Tindal Chapter 8 Intergovernmental Relations

1
Tindal Chapter 8Intergovernmental Relations

• Shifts in dominance by feds and provinces
• Merits of strong provinces or feds
• Provincial-municipal relations

2
Division of Powers

• Federal Government
• Peace, Order and G.G. (29 examples, now 31)
• Unlimited taxation
• All residual powers
• Disallowance
• Reservation

• Provinces
• 16 responsibilities, of minor or local nature
• direct taxation only

3
Overall Shifts in Federal-Provincial Relationship

• First 30 years, federal level dominant
• 1896-1914, relatively stable
• 1914, centralization during WWI
• 1920, provincial upsurge in Roaring 20s
• 1930 on, centralization in Depression, War
• 1960s, era of cooperative federalism
• Since 1980s, decentralizing due to debt and swing
  to right

4
Post-War Federal Dominance

• Continuation of dominance from war period
• Centralization of the three tax fields
• Influence of Keynesian economics
• Expertise of federal civil service
• Growing use of federal spending power

5
Pendulum Swing to Provinces

• Urbanization spurred prov/local spending
• Increased expertise of provincial staff
• Less centralist federal position after 1957
• Quebec demands cooperative federalism
• Move to the right by the 1980s
• Major federal retrenchment by the 1990s
• Feds constrained by global economy

6
A New Social Union?

• National standards questioned (Courchene)
• Premiers agreed in August 1998 that
• permission needed for any new social program
• could opt out instead, with full compensation
• Social Union Agreement in February 1999
• signed by feds all provinces except Quebec
• new rules re social programs
• new federal money for health care

7
Passing the BuckChanges in Financial Relations

• Growing federal assistance in early years
• Problem of double taxation led to tax-rental
  and tax-sharing agreements
• In 1977 EPF replaced 3 federal grants
• EPF and CAP reduced from mid-1980s on
• EPF and CAP replaced by CHST in 1996-97
• CHST reduced sharply in early years

8
Which Level Should Prevail?

• Case for Provinces
• closer to people
• outlet for issues that could overwhelm feds
• can experiment and innovate
• mistakes more limited in provincial lab
• can work together and define national interest

• Case for Feds
• only it can assert, protect national interest
• ensure minimum standards
• provinces amplify regional differences
• provincial competition destructive, wasteful

9
Municipalities in the Federation

• Relationship not one between equals
• No constitutional guarantee
• Several parallels with fed-prov relations
• limited role expected for municipalities
• property tax supposed to be adequate
• provinces responded with conditional grants, then
  switched to unconditional, but reduced
• some downloading and/or disentanglement

10
Disentanglement

• Cheaper, simpler, more accountable?
• Major shift of functions upward in NB
• Limited service swap in Nova Scotia
• Major download of functions in Ontario, including
  inappropriate social programs?
• Fiscal neutrality constrains service swaps
• Disentanglement limited, maybe pointless

11
Searching for a New Balancein Intergovernmental
Relations

• Era of federal dominance over?
• Federal spending power sharply curtailed
• Decentralization urged for national unity
• Can provinces fill vacuum at centre, and do we
  want stronger provinces?
• If provinces follow feds in retrenching, is there
  enhanced role for municipalities?