Federalism and Public Policy I: Respecting Federal Jurisdiction

The newly-elected 39th Parliament is brimming with new potential political and policy dynamics that could have far-reaching consequences for Canadians and their place in the world. For example, an interesting aspect of Stephen Harper's approach to federal-provincial relations is the idea that by showing more respect for provincial jurisdiction--i.e. by reining in the federal government's penchant for using its spending power in areas of provincial responsibility, and "disentangling" from the provinces--the feds will be able to govern more effectively within their own jurisdiction.

Mr. Harper makes a good point.

Corrections, gun control, defence (i.e. in suitable "niche" areas as arctic sovereignty, patrolling borders and coastlines, military intelligence, disaster relief, and peacekeeping), national sport and culture, research, parks, museums and heritage sites, foreign aid, transboundary (air and water) environmental issues and aboriginal policy, are all areas of federal jurisdiction that have historically been among the most neglected and ill-governed policy fields. Surely this is not what we should expect in a federation where the national level of government enjoys a perennial fiscal surplus. Whatever the political importance of healthcare and education--and they are the most important policies to Canadians--it nonetheless remains a fundamental truth that they are primarily provincial responsibilities and, as such, it is always possible for provincial governments to raise their own taxes to pay for them. No such option exists for the aforementioned items of exclusively federal jurisdiction.

In addition, a federal government that is less preoccupied with provincial social programs and their funding ought to be more capable of realizing an internationalist vision and a policy of connectedness to the world. Yet, in the election campaign, not one of the three main party leaders gave a major address on international affairs. If anything, the Conservatives were even more guilty than the Liberals and NDP of neglecting the rest of the world in their platform.

The problem: other aspects of conservative ideology and the Conservative platform, which could frustrate the potential of any new 'politics of federal jurisdiction'.

The new Conservative government should have little trouble delivering on its GST cut, its accountability agenda, and its crime bill. Opposition parties would be foolish to try to block these initiatives. It is also possible that the Bloc Quebecois could be counted upon to support the government's childcare program, but for an ironic reason: Quebec already has a full-fledged public daycare program of its own, and therefore has nothing to lose if such a program is not adopted in the rest of the country. A $1200 parental tax break could complement Quebec's policy without "interfering" in program standards or design. In other words, the Conservatives' childcare policy is consistent with their "disentanglement" agenda, and could help to consolidate Tory gains in Quebec. After that, however, things could get shaky.

For example, doing something to redress the "fiscal imbalance" between provincial spending responsibilities and federal fiscal capacities would appear to imply giving more tax room, or transfers, or jurisdiction over resources, to provincial governments. With a federal budget already strained by Liberal health care commitments and Tory election promises, this could prove unaffordable.

Try talking to Stephen Harper about how the government plans to reduce greenhouse gas emissions and close the gap between our Kyoto promises and our Kyoto performance, and he will likely try to change the subject to his "anti-smog strategy". That's because he apparently intends to renege on Canada's commitment to implement the Kyoto Treaty. One can question whether recognizing Quebec's cultural autonomy at UNESCO is the best way for Canada to fulfill its international role. And it is also highly doubtful that the Tories would improve upon the Liberals' performance in foreign aid, which is expected to remain well below half of our stated goal of 0.7% of GNP through 2010. Is this what will count as assertiveness from the new, unshackled federal government of the Tory future?

The Conservatives supply us with a valid premise--that disentanglement from provincial jurisdiction can "free" the federal government to do its own job better--but they appear either unable or not inclined to follow through on what such a realignment should mean for Canada's role in improving the global environment, ending global poverty, and safeguarding universal human rights. Such an epiphany may have to wait until the 40th Parliament of Canada.

