Document Information

Date: 1978-09
By: British Columbia
Citation: British Columbia, British Columbia’s Constitutional Proposals, Paper No. 8 (Victoria: Queen’s Printer, 1978).
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I. Introduction

One of the key features of a federal system is the distribution of legislative powers between the two levels of government. Generally this distribution is set out in the Constitution of the country. In Canada the distribution of legislative powers is contained in Part VI, particularly sections 91 and 92, of the British North America Act.

Because the distribution of powers is central to the operation of a federal system, in any process of far-reaching constitutional review, it is essential to examine distribution of powers issues. In the remainder of this paper the Government of British Columbia addresses some—but not all—of these issues.

In Part II of the paper there is an identification and discussion of certain general principles for distributing powers in Canada. British Columbia believes that there are certain basic facts of Canadian national life which must be recognized, respected and utilized as starting points in addressing the distribution of powers.

Part III of the paper contains a discussion of, and recommendations concerning, the structure of the distribution of powers sections of the Constitution. Should there be one or two enumerated lists of legislative powers? Should there be a residuary power? Which level of govern- ment should control it? Is there a greater role in the new Constitution for concurrent powers? For a delegation mechanism? For the West German law creation/law administration dichotomy whereby one level of government enacts legislation and the other level administers and enforces it?

Part IV of the paper consists of a discussion of five subject matters concerning which British Columbia believes that constitutional change is required. The five subject matters discussed are:

(1) The federal government’s power of reservation and dis- allowance;

(2) The federal government’s declaratory power;

(3) The emergency power;

(4) The spending power of Parliament;

(5) The allocation of taxing powers between the two levels of government.

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This is not to say that British Columbia’s suggestions for changes in the distribution of powers are limited to these five items. The Govern- ment of British Columbia is presently engaged in a comprehensive review of the present distribution of powers. This review Wlll be completed by next year. It is likely that further recommendations for changes to the distribution of powers will be forthcoming following completion of this review.

Part V of the paper contains a few observations concerning govern- mental attitudes to the distribution of powers once that distribution is agreed upon.

Part VI contains a summary of the recommendations made in the preceding parts of the paper.

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II. General Principles for Distributing Powers

A distribution of powers in a constitution cannot be made in the abstract. Rather there must be an underlying philosophy or unifying theme in a country from which a logical distribution of powers can flow. In a democracy there are, of course, the traditional themes of majority rule and protection of the individual from arbitrary government action. In the Canadian federal system there are three other themes or general principles which British Columbia believes are essential and therefore must serve as starting points for our distribution of powers. These three organizing principles are:

(1) The need to create a distribution of powers which strikes an appropriate balance between factors of unity and factors of diversity in Canadian national life. Specifically, this in- volves recognizing, and attaching appropriate weight to, the factors of nationalism and regionalism, in our national consciousness;

(2) Benefit sharing;

(3) Efficiency.

Each of these three general principles will be considered in turn.

1. Balancing Factors of Unity and Factors of Diversity in Canada

A federal system of government is chosen in a country because of a recognition by the constitution-makers of the day that there are present in the society both factors of unity and factors of diversity which must be respected in the political arrangement. Canada was in 1867, and is today, no exception to this general rule. There are a large number of areas in which all Canadians have similar interests and aspirations—in these areas, either because of the importance of the subject matter or the lack of divergence of provincial, group or individual interests, a strong national government is appropriate. Equally, there were in 1867 important matters concerning which there was no national consensus or overriding national interest. Many of these items of diversity, and some new ones, continue to prevail in 1978, a fact which augers for the existence of strong provincial governments exercising important powers.

It is important in a re-assessment of the current distribution of powers to analyze carefully these factors of unity and factors of diversity because the final allocation of a specific power to a particular level of government will flow logically from a decision whether that power is of substantial importance to the whole country (in which case it would be assigned to the federal government) or of differing significance to the various regions of the country (in which case assignment to the provinces would

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follow). British Columbia believes that the factors of unity existing in Canada flow from our feelings of nationalism—our strong sense of a clearl definable unhyphenated Canadian identity. Canadian factors of diversity on the other hand are derived from a separate strain of national life, namely regionalism.

(a) Nationalism

It is clear that in 1867 there were enough similarities in the various regional social fabrics and individual aspirations to justify the creation of a strong central government. There was a definite sense of military insecurity in the Canadian colonies in the 1860’s and this highlighted the need for a strong national government capable of providing for common defence. There Was also the hope that union would be to the economic advantage of all the federating provinces. Nova Scotia, New Brunswick and. to some extent, Quebec had resource based economies which could provide raw materials to the manufacturing plants of Ontario. Ontario in turn could then send its finished products back to the Maritime market. When the four western provinces joined Confederation or were created hopes were entertained for similar economic advantages. A third reason for union was a commonly felt desire by most Canadians to be independent of foreign powers. French Canadians in particular hoped that in a separate country their interests would be better represented than in a colony subject to British rule. And English Canadians, not because of any anti-British feeling, but rather as a natural out-growth of increased maturity and self-reliance, felt prepared to govern themselves.

Because of these unifying factors many of the great powers sf government were granted, in section 91 of the B.N.A. Act. to the federal government. Although the subject matters in section 91 are not listed in a logical order a careful reading of that section indicates that foreign affairs, national defence and major economic commercial and taxation powers were assigned to the federal government.

