How do you govern a vast country made out of 13 different jurisdictions?  I am tempted to say that it is barely governable, but I won’t; Canadians are disciplined and that makes that impossible endeavor possible.

By the time I arrived in Canada, its system of government has existed for some 400 years; time enough to iron out all its kinks?  Not quite.

There are three levels of governments:  Federal, Provincial, and Municipal.  Each of those governments ensures that its rights are preserved, and that there is no meddling coming from another jurisdiction.  To do that each level needs to have well-defined roles spelled in the constitution; and that in a confederation is asking for the impossible.  The only good news is that a municipality is a child of its respective province; nevertheless, numerous issues arise as between a given municipality and its province.

Briefly what are their respective roles, and what are some of the issues resulting from such a system?

Canada is a monarchy, its head of state is the Queen of England represented by the Governor General.

At the Federal level, the real power resides with parliament, and the Prime Minister and his cabinet.

The federal government is in charge of the economy, national defense, security, criminal law, foreign affairs, and First Nations policy.  It financially assists the other jurisdictions by providing transfer payments related to health, social services, education, and equalization.  (Equalization payments allow the have-not provinces to provide a level of service to its residents more or less equivalent to the residents of wealthier provinces.  The payments are based on complex and controversial formulas).

The provincial government provides key services in the areas of health, education, social services, and control over civil and property rights.  Municipalities are subject to municipal legislation enacted by the province.

Municipalities provide the usual local services: police and firefighting; local transportation; zoning; industrial and economic development; libraries and educational facilities; public utilities such as sewage, and water treatment; parks, recreation and culture; and social assistance services not provided by the province.

The issues arising between these three jurisdictions are numerous; I will therefore provide you with the main ones only.

As already stated, the federal government affect numerous transfers to the provinces; the amounts transferred should be cut and dry, but are not; let me explain.

There was a time when the federal shared specific expenses of the provinces on a 50/50 basis.  Health, education, and social services were submitted to the federal, and in turn, they (after auditing the figures) paid half of it.  But that was so long ago; the civil servants that administered those programs are by now retired, or have passed away!  Ottawa, faced with ever increasing payouts, was forced to replace direct sharing with formulas based on population, increase in the cost of living, and many other variables.  The provinces have very reluctantly accepted the changes, but disputes about the formulas and the variables are still ongoing.  And that’s not all; from time to time the provinces ask for more money, and coincidentally these demands are made when a federal election is on the horizon!  When there is money in the till, Ottawa hands out the extra cash; and the government of the day make sure to remind the voters how generous they are!

Provinces face different circumstances, and what I mentioned above will somewhat vary from province to province.  They all agree though that Ottawa is shortchanging them!

And then you have the matter of the equalization payments.

The original idea, and the details behind those payments, is pure genius.  They are formulated in such a way that they come across as funds distributed by the federal to poorer provinces, rather than the wealthy provinces handing out vast sums of money to their poorer cousins.  At any one time, there are at most three provinces that are considered as “have” provinces, whereas the remaining provinces are “have not” provinces.  Nobody is fooled here, and the wealthy provinces know that they play, reluctantly, the role of the rich uncle!

The provinces are directly involved in the areas of health, education, welfare, and many other services that directly impact the average Canadian.  They are also legally responsible for the municipalities in their jurisdiction.  They often find themselves facing issues vis- à -vis the federal, the municipalities, and their citizens.  Governing a province in Canada is largely an impossible undertaking!

The municipalities affect a complex dance to comply with the provincial legislation, and the by-laws required to govern themselves according to local exigencies.  They also face some costs that are downloaded by the provinces; typically this happen in some areas of social assistance that the province claims is not its responsibility.  The most difficult issue is that their source of income is not as reliable as the federal or the province; they derive their income mainly from property taxes, and these are less reliable than direct taxation and sales taxes.  Thus they often have to go hat in hand to the two other levels of governments; typically it happen when a major project (example expanding public transit) is considered or a natural disaster happens.

Property taxes are inherently unfair; a change in the value of your home will increase your taxes even though your actual property and/or income remain unchanged.  Many solutions have been proposed, but the political will to change the status quo does not exist.

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