Conservative Majority? Second Thoughts

{The following post, though written on Janaury 20, appeared as a special article to the Williams Lake Tribune on January 24, 2006. Given the importance of aboriginal issues in the Cariboo-Chilcotin region of British Columbia, I felt it was an apposite commentary. However, I probably should have known better than to hazard a guess as to what the party standings would be after the election. Another blow to the prestige of political "science"! --MC}


Stephen Harper has finally made a mistake. While he has for the most part avoided getting drawn into detailed discussions of who will be in his Cabinet ( a blunder that former British Labour Party leaderNeil Kinnock made in 1992, stealing defeat from the jaws of victory in that year's British general election), his remarks about how his power would be constrained by Liberal-appointed bureaucrats, judges, and Senators have had the opposite of their intended effect.

First, the feeble nature of Harper's reassurance served to underscore the near-absolute power that a Prime Minister enjoys in a majority government. Second, Harper appeared to imply that our professional civil service and independent judiciary are as politicised by patronage appointments as the Senate is. Third, the soon-to-be Prime Minister's attitude suggested that a Conservative government might need to appoint conservative judges, conservative deputy ministers, and conservative senators in order to rectify the problem. Finally, we were led to wonder just what there was in Harper's conservative agenda that would come into conflict with the Charter of Rights or strain the usual obeisance of unelected officials toward their political masters.

Journalists and political opponents pounced upon Harper's remarks, and rightly so.

I am betting that the election of a Harper Government will trigger a run on library and bookstore copies of Thomas Flanagan's First Nations? Second Thoughts, especially on the part of citizens in the aboriginal policy community. Flanagan, a close advisor to Harper who is certain to be playing a leading role in a Harper PMO, is famous (or infamous) for puncturing the image of Louis Riel and attacking any form of special status for First Nations people. Essentially, he is a throwback to the classical liberalism on Indian policy that was abandoned by Pierre Trudeau in the wake of the aboriginal backlash against his 1969 White Paper and the pathbreaking Supreme Court decision in the 1973 Calder case. First Nations? Second Thoughts makes a refreshing read (i.e. classical liberalism is not dead), but its prescription, taken as a whole, is not tenable either legally or politically, in today's Canada.

The Conservative attitude, typified by Flanagan--is that native Canadians, who suffer from ghettoization and a culture of defeatism and dependency, are best helped by changing the structure of economic incentives and opportunities that face them as individuals, rather than the kind of collective enablement that comes from aboriginal rights, treaties, or "throwing money" at their problems. How will this stance be manifested once the Kelowna Accord is scrapped? I am willing to believe that that the mooted policy changes could result in marginal improvements to the lives of some First Nations peoples, but most of that cautious optimism is based upon the force of Section 35 of the Constitution Act, the impressive body of law recognizing indigenous difference in the constitution and the common law, and the determination of today's First Nations leadership, all of which would prevent any Government from undoing what has been accomplished in the past 30 years.

{People wishing to look at a detailed profile of Flanagan, the Calgary School, and their influence upon Stephen Harper, should look at "The Man Behind Stephen Harper" by Marci MacDonald in The Walrus, dated Friday October 08, 2004: http://www.walrusmagazine.com/article.pl?sid=05/05/09/2119243 . According to MacDonald, First Nations? Second Thoughts unleashed outrage in aboriginal and academic circles. "These aren't second thoughts," says Joyce Green, an associate professor at the University of Regina and a Metis herself. "They're the same old first thoughts that the colonizers came with from Europe. It's a celebration of the original arguments that supported the subordination of indigenous peoples." }

It is not surprising that the Globe and Mail and the Vancouver Sun have both endorsed the Conservative Party in this election. The Conservatives are the Official Opposition and the best bet to form a new government. But what both newspapers should have also stressed is that the objective of house-cleaning and the promise of new accountability standards can be realized in a minority parliament. Many voters wince at the prospect of another minority government, and the conventional wisdom is that a Conservative minority would be as unstable as the previous Liberal one. I disagree. Mr. Harper can work with the NDP on accountability, the Bloc Quebecois on decentralization, and even the Liberals on a wide range of economic and social issues. He will likely only need the support of any one opposition party for any given piece of legislation--a distinct improvement over the situation facing Prime Minister Martin. The result should also be sufficiently well-drawn to remove some of the incentives for vote-buying and floor-crossing on the part of individual Members that marred the 38th Parliament.

