provinces of federal fiscal restraint. For
example, the Canadian Tax Foundation found that, between 1986-7 and 1994-5,
the combined effect of federal restraint measures had been to reduce transfers
to the provinces under the EPF and CAP by a cumulative total of some $35
billion (about four times the total annual transfer as of the mid-eighties).(17)
While figures of this kind
are inherently arbitrary (there is no clear reason for selecting 1985
arrangements as a basis for identifying "reductions"), they
nevertheless provide a useful indication of the global trend in federal
funding. They are supported by a second set of figures, which indicate
that since the early seventies federal transfers have become less important
as a percentage of provincial revenues:
Percent of Total
Provincial Revenues Obtained from Federal Grants(18)
| |
Nfld.
|
P.E.I.
|
N.S.
|
N.B.
|
Que.
|
Ont.
|
Man.
|
Sask.
|
Alta.
|
B.C.
|
|
1970-1
1980-1
1990-1
|
62.2
46.8
45.6
|
61.5
51.5
43.7
|
47.1
45.5
36.6
|
47.3
43.5
39.8
|
29.1
21.8
18.9
|
17.2
17.6
11.1
|
31.7
36.4
27.9
|
28.2
15.7
23.2
|
23.5
7.9
14.9
|
17.6
15.2
12.3
|
5. Standards: Then and Now
It is useful, finally, to
consider the possible impact of intergovernmental pressures, the more
flexible arrangements that responded to them, and declining federal funding
on the national standards for provincial social programs. While a full
exploration of this question would require detailed attention both to
standards and levels of actual enforcement, some initial conclusions are
suggested by even a general comparison. The chart below suggests several
observations:
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Second, the most noteworthy
change is the replacement of detailed administrative requirements
with more general norms or principles. In some cases (e.g., health
care access), these appear to involve strengthened (i.e., higher)
standards, while in others (e.g., hospital service standards) there
appears to have been at least a nominal decline.
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Third, a number of central
elements in Canada’s safety net -- including welfare benefit
levels and services -- have never been subject to national standards.
This reminds us that the adequacy of the social safety net depends
on multiple factors, of which the presence of standards, national
or otherwise, is only one.
National Standards
|
Early Seventies
|
Now
|
|
Health
- comprehensive
coverage (all medically necessary services)1
- universality (uniform terms and conditions)
- Medicare required coverage of only 95% of
residents
- access
- no standard (hospitals), authorized charges to
user permitted
- reasonable access (Medicare), limited user
charges permitted
- residency requirements
- none permitted (hospital)
- up to three months permitted (Medicare)
- service standards
- hospitals: "adequate," with provincial
licensing/
monitoring
- Medicare: no service standards
- public administration
- detailed requirements (hospital)
- general principle (Medicare)(2)
- no federal recognition requirement
|
Health
- comprehensive coverage
(all medically necessary services)(1)
- universality (uniform terms and conditions)
- access
- reasonable access, no user charges
- residency requirements
- up to three months permitted
- no service standards
- public administration
- general principle
- federal
contribution to be recognized in publications, advertising
|
|
Social
Assistance
- benefit
levels: no standards
- residency requirements: prohibited
- appeals procedure (in law): required(3)
|
Social
Assistance
- benefit
levels: no standards
- residency requirements: prohibited
- appeals procedure: not required
|
|
Post-Secondary
Education
- no
standards
|
Post-Secondary
Education
- no
standards
|
|
Equalization
- no
standards
|
Equalization
- no
standards
|
Notes
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While the Hospital
Insurance and Diagnostic Services Act set out a list of required
services, and provided for agreements that could add to it, subsequent
legislation has simply referred to medically necessary services.
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Private insurance companies
could be designated to administer the plan on a non-profit basis as
agents of the provincial government (as a result of pressure from
Ontario).
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The difference here
may be more apparent than real. According to Derek P.J. Hum (Federalism
and the Poor: A Review of the Canada Assistance Plan, Policy Study
Series, Ontario Economic Council, Toronto, 1983, p. 40), the
right to appeal had, as of 1983, "failed to materialize to any
appreciable extent" because of the inadequacy of public information,
and because appeal boards tended to act as extensions of provincial
welfare departments.
PART
II: THE JURISDICTIONAL BASIS
The capacity of the federal
government to influence the provinces is ultimately a product of the powers
constitutionally vested at the federal level. It is therefore appropriate
to outline these powers before examining, in Part III, the kinds of influence
that they enable.
The constitutional basis
for federal action within what have come to be seen as the health and
social policy fields can be understood only in the light of three fundamental
processes of change that have operated since the enactment of the British
North America Act in 1867.
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First, today’s
Constitution differs somewhat from that enacted in 1867 as a result
of formal constitutional amendments, notably those that transferred
responsibility for unemployment insurance to the federal government
(1940) and replaced the provincial responsibility for old age pensions
with one concurrently held by both provincial and federal governments
(1951 and 1964).(19) The main impact of these changes
has been to enlarge the federal jurisdiction, and thus the federal
capacity to set national standards directly in social policy areas
for which it has acquired responsibility.
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Second, as a result
of judicial interpretations, many of the provisions of today’s
Constitution have a meaning different from that intended in 1867.
The story of evolving judicial interpretations, and their decentralizing
impact on the federation, has been widely told.(20) In general, expansionary interpretations of provincial
jurisdictions (such as "property and civil rights"), in
combination with restrictive interpretations of federal powers (such
as the "peace, order and good government"), have had the
effect of preserving provincial jurisdiction over most of the emerging
health and social policy sector.
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Third, the provinces
have "emerged," evolving from extremely rudimentary structures
to become a level of government politically and administratively counterbalancing
the federal government. One aspect of this change is the dramatic
increase in importance of what is now seen as the social policy sector.
At the time of Confederation, this sector (incorporating areas such
as health, education and welfare) was assumed to be a sphere of minimal
governmental activity. As these areas have come to be seen as central
to the role of government, the provinces have acquired heightened
visibility and political legitimacy. This development has added force
to a tradition of provincial assertiveness and a gradual shift in
the political centre of gravity in favour of the provinces which dates
back to the very early days of Confederation.(21)
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Fourth, the vast expansion
of the scope of government since 1867 has generated a series of new
policy fields not anticipated by the Fathers of Confederation and
which have not proven to be assignable exclusively to either level
of government. Examples of such fields, none of which is mentioned
in the sections of the Constitution dealing with federal and provincial
powers, include: the environment, culture, communications, regional
development, industrial strategies, manpower and training, fitness
and sports, health, tourism and science policy.(22) Within the new policy fields,
both federal and provincial governments act, using the various legislative
powers ascribed to them in the Constitution, as interpreted by the
courts.
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Fifth, the expansion
of government did not merely involve the opening up of new areas in
which to legislate, it involved a substantial broadening of government
activity beyond the realm of legislation and regulation. Thus, while
the Fathers of Confederation appear to have envisioned government
as primarily regulatory, supported by minimal levels of taxing and
spending, governments today engage in four broad categories of activity:
regulation, taxation, the provision of services, and spending. Direct
federal initiatives within the social policy sectors typically involve
a combination of these, each of which (with the exception of regulation)
also has potential influence upon provincial governments.(23)
The five changes described
have had profound impacts on the constitutional basis for federal influence
within the social policy fields. They have determined the practical meaning
of the federal powers. More fundamentally, they have defined the jurisdictional
questions in response to which these powers have been clarified, and shaped
the political and intergovernmental context in which a federal role can
be put into practice. The resulting federal powers, described by policy
field, are as follows:
A. Education
By virtue of section 93
of the Constitution Act, 1867, provincial governments have the
exclusive power to make "laws in relation to education," and
are thus responsible for the establishment and administration of schools
and universities.
Under section 93(4), the
federal government has a power to enact laws to implement constitutional
provisions related to denominational schools, should the provinces fail
to do so. This power has never been used, however. The federal government
also has certain narrow responsibilities incidental to various heads of
federal power, including responsibility for operating schools on military
bases and Indian reserves.(24)
More problematically, the
federal government’s acquisition in 1940 of jurisdiction over unemployment
insurance has provided it with the constitutional basis for an enhanced
role in manpower training, beyond its previous role, based on the spending
power, as an initiator and co-funder of cost-shared programs. Provinces
have varied in their acceptance of a stronger federal presence, however;
in several cases, they claim that all training is a subspecies of education,
and therefore a purely provincial matter, and have moved aggressively
to establish their own training initiatives. Thus, for example, Quebec,
Ontario, and British Columbia in the early nineties created structures
that either competed with (or in the case of Quebec, pre-empted) the Canadian
Labour Force Development Board initiatives that the federal government
sought to establish beginning in 1991.(25) More recently, the federal government has moved to
substantially vacate this field (see p. 24 below).
The spending power remains,
however, a central basis for federal involvement in this field. It enables
both direct and indirect participation. Indirect participation consists
of the post-secondary education cash and tax transfer to the provinces
(now a component of the CHST), and funds provided for minority official
language education and second official language instruction through the
Department of Canadian Heritage. Direct participation includes aid to
students (loans, grants and tax measures), and direct support for various
aspects of post-secondary education, notably research (through federal
contracts and granting councils). As well, the Department of Indian and
Northern Affairs supports the post-secondary education of Indian and Inuit
students.(26)
B. Health
Although the Constitution
Act, 1867 assigned jurisdiction over hospitals to the provinces, it
made no mention of the various additional components of the modern field
of health policy and related programs. Reflecting this, the courts have
deemed health to be an "amorphous topic," where one level of
government (or possibly both) may act, depending on the purpose and effect
of the particular health measure involved.(27)
Both levels of government thus have come to be active in this field, using
the various jurisdictional bases given them by the Constitution Act,
1867 and subsequent interpretation.
