The
preceding discussion has called into question the doctrinal position
favouring the constitutionality of the federal spending power.
It would be naïve, however, to suggest that doctrine alone can
resolve a question of such fundamental political importance. Where
major public issues are involved, legal doctrine inevitably takes
a back seat to broader political and practical concerns. Nowhere
is this more obviously true than in the field of constitutional
law. Constitutional decision-making requires courts to resolve
important issues of public policy based upon vague, broadly framed
provisions - provisions that in many cases were written to take
account of social and economic conditions that have long since
changed. The realization that constitutional decision-making is
political does not end debate on constitutional issues; it helps
to inform it. While constitutional provisions may be vague, broadly
framed and anachronistic, we tolerate them on the basis that they
reflect certain abiding political values. The purpose of a constitution
is to protect those values, and the role of the courts is to interpret
and apply the constitution in a manner consistent with those values.53
There
are many values which find voice in the Canadian Constitution
but, in terms of the structure of government, the two most fundamental
are federalism and responsible government. Although federalism
has many forms, at root it implies a division of legislative and
executive responsibilities between two orders of government, neither
of which is a system subordinate to the other.54
Responsible Government is a system of representative democracy
in which the head of state acts upon the advice of an executive
that, in turn, is directly answerable to a democratically elected
legislature. Viewed in light of these constitutional values, the
debate over the federal spending power takes on new importance.
It becomes a debate not just about constitutional doctrine, but
about the integrity of the federal system and the preservation
of political accountability in Canadian Government.
The
underlying rationale for federalism is a belief that while some
matters are better decided by the national political community,
others should be left to regional political communities. Implicit
in this belief is a view that, with respect to certain matters,
regional governments can better reflect the political attitudes
and aspirations of citizens. It is not hard to see why this might
be the case. In a country as large and diverse as Canada, the
opinions and priorities of the inhabitants of one region may well
differ from those of other regions. A system of regional governments
is more likely to be responsive to these regional variations than
is a single central Government. This is so not only because regional
governments have more extensive knowledge of local conditions
and preferences, but also because they depend for their existence
upon local voter support. Thus while a central government can
afford to ignore the preferences of a particular region of the
country (and may have to do so to garner voter support in other
regions), a regional government cannot.
In
this way, federalism is a democratizing force. It provides citizens
greater influence over policies that have been assigned to regional
governments than they would have had those same policies been
assigned to a central government. Put another way, it ensures
that the preferences of more citizens can be reflected in government
policy. As Breton and Scott have noted, "an increase in the number
of governmental units increases the probability that any person
living in any jurisdiction will be a member of a majority able
to secure for him or herself the quantity and quality of public
policies that he or she (and others of his or her group) prefer".55
The
raison d'être of the federal spending power (and of conditional
grants in particular) is to permit the federal government to use
fiscal means to influence decision-making at the provincial level.
In other words, it allows national majorities to set priorities
and to determine policy within spheres of influence allocated
under the Constitution to regional majorities. Thus, both by design
and effect, the spending power runs counter to the political purposes
of a federal system. Supporters of the federal spending power
have sought to address this concern by contending that conditional
grants are offered on a "voluntary" basis and that provincial
governments are free to reject them if they wish. However, claims
about the voluntary nature of conditional grants are unconvincing.
Even those writers who have stressed the theory of "voluntary"
grants have had to concede their coercive impact upon provincial
decision-making. Hogg describes this impact in the following terms:56
The
programme proposed may be well down on a province's list of
priorities, or a different kind of programme may be preferable
to the province; nevertheless, the federal offer is very difficult
to refuse, because refusal would deny to the province the federal
grant. Indeed, refusal of the grant wears an aspect of taxation
without benefit, since the residents of a non-participating
province would still have to pay the federal taxes which finance
the federal share of the programme in the other provinces. The
result is that the provinces have usually felt sufficiently
tempted by "50-cent dollars" to join the federally-initiated
shared-cost programmes.