A minority government would also force the Conservatives to do what they clearly have not yet done----actually sell their programme to Canadians.

P.S. My Predictions, as of 7 p.m. Friday Jan.20:

Conservatives-- 138
Liberals -- 73
Bloc Quebecois-- 62
NDP -- 35

The Two Most Important Things You Need to Know About "Public Versus Private" Health Care

Public discourse over the state of our health system has repeatedly stumbled over the issue of "privatization" and how it relates to the "unsustainable" situation of escalating costs and growing waiting lists. Some point out that Canada already has "private" clinics, that Paul Martin and Jack Layton have both used them, and that most doctors and even most (not-for-profit) hospitals are already "private" actors, so why get worked up about greater privatization of delivery of health services? Now that the Supreme Court has ruled that in certain situations banning private health insurance for medically necessary services is unconstitutional, and large parts of the non-medicare health system are already being purchased privately, what could be wrong with allowing people to purchase better health care? Is the whole "public versus private" debate much ado about nothing? To understand why it is not, voters (and governments, and judges) need to grasp the implications of two fundamental distinctions: first, between financing and delivery; and second, between medicare and non-medicare components of health care expenditures.

Financing versus Delivery. This distinction is recognized as fundamental by everyone who studies health policy, but its implications weigh perhaps most heavily in the analysis of the Kirby Senate Committee Report on health care reform. Kirby states that a public monopoly (single-tier) health insurance for medically necessary services is essential to the achievement of both efficiency and equity because of the gains from larger scale; simpler administration; restrictions on the impact of inevitable market failures; and better cost control. These gains are so significant that Harvard Professor David Himmelstein has estimated that adopting a single-payer system in the US would free up sufficient funds to allow universal coverage in a country that now has over 30 million uninsured people. Kirby, however, does not see any similar advantages for public delivery: indeed, he sees competition in delivery (either within the public sector or in the private sector) as crucial to the sustainability of the system. This is another version of the "governments should steer, not row" philosophy that underlies much contemporary policy that goes by the name of New Public Management, Smart Regulation, et cetera.

The Kirby view strikes me as being quintessentially liberal--and Liberal. It is certainly true that more private and competitive health care delivery will not necessarily destroy our cherished medicare system. The heart of medicare is single tier financing of medically necessary physician and hospital services, not the idea that healthcare providers should be public employees. But the professed open-mindededness of the Kirby approach --"we are completely neutral as to whether delivery is done by private actors, interested only that competititon be allowed and efficiency be attained" runs into at least a couple of objections. The notion (endorsed by the B.C. Medical Association) that private, for-profit clinics would necessarily spend public monies more efficiently is highly questionable. Researchers at McMaster University released a detailed study in 2004 of for-profit hospitals in the US indicating that services cost 19% more in for-profit hospitals than in non-profit ones and that health outcomes were worse on average in for-profit facilities. Furthermore, trade policy analysts generally agree that the greater the degree of privatization and marketization, the greater the likelihood that health care measures will fall outside of trade treaty exclusion clauses for public services and therefore be subject to NAFTA and GATS/WTO obligations. These obligations could make reversing privatization prohibitively expensive--either in terms of financial compensation to private actors under NAFTA, trade sanctions under the GATS, or both. In short, there is a danger that privatization could get "locked in", whether it is in the public interest or not.

These considerations do not mean that competitive or for-profit delivery is always wrong. But in my mind they should create a presumption in favour of healthcare that is public or not-for-profit in how it is delivered, and not just in how it is financed. If that presumption is to be rebutted, it should be on a case-by-case basis in terms of demonstrated cost savings and efficiencies for the health system as a whole, without harm to quality of service or equality of access.