Provincial jurisdiction
over property and civil rights (as interpreted by the courts) has become
a major source of provincial regulatory authority within the health field.
It provides a basis for regulating: (a) the manufacture and sale of food
and drugs; (b) occupational health and safety (through labour relations
and standards) in most sectors of the economy; (c) the licensing of physicians,
nurses and other health professionals and (d) medical and hospital
insurance plans.(28)
The provinces are the major
players with respect to the provision of facilities and services. In addition
to clear jurisdiction over hospitals and asylums, the provinces have been
given extensive authority over public health on the grounds that it falls
within the class of local or private matters made provincial responsibilities
by the constitution. The provinces also administer provincial medical
insurance plans, reflecting their regulatory authority.
The federal government’s
jurisdiction over the criminal law authorizes it to proscribe and punish
conduct that is dangerous to health, notably with respect to food and
drugs. In addition to the responsibility for marine hospitals and quarantine
conferred in 1867, the federal government has come to provide health services
for Indian and Inuit people (as a result of its general jurisdiction concerning
these groups). Certain services are also provided to residents of the
Yukon, federal government employees, immigrants and civil aviation personnel.
The federal government regulates food and drugs, inspects medical devices,
administers health care insurance, and provides general health information
services. As well, it can address issues of occupational health and safety
in federally regulated economic sectors, through jurisdiction over labour
relations and standards.(29)
The federal spending power
has been used to considerable effect in the health care sector, as has
been seen in Part I of this paper. In addition to its use in launching
hospital insurance and Medicare at the national level, the spending power
is also the basis for diverse other federal activities in the health care
sector, including the funding of medical research.(30)
C. Income Support
The income support category
is not mentioned in the Constitution, but the term has come to be employed
by social policy analysts in recognition of the shared practical effect
of a range of constitutionally distinct programs, all of which provide
financial support based on an assumption of need. Two major types of such
programs are: welfare-type non-contributory programs, whose eligibility
tests focus on demonstrated need or membership in a designated group assumed
likely to be in need, and insurance-type contributory programs which provide
assistance to individuals who have contributed to them from previous income.
1. Social Assistance
The capacity of provincial
governments to make welfare payments to individuals has never been questioned.
It is founded on the constitutional jurisdiction over "charities
and eleemosynary institutions," supported by jurisdiction over "municipal
institutions," "property and civil rights," and "matters
of a merely local or private nature in the province."(31)
The federal government has
no specific jurisdiction relating to social assistance payments or services,
but the general "peace, order and good government" power has
been accepted by the courts as a basis for some assistance programs, notably
the Family Allowance, which was upheld on this ground in 1957.(32)
Given that this power applies only outside the provincial jurisdiction,
its utility as a basis for broad federal activity in this area is questionable,
however.
The federal spending power
has proven to be the central basis for federal involvement in this field.
It has been invoked by the federal government as a basis for payments
to individuals, payments to institutions, such as grants for the purpose
of funding administrative improvements, experimentation and welfare research;
conditional grants to provinces; and unconditional transfers such as the
CHST and equalization payments.(33)
2. Social Insurance
The 1867 Constitution was
interpreted by the Judicial Committee of the Privy Council as giving jurisdiction
over social insurance-type programs to the provinces, as a species of
insurance. After federal legislation that would have established a national
social insurance program in response to the depression had been struck
down by the courts in 1937, the federal government and the provinces agreed
to a constitutional amendment giving the federal government exclusive
jurisdiction over unemployment insurance. When attention turned to contributory
pensions in the fifties and sixties, the 1937 court decision prevented
the federal government from establishing any pension program directly
linked to the taxes or contributions used to finance it. In 1951, with
provincial agreement, the Constitution was amended to enable the federal
government to operate old age pensions; in 1964, an additional amendment
expanded this jurisdiction to include supplementary benefits such as survivors’
and disability benefits. Federal jurisdiction over pensions and supplementary
benefits did not confine the existing provincial jurisdiction, which was
made paramount in the event of a conflict between federal and provincial
laws.
The provinces retain general
jurisdiction over contributory programs outside unemployment insurance;
workers’ compensation programs thus remain an exclusive provincial
responsibility. As well, paramountcy within the pension jurisdiction enabled
the provinces to press the federal government for explicit guarantees
when the Canada Pension Plan Act was being drafted. Accordingly,
this provides: (1) that any changes to the plan must be approved by two-thirds
of the provincial governments representing at least two-thirds of the
population, and (2) that any province may opt out with compensation and
establish its own plan. Thus far, the government of Quebec has been the
only province to do this.(34)
The federal spending power
is of limited importance within the social insurance sector because federal
jurisdiction enables the federal government to establish federal programs,
and because of the nature of these programs as funded by contributions.
PART
III: INTERGOVERNMENTAL PROCESSES
The powers just outlined
can be used by the federal government in some areas to deliver social
programs directly. In the provincial jurisdiction, the powers provide
the basic tools with which the federal government can attempt to influence
provincial programs and standards.
This section provides a
status report on major types of federal influence upon provincial governments.
It is organized in two parts, to reflect the reality that intergovernmental
relations are in virtually continuous evolution, and that at any given
moment in the history of the federation some types of influence have been
in stasis or decline, while others have been gaining importance.
The distance traversed since
1867 may be suggested by the fate of what originally appear to have been
envisioned as two key sources of the federal government’s capacity
to manage the federation. The power of disallowance given to the federal
government in 1867 allowed it unilaterally to disallow any provincial
law within one year of its passage; the related power of reservation allowed
the Lieutenant Governor of a province to reserve a bill for the "pleasure
of the Governor General in Council" and provided that a reserved
bill would have no effect unless approved at the federal level. As the
provinces have emerged as a distinct level of government, however, this
high level of federal influence has become less and less acceptable politically,
even though the powers remain in the Constitution. The power of disallowance
has not been used at all since the 1940s, and not extensively since the
turn of the century, while the power of reservation has likewise fallen
into disuse. Attempts to use these powers today would undoubtedly provoke
enormous political controversy and could also be open to judicial rejection
as violating a constitutional convention. In short, the evolving system
has left them aside.
A. Major Mechanisms
1. Taxation: National Standards through
the Back Door
The power to tax is dealt
with in general terms in the Constitution Act, 1867. The federal
government is given unrestricted powers to tax, while the provincial governments
are awarded the power of direct taxation within the province (i.e., taxes
demanded from the persons intended to pay them, rather than indirect taxes,
which can be passed on to customers) and powers of licensing.
In the years since 1867,
the taxation system has come to perform a number of critical functions
additional to that of revenue-raising. It is a major means of economic
management, and also "an important vehicle for delivering social
benefits to Canadians."(35) An example is the child tax benefit, which (as a
refundable credit) has the effect of "topping up" the incomes
of poor families on welfare, those on unemployment insurance, and those
relying on low wage jobs.(36) Refundable tax credits are paid directly in the form
of a cheque rather than in the form of reduced taxes and thus benefit
those earning little or no taxable income. They provide a major potential
means for federal income support, up to and including a national guaranteed
income. Federal tax credits can contribute directly to the meeting of
national standards for income support, and can also contribute indirectly
by altering the provincial tax base and triggering involuntary provincial
tax benefits.
In addition, the tax credit
mechanism has potential uses as a means of maintaining standards widely
outside the area of income support. For example, it could provide a 100%
refund for money spent on user fees or other medical charges, and thus
(in theory, at least) maintain standards of accessibility without the
punitive reduction of transfers upon which the Canada Health Act
relies.
Limits:
The use of the tax system to ensure adherence to national standards is,
however, limited in four important ways:
-
Federal assistance through
this mechanism goes to individuals rather than governments. It is
therefore more likely to work against provincial governments’
adherence to standards. It would encourage provincial governments
to lower to the greatest possible extent the benefits a federal tax
credit was designed to supplement (or increase to the maximum extent
charges to be compensated), thus freeing up provincial funds.
-
Tax credits/refunds
can increase incomes to a pre-established standard, or compensate
for provincially permitted charges, but cannot provide other varieties
of program support, or directly compensate for deficiencies in provincial
programs.
-
Provincial counter-actions
are broadly available. First, the Constitution gives provinces as
well as the federal government the power to levy direct taxes. Indeed,
federal unilateralism in this area could fracture the harmonization
of federal and provincial taxation (sales taxes being the exception)
achieved during the 1940s, and provoke a regression to the "tax
jungle" of earlier times.(37)
As well, provinces could lower benefits or reduce services, thus eroding
the practical effect of federal tax credits.
2. The Federal Spending Power:
National Standards C.O.D.
The Constitution does not
explicitly define a "spending power," either of the federal
government or the provinces. Both levels of government have therefore
felt free to spend revenues outside their areas of substantive jurisdiction.
In the case of the federal government, a spending power can be inferred
from the powers granted to levy taxes (implying the raising of revenue),
to legislate in relation to public property, and to appropriate federal
funds.(38)
The array of federal-provincial
cost-shared programs created during the post-war period, implies an extremely
wide potential scope for the federal spending power. It is noteworthy
that the Supreme Court, in a 1991 case in which the government of British
Columbia attempted to have the unilateral federal cap on CAP transfers
declared unconstitutional, specifically affirmed the federal Parliament’s
right to authorize grants to the provinces for use within their fields
of jurisdiction, and to impose conditions on the recipient provinces.(39) This interpretation reflects precedent.
