Intergovernmental Policy Capacity in Canada: Inside the Worlds of Finance, Environment, Trade, and Health 9780773587359

Table of contents :
Cover
Title
Copyright
Contents
List of Tables and Figures
Acronyms
Preface
Acknowledgments
1 Intergovernmental Policy Capacity: A New Perspective
2 The Landscape of Federalism and Intergovernmental Relations in Canada
3 Intergovernmental Relations Generalists: The View from the Centre
4 Finance: Long-Standing Influence
5 Environment: High Expectations, Low Deliverables
6 Trade: Measured Cooperation
7 Health: Money and Turf Wars
8 Comparative Analysis Across Policy Sectors: Similarities and Differences
9 Intergovernmental Policy Capacity and Jurisdictional Variation: Fourteen Stories
10 Findings, Recommendations, Conclusions, and Challenges
Appendices
1 Provincial Equalization Prior to 2004
2 Territorial Transfers Prior to 2004
3 Federal Transfers 2006–07
Bibliography
Index
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
R
S
T
U
W
Y
Z

Citation preview

INTERGOVERNMENTAL POLICY CAPACITY IN CANADA

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Intergovernmental Policy Capacity in Canada Inside the Worlds of Finance, Environment, Trade, and Health GREGORY J. INWOOD, CAROLYN M. JOHNS, AND PATRICIA L. O’REILLY

McGill-Queen’s University Press Montreal & Kingston • London • Ithaca

© McGill-Queen’s University Press 2011 ISBN 978-0-7735-3894-8 (cloth) ISBN 978-0-7735-3895-5 (paper) Legal deposit fourth quarter 2011 Bibliothèque nationale du Québec Printed in Canada on acid-free paper that is 100% ancient forest free (100% post-consumer recycled), processed chlorine free This book has been published with the help of a grant from Ryerson University. McGill-Queen’s University Press acknowledges the support of the Canada Council for the Arts for our publishing program. We also acknowledge the financial support of the Government of Canada through the Canada Book Fund for our publishing activities.

Library and Archives Canada Cataloguing in Publication Inwood, Gregory J.   Intergovernmental policy capacity in Canada : inside the worlds of finance, environment, trade, and health policy / Gregory J. Inwood, Carolyn M. Johns, and Patricia L. O’Reilly. Includes bibliographical references and index. ISBN 978-0-7735-3894-8 (bound). – ISBN 978-0-7735-3895-5 (pbk.)   1. Federal-provincial relations – Canada. 2. Federal government – Canada. I. Johns, Carolyn M., 1967–  II. O’Reilly, Patricia Louise, 1954–  III. Title. JL27.I68 2011  321.02’30971  C2011-904533-8 Typeset by Jay Tee Graphics Ltd. in 10.5/13 Sabon

This book is dedicated with gratitude to all the intergovernmental officials who participated in this study. And to John, Kate, and Mitchell; Alison and Matthew; and Noreen and Francis.

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Contents

List of Tables and Figures  ix Acronyms xi Preface xv Acknowledgments xvii   1 Intergovernmental Policy Capacity: A New Perspective   3   2 The Landscape of Federalism and Intergovernmental Relations in Canada 32   3 Intergovernmental Relations Generalists: The View from the Centre 80   4 Finance: Long-Standing Influence  131   5 Environment: High Expectations, Low Deliverables  178   6 Trade: Measured Cooperation  217   7 Health: Money and Turf Wars  259   8 Comparative Analysis Across Policy Sectors: Similarities and Differences 302   9 Intergovernmental Policy Capacity and Jurisdictional Variation: Fourteen Stories  346 10 Findings, Recommendations, Conclusions, and Challenges  414 Appendices 1  Provincial Equalization Prior to 2004  475 2  Territorial Transfers Prior to 2004  475 3  Federal Transfers 2006–07  476 Bibliography 477 Index 519

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List of Tables and Figures

TABLES 1.1 Distribution of interviews by position  28 1.2 Total number of interviews by sector  28 1.3 Total number of interviews by jurisdiction  28 2.1 Summary of First Ministers’ Conferences (FMCs) and related policy agendas 1963–2005  42 2.2 Conferences served by the Canadian Intergovernmental Conference Secretariat 1998–99 to 2005–06  48 2.3 The functions and powers of intergovernmental officials  68 4.1 The machinery for federal-provincial-territorial fiscal relations 146 9.1 Provinces and territories: basic socio-economic features 2007  348 9.2 Annual expenditures of intergovernmental agencies 1995–2005 (in millions)   350 9.3 Personnel in intergovernmental agencies 1995–2005 (FTEs)   351 9.4 Intergovernmental agency structures and accountabilities 2006 352

FIGURES 1.1 Theoretical foundations  6 1.2 Determinants of intergovernmental policy capacity  19 2.1 Hierarchical network of intergovernmental structures  45 2.2 Sectoral departments with intergovernmental units 1985 and 2003 47 5.1 The Canadian Council of Ministers of the Environment 2008  184 9.1 Number of departments/ministries with intergovernmental units by jurisdiction 1985 and 2003  353

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Acronyms

ADM AHRAC AIT APC CAP CASA CCMD

Assistant Deputy Minister Assisted Human Reproduction Agency of Canada Agreement on Internal Trade Annual Premiers’ Conference Canada Assistance Plan; Council of Atlantic Premiers The Clean Air Strategic Alliance Canadian Centre for Management Development (renamed Canada School of Public Service in 2004) CCME Canadian Council of Ministers of the Environment Continuing Committee of Officials CCO CEAA Canadian Environmental Assessment Act CEC Commission for Environmental Cooperation Canadian Environmental Protection Act CEPA CESCC Canadian Endangered Species Conservation Council Canada Health Act CHA CHST Canada Health and Social Transfer CHT Canada Health Transfer CIHI Canadian Institute of Health Information CIHR Canadian Institutes for Health Research COF Council of the Federation Canada Pension Plan CPP CST Canada Social Transfer CTRADE Canada Trade Mission CWN Canadian Water Network DFAIT Department of Foreign Affairs and International Trade DM Deputy Minister DOE Department of Energy; Department of Environment EMFA Environmental Management Framework Agreement

xii Acronyms

FPRO Federal-Provincial Relations Office FPT Federal-Provincial-Territorial FMC First Ministers’ Conference FMM First Ministers’ Meeting FTA Free Trade Agreement FTAA Free Trade Agreement of the Americas GATT General Agreement on Tariffs and Trade FTE Full-Time Equivalent Harmonization Accord HA HCC Health Council of Canada HMIRC Hazardous Materials Information Review Commission IGA Intergovernmental Agency Intergovernmental Relations IGR IJC International Joint Commission ILO International Labour Organization International Monetary Fund IMF IOSCO International Organization of Securities Commissions Intergovernmental policy capacity IPC IRPP Institute for Research on Public Policy MIA Ministry of Intergovernmental Affairs Member of the Legislative Assembly MLA MOU Memorandum of Understanding NAFTA North American Free Trade Agreement NAPCC National Action Program for Climate Change NAAEC North American Agreement on Environmental Cooperation NCB National Child Benefit NLCA Nunavut Land Claim Agreement NPM New Public Management NRTEE National Roundtable on Environment and Economy NWPTA New West Partnership Trade Agreement OECD Organization for Economic Cooperation and Development PCO Privy Council Office PHAC Public Health Agency of Canada PMO Prime Minister’s Office PMPRB Patented Medicine Prices Review Board PRI Policy Research Initiative PT Provincial-Territorial PQ Parti Québécois



Acronyms xiii

SARS Severe Acute Respiratory Syndrome SUFA Social Union Framework Agreement TILMA Trade, Investment and Labour Mobility Agreement UFA Umbrella Final Agreement UNESCO United Nations Economic, Scientific and Cultural Organization World Trade Organization WTO YFN Yukon First Nations

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Preface

Governments in Canada must work through the system of intergovernmental relations to address an increasing array of policy problems of concern to Canadians. This entails working together within, between, and across state boundaries and state-society relations. Although our federal system has demonstrated some adaptability and durability in its intergovernmental policy capacity (IPC) over time, intergovernmental relations have been marked by disputes and considerable lack of progress. Collaboration has occurred, but only sporadically, and policy problems in economic, social, and environmental sectors, as well as the increasing inter-relatedness of our “networked” world, highlight the need for improved IPC. Our research focuses on the need to more fully understand the interface of federalism, public policy, and public administration and to use what we learn there to analyze key political and administrative ideas, institutions, actors, and relations which facilitate or impede IPC. Our purpose has been to collect and assess recommendations for improving IPC, and to disseminate the results of the research through public seminars and through the publication of articles and, now, this book on IPC. Our methodology, rooted in a neo-institutionalist and interpretive analysis, involves a combination of a survey and interviews of intergovernmental officials working in intergovernmental relations and finance central agencies, and in environment, trade, and health ministries, as well as a review of primary and secondary documents. The survey and interviews collected baseline data on the demographic profiles of intergovernmental officials and their perceptions on factors enhancing and inhibiting IPC, as well as on recent and future developments in intergovernmental relations; and recommendations

xvi Preface

for future intergovernmental challenges. This was supplemented with existing government data and scholarship in the fields. Overall, this work has resulted in a better understanding of IPC in Canada. It identifies the many different factors which enhance and inhibit IPC across policy sectors and jurisdictions, and contains recommendations from a cross-section of intergovernmental officials. The authors supplement this set of important recommendations with others which have been made in the federalism, public policy, and public administration literature, resulting in an innovative study which provides a needed synthesis of the literatures of the field, and hopefully a valuable source for academics, government officials, students, and stakeholders alike.

Acknowledgments

This project began in spring 2001 with a brainstorming cottage retreat. We were nearly consumed by hordes of blackflies, but nar­ rowly survived to design a study which pooled our varied areas of expertise in federalism, specific policy sectors, and public administration to comparatively investigate the issue of intergovernmental policy capacity (IPC). In the process of researching and writing this study, we incurred debts of gratitude to many people. The authors gratefully acknowledge the Social Sciences and Human­ities Research Council Federalism and Federations Research Grant Program (Research Grants #832–2000–0036 and #832– 2001–0020), as well as the Ryerson University, Faculty of Arts, Scholarly Research and Creativity Grant Program, which assisted us financially with the research for this book. We would like to thank the excellent team at McGill-Queen’s University Press including Joan McGilvray, Grace Seybold, Jessica Howarth, Jacqueline Davis, Katie Heffring, and especially Philip Cercone. We would also like to thank Dr Carla Cassidy for her unstinting support for this project during its gestation in all her roles as Vice President of Research and Innovation, Dean of the Faculty of Arts, and Chair of the Department of Politics and Public Administration at Ryerson University. As well, we thank our hard-working research assistants. We thank the anonymous reviewers who provided us with invaluable feedback, and the many scholars of federalism, public policy, and public administration upon whose work we relied for insight and guidance. We are also especially grateful to the many government officials across Canada who gave their time for interviews and who responded to our survey. Their contribution to our understanding

xviii Acknowledgments

of ­intergovernmental relations and the system’s IPC was immense. Errors of fact and interpretation, however, are ours alone. Gregory J. Inwood Carolyn M. Johns Patricia L. O’Reilly Department of Politics and Public Administration Ryerson University

INTERGOVERNMENTAL POLICY CAPACITY IN CANADA

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1 Intergovernmental Policy Capacity: A New Perspective

INTRODUCTION Governments in Canada are under increasing pressure to provide solutions to Canada’s policy problems, but what Canadian has not expressed exasperation at the apparent inability of the federal, provincial, and territorial governments to work together to produce policy for Canadians? Today’s seemingly intractable problems in the economic, social, and environmental sectors, as well as the growing interrelatedness of policies and our networked world, highlight the need for governments to work together across jurisdictional and state-society boundaries. Information and communication technologies have reduced time and space. At the same time, Canadian society is more diverse and multi-layered. All of these realities pose challenging policy questions for the Canadian federal system. A federal system of government is one in which the constitutional authority to make laws is divided between a national government and some number of sub-national governments, and neither level of government has the authority to alter the power of the other (Stevenson 2004). But federalism also has a sociological and normative meaning, one in which the citizens express a sense of shared membership in a community which goes beyond a mere articulation of legalistic constitutional rules (Smiley 1987; Shugarman and Whitaker 1989; Rocher 2009; Bakvis, Baier, and Brown 2009). The federal system in Canada has, to date, been a very adaptable fusion of parliamentary government and division of powers to accommodate pan-Canadian differences. Federal, provincial, and territorial governments in Canada have found ways to work together through what is called “executive federalism” (Smiley 1980), entailing r­elations between the

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executive branches of each government pursuing their own constitutional, legal, and policy priorities while also sustaining “both a common way of life and different ways of life” in civil society (LaSelva 1996, ix). This political system has yielded much to be proud of. Yet, governments at all levels are facing increasingly complex public policy challenges that demand more from the Canadian union. Many policy issues of today challenge the federation. Along with intergovernmental relations, other sectors that illustrate this well are finance, environment, trade, and health, as each has important intergovernmental dimensions. These dimensions are present across almost every policy issue facing the country and are reflected in the increasing interactions and agreements between federal, provincial, and territorial governments. They are also reflected in the increasingly networked relations that governments have with First Nations, municipal governments, foreign nations, non-governmental organizations, stakeholders, and citizens. These challenges are not unique to the Canadian federation; they test the capacity, flexibility, and adaptability of other federal systems as well. Scholarship in the areas of federalism, public policy, and public administration has documented these challenges from each field’s own perspective. However, a deeper understanding and application of theory and analysis at the interface of these literatures is required to better understand and address the policy challenges of today and of the future. In this book we argue that intergovernmental policy capacity (IPC) is a concept derived from the nexus of federalism, public policy, and public administration. Further, we argue that IPC is needed both to fulfill existing intergovernmental policy agreements and to develop new policies in the growing number of areas where both jurisdiction and resources are shared between levels of government. This chapter begins with an examination of the scholarship and theory at the interface of federalism, public policy, and public administration, situating our study within that nexus. It then outlines how the concept of IPC is defined at the interface of these bodies of scholarship and operationalized for this study. Four significant determinants of IPC (ideas, institutions, actors, and relations) are then each defined and discussed in the context of contributions from these three fields of study. Our comparative approach is then outlined. The final section of the chapter presents the methodology used in this analysis, as well as the plan of the book.