The Government of British Columbia believes that the factors which bound Canadians together in 1867 still exist and, indeed, have strengthened. In addition to the military security and economic advantages provided by nationhood we now have a collective history of over one hundred years. Our social and political institutions, literature, art, culture, economy, athletics—indeed every facet of our life—have grown to maturity under the umbrella of Canadian nationhood. We have all the unifying factors that were present in 1867. But we have one more now—namely, a shared

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history as participants in a great national enterprise. Accordingly, it is appropriate, as we reassess the distribution of powers, to conclude that the similarities of 1978 in our national fabric argue for the continuation of a strong national government.

(b) Regionalism

In spite of the growth of nationalism in Canada over the last century it is still true that Canadians are dissimilar in many important respects. Different historical backgrounds, languages, cultures, legal systems, social institutions and economic interests— these and other factors compel a governmental system that is not monolithic or overly centralized. We do not resemble the homogenous American “melting pot”, an important fact which must be reflected in our government structure.

Many of the differences listed above are organized on regional lines. To take but one example—economic interests—the Atlantic provinces share a common ocean orientation (including a heavy dependence on fisheries), and similar levels of economic activity. The formation of the Atlantic Provinces Economic Council testifies to these shared policy interests. Quebec and Ontario, as the powerful inland halves of central Canada, share common interests arising from their strong agricultural resource and manufacturing sectors. However, their interests conflict at times even on these issues, and Quebec’s cultural, religious and linguistic distinctiveness ensures that, on social and cultural matters, their interests diverge sharply. The common resource, grain, of the Prairie provinces leads to shared views on transportation and trade policies and to a concern with diversifying their narrow resource base. British Columbia, being a coastal region overwhelmingly dependent upon forestry, mining and fishing, is concerned with its high reliance on the international economy.

These regional diversities in economic interests are paralleled in many other important facets of our national life such as literature, culture, religion, and social institutions and customs. In addition, there is strong evidence that Canadians living in Canada’s five regions view themselves as members of a particular regional community. In other words, regionalism in Canada is both a psychological and sociological fact of life.

It is not necessary to expand further on the importance of regionalism in Canada. In Paper No. 2 entitled British Columbia: Canada’s Pacific Region and, to a lesser extent, in Paper No. 3 entitled Reform of the Canadian Senate the Government of British

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Columbia has discussed regionalism at length. For the purposes of the present paper it is suflicient to conclude that a new distribution of powers must acknowledge, and be based on, the importance of regional diversities in our country. In relation to those subject matters in which these differences appear it is essential that the distribution of powers be structured so as to permit different regional responses.

2. Benefit Sharing

Canada is one of the largest and richest countries in the world. Yet, not surprisingly, the natural resources and economic advantages that are Canada’s have not been spread evenly throughout the country’s five regions.

The Government of British Columbia believes that the hope of mutual economic advantage was a prime motivating force behind the union of the original provinces and the subsequent entry into Confederation of the other six provinces. This goal was a worthy one and, although in part it has been fulfilled, there remains much to do to ensure that the benefits of the Canadian economy are shared by all Canadians. In this regard British Columbia affirms its continuing attachment to the concept of the promotion of equality of opportunity and well-being for all individuals in Canada, and the assurance, as far as possible, that essential public services of reasonable quality are available to all individuals in Canada.

These are worthy goals, ones which a distribution of powers should respect and promote. In the past the Government of British Columbia has been critical of the federal equalization program, which have been developed in purported furtherance of those goals. This criticism has never been directed toward the goal of equal access to essential public services or indeed toward the role of the federal government in establishing programs to realize that goal. Rather our criticism has been directed to some of the specific details of equalization which, in our opinion, are unfair and counterproductive. In spite of these unhappy experiences, British Columbia is prepared to accept that equal access to public services is a legitimate Canadian goal, that the distribution of powers must recognize this fact and that, in practice, the federal government will have to take primary responsibility for achieving that goal.

3. Efficiency

The Government of British Columbia believes strongly that one of the major problems of our national life is the inefficient provision of services by government to the public. There are two reasons for the

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vast amounts of duplication and overlap that characterizes Canadian government today. First, in a number of important areas, there is a lack of clarity in the present distribution of powers as to which level of government has jurisdiction. Secondly, even if the distribution of powers in the Constitution is clear, the aggressive attitude of the present federal government and its attempts to expand the limits of its own jurisdiction have resulted in much duplication and overlap.

British Columbia believes that both of these problems must be overcome. The first can be solved by acceptance in a new distribution of powers of efficiency as a fundamental principle. Subject matters should be identified accurately and then assigned clearly on the basis of which level of government could legislate in that area—both more effectively and less expensively. The second problem could then be solved by greater government respect for the distribution of powers that is agreed upon. The combination of the solutions to both of these problems should be a distribution of powers which contributes significantly to the better provision of services to the people by both levels of government.

4. Conclusion

In a federal constitutional democracy there are perhaps scores of factors which might compete for designation as “first principles” from which all other constitutional provisions, including those relating to the distribution of powers, would flow. British Columbia has considered those principles and has decided that the distribution of powers should flow from the four starting points of nationalism, regionalism, benefit sharing, and efficiency. The first two are actual facts of our national life, the latter two are essential goals of nationhood—together they provide the key to an effective evaluation of our existing distribution of powers.

In the next few months the Government of British Columbia will be completing a comprehensive study of the subject matters which require allocation within the country. Each subject matter will be measured against the four yardsticks of nationalism, regionalism, benefit sharing, and efficiency. By then assigning the subject matters according to the results of the measurement we hope to be able to recommend a complete distribution of powers that is both rational and refined.