The Hon. Monique Begin’s account of the development of the Canada
Health Act, for example, stresses the painstaking attention given
to the drafting of legislation so that it could not be construed as an
intrusion on the provincial jurisdiction, but would apply solely to the
use of the federal spending power.(40)
The central advantage of
the spending power is precisely that the absence of constitutional definition
enables an extremely wide application. Reflecting this, the spending power
has provided the constitutional basis not only for a multitude of federal-provincial
transfers over the years, but also for grants and loans to private firms
or individuals, the tax expenditure provisions of the Income Tax Act,
and the commercial activities of the federal government.
Limits: While use
of the spending power does not appear to be seriously constrained by the
Constitution, it remains subject to important fiscal and political limits.
-
Use of the spending
power to initiate new programs relies on the availability of new federal
money, following the pattern of the cost-shared programs of the fifties
and sixties. Fiscal constraints now applying to both the federal and
provincial governments limit the likelihood of major new programs.
-
Federal use of the spending
power has long provoked political resistance from Quebec and, in varying
degrees, from other provinces, on the grounds that it represents an
intrusion into provincial jurisdictions.(41) Thus, aggressive use of this power
could threaten the broader fabric of intergovernmental cooperation
required by a workable federal system.
-
In the 1996 Speech for
the Throne, it was announced that the federal government would not
use its spending power to create new shared-cost programs in areas
of exclusive provincial jurisdiction without the consent of a majority
of the provinces. Furthermore, all new programs would incorporate
provisions for individual provinces to opt out with compensation,
provided they established "equivalent or comparable" initiatives.
-
refusing to establish
initiatives "equivalent or comparable" to new federally
initiated programs;
-
absorbing financial
penalties levied by the federal government against existing transfers;
-
using the provincial
spending power to compensate third parties for reductions in federal
payments reflecting the application of federally developed national
standards, thus (in theory) minimizing financial pressure to adhere
to them; and
- reducing or reallocating provincial
spending.
3. Shared or Divided Policy Fields: National
Standards by Gamesmanship
Shared, contested or overlapping
policy fields create a subset of potential intergovernmental activity
involving the capacity of both levels of government to regulate and/or
provide services within a policy field. Thus, each level of government
has a range of possible opportunities to influence the other level, depending
on their respective jurisdictions, activities involved, existing intergovernmental
arrangements, and prevailing political imperatives.
The development of the Canada
and Quebec pension plans illustrates some of the dynamics that can apply
within a shared policy field. Old age pensions are a concurrent jurisdiction
with provincial paramountcy, which enabled Quebec to opt out of the Canada
Pension Plan (CPP) at its inception. Mobility and equity considerations
created a strong incentive, however, for the harmonization of the national
and Quebec plans. The government of Quebec outlined a pension regime at
a 1963 federal-provincial conference that offered broader coverage, higher
benefit levels, and stronger redistributive impacts than the scheme being
proposed by Ottawa. This created pressure on the federal government to
enhance its own proposals, in order to reassert policy leadership and
demonstrate that the federal system could deliver pensions as attractive
as the one proposed by Quebec. The resulting CPP/QPP arrangement in effect
embodied standards reflecting the Quebec model.(42)
Limits: Four general
limitations apply to federal action within shared policy fields as a means
of influencing standards:
-
The duplication and
overlap that may enable federal influence has drawn increasing criticism
in recent years, reflecting both public resentment of its real or
perceived costs to the taxpayer and, intergovernmentally, a synergy
between Quebec nationalism and decentralist pressures from Ontario
and the West. As it is reduced, opportunities for influence which
it created will also be reduced.
-
The federal government
has announced a series of self imposed limits, involving federal withdrawal
(subject to federal-provincial agreement on specific terms) from a
number of shared policy fields, including:
- Labour Market Training:
the government has publicly recognized this field as a provincial responsibility,
is phasing out purchases and funding of training, and is shifting to
the provinces active employment measures and some $2 billion of
related funding; and
- Social Housing: the
federal administrative role in social housing is being transferred,
leaving the federal government a role confined to social housing on
Indian reserves and other functions not directly related to social policy
objectives.(43)
4. Charter Rights and Affirmations:
National Standards through
Constitutional Politics
Since 1982 (1985 for equality
rights), the Canadian Charter of Rights and Freedoms has emerged
as a powerful national standards mechanism. As interpreted by the courts,
its provisions concerning mobility rights, minority language education
rights, and equality rights, among others, create a series of national
standards with which Canadians can demand that both federal and provincial
governments comply.
The Charter also affirms
certain standards applying to intergovernmental relations. Although questions
remain as to its enforceability, section 36 affirms the commitment of
both federal and provincial governments to broad principles of equalization:
promotion of equal opportunities, reduction of regional disparities, and
provision of essential public services of reasonable quality to all Canadians.
Had they been successful,
subsequent efforts at constitutional reform would have extended the role
of constitutionalized national standards. The 1992 Charlottetown Agreement,
for example, proposed the entrenchment of a statement of principles of
the Canadian social and economic union, to be monitored by an intergovernmentally
established mechanism. Discussion leading up to this proposal had given
rise to a number of more wide-ranging "social charter" or "social
covenant" ideas, which proposed constitutional entrenchment of a
variety of positive social and economic rights, including a right to adequate
housing, food and other basic necessities, medical care, education, and
an improved environment. The reappearance of proposals along these lines
may be anticipated in future constitutional rounds.(44)
In general, the constitutionalizing
of national standards provides a powerful means of securing those standards
that can be made justiciable.(45)
Non-justiciable charters or covenants are not subject to enforcement through
the courts, although they may be an element of the constitutional context
that the courts could consider in reaching decisions. As the frequency
of references to section 36 of the Charter in debates about equalization
may suggest, constitutionalized commitments can become a reference point
for public debate, and for assessing the performance of governments.(46)
Limits: While constitutional
charters and related instruments can be powerful protectors of national
standards, they have a number of inherent limitations as mechanisms enabling
federal influence:
-
The unique circumstances
of 1982 permitted a degree of federal unilateralism now substantially
precluded by the amending procedure which requires that amendment
proposals (including any proposed national standards) must be carefully
crafted to respond to regional and intergovernmental imperatives,
in order to gain the support of at least seven provincial legislatures
representing at least 50% of the population.
-
The Act Respecting
Constitutional Amendments, which received Royal Assent on 2 February
1996, subjects future amendments to an additional requirement: no
federal Minister will place an amendment before Parliament in the
absence of the required regional support in B.C.; the prairie provinces;
Ontario; Quebec and the Atlantic provinces. In addition to reducing
the likelihood of amendments, this legislation reduces the scope for
unilateral federal influence upon future negotiations by increasing
the ability of various combinations of provinces to stop amendments.
-
Constitutionalized standards
rely on the general language required by an instrument subject to
limited and infrequent modification. Unless Canadians are prepared
to accept the interpretative decisions of non-elected judges as major
determinants, in practice, of social program standards, justiciable
charters remain subject to significant limitations as a source of
meaningful standards. The limitation of inherent generality also applies
to non-justiciable standards.
5. Intergovernmental Agreements: National
Standards through
Executive Federalism
As has been seen, the creation
of the modern social safety net involved a range of formal intergovernmental
agreements, several of which set out detailed national standards applying
to the programs they created. As the federal government’s ability
to exercise dominant influence over such negotiations by wielding the
spending power and other traditional federal strengths has waned, however,
the nature of these negotiations has altered. It is thus useful to discuss
the intergovernmental agreement process separately from the types of influence
applying within it, as a mechanism through which the federal government
might influence provinces.
Intergovernmental agreements
exist across an extensive range of policy fields, testifying to the capacity
of the federal and provincial governments to collaborate in the discharge
of joint responsibilities.(47) At the same time, most general assessments
of trends in intergovernmental relations conclude that the potential for
stalemate has increased since the fifties, reflecting the absence of decisive
leverage on either side of the federal-provincial negotiating table.(48)
An important test of the
present capacity of the process to deliver national standards in the social
policy sector is currently underway. As this is written, discussions announced
with the 1996 budget are continuing between the federal government and
the provinces in order to jointly develop "values, principles and
objectives" which can govern the CHST and, more generally, the diverse
programs and practices that define the social union.(49)
A Federal-Provincial-Territorial Council on Social Policy Renewal was
created in 1996 to coordinate provincial/territorial participation in
these discussions and, at the Annual Premiers’ Conference in August
of 1997, was mandated to work with the federal government to develop a
framework agreement addressing cross-sectoral issues such as the development
of common principles.(50) Provincial
pressure for joint approaches to the definition and enforcement of standards
in specific sectors, such as health, has not met with unqualified federal
enthusiasm, however. At a meeting of federal, provincial and territorial
health ministers on 11-12 September 1997, federal Health Minister
Allan Rock maintained the position that interpretation and enforcement
of the Canada Health Act are federal responsibilities. It thus
remains to be seen whether substantive social program standards can be
achieved through the intergovernmental agreement process.
Limits: Leaving aside
limitations connected to the federal government’s diminished fiscal
and related clout within the process, the intergovernmental agreement
process remains subject to several inherent limitations as a means of
federal influence:
B. Alternatives to Unilateralism: The Orchestration
of Standards
The traditional ways in
which the federal government has exerted influence on behalf of national
standards for matters within the provincial jurisdiction appear, for a
variety of reasons, to be of diminishing effectiveness in the contemporary
environment.
First, use of the spending
power, tax system, and direct federal action within shared policy fields
all require federal expenditures. In the short term at least, this puts
them in conflict with the severe fiscal restraints required to attain
deficit reduction objectives.