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THE INTERFACE OF FEDERALISM, PUBLIC POLICY, AND PUBLIC ADMINISTRATION In theoretical terms, the intersection of the federalism, public policy, and public administration fields is underdeveloped. Aside from an influential and enduring study by Simeon in 1972 which was ahead of its day in melding federalism, public policy, and public administration (Simeon 1972, 2006), there has been little theoretical advancement in the combination of the three fields since then. This is even though the three fields obviously exist and operate together in the real world and there has always been a certain degree of fit between the three bodies of literature. First, all three fields find common ground in institutional theory. They all focus on the significance of political institutions and state actors. Second, scholars in each have crossed over at times into the other two fields, resulting in a sharing at the margins of each other’s ideas and findings. Third, research in all three fields has been evolving and broadening to include noninstitutional factors as the reality of the policy world becomes increasing networked within a set of state and societal actors and more complex analytical frameworks, such that “the effects of federalism ... depend on how the federal system intersects with other factors” (Tuohy 1989, 142). Overall, however, research at the interface of these fields lacks theoretical coherence and is under-examined in the literature. While we cannot herein give a full review of these large, complex bodies of literature, for the purposes of this study we provide a snapshot of key elements and trends which have influenced the integration of the three fields. As we see it, there is much to be gained theoretically and empirically by conceptualizing IPC as situated at the nexus of federalism, public policy, and public administration (see figure 1.1). The Canadian Federalism Literature The study of Canadian federalism has been strongly influenced by historical institutionalism, which emphasizes the formal structures, constitution, and powers of its key institutions and actors over time (Gagnon 2009). Analyses of the key institutions of executive federalism, the Constitution, the division of powers, the role of the Supreme Court, and the interface between intergovernmental forums and

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Intergovernmental Policy Capacity in Canada

Figure 1.1 Theoretical foundations

f­eatures of Westminster parliamentary government have contributed to a maturing of scholarship on Canadian federalism. Analyses of key historical events such as Confederation, the patriation of the Constitution, the Charter of Rights and Freedoms, and the Meech Lake and Charlottetown Accords have provided important insights into the inner workings of federalism and ideas on how to improve Canada’s system of executive federalism. Indeed “they are the principal ‘pillars’ of the institutional framework within which Canadian governance and policy making take place” (Simeon 2010, 401). These institutional developments are central to any analysis of intergovernmental relations and are presented in chapters 2 and 9. Alongside the historical institutionalist influence, the field of federalism has also been strongly shaped by an interest in the relations between the key institutions and actors of the federation (thus the interchangeable use of “intergovernmental relations” to describe federalism), particularly the relations of state interaction (cooperation, collaboration, competition, disentanglement, or unilateralism) and executive power or dependency (executive control, ­centralization/ decentralization, or symmetry/asymmetry). These relations, or what Scharpf would call “modes of interaction” (Scharpf 1999), are clearly important both practically and methodologically (Heinmiller 2002) and have spawned considerable analysis and debate in the federalism literature (Cameron and Kikorian 2002; Fafard and Rocher 2008). Aside from these formal relations where ­institutionalized norms



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and rules are both followed and contested, the federalism literature also at one point placed considerable emphasis on the informal relationships of the federation. In the 1960s and 1970s especially, Canadian federalism scholars pointed to the importance of informal and cultural factors where, for example, human relations of trust, leadership, friendship, and animosity played an important role in intergovernmental decision-making (Black and Cairns 1966; Smiley 1971; Simeon 1972, 1979; Dyck 1976; Veilleux 1979; Stevenson 1979; Dupré 1985). Today a few scholars still note the importance of this informal interaction (Leslie, Neumann, and Robinson 2004; Johns, O’Reilly, and Inwood 2007), but it is a relatively understudied area compared to the scholarship focused on the formal institutions of the federal system. The Federalism and Public Policy Interface At the intersection of public policy and federalism, scholarly interest grew in the 1960s and 1970s in various policy areas on the impact of the institutions of federalism on public policy development, implementation, and outcomes. Moving from description to explana­ tion, institutional analysts emphasised the role of institutions in explaining policy outcomes in areas such as fiscal and social policy. While some policy analysts thought intergovernmental institutions held much promise in addressing public policy problems (Gallant 1971), others thought federalism was a barrier to policy progress (Porter 1965) – even resulting in “policy paralysis” (Jenkin 1983, 170). Much of the theoretical debate focused on the structure and character of intergovernmental institutions in terms of centralization and decentralization. In the 1980s, constitutional, fiscal, and jurisdictional conflicts in policy areas such as energy, environment, and trade enhanced interest in the federalism-policy interface. By the late 1980s, some federalism scholars were producing collected, comparative works on federalism and policy (Chandler and Zollner 1989), and increasingly the emerging emphasis in Canada on policy communities and policy networks (Pross 1986), or state-societal relations, was being translated intergovernmentally (­Atkinson and Coleman 1989; Coleman and Skogstad 1990). This interest in federal-provincial-territorial actors in policy networks was also reflected in a growing concern with democracy and c­itizen engagement (Cairns 1995; Dobell and Bernier 1997;

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Intergovernmental Policy Capacity in Canada

Lazar and McIntosh 1999; Cameron and Simeon 2000; Seidle 2000; ­Mendelson and McLean 2000; Institute of Intergovernmental Relations ­2001–04). Theoretically this debate has remained centred on whether federalism fragmented or excluded societal and state interests and what impact that had on various policy sectors and outcomes. The mid-to-late 1990s climate of federal debt and deficit reduction and the decided shift in intergovernmental relations away from a constitutional focus toward a more policy-oriented focus generated renewed scholarly interest in the intersection of federalism and public policy. Scholars became increasingly concerned with the policy implications of federalism, particularly policy outcomes (Bakvis and Skogstad 2002, 2008) and policy capacity amidst significant public sector reform (Peters 1996; Anderson 1996; Bakvis 2000). During the 2000s, the crossover of federalism and policy analysis grew in volume and sophistication – to the point where a Canadian text on federalism included a chapter on policy that laid out commonly used policy methodologies and theories (Bakvis, Baier, and Brown 2009). Essentially led by methodological debates in public policy over causal factors, scholars had come to see the role of institutions in political decision-making as considerably circumscribed by exogenous variables such as social, economic, and cultural drivers. Diversity and identity politics, the effects of globalization and “scale,” and the role of previously neglected actors (especially Aboriginals, municipal governments, and international organizations) and the networks they were developing were increasingly brought in as important factors to be assessed and debated in determining intergovernmental outcomes (Doern, Pal, and Tomlin 1996; Sancton 2002, 2008; Abele and Prince 2003). Network theories of policy studies tended to place institutions of federalism as macro, contextual, intervening, or independent variables which influenced the structure, function, and character of policy networks and actors and in turn outcomes. However, this approach was not yet extended in any significant way to a more networked theory of federalism. Related to these developments, interest in the role of ideas in influencing political outcomes in policy areas with significant intergovernmental features was beginning to grow in Canada at this time. International policy literature, particularly the American literature, from the 1980s had emphasized the importance of ideas in policy analysis (Stone 1988). It had been argued that the r­ equirement for



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ideational resources for policy capacity had created the need for a “higher level” of “policy coherence” in order to cope with a world in flux, one requiring systems with the capacity to learn and act (Schon 1983; Sabatier 1987; March and Olsen 1989) and at the same time to bring about their own transformation (Giddens 1987; Yanow 1996; Weiss 1998). The role of ideas was highlighted in several Canadian studies in the late 1990s and mid-2000s (­Bradford 1998; O’Reilly 2000; White 2002; Bhatia and Coleman 2003; Inwood 2005). The methodological offshoots of the new emphasis on ideational analyses, that is, discourse, narrative, and interpretive analyses, were occasionally called for (Abele and Prince 2003) or used in Canadian analyses (O’Reilly 2000; Bhatia and Coleman 2003), but they were more commonly seen in American, European, or Australian literature. What was increasingly seen at the intersection of federalism and public policy literature in Canada by the 2000s was simply a rise in interest in policy by federalism scholars (and vice versa) as key policy issues began to dominate the agendas of the first ministers’ meetings. A renewed focus on intergovernmental policy developments resulted in collected works (Lazar and McIntosh 1999; Institute of Intergovernmental Relations 2001–04; Rocher and Smith 2003; Harrison 2006; Bakvis and Skogstad 2002, 2008) and numerous sector-specific policy studies related to federalism. The Federalism and Public Administration Interface In North America, the interface of federalism and public administration followed a similar broad trajectory from a strongly institutional orientation to the more recent inclusion of contemporary neo-institutional and network analyses. Of course its path was ­ shaped by more management- and administrative-oriented concerns channelled, for example, at understanding the role of hierarchy, networks, and markets in addressing coordination problems in public policy implementation (Wollmann 2003), as well as vertical and horizontal capacity (Johns 2000; Bakvis and Juillet 2004) in the public sector broadly and in various policy domains. In the United States, there was considerable interest in the 1980s in the interface of public administration and federalism. Walters claims there was more crossover in the US between federalism and public administration than federalism and public policy (Walters 2005).

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Intergovernmental Policy Capacity in Canada

Some American scholars argued in the 1980s that the new “gospel of efficiency” was making the need to study intergovernmental administrative relations increasingly important (Schechter 1981). There was some theoretical development of multi-level analytical frameworks to highlight different research foci and different levels and units of analysis (Wright 1983, 1988; Agranoff and McGuire 1999) and inter-organizational and network theory for intergovernmental relations (O’Toole 1988; Agranoff 1988; Gage and Mandell 1990; Agranoff and McGuire 2001). More recently, theoretical work on networks and intergovernmental relations (Agranoff and McGuire 2003) and research on the role and perceptions of officials (Cho and Wright 2004) embodies work at this interface. There is now recognition in this literature that “as the importance and relevance of intergovernmental management becomes more central to more policy areas, gaining a systematic and credible understanding of trends in the fiscal, programmatic, and administrative capacity of the system has become more critical” (Conlan and Posner 2008, 4). In Canada, in the 1980s, a growth in scholarly literature at the interface of federalism and public administration also paralleled the growth of the intergovernmental bureaucracy (Schultz 1981; Doerr 1982; Wollstencroft 1982; Warhurst 1983, 1987; Simeon 1985; Smiley and Watts 1985; Dupré 1985; Pollard 1986). However, this literature tended to emphasize the key variables or drivers of federalism and was primarily concerned with institutions and their actors, the intergovernmental bureaucracy, and an increased emphasis on the relations among officials for explanation of policy developments and implementation outcomes. It was less influenced by the new network theories coming out internationally. The Canadian research at the federalism-pubic administration interface was upstaged by important developments in executive federalism, especially the constitutional debates and nationalism which featured prominently in the Canadian federalism literature at the time. However, by the early 1990s, in the broader context of neoconservative governments, state retrenchment, globalization, trade liberalization, and the political focus on debts and deficits, there was some renewed interest in Canada in the public administration-federalism interface (Cameron 1994). There was some academic interest in the impact of New Public Management (NPM) ideas on the federation (Aucoin 1995; Paquet and Shepherd 1996; Simeon 1997; Painter 1998) and by the late 1990s, academic research was descriptively examining



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the rationale and factors associated with “rethinking government,” “rethinking federalism,” and new collaborative models emerging to address intergovernmental challenges (Dobell and Bernier 1997, Simeon 1997; Cameron and Simeon 2000). However, there was very little empirical examination of the implications of such change for the Canadian administrative state (Tupper 1996; Johns, O’Reilly, and Inwood 2006; Fafard, Rocher, and CÔté 2009). The Federalism-Policy-Administration Nexus At the simplest level, our research design combines insights from the three fields of federalism, public policy, and public administration by focusing on IPC as seen through the eyes of its administrators. Our contribution is to situate our study at this nexus and then draw on both the experience of Canadian intergovernmental officials and the theoretical and methodological contributions of all three fields to produce a higher degree of integration than is typically seen in the literatures. To ground our concept of IPC at this nexus (see figure 1.1) we draw several key assumptions and concepts from each of these fields. Our starting point is Canadian federalism – it is our setting. The strength of the Canadian federalism literature is its focus on institutions and relations, particularly those of the state, where executive processes, political outcomes, institutional relations, and personal relationships of state actors play important roles. For federalism studies – including critical political economy analyses of federalism (Armstrong1981; Simeon and Robinson 1990; Stevenson 2004) – the stark power dynamic of institutional analysis with its central role for the state continues to define much of the scholarship ­(Cameron and Kikorian 2002; Fafard and Rocher 2008). This emphasis on power has resulted in a strengthening of its analyses of relations and relationships, both the formal institutionalized relations and the informal personal relationships. This is to say, the federalism literature is very strong on executive power and process, human dynamics, and political outcomes. It is less so on policy outcomes and management processes and resources. The outcomes produced in federalism have been analyzed by focusing on the agendas of key actors and the institutional means to attain these agendas, such as jurisdictional and/ or spending power. There is recognition that “policy responsibilities inevitably spill across jurisdictional lines and that in field after field,

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Intergovernmental Policy Capacity in Canada

successful policy making and implementation require coordination among the levels, if duplication, contradiction, and frustration are to be avoided and the aspirations of Canadians are to be met” (­ Simeon 2010, 401). Yet, most of this analysis of the federal system and sectoral levels has focused more on the “who” (uni-, bi-, multilateral actors) and the “how” (through what relations and by what means), than on the potential outcomes and impediments to their realization which, of course, is the dominant focus of the field of policy analysis. Nor does the study of Canadian federalism, caught up in analyzing the macro world of executive b ­ attles and intergovernmental agreements, give much thought to the maintenance of the system or the implementation of its outcomes by the micro administrative world – which, of course, is the dominant focus of public administration. Public policy contributes its own strength through ­neo-institutional analysis which holds together a wide set of institutional and social factors, as well as having a focus on policy outcomes and performance. From the public policy and federalism literature we incorporate theoretical assumptions that the design and functioning of federal institutions matter for public policy development, implementation, and outcomes. Describing and explaining outcomes in a number of policy areas must therefore incorporate an intergovernmental dimension. In addition, scholarship at the interface of public policy and federalism has placed an important emphasis on the roles of both state and non-state actors. It is assumed that both are important. It should be noted, however, that for purposes of this study a particular emphasis is placed on the role of the unelected public service officials who populate the institutions of Canadian federalism. Further investigation into the perspectives of the political actors and the public actors would, of course, complement this study. The role of ideas in the policy process is particularly well developed in the public policy scholarship, along with actors and institutional dynamics. Increasingly there is a focus on enhanced u ­ nderstanding of institutions and actors set within a context of ideas, culture, and history. An interpretive approach is often employed for this. At its most basic level, interpretive analysis is simply the suspension of hypotheses until one has listened to the various (deconstructed) accounts of the policy actors’ interpretations of their world, after which one creates a synthesis and analysis (or reconstruction) which maintains the integrity of the actors’ “voices” (O’Reilly 2000). That is, the analyst lets the analyzed tell her or his own story as much as



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possible without imposing academic theories early on. This is also the intent of discourse analysis, and there are increasing examples of this methodology in public policy and public administration literature (Stone 1989; Yanow 1996; Ospina and Dodge 2005). We employed this approach to this study as much as possible. In this study we also recognize, and hope to complement, the work of current and former public servants who are active scholars and who bring an applied perspective with their experiential knowledge and ongoing connections with decision makers by “speaking truth to academics” (Kernaghan 2009). These individuals who cross the boundaries of federalism, public policy, and public administration have made significant scholarly contributions at this interface and provide a valuable “real world” grounding of our approach and hypotheses. Public administration research brings in the reality of the administrative dimension in federal systems and the management of intergovernmental networks, partnerships, and relationships within a context of broader administrative institutions, cultures, and ideas. In this sense it applies theory to practice, which is particularly important since reality does not always match up to doctrine, or as Erk puts it, Canadian federalism is replete with “uncodified workings and unworkable codes” (Erk 2006). This focus on the administrative state, the bureaucratic machinery of intergovernmental relations, and the key roles that career officials play in federalism and the policy process is foundational for our analysis. Public administration views bureaucratic officials and the organizations and institutions in which they work as central to understanding policy implementation and outcomes. Here the focus on managing relationships, networks, and partnerships (of increasing interest to public policy analysts) in a public sector culture which values ideas such as efficiency, effectiveness, accountability, and performance is an important foundation of our study and analysis. One of the interesting dynamics discussed in contemporary policy and public administration literature is the dynamic between ideas and institutions and actors, where policy “arenas” provide a forum for the shaping of all three. Here, institutions or “structures can be seen as arenas that set the ‘rules of the game’ for the competition among different interests and the clash of distinctive ideas” (Howlett, Ramesh, and Perl 2009, 48). Jenkins sees policy as a “medium for the packaging of values and ideology; policy and ­politics are in the

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Intergovernmental Policy Capacity in Canada

­ usiness of producing and re-producing the shared meanings that are b at the heart of culture” (Jenkins 2007, 28–9). State-society “social networks” with their own “policy discourse” are emerging (de Leon 2006). Power has returned as an important variable to policy and administrative studies – a variable of which scholars of federalism never lost sight. Combined, the federalism literatures’ emphasis on power, institutions, and relations, the policy literatures’ emphasis on institutions, actors, and ideas, and the public administration literatures’ emphasis on bureaucratic organizations, officials, networks, and relationships yield a wide-ranging set of political and administrative factors which collectively contribute to our central concept – intergovernmental policy capacity.

