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Peter Graefe: Fitting Federal Equality into a More Equal Canada


Any project for social and economic equality in Canada faces a challenge: our primary collective lever for change, the state, is a confusing and complicated machine of federal-provincial relationships.  Most advocates of a more egalitarian Canada are frustrated by this. Reform energies are lost in doing the “federalism foxtrot” of getting the federal and provincial players on side, while provincial desires to do things their own way conflict with the idea of all Canadians sharing the same economic and social rights.  Since at least the 1930s, the dominant view of the equality-seekers has been to strengthen the federal government and its capacity to impose its agenda on the provinces.  In a more muted form, Towards A More Equal Canada calls for “federal leadership.”

In rebuilding a project of equality for Canada in the twenty-first century, it is worth asking whether this frustration with federalism is part of the problem, rather than the solution. Federal institutions can slow the progress of equality by giving vested interests additional ramparts, but they also protect other equalities.  Partisans of equality would do better to spend their scarce energies in creating pathways for their projects within existing intergovernmental structures rather than trying to alter long-standing federal-provincial power dynamics. There is no denying that federalism makes it easier to talk about sharing fairly between regions than about sharing fairly among Canadians. But trying to change that ingrained bias is likely to reinforce it by raising resistance. 

Changing the course of inequality in Canada may be most effective in working with rather than against the grain of our federal constitution.

The Various Equalities of Canadian Federalism

Progressive Canadians have often seen federalism as a shield used by regional elites to protect their privileges from pan-Canadian reforms. But what if federalism protects other equalities? Federalism is also about the equality of the federal and provincial orders of government, which protects regional identities and distinct conceptions of how to address social problems. In Canada, the federal bargain also involved a conception of two founding peoples, which has over time been expanded to the idea of Canada as a multinational federation. A Canada-wide project of socioeconomic equality that lacks the consent of Quebecers and First Nations achieves one sort of equality at the expense of another.

Trying to bring about the type of Canada proposed by Towards A More Equal Canada cannot and should not return to a centralist, “federal government knows best” vision.  It cannot, because energies spent trying to rework the division of power between orders of government are energies diverted from building change. It should not, because there is no point being cavalier about the value of other equalities built into the federal bargain, and indeed some resistance to change may not be from those who oppose equality but from egalitarians with a different understanding of their political community. The opposition of Quebec progressives to federal government social initiatives is a case in point.

Getting Realistic About the Federal Government

While we have the federal and provincial orders of government, egalitarians need to remember that there is only one voter. When citizens make equality a ballot box issue, and when they participate in equality-seeking organizations and parties, they move the political debate towards reform, making it necessary for all parties to offer something.  The post-war welfare state may be linked in popular imagination to CCFers like Tommy Douglas or Liberals like Lester Pearson, but it also bears the mark of federal and provincial Conservatives like John Diefenbaker, Richard Hatfield and John Robarts. And while the retreat from equality since the 1990s is often attributed to events like the Liberals’ 1995 federal budget or neoliberal provincial governments such as the Harris or Klein Conservatives or the Campbell Liberals, it is not as if governments of any partisan stripe were able to get much traction on equality in these years, except perhaps the Parti Quebecois. So one lesson is that, while federal-provincial negotiations and stand-offs may slow change at times, the real driver of equality trends are public opinion and political mobilization. This opinion and mobilization moves both the federal and provincial governments, albeit with their own particular dynamics.

A second lesson is that it is foolish to invest either the federal or provincial order with the mantle of the engine of progress. In periods like the 1960s when important progress was made on equality, one could see the federal government as a driving force as its policies necessarily generalize benefits across the country. Yet this same power to generalize cuts both ways: whether it be neutering employment insurance or raising the retirement age, the power of the federal government has no inherent progressive tendency. In the current context, it is the provinces who are innovating in child care, housing and poverty reduction.

A New Federal Practice

If the driver of change is opinion and mobilization, and if neither federal or provincial governments are inherently progressive, strategic reflection should turn to the question of how to encourage federal-provincial dynamics conducive to egalitarian projects. What form should “federal leadership” (as well as needed provincial leadership) take?

