The promise of a renewed federalism under Carney's stewardship
Over the last two decades, Canadian federalism has been marked by disengagement or coercion, but PM Mark Carney seeks to broker a collaborative federalism aimed at achieving nation-building objectives
Throughout our country's history, Canadian federalism has been challenged to varying degrees of unrelenting shocks (wars, economic crises, social unrest, etc.), and yet, continues to prove itself to be among the most durable and adaptable federations in the world.
But Canada's system of federalism has also steadily drifted into becoming the most decentralized as well. This can be attributed to a variety of different reasons, but underpinning most of them is an intensification of regional demands, normally driven by provincial premiers asserting their authority within its jurisdiction, while simultaneously seeking to have influence on the federal government in its national-decision making process.
Federalism by its nature generates an expected amount of tension between the two levels of government, especially in areas of mutual jurisdiction, but there are times when the relationship becomes so fraught with conflict that it reaches a near breaking point. Perhaps there may be no better illustration of this friction than what we are currently witnessing out in Alberta.
In a speech delivered shortly following the re-election of the federal Liberals under Prime Minister Mark Carney, Alberta Premier Danielle Smith had re-litigated many of the province’s historical grievances, and highlighted some of her previous demands for the new Carney government, centered on resource development and pipeline expansion - all the while in the backdrop, threats of Alberta separation are becoming more pronounced than ever before.
According to a recent Leger poll, the sentiment for an independent Alberta was nearly split amongst Albertans, while over half of Canadians understood why Alberta may want to separate. Given the precariousness of our national unity to date, it is worth reflecting on how Canada found itself at this critical juncture, and moreover, how the Carney government intends to ameliorate the situation.
It is from here that this analysis will seek to demonstrate that it has been failed approaches to intergovernmental affairs over the last twenty years from Stephen Harper and Justin Trudeau successively, which has led to the breakdown in our federation. And in contrast, identifying the early steps Carney has taken to signal the promise of a restorative approach to federalism, one grounded in constructive collaboration and consensus-building between the two levels of government.
From Harper to Trudeau: The unsuccessful intergovernmental approaches
As referenced prior in this newsletter, Stephen Harper's approach to intergovernmental relations was to utilize a practice he coined as “open federalism,” which was a strict adherence to the division of powers codified in the Constitution, whereby the federal and provincial governments kept within their own jurisdictional lanes without any overlap or encroachment. That is to say, Harper disengaged from any involvement in provincial affairs, focusing solely on federal areas of responsibility.
Under Harper's approach, national unity concerns were close to non-existent. Historically, ‘national unity’ denotes the federal government’s efforts to manage the demands of Quebec nationalism within the pan-Canadian polity. Harper’s hands-off arrangement worked well for Quebec, as past federal interventions through the use of its spending power had always been a sore point for the province, which is sensitive to any perceived interference in the preservation of its cultural distinctiveness.
Consequently, Harper is largely credited with maintaining a constitutional peace perhaps not seen since the early days of Wilfrid Laurier’s premiership. This was not a coincidence. Harper was the only other prime minister aside from Laurier, to have embraced a more classical understanding of federalism, believing provinces were best situated to deliver specific programs under its jurisdictional expertise without the necessity of federal intervention.
This was certainly evident when it came to environmental policy, as the primary example. Harper viewed the previous government's commitments under the Kyoto Protocol to be far-fetched and impractical, and instead left it entirely to the provinces to develop their own programs towards emission reductions.
While Harper's provincial patchwork of environmental policy was pleasing to Alberta's energy sector, a posture which had even reinforced constitutional peace in the short-term, it also marked the beginning point for strained relations between the federal and provincial governments.
Because Harper had thoroughly disengaged from any collective intergovernmental dialogue in areas of shared jurisdiction, Alberta's existing frustration with a lack of pipeline construction should be traced back to this period. Harper had pursued several pipeline projects, but ran into three predictable roadblocks: 1) the environmental lobby that felt Canada had ceded its leadership on the environment file under Harper; 2) several provincial premiers opposed a pipeline impinging on the very environmental plans Harper had empowered them to craft on their own; and, 3) Indigenous groups whose lands would be impacted were not consulted in any meaningful fashion.
As such, any new major pipeline construction essentially became a non-starter under Harper's conception of federalism, which was inherently flawed in its ability to generate any level of consensus, and started us down the path of intergovernmental turmoil anew.
If Harper’s philosophy of federal disengagement set the foundation for future intergovernmental tensions to appear, then it was Justin Trudeau's strategy of coercion that inflamed it.
Trudeau was eager to carry the mantle of environmental leadership that Harper had willingly abandoned, but in pursuit of doing so, demonstrated a reckless and unsophisticated approach to federalism. An approach that could be seen as an asymmetrical, paternalistic version, whereby the federal government saw provinces as mere subordinates to carry out national directives, with federal caveats and exceptions afforded to some and not others.
Case in point, the signature plank of Trudeau's environmental policy was to unilaterally impose a federal carbon pricing regime on both consumers and industries across the country. However, the Act was crafted with an embedded acceptance of selected programs already adopted in British Columbia, Alberta (under an NDP government), Ontario, and Quebec. In effect, it compelled provinces outside of that cohort to either adopt some form of carbon pricing or a cap-and-trade system, otherwise, the federal carbon levy would apply.
The early dissenters from carbon pricing were Saskatchewan and Nova Scotia, which had their own “capture and store” system and a regulatory framework respectively, yet despite their proven, and in Nova Scotia’s case, leading methods to reduce greenhouse gas emissions, the Trudeau government rejected both.