WHAT IS INTERGOVERNMENTAL POLICY CAPACITY? Intergovernmental policy capacity (IPC), in its simplest form, is the ability of national and sub-national governments in a federal system to work together to address public policy problems. But a more complex definition of IPC emerges when we draw on theoretical and methodological contributions from the federalism, public policy, and public administration literatures. Our starting point was to consider the concept of policy capacity, which has appeared in some government discourse and scholarly literature (Peters 1996), but is not well developed. Canadian authors have variously defined policy capacity as “concerning the intellectual dimension of governance, that is, the capacity of the system to think through the challenges it faces” (Bakvis 2000, 3); or “the institutional ability to conduct policy analysis and implement its results effectively and efficiently” (Pal 2006, 35). Others have focused on “policy analytical capacity” as “a more focused concept related to knowledge acquisition and utilization in policy processes” (Howlett 2007, 2009). Some practitioners have focused on policy capacity in the ­context of public sector reform (Anderson 1996; Canadian Centre for Management Development 1996A), while others have looked at the prospect of rebuilding lost capacity in the context of budget surpluses (Bakvis 2000). In her 1995 Annual Report to the Prime Minister on the public service, the federal Clerk of the Privy Council raised the issue of the diminished policy capacity of the federal government after years of cutbacks and downsizing. She also hinted at the



Intergovernmental Policy Capacity: A New Perspective

15

intergovernmental dimension when she wrote, “The strategic policy capacity of the federal public service must be strengthened. This is essential, given the complexity of the issues that governments must address, and the increasingly horizontal and cross-sectoral nature of these issues” (Canada, Privy Council Office 1995, n.p.). Like the federal government, most provinces and territories similarly have found themselves lacking policy capacity, although Quebec, Saskatch­ewan, Manitoba, and New Brunswick engaged in various ­capacity-building exercises even during a period of general retrenchment (Policy Research Secretariat 1999, 3; Savoie 2003). Contributors to the 1996 Canadian federal Deputy Minister’s Report, Strengthening Policy Capacity, also focused on the concept of the policy capacity of the federal government after a period of significant downsizing. In its 1995 report, the task force stated: “The policy capacity of the government is a loose concept which covers the whole gamut of issues associated with the government’s arrangements to review, formulate and evaluate policies within its jurisdiction. It obviously includes the nature and quality of the resources available for these purposes – whether in the public service or beyond – and the practices and procedures by which these resources are mobilized and used ... Policy capacity is only as good as the integration of all of the various policy functions, including implementation. Policy capacity is not simply ‘what policy shops do,’ it touches most parts of government” (Canadian Centre for Management Development 1996A, 1). Although the report did not offer a definition of IPC, it did allude to the issue when commenting on the policy capacity of the federal system and documented a lack of research on even the basic intergovernmental institutions and practical working arrangements between federal and provincial departments. As stated in the report, “Our institutions for cooperative federal-provincial policy are weak. It is something of a paradox, for example, that we operate within far more structured institutional arrangements for cooperative policy work with many of our international partners than we do within our federation” (Canada Canadian Centre for Management Development 1996, 36). While much of the literature has focused on policy capacity within jurisdictions, in connecting this with the federalism litera­ ture, our study set out to examine other, richer dimensions of policy capacity, those within, between, and across jurisdictions. This

16

Intergovernmental Policy Capacity in Canada

c­ on­ceptualization was in keeping with increasing recognition in the late 1990s and early 2000s, in the policy and public administration literature, of the need for managing complex networks (Kickert, Klijn, and Koppenjan 1997) and the emerging intergovernmental features in even unitary systems like the United Kingdom and multilevel systems like the European Union. There has been a developing fusion in the literature of inter-organizational theory, network theory, implementation studies, international relations, and development studies in work on multi-level governance (Jordon 2001; Smith 2003; Peters and Pierre 2005; Ostrom 2009; Bourgon 2010) and on political and administrative decentralization related to the subsidiarity principle (Höffe 1996; Baldersheim and Ståhlberg 2002; Hueglin 2007). Several fields were increasingly using the concepts of governance capacity, institutional capacity, and state capacity to analyze the integrative aspects of economic, social, and environmental policy in the midst of globalization and concern about domestic policy capacity and the capacity to govern (Dror 2001). The “new governance” approach downplayed the traditional strong agency of institutions per se: placing states in society; public administration in publicprivate partnerships; and public policy in policy communities and networks. Concerns were raised about the capacity of the state in this new environment and its ability to direct change or policy (Rhodes 1997; Weiss 1998). Perhaps not surprisingly, this concern about capacity framed a call in Canada in the mid-2000s from an international relations expert for a more networked approach to Canadian federalism (Stein 2006). This emphasis on the complexities of a contemporary multi­layered, multi-scaled, multi-actor world of state-societal interaction can also be seen in contemporary policy capacity literature, where questions are raised about how best to deal with these interactions both practically and analytically. Painter and Pierre defined policy capacity as “the ability to marshal the necessary resources to make intelligent collective choices about and set strategic directions for the allocation of scarce resources to public ends ... ” (Painter and Pierre 2005, 2; see also Christensen and Laegreid 2005, 137; and Cummings and Norgaard 2004, 688). Their definition focused primarily on the capacity of state institutions and actors. They relate this policy capacity for “intelligent choice” to both state capacity for appropriate outcomes and administrative capacity for e­ ffective



Intergovernmental Policy Capacity: A New Perspective

17

resource management. Similarly, in our definition of IPC, both ­political and administrative aspects of policy capacity are important. Resources, which are also seen as central by Painter and Pierre to their definition of policy capacity, are important to our conceptualization of IPC. There is a mobilization and innovation dimension to policy capacity which requires the activation of the “resource stocks of a governing system” (Painter and Pierre 2005, 5) in a proactive, rather than a crisis-led manner (Chandler and Zollner 1989; Rydin and Falleth 2006, 28; Bourgon 2010). Assessing the degree and conditions of these resources for policy capacity is a challenge. Perhaps even more daunting, though, is adding the intergovernmental dimension to policy capacity which is under-conceptualized in both practice and scholarly analysis. Indeed, there is no IPC literature as such. So we asked ourselves: What makes intergovernmental policy capacity different from policy capacity per se? What is the relationship between the two? Are there different variations of IPC? First we have to ask: how do we observe IPC? How do we know it when we see it? How do we gauge more and less of it, since “monitoring the performance and capacity of a diverse system of intergovernmental partners has always been a challenge” (Conlan and Posner 2008, 4)? Although we started our project with a simple definition of IPC as the ability of federal, provincial, and territorial governments to work together to address public policy problems, it is clear that IPC is more than that. It involves unilateral, bilateral, and multilateral interactions of governments utilizing the resources at their disposal under limited conditions in order to address public policy problems. However, we deliberately chose to suspend our conceptualization of IPC until after our survey and interviews of intergovernmental officials. We wanted them to tell us. We also wanted to set this against the existing literature – after we had asked the officials for their ideas and opinions on the subject of IPC. In the end we decided there is a three-way distinction important to IPC which recognizes the importance of its various iterations: within, between, and across jurisdictions. However, we do not claim this concept can be fully quantified. In fact, since this layered definition grew out of our project, no attempt was made to superimpose it on our interview findings at a later date. When we began the project, we simply asked intergovernmental officials what they thought IPC was and what the factors affecting it were. This is what we present here

18

Intergovernmental Policy Capacity in Canada

in chapters 3 to 8. Others may find this material of use as it is. For our larger ­project, however, we will return to a broader conceptualization of IPC in our concluding chapter. The framework we did choose to present our findings on the factors affecting IPC grew out of both our primary research (what the officials said) and our combination of the three fields most closely related to IPC: federalism, public policy, and public administration. We found there are four categories of factors that are of considerable significance to IPC. Our view is that the policy capacity literature needs to recognize: 1) the ideational context of policy making; 2) the institutional resources available to translate ideas into action; 3) the actors who influence and implement policy; and 4) the relations within which policy capacity is realized. So while we may start with a simple definition of policy capacity (whether in general or for intergovernmental relations specifically), it soon develops into a more complex discussion of the factors involved in this capacity – the ideas, institutions, actors, and relations in which they sit. We turn now to those factors.

FACTORS OF INTERGOVERNMENTAL POLICY CAPACITY: IDEAS, INSTITUTIONS, ACTORS, AND RELATIONS The four factors which our analysis reveals play a significant role in determining IPC are depicted in figure 1.2. Ideas, as used here, are the larger political, economic, and social ideas which set the context for Canadian federalism and influence the behaviour and actions of policy makers. Political ideas such as those related to the role of the state in society and economic ideas such as the role of the state in the economy play a role in framing the policy decisions of their time. For example, “executive federalism,” “fiscal imbalance,” “sustainable development,” “free trade,” and “privatization” are ideas familiar to anyone following developments in intergovernmental relations, finance, environment, trade, and health policy in Canada. The collective consciousness, congruence, and salience of ideas matter. The cultural climate and ideological bent of politicians, public servants, citizens, or organized interest groups may have considerable influence on their decisions, resource allocations, and degree of engagement. The public policy literature in particular has illustrated how ideas matter. As Hall put it, “It takes a theory to kill a theory” (Hall 1989, 15). As we saw above, policy analysts are



Intergovernmental Policy Capacity: A New Perspective

19

Figure 1.2 Determinants of intergovernmental policy capacity

increasingly concerned with the capacity of state and society actors to harness ideational resources for institutional learning, and even institutional transformation, of a nature that will allow for coping with complex policy problems. We will see in our study how ideas act as drivers in IPC. This raises questions about whether intergovernmental policy actors can enhance their IPC by more attention to the role of ideas in policy m ­ aking – and whether they have the capacity to do so in a modern, networked environment. Institutions are defined here to include the formal institutions of the Canadian political system and in particular the institutions of executive federalism. In this study, this begins with the ­Constitution and its division of powers. It also includes the political and administrative institutions of federal, provincial and territorial governments – First Ministers’ Meetings (FMMs), intergovernmental ­ministerial councils and secretariats, and central agencies and line departments with intergovernmental units. Institutional resources as part of IPC include the fiscal, human, and knowledge resources endowed in these institutions, such as budgets, personnel, and research capacity. The less legally-established institutional arrangements such as intergovernmental accords and agreements and policy and program partnership arrangements are also significant, as are their

20

Intergovernmental Policy Capacity in Canada

a­ ccompanying protocols and decision rules. The literatures on federalism, public policy, and public administration also clearly indicate that the courts, parliaments, political parties, and international institutions, organizations, and agreements can play a role in IPC. While “renewed attention to institutions in political science over the past ten to fifteen years is a trend that has been widely recognized, discussed, and debated” (Lecours 2005, 3), the need for adequate institutional resources has also been increasingly recognized in the repeated restructuring and reinvestment in government over the past decades (Peters and Savoie 1995; 1998; and 2000). In each of the policy areas we assess, a variety of institutional arrangements and forums have evolved. These arrangements under the framework of executive federalism exhibit varying degrees of institutionalization and involve a variety of state and societal actors. In this sense they act not only as institutions per se but as processes and arenas of representation, interaction, negotiation, or exclusion, and they house the relations discussed below. This focus on institutions raises some interesting questions about the relationship between strong institutional capacity and strong IPC. Actors, for the purposes of this study, include the state and nonstate actors which inhabit the Canadian federal system. State actors include elected officials and unelected career public servants. Political actors include first ministers (prime ministers and premiers), ministers, and their political aides. It also includes administrative actors under the executive branch: the career officials who have primary responsibility for intergovernmental relations in central agencies and various line departments. This study places a primary emphasis on the role of senior administrative officials in examining IPC. This is the group of actors we chose to interview because of their knowledge and experience. The category of actors also includes non-state actors such as the public, broadly understood. Since we did not have the resources to interview public or international participants in IPC, our approach – in keeping with contemporary literature on public participation and civic engagement – was to view public actors as potentially influencing policy capacity, and then determine what weight intergovernmental officials put on their role in IPC. Relations, while long important to federalism analysis, are now more commonly referenced with regard to policy and administrative networks and communities. Here we use a two-way typology of i) the formal institutionalized relations of executive federalism, and



Intergovernmental Policy Capacity: A New Perspective

21

ii) the personal relationships of federalism. In the former, the focus has particularly been on the roles and responsibilities and the ensuing relations that the institutions of executive federalism encourages or discourages. Some of these relations presume a formal equality of the players, but certain hierarchies and asymmetries have also been embedded into jurisdictional history, alongside other powerrelated factors such as wealth and size. The latter type of relations, the less visible informal personal relationships of executive federalism which were studied in the 1970s and 1980s, have not been well incorporated into contemporary studies (Johns, O’Reilly, and Inwood 2007). These informal personal relationships are played out in less institutionalized, unstructured, ad hoc personal meetings, contacts, telephone and conference calls, emails, and lunches where fuzzy concepts such as friendship, trust, and leadership reside. Both formal relations and informal relationships are conceptually very important to IPC. The formal relations of centralization or asymmetry, for example, are strongly studied in contemporary federalism studies (Institute of Intergovernmental Relations 2005); and the more nebulous issue of the role played by informal relationships has been of increasing concern to scholars and practitioners seeking to understand what lubricates the policy-making process (Lazar 2005A; Erk 2006; Johns, O’Reilly, and Inwood 2007). Focusing on relations raises questions about the relational needs of the working system. Is it the relations found within, between, and across the institutions and actors of the system that drive change and adaption, such that they should be the targets of any reforms meant to improve IPC, rather than the institutions and actors? Lastly, it should be said that governments choose to maintain and utilize whatever capacity they have. Both choice and capacity are central to intergovernmental policy development. Choice is, of course, a political decision, but without the capacity, choice is relatively meaningless. It is also relatively meaningless without the resources to engage that capacity. The four factors above are ‘soft’ determinants of IPC; they are constitutive; they influence IPC; and because they influence IPC, they are also potential resources to be utilized in enhancing IPC. In this analysis, we uncover and discuss the importance of these factors and then ask, in our conclusion, how they might be made to enhance the potential pool of resources for intergovernmental policy action within, between, and across jurisdictions in the Canadian federalism system.

22

Intergovernmental Policy Capacity in Canada

OUR COMPARATIVE ANALYSES Sectoral Comparative Analysis We chose to assess the perspectives of intergovernmental generalists in central intergovernmental units and those of intergovernmental specialists in the four comparative policy areas of finance, environment, trade, and health because they provided similar, yet varied, examples of major ongoing policy fields of concern in intergovernmental relations. Finance was particularly salient, given its historical importance in intergovernmental relations as well as the difficult economic conditions and intense intergovernmental fiscal conflict which prevailed during the period of our focus, 1995– 2005. Environment was low on the political agenda for most of the period of our study, trade was medium, and health was high, but the policy problems they contained all had significant intergovernmental dimensions. Comparatively, trade is an economic policy area, health a social policy area, and environment a mix of both. Finance is a macroeconomic policy area with significance across all three. Finance also provides a crossover case since it acts as both a central agency and a policy sector. With regard to determinants of IPC, intergovernmental relations and the four policy sectors also provide an interesting contrast in which to examine the significance of ideas. As we shall see, intergovernmental relations generalists were operating in an ideational climate of non-constitutional approaches to reform of the federal system, and the increasingly contested parameters of fiscal federalism. Finance ideas, coming from a powerful central agency overseeing the fiscal dimensions of policy in all areas, were central as jurisdictions had to make ideational switches, first to a focus on debt and deficit reduction and then to a focus on surpluses and expanded expenditure options (then back again after our focus years to a politics of scarcity). Environment policy has been couched in the language of sustainable development and, more recently, national standards; trade policy has been heavily influenced by neoconservative economic ideas about free trade, free markets, globalization, and continentalism; while health policy has been strongly influenced by ideas about privatization and accountability for performance. Second, the institutions of intergovernmental relations and the four policy areas reflect varying degrees and types of intergovernmental development and institutionalization. Intergovernmental