Secondly, they involve a
degree of federal unilateralism. This has always been a source of federal-provincial
difficulties, even during what has since come (somewhat erroneously) to
be seen as the golden age of federal-provincial cooperation in the 1950s.
More recently, political resistance to federal unilateralism has increased
in response to diminishing federal transfers. It is predictable that the
combination of the long-standing political and more recent fiscally driven
sensitivities will continue to result in provincial resistance to anything
perceived as federal unilateralism.
Several available modes
of federal influence minimize concerns about spending and intrusion but
imply that the federal role of directly establishing and enforcing national
standards will be replaced by a role as the orchestrator of processes
of consensus-building that generate national standards. By definition,
these standards rely less on control-compliance relationships between
the federal government and individuals or other governments, and more
on democratic processes for which articulated standards provide significant
reference points. Some possibilities:
1. National Standards by Public Demand:
The Power of Persuasion
The federal level of government
possesses a substantial political and communications presence across Canada,
irrespective of the popularity of individual governments. A popular Prime
Minister and cabinet are uniquely able to influence public expectations
and the political demand for standards. Modern communications technologies
enhance this capacity, which also reflects relatively high levels of media
attention resulting from the "marketability" of nationally known
political figures.
The capacity of national
leaders in Canada to appeal directly to the people "over the heads"
of provincial governments and politicians is illustrated by the constitutional
negotiations of the early eighties. The federal government deliberately
highlighted its Charter proposals within what was presented as a people’s
package, while portraying the provincial government package as reflecting
parochial ambitions and a self-interested obsession with expanded powers.
While the precise impact of this strategy remains open to conjecture,
and provincial agreement to a Charter was obtained partly through federal
concessions in the course of negotiations, it remains true that a Charter
of Rights and Freedoms was ultimately accepted by most provincial
leaders, despite long-standing provincial resistance to such proposals.(51)
Furthermore, the emergence
of new policy fields in which both the federal and provincial governments
share responsibilities, as outlined in Part II of this paper, has typically
been accompanied by the emergence of new groups of stakeholders who deal
on a continuing basis with both levels of government. Where the federal
government can successfully recruit support for values, objectives or
national standards within such groups, provincial governments may come
to adhere to these standards simply as a result of provincial consultative
and democratic processes.
Limits: As a means
of influencing the standards governing provincial social programs, direct
appeals to the people have two inherent limitations:
-
Attempts to bring political
pressure to bear on provincial governments can easily provoke a political
counter-reaction. The Canadian federal system has, however, shown
considerable resilience in the face of provincial leaders’ often
highly emotional critiques of federal actions having provincial impact.
-
The effectiveness of
public appeals is conditional upon the policy development strength
of the federal level, reflected in proposals for national standards
that can stand up to public examination and debate. In the absence
of this strength, a more populist and political approach to national
standards, by mobilizing opposition, could actually reduce the federal
capacity to act.
2. National Standards and the "Information
Age"
Commentaries on the combination
of technological and social changes (often lumped together in phrases
such as "the information revolution") widely recognize its immense
potential impact on government. Indeed, the existence of increasingly
educated and politically sophisticated publics, the dispersion of information
traditionally viewed as the preserve of "experts," and growing
public disenchantment with governments are central sources of the "reinventing
government" initiatives that have recently arisen in many western
countries.(52)
In Canada, consequences
of these trends have been strikingly visible in constitutional politics
since the mid-eighties. The failure of the Meech Lake Accord is widely
recognized as signifying that constitutional reform can no longer rely
upon negotiations conducted behind closed doors under conditions of relative
public indifference. While it has been argued that the Charter has had
a special role in fostering the development of constitutional involvement
outside traditional intergovernmental circles, it is likely that participatory
pressures and populist suspicions similar to those that arose during the
Meech Lake process would have arisen even in the absence of the Charter.
Outside the constitutional
process, as government devolves responsibilities upon individuals and
attempts to become more responsive in discharging its remaining roles,
public information will become increasingly important as the base upon
which publics judge institutions and formulate and apply standards. If
the federal government desires enhanced performance standards in areas
such as education or manpower training (assuming the success of current
devolutionary initiatives), the provision of high quality performance
information which permits voters in the provinces to compare local performance
with others may prove to be a potent means of fostering such standards.(53)
Centrally, a federal role
in supplying (or ensuring the supply of) such high quality performance
information would support democratic processes of public accountability
and responsiveness with respect to provincial programs. Indirectly, it
could foster adherence to national standards, seen more as prevailing
norms rather than as standards imposed unilaterally by the federal government
or arrived at through intergovernmental bargaining.
Limits: While potentially
very broad in scope, the use of information to inspire adherence to standards
is subject to substantial uncertainties in any given policy field. In
particular:
-
Federal information
initiatives could provoke provincial counter-initiatives, a federal-provincial
"war of statistics," public information overload, and increased
cynicism.
3. National Standards by Interprovincial
Consensus
The annual Premiers’
Conference provides a mechanism for enabling provincial leaders to work
towards consensus on common issues, including standards for matters within
the provincial jurisdiction. Recent years have seen a number of proposals
which argue for a degree of federal withdrawal from standard-setting in
such matters and for the capacity of provincial governments to jointly
establish standards on their own.
For example, the 23 August
1996 Premiers’ Conference considered a paper jointly sponsored by
Ontario and Alberta which proposed broad reforms along these lines. This
proposal was not accepted, as result of opposition from many of the smaller
provinces; however, it remains a good illustration of the larger provinces’
perspectives on standard-setting within their jurisdiction. The paper
advocated the substantial disentanglement of the two levels of government
and (among other changes) the concentration of full responsibility for
the design and delivery of health care, welfare and education in the hands
of provincial governments.(54)
This proposal would have
eliminated federal-provincial cash transfers for social programs, and
shifted tax points to the provinces to enable them to finance such programs
autonomously. Pan-Canadian aspects of social program responsibilities
would not have been addressed through federal leadership or influence,
but by the provinces through an interprovincial accord that would have
guaranteed portability and mobility and established principles and standards.
It is recognized that the viability of such a proposal would hinge on
the capacity of the provinces to actually deliver such an accord, and
abide by its terms.
By definition, the central
objective underlying this interprovincial consensus approach is not to
provide a mechanism for federal influence, but to replace that influence.
The history of federal arrangements suggests, however, that unintended
consequences are likely to accompany any such major change. One possible
unintended consequence might be to release the federal government from
the constraints of federal-provincial bargaining and enable it to develop
and publicly advocate positions based solely on national interest considerations.
While this is not a form of influence per se, it could enhance
the credibility and impact of the political appeals discussed above.
Limits: The use of
interprovincial accords and agreements has, in theory, unlimited scope
within the provincial jurisdiction. Any federal influence achievable within,
or through, an interprovincial consensus process would, however, be subject
to some practical limits applying to that process:
- consensus would have
to reflect the views of 10 premiers and governments; and
- consensus would have
to rely upon public support (or at least the absence of significant
opposition) in all provinces (rather than the more varied preconditions
for federal action); and
PART
IV: TWO PRACTICAL CONSIDERATIONS
The above review of traditional
modes of federal influence provides a clear basis for perceptions of diminished
federal influence over social programs within the provincial jurisdiction.
Equally, however, it suggests that diminished influence should not be
equated with negligible influence. The two key determinants of whether,
and how effectively, potential federal influence will actually be exercised
are (1) political will and (2) the availability of federal money.
These warrant separate discussion.
A. Political Will
In a democratic system,
the existence of political will within governments cannot be seen as an
independent variable, expressing solely the intentions of politicians.
Rather, it results from a complex interplay of factors, including the
motives and policy commitments of individual politicians; the perceived
political risks, costs and benefits of action; public demand for substantive
policy; and the practical capacity of governments to act. This capacity
reflects, in turn, factors such as the presence of the required fiscal,
jurisdictional and other resources and the degree of legitimacy that citizens
accord to particular governments and politicians. Several of these factors
have a special significance for federal action on social program standards.
1. Intergovernmental Pressures
Prevailing federal-provincial
dynamics are of central importance in determining the outcome of issues
relating to national standards for social programs. It is not difficult
to predict the continuation of pressures on the federal government to
reduce its influence in this sphere, both within areas of provincial jurisdiction
and within areas where both levels of government are able to act. These
pressures have been virtually continuous since the inception of the federation,
beginning with the early province-building efforts of Ontario.(56)
In recent years, they have been propelled centrally by the emergence of
modern Quebec nationalism, growing assertiveness among the Western provinces
and, since the recession of the early 1990s, Ontario’s fiscally driven
resentments.
An indication of the current
direction of these pressures is provided by a December 1995 report that
was endorsed by the Premiers of all provinces except Quebec as a basis
for discussions on renewing the federation, and forwarded to the Prime
Minister for response at the 1996 First Ministers’ Conference.(57) The report calls for, among other
things:
-
Termination of the current
federal role as the sole interpreter and enforcer of the Canada
Health Act, establishment of a "federal-provincial/territorial
process" to clarify its requirements, and a "federal-provincial/territorial
structure" to resolve differences over interpretation.
At their August 1997 Annual
Meeting, premiers reviewed and approved a progress report on the themes
set out a year earlier, as well as a paper providing more detailed options
for the management of the social union.(58) The decision to seek a broad framework
agreement with the federal government to deal with cross-sectoral issues
such as common principles, use of the federal spending power, and new
dispute resolution mechanisms, indicates the directions that provincial
governments may be expected to pursue in the near term.
