A Federal-Provincial Muddle

November 4, 2023

HERE'S MY TAKE

Canadian politics would be nothing without federal-provincial sparring, just as Canadian furnaces would be nothing without the stuff that fuels them. Right now, however, the sparring and the furnace fuel just happen to be the same issue.

To briefly review the big story this week, the carbon tax has been the signature policy of the federal Liberals to fight climate change, with anyone who questioned any aspect of it dismissively labelled as a “climate denier.” The opposition Conservatives have argued that the carbon tax is ineffective in reaching climate targets, worsens inflation by adding to the already high cost of living for ordinary Canadians, and that it’s time to “axe the tax.” That all changed last week for the Liberals. Since a 17-cent per litre tax came into effect this summer on home heating oil, members of the Atlantic Liberal caucus have been receiving major heat from their constituents (and not the type you can heat your home with).

The Liberals hold 24 of the region’s 32 seats and holding them is crucial to any hope of Liberal re-election. Last week, the government announced a three-year pause on that tax, while offering a subsidy to change from oil heating to a heat pump system (which according to the government’s own advice, requires a supplementary heating supply when temperatures go below -25 degrees, something that happens in many parts of Canada. Given that almost one-third of Atlantic Canadian homes are heated with oil, and a very marginal fraction elsewhere in the country, this was widely seen as a “vote-buying” strategy, something hard to argue with when a federal cabinet minister suggested that if Alberta wanted similar treatment, “they need to elect more Liberals in the Prairies so that we can have that conversation as well.”

Cue the outrage. Several premiers called on the prime minister to extend the policy to apply to home heating fuel in their regions and exempt other forms of fuel from the carbon tax. The federal opposition parties mocked the government, asking why some Canadians are more equal than others. The Saskatchewan legislature (including the 14 NDP opposition MLAs) unanimously passed a motion for the province’s energy crown corporation to stop collecting the carbon tax for the federal government next January 1.

Like the federal-provincial spats which preceded this one, the politics on this will sort themselves out in due course. But it does put the spotlight on what might be described as a changed focus in the ever-morphing saga of Canadian federalism. This week, the Alberta throne speech pledged several motions to counter the federal government’s attempt “to fundamentally alter (Alberta’s) provincial economy, and our way of life” under the province’s as-yet-untested Sovereignty Act. On October 13th, the Supreme Court of Canada described the Environmental Impact Assessment Act, which the opposition dubbed the “No More Pipelines Act,” as Parliament “plainly overstep(ing) its constitutional competence in enacting this designated projects scheme.”

Withholding taxes, violating the constitution, suspending taxes on regions that support the governing party and not on those who don’t—these aren’t the ordinary tactics of argument between federal and provincial governments. And while the previous tactics of political haggling and constitutional wrangling weren’t exactly benign weapons, the current tactics involve something even more lethal for the health of the federation.

It is striking how the major issues facing Canadians today, whether housing, health care, post-secondary education, energy infrastructure, or climate change all have solutions that require actions of different levels of government. In recent years, we’ve had the federal “$10-a-day daycare” framework in which the federal government offered to pay 50% of the costs of this new program and entered into deals with each of the provinces who politically could not afford to “leave cash on the table.” What is less discussed is that the other 50% risk is borne by the province and, as has been learned through health care, once programs are running, unilateral cutbacks of funding by the federal government leave the province on the hook for potentially much more. The pharmacare program, which the NDP is insisting on as the price for continuing to support the federal Liberals in Parliament, would enact a similar cost-sharing program.

It isn’t just the federal Liberals who use the power of the federal purse to get their way in areas of provincial jurisdiction, forcing other levels of government to adjust their priorities. A key part of Opposition Leader Poilievre’s housing proposals puts strings on federal funding to cities (a version of which is being implemented by the new federal housing minister). Some have called this "distraction federalism" in which the federal government, having the greatest taxation power, is effectively erasing the division of powers in the constitution and reworking federalism. Others have called for a decentralised federalism, with a redistribution of taxing powers so that the level of government that spends the money also collects the money.

Using the power of the purse to override federalism and differing regional choices is just the latest tactic in the ongoing federal-provincial tussles that have characterised Canada. I grew up with the constitutional challenges of the 70s and 80s. Quebec was threatening to leave Confederation (in fact, in the October 30, 1995 referendum, Quebec came within a percentage point of voting to take concrete steps toward sovereignty) and constitutional conferences were routine. The “close call” and subsequent Clarity Act quieted the constitutional wrangling. It was replaced by a new era of regionalism in politics.

The different interests of Atlantic Canada, Quebec, the Prairies, and BC have always been a subtext of Canadian politics. In fact, rural and northern Ontario often feel kinship with those regions in being left outside of the “Laurentian consensus”—a tagline for the notion that Canada is run by a small network of political, cultural, and business elites concentrated in Toronto, Montreal and Ottawa. With the exception of the Mulroney government after 1984, no modern governing party has had a caucus with significant numbers of seats from every region of the country. That was short-lived, however. The Reform Party, using the slogan “The West Wants In,” and the Bloc Quebecois, after the failure of the Meech Lake Accord, both formed during Mulroney’s first term. The two new parties seemed to believe that a focus on regional interests might be more effective. Cynics might even suggest that playing the interests of the different regions against each other is part of the tactics that have kept the Laurentian elites in control.