Intergovernmental Policy Capacity: A New Perspective

23

relations agencies are relatively new, most dating from the early 1960s, and are varied in type and structure. Finance is a key central agency in all jurisdictions because of its mandate related to budgetary policy and financial relations and its long-standing intergovernmental institutions. Environment is a policy area with shared federal-provincial-territorial jurisdiction with increasing levels of institutional interdependence and internationalization, and recently implemented intergovernmental agreements. Trade is predominantly under federal jurisdiction with high levels of interdependence and internationalization where agreements have been in place for several years, providing a mature context to examine IPC. Health is predominantly under provincial jurisdiction with low levels of institutional interdependence and internationalization and comparatively new and different institutional arrangements. Institutional variation was also found in the existing and developing policy agreements and accords. Intergovernmental relations agreements were forged around the Social Union Framework Agreement (SUFA), health, early childhood development, child poverty, and other social policy areas. Finance had an ongoing series of national tax collection, equalization, and other fiscal transfer arrangements, most contentiously with the Canada Health and Social Transfer (CHST). Environment had two national and international accords on the political agenda (the Canada-Wide Accord on Environmental Harmonization and the Kyoto Accord), the former with quite developed institutions for implementation and the latter with some level of international institutionalization but very few intergovernmental institutions for implementation. Trade had major continental and domestic “done deals” in the North American Free Trade Agreement (NAFTA) and the Agreement on Internal Trade (AIT). Health was in the process of trying to develop pan-Canadian funding agreements (the Health Accords). Intergovernmental relations and all four policy areas have a mix of state and non-state actors. Political circumstances saw intergovernmental officials and finance officials increasingly interacting around a policy sector neither worked in – health – due to their vantage points in central coordinating agencies. Finance has a very technical set of actors which develop and implement fiscal policies between governments. Environment has active state and non-state actors in intergovernmental arenas. Trade has a wide range of state and increasingly non-state actors, and perhaps has felt the greatest increase in the influence of international actors compared to the

24

Intergovernmental Policy Capacity in Canada

other sectors. Health predominantly has disparate policy actors at the federal, provincial, and territorial levels, but little in the way of international actors. All of the policy areas have witnessed some increase in pressures for policy action by either non-state or international actors, or both. Finally, the federalism literature states the importance of formal relations and informal relationships at both the political and administrative level, but it was not known at the outset of the study how well-developed these relationships were in any of these sectors, due to a paucity of empirical research. Given the history of interaction in the areas of intergovernmental relations and finance, we expected to see long-standing relations there, but less so in environment, trade, and health. It was also the case that the study of informal relationships figured prominently in the literatures on intergovernmental relations during the era of cooperative federalism in the 1960s and 1970s, and the constitutional wars of the 1980s and early 1990s. But it was not clear how significant or deep these relationships were in the succeeding years, or in other sectors. Jurisdictional Comparative Analysis In addition to comparative analysis across intergovernmental relations and the four policy sectors, this study also includes an analysis of how IPC varies within and across the jurisdictions that make up the Canadian federation. The classic “have” and “have-less” categorization is one theoretical starting point which generates some obvious hypotheses; however, the assumption in this study was that this distinction, based mainly on population and revenue-generating capacity, is too simplistic. Our definition of IPC is based on an element of relativity, as individual and joint capacities vary across the country. Our analysis therefore focuses on a basic question. Do some jurisdictions have more IPC than others? As outlined above, the analysis is enriched by the assumption that a distinction needs to be made between characterizing the independent policy capacity of a given jurisdiction and its IPC, though the two aspects are interconnected. Both policy capacity and the various levels of IPC of each and all of the federal, provincial, and territorial governments are significantly influenced by a wide range of historical and contextual factors that contribute to each jurisdiction’s unique place in the federation and its ability to engage



Intergovernmental Policy Capacity: A New Perspective

25

in intergovernmental relations for the purpose of improving policy outcomes for its residents. While initially not a central and direct part of our methodology, comparison and analysis across jurisdictions became inevitable as we began to analyze the IPC of the federation across policy areas. We provide an analysis of this in chapter 9 both to enhance the basic understanding of students and scholars new to the study of Canadian federalism, and to set the context for our conclusions on IPC.

METHODOLOGY Our methodology involved collecting and analyzing data from secondary sources, a mail survey, and interviews with senior intergovernmental public servants. Based on our interest in the IPC of the federal system, we decided we needed to begin our exploration with the people who had to work day-to-day within the parameters offered and allowed by this capacity. Their tenures span different time periods, governments, and periods of intergovernmental relations. This focus on officials also fit with our interest in combining the three fields of federalism, public policy, and public administration, since this is the nexus at which they actually work: they administer policy making in a federalist system. We also assumed that these officials would be best suited to provide a perspective on the degree of importance, or unimportance, of the ideas, institutions, actors, and relations within which they have to work in order to realize the system’s IPC. In addition, much attention has been devoted to the study of political officials and to executive federalism, but systematic analysis of unelected officials has not been undertaken in many years. Politicians’ positions and ideas also tend to be somewhat more available through public sources, especially biographical and journalistic. There is less available public knowledge on the public service. Forced by feasibility to choose between elected and unelected actors, we felt the administrative actors could bring to bear their extensive yet largely untapped knowledge and experience of the intergovernmental system and were less likely to be clouded by fears of electoral repercussions for their statements (all interviews were confidential). We also considered a focus on public servants to be important because of their intelligence and professionalism, as well as their non-partisan nature and their long-term capacity to operate in a complex networked environment. Having said this,

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Intergovernmental Policy Capacity in Canada

f­urther studies would benefit from insight and input from both the political actors and the public actors involved in IPC. There are some limitations in our methodology that should be noted. First, there was a lack of research on policy capacity and no prior studies on the IPC of Canadian federalism in the existing secondary literature, as well as a lack of comparability to previous research. While a federal government study involved some case studies on the state of intergovernmental dimensions of policy capacity (Canada, Canadian Centre for Management Development 1996, Annex 10), it was limited to descriptive “best practices” case studies of where intergovernmental relations seemed to be working well. One of our first methodological challenges was to define the universe of intergovernmental officials. We used an operational definition adopted from Warhurst: intergovernmental relations officials are public servants who work solely or primarily on intergovernmental business (Warhurst 1983, 459). From this we made a conceptual distinction between intergovernmental generalists who work in central agencies, separate departments, or separate units within central agencies responsible specifically for coordinating relations with other governments and intergovernmental activities within their own governments, and intergovernmental specialists who work on intergovernmental issues in line departments and policy-specific agencies. Our first stage of data collection involved a survey of intergovernmental generalists and specialists across Canada in 2001. The sample of officials working in intergovernmental ministries and units in central agencies was 91, and the total working in environment, trade, and health was 205, for a total sample size of 296. Due to the original research design and lack of funding, intergovernmental specialists in finance departments were not included in this survey but were included in the interview sample discussed below. The survey was designed around four core research questions about intergovernmental officials: Who are these people and what do they do? How have their roles changed in the past decade? What are their perspectives on the current state of intergovernmental relations? What are their perspectives on the future challenges in intergovernmental policy-making? The survey also collected baseline data on the demographic profile of intergovernmental officials. The survey was distributed by mail to the sample in March 2001. Due to a low response rate of 14 percent, a follow-up distribution took



Intergovernmental Policy Capacity: A New Perspective

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place in September 2001. This raised the overall response rate to 24 percent. Sampling, response rates, and uneven distribution of responses across governments, policy sectors, and occupational ranks potentially compromised the usefulness of the survey instrument. Since we did not know the survey universe, we could not assess the optimum sample size, degree of accuracy (that is, margin of error), or confidence level of our results. Moreover, there is virtually no baseline data against which to measure and compare the results. The response rate of 24 percent is problematic in that non-respondents may differ from respondents in significant ways. However, it can be said that the response rate is acceptable for a survey of this type given the closed nature of the respondents’ working world. The uneven distribution of responses across governments, policy sectors, and occupational ranks means that qualifications need to be attached to conclusions. Despite these methodological limitations, the survey generated useful data from which to draw inferences about the roles of intergovernmental officials. Rather than attempt to employ statistical exactitude, we opted to adopt the idea of “logical generalizations” (Carroll and Siegel 1999, 28–9). This data allowed us to profile these officials and gauge their view of intergovernmental relations from 1990 to 2000 (Inwood, Johns, and O’Reilly 2004). To supplement the findings from the survey, an analysis of secondary sources was undertaken which updated previous research (see, for example Pollard 1986; Warhurst 1983, 1987; Woolstencroft 1982; Smiley 1980; Simeon 1972; Gallant 1971) on the structures, functions, and resources of intergovernmental ministries and units. This groundwork gave us some basic data on the context in which officials were operating and factors which impact IPC (see Johns, O’Reilly, and Inwood 2007). At the same time we were conducting interviews with officials across the country. In-person interviews were conducted with 139 senior intergovernmental officials in Ottawa and the provincial and territorial capitals between 2001 and 2005. The sample we generated for interviews included intergovernmental generalists and specialists in all federal, provincial, and territorial governments in intergovernmental relations, finance, environment, trade, and health. The sampling covered deputy ministers and assistant deputy ministers and other senior ranked officials who fit our definition, including directors, senior

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Intergovernmental Policy Capacity in Canada

Table 1.1 Distribution of interviews by position Clerk or Cabinet Secretary Deputy Minister Assistant/Associate Deputy Minister Directors General Executive Director Director Assistant Director, Senior Policy Analyst/ Advisor Other (Manager, Scientist, Senior Coordinator, Counsel, Chief Executive Officer,  Economist) Total

4 33 29 4 7 34 13 15 139

Table 1.2 Total number of interviews by sector Intergovernmental Relations

Finance

Environment

Trade

Health

Other

Totals

47

25

20

25

19

3

139

Table 1.3 Total number of interviews by jurisdiction FED

NF

NS

PE

NB

ON

QC

MB

SK

AB

BC

YT

NT

NU

25

7

11

5

8

17

9

13

6

13

11

5

6

1

Other Total 2

139

policy analysts, and intergovernmental officials with communication and coordination titles (see table 1.1). The variety of job titles across governments made this part of the process a challenge in itself. A snowball sampling technique was used to expand the sample we had generated from the survey. Efforts were made to interview at least one official in each government in each jurisdiction (bearing in mind that intergovernmental units can be very small, sometimes consisting of as few as one or two people). Tables 1.2 and 1.3 show the total number and distribution of interviews by sector and jurisdiction. No government refused to talk to us. A semi-structured interview instrument was designed around several broad research questions: 1 What is your background? Current role? 2 How would you define intergovernmental policy capacity?



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3 Would you say we have more or less intergovernmental policy capacity now compared to ten years ago? Why? 4 What are the factors inhibiting intergovernmental policy capacity in Canada? 5 What are the factors enhancing intergovernmental policy capacity in Canada? 6 Are there examples of high levels of intergovernmental policy capa­city in Canada? 7 How might intergovernmental policy capacity be improved in the future? (institutions / factors / mechanisms / actors / etc.) 8 Additional Comments? Are there others with intergovernmental expertise that we should interview related to this research project? These questions were also supplemented with sector-specific questions related to IPC. In most cases, the interviews were conducted with two or all three of the authors present. We began with Good’s caveat on the challenges for researchers of delving into the closed and secretive world of officialdom (Good 1980), and Carroll and Siegel’s point that interviews are “dependent upon the participant’s accurate recollection of events and motivations ... ” (Carroll and Siegel 1999, 28), but we think interviews are valuable and continue to provide indispensable information for researchers. The interviewees were all asked the same set of questions; notes were transcribed; and responses were aggregated using an unstructured coding process. Interviews ranged in length from forty-five minutes to two hours. Officials were permitted wide latitude if they seemed determined to focus on some particular aspect of the issues we raised. Most were very forthcoming with information. Of course, politics, expense, and the nature of our policy areas resulted in lower numbers for some jurisdictions, particularly Nunavut, but this was not the result of lack of effort on our part. We made every attempt to give equal representation to all jurisdictions. However, it should also be noted that there was one inherent bias to our study which was caused by our attempt at equal representation of all jurisdictions. That was the numerical bias against the federal government. Because the comments were necessarily heavily weighted in favour of the provinces’ and territories’ opinions, since they have thirteen sets of voices to the federal government’s one set, our quotations and findings need to be read with that in mind. This numerical reality combined with the fact that the federal officials did not

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Intergovernmental Policy Capacity in Canada

tend to make disparaging comments about the provincial or territorial governments, and even in some cases added to the criticisms of their own government, weighted the study on the side of criticizing the federal government. Furthermore, the officials’ quotations are in our opinion of considerable value and interest and we chose to present a large number of them. In order to balance the often-made comment from the unusual point of view, we made note of where an official’s opinion was unusual or went against the main opinions of other officials. Although we often use the phrase “one official said,” unless otherwise noted, this is generally representative of the opinions of many others. We also gave an indication of the jurisdiction of the official or the date of the quotation when necessary for understanding, except in the rare case where it might have identified the interviewee, since all interviews were kept confidential. We decided on the sometimes painstaking approach of providing the reader with a direct rather than an interpreted sense of the official’s ideas and opinions because we wanted to let them speak in their own words. We, of course, later interpret our body of findings, but by providing the unvarnished version first, we leave our readers free to dispute any and all of our interpretations. Overall, by combining the quantitative research conducted through the survey with a qualitative approach to interviews and analysis using secondary sources we feel we have presented a valuable picture of the IPC of the Canadian federal system from the mid1990s to the mid-2000s.

PLAN OF THE BOOK Chapter 2 of the book describes the landscape of intergovernmental relations in Canada, focusing on broad economic, political, and social developments in the period just prior to our study and more specifically on the years 1995–2005 – the focus of our analysis­. A broad range of significant ideas, institutions, actors, and relations are reviewed, including those the literature indicates are important determinants. Chapter 3 presents the factors which intergovernmental generalists in intergovernmental central agencies felt were important determinants of IPC. Chapter 4 examines these factors in the broader context of fiscal federalism and from the perspective of intergovernmental specialists in finance ministries. Chapters 5,



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6, and 7 examine the significance of ideas, institutions, actors, and relations across three policy areas: environment, trade and health, respectively. (It should be noted here that there is considerable overlap of the federalism story in chapters 3 to 7. Readers who are less interested in the details and “voice” of each of the five sets of interview subjects may wish to move to chapter 8 for a summary.) Chapter 8 provides a comparative analysis of the determinants of IPC by sector. Chapter 9 provides a comparative analysis of IPC by jurisdiction. Chapter 10 highlights the officials’ concerns and recommendations and contrasts them to those of the literature, as well as providing our conclusions and concerns for the intergovernmental policy challenges facing Canada today.

2 The Landscape of Federalism and Intergovernmental Relations in Canada

INTRODUCTION This chapter reviews the major factors that collectively formed the landscape in which Canadian federalism and intergovernmental relations evolved during the period of our study, 1995–2005. We conduct this review within our framework of ideas, institutions, actors, and relations. These categories contain the major factors which the federalism, public policy, and public administration literatures and our research have revealed as central to understanding Canadian federalism and intergovernmental relations, and which together influenced the perceptions and opinions of officials. In subsequent chapters we use this framework of factors to elucidate our core concept of intergovernmental policy capacity (IPC). For some readers this chapter may be a familiar review of recent political, economic, and social developments related to federalism in Canada. For other readers this landscape may be new terrain. For the benefit of those new to the field, Canadian federalism shares features common to other federal systems: a written constitution with a division of legislative powers; a constitutional court to serve as umpire when disputes arise between governments; a mechanism for coordination between governments (intergovernmental relations); and representation of sub-national units (e.g. provinces or states) in national institutions (Bakvis, Baier, and Brown 2009, 2–3). Federalism is defined as “a political system in which most or all of the structural elements of the state (executive, legislative, bureaucratic, judiciary, army or police, and machinery for levying taxation) are duplicated at two levels, with both sets of structures exercising effective control over the same territory and population. ­Furthermore,



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neither set of structures (or level of government) should be able to abolish the other’s jurisdiction over this territory or population. As a corollary of this, relations between the two levels of government will tend to be characterized by bargaining, since neither level can fully impose its will on the other” (Stevenson 2004, 8). In terms of public policy and for purposes of public administration, citizens in a federal state are members of two political communities – one national and one sub-national. The policy and administration roles of different levels of government have evolved over time along with changes in the role of the state in the economy and society. The scholarly literature has documented various periods in this evolution well. The history and evolution of Canadian federalism has been the focus of many very good texts and scholarly publications. Thus we do not present this landscape in the traditional historical-chronological manner of these other studies, but rather organized around ideas, institutions, actors, and relations. Since the entire political and administrative landscape is also impossible to encompass in a single chapter, we focus on those factors most directly related to IPC.