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III. Structure of Distribution of Powers Sections of the Constitution

1. Theoretical Possibilities

When formulating the distribution of powers sections of a Constitution one of the key issues requiring decision is what should be the form or the structure of those sections of the Constitution? There are in fact eight theoretical possibilities:

(a) An enumerated list of provincial powers and a provision allocating the residue of powers to the national government;

(b) An enumerated list of national powers and a provision allocating the residue of powers to the provincial governments;

(c) An enumerated list of national powers and an enumerated list of provincial powers and a provision allocating the residue of powers to the national government;

(d) An enumerated list of national powers and an en.umerated list of provincial powers and a provision allocating the residue of powers to the provincial governments;

(e) Two enumerated lists and shared residuary powers (the allocation to depend on the true nature of the newly identified subject matter);

(f) The Concurrency and Paramountcy Option. Subject matters (some or all) would be assigned to both levels of government. Because conflicts might arise it is necessary that the Constitution indicate which level of government would have paramount authority in relation to a particular subject matter. Theoretically, there are three ways of structuring the paramountcy provision. First, there could be a rule that the federal government would always have paramountcy in conflict situations; secondly, the rule could be constant provincial paramountcy; thirdly, paramountcy could be divided between the two levels of government depending on the nature of the subject matter (for example, defence and education could be assigned to both levels of government with a provision that in cases of conflict federal defence legislation would override provincial defence legislation whereas (provincial education legislation would take precedence over federal education legislation).

(g) The Law Creation/Law Administration Option. In relation to some subject matters, provision could be made for the

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national government to create or enact the law while leaving the actual administration or enforcement of the law to the provincial government.

(h) The Delegation Mechanism. Provision could be made for one level of government to lend or delegate its jurisdiction over a particular subject matter to the other level of government. The delegatee would be able to exercise its new jurisdiction only as long as the delegating government allowed.

2. Historical Background

(a) Other Federations

One of the interesting features of the form of the distribution of powers sections of the Canadian Constitution is the way in which it differs in several significant respects from the structure of the distribution of powers of constitutions of other federal states. In the United States there is a list of matters subject to the exclusive jurisdiction of the national government. There is no list of subject matters assigned to the states; rather the 10th Amendment provides that all subject matters not assigned specifically to the national government automatically fall within state jurisdiction. There is also an extensive list of concurrent powers in the United States. This list includes such matters as interstate commerce, bankruptcy, copyrights and patents, census and statistics, weights and measures and even the armed forces and import and export charges. The Constitution provides for the paramountcy of national legislation in these fields.

The form of the Australian distribution of powers is identical to that of the United States—an enumerated federal list, assignment of the residue to the States and an extensive list of concurrent powers with provision for the paramountcy of national legislation.

The West German Constitution, the Basic Law, contains a list of national government powers and a long list of concurrent powers with provision for the paramountcy of national legislation. In addition, West Germany makes substantial use of the law creation/law administration mechanism described above. The national legislature enacts broad or “skeletal” legislation which emphasizes general principles. The state legislatures then enact legislation to fill in the details and administer the whole package. This has proved to be a very effective means of ensuring meaningful national/state consultation before important legislation is enacted.

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Finally, in Switzerland there is an enumerated list of federal powers, provision that the residue belongs to the cantons and a list of concurrent powers which is more extensive than Canada’s but less extensive than those in the United States and Australia. Switzerland also has a long list of “divided powers”—part of a subject is given to the federal government and part to the cantons.

(b) Canada

Among the five established western federations (the United States, Canada, Australia, Switzerland, and West Germany) the form of the Canadian distribution of powers is unique. It differs from the other four federations in three important respects. First, there are two enumerated lists of powers in the British North America Act. In all the other federations there is no list of state powers. In Canada section 92 of the B.N.A. Act sets out provincial powers in detail. Secondly, in Canada the residuary power has been assigned to the national government; in the other four countries it belongs to the regional governments. The reason for this Canadian choice is the Fathers of Confederation desired a strongly centralized federation. Thirdly, Canada makes little use of the concept of concurrent powers—a concept which is central to the distribution of powers in the United States, Australia, West Germany and, to a lesser degree, Switzerland. There are only three specifically designated concurrent powers in Canada—immigration, agriculture, and old age pensions.

3. Analysis and Recommendations

Against the background of this brief description of the structure of federations it is possible to analyze, and make recommendations concerning, the form of the Canadian distribution of powers.

There are four common criticisms that are often made concerning the distribution of powers sections of the B.N.A. Act:

(a) The subject matters in Sections 91 and 92 are not arranged rationally.

(b) The existence of three lists of subject matters—exclusive federal, exclusive provincial, and concurrent—makes the Canadian distribution of powers overly complex.

(c) The residuary power should be assigned to the provinces. Its original assignment to the federal government has contributed to the Canadian federation becoming too centralized.

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(d) The distribution of powers is too rigid for a modern world in which conditions change quickly, thus requiring varying governmental responses.

Each of these criticisms will be considered in turn.

(a) Rational Arrangement

There can be no doubt that there are no discernible themes or logical foundations underlying the actual arrangement of subject matters in sections 91 and 92 of the B.N.A. Act. Some sections use broad language (“trade and commerce”, “property and civil rights”), others relate to very specific items (“beacons, buoys, lighthouses and Sable Island”). In addition the sections dealing with a particular area, for example economic matters, are not arranged together—rather the arrangement of subject matters seems to be quite haphazard.