2. Public Opinion
Public opinion is another
key factor in the formation of political will. In the context of federalism,
it provides a major potential counterbalance to intergovernmental pressures
and can become an important operative factor where such pressures are
based only on bureaucratic or political self-aggrandizement. For example,
advocacy of a substantial devolution of powers by Alberta Premier Donald
Getty in the early stages of the Charlottetown process faded rapidly in
the face of opinion poll results which indicated little support among
Alberta voters for a major transfer of powers.
Recent opinion polls suggest
that Canadians are increasingly ambivalent about the appropriate role
of the federal government in maintaining national standards in Medicare
and other social programs. One the one hand, there is clear support for
the programs (at least for those providing direct benefits widely to the
public). Reflecting this, a Globe and Mail/Environics poll conducted
18 December 1996 to 15 January 1997 found that, in a sample of 2,000:
-
57% favoured increased
spending on government programs (versus 35% favouring continued deficit
cutting), while health care programs ranked second on the list of
program priorities, chosen by 25% (31% chose infrastructure/job creation).(59)
As well, the annual year-end
poll conducted for Maclean’s Magazine and the CBC found that,
of those interviewed:
On the other hand, the universal
health care and relatively generous social safety net traditionally viewed
as "sacred trusts" appear, according to the same poll, to be
viewed with growing scepticism. While health care and other social services
continue to be among the half dozen priority issues identified by Canadians,
of those interviewed:
There is evidence, as well,
of public resistance to punitive actions taken by the federal government
against provinces that violate federally proclaimed standards. An Insight
Canada Research poll, taken in November 1995 (shortly after the application
of federal penalties to several provinces over facility fees) found that,
of those interviewed:
For more detailed information
on the polls summarized above, along with 1995 poll results contrasting
with some of their findings, see Appendix II.
In conclusion, at least
two important elements of the political will "equation" reduce
the likelihood that the federal government can develop and sustain the
will for aggressive use of the various strategies available to it for
influencing social programs within the provincial jurisdiction.
B. Money
A second general factor
that determines the practical scope of federal influence is the availability
of federal funds. As noted above, the current fiscal constraints on the
federal government severely limit the availability of new money for new
programs (and new or newly emphasized national standards). Furthermore,
it must be recognized that recent progress with deficit-reduction has
been significantly aided by low interest rates. When the business cycle
inevitably brings higher rates, the size of the national debt ensures
that interest costs will pose a major challenge to governments. Thus,
although new money may be available intermittently and for a limited number
of carefully selected initiatives, federal-provincial transfers will be
subject to global restraint patterns for the foreseeable future.
A full exploration of the
probable impact of scarce money on the federal government’s ability
to use its potential influence would necessarily be complex, since the
impact will be greater on some modes of influence (e.g., the spending
power) than on others (e.g., populist appeals). It can be concluded, however,
that it will remain necessary to be extremely selective in using the types
of influence that depend directly upon spending (notably the spending
power itself), and that types of influence which do not tie national standards
directly to the federal capacity to fund them (e.g., the alternative options
discussed in Part III, B) will have a major advantage under foreseeable
conditions.
Many of the concerns raised
about recent trends in the area of national standards have tended to focus
narrowly on the federal spending power. Even within this narrower focus,
however, the relation between declining federal transfers and national
standards is complicated. There are at least three possible relations:
-
Reduced
federal transfers may have rendered some provinces (or may do so
in the future) unable to maintain social safety net standards to
which they are fully committed;
-
Provincial
governments may be actively interested in deviating from national
standards (in order to save money or for other reasons) and cash
transfers may be, or may become, insufficient to enable the federal
government to penalize such deviations effectively; and/or
-
Reductions
to federal transfers may have eroded (or may erode) the provincial
political will to maintain national standards (perhaps by removing
a factor which had previously moderated resentments over federal
influence).
It is important to recognize
the differences among these arguments, which are sometimes combined by
critics seemingly intent only on compiling as many criticisms of transfer
cuts as possible. Arguments (1) and (2) make contrary and incompatible
assumptions about the intentions of provincial governments. If, for example,
provinces are said to be forced to depart from federal standards as a
result of transfer reductions, federal penalties are unlikely to solve
the problem (indeed, logically, more severe penalties will exacerbate
the problem). Argument (3) raises a possibility that is also implicit
in argument (2): that the impact of transfer reductions has to be understood
primarily in political terms, rather than narrowly fiscal terms. The key
determinant of the impact of a reduction would thus be how it is perceived
by provincial politicians and the public, rather than its direct impact
on the fiscal capacity of a province.
1. The Provincial Capacity Argument
The first argument - that
cuts to federal transfers have eroded the capacity of provinces to adhere
to national standards - depends on matters lying well beyond the scope
of this paper. These include a province’s potential for improved
program efficiency (enabling its absorption of transfer cuts) and the
need for global assessments of provincial programs in order to explore
the possibility of reallocations from elsewhere in a provincial budget.
It remains noteworthy that claims focusing on provincial capacities require
supporting arguments of this sort if they are to be convincing.
It is also noteworthy that
this argument has not been extensively made by the people with the most
to gain by making it: provincial premiers. For example, premiers who argued
at the 20-21 June 1996 First Ministers’ Conference that declining
federal contributions should be reflected in a declining federal role
in standard-setting did not claim that provinces had become incapable
of adhering to National Health Act standards, but rather that the
federal government had ceased to have a legitimate claim to a role as
the unilateral guardian of standards.(62)
This may suggest that the capacity of provinces to adhere to national
standards has not yet disappeared (although this remains a future possibility).
2. The Effectiveness of Penalties
The second argument expresses
concerns that date back at least to the early nineties. At that time,
the National Council of Welfare, among others, calculated that the various
de-indexations and freezes applied to the EPF transfer since the eighties
would in the near future reduce the transfer to a level that would be
fully covered by the value of its tax point component (as early as 1996-7
in the case of Quebec).(63) At this
point, it was feared, the absence of a cash component to the transfer
would disable the federal government from applying (or threatening) fiscal
penalties in order to dissuade provinces from violating federally established
standards. In particular, the Canada Health Act standards would
be undermined, because they rely on provisions authorizing Ottawa to reduce
the cash component of the EPF (or, now, the CHST) on a dollar-for-dollar
basis for any province permitting unauthorized charges to patients.
The 1995 budget, which announced
the CHST, prompted a renewal of these concerns. Thus, for example, a Caledon
Institute of Social Policy publication developed projections indicating
that cash transfers under the CHST (i.e., all federal cash payments for
both the programs previously covered by EPF and social assistance programs)
would disappear between the years 2006 and 2011 in most provinces and
in others (e.g., Quebec) as early as 2004. Their conclusion was blunt:
The rapid diminution of
federal transfer payments surely will cripple if not kill federal influence
over provincial health and human services years before the money runs
out. ... there is no protection for Medicare without federal dollars;
the dollars provide the enforcement clout.(64)
The long-term CHST funding
commitments announced in the 1996 federal budget would appear to address
such concerns. Still of interest, however, is the question of how large
the cash component of the transfer needs to be in order to preserve its
potential effectiveness in penalizing provinces. Is the 1997-98 cash floor
of $12.5 billion, which will apply between now and the year 2000
when the cash component is projected to begin to increase, enough?(65) By province, the 1997-98 allocation is as follows
(in millions of dollars):(66)
B.C.
Alberta
Saskatchewan
Manitoba
Ontario
Quebec
New Brunswick
Nova Scotia
Prince Edward Island
Newfoundland
Northwest Territories
Yukon |
1,517
956
418
496
4,022
3,876
332
429
60
281
36
17
|
The recent conflict between
the federal government and Alberta over facility fees may be taken as
an illustrative case. Following a lengthy dispute with Alberta over the
practice of permitting "facility fees" (i.e., user fees claimed
to cover operating costs of a facility, rather than service costs), the
federal Minister of Health announced that Alberta’s failure to replace
the arrangement with either full public funding, or full private funding
and exclusion from public support would be penalized. Starting in November
1995, a $422,000 per month penalty was levied against federal EPF transfers
to Alberta; this amount matched provincial receipts from the facility
fee on a dollar-for-dollar basis.
The penalty levied against
Alberta between November 1995 and June 1996 is equivalent to an annual
penalty of $5,064,000, or only about 0.52 % of the 1997-98 CHST transfer
to Alberta. In other words, even as the federal capacity to penalize reaches
its low point, it would still enable the federal government to impose
a penalty 200 times greater than that actually levied against Alberta.
This suggests that the federal capacity to penalize is not undermined
by CHST funding levels.
The 1 July 1996 retreat
of the Alberta government on the issue of facility fees would support
this optimism. Under an agreement with the federal government announced
in May, the provincial government assumed interim responsibility for paying
the facility fees charged by private clinics, while regional health authorities
were to negotiate longer-term contracts with the clinics. In other words,
Alberta complied (if belatedly) with federal requirements.
While the case of Alberta
dominated the news media, three other provinces were also subjected to
penalties over facility fees in November 1995:
-
Newfoundland was subjected
to an initial penalty of $20,000, revised on the basis of subsequent
information to a monthly penalty of between $8,000 and $11,000, in
relation to facility fees charged by one abortion clinic.
-
Nova Scotia was subjected
to an initial penalty of $20,000, revised on the basis of subsequent
information to a monthly penalty of between $4,000 and $9,000, for
the same reason.