Medicare versus Non-Medicare. It is remarkable how seldom combatants in health care debates take the trouble to distinguish between different categories of health care expenditure, or to even specify what they mean by "medicare". It turns out to matter very, very much. Indeed, to use the term "medicare" as a synonym for health expenditures or even for public health expenditures is extremely misleading. Between 1993 and 2003 total annual health expenditures in Canada grew by about $50 billion--by 69.8 percent, as compared to 66.8 percent growth in GDP. But if we break these aggregate figures down we see a surprising result. If we reserve the term "medicare" for the two major founding programs which came into being in the 1960s, that is, hospital services and physician services, we find that their combined cost as a share of GDP actually declined over the decade--from 5.11 percent to 4.29 percent! The big increases occur in such categories as "other professionals", "other institutions", "prescription drugs", "capital", and "public health and administration", according to the Canadian Institute for Health Information. As Hugh Scott, the former executive director of the McGill University Health Centre, puts it, "it is difficult to see what is unsustainable about medicare funding as viewed from this perspective".

Indeed, when we look more closely at the categories of healthcare expenditure that are growing fastest, we find that they are to a large degree private. Compared to other countries, Canada is distinguished by the degree to which classic medicare (hospitals and physicians) is public, while the fastest growing items of expenditure, e.g. "other professionals", and to a large degree "drugs", are private. That makes it prima facie very difficult see how further privatization--whether of funding or delivery, and whether of medicare or non-medicare items--can be the panacea for reining in "unsustainable" cost increases.

Indeed, medicare has adapted quite well to technological and demographic change, although it has been temporarily compromised by under-funding and under-supply of health care professionals. A decade ago, the concerns about "waste" and "over-servicing" in the context of budget-cutting at the federal level led to major cutbacks in hospitals and decreases in health professional enrolment opportunities. The resultant personnel shortages are the root source of long current waiting lists. Fortunately, current efforts to increase the supply of health professionals, coupled with an effective waiting list management strategy, should mean than by the time the first baby boomers turn 65, most waiting lists will have been greatly reduced or eliminated.

The real question for the future is not whether we can continue to afford the publicly funded medicare component of our healthcare system, but whether we can afford the privately funded, non-medicare components of that system.

Senate, Override Sleeper Issues in 2006 Federal Election Campaign

[Note: The Prime Minister's 'Hail Mary' policy announcement in the Second Debate on January 10 to remove the federal government's right to use the override clause in the Charter of Rights is understandable in the current political context--the P.M. is trailing in the polls with less than two weeks left, and is now trying even harder to play the "rights" card. But the proposal is difficult to justify in moral or policy terms, coming as it does on the heels of (1) an assurance by Martin himself that no Supreme Court interpretation of Charter rights for gays would be allowed to circumscribe the religious freedom of clergy to refuse to perform same-sex marriages; and (2) a decision by the Supreme Court last June 9 in Chaoulli that has been widely criticized for potentially laying the legal foundations for the destruction of single-payer public health insurance, which is the very heart of medicare.

The following blog was written on December 16, following the first English-speaking Leaders' Debate. It underscores the danger of using major institutional reform as a political football. Now, it is clear that no matter which of the two major parties forms the government after January 23, either the Supreme Court or the Senate will have its political power enhanced, with potentially far-reaching consequences.---MC ]
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Scheduling a leaders' debate to occur during the middle of Christmas office parties and at the height of the shopping season guaranteed that it would not have a decisive impact on the polls. Most observers consider the first leaders' debate of December 16 to have been a mere dry run for the real contest, which shall begin in earnest in the first week of January. Nevertheless, critical issues were identified in this debate concerning the operation of two of our most important political institutions: the Upper House of Parliament, the Senate, consisting of unelected appointees of the Prime Minister; and the Charter of Rights and Freedoms, as interpreted by our most important unelected body (also appointed by the Prime Minister), the Supreme Court of Canada. In both cases, very serious questions have been raised that need to be answered before Canadians finally go to the polls on January 23.