IDEAS The ideas about the federalist principle and federal system have always been to some degree “in flux” (Vipond 1989, 5) and have changed over time (Rocher and Smith 2003; Montpetit 2008; ­Broschek 2010). The landscape of Canadian intergovernmental relations from 1995 to 2005 was characterized by a number of contending ideas. Some of these ideas are long-standing and others particularly salient to the elected and unelected officials during the period of our study. As outlined in chapter 1, ideas here are the dominant political, economic, and social ideas which set the context for Canadian federalism and influenced the behaviour and actions of political leaders and officials. Ideas helped define and determine the nature of Canadian federalism and the political-economic arrangements which supported the translation of ideas into policy. Fundamentally, ideas also relate to the exercise of power in the federation – who has it, how it is enacted, and who pays. Political actors in Canada, primarily first ministers (the prime minister and ­provincial and t­erritorial premiers), expend a significant amount of energy in the ongoing ideational contest of defining the nature of the

34

Intergovernmental Policy Capacity in Canada

f­ ederation, and making it work according to their vision of its goals and purposes. The patriation of the Canadian Constitution in 1982 without the signature of the province of Quebec, subsequent failed efforts to reform the constitution under the Meech Lake and Charlottetown Accords (discussed below) in the late 1980s and early 1990s, and the near-victory of the separatists in the Quebec referendum on sovereignty in 1995 all had significant implications for the ideas, assumptions, and approaches to intergovernmental relations in Canada. In the aftermath of these significant events, the early period of this study was marked by exhaustion on the part of political and administrative actors who had spent literally decades wrangling over big debates and constitutional politics. Their fatigue caused a search by the mid-1990s for alternative ideas, including non-constitutional approaches to federalism. Looming over these debates, however, was the ideational backdrop of neoconservative ideas which drove a political-economic project of debt and deficit reduction and a broader debate over the appropriate role of the state in economy and society. Following the lead of Thatcher’s Britain and Reagan’s America, the Canadian government, first under Prime Minister Brian Mulroney and then under Prime Minister Jean Chrétien, turned to neoconservative fiscal policies. For the Chrétien government this meant derailing its social policy review, initiating an extensive Program Review of its own expenditures, and drastically reducing its spending on transfers to the provinces and territories. As we shall discuss in later chapters, years of federal-provincial-territorial battles ensued, particularly over the Canada Health and Social Transfer (CHST) and the “fiscal imbalance.” While some provincial governments also instituted neoconservative economic policies (especially Alberta under Ralph Klein, Ontario under Mike Harris, and British Columbia under Gordon Campbell), federal neoconservatism had particularly important consequences for IPC. One was to diminish the legitimacy of Ottawa’s role in social policy areas, particularly in areas of provincial jurisdiction, since they were paying less of the overall bill (Cameron and Simeon 2002). Another was to usher in a bitter and acrimonious period of intergovernmental relations leading ultimately to the major fights over health care funding and the fiscal imbalance. A third was to foster a crisis at the municipal level of government in Canada, as



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many provinces simply downloaded the budget cuts onto local governments, universities, colleges, school boards, and hospitals. And a fourth was to affect the constitutional relationship between the federal and provincial governments. The administrative arm of government was also struggling with some major challenges, and the political and economic ideas of this time had important administrative implications. After a period of growth and stability in the 1980s, the 1990s were a period of significant restructuring and change. During the first part of our study period, the public service was the focus of intense interest as governments across the country faced the early 1990s recession and heightened public concerns about debts and deficits. This was accompanied by the dominance of neoconservative ideas about the appropriate role of the state and markets in economy and society, the rise of New Public Management (NPM), and the application of private sector principles, values, and goals to the public sector (Aucoin 1995). Ideas associated with NPM which prioritized the goals of efficiency, cost-cutting, and public accountability for performance were evident in various initiatives of the governments of the day. Some provincial premiers embraced the tenets of NPM and aggressively sought to diminish the role of government through downloading services to municipal governments, privatization, contracting out, publicprivate partnerships, cutbacks in the public service, private health clinics, charter schools, and workfare programs (Hood 1991; Savoie 1995; Borins 1995; Shields and Evans 1998; Murray 2006). The federal government’s wide-ranging Program Review exercise essentially ended up as a top-down cost-cutting exercise rather than an ideationally-based reform of the public service (Paquet and ­Shepherd 1996; Good 2007; Inwood 2009). Still, the Program Review included six key questions, one of which was the “Federalism Test” which asked: “Is the current role of the federal government appropriate, or is the program a candidate for realignment with the provinces?” (Armit and Bourgault 1996). The 1994 Efficiency of the Federation Initiative (Kernaghan and Siegel 1999), launched at the 1993 First Ministers’ Conference (FMC), was partially aimed at inserting NPM principles and values into intergovernmental relations. The federal Clerk of the Privy Council, in her annual report to the prime minister, said that under this initiative, “federal and provincial levels of governments are co-operating on an ongoing basis in order to increase administrative efficiencies and improve client service, to

36

Intergovernmental Policy Capacity in Canada

harmonize procedures and regulations, and to reduce both costs and unnecessary overlap and duplication” (Canada, 1995B, n.p.). By the mid-1990s a fiscally-driven public service reform agenda which renewed interest in policy capacity, policy implementation, and service delivery through intergovernmental mechanisms had emerged. This was refracted through the lens of NPM and came to be associated with alternative service delivery and partnerships (Dobell and Bernier 1996, 1997) in a framework of collaborative government (Tupper 1996; Delacourt and Lenihan 1999; Armstrong and Lenihan 1999; Johns, O’Reilly, and Inwood 2006). By the end of the 1990s, some variant of NPM was embraced by the administration of every Canadian government (Simeon 1997; Shields and Evans 1998; Armstrong and Lenihan 1999; Inwood 2009). The impact of NPM was also evident in the work of established mechanisms such as federal-provincial-territorial conferences and councils; collaborative agreements in the policy sectors such as the Health Accords, the Canada-Wide Accord on Environmental Harmonization, and the Agreement on Internal Trade (AIT); bilateral and multilateral partnerships between governments and between governments and nonstate actors; examination of the roles and responsibilities of each government and coordination of previously duplicated activities; and increased use of information and communication technology (Johns, O’Reilly, and Inwood 2006; Brown 2010, 533). NPM ideas about improving intergovernmental cooperation in the name of enhancing public sector efficiency and service delivery were also apparent in the public sector reform agenda in other industrial democracies and had an influence on Canadian thinking. In the late 1990s, the Public Management Service of the Organization for Economic Cooperation and Development (OECD) began reflecting the international dimension of this by using the language “managing across levels of government” (OECD 1997) and “managing accountability in intergovernmental partnerships” (OECD 1999). In Canada, two ideational impulses dominated. One was the goal of disentangling federal and provincial responsibilities in the name of addressing duplication; the other was to simultaneously look for greater collaboration in areas where the federal, provincial, and territorial governments could work together. But some principles of NPM seemed to be at odds with the collaborative model of federalism (Painter 1998; Cameron and Simeon 2000). Intergovernmental collaboration in the name of efficiency



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would seem to contradict the goal of improving efficiency through disentanglement and reducing duplication. Nonetheless, Simeon and others concluded that, in general, collaborative approaches to “making federalism work” were consistent with many elements of NPM. Both valued decentralization, less emphasis on formal rules and arrangements, more emphasis on flexible agreements, and informal approaches in the context of greater fiscal restraint and efficiency (Simeon 1997). Overall, though, the intergovernmental emphasis of public sector reform was comparatively weak in Canada (Johns, O’Reilly, and Inwood 2006). By the later period of our study, a quite different climate and ideational context had emerged, as the federal and many provincial governments generated budget surpluses which fundamentally changed thinking about intergovernmental relations and led to a debate over the nature of fiscal federalism. This is elaborated on in chapter 4. Moreover, a federal government scandal in the mid-2000s made the ideas of administrative and political accountability very significant during the Chrétien regime, resulting in a major public inquiry which contributed to the downfall of the Liberal government of Paul ­Martin, and leading the new Conservative minority government under Prime Minister Stephen Harper to focus initially on accountability as a centrepiece of its political agenda. It is within this ideational context of the 1995–2005 period that many of the intergovernmental officials we surveyed and interviewed were situated. Ideas about intergovernmental relations, the economy, and managing the public service, as well as ideas specific to different policy areas, informed their thinking and perspectives. These ideas came to life in federalism and public policy primarily within the context of the administrative institutions in which these officials work.

INSTITUTIONS The Constitution The capacity of the Canadian federal system is heavily conditioned by a written constitution, unwritten constitutional conventions, and specifically the constitutional division of powers primarily outlined in Sections 91 and 92 of the Constitution Act, 1982. ­Intergovernmental relations are in large part a response to

38

Intergovernmental Policy Capacity in Canada

the ­constitutional ­relationship between the provincial and federal governments. The Constitution serves as a blueprint for the assignment of governmental responsibilities and entitlements. Constitutionally defined jurisdiction, perhaps more than any other structural factor, determines the relative weights of the resources available to each order of government in its interactions with the others (Bakvis, Baier, and Brown 2009, 68). Whether one talks of so-called “watertight compartments” of jurisdictional authority or a more permeable set of relations, federalism has always been shaped by certain legal-constitutional formalities (Wheare 1964; Lazar 1998; Hogg 1985; Simeon and Robinson 1990). While shared responsibility in immigration and agriculture is enshrined in the Constitution, in most other policy areas under the constitutional division of powers one level of government has primary constitutional authority. However, the complexity of contemporary policy issues often requires the resources or actions of both levels of government, notwithstanding what the division of powers prescribes. This can help foster policy solutions or, more often in the period of our study, acrimony and conflict, as for instance when the federal government unilaterally intrudes on provincial jurisdiction using the federal spending power. Although not listed in the written Constitution, the spending power is the convention that if the federal government has money to spend, it has the authority to do so even in areas of provincial jurisdiction. As outlined in chapter 1, increasingly both levels of government have political, economic, and social grounds for engagement and collective action in a wide range of policy areas. The constitutional division of power varies with policy sectors and can be a source of either cooperation and collaboration, or debate and dispute leading to unilateral initiatives, the negotiating table, the courts, or stalemate. These institutional realities have significant impacts on public policy in Canada and IPC. While constitutional politics dominated Canadian federalism from the 1960s to the 1980s, culminating in the patriation of the Constitution in 1982, it fell into disrepute as a consequence of the failed Meech Lake and Charlottetown Accords in the late 1980s and early 1990s. Signalling the change in attitudes, the 1993 federal Liberal Party Red Book of campaign promises was silent on constitutional issues, notwithstanding over one hundred pages of policy discussion (Lazar 1998B). The Quebec referendum on sovereignty in 1995,



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which very nearly separated one of the sub-national governments from the federation, was also a serious breaking point which challenged the constitutional foundations of the country. By this time, “[t]o define the rules in the constitution and make them judicially enforceable [appeared to be] impossible. Hence, negotiated intergovernmental collaboration became the only way to make progress” (Cameron and Simeon 2002, 56). The federal government enacted a series of measures designed to decentralize responsibility for a variety of policy areas, including forestry, mining, recreation, tourism, social housing, and labour market training. However, it also made unilateral spending decisions on direct-to-citizen transfers which angered the provinces and territories and led to calls for more transparency, consultation, and shared decision-making. Most importantly, the net consequence of moving to non-constitutional politics coupled with reductions in transfers and public spending “was to invest the provincial governments with a stronger sense of their autonomy, their responsibility, and their right to judge within their spheres of jurisdiction, what the national as well as the provincial interest requires” (Cameron and Simeon 2002, 54). The shift in the constitutional landscape toward n ­ on-constitutional approaches was also brought into focus by the federal government’s reference to the Supreme Court of Canada on the legalities of secession and the passing of the federal Clarity Act in 2000, which clarified the rules of the game related to referendums on independence by stipulating that a province initiating such a referendum on separation would have to have a clearly framed question (as judged by the federal House of Commons) and that the result would have to be a clear majority, rather than merely a 50%+1 majority rule. The “sponsorship scandal” during the period of this study showed how far non-constitutional approaches could go. Focus on the national unity issue caused some officials and politicians within Prime Minister Chrétien’s Liberal government to overreach themselves in trying to promote a positive image of the federal government in Quebec to forestall the separatist movement there. A number of illegal acts committed in the dispensing of advertising and other contracts, including illegal contributions to the Liberal Party, came to light toward the end of our study period. The federal government struck the Commission of Inquiry into the Sponsorship ­Program and Advertising Activities (the Gomery Commission) which exposed the

40

Intergovernmental Policy Capacity in Canada

wrongdoing. Ultimately the Liberals under Paul Martin paid the price at the polls in 2006 when the Harper Conservatives capitalized on the scandal and won a minority government. One other important constitutional development in intergovernmental relations was the de facto evolution of the three territories into quasi-provincial status for the purposes of participating in ­federal-provincial-territorial conferences, meetings, councils, and so on. While the creation of Nunavut in 1999 was an important constitutional development, this ascension in intergovernmental relations of all three territories effectively added three voices to the ranks of the “have-less” provinces in federal-provincial-territorial negotiations and thereby affected the dynamic of intergovernmental relations ­(Cameron and Simeon 2002; Tardi 2006; White 2001). Political and Administrative Institutions Executive federalism includes interactions of the executive branches of federal-provincial-territorial governments in Canada. Simeon identified the development of federal-provincial interdependence emerging in the 1970s as akin to state-to-state relations, calling it federal-provincial diplomacy (Simeon 1972, 2006). The term ‘executive federalism’ was coined by Smiley, who defined it as “the relations between elected and appointed officials of the two levels of government” (Smiley 1976, 54). In practice this includes institutionalized interactions of first ministers (the prime minister and premiers), ministers (with various policy portfolios), and their bureaucracies. While such interactions do not have constitutional foundations, they have evolved to be very significant in Canadian federalism, public policy, and public administration. The significance of the various federal-provincial-territorial political institutions of executive federalism is well-documented. Given their long duration, an outside observer might be forgiven for erroneously thinking that these institutions have had a long enough incubation period to have matured into smoothly functioning and effective bodies. This has not, however, been the case in Canada since, compared with some other federations, they are relatively “underinstitutionalized” (Cameron and Simeon 2002, 50). In addition, there has been limited institutional innovation despite significant pressures during this period for collaborative federal-provincialterritorial approaches (Johns, O’Reilly, and Inwood 2006). In any



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event, uneven distribution of resources between “have” and “haveless” provinces and territories means uneven capacity to participate in these institutions, as we document in chapter 9. Nonetheless, there have been some important changes to the institutions of executive federalism which have had an impact on IPC. First Ministers’ Conferences (FMCs) are the most long-standing institutional site for federal-provincial-territorial relations. The FMC was once an elaborately staged vehicle of intergovernmental negotiations and was seen as the principal forum for the conduct of intergovernmental relations. However, according to Papillon and Simeon, “The FMC remains a relatively underdeveloped institution. Meetings are ad hoc, sporadic, and often motivated by political ends only remotely tied to the management of interdependence between the two orders of governments. There are few agreed-upon ­decision-making rules or procedures and there is often little organized bureaucratic preparation or follow-up compared with other intergovernmental forums. Nor are there clear links between the FMC and other intergovernmental institutions, or between it and federal and provincial legislatures” (Papillon and Simeon 2004, 114). During our study, the FMC was renamed the First Ministers’ Meeting (FMM) and reduced, at the whim of the prime minister, in frequency and duration. Almost eighty FMCs/FMMs have been held since Prime Minister Laurier presided over the first one in 1906 (Canada 2004A). As shown in table 2.1, since the 1960s the frequency and policy issues discussed at FMCs has varied significantly. During the period of this study, Prime Minister Chrétien held seven meetings between 1993 and 2003, while Prime Minister Paul Martin held two during his year as prime minister. By comparison, Harper cancelled his first scheduled FMM, his second consisted of a dinner lasting only four hours, and another was a conference call with the premiers. Generally, there is some consensus that FMMs declined over time in both frequency and, perhaps, significance. In the period of this study, fiscal issues related first to health care and then to transfer payments and equalization dominated FMMs. Policy debate and development at FMMs frequently revolved metaphorically and literally around shouting matches – first over federal cutbacks during the debt and deficit era, and then over federal surpluses in the good times – often resulting in a reduced willingness or ability of the two levels of government to work together. Federal financing agreements from 1999 to 2004 relieved some of