These three provinces have
not altered facility fee practices in response to federal sanctions, despite
having sustained cumulative penalties (as of September 1997) of at least
$1,150,000 (Manitoba), $180,000 (Newfoundland), and $130,000 (Nova Scotia).(67)
The persistence of facility
fee practices in three provinces would appear to refute any general conclusions
suggested by the Alberta case. Furthermore, it calls into question the
assumption that the fiscal impact of the penalties is the key to explaining
their consequences, since the dollar-for-dollar basis for calculating
the fees (and thus their net impact) is the same in all cases. The most
obvious distinguishing feature of the Alberta case is that the dollar
figures involved were higher, and that they prompted substantially greater
media and public attention. This suggests that governments are less influenced
through the direct fiscal impact of penalties than through the "political
loop," centering on public dissatisfaction over what are perceived
to be forgone provincial revenues and local benefits.
3. The "Political
Loop" - A Concluding Note
The case of the British
Columbia welfare residency requirement appears to support conclusions
suggested by the impact of facility fee penalties. In early November 1995,
British Columbia announced a three-month residency requirement for social
assistance recipients, to take effect on 1 December 1995; the federal
government responded to this violation of Canada Assistance Plan standards
(subsequently incorporated in the CHST) by withholding the $47-million
final payment due to British Columbia under the CAP for 1995. This penalty
considerably exceeded the $25 million the B.C. government had estimated
its measure would save annually. The residency requirement was not withdrawn
until 6 March 1997, however.
The federal government obtained
British Columbia’s agreement to withdraw residency requirements by
undertaking to bring the original penalty into line with the dollar-for-dollar
penalties applied to other provinces; this meant reducing the penalty
to just over $20 million (reflecting actual savings to the province
achieved by the residency requirements). As well, it was agreed that a
national multilateral process for considering issues of internal mobility
would be established, with a two-year timeframe. It may also be noteworthy
that the agreement about residency requirements coincided with a second
agreement beneficial to the province, whereby federal funding for the
settlement of immigrants would be increased by $67.2 million over
three years.(68)
The fact that the residency
requirement persisted for well over a year after the application of federal
penalties may have reflected the political appeal of the requirement within
British Columbia (the government portrayed its stance as a valiant attempt
to maintain assistance levels, despite inflows of recipients from provinces
that had recently lowered benefits, and despite the federal 5% cap on
CAP transfer growth applying to B.C.). Also reflected may have been other
circumstances, such as the apparent absence of a clear federal intention
to continue penalization. In any event, it is significant that the requirement
was not cancelled as a result of heightened federal penalties, but rather
by more positive inducements.
More broadly, provincial
premiers’ comments on the transfer fee reductions of recent years
provide considerable evidence of the salience of political considerations
in determining provincial reactions. As noted above, at the 20-21 June
1996 meeting of First Ministers, several premiers supported a proposal
that federal and provincial governments jointly participate in interpreting
and applying the Canada Health Act on the grounds that the federal
government’s influence should decline to reflect the recent decline
in its fiscal contribution. Provincial positions were not dictated by
fiscal determinism. The impact of federal fiscal withdrawal (and perhaps,
in some cases, of fiscal penalties) was primarily on the willingness of
provincial leaders to accept continuing federal influence.
PART
V: GENERAL OBSERVATIONS AND CONCLUSIONS
Considered together, the
historical, constitutional and intergovernmental perspectives developed
in this paper suggest six general observations, and one fundamental conclusion:
-
The classification
of intergovernmental relations into periods of "cooperative"
and "executive" federalism has enhanced popular understanding
of some complex realities; however, abstracted from actual events,
the classification misleadingly suggests that relations among governments
have evolved in a series of distinct phases separated by momentous
watersheds. This ignores the very considerable degree of continuity
in Canadian federalism.
-
The role
of the federal government in establishing and maintaining national
standards has always been subject to limits, even at the apogee of
what has come to be seen as the era of cooperative federalism. To
a greater extent than is sometimes acknowledged, provincial compliance
with standards reflects the interplay of various factors including
public support for these standards, and support within provincial
governments.
-
Provincial
resistance to federal unilateralism in setting national standards
is not primarily a response to federal reductions in transfer payments,
although these have certainly given provincial premiers a new basis
for complaints. On the contrary, resistance to federal influence specifically
within provincial social programs was amply in evidence by the mid-sixties,
well in advance of significant fiscal constraints.
-
The importance
of federal penalties in ensuring that provinces comply with national
standards is more political than financial, and in most cases is probably
very limited. Recent cases suggesting increased provincial willingness
to depart from standards probably result from other factors (increased
fiscal and political pressures on provincial governments, to which
diminishing federal transfers have undoubtedly contributed).
-
The diminished
federal fiscal capacity to penalize remains more or less intact and
thus cannot be the cause of increased provincial non-compliance with
standards. If shrinking cash transfers were to erode the federal capacity
to penalize, provincial responses would be determined by political
perceptions rather than the direct fiscal impact of penalties, and
might therefore be less dramatic than anticipated by social policy
analysts in the early nineties.
-
The array
of mechanisms through which the federal government can influence provincial
governments has remained remarkably stable over the years. What have
changed are the multiple factors within the intergovernmental universe
that establish the practical potential of each mechanism. Though current
trends appear to be eroding the potential of traditional command-compliance
mechanisms, that of more diffuse forms of influence may be increasing.
PART
VI: CONCLUSION
The fundamental conclusion
of this paper is that the scope for federal influence over provincial
social programs and standards is clearly more restricted than it was during
the immediate post-war period. It is equally clear that the causes of
this change go far beyond the reductions to transfer payments that have
been taking place since the seventies. It follows that efforts to increase
federal influence, should this be desired, will need to take account of
the evolving character of the federal system rather than attempting to
recover a world that was already in the process of disappearing 30 years
ago.
BIBLIOGRAPHY
Abele,
Frances, ed. How Ottawa Spends. Carleton University Press, Ottawa,
1992.
Bakan,
Joel and David Schneiderman, eds. Social Justice and the Constitution
- Perspectives on a Social Union for Canada. Carleton University Press,
Ottawa, Canada, 1992.
Banting,
Keith G. The Welfare State and Canadian Federalism. Second Edition.
McGill-Queen’s University Press, Kingston and Montreal, 1987.
Banting,
Keith and Ken Battle, eds. A New Social Vision for Canada?. School
of Policy Studies, Queen’s University, Kingston, and Caledon Institute
of Policy Studies, Ottawa, 1994.
Banting,
Keith, Douglas M. Brown and Thomas J. Courchene, eds. The Future of
Fiscal Federalism. School of Policy Studies, Queen’s University,
Kingston, 1994.
Battle,
Ken and Sherri Torjman. "Federal Social Programs: Setting the Record
Straight." Caledon Institute of Social Policy, Ottawa, Spring 1993.
Battle,
Ken and Sherri Torjman. "How Finance Re-Formed Social Policy."
Caledon Institute of Social Policy, Ottawa, April 1995.
Cairns,
Alan C. Reconfigurations: Canadian Citizenship and Constitutional Change.
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Canada,
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Background Document for the First Ministers’ Meeting of 20-21 June
1996. Ottawa, 1996.
Canada.
"Improving Social Security in Canada. Federal Support to Post-Secondary
Education: A Supplementary Paper." Minister of Human Resources Development,
1994.
Canada,
Parliament, Parliamentary Task Force on Federal-Provincial Fiscal Arrangements.
"Fiscal Federalism in Canada." Final Report. Minister of Supply
and Services Canada, 1981.
Canada,
Privy Council Office, Federal-Provincial Relations Division. A Descriptive
Inventory of Federal-Provincial Programs and Activities as of September
30, 1973. Ottawa, 1974.
Canada,
Privy Council Office. Federal-Provincial Programs and Activities -
A Descriptive Inventory, 1993-1994 and 1994-1995. Minister of Public
Works and Government Services, Ottawa, 1995.
Carter,
George E. Canadian Conditional Grants Since World War II. Canadian
Tax Papers, No. 54. Canadian Tax Foundation, Toronto, November 1971.
Courchene,
Thomas J. Access - A Convention on the Canadian Economic and Social
Systems. Working Paper Prepared for the Minister of Intergovernmental
Affairs. Government of Ontario, August 1996.
Courchene,
Thomas J. Social Canada in the Millennium - Reform Imperatives and
Restructuring Principles. C.D. Howe Institute, Toronto, 1994.
Courchene,
Thomas J., David W. Conklin and Gail C.A. Cook, eds. Ottawa and the
Provinces: The Distribution of Money and Power. Ontario Economic Council,
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Drache,
Daniel and Andrew Ranachan, eds. Warm Heart, Cold Country - Fiscal
and Social Policy Reform in Canada. Caledon Institute of Social Policy,
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Economic
Council of Canada. Financing Confederation - Today and Tomorrow.
Canadian Government Publishing Centre, 1982.
Grady,
Patrick, Robert Howse and Judith Maxwell. Redefining Social Security.
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Hogg,
Peter W. Constitutional Law of Canada. Third Edition. Carswell,
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Hum,
Derek. Federalism and the Poor: A Review of the Canada Assistance Plan.
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Ismael,
Jacqueline S., ed. Canadian Social Welfare Policy - Federal and Provincial
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APPENDIX I:
FEDERAL CAPS AND CUTS, 1972-1995
Responding to the combined
impact of fiscal, intergovernmental and other pressures, the federal government
has, since at least the mid-seventies, been engaged in what has been widely
portrayed as a retreat from the social policy role established during
the immediate post-war period. Major milestones in this development are:(69)
-
Established Programs
Funding (EPF) program created - 1977, replacing 50/50 conditional
grants for Hospital Insurance, Medicare and Post-Secondary Education
with a combination of a block grant, indexed to population and GNP
growth, and a transfer of tax points. This arrangement initially increased
the federal share of aggregate program costs, but from 1978-9 it began
to decline.