First, the Charter. You may have noticed that the Liberal Party has aired some very effective advertisements identifying itself with the Charter of Rights. Never mind that it was actually three parties and ten governments (one federal, nine provincial) that negotiated that hallowed document and put it in a made-in-Canada constitution in 1981. Or that the CCF first proposed the idea of a constitutional charter in Parliament in 1945, and first enacted a bill of rights in provincially in the 1940s, or that John Diefenbaker first brought in the Bill of Rights and led the battle against Apartheid in the early 1960s--a battle that was not fully taken up again until the Tories returned to office in the 1980s. Never mind that the subtle message--"we gave you your rights, so you owe us your eternal gratitude"--smacks of precisely of the arrogant culture of entitlement that is at the root of this Government's worst scandal. The idea of the sacredness of the Charter and the rights that it contains was an effective wedge issue that helped to scare many people away from the Conservatives in 2004, when their opposition to same-sex marriage conflicted with appellate court rulings and raised the question of whether the Conservative might actually use the dreaded section 33 "notwithstanding" clause to override a decision of the Supreme Court concerning fundamental rights and freedoms contained in the Charter!

Mr. Harper is now ready for this line of attack, making it perfectly clear that he is not prepared to use the override clause of the Charter to implement his party's views on same-sex marriage, although he would entertain a free vote in the House of Commons (and if parliament voted to end same-sex marriages, what then?). Fine, but an even larger question is being begged in this debate. Exactly when would our leaders be prepared to use the override? Is it ever justified? This question has had some considerable urgency and relevance to the field of healthcare since last June 9, when the Supreme Court of Canada decided in Chaoulli v. Quebec that the ban on private health insurance in Quebec was unconsitutional because it violated section 1 of the Quebec Charter. This hypothetical is not so hypothetical anymore: if the Supreme Court reproduces its Chaouilli decision nationally, so as to strike down the ban on private health insurance for medically necessary health services supplied by physicians and hospitals; and that decision threatens to destroy single tier healthcare with respect to those services; is roundly condemned by healthcare experts as being inadequate in its use of social science and compartive policy evidence; and is equally condemned by a vigorous dissenting judgment of three or four judges who (correctly, in my view) see this area as a quintessential public policy question, calling for judicial restraint---well, in those circumstances, would any of the leaders be willing to use the notwithstanding clause? In particular, can we trust Mr. Martin, who has wrapped himself up so tightly in both medicare and the Charter--to make the right decision? And just what might that be, Mr. Dithers?

Second, the Senate. Mr. Harper almost casually mentioned that a Conservative government would finally bring an elected Senate to Canada. Of course, constitutionally speaking, this is an impossibility, as that would require a constitutional amendment, which in turn would invovle haggling over the distribution of seats, electoral formulae and the like. What Mr. Harper no doubt means is that he would continue to appoint Senators, but that provinces would be allowed and encouraged to elect replacements for Senate vacancies and that he would use his appointment power to honour their democratic wishes. Nice move, but again it raises some uncomfortable questions. The Senate constitutionally has all of the same powers that the House of Commons has, except that it cannot initiate money bills and only has a suspensive veto on constitutional amendments. Do we want a Senate blocking government legislation frequently? And, if Senators are democratically elected, why shouldn't they introduce money bills? If Senators are elected as members of Parties, won't they vote along party lines rather more than purely "regional" ones? And is the existing distribution of Senate seats--30 for the 4 atlantic provinces, 24 for the 4 western provinces, 24 each for Ontario and Quebec, and 3 for the three territories--the proper one for democratic accountability in 21st century Canada? It is far from being a Triple-E Senate based on provincial equality, or even regional equality, since B.C. arguably ought to count as a region in its own right. It is heavily weighted toward central and Eastern Canada, just like the House of Commons.

For a political junkie, the Senate provides an endless array of potential possibilities for reform to ponder. Some--like having the P.M. share half of his appointments with the Opposition and the Premiers, and paying Senators on a per diem basis--are constructive, can be done within the present constitutional framework, and have no obvious downside. Others--like Mr. Harper's proposal--are so potentially fraught with unintended consequences that they should be approached with caution. Personally, I am intrigued by the notion that the Senate, as a legislative body that is not the seat of government and is therefore not a House where the government can fall due to a vote of non-confidence, can more easily be based on proportional representation. I also like to imagine an elected Upper House where a more regionally balanced group of legislators can exercise a veto in areas where the Government is spending money in provincial jurisdiction--health, education, daycare , and so on. In areas of pure federal jurisdiction such a newfangled Senate would have only a suspensive veto. But this is not Mr. Harper's Senate.