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Intergovernmental Policy Capacity in Canada

Table 2.1 Summary of First Ministers Conferences (FMCs) and related policy agendas 1963–2005 Prime minister

FMCs

Years

Subjects Canada Pension Plan, fiscal arrangements, welfare state programs including post­ secondary education and student loans, recommendations of Royal Commission on Bilingualism and Biculturalism Constitution (Victoria Charter, patriation), economy, fiscal arrangements, unemployment, natural resources, Aboriginal issues Energy policies Economy, Native issues, constitution (Meech Lake and Charlottetown Accords), fiscal arrangements Economy, fiscal arrangements, constitution (Section 49), health care, social programs Health care, Aboriginal issues

Lester Pearson

9

1963 to 1968

Pierre Trudeau

23

1969 to 1984

Joe Clark Brian Mulroney

1 14

1979 1985 to 1992

Jean Chrétien

7

Paul Martin

2

1993 to 2003 2004 to 2005

Source: Adapted from Canada, Canadian Intergovernmental Conference Secretariat http://www.scics. gc.ca/pubs/fmp_e.pdf (Accessed 22 January 2008).

this ­tension but provinces and territories continued to respond negatively to any sign of federal “interference” in “their” policy issues. This created an overall culture of caution and risk aversion and lack of trust in intergovernmental relations – not an atmosphere one might expect to lead to enhanced IPC. Below the level of the FMC or FMM is that of the sectoral ministerial councils and ministerial meetings. “Some councils have existed for many years. Recently (in 2002) their numbers have increased, they have become more institutionalized, and have played a more formal role in carrying out mandates assigned by their ministers. They have become the workhorses of the system, assuming a central role in the policy process, including, in some cases, developing close relations with related interest groups” (Cameron and Simeon 2002, 62). Over twenty councils of ministers exist in such areas as health, finance, social services, agriculture, trade, and environment ­(Simmons 2004; Johns, O’Reilly, and Inwood 2006). While many of the ministerial councils have been in existence for decades, there have been some notable institutional innovations. One example is the Federal, Provincial, and Territorial Council on Social Policy Renewal created in 1996 following the creation of the P ­ rovincial-Territorial



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Council on Social Policy Renewal at the 1995 Annual Premiers’ Conference (APC). This institution was charged with the – perhaps impossibly grand – task of developing principles and a framework for the social policy renewal agenda, identifying objectives and priorities, coordinating sectoral councils in various policy areas, and ensuring appropriate reporting and communication with premiers (Provincial-Territorial Council on Social Policy Renewal 1999). Ministerial meetings have also increased within and outside of ministerial councils. During the period of this study there was a decline in ministerial meetings from over 125 in the early 1990s during the constitutional interactions to only 70 ministerial meetings in 1997–98. By 1999–2000 this had increased to 105. Approximately sixty percent of these meetings involved all three levels of government, while the other forty percent were meetings of provinces and territories without a formal federal presence (Simeon 2010, 419). Some institutional innovation in the period of this study also occurred at the provincial-territorial levels. For instance, the territorial governments established their own forum of cooperation. In September 2003 the northern premiers organized the first regional heads of government meeting in Cambridge Bay, Nunavut. They signed a “Northern Cooperation Accord” to promote intergovernmental cooperation on matters of mutual concern and interest (Tardi 2006). There was also some evolution of the long-standing APC. The provincial and territorial governments have long had a regularized meeting system which began largely as a social gathering for premiers and their families in the 1960s. The lack of satisfactory federal responses to various provincial-territorial concerns, particularly health care funding and the fiscal imbalance, led to an institutional innovation by the premiers, namely the Council of the Federation (COF) in December 2003. At the behest of Quebec premier Jean Charest, the thirteen premiers and territorial leaders joined together with the stated goal of strengthening provincialterritorial cooperation and enhancing relations with the federal ­government. Priorities for the COF included health care reform, internal trade liberalization, labour mobility, and streamlined regulations (Council of the Federation 2003). By the mid-2000s the COF had evolved into a fully institutionalized structure commanding national attention through its annual meetings, reports, secretariat, working groups, and web site. However, its purpose is divided between interprovincial concerns and federal-provincial-territorial relations.

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Intergovernmental Policy Capacity in Canada

It is not clear, however, whether this new body will be any different from its predecessor, the APC. Academics expressed an interesting combination of optimism and skepticism about the prospects of the COF (Institute of Intergovernmental Relations 2003). Meekison has demonstrated how, even where it addressed federal-provincialterritorial concerns, it tended to be predominantly reactive to the federal government rather than innovative (Meekison 2004A). More recently, the intractability of zero-sum issues like the fiscal imbalance (see chapter 4), which pitted some “have” provinces against some “have-less” provinces and territories, revealed the limitations of this institution. In addition to the political institutions of executive federalism, inter­­ governmental relations in Canada includes a rich array of administrative institutions, structures, agreements, processes, and mechanisms for coping with the inevitable overlap and interdependence that are features in many policy areas (Pollard 1986; Warhurst 1987; Bakvis 2000; Cameron 2000; Johns, O’Reilly, and Inwood 2007). The traditional machinery includes central agencies and line departments or specialized units within line departments, supported by institutionalized meetings and their support secretariats (First Ministers’ Conferences, federal-provincial-territorial sectoral conferences, and councils of ministers and senior officials), as well as an array of informal networks and interactions associated with these institutions. Figure 2.1 depicts the hierarchical network of intergovernmental structures in Canada. Between the late 1950s and the late 1970s, the number of ministerial and administrative intergovernmental organizations increased significantly (Gallant 1971; Veilleux 1979; Pollard 1986; Warhurst 1987). Originally, intergovernmental units appeared either in the office of the first minister or in the finance department. In 1961, Quebec introduced an institutional innovation: the first stand-alone intergovernmental relations department. The remaining jurisdictions all followed within the next ten years. By 1980 all jurisdictions had intergovernmental central agency units and several departments had intergovernmental units systematizing and centralizing the conduct of intergovernmental relations to a greater extent than in the past. In addition, three provinces, Alberta, British Columbia, and Quebec, maintained offices in the national capital in the mid-1980s (­ Warhurst 1987, 267). Federal regional councils were created as forums for federal regional officials in the provinces to share i­nformation and



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Figure 2.1 Hierarchical network of intergovernmental structures Source: Adapted from Paul Barker. 2008. Public Administration in Canada. Brief ­Edition. Toronto: Thomson Nelson, 243.

improve coordination of regional economic development initiatives, and over time added voluntary representation from provincial agencies (Juillet 2000). As we document in chapter 9, by the 1990s a variety of structures existed with various resource levels, and several jurisdictions had changed their structures from department to secretariat, branch to division, division to department, and vice versa. The structural choice of governments varied with no one particular organizational model, although, as noted in chapter 9, some governments did develop innovative institutional structures combining intergovernmental relations with other functions. However, while the structures may have changed, the role and functions of intergovernmental administrative agencies have not changed much in the last forty years (Pollard 1986; Johns, O’Reilly, and Inwood 2007). Generally, intergovernmental agencies share intergovernmental responsibilities with line departments in environment, social services, education, economic, labour, transport, and immigration. However, in some cases, intergovernmental agencies assumed responsibilities traditionally the purview of line departments. Saskatchewan’s intergovernmental agency appeared to have the broadest range of responsibilities: Aboriginal affairs, French language coordination, immigration, the Lieutenant-Governor’s Office, and protocol and honours. Newfoundland and Labrador’s ­intergovernmental agency is responsible for regional development,

46

Intergovernmental Policy Capacity in Canada

international affairs, and defence; Quebec’s for Francophones within Canada, reform of democratic institutions, and access to information; Manitoba’s for municipal affairs; Ottawa’s for Official Languages; and Nunavut’s for circumpolar affairs. As outlined in chapter 9, these structural features are the result of strategic choices made by each of the jurisdictions. Several governments also opened offices in other jurisdictions to monitor intergovernmental policy. The governments of Nova Scotia, Nunavut, and Yukon maintain external offices in Ottawa and the Secrétariat aux Affaires Intergouvernementales in Quebec maintains offices in Ottawa, Toronto, Vancouver, and Moncton (Johns, O’Reilly, and Inwood 2007). Under pressure for increased efficiency and improved service delivery, intergovernmental institutions responded in the past thirty years with developments on a continuum from projects and temporary arrangements through to formal restructuring of existing agencies with intergovernmental functions and new joint institutions with explicit intergovernmental mandates and management structures. Three notable structural changes in the intergovernmental administrative machinery have been: first, the downsizing or restructuring of constitutional affairs divisions and units in intergovernmental agencies; second, the addition of international affairs units within intergovernmental agencies, often including responsibilities for trade (Alberta, British Columbia, Manitoba, New Brunswick, North West Territories, Ontario, and Yukon); and third, the increasing number of intergovernmental units in line departments. Virtually all policy areas experienced a growth in intergovernmental administrative interactions, largely due to the increasing number of multilateral and bilateral intergovernmental agreements and partnerships which have recently emerged (Johns, O’Reilly, and Inwood 2007; Poirier 2004). As figure 2.2 reveals, environment, health, social services, and education were the sectors with the largest overall growth rates in intergovernmental units. But several other policy areas including economic development, trade and municipal affairs, Aboriginal affairs, labour, justice, tourism, heritage, and sport also showed increases in departmental intergovernmental units. Sometimes, a single policy area might have multiple intergovernmental units spread across several departments. For example, there were four departments with intergovernmental units which had responsibilities related to environmental policy in the ­federal government. Agriculture (a shared constitutional j­urisdiction) does



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Figure 2.2 Sectoral departments with intergovernmental units 1985 and 2003 Source: Johns, Carolyn M., Patricia L. O’Reilly and Gregory J. Inwood. 2007. “Formal and Informal Dimensions of Intergovernmental Administrative Relations in Canada,” Canadian Public Administration 50, 1 (Spring), 27.

not have a designated intergovernmental unit but rather has intergovernmental relations integrated into several department units (Johns, O’Reilly, and Inwood 2007). Clearly there is no one Canadian way of organizing the institutions of intergovernmental relations. However, one common feature seems to be the establishment of intergovernmental agencies that are proximate to executive power, with first ministers often acting as their own intergovernmental relations minister, while finance departments continue to be central to the machinery. Other observable trends in the intergovernmental machinery which we elaborate on in subsequent chapters include more partnerships with an intergovernmental dimension, an expanding system of meetings and technical committees, and more provincial-territorial collaboration (Johns, O’Reilly, and Inwood 2007). There have also been efforts in the Canadian federal system, particularly at the federal level, to incorporate intergovernmental institutional features into new agency structures, for example where intergovernmental features have been designed into new or restructured federal agencies such as the Canada Food Inspection Agency and the Canada Revenue Agency. However, the institutional option of joint institutions has not been a popular choice in the Canadian

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Intergovernmental Policy Capacity in Canada

Table 2.2 Conferences served by the Canadian Intergovernmental Conference Secretariat 1998–1999 to 2005–2006 1998– 99 Intergovernmental Affairs Finance Health* Environment** Trade*** Total of all Sectors

1999– 2000

2000– 01

2001– 02

2002– 03

2003– 04

2004– 05

2005– 06

4

8

8

5

8

10

13

7

1

2

6 4 99

8 4 105

1 10 8 5 99

2 6 7 3 99

1 17 6 7 117

4 12 4 7 104

2 11 8 4 106

N/A 9 5 2 100

Source: Adapted from Canada, Canadian Intergovernmental Conference Secretariat Report to Government, (Ottawa: Canadian Intergovernmental Conference Secretariat, 2007) http://www.scics.gc.ca/pubs_e.html Accessed 16 October 2008. *Health includes: Ministers of Health and Ministers of Aboriginal Affairs and Leaders of National Aboriginal Organizations; Health Retreat; Premiers Campbell-McGuinty Forum; Blueprint on Aboriginal Health; Seniors; ­Public Symposium on Health; Joint Health and Environment. **Environment includes: Joint Forest, Wildlife and Endangered Species; Fisheries and Aquaculture; Joint Energy and Environment; and Climate Change. *** Trade is listed under “Industry” and includes: Internal Trade; Tourism; Industry and Innovation; Consumer Affairs; Communications, Science and Technology.

federation to date (Johns, Inwood, and O’Reilly 2006). Intergovernmental agreements have become the more flexible choice since political and accountability issues remained a concern for politicians and public sector executives. By 1990, almost all sectors had their own set of deputy ministerial conference tables and secretariats or advisory bodies which feed into Ministerial Councils and FMMs. According to Canadian Intergovernmental Conference Secretariat (CICS) statistics, there was an average of 104 federal-provincial-territorial conferences of first ministers, ministers, deputy ministers, and premiers per year from 1998–99 to 2005–06 (see table 2.2). In 2009 the CICS organized sixty-seven intergovernmental meetings (Simeon 2010, 413). This data does not include the countless meetings held at lower levels of the intergovernmental bureaucracy outside of the CICS, which it is estimated would, if included, raise the number of intergovernmental relations meetings into the thousands (Barker 2008). There was a steady increase in the number of ministerial, and especially officials’ meetings from the 1970s onward, such that by the end of the 1990s there were more than a thousand federal-provincial-



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territorial committees and more than five hundred federal-provincialterritorial meetings each year (Kernaghan and Siegel 1999; Bakvis and Skogstad 2002B). A feature not unique to intergovernmental relations but worth noting is that committees and networks functioned well when issues were of a more technical than political nature. Examples include tax collection agreements, the National Child Tax Credit, the Canada Pension Plan, national health care reporting, the common drug review, and toxic substance regulation. Deputy minister meetings declined, however, during the 1990s (Simmons 2004), attributable to worsening relations following the 1996 federal transfer reductions (see chapter 4). Informal interactions may have increased, however, due to new technologies and increased interactions at lower levels in the bureaucracy. The administrative institutions of intergovernmental relations have evolved similarly, but are unevenly distributed across the federation. As outlined in chapter 9, the federal government, provinces, and territories all have varied capacity to engage in intergovernmental meetings. For instance, while an issue such as the fiscal imbalance emboldened several provinces to aggressively challenge the dominant role of the federal Department of Finance, the uneven institutional and technical capacity of provinces and territories often compromised their ability to do so in this and other issue-areas. While intergovernmental units typically had their origin in finance departments, they had over time become established as separate bodies by the period of our study. The finance-intergovernmental link was not necessarily attenuated as a result. Indeed, as the period of our study was dominated by issues related to fiscal federalism – even in functional policy areas such as health – a notable development was the increased coordination between intergovernmental agencies and departments of finance. More and more intergovernmental affairs officials attended meetings of finance ministers and officials, and ministers and officials from finance attended meetings of first ministers (Leslie, Neumann, and Robinson 2004). The same was true for sectoral meetings. During the emphasis on the health sector, meetings of high-level health officials were attended by finance ministers. At the same time, the decreased frequency of finance ministers’ meetings since the mid-1990s may be the result of this close interface between intergovernmental agencies, finance, and sectoral agendas resulting in a shift of finance ministers’ agendas to the First Ministers’ Meeting agendas (Johns, O’Reilly, and Inwood 2007).