British Columbia recommends a two-step solution to this problem. First, the starting point for the restructuring of the distribution of powers should be the identification of a few central realms of subject matters.

For example, the realms of subject matters (these would be broader than most of the specific heads in the present section 91 and 92) could include: international relations, economics, culture, education, health, communications, transportation, justice, property. Secondly, following identification of these broad realms of subject matters more specific subject matters could then be identified and arranged within a group of sub-headings under the umbrella of the theme heading. Thus, for example, section 91 might look like this:

A. International Relations

1. Provision relating to national defence.

2. Provision relating to conduct of foreign affairs.

3. Provision relating to treaties.

B. Economics

1. Provision relating to trade and commerce.

2. Provision relating to money supply.

3. Provision relating to taxation.

4. Provision relating to financial institutions.

5. Provision relating to expenditures of public funds.

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C. Justice

1. Provision relating to criminal law and procedure.

2. Provision relating to courts.

The remainder of Section 91 and also Section 92 would follow the same pattern. Indeed Section 92 would include many. of the same general headings—for example, economics. and justice—as Section 91 although the specific powers would differ.

While it is realized that rational arrangement of subjects does not of itself settle the essential question of which level of government should have jurisdiction over those subjects, British Columbia does believe that if this method is used many of the problems caused by the illogical organization and imprecise language of the present sections 91 and 92 will diminish.

(b) Complexity

The Canadian distribution of powers is certainly complex. Canada, alone of the Western federations (unless one Counts India as a federation), has three lists of powers. It has been suggested that this makes the task of politicians and judges trying to assign a particular subject matter to one of the three lists too difficult and that, therefore, in a new Constitution, Canada should abandon the practice of listing both federal and provincial powers and adopt the common practice in other federations of listing the matters for one level of government and simply providing for the residue to go to the other level.

British Columbia does not accept the argument that the existence of three lists has increased the complexity of our Constitution. First, our present list of concurrent powers is short; it is, therefore, a rare case in which it is necessary to consider all three lists before assigning jurisdiction to a government. More importantly, in the far more common cases involving potential conflict between the exclusive federal and exclusive provincial lists, the existence Of detailed enumerated subject matters in both lists has made the task of assignment easier because the yardsticks against which the proposed legislation can be measured are more accurate than in other federations. In any case, politicians and judges have been working with the twin enumerations for over a century now and have generally done a good job of assigning subject matters. Hence it would seem inadvisable to jettison one of the lists at this stage of our history.

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(c) Residual Power

In all other federations the residual power rests with the provincial or state governments; in Canada it belongs to the federal government. This significant difference when coupled with the perceived (by some) overly centralized nature of Canadian government has led some people to suggest that the residuary power should be assigned to the provinces.

The Government of British Columbia does not altogether agree with this proposal—for two reasons. First, there is no real connection between the location of the residual power and the centralized nature of Canadian government. In actual fact, when a new subject matter has arisen the courts, because of the breadth of the words of many of the enumerated sections of federal and provincial jurisdiction, have had little difliculty assigning the new matter to one of the items in those lists. Secondly, and more importantly, although the legal (de jure) residual power belongs to the federal government, judicial decisions have created a situation in which the de facto residual power is divided between the two levels of government. Now when a new subject matter arises it is as likely to be assigned to the provinces under the “property and civil rights” or “matters of a local nature” sections of the B.N.A. Act as to the federal government under the recognized residual power. In other words, identification of a subject matter that was unknown in 1867 does not lead automatically to federal jurisdiction. If the subject matter does not fit into anyof the specific enumerations of Sections 91 and 92 it will then be considered under the federal government’s residuary power and the provinces’ de facto residual powers, sections 92 (13) and 92 (16), and assigned on the basis of whether its true nature and effect is “national” or “local”.

British Columbia believes that this judicial construction—a double or shared residuary power—is sensible and can usefully serve as a model for the residual power in a new distribution of powers. It has never seemed logical to us that mere ignorance of a subject matter in 1867 should be a compelling argument for its assignment, after later discovery, to the federal government. Rather the matter should be assigned to either level of government according to whether its nature is primarily “national” or primarily “local”. Therefore, the Government of British Columbia recommends that the enumeration of federal subject matters conclude with a section such as “all other matters of national interest” and the enumeration of provincial subject matters conclude with the section “all matters of provincial or local interest.”

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(d) Rigidity

British Columbia believes that the most serious problem with the current distribution of powers is that it is too rigid. The contents of the two lists of enumerated powers are practically carved in stone. Indeed there are practically no countervailing flexibility mechanisms in the B.N.A. Act—the list of concurrent powers is short and contains only minor subject matters, there is no provision for legislative delegation and the courts have held such delegation unconstitutional, and it is diflicult to amend the distribution of powers sections of the Constitution.