-
a three-year transitional
payment provision, under which entitlements resulting from the new
standard were topped-up to the level which the previous standard
would have established; and
-
a ceiling on grant
increases based on GNP growth, and floors precluding drops of more
than 5%, 10% or 15% depending on the fiscal strength of an individual
province.
-
Cap on CAP (maximum
5% annual growth in transfers to Ontario, Alberta and B.C.) extended
for an additional year (through 1995-1996), along with a general freeze
on payments for the Post-Secondary Education component of EPF - 1994
-
Canada Health and Social
Transfer (CHST) established 1995, combining the EPF and CAP
transfers in a single block transfer which reduced federal funding
by some $2.5 billion for 1996-97, and an additional $2 billion
for 1997-1998, compared with funding levels projected under previous
transfers.
-
long-term funding
established, frozen at 1997-98 levels of $25.1 billion for 1998-99
and 1999-2000, then indexed to GNP growth rate minus 2% for 2000-01,
GNP growth minus 1.5% for 2001-02 and GNP growth minus 1% for 2002-03;
-
cash transfers do
not fall below $11 billion, and begin to grow after 2000-2001; and
-
allocation among provinces
will, in stages, reduce distortions created by the cap on CAP by
coming to reflect two factors:
-
current CHST share,
adjusted for interprovincial population shifts, and
-
provincial share
of the Canadian population.
APPENDIX II:
FURTHER POLL RESULTS
1. Globe and Mail/Environics
poll (taken 18 December 1996 - 15 January 1997) details:
Question: If the federal
government decided it has some extra money to allocate as it approaches
the next budget, to which of the following areas do you think most of
the money should go?
| |
Atlantic
|
Quebec
|
Ontario
|
West
|
Total
|
|
Building/construction
to create jobs
Health care
Reducing taxes
Child benefits in
low income families
Reducing federal
deficit and debt
CBC and other cultural
institutions
Don’t know
No answer
|
30
27
13
11
11
-
7
|
38
26
6
10
17
-
3
|
29
24
9
13
19
2
4
|
26
24
10
16
21
2
1
|
31
25
9
13
18
1
3
|
2. Another recent poll supports the
Maclean’s CBC poll findings on public attitudes concerning
universal access versus a two-tiered health care system. A mid-September
1996 Gallup poll produced the following results:(70)
Question: Thinking about
Canada’s health care system, would you be strongly in favour, somewhat
in favour, somewhat opposed or strongly opposed to offering two levels
of service to Canadians: a basic level of service funded by the government
and available to all Canadians, and for those who wished to do so the
option of paying for any additional services they wanted?
Results:
|
Support
|
Favour
|
Oppose
|
Strongly
Oppose
|
Unsure
|
|
Atlantic
Canada
Quebec
Ontario
Prairies
B.C.
Overall
|
12%
17%
14%
19%
14%
15%
|
25%
35%
24%
36%
26%
29%
|
12%
13%
17%
14%
13%
15%
|
45%
29%
36%
26%
41%
34%
|
6%
6%
10%
4%
7%
7%
|
These results contrast
with those obtained in a wide-ranging study of public attitudes carried
out by Ekos Research Associates Inc. in August 1995. In this poll, 53%
of a sample of 3,000 ranked equal access for all Canadians as the aspect
of health care having the greatest importance to them personally (followed
by 31%, quality of health care services; 9%, health of the Canadian
population; and 8%, cost of the system). Furthermore, 60% disagreed
with the statement that "individuals should be allowed to pay extra
to get quicker access to health care services," while only 28%
agreed (with 11% neither agreeing nor disagreeing). (See Ekos Research
Associates Inc., Rethinking Government 1995 - Final Report, Submitted
to Rethinking Government Sponsors, 12 July 1996, Ekos Research
Associates Inc., Ottawa and Toronto, 1996, p. 35.)
Public resistance to punitive
actions on the part of the federal government against provinces which
violate federally proclaimed standards is not evenly distributed across
Canada’s regions. The Insight Canada Research poll (discussed in
text) produced the following results:(71)
Question: Do you support
or oppose the federal government’s decision to penalize provinces
that allow facility fees to patients in private clinics receiving medically
necessary services?
Results:
| |
Support
|
Oppose
|
Unsure
|
|
Atlantic Canada
Quebec
Ontario
Prairies
B.C.
Overall
|
25%
42%
41%
36%
38%
39%
|
69%
53%
53%
60%
59%
57%
|
6%
5%
7%
3%
3%
5%
|
(1)
See Ronald Manzer, Public Policies and Political Development in Canada,
University of Toronto Press, Toronto, 1985, p. 56 ff.
(2)
See Paul Barker, "The Development of the Major Shared-Cost Programs
in Canada," in R.D. Olling and M.W. Westmacott, eds., Perspectives
on Canadian Federalism, Prentice-Hall Canada Inc., Scarborough, 1988,
p. 197 ff.
(3)
For a discussion of various aspects of the development of provincial governments,
see Richard Simeon, "Regionalism and Canadian Political Institutions,"
in J.P. Meekison, ed., Canadian Federalism: Myth or Reality, Third
Edition, Methuen, Toronto, 1977, p. 292 ff.
(4)
Cited in Canada, Parliament, Fiscal Federalism in Canada, Report
of the Parliamentary Task Force on Federal-Provincial Fiscal Arrangements,
Minister of Supply and Services, August 1981, p. 30.
(5)
See Hospital Insurance and Diagnostic Services Act, 1957, c. 28,
s. 1., esp. sections 3, 5 and 8, and Canada, Privy Council Office, Federal-Provincial
Relations Division, A Descriptive Inventory of Federal-Provincial Programs
and Activities as of September 30, 1973, Ottawa, 1974, p. 214-15.
See also Malcolm G. Taylor, Health Insurance and Canadian Public Policy,
Institute of Public Administration of Canada, McGill-Queen’s University
Press, Kingston and Montreal, 1987, p. 239.
(6)
"Fiscal Federalism in Canada" (1981), p. 53.
(7)
See Medical Care Act, 1966-67, c. 64, s. 1.
(8)
See Fiscal Federalism in Canada (1981), p. 59 ff.
(9)
See, for example, Keith G. Banting, The Welfare State and Canadian
Federalism, Second Edition, McGill-Queen’s University Press,
Kingston and Montreal, 1987, p. 75, and Derek J. Hum, "Social
Security Reform during the 1970s," Chapter 3 of Jacqueline S. Ismael,
ed., Canadian Social Welfare Policy - Federal and Provincial
Dimensions, Institute of Public Administration of Canada, McGill-Queen’s
University Press, Kingston and Montreal, 1985, p. 33 ff.
(10)
It is noteworthy that this move responded primarily to pressures from
Ontario and Quebec; most of the smaller provinces would have preferred
a reformed cost-sharing arrangement (Barker (1988), p. 209).
(11)
Hon. Allan J. MacEachen, Minister of Finance, Submission to the Parliamentary
Task Force, cited in Fiscal Federalism in Canada (1981), p. 71.
(12)
See John F. Graham, "Funding of Universities in Canada," in
Thomas J. Courchene, David W. Conklin and Gail C.A. Cook, eds., Ottawa
and the Provinces: The Distribution of Money and Power, Vol. 1,
Ontario Economic Council, Toronto, 1985, p. 326.
(13)
Fiscal Federalism in Canada (1981), p. 75-76.
(14)
See Judith Maxwell, "The Social Role of the State in a Knowledge-Based
Economy," in Patrick Grady, Robert Howse, Judith Maxwell, Redefining
Social Security, Government Competitiveness Project, School of Policy
Studies, Queen’s University, Kingston, 1995, p. 34.
(15)
Department of Finance Canada, "Canada Health and Social Transfer:
Backgrounder," at http://www.fin.gc.ca/fedprove/chse.html,
2 October 1996, p. 1.
(16)
Sherri Torjman and Ken Battle, "Can We Have National Standards?"
Caledon Institute of Social Policy, May 1995, p. 1.
(17)
Drawn from a table cited in Thomas J. Courchene, "Canada’s Social
Policy Deficit: Implications for Fiscal Federalism," Chapter 3 of
Keith G. Banting, Douglas M. Brown and Thomas J. Courchene, The Future
of Fiscal Federalism, School of Policy Studies, Queen’s University,
Kingston, 1994, p. 99.
(18)
Based on Table in Robin Boadway and Frank Flatters, "Fiscal Federalism:
Is the System in Crisis?" Chapter 2 of Banting, Brown and Courchene
(1994), p. 41.
(19)
See, for example, Leslie A. Pal, "Federalism, Social Policy, and
the Constitution," Chapter 1 of Ismael (1985), p. 12 ff.
(20)
See, for example, Martha Fletcher, "Judicial Review and the Division
of Powers in Canada," Chapter 7 of Meekison (1977), p. 100 ff.
(21)
While, in recent years, there has been a widespread tendency to ascribe
this tendency to the forces of nationalism in Quebec and decentralist
pressures from the Western provinces, it is noteworthy that Ontario played
a central role in counterbalancing the federal government at earlier junctures.
See Garth Stevenson, Ex Uno Plures - Federal-Provincial Relations in
Canada, 1867-1896, McGill-Queen’s University Press, Montreal
and Kingston, 1993, p. 48 ff.
(22)
See Garth Stevenson, "The Division of Powers," in Richard Simeon,
Research Coordinator, Division of Powers and Public Policy,
Vol. 61 of the studies commissioned by the Royal Commission on the Economic
Union and Development Prospects for Canada, University of Toronto Press,
Toronto, 1985, p. 92 ff.
(23)
See Stevenson (1985), p. 75 ff.
