Federalism (W3)

federalism

a system with multiple levels of constitutional authority and a division of powers between them, such that neither is subordinate to the other

why federalism?

practical → size + diversity of recognition of subnational identities

normative → benefits of larger union (ie. security), local rule (multiple social identities), and check against gov power

reasons for canada’s union in 1867

• economic interests and territorial expansion (particularly in trade)

• threat from the US

• in order to have resources, manpower + political power, solid gov was needed

• Quebec + maritimes sought local control and would not have agreed unless it was a federalist structure

how constitutional federal division favour national (federal) government

• nation-building powers: “great subjects of legislation”

• superior revenue sources

• powers of reservation + disallowance

power of reservation

reservation (federal government could refuse to give royal assent (ask crown to wait) to provincial legislation’s request and "reserve" it for further consideration) (not used since 1961)

power of disallowance

disallowance (the federal government could disallow provincial legislation (tell crown no thanks) within one year of its passage) (not used since 1943)

high decentralisation

a system where power and authority are distributed among various levels of government, provinces in canada are typically more powerful than american states (pushed by quebec)
ie. giving more taxing powers to provincial governments

fiscal federalism

financial arrangements between the federal and provincial levels of government, primarily through transfers from the federal government to provinces

vertical fiscal imbalance

gap between federal resources and spending demands and provincial and spending demands (federal vs provinces)

horizontal fiscal imbalance

differences among provinces in resources (province vs province)

federal spending power

allows the federal government to spend money in areas of provincial jurisdiction by transferring funds to provinces, sometimes with conditions attached.

addressing vertical fiscal imbalance

CHT AND CST treat al provinces equally → maintains inequality among provinces (no equity)

• instead, equalise by transfer to some provinces whose fiscal capacity is below the national average to ensure reasonably comparable level of public services at reasonable levels of taxation

addressing horizontal fiscal imbalance

treats provinces unequally to achieve equitable outcomes ‘have’ and ‘have-not’ provinces by redistributing resources to ensure that all provinces can provide similar levels of public services despite differences in their fiscal capacities.
→ prince edward island has received the most funding in equalisation payments per capita, ontario the least

canada health transfer

• largest program of transfers from federal to provinces

• funding for health care service provision

• 2025-26: 54.7 billion

canada social transfer

• second largest program of transfers from the federal government to provinces

• funding for social services and education

• 2025-26: 17.4 billion

federal spending power

ability of the federal government to send its own money in areas of provincial responsibility

quasi-federalism

a system of governance where powers are divided between national and subnational governments, often with regional autonomy.

conditional vs unconditional grants

Conditional grants are funds provided to provinces that must be used for specific purposes, while unconditional grants are given without limitations on how the money is spent.

bicameralism

the practice of having two legislative or parliamentary chambers. (like Canada)