The consequences of this rigidity are serious. First, it tends to discourage consultation and negotiation between the two levels of government. Both levels of government have no difficulty in their own minds assigning a particular subject matter to their level of government because of the broad and vague wording in sections 91 and 92. The other level of government may have made a similar mental assignment. The result is that two levels of government may converge on a single problem. Each may not recognize the interest of the other level. There is unlikely to be negotiation or compromise because each is convinced that the subject matter comes within its exclusive jurisdiction. Consequently there may well be two laws dealing with the same problem. At best, the laws will duplicate each other, the result being unnecessary expense and inefficiency. At worst, the laws may conflict, a consequence which is deeply frustrating to the citizen. In addition, the conflict will probably require judicial, rather than political, resolution. (For a detailed analysis of the magnitude of the problems of duplication and conflict of legislation in Canada today reference may be made to the two Reports of the Western Premiers’ Task Force on Constitutional Trends published in May, 1977 and April, 1978).

The solution to the problem of rigidity is to build into the distribution of powers one or more flexibility components. Social, economic and political conditions are not immutable. The conditions which give rise to a particular distribution of powers when a nation is created may change. There must be some mechanism in the Constitution which makes it possible to respond to these changing conditions.

Secondly, in Canada the importance of regionalism has created a situation in which some provinces desire a broader jurisdiction over language, culture, education, communications, immigration and social services. Not all provinces may wish to exercise these

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powers to the full. The distribution of powers must accommodate these varying realities. A flexibility mechanism, such as delegation or concurrency (discussed following), would overcome this problem.

Thirdly, flexibility would compel intergovernmental consultation and negotiation: As long as a government believes that a subject matter comes within its exclusive jurisdiction there is little incentive for co-operation with the other level of government. As soon as a government recognizes the potential power of the other level of government. (the concurrency situation) or realizes that it can give some of its jurisdicition to the other level (the delegation situation) the prospects of meaningful consultation and ultimate harmonization of legislation are greatly enhanced.

The question nowbecomes: how can the Constitution provide for this desired flexibility? There are four possible methods requiring analysis—special constitutional arrangements for different provinces, concurrent powers, delegation, and the law creation/ law administration device.

(i) Special Status

British Columbia cannot accept a distribution of powers in which a major feature is the granting of some subject matters to some provinces and the denial of those matters to other provinces. British Columbia believes that a Constitution containing broad special powers to be exercised by only one or a few provinces is alien to the original rationale of Confederation, namely the legal equality in law-making terms of all the provinces. British Columbia believes that this equality should be maintained. If certain provinces then acquire a de facto special status by exercising or failing to exercise powers which all provinces have, British Columbia would not complain.

(ii) Concurrency

British Columbia finds the arguments in favour of a substantially increased list of concurrent powers attractive. There is one strong argument against concurrency. If both levels of government have legislative jurisdiction there is a chance that their politicians will compete with each other to enact legislation. This could lead to needless expense and inefficiency.

British Columbia is persuaded, however, that this possibility can be guarded against if a refined process of political

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harmonization is developed at an early stage. In a concurrency situation governments would recognize immediately the potential claims of the other government. Mental red lights would flash on, negotiations would commence and, hopefully, a co-ordinated legislative response would result.

A second method for preventing duplication is coupling concurrency with paramountcy. Primary jurisdiction over every concurrent matter would be given to one level of government (which level would depend on the nature of the subject matter). This would probably make the process of political harmonization work better and if ultimately the process of political harmonization still did not work, the paramountcy provision would ensure a quick and simple solution to the problems of duplication and conflict of legislation. In other words, concurrency encourages negotiation, paramountcy ensures decision.

(iii) Delegation

Delegation is another means of ensuring constitutional flexibility.

The major advantage of delegation is that it combines flexibility with clear final authority over a subject matter. Conceptually, whereas the principles of exclusivity and concurrency are diametrically, opposed, the principle of delegation is merely an addendum to the exclusivity principle. Exclusive control over a subject matter is assigned to one level of government. Then that government is given the power to give away, or delegate, its control to another government. But the giving away, and the taking back, of control are entirely in the hands of the government with exclusive jurisdiction. One of the consequences of this clear final authority is that there is no need to put a premium on the process of political harmonization. Flexibility will occur, by and large, at the instigation of only one level. of government. If one believes that political harmonization in Canada works poorly—and is unlikely to improve—then delegation is probably a better route to flexibility than concurrency.

But there are at least two important disadvantages of delegation. First, it gives rise to visions of special status in the public eye. There is an important psychological difference between a government deciding not to exercise a power it has (the concurrency situation) and a government giving

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away, however temporarily, its power (the delegaton situation). The former does not give rise to perceptions of special status, the latter might well. Secondly, there is the political difficulty of retrieving a power given away. It is likely that the government to which the power has been delegated will mount programs and create institutions in furtherance of its new-found power. Thus, if the original government decides that it wants to exercise jurisdicition it will have to take two distinct steps—first, take back its jurisdiction, second, enact positive legislation to fill the gap. This might prove very difficult—psychologically, politically and financially.

In spite of these potential disadvantages, British Columbia believes that delegation is a useful device, particularly if greater use is not made of concurrency. Our history and traditions (a distribution of powers characterized by exclusivity, rigidity, formalism and judicial conflict-resolution) may well make us more comfortable with the delegation addendum to exclusivity rather than the concept of concurrency. This is perhaps why so many groups, from Rowell—Sirois to Fulton-Fauveau, have recommended the delegation route to greater flexibility. British Columbia believes that this mechanism should be included in a new Constitution.

(iv) Law-Creation/ Law Administration

In West Germany substantial reliance is placed on a process involving enactment of a law by the federal government and subsequent administration of the law by state governments. Our investigations indicate that this process had worked very well. It has led to extensive and valuable consultation between governments before a law is enacted (obviously, the views of those responsible for administering the laws are important). This consultation, in turn, seems to have contributed to the enactment of better federal laws.