Three decades later, significant shifts and realignment of political interests suggest we are entering a new phase of strain and challenge on the federalism front. In the first phase, the focus was primarily constitutional and legal. The second phase was more about the changing of the coalitions that formed in the different political parties. Today it’s the use of the government chequebook to reward those who play nice and accommodate federal priorities. If regions think differently, they end up effectively “punished” in their pocketbooks.

Making these distinctions is a bit artificial, of course. The constitution, politics, and economics are always interacting, and one can’t neatly carve out the impact of any one of them. Institutional behaviour is shaped by all of them. But sometimes they interact in different manners, and it would seem that we are entering a new and more dangerous phase. The Marquess of Queensbury rules that governed federal-provincial sparring are being changed unilaterally.

As a patriotic Canadian, I felt the angst in 1995, and the very real sense that my country might not survive with the borders I had grown up with. But even then, the battles and arguments were legal and constitutional and the consequences were political. The difference between paying rather than persuading in the crass manner we are seeing is that it produces a different type of embitterment for those who are the “losers” in the arrangement. It changes the process from being on the losing end of an argument (which no one likes but we all understand is life) to being unfairly targeted (which destroys bonds of trust and identity). No one incident may by itself be game-changing, but every incident corrodes the trust and togetherness of the country. Continuing down this path is a sure recipe for further tensions.

Is there a path out? It’s not just about getting the right answer, but also about using the right methods. The most foundational norm of politics is justice and when the process is mockingly dismissed as unfair, even the most noble outcomes will be less solutions and more seeds for the next round of troubles.

WHAT I’M READING

Biting into Restaurant Economics

National Newswatch published a commentary on a trend observable in my own neighbourhood: decent restaurants that seem to have decent crowds are shutting down. It seems the combination of high food prices, the general economic factors affecting all businesses, and consumers’ cost-consciousness are making it hard to make a go of it in food service. Restaurants Canada proposes tax cuts and creating a new immigration path for restaurant workers among its preferred solutions. We shouldn’t overlook the fact that restaurants are not just economic contributors but important markers of place that build community.

Palliative Care a MAID Casualty

The Hub published an op-ed by my Cardus colleagues which argues that palliative care, described by the courts as “a mandatory precondition” to making euthanasia legal, has in fact been a casualty of “medically assisted death.” The federal government created palliative care frameworks and action plans in 2018 and 2019 respectively. None of that, however, meant Canadians would have more meaningful access to palliative care at the appropriate time (since wait lists aren’t helpful when discussing end-of-life care). Despite the promises, “Canada lags behind its international counterparts in terms of access to quality end-of-life care” and palliative resources are being reallocated towards euthanasia.

The Road to Two

Bank of Canada Governor Tiff Macklem told the Parliamentary Finance Committee on Monday that he was open to lowering interest rates once “we’re clearly on a path to 2%” inflation. Some had assumed his previous statements to indicate that rates would not be lowered until inflation, currently hovering between 3.5 and 4%, actually was lowered to 2%.

Understanding Decolonization Narratives

It’s a longer read but I found The Atlantic’s piece on decolonization useful in sorting out the “oppressed identity” analysis framework that has “replaced traditional universalist leftist values.” The piece has a strong (but not unqualified) pro-Israel perspective. However, its value lies especially in overlaying the response to the current conflict in the contexts of both Middle East history and academia which is the logic that informs so much of the public protest including in North America.

Remembering to Pray

The directive to Canadian Armed Forces chaplains to replace prayer with “spiritual reflection in public settings” and not to wear religious symbols to Remembrance Day ceremonies has attracted a fair bit of attention. Michael Van Pelt and I penned a reaction published in the Ottawa Citizen this week. We argue that inclusion isn’t achieved through exclusion and that whatever spin the politicos offer, the directive amounts to a directive against prayer.

MEANINGFUL METRICS

The Ticking Clock…

Tonight’s the night that most Canadians turn their clocks back an hour, but that’s a global anomaly. As the above map illustrates, it’s primarily North America, Europe and Australia (with honorary mention to Brazil) that participate in daylight-saving time rituals. Egypt is the only African country to do so—and it had discontinued the practice but then restarted as an energy-saving strategy. Most Canadians adjust their clocks forward by one hour on the second Sunday in March and back to their official time-zone time on the first Sunday of November. This accounts for 238 days of the year (65% of the time) in which Canada, along with about one-third of the world’s countries, adjusts the clocks as has been common for about a century. Debate continues about its efficacy.

TAKE IT TO-GO

104 Skydiving Tales

Blame this wordplay descent on an Associated Press story regarding the 104-year-old Chicago woman who went skydiving earlier this month. It took seven minutes for Dorothy Hoffner to go the 4,100 metres from her airplane jump to the ground. Awaiting her arrival were cheering friends, including the one who brought over the red walker she ordinarily relies on to get around. I don’t have a lot of parachute jokes in my repertoire so I’m filling this in on the fly. If at first you don’t succeed, skydiving isn’t a place for second tries. Hey, don’t chute the messenger. So let’s just be safe, let things be ground to a halt, and wish you a good week.

Until next Saturday.