Moreover,
the suggestion that conditional grants are "voluntary" again ignores
the relationship between spending and taxation. The impact of
such grants upon provincial decision-making is a function not
only of the carrot of federal spending, but also of the stick
of federal taxation. The extent to which funding for such grants
is derived from the imposition of federal taxation is the extent
to which tax dollars are depleted. The point here is not simply
that provincial refusal of such grants would subject residents
of that province to taxation without benefit; it is that federal
occupation of the available tax room for provincial purposes limits
the amount of tax room left to provinces, thus restricting the
capacity of provinces to initiate policies they favour. In this
way, federal spending that derives from federal taxation has a
coercive impact upon provinces as well as provincial taxpayers.
An
even more powerful political objection to the federal spending
power concerns its impact upon responsible government. The organizing
principle of responsible government is political accountability:
accountability of the executive to the legislature and of the
legislature to the electorate. It is this thread of accountability
that transforms what would otherwise be a despotic system of government
into a democratic one. Yet if a legislature is to be held accountable
to its electorate, citizens must have a definite understanding
of the scope of that legislature's powers. An electorate that
cannot attribute political responsibility to one order of government
or the other lacks both the ability to express its political will
and the assurance that its will can be translated into action.57
By allowing the federal government to use fiscal means to influence
provincial policies, the spending power compromises political
accountability and thereby weakens the ability of electors to
exercise democratic control over Government. The argument has
been put most forcefully by Smiley:58
. . . there is an increasing number of important
public functions for which the federal authorities assert the
provinces have the primary responsibilities but on behalf of
which federal financial assistance is available. In these circumstances
it is almost impossible to enforce accountability, and no satisfactory
answer can be given to the broad question of whether the provinces
have in fact been delinquent in not providing adequate support
for particular services or, alternatively, whether some or all
of them could not reasonably be expected to do better in the
light of the existing distribution of tax sources, revenues
and functional responsibilities. Further, if we were to assume
that the federal government has some direct responsibilities
in relation to particular provincial programs, it is almost
impossible to gauge whether their level of support for these
activities has been satisfactory. On a day-to-day basis, also,
it is sometimes open to the provinces to avoid responsibility
for their actions in conditional grant programs by attributing
alleged deficiencies to federal policies.
An
illustration of the above concerns is provided by the Canada Health
Act.59
Under the terms of that Act, funds are made available to provinces
that establish hospital insurance and medicare programs in accordance
with federally stipulated criteria. Provinces that fail to adhere
to these criteria are denied full federal funding. The purpose
of the Act is to influence provincial policy with respect to the
provision of public health insurance. The extent to which it achieves
this purpose is the extent to which decisions assigned under the
Constitution to regional political communities have been effectively
transferred to the national political community. Moreover, the
diffusion of political responsibility serves to weaken the ability
of either community to attribute political responsibility for
the strengths and deficiencies of the public health care system.
Suppose,
for example, that a majority of citizens in a particular province
came to believe that medical user fees should be imposed upon
higher income earners in order to finance a preventive health
care initiative aimed at school-age children. Under the Act, the
imposition of such fees would produce reductions in federal transfers
to the province with no commensurate reductions in federal taxation.
The political pressure created by the combined threat of declining
federal grants and continued federal occupation of the tax field
would make even the most sympathetic provincial government balk
at implementing a policy of this kind.
Some
may say that the solution is for citizens who favour such a policy
to organize at the national rather than the provincial level.
The first thing to note about this suggestion is that it qualifies
as a solution only if one is prepared to abandon the political
purposes of assigning health care to provincial control in the
first place. The problem, however, runs much deeper than that.
Even if citizens, by organizing nationally, were able to convince
the federal government to endorse their proposal, that government
would be forced to rely solely upon fiscal measures to implement
the reform. While such measures probably could be structured so
as to compel provincial acquiescence with federal requirements,
they could not give the federal government direct regulatory control
over the policy. Thus the policy, although well conceived at the
federal level, could suffer from incompetence or lack of political
support on the part of the provincial authorities charged with
its administration.