Canada has one example of a law which is passed by the federal Parliament and administered by the provinces—the Criminal Code. The federal government has authority to create criminal offences but administration and enforcement rest with the provinces. This history of the combination of a uniform criminal law with the possibility of flexible provincial enforcement (depending on local conditions and

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community values) seems to have worked well. Consultation between the two levels of government has not always been what it should have been but has improved in recent years.

Accordingly, British Columbia recommends that careful consideration be given to the possibility of using the criminal model in other areas of legislation. It is to be hoped that such a process would contribute substantially to increased intergovernmental consultation, at both the political and bureaucratic levels. Since this is likely to lead to better law-making and more efficient law-administration it is a process with significant potential.

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IV. The Present Distribution of Powers

1. Subject Matters Requiring Constitutional Changes

Although the Government of British Columbia is presently engaged in a comprehensive review of the whole range of subject matters covered by the distribution of powers and is therefore not yet ready to make recommendations concerning them all, our studies have proceeded far enough to recommend constitutional changes in five areas—disallowance and reservation, the declaratory power, the emergency power, the spending power, and the allocation of taxing powers.

(a) Disallowance and Reservation

At the Victoria Conference in 1971 all the participating governments agreed that the powers of disallowance and reservation should be abolished. British Columbia adheres to this position. There were perhaps sound historical reasons for granting these powers to the federal government. In a sense the central government gave itself, through the powers of disallowance and reservation, the same kind of ultimate control over provincial governments which the imperial government had exercised over its colonial regimes.

But Canada has outgrown this colonial mentality. Today Canadian federalism means, in both theory and practice, two separate, independent and equal levels of government. The powers of disallowance and reservations are inconsistent with this modern notion of Canadian federalism. Fortunately, recent federal governments have allowed these powers to fall into disuse. British Columbia recommends that these powers be abolished unconditionally. They serve no useful practical purpose and are a denial of true federalism.

(b) The Declaratory Power

Section 92 (10) (c) permits Parliament to declare unilaterally that a work situate wholly within provincial boundaries and within provincial jurisdiction is one for the general advantage of Canada or for the advantage of two or more of the provinces and hence subject to federal jurisdiction. If used often (as historically it has been), and without provincial consent, this section could result in a virtual suspension of the federal system. If Parliament wants to declare oil wells, mines, grain elevators, universities, or many other provincial industries or institutions to be works for the general

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advantage of Canada, then traditional provincial jurisdiction over natural resources, local industries, and education would be obliterated. The trotting out of these theoretical “unthinkables” has led many people to suggest that the declaratory power should be abolished. British Columbia does not go that far.

The invocation of the declaratory power has had some good historical results—for example, we would probably not have as comprehensive a national railway system or a successful international grain marketing scheme without it. Accordingly, British Columbia recommends retention of the declaratory power, but with significant restrictions attached to its use. It is wrong for Parliament to be able to declare unilaterally, without taking account of provincial views, that provincial works will henceforth be subject to federal jurisdiction. It is equally wrong for an individual province to be able to decide unilaterally that provincial works will under no circumstances be used for the general advantage of the whole country.

Some middle ground is required. British Columbia suggests that including the declaratory power in the Senate’s absolute veto list (for a full discussion of the concepts of “absolute” and “suspensive” veto see Paper No. 3 Reform of the Canadian Senate) provides a useful middle ground. The Senate, representing all the regions of the country, would in effect act as an umpire between the conflicting claims of the national and individual provincial governments on this issue.

(c) The Emergency Power

The Government of British Columbia acknowledges that the federal government requires an emergency power. But we think that three changes in the present power should be made.

First, the Constitution should state clearly that the federal government has an emergency power. At the moment the emergency power is based on judicial inference from the words “peace, order and good government” in Section 91 of the B.N.A. Act. Although this judicial inference has given the emergency power life for over 50 years now, in a new Constitution all doubt should be removed by clear assignment of an emergency power to the federal government.

Secondly, the Constitution should spell out that the courts can apply the emergency power to validate federal legislation only if Parliament specifically declares that an emergency exists. In the

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recent Anti-Inflation Act Reference case the Supreme Court of Canada invoked the emergency power to uphold the Anti-Inflation Act, even though Parliament had not declared that an emergency existed. Because the consequences of a judicial finding of emergency can be of the utmost significance (virtual suspension of the federal system) British Columbia does not believe that the courts should be permitted to infer the existence of an emergency. A clear statement from Parliament to that effect should be necessary.

Thirdly, the Constitution should provide for consultation with the provincial governments prior to the making of an emergency declaration if that declaration will result in a serious infringement on normal provincial powers. British Columbia recognizes that in some situations, such as in wartime, rapid action by the federal government is required. In these situations the consultation could be quick, even perfunctory. What troubles British Columbia is the anti-inflation legislation situation. Obviously the final decision concerning the existence of a national emergency must be made by the federal government. But provincial governments, particularly in purported economic crises, may have important views which might assist Parliament in making that final decision. Providing for consultation with the provinces allows those views to be heard, but without hamstringing the federal government. British Columbia believes that this is a good balance.

(d) The Spending Power of Parliament

While there is no specific legal meaning to the term “the spending power,” essentially it involves the right of Parliament to expend funds on matters in which it has no constitutional jurisdiction. As long as such expenditures are not used in an attempt to legislate, the power appears to be free from effective legal challenge.