(24)
See Peter W. Hogg, Constitutional Law of Canada, Third Edition,
1992 Carswell, Scarborough, Ontario, 1992, p. 1227 ff.
(25)
Rodney Haddow, "Federalism and Training Policy in Canada: Institutional
Barriers to Economic Adjustment," Chapter 14 of Francois Rocher and
Miriam Smith, eds., New Trends in Canadian Federalism, Broadview
Press, Toronto, 1995, p. 353 ff.
(26)
Government of Canada, "Improving Social Security in Canada. Federal
Support to Post-Secondary Education: A Supplementary Paper," Minister
of Human Resources Development, 1994, p. 15 ff.
(27)
Hogg (1992), p. 476.
(28)
Ibid., p. 476 and 149.
(29)
Nancy Miller Chenier, "Health Policy in
Canada," Current Issue Review 93-4, Library of Parliament, Parliamentary
Research Branch, p. 2-3, and Hogg (1992), p. 475 ff.
(30)
Fiscal Federalism in Canada (1981), p. 51 ff.
(31)
Leslie Pal, "Social Policy and the Constitution," Chapter 1
of Ismael (1985), p. 12.
(32)
Banting (1987), p. 52.
(33)
Ibid., p. 53.
(34)
Ibid., p. 50.
(35)
Ken Battle and Sherri Torjman, "Federal Social Programs: Setting
the Record Straight," Caledon Institute of Social Policy, Ottawa,
Spring 1993, p. 5.
(36)
Negotiations for the harmonization of federal and provincial measures
to create an enriched National Child Benefit (incorporating a federal
commitment of $600 million in new funds announced in the February
1997 budget) continue as this is written.
(37)
For a discussion of the complex forms of intergovernmental cooperation
involved in current taxation arrangements, and the problems they superseded,
see Fiscal Federalism in Canada (1981), p. 43 ff.
(38)
Hogg (1992), p. 150.
(39)
Ibid., p. 152-3.
(40)
See Monique Bégin, Medicare - Canada’s Right to Health, Optimum
Publishing International Inc., Ottawa, 1987, p. 104 ff.
(41)
For a specific account of the impact of this on intergovernmental relations,
see A.W. Johnson, "Federal-Provincial Fiscal Relations: An Historical
Perspective," in Vol. 2 of Courchene, Conklin and Cook (1985), p. 126 ff.
(42)
Banting (1987), p. 74.
(43)
For a status report, see Government of Canada, "Renewing the Canadian
Federation: A Progress Report," Background Document for the First
Ministers’ Meeting of 20-21 June 1996, Ottawa, 1996.
(44)
See Joel Bakan and David Schneiderman, eds., Social Justice and the
Constitution - Perspectives on a Social Union for Canada, Carleton
University Press, Ottawa, 1992, Appendices II-V, et passim.
(45)
Katherine Swinton, "Federalism, the Charter, and the Courts: Rethinking
Constitutional Dialogue in Canada," Chapter 15 of Karen Knop et
al., eds., Rethinking Federalism: Citizens, Markets, and Governments
in a Changing World, UBC Press, Vancouver, 1995, p. 300.
(46)
Section 36 of the Canadian Charter of Rights and Freedoms commits
Canadian governments in principle to equal opportunities and public services
of reasonable quality, and commits the Canadian government to making equalization
payments for those purposes.
(47)
For an inventory of current agreements, see Government of Canada, Privy
Council Office, Federal-Provincial Programs and Activities - A Descriptive
Inventory, 1993-1994 and 1994-1995, Minister of Public Works and Government
Services, Ottawa, 1995.
(48)
See, for example, Donald V. Smiley, "An Outsider’s Observations
of Federal-Provincial Relations among Consenting Adults," Chapter
16 of Olling and Westmacott (1988).
(49)
Department of Finance Canada, "Canada Health and Social Transfer:
Backgrounder" (1996), p. 1.
(50)
See News Release, Thirty-Eighth Annual Premiers’ Conference, "Social
Policy Renewal," Canadian Intergovernmental Conference Secretariat
Reference 850-061/009, p. 2.
(51)
Central concessions were the insertion of the notwithstanding clause and
the reflection of provincial demands within the amending formula. For
a discussion of the broader federal strategy, see Alan C. Cairns, Reconfigurations:
Canadian Citizenship and Constitutional Change, Douglas E. Williams,
ed., McClelland and Stewart Inc., Toronto, 1995, esp. p. 194 ff.
(52)
See David Osborne and Ted Gaebler, Reinventing Government, Addison-Wesley
Publishing Company, Reading, Mass., 1992. These themes are usefully related
to developments in Canada in F. Leslie Seidle, ed., Rethinking
Government: Reform or Reinvention?, Institute for Research on Public
Policy, Montreal, 1993.
(53)
Public response to the annual McLean’s Magazine survey of
universities may provide an indication of the public appetite for comparative
performance information relating to public institutions, and of the immediate
impact of this on practices within these institutions. This issue has
become the magazine’s most popular issue, in terms of newsstand sales,
and routinely triggers a flood of comments and inquiries. (See Robert
Lewis, Foreword to "The Maclean’s Guide to Universities,"
Maclean Hunter, Toronto, 1996, p. 4.)
(54)
See Thomas J. Courchene, Access - A Convention on the Canadian Economic
and Social Systems, Working Paper Prepared for the Minister of Intergovernmental
Affairs, Government of Ontario, August 1996, esp. p. 16-19. Although
it does not advocate the Courchene approach, it is noteworthy that the
more recent Report of the Quebec Liberal Party Committee on the Evolution
of Canadian Federalism ("Quebec’s Identity and Canadian Federalism
- Recognition and Interdependence," Quebec Liberal Party, December
1996) asserts that Quebec should actively participate in interprovincial
decision-making processes directed to the achievement of common standards
in areas such as social assistance (p. 34-37), and affirms the potential
effectiveness of these processes.
(55)
The Courchene paper (1996) argues that a degree of "enforcement"
would be achieved, for example, by: legislative "manner and form"
provisions reducing the likelihood of future amendments, political pressure
(supported by credible monitoring and public reporting of governmental
performance) and, ultimately, by the capacity of provinces to punish a
recalcitrant province by refusing to grant mobility rights to its residents
(in the context of Courchene’s proposal, this would take place within
the framework of a "social union" from which individual provinces
could be expelled), p. 29-31. The second of these is arguably
important; however, the first would be of limited value in restricting
the activity of sovereign legislatures and the third, even if made possible
by such required changes as amendment of the Charter, would provide only
a one-time draconian response whose use for minor defaults would not be
credible.
(56)
See Stevenson (1993), esp. chap. 3, p. 48 ff.
(57)
Ministerial Council on Social Policy Reform and Renewal, Report to
Premiers, December 1995. While this paper was not endorsed by the
Government of Quebec, it is noteworthy that December 1996 Report of the
Quebec Liberal Party Committee on the Evolution of Canadian Federalism
called broadly for a rebalancing of federal and provincial roles within
the federation and, on several key issues, adopted the language of the
Ministerial Council report (see, for example, p. 71-72).
(58)
See Provincial–Territorial Council on Social Policy Renewal, Progress
Report to Premiers, July 1997 and New Approaches to Canada’s
Social Union – An Options Paper, 29 April 1997.
(59)
Edward Greenspon and Hugh Winsor, "Spending Increase Favoured, Poll
Finds," Globe and Mail (Toronto), 23 January 1997, p. A-1
and A-5.
(60)
"Canada in the Year 2005," Maclean’s, Vol. 109,
No. 53, 30 December 1996/6 January 1997, p. 23 ff
and p. 46 ff.
(61)
Jim Bronskill, "Ontario Residents Don’t Want Federal Crackdown
on Provinces," The Ottawa Citizen, 26 August 1996,
p. A-3.
(62)
See Jack Stilborn, "Federal-Provincial
Relations," Library of Parliament, Parliamentary Research Branch,
CIR 93-10E, p. 14.
(63)
See Allan M. Maslove, "Reconstructing Fiscal Federalism," Chapter
3 of Frances Abele, ed., How Ottawa Spends, Carleton University
Press, Ottawa, 1992.
(64)
Ken Battle and Sherri Torjman, "How Finance Re-Formed Social Policy,"
Caledon Institute of Social Policy, Ottawa, April 1995, p. 8 and
9.
(65)
On 2 June 1997, it was announced that better-than-expected progress
on deficit reduction would enable the cash component of the CHST to be
maintained at $12.5 billion, rather than declining to the $11 billion
originally projected.
(66)
Department of Finance Canada, "Canada Health and Social Transfer:
Backgrounder," Depart-mental Internet Home Page, 2/10/96, p. 3.
(67)
Information provided by an official of Health Canada, supplemented by
figures contained in Mark Kennedy, "Provinces Continue to Flout Medicare,"
The Ottawa Citizen, 30 September 1997, p. A-6.
(68)
See British Columbia, Government Communications Office, "PM, Premier
Settle B.C. Residency Dispute, Agree to New Co-operation on Mobility,
Immigration and Asia-Pacific," News Release dated 6 March 1997.
(69)
Events 1985-1993 based on summary in Battle and Torjman (1993), p. 14 ff.
(70)
R. Gary Edwards and Jon Hughes, "Public Remains Divided on Two-Tiered
Health Care," The Gallup Poll, Vol. 56, No. 67, Gallup Canada
Inc., Toronto, 19 September 1996.
(71)
Jim Bronskill, "Ontario Residents Don’t Want Federal Crackdown
on Provinces," The Ottawa Citizen, Ottawa, 26 August
1996, p. A-3.
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