What
the above example shows is that the spending power does not simply
shift political responsibility from one order of government to
the other; it intersperses responsibility between both orders.
The result is to require those advocating a particular reform
to fight a battle on two fronts. At the same time, it becomes
virtually impossible for citizens to determine which order of
government to hold accountable for policies that fail or, for
that matter, for ones that succeed. The consequence is to diminish
the influence of ordinary citizens over government policy-making
and to heighten the power of governmental elites. Political decisions
become less a product of responding to public opinion and more
a product of intergovernmental accommodation among senior politicians
and bureaucrats. Moreover the problem is not confined to those
areas in which the spending power is currently exercised. Once
the authority of the federal government to spend where it pleases
is accepted, it becomes possible for politicians and citizens
to attribute responsibility for almost any deficiency in provincial
policy to an absence of federal support. Thus provincial governments
routinely blame their failure to provide adequate programs, such
as welfare, daycare and housing, on a lack of federal support,
encouraging voters and interest groups to look to Ottawa for solutions
to these problems.
In
sum, reliance upon the spending power to overcome legislative
limitations in a federal system of responsible government creates
the worst of all possible worlds. It imposes upon citizens the
costs and inconvenience of supporting two orders of government
while denying them the benefits of local control. In addition,
it creates a situation in which political power is so diffused
that citizens possess less ability to influence and control government
decision-making than they would even in a unitary state.
As
Dickson C.J.C. put it in Reference re Manitoba Language
Rights, [1985] 1 S.C.R. 721, at pp. 751-752, (1985),
19 D.L.R. (4th) 1, at pp. 24-25:
This
Court cannot take a narrow and literal approach to constitutional
interpretation. The jurisprudence of the Court evidences
a willingness to supplement textual analysis with historical,
contextual and purposive interpretation in order to ascertain
the intent of the makers of our Constitution.
The
Court has in the past inferred constitutional principles
from the preambles to the Constitution Acts and the general
object and purpose of the Constitution. In the Patriation
Reference . . . the Court found the federal principle
to be inherent in the Constitution in this way.
In
other words, in the process of Constitutional adjudication,
the Court may have regard to unwritten postulates which
form the very foundation of the Constitution of Canada.
54.
Some
writers have posited visions of federalism that deviate
from this norm. However, as Professor Hogg notes, in doing
so "they have so eroded the concept of federalism that it
has become too vague to be useful": op. cit., footnote
6, p. 81. Moreover, whatever the merit of these visions
in conceptual terms, it is clear that they have little application
to the vision of federalism represented in the Canadian
Constitution. Sections 91 and 92 of the Constitution Act,
1867 divide political powers between Parliament and the
provincial Legislatures in a manner that seeks to avoid
the possibility of overlapping jurisdiction. Under s. 92,
the provinces are given the power to "exclusively make
Laws in relation to Matters coming within the Classes of
Subject next hereinafter enumerated", while, under
s. 91, Parliament is given authority to make laws "in
relation to all Matters not coming within the Classes of
subjects by this Act assigned exclusively to the Legislatures
of the Provinces". It is true that the Constitution
Act, 1867 provides for a few areas of concurrency, but these
stand out as narrow exceptions to the general pattern of
division in ss. 91 and 92. See G.P. Browne, The Judicial
Committee and the British North America Act (1967), esp.
pp. 29-32; Black, op. cit., footnote 1, pp. 7-8.
55.
A.
Breton and A. Scott, The Design of Federations (1980), p.
15.
56.
Hogg,
op. cit., footnote 6, p. 120. See also Hanssen, loc.
cit., footnote 25, at p. 197.
57.
Trudeau
made the same point when he wrote: "Since the same citizens
vote in both federal and provincial elections, they must be
able to determine readily which government is responsible
for what; otherwise democratic control of power becomes impossible.":
op. cit., footnote 49, p. 80.