The term “spending power” does not appear as such in federal constitutions, but it is a recognized element of most federal systems. In the United States its purpose is served by the welfare clause of the Constitution which gives Congress “the power to levy and collect taxes and provide for the general welfare of the United States.” In Australia the Constitution specifically provides that the federal Parliament may “grant financial assistance to any State on such terms and conditions as the Parliament thinks fit.” Similar, although somewhat more restricted, provisions are to be found in the Constitutions of Switzerland and West Germany.

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In Canada, although its authority is nowhere precise and it has been politically challenged, the spending power has become a central element in the financial relationships of the federal and provincial governments. It has been supported on several grounds under the B.N.A. Act, including the general power to spend from the Consolidated Revenue Fund, the general taxing power, public debt and property, and also on the basis of the royal prerogative.

The primary justification for the spending power is in the acceptance of the concept of the national interest which must be promoted by the federal government. Although there has been in- creasing resistance to its use in recent times, the spending power has been an essential element underlying the creation of many programs which were perceived by the federal government as being in the national interest. Almost the whole system of fiscal transfers, conditional and unconditional, rests on it. While the wealthier provinces can survive without the help that comes from equalization payments and other fiscal transfers, the majority of provinces would find their absence a serious, if not an insurmountable, handicap. In the case of conditional grants, the effects are even more universal, for it was in the period of their development that much of our national social progress took place—hospital and medical insurance, post-secondary education, resource roads, the Trans-Canada Highway, regional development assistance and the Canada Welfare Plan. Perhaps these advances would have come about in time, regardless of the federal initiative. But it remains a fact that they did come about because the federal governments of the day recognized the importance of the national need and responded, even where it was necessary to act in an area constitutionally of provincial jurisdiction.

But while the advantages of the spending powers are generally recognized, there are some important objections to it—both theoretical and practical.

Objectives are that if the power is used indiscriminately it could provide the federal government with an important extension of its practical constitutional powers. One of the clearest statements of this possibility is contained in the judgment of the Judicial Committee of the Privy Council in one of the cases involving Prime Minister R. B. Bennett’s New Deal legislation:

“That the Dominion may impose taxation for the purpose of creating a fund for special purposes, and may apply that fund for making contributions in the public interest to individuals, corporations or public authorities, could not as a general proposition be denied . . . But assum-

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ing that the Dominion has collected by means of taxation a fund, it by no means follows that any legislation which disposes of it is necessarily within Dominion competence. It may still be legislation affecting the classes of subjects enumerated in section 92, and, if so, would be ultra vires.”

The actual effect of this judgment was to deny Parliament the power to regulate unemployment insurance through a specific levy or fund established for that purpose. An amendment to the B.N.A. Act in 1940 was necessary to give the federal Parliament jurisdiction over the subject matter. But it does not seem to have limited the power of the federal government to make grants or to contribute to public services in areas of provincial jurisdiction as long as it does not attempt to legislate in those areas.

In more practical terms the objections to the spending power are well known. Some of the federal programs based on the spending power have involved provinces in expenditures they really could not afford, others have distorted provincial priorities, and still others, following federal withdrawal, have presented serious problems for the provinces because of citizen expectations that the programs would be continued.

Obviously there are both serious advantages and detriments with the spending power. British Columbia believes that what is needed is a balancing mechanism—a mechanism that permits the federal government to create national programs which may infringe on areas of provincial jurisdiction but only if there is widespread provincial support for them. As in the declaratory power situation, British Columbia thinks that a reformed Senate, along the line of the British Columbia proposals, could provide a forum for this balancing process. The federal government would establish a program but the Senate would then have to approve it before it became operative. In this way there would be an assurance that the program would be acceptable to most of the provinces of the country. The result would be that, on the one hand, the federal government could not establish a program that did not have substantial regional support; yet, on the other hand, the federal government would not be completely prevented from establishing programs that could be of great benefit to all regions of the country. This, in British Columbia’s opinion is a useful balance—clear constitutional provision for the spending power coupled with restrictions on its use unless it can be demonstrated, through the vehicle of Senate approval, that there is substantial support for its use.

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(e) Taxing Powers

Problems of intergovernmental relations in a federal system are very frequently fiscal in content, directly or indirectly. In this area the division of revenue sources, particularly that of the principal field of modern taxation, assumes a pre-eminent place. Because of this significance the Government of British Columbia is devoting careful study to the problem of allocating taxing powers in Canada. Although our studies are not yet complete the following observations may be made.

The subject of the division of taxing powers was thoroughly examined in a document, entitled The Taxing Powers and the Constitution of Canada, produced for the Constitutional Conference in 1969 by the Government of Canada. In this study various alternative approaches were examined. Essentially, the conclusion was that there were really only two main ways in which the powers of taxation could be constitutionally divided—first, by attempting to allocate particular sources of taxation to the two levels of government in accordance with their perceived needs; secondly, by granting both levels of government universal access to most revenue sources.

The general conclusion was that the second method was the only practicable way in which the allocation could be accomplished, given the uncertain nature of change in the extent and cost of public activity. The extreme variation in the returns from the most important taxes in different provinces also made any uniform allocation difficult to determine.

In general terms, British Columbia looks favourably on the use of the principle which provides the two major levels of government with equal access to the same fields of taxation. But British Columbia also believes that the complexities which might flow from adoption of this principle must be examined with great care. Every effort must be made to prevent any such tax approach from creating artificial economic barriers in restraint of commerce in this country such as could result from indiscriminate use of an indirect provincial sales tax.