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Another development in the intergovernmental machinery was public-service-wide initiatives to comprehensively integrate intergovernmental approaches into all aspects of policy and public sector management. This approach focused more on process and organizational development as opposed to restructuring the intergovernmental machinery. This is consistent with Savoie’s observation that intergovernmental relations filters through the public service as a whole and are not contained in one government department (Savoie 1999). Organizations such as the Canadian Centre for Management Development (CCMD – since 2004 the Canada School of Public Service) and federal and provincial Auditors General attempted to institutionalize intergovernmental approaches in the name of improving efficiency and service delivery. CCMD attempted to do this through research, communication, and organizational learning initiatives. Federal and provincial Auditors General weighed in on administrative institutions in the intergovernmental realm, reporting on perceived duplication and overlap in policy areas such as economic development, taxation, regulation, and inspections. Another important institutional change which emerged in the period under review was horizontal policy making. Working across the traditional vertical bureaucratic institutions took the form of increased emphasis on inter-agency institutions, some of which had intergovernmental features (Bakvis and Juillet 2004). The capacity to manage this interface was of increasing administrative importance (Canada, Canadian Centre for Management Development 1996A). Policy capacity was increasingly seen to include the ability to work across conventional boundaries and functional definitions of policies (Peters 1996). Mastering the art of horizontality, however, was fraught with barriers associated with a complex set of actors and individuals, ongoing turf wars, and the silo mentality of traditional bureaucratic structures and processes (Peters 1996; Canada 2002; Bakvis and Juillet 2004; Painter and Pierre 2005). Out of this maze emerged concerted efforts to work both across departments within governments as well as across governments to construct intergovernmental accords and agreements founded on partnerships. Institutional Resources In many ways, resources are the lifeblood of the institutions of Canadian federalism. As outlined in chapter 1, resources include the



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budgets, personnel, time, knowledge, expertise, and leadership assets associated with the various institutions in the federation. They are central to the policy capacity of individual jurisdictions as well as to IPC within, between and across jurisdictions. Levels of resources are obviously related to the state of the economy and the general fiscal state of a given jurisdiction. Resource allocations are also dependent on the salience of intergovernmental relations to the overall policy agendas of governments. For example, significant resources were garnered to engage in constitutional negotiations and efforts from the 1970s to the early 1990s. When these efforts subsided, resources shifted. Given the difference in wealth among the governments in Canada, there are, of course, differences in the ability to pay for policy development, implementation, evaluation and ongoing programs. In the 1980s, Pollard noted there was “no single trend across all governments regarding the level of resources – both financial and human – allocated by a government to intergovernmental relations, or regarding the proportion of resources that governments put into intergovernmental affairs” (Pollard 1986, 13). However, the federal government was noted at that time as having significantly more resources at its disposal given its taxation and spending powers. Where policy capacity is concerned, many of the poorer provinces and territories could not compete with the resources of the federal government or the richer provinces (Lightman and Irving 1991). In the period of this study, the landscape of intergovernmental administrative resources saw relatively stable levels of both money and people. This is striking in the context of broader public sector reforms at the time. For instance the federal Program Review exercise following Martin’s 1993 budget called for reductions in spending of $29 billion over three years and the elimination of 45,000 public service jobs, or fourteen percent of the entire federal public service (Good 2007, 269). Expenditure cuts in individual departments ranged from five to sixty percent, although central agencies suffered proportionately less than line departments. Similar trends were evident in other governments. The fact that intergovernmental agencies tend to be housed in central agencies perhaps explains why they were generally spared (Bernier, Brownsey, and Howlett 2005), as perhaps does the fact that they tended to be small to begin with. Although conventional wisdom suggests governments went through significant cutbacks in the 1990s and beyond (which they did in most

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areas), in intergovernmental relations the pattern was more nuanced and, in some ways, surprising. In 2008, Barker noted the more recent buildup of expertise of (some) provincial intergovernmental officials, more closely matching that of the once-dominant federal government (Barker 2008). We explore these developments when we examine this across all jurisdictions in more detail in ­chapter 9. Another important resource factor in intergovernmental relations is simply time. Many officials during the era of government restructuring were expected to assume new roles and responsibilities alongside their existing ones. So, for example, the increased emphasis on accountability in government led to the need for increased communication with the public. The increasing emphasis on horizontal coordination and international relations, particularly with the US, led to other roles on which intergovernmental officials were asked to focus. As a result, some intergovernmental officials were asked to assume new functions in addition to their original policy or program functions. By the early 2000s, the need to re-establish and invigorate the policy capacity within each government was identified as pressing by both practitioners and academics. Flush with surplus budgets, the federal government undertook several proactive steps including the creation of the Policy Research Initiative (PRI), combined with increased spending in several research and development-related areas. The federal government also established the Forum of Federations, an international body dedicated to researching and promoting federalism, and dedicated research funding in the Federalism and Federations Program of the Social Sciences and Humanities Research Council. As noted above and in more detail in chapter 9, several provincial governments began to reinvest in their own capacity and in the resources of intergovernmental relations as well in this period. Part of the reason for this was the need to implement existing and new intergovernmental agreements. Accords and Agreements All governments in Canada are signatories to numerous intergovernmental accords and agreements. This instrument of formalizing and institutionalizing intergovernmental relations has been used since the earliest periods of executive federalism. These agreements can be multilateral (involving more than two jurisdictions in the ­federation)



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or bilateral (between the federal government and a province or territory or between two provinces or territories). They have been aimed at improving policy and program and service delivery in virtually all policy areas (Kernaghan and Siegel 1999) including the areas included in this study: intergovernmental relations, finance, environment, trade, and health. Although there is no official inventory of such agreements, it was estimated in 2004 that there were over 1,500 intergovernmental accords and agreements in place and that some eighty-five percent of those were bilateral (Poirier 2004). Part of the significance of intergovernmental agreements relates to their legal and political status. Some intergovernmental agreements are not legally binding or enforceable (Cameron and Simeon 2002, 62). Other agreements, though, are legally binding insofar as a government is acting within its jurisdictional powers, a view reinforced by a 1991 Supreme Court decision regarding the Canada Assistance Plan (CAP). In general, “[m]any of the most important federalprovincial arrangements are not in fact formal contracts, though they may be later enshrined in federal and provincial legislation” (Poirier 2004, 431). Ultimately, most officials resort to the view that intergovernmental agreements are akin to “gentlemen’s agreements” and that disputes about them ought to be resolved through political processes (Poirier 2004, 431). The era under consideration contained political and fiscal conditions which resulted in an enhanced focus on accords and agreements. The failed constitutional talks of the 1980s and early 1990s left a bitter taste for politicians and officials, but they also knew they still had to deal with questions of who does what, and how to make the federation function effectively. These questions were intractable if posed in constitutional terms, so they turned to ­political and administrative agreements, accords, memorandums of understanding, and partnerships. The ongoing question of separatism in Quebec also contributed to the search for ways to make federalism appear palatable, including intergovernmental accords and agreements that directly addressed the unique needs and aspirations of that province. The western provinces, particularly Alberta and British Columbia, were also demanding an increasingly decentralized federation, while public administration reforms were driving an approach to intergovernmentalism based on partnerships. All these factors contributed to the rise in importance of accords and agreements for IPC.

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Despite sometimes acrimonious relations springing from the national unity issue, fiscal federalism, health care, or other policy areas, many multilateral political accords and agreements were reached during the period under study. These include, for instance: the 1995 Agreement on Internal Trade (AIT); the 1998 Canada-Wide Accord on Environmental Harmonization; the 1998 National Child Benefit (NCB); the 1999 Social Union Framework Agreement (SUFA); the early 2000s First Ministers’ Accords on Health Care; and the 2005 agreements on early learning and child care. In addition, many bilateral agreements were negotiated related to tax harmonization, immigration, homelessness, sports policy, Aboriginal governance, and other issues (Johns, O’Reilly, and Inwood 2006). SUFA was a particularly relevant development in that it attempted to move beyond just social policy and the goals of one policy area and institutionalize a new approach to intergovernmental relations in general (Fortin, Nöel, and St.-Hilaire 2003). SUFA was signed on 4 February 1999 by Ottawa and all the provinces and territories except Quebec and Nunavut (Gagnon and Segal 2000). It espoused social policy goals and commitments as well as a framework of broad principles for improving intergovernmental relations such as commitments to strengthen the transparency and accountability of each government to its constituents; commitments to improve partnerships between governments through joint planning and collaboration, and reciprocal notice and consultation measures; a collaborative approach for the exercise of the federal spending power; and a process for avoiding and resolving disputes between governments (Provincial/Territorial Council on Social Policy Renewal 1999, 2).Values espoused in SUFA included cost effectiveness, equality and fairness, collaboration, access to health care in a variety of its manifestations (primary, community etc.) performance measure­ ment, accountability, reporting, and comparable indicators of progress. Politicians saw in SUFA a flexible instrument based on a somewhat ambiguous “understanding” rather than a precisely defined meaning, leaving wide latitude in discussions and negotiations (O’Hara, 1998; Inwood 2000). SUFA was also an important attempt to reign in the unilateralism of the federal government while making the rules of the game clearer to all (McIntosh 2004; Jeffrey 2006). Attempts were subsequently made to couch various agreements in the language and spirit of SUFA, though with very uneven results, as we show in subsequent chapters.



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Some accords and agreements also indicated a more decentralized approach to federal-provincial-territorial relations. Ottawa and the provinces reached agreement on the devolution of labour-market policy after Ottawa announced in 1996 it would be withdrawing from this policy area (Armstrong and Lenihan 1999). The actual agreements reached with each province differed from each other (Lazar 1998A). Bilateral negotiations resulted in full devolution of authority to four provinces and co-management with five others, mainly due to the lack of capacity of those five to fully manage the field (Cameron and Simeon 2002). This process of institutionalizing bilateral agreements was not without some controversy, variously referred to as “asymmetrical federalism” (Institute of Intergovernmental Relations 2005), “checkerboard federalism” (Bakvis 2002), and, as applied to some other policy fields, “sugar-daddy feder­ alism” (Kent 2004). In addition, some bilateral accords proved to be very contentious, such as the 2004 Atlantic Accords between Ottawa and Newfoundland and Labrador and Nova Scotia (see chapter 4). Intergovernmental coordination of regulatory policy was a major concern in this period. The two levels of government share regulatory responsibilities in numerous areas, including agriculture, environment, food safety, pharmaceuticals, and transport. It has long been recognized that this situation creates the potential for duplication and inefficiency, which require a highly coordinated effort to avoid. During the 1990s, apart from several high-profile regulatory agreements such as the AIT and the Accord on Environmental Harmonization, most provinces and territories also undertook to reform their regulatory practices and eliminated thousands of outdated and unnecessary regulations (Canada 2004B). A 2002 report by the OECD cited federal-provincial-territorial cooperation around regulatory policy as a major priority for reform, stating that “Canada needs to get its national house in order to create a stronger, more seamless national system [of regulation]” (cited in Canada 2004B, 26). The External Advisory Committee on Smart Regulation suggested that “[a] significant challenge to addressing inter-jurisdictional coordination is the lack of a formal process and mechanism to promote cooperation. Federal-provincial-territorial ministerial councils have been established in most policy areas (e.g. labour market, health, the environment, and transport), but federal, provincial, and territorial governments rarely meet there to discuss

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detailed regulatory policies” (Canada, External Advisory Committee on Smart Regulation 2004, 27). In addition to more formalized accords and agreements a wide range of partnership agreements also exist between the two levels of government (Johns, O’Reilly, and Inwood 2006). It is difficult to quantify the number and character of intergovernmental partnerships as many are below the radar screen of academic observation, and many involve actors beyond the two levels of government and include Aboriginal governments, municipalities, the private sector, and non-governmental organizations. There is some anecdotal evidence that these have expanded in virtually all policy areas. Some were facilitated by crises, and some were temporary, like those developed for short-term projects, policy commissions, or annual budget processes (Institute of Public Administration of Canada 2003). Some were also fostered through alternative coordination structures such as federal regional councils (Juillet 2000). This emphasis on intergovernmental partnerships has been reinforced by citizen-centred approaches and new alternative service delivery arrangements (Dobell and Bernier 1997). Many officials in line departments and agencies during the period of this study were focused on facilitating efficient, effective, and citizen-focused public service delivery, setting performance standards, monitoring best practices, and reducing intergovernmental barriers for the seamless delivery of services to Canadians (Simeon 2002). The growing use of information and communication technologies in the public sector has also aided the proliferation of these intergovernmental institutional arrangements. The Courts In the 1960s the observation was made that federalism often leads to “legalism” (Dicey cited in Stevenson 2004, 15) and the Canadian case has traditionally provided testament to this view. There is a long history of judicial review in Canadian federalism. However, as Baier points out, since the last major constitutional reform efforts in 1992, “intergovernmental negotiations have replaced the courts as the primary venue of change in federalism” (Baier 2008). Nevertheless, court decisions still play a role in various disputes over the division of powers, rights articulated in the Charter, and important reference cases.



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Early judicial decisions in intergovernmental disputes historically favoured increased provincial autonomy, but more contemporary decisions by the Supreme Court of Canada have tended to swing the pendulum toward enhanced federal power (Stevenson 2004; Baier 2002). This generalization is partly dependent, though, on the policy area affected. It seems to hold true, for instance, for environment in cases such as the Oldman River decision (Friends 1992) and for trade where any legal challenge to the status quo would likely result in enhanced federal power, but not so much for health. There the Supreme Court made several decisions (directly and indirectly) in favour of the market over either level of government, through allowing further privatization in the sector as, for example, in the Alberta Bill 11 case and the Chaoulli judgment (Alberta Bill 11, 2000; Chaoulli v. Quebec, [2005] 1 SCR 791). Federalism and intergovernmental relations are affected by these court decisions both directly in circumscribing what can be done, and indirectly in the government’s calculations of likely judicial decisions. Still, the issue of an alleged centralist bias to the Supreme Court, whose members are appointed by the prime minister, is a recurring theme in the politics of intergovernmental relations in the era we examine. A series of important court cases around the national unity issue coloured Canadian federalism in the mid-to-late 1990s (Baier 2002, 2008; Leyton-Brown 2002; Mutimer 1996, 2002). This veritable flurry of judicial activity meant that a considerable portion of time, energy, and attention had to be channelled into this realm, presumably at the expense of time, energy, and attention to policy issues. In any event, it did not contribute to a positive atmosphere between the two main protagonists, Ottawa and Quebec, while the other provinces and territories often looked on in exasperation waiting for other issues to be addressed. Parliament and Political Parties Intergovernmental relations also occur within the broad context of a representative democracy whose apex is the Canadian Parliament and the provincial and territorial legislatures. Indeed, Canada was the first country in the world to combine parliamentary government and federalism. Yet Parliament played a negligible role in intergovernmental relations in the period under consideration, as it has histor­ ically (Franks 2004). This is one factor that persisted ­throughout

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the era of this study. Indeed, if anything, the executive-dominated nature of the Canadian political system intensified (Savoie 1999, 2008), while the role of legislatures was generally limited to rubberstamping the decisions of first ministers and their cabinets. Some scholars have noted that ordinary legislators – the political representatives of the people – have little or no role in the making of public policy (Docherty 2004), and especially in the making of intergovernmental policy. Furthermore, the first-past-the-post electoral system and strict party discipline constrain the role of the House of Commons, while the Senate has never lived up to its billing as the site of regional interests (Meekison, Telford, and Lazar 2004). Even as simple an innovation as legislative committees charged with overseeing intergovernmental relations is absent on the parliamentary landscape (Cameron 2004), even though such committees could alleviate some of the democratic deficit by providing an important forum for the public to engage decision-makers. Thomas, in reviewing the annual reports of Officers of Parliament, has commented on the decline of Parliament’s accountability function and discussed how tight executive control inhibits the legislative committee process (Thomas 2004). Overall, the lack of accountability in the system of executive federalism has been commented upon frequently (Smiley 1979; Brock 1995; Franks 2004; Cameron 2004). In addition, as Smith points out, “no body within the federal government is designed to represent the provinces or to speak for them in federal councils. This leaves the provincial governments as the singular agents of provincial concerns, not just in the provincial capitals but at the federal level as well. This situation also drives the need for an arena like executive federalism in which the provincial governments speak directly to the federal government” (Smith 2004, 102). The limited role for Parliament related to policy and intergovernmental relations seemingly became more limited in the past fifteen years. As the institutions of executive federalism evolved, both the federal and provincial governments became more ­executive-dominated (Bernier, Brownsey, and Howlett 2005) and as political culture reinforced the executive-dominated nature of Canadian intergovernmental relations (Smith 2004), legislatures seemed increasingly at the periphery of intergovernmental relations. Theorists interested in the relationship between the party system and federalism in Canada long ago noted the disjunction between



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the federal and provincial (and one might add territorial) party systems (Smiley 1987; Dyck 1996), where different parties, even parties with the same labels, operated in relative isolation from one another. Rather than act as an integrating agent for national unity, the two-party system has had a largely disintegrative effect. Hence the pivotal role of the federal cabinet, rather than the parties, as the agent binding the regions to the centre. Moreover, the party system in Canada at the federal level fractured in the period under examination. The 1993 election was a turning point in this regard as the Progressive Conservatives collapsed, the western-based Reform Party and the Bloc Québécois emerged, and the Liberal Party was relegated to an Ontario power base with pockets of representation in other parts of the country. Meanwhile, a separatist government returned to power in ­Quebec City. This set of developments “suggested that the regionalization of the party system had entered a new and dangerous phase” (Bakvis and Tanguay 2008, 121). Rather than acting as a vehicle for the aggregation and articulation of views and as a broker of interests reflecting some sort of national consensus, the federal Parliament turned into an agglomeration of regional voices and preoccupations, with up to five parties represented there. In addition, the extent of ties between national and provincial wings of the same parties came under increasing disintegrative pressure. As Carty and Wolinetz report, “Once closely integrated, parties, and the party system they constitute, are now largely disconnected” (Carty and Wolinetz 2004, 58). They further assert that “[w]ith organizational fragmentation came financial independence and the development of distinctive and separate career paths for politicians. The upshot was a complex set of provincial and national political parties in which even members who came from the same political family, and bore the same name, no longer sang from the same page – indeed they often appeared to be using quite different hymn books” (Carty and Wolinetz 2004, 66). It has also been asserted generally that a more ideological and politicized style of policy-making emerged in the late 1980s and 1990s (Aucoin 1988; Savoie 1994). Party politics in Canada reflected this and arguably so did intergovernmental relations. One important consequence of all these developments was to ratchet up many of the tensions in the federal system.