Happily, much of the roadmap proposed by Towards A More Equal Canada does not require much federal provincial negotiation and cooperation. In terms of “fair taxes” and the transfer system, crucial to improving equality in the here and now, the federal government has a great deal of the latitude to increase the progressivity of the tax system and to provide income-tested benefits for groups such as the elderly through Old Age Security and the Guaranteed Income Supplement. The provinces themselves are not so badly equipped on this front either, being able to set their own tax brackets, and to deliver transfers such as child benefits. The federal government also has full latitude to rebuild Employment Insurance. Finally, for all provinces to provide the sorts of services that build equality over time (education, training, housing, health care), the federal government needs to equalize provincial tax bases. This may be the most challenging task for the federal government as resource booms create unprecedented imbalances between provincial abilities to fund services.

On the provincial side, the key contribution to equality in the here and now is around labour markets, where they can work independently to encourage “good jobs”.  Provinces can modernize labour legislation so as to “lift the floor” of wages and working conditions at the bottom end of the income distribution, and can encourage institutions such as unions that ensure a more even distribution of productivity gains. In terms of fostering equality between groups and over the life cycle, provinces again hold the important cards in areas such as social assistance, housing, early childhood development and violence prevention. These are big tasks, and there may be ways that smaller provinces could benefit from the expertise of other provinces or the federal government. But there is no need to do the “federalism foxtrot” to get these initiatives started in provinces, and this is evident in provincial innovations around poverty reduction, child care, and minimum wages, among others.

In sum, a lot of the egalitarian policy agenda sketched out in the discussion paper has little to do with federalism and much to do with stirring governments to action around existing responsibilities. That said, there may be places where it is worth having discussions about trying new things. In disability policy, some have looked for the federal government to provide income support (modeled on a guaranteed income), while the provinces provide supportive and developmental services. In income support, the Caledon Institute has proposed a new structure for “adult benefits” where the federal government takes the burden of financial support off provincial social assistance programs, and the provinces take on greater responsibility for training and labour market placement. If there is appetite for these kinds of changes, then they are worth pursuing. But if there isn’t, then continuing to push them will dissipate reform energies rather than ignite them.

Pathways Within Existing Structures

An alternative approach is to consider new institutions that open spaces for policy innovation and that strengthen egalitarian-minded actors within both the federal and provincial governments. Social and economic policy-making has been concentrated in federal and provincial ministries of finance in an unprecedented fashion over the past twenty years, leaving social policy and labour ministries with little policy-making leeway. This leeway is further constrained when federal transfers come with conditions, be they national standards or the responsibility to report on results, so energies are diverted to jurisdictional wrangling rather than policy content.

One way forward would be to create institutions outside of the direct purview of either the federal or provincial governments to develop social policy agendas, share experiences and discuss results.  These kind of “meeting places” (as the Canadian Policy Research Networks called them; the Canadian Council on Social Development and the Canadian Centre for Policy Alternatives developed similar ideas for Social Councils) would take policy discussion somewhat outside of jurisdictional battles.  They would include policy advocates and stakeholders so as to improve supportive linkages in bringing reform projects through the bureaucracy and through partisan politics.

There may still be cases where using policy-specific federal transfers makes sense to bring about projects developed in these meeting places, but the development of meeting spaces takes the weight off the federal government in terms of trying to set and police standards.  Given the accountability provided by provincial budgetary and auditing practices, the most the federal government should ask of provinces is the creation of an action plan in concert with their citizens.  Such transfers should also involve a real openness to asymmetrical solutions, particularly in terms of Quebec doing its own thing, but also to allow provincial pioneers on given policies to use anyadditional money from transfer to try new things.

In sum, Towards a More Equal Canada provides a blueprint to bypass frustrations with federalism.  The big pieces of “fair taxes” and “good jobs” require relatively minimal federal-provincial coordination. In areas where federal-provincial coordination is more necessary, such as around rebuilding public services or aspects of income security, the partisans of equality might do better to build institutions of policy consensus formation, such as Social Councils or “meeting places” than to search for some fleeting “federal leadership.”  We will have a more equal Canada when citizens and their organizations make equality a goal that no party and no government can downgrade to secondary status.  Expectations of creating more equality by trampling on the regional and national equalities bound up in federalism are likely to be dashed by heightening the very same intergovernmental axe-grinding that they perceive as the barrier.

Peter Graefe is Associate Professor of Political Science at McMaster University.