British Columbia’s second general point (and this represents an exception to the universal access principle) is that the imposition of customs and excise taxes should be constitutionally reserved to the federal government.

British Columbia’s third proposition is that taxes on real property and retail sales taxes should be reserved to the provinces. Although this is also an exception to the universal access principle it merely confirms the existing practice.

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Finally, it is essential not to exaggerate the importance of access to tax fields as a panacea for provincial finances. Access to tax fields alone will not be enough for less wealthy provinces which are heavily dependent on fiscal transfers from the centre for their existence. British Columbia acknowledges the importance of weighing this fact in any discussion of the distribution of taxing powers.

2. Subject Matters Requiring Further Study

Items (a) to (e) above, do not by any means constitute the complete list of subjects within the distribution of powers with which British Columbia is concerned. It has already been stated that the Province is presently engaged in a comprehensive review of other subjects. These include international relations, economics, culture, education, health and welfare, communications, transportation, justice and property. The results of these studies will be forthcoming in the future.

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V. Honouring the Distribution of Powers—Present and Future

The Government of British Columbia wishes to draw attention to one final matter in this submission on the distribution of powers. British Columbia believes that the effective operation of the distribution of powers in a federation depends on two factors. First, the distribution of powers must strike an appropriate balance between national and local conditions, values and aspirations. The preceding sections of this paper have raised issues and made recommendations which British Columbia hopes will contribute to the achievement of a proper balance.

But striking the right balance between national and provincial powers is not enough in itself. It is absolutely essential for both levels of government to respect the distribution of powers once it is agreed upon. British Columbia believes that the federal government has not shown this respect for the present distribution of powers—an attitude which, in our opinion, has seriously weakened Canada in the last decade.

This is not the place to discuss this problem in detail. British Columbia would simply refer to the two Reports of the Western Premiers’ Task Force on Constitutional Trends (April, 1977 and May, 1978) in which federal intrusions into areas of provincial jurisdiction were examined. The conclusions reached by the Task Force were that, in recent years, the federal government has made intrusions into areas of provincial jurisdiction, including consumer and corporate affairs, natural resources, housing and urban development, economic development, communications, manpower and labour, and the administration of justice.

A federation cannot long prosper when one level of government displays such an attitude to the distribution of powers. Accordingly, British Columbia recommends that both levels of government show the utmost respect for the present distribution of powers until it is changed. A similar attitude would be an appropriate starting point for intergovernmental relations once a new distribution of powers is established.

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VI. Summary of Recommendations

The Government of British Columbia recommends that:

(1) The four principles of nationalism, regionalism, benefit sharing and efficiency should form the foundations for a new distribution of powers.

(2) The starting point for a revised distribution of powers should be the identification of a few central realms of subject matters such as international relations, economics, culture, education, health, communications, transportation, justice, property. Following identification of these broad realms of subject matters, more specific subject matters should be identified and arranged as a group under the umbrella of the theme heading. This two-step approach would solve the current technical problem of the illogical arrangement of subject matters in sections 91 and 92 of the B.N.A. Act.

(3) The Canadian Constitution should continue to have three lists of power—exclusive federal, exclusive provincial, and concurrent power.

(4) There should be a shared residuary power. The enumeration of federal subject matters should conclude with a section such as “all other matters of national interest.” The enumeration of provincial subject matters should conclude with the section “all matters of provincial or local interest.”

(5) In order to solve the serious problems of a distribution of powers which is too rigid, one or more of the following flexibility mechanisms should be given a primary place in a new distribution of powers:

(a) concurrency with paramountcy

(b) delegation

(c) allowing the federal government to create a law and the provincial governments to administer it.

(6) Flexibility should not be achieved by granting some subject matters to some provinces and denying those matters to other provinces.

(7) The federal government’s powers of disallowance and reservation should be abolished.

(8) The federal government’s declaratory power should be retained, but with serious restrictions. A declaration that a provincial work has become one for the general advantage of Canada should require confirmation by a Senate recon-

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stituted along the lines of British Columbia’s Senate proposals before it becomes operative.

(9) The Constitution should make clear the existence of the federal government’s emergency power and should provide that the courts can apply the emergency power to validate federal legislation only if Parliament specifically declares that an emergency exists. Judicial inference of an emergency situation should not be permitted. Thirdly, the Constitution should provide for consultation with the provincial governments prior to the making of an emergency declaration if that declaration will result in a serious infringement on normal provincial powers.

(10) The federal government’s spending power should be retained, but with serious restrictions. Federal programs based on the spending power which relate to areas of provincial jurisdiction should require confirmation by a reconstituted Senate before becoming operative.

(11) The principle of universal access should be the touchstone for the distribution of taxing powers. Two exceptions to this general rule could be: the imposition of customs and excise taxes could be reserved to the federal government while taxes on real property and retail sales tax could be reserved to the provinces. Finally, it is essential not to exaggerate the importance of access to tax fields as a panacea for provincial finances. Access alone will not be enough for less wealthy provinces—a fact which must be borne in mind in discussions of the distribution of taxing powers.

(12) Both levels of government must respect the current distribution of powers and a new allocation once agreed upon. Major intrusions by one level of government into the jurisdiction of the other level seriously distorts the delicate balance of powers required for successful operation of federalism in Canada.