Even after the carbon tax had become universally unpopular, having been associated with the rising cost of living, along with a politically motivated exemption made by Trudeau, Nova Scotia Premier Tim Houston still attempted to assuage Trudeau of the province's alternative plans to reduce emissions without the tax, but to no avail. Saskatchewan, on the other hand, went the way of active defiance by passing an unconstitutional law not to remit the tax, serving as another sad legacy offshoot to the Trudeau era of federalism - fostered unconstitutionality.
Moreover, this was a prime illustration of the described approach to Trudeau's view of federalism, binding provinces to the will of the federal government in a one-size fits all model, but fixing that model in an asymmetrical way that benefits and/or lessens the impact for those regions crucial to Trudeau's electoral fortunes, while being dismissive to all other external sentiments.
This abrupt shift from disengagement to coercion in federal-provincial relations was felt most by Alberta. As mentioned, though Harper faced stiff opposition in pipeline expansion efforts due to a lack of stakeholder engagement, for Alberta, the Trudeau government simply became another active impediment against its primary resource industry. Trudeau had successfully shaped an entire legislative apparatus designed to effectively kneecap Alberta's energy sector. As per a recent Frasier Institute review:
“Albertans have faced a barrage of federal policies that disproportionately and negatively impact the province including Bill C-69 (which imposes complex, uncertain and onerous review requirements on major energy projects), Bill C-48 (which bans large oil tankers off B.C.’s northern coast and limits access to Asian markets), an arbitrary cap on oil and gas emissions, numerous “net-zero” targets, and so on.”
The aforementioned review concluded that in order to quell the separatist fervour in Alberta, it necessitates the new Carney government to end these policies, echoing Smith’s own warnings to the federal government. Carney has been non-committal on repealing any of these laws as they stand, but what he has shown is the possibility of a new path for a more collaborative federalism.
A vision and a promise: Carney's renewed approach to federalism
Carney will embark on a major test this week at the highly anticipated First Ministers' Conference in Saskatoon, where it is expected he will, in collaboration with provincial and territorial leaders, come to a tentative agreement on a short-list of building projects considered to be in the national interest for fast-tracked development, which may include oil pipelines. Smith has already raised the stakes of the conference, issuing a demand letter for the prime minister, in advance of the two-day meeting.
Be that as it may, Carney has been meeting the moment since becoming prime minister. Pivoting away from his predecessors’ approaches, and in some cases policies (i.e. eliminating the consumer carbon tax), Carney has been attempting to signal a reset in the functional operation of federalism, by treating the provinces as equal collaborators and partners in Confederation.
Due to the growing need for collaboration from both orders of government, especially with the onset of the U.S trade war, one of Carney's first acts as prime minister was to hold a First Ministers’ Conference just prior to the federal election. The intent was not only to coordinate a united response to the U.S. tariff threat, which to that point was severely disjointed on account of absented federal leadership, but also to lay the groundwork for Carney’s ambitious vision for an interprovincial trade strategy.
After the election, Carney forged ahead with yet another First Ministers' Conference last month, to build on the momentum of the continued lifting of interprovincial trade barriers that was happening throughout the country. In addition, the fast-tracking of approvals for building projects of national importance was emphasized. This follows from the Liberals election platform, in pursuit of the One Canadian Economy, including a “one-project, one-review,” mechanism to aid in the rapid completion of nation-building projects.
The pace and frequency of Carney's engagements with the premiers is unlike anything we have seen in a long time. One could argue Carney is returning to a model of executive federalism, which can be defined as political elites’ deal-making with national implications, characteristic of the mega-constitutional politics seen between the 1970s to early 1990s.
However, Carney's approach differs in two critical ways. First, Carney is not seeking to be a driver of consensus (as was the case with Pierre Trudeau and Brian Mulroney's constitutional gambits), but rather as a conduit to consensus. As Carney stated in a recent interview, this means putting in place the processes that help drive consensus. But secondly, part of those processes must involve Indigenous peoples, to which Carney has already met with and declared that any major national resource project will have an “Indigenous component.”
With regard to Alberta, the Carney government intends to put forward another process for consensus-building, by tabling a “national interest” bill, setting out the criteria for a streamlined approval process on any project considered to be in the national interest. The streamlining would effectively circumvent existing regulatory assessments, such as Bill C-69, an already noted irritant for the Alberta government. The bill also holds for the requirements to consult with Indigenous groups - in all, serving as an elegant solution for maintaining existing federal standards overall, without impeding on provincial ambition.
All this to say, by underscoring the seriousness of the U.S. threat in pursuit of his vision for a united Canadian economy, Carney has provided both the contextual and practical landscape to foster collaboration and consensus amongst premiers, environmentalists, and Indigenous groups alike, though its likely to be a very finite window.
Carney’s strategy is not without its landmines. By leaving it to the provinces to identify and present projects of national importance, this could threaten to overwhelm the agenda to a degree that it impedes meaningful progress. Or worse, ends with bitter disappointment and exclusion of other provinces, should their desired project not attain the necessary consensus to get off the ground, and thereby creating new or deepening rifts within the federation.
It is also unclear if the proposed circumvention bill would be enough to satisfy Smith and stifle any separatist movement, even if a major pipeline project is deemed to be in the ‘national interest.’ Nonetheless, these are laudable efforts by the federal government to appreciate matters of regional concerns without wholesale capitulation to the whims of any maverick premier. To that end, Carney's reasonable tack on federalism has much promise.
Will the promise be fulfilled? To quote Canada’s new Minister of Energy and Natural Resources, Tim Hodgson, “Canada will no longer be defined by delay, we will be defined by delivery.” For the sake of our national unity and future economic prosperity, Canadians are counting on it.