One of the great things about our present group of unelected rulers in Parliament is that they can be counted upon to do a lot of good committee work and to keep their constitutional powers in reserve. Such admirable restraint will go out the window with the appointment of elected Senators.

The real problem occurs when our unelected rulers lack self-restraint--which is why, for the time being at least, we should be more concerned about that that other "other place"--the Supreme Court of Canada.

The Case For Another Minority Parliament

The Parliament of 2004-2005 has been a poor advertisement for minority governments. It barely stumbled out of the gate, with some people wondering whether the Government would even survive the first Throne Speech debate.
Since then, Parliament's existence appeared to hang alternately on the health of Chuck Cadman, the price of Gurmant Grewal, and the colour of Belinda Stronach's dress. Why on Earth would anybody want another minority government?

Part of the answer must be that few people who think about it really want a majority government, either. While polls have fluctuated during this election campaign, the public has consistently indicated that it feels (1) that the ruling Liberal Party is overripe, if not rotten; and (2) that the Official Opposition Conservative Party is not quite ready to take over. These opinions are obviously well-founded on both counts.

The steady stream of unflattering leaks and revelations coming out of Liberal ministries are a tell-tale sign that this Government has too much baggage to carry comfortably.

Conservative campaign commercials designed to persuade us that Stephen Harper and his gang are really just a regular group of Canadians is providing a steady source of material for the Royal Canadian Air Farce. The Conservative Party's policy imagination seems limited to tax breaks and tax incentives, while Stephen Harper vows to protect medicare with all of the enthusiasm and sincerity of a recalcitrant schoolboy reciting "I shall not misbehave in class".

Another minority parliament therefore seems to be both very likely and preferable to giving either of our two major parties a free hand for 4-5 years. And with luck, it will be based, either formally or informally, on a contractual agreement between two or more parties. Such an accord would have both the virtue of stability (defined as at least two years without a serious threat of defeat) and of integriy, by forcing the government to keep its election commitments (assuming that is desirable and affordable) and closing its credibility gap on a number of key issues: finally delivering on public daycare, actually reducing greenhouse gas emissions, achieving real democratic reform, and restoring levels of foreign aid spending to what they were 15 years ago.

Most importantly, such a Parliament--and clearly, I am thinking of an NDP-Liberal entente and not a Conservative-Bloc Quebecois one--could buy some precious time for our single-tier healthcare system. A moratorium on decentralization and privatization is probably a good idea while we assess (1) how successful the Romanow recommendations and the waiting list management strategy are in achieving their stated aims; (2) what our domestic constitution, as interpreted by the Supreme Court of Canada, has to say about the ban on private healthcare insurance; and (3) what our external constitution--the international trade rules contained in the NAFTA and the WTO --says about the scope of exemptions for public services from international trade law.

Although both Mr. Martin and Mr. Harper have been rhetorically unequivocal in their support for single-tier healthcare, Mr. Martin has also been unequivocal in his support for the Charter of Rights as interpreted by the Supreme Court and his opposition to the use of the notwithstanding clause, while Mr. Harper has repeatedly supported letting the provinces have more room to exercise their jurisdiction and letting markets play a larger role in governance. In both cases, we need to know--what would they do when these fundamental values collide with the value of single-tier medicare? Since we don't know, and probably won't know before January 23, I suggest that it would be unwise to give either man a monopoly of political power at this time.

So sit back, relax, and look forward to a minority government that looks more like the Pearson years of 1965-1968 and the Trudeau years of 1972-1974 than ones we have just been through. It could prove to be a more expensive ride, but it will ultimately be a safer and more enjoyable one.