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International Institutions International institutions are one other important component of the landscape which has had implications for Canadian f­ederalism and intergovernmental relations. Internationalization is defined by Doern as “a process by which various aspects of policy making are influenced by factors outside national territorial boundaries” (Doern 1996, 3), whether by other nation-states or by non-state actors. There were several international developments in the 1990s and the period of our study which had an impact on the landscape of intergovernmental relations in Canada. They include: policy issues related to the national unity file and concerned foreign governments supporting Quebec’s aspirations for independence; policies concerning the broad area of continental economic integration in the context of globalization; the terrorist attacks of 11 September 2001 and their aftermath; international environment agreements and general international developments and agreements related to globalization. An ongoing source of intergovernmental consternation has been the official position of foreign governments, particularly France, towards Quebec sovereignty (Goldenberg 2006). During the period of our study, the separatist government in Quebec attempted to court la Francophonie (Leyton-Brown 2002; Baier 2003) and agitated for representation in a number of international bodies like the United Nations Educational, Scientific and Cultural Organization (UNESCO) (which was finally agreed to by Harper in 2006). To demonstrate the efficacy of federalism to Quebecers and other Canadians, and to forestall separatism gaining wider international legitimacy, the Chrétien government launched the international Forum of Federations, an independent organization that was initiated in Canada and is supported by many countries and governments (Forum of Federations 2007). Another internationalist impulse was continental integration through free trade as the political economy of Canadian federalism was reformed and altered by the impact of globalization (McBride 2005; Inwood 2000) (see chapter 6). Although the negotiation of trade agreements and treaties falls under federal jurisdiction, provincial governments are often called upon to implement agreements when elements of these agreements come under their authority. Without question, the Free Trade Agreement (FTA) and North American Free Trade Agreement (NAFTA) were important by ­virtue



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of the many intergovernmental bodies they spawned promoting interdependence between the bureaucracies of the three signatories. One consequence was increased legalism in the work of public servants. For instance, according to Hale, “the power of the Canadian International Trade Tribunal has grown dramatically under FTA and NAFTA forcing federal public servants to pay far closer attention to due process in awarding contracts or face greatly increased risks of litigation (and public exposure) from disappointed bidders” (Hale 2006, 249–50). As such, greater federal-provincial-territorial consultation now occurs before and during the formulation of trade policy (Skogstad 2008). Concerns about environmental policy were placed in the hands of the North American Agreement on Environmental Cooperation (Clarkson 2008), while concerns about US healthrelated corporate entry into the Canadian health care system also rose as a result of the terms of NAFTA (see chapter 7). Other regional cross-border linkages intensified. As Fry notes, “To a certain point, the provincial governments have developed their own foreign relations with the United States, or at least the regions of the United States” (Fry 2004, 15). The New England Governors’ and Eastern Canadian Premiers’ Conference, the Council of Great Lakes Governors, and the Pacific Northwest Economic Region had cadres of officials whose job it was to facilitate relations and implement agreements. However, compared to the European Union, there was a marked dearth of bureaucratic bodies responsible for interstate relations between Canada and the United States. Apart from the Labour and Environment Commissions under NAFTA, and the International Joint Commission, most cross-border inter-bureaucratic activity involved informal consultations between public servants in the two countries (and to a much lesser extent with Mexican officials). Contacts consisted mainly of telephone and email communications as well as a significant number of cross-border trips (Heynen and Higginbotham 2004). The landscape was also changed by international forces which resulted in financial responsibility, especially in the social policy arena, being devolved to the provinces (Courchene 1996, 38). Domestic political economies were increasingly subject to the power of non-state actors such as transnational corporations and international finance. Some argued these forces were even supplanting governments (Johnson and Stritch 1997; see also Clarkson and Lewis 1999) and accelerating decentralization (Robinson 1995). Others

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welcomed these developments, particularly those on the right of the political spectrum; although some scholars demonstrated this external power was less empirically realized than would appear from the oft-quoted claims (Weiss 1998; Hoberg, Banting, and Simeon 2002). Provincial governments have increasingly reoriented their most significant economic relationships on a north-south basis rather than an east-west one, and each now trades more with the United States than with the rest of Canada. Thus, international forces place the economic union under some strain. The Western prairie provinces have become increasingly integrated with the states of the American Midwest. Yukon, British Columbia, and Alberta joined the Pacific Northwest Economic Region with Washington, Oregon, Montana, Idaho, and Alaska; while Ontario and Quebec are associate members of the Council of Great Lakes Governors which includes Illinois, Indiana, Michigan, Minnesota, New York, Ohio, Pennsylvania, and Wisconsin. Both central provinces have been identified as “North American region states” (Courchene and Telmer 1998; Lisée 2003 and 2001) and it has been suggested New Brunswick and Alberta also displayed some characteristics of North American region states (Hale 2003). The Atlantic provinces traded and interacted increasingly with the eastern American seaboard and are members of the New England Governors’ and Eastern Canadian Premiers’ Conference, formed in 1973 (Heynen and Higginbotham 2004). One important implication of these developments is that Canadian federalism was caught between the imperative of continental and national economic integration. Many policy issues associated with North American integration are either subject to provincial jurisdiction or at least require federal-provincial cooperation (Fry 2004). This created some dilemmas because, as Hale points out, “[a]ll these policy fields are characterized by jurisdictional asymmetries that make it difficult, if not impossible, for the federal government to take unilateral responsibility for their resolution in negotiations with the United States (and/or Mexico), or for provincial governments to take major initiatives without undermining federal responsibility for the management of Canada’s foreign affairs” (Hale 2003, 43). In 2003–04, the Canada School of Public Service initiated a research study of the extent and nature of Canada-United States administrative relationships and ties. The study included cataloguing those connections, as well as those between the provinces and territories and the United States (Heynen and Higginbotham 2004). This



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report provided an extensive study of the growing provincial and territorial machinery for the coordination of Canadian-American cross-border relations (Heynen and Higginbotham 2004) and highlighted: “The densest network of Canada-US sub-national linkages occurs among working-level public servants. For the most part, these functional ties remain highly decentralized within each provincial and territorial government. Limited coordination takes place within the premier’s office and quite often within the intergovernmental affairs ministry or agency. The most robust coordination takes place in Quebec through the Ministry of International Relations” (Heynen and Higginbotham 2004, 38). This study shows that provincial governments proportionately spend more on international programs and have more personnel involved than do American state governments. Fry argues Canadian provincial and territorial governments may have been the most active of sub-national governments on the international scene (Fry 2004). This ongoing international focus was reinforced by international crises such as the Mexican peso devaluation in 1994, climate change, and, most dramatically, the terrorist attacks on the United States of 11 September 2001 which required a considerable amount of intergovernmental energy and activity (McDougall 2006). In some cases, policy makers had to meet international obligations such as the International Joint Commission on the Great Lakes (Hartig and Zarell 1992; Sproule-Jones 1999; Johns 2009) and the Kyoto Protocol (Johns 2001). The issue of climate change, in particular, highlighted the type of problem that can arise in a federation where the constituent parts disagree with the national government over an issue, even one that is putatively within federal jurisdiction, thereby compromising the national government’s capacity to implement a policy by diverting energy to stamping out brush fires and (sometimes) larger conflagrations. A variety of factors have shaped trans-governmental relations between Canadian and American officials, including the degree of bilateral interdependence in a given policy field, the focus of those bilateral relations, and the presence or absence of crisis in addressing issues in the policy domain (Gattinger 2004). The role played by intergovernmental officials in this realm is of particular interest since a large number and variety of cross-border local activities have developed. These include public-private partnerships and other nongovernmental and local government initiatives that require

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­ onitoring by intergovernmental agencies and officials. Ontario m is illustrative. Cross-border bodies there include the CanadianAmerican Border Trade Alliance; the Eastern Border Transportation Coalition; the Canada-US BorderNet Alliance; various Great Lakes networks; the Commercial Vehicle Processing Centre; the Association of International Border Agencies; and hundreds of others (Meyers and Papademetriou cited in McDougall 2006). The international landscape witnessed a profusion of global agencies with which intergovernmental officials increasingly have to monitor and liaise. As Hale observed: The capacity of Canadian governments to design effective economic policies ... is also linked to their ability to work effectively within the specialized bilateral or international networks of policy-makers, usually organized on a sectoral basis. The involvement of senior and mid-ranking government officials with organizations such as the International Monetary Fund (IMF), the Organization for Economic Development (OECD), the International Organization of Securities Commissions (IOSCO), and a host of others provide opportunities for international cooperation and for the exchange of information and ideas within an international economic system characterized by a relatively high degree of decentralization (Hale 2006, 255). The other aspect of increasing internationalization is based on the deliberate choices governments have to make to focus on international rather than national policies and interactions. These may be at the expense of ongoing national and provincial or territorial policy files in need of long-term planning. As noted above, the intergovernmental agencies of most governments in Canada expanded their purview to include aspects of international relations, including trade, environment, security, culture, and other matters. As a consequence, officials in intergovernmental units had to broaden their focus and often develop new skill sets to learn how to interact with officials from foreign nation states and their respective sub-national units. This was a trend not limited to intergovernmental relations, however. Other departments and sectors also expanded their activities and relations in this realm. This in turn often necessitated increased coordination within, between, and across governments.



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ACTORS Political and Administrative Actors The visions and personal approaches to intergovernmental relations of individual prime ministers and premiers have been well documented in political science scholarship, biographies, and memoirs. These actors and the positions they hold undoubtedly influence intergovernmental approaches to policy and the fate of some issues. “This means that the scope of intergovernmental relations remains heavily dependent on whether the first ministers, especially the prime minister, find it advantageous or not” (Cameron and ­Simeon 2002, 64). Equally important, but less well understood, are the roles and significance of other political actors including ministers, political staff, deputy ministers, and officials. This section reviews these actors as part of the landscape of intergovernmental relations. The influence of first ministers and the centralization of intergovernmental structures was a marked feature of intergovernmental relations during the period of this study, following a trend over the last thirty years of the executive branch increasing its power vis-à-vis the other branches of government in a number of key areas, including intergovernmental relations (Savoie 1999, 2008; White 2005; Bernier, Brownsey, and Howlett 2005; Johns, O’Reilly, and Inwood 2007). This is a trend perhaps even more pronounced at the provincial level (White 2005), and premiers were not shy about moving onto the national stage to air their grievances and make demands. Given these realities, it should not be surprising that the relations between politicians, and especially first ministers, are important in intergovernmental relations and IPC. Characteristics such as personality and leadership play a role in any political dynamics. Some politicians choose to engage more in policy development than others. Some provinces have had “policy premiers” such as Roy Romanow in Saskatchewan, Gary Doer in Manitoba, or Frank McKenna in New Brunswick, who all appeared comparatively interested and active in policy development. Likewise, prime ministers varied in their approach to governance. ­Chrétien was noted for his “pragmatism” and his relative lack of interest in long-term, big-picture goals. Hence he reduced the frequency of FMCs. The personalities and actions of political leaders clearly have an impact in general and in specific policy areas. For example,

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­ olitical ­leadership has been noted as a key factor in the intergovernp mental work around the development of the NCB (Armour and ­Senchuk 2002). The significance of ministers to intergovernmental relations and policy has also evolved. In the era of “cooperative federalism” and what Smiley (1987) and Dupré (1985) referred to as the “departmentalized cabinet” the personal interactions of first ministers, ministers, and senior officials lubricated the machine. Powerful individual cabinet ministers at both levels coordinated intergovernmental initiatives. Ministers and their ministries were more prominent. As the “departmentalized cabinet” gave way to the “institutionalized cabinet” (Smiley 1987; Dupré 1985; Dunn 1995; Savoie 1999), the role of ministers independent of first ministers and central agencies was diminished. Moreover, the increasing turnover of ministers was a significant development in the landscape in the decade just prior to the period of this study. In addition to the important role of political actors in intergovernmental relations, scholars of Canadian federalism have documented and debated how the changing landscape has made intergovernmental officials important actors in Canadian federalism. As outlined in chapter 1, in an examination of the role of officials, there is an important distinction between intergovernmental generalists working in central agencies and intergovernmental specialists, those working in intergovernmental units within line departments and specialized agencies. In general, the former are more focused on coordination of intergovernmental efforts, while the latter are more focused on intergovernmental efforts in a policy area. The landscape in which these officials carried their responsibilities did subtly change in the decades prior to our study and in the 1995–2005 period which we examined. In keeping with the general observation of more centralized control in the Canadian federal political and policy process (Savoie 1999) and similar observations provincially (Bernier, Brownsey, and Howlett 2005) the power and role of intergovernmental administrative actors reflect this. Savoie notes that the structure and organization of the federal intergovernmental affairs unit within the Privy Council Office (PCO) is geared toward prime ministerial domination. His analysis sheds some light on the degree of influence of the public servants in the PCO responsible for intergovernmental relations (and the corresponding relations within their provincial equivalents). In Savoie’s analysis, the growing influence of federal intergovernmental officials parallels the



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growing influence of the centre in recent years. As Savoie’s snapshot of the Intergovernmental Relations division of the PCO reveals, the role of the senior most public servants in intergovernmental relations is a complex one, in part due to the overarching policy presence of intergovernmental considerations in virtually every ministry (Savoie 1999), all of which require coordination. As federal and provincial intergovernmental ministries and units fill central agency roles, it is a common practice that all cabinet submissions contain an assessment of relevant federal-provincial-territorial issues. This implies a necessity for an overarching degree of effective and efficient coordinative functions. The influence of all intergovernmental officials “is based to a large extent on their ability to wind their way skillfully through the labyrinth of intergovernmental affairs in search of agreement with officials in their own government and in other governments” (Barker 2008, 245). Many of these public servants must be skilled diplomats. The formal functions of the intergovernmental officials, working in either central agencies or line departments are similar – to monitor, coordinate and advise on issues affecting both levels of government. As discussed in an earlier study (Johns, O’Reilly, and Inwood 2007), officials described the functions and powers of intergovernmental officials, as shown in table 2.3, as monitoring, coordinating, and advising. There has been little or no significant change since Pollard’s early 1980s study of the functions and powers of intergovernmental officials (Pollard 1986), except for some expansion of existing duties, such as the reviewing of proposals to cabinet by other departments and the exchange of a significant amount of information with each other. These functions expanded in the period under review with both positive aspects (improved technology, enhanced relations, and information-sharing) as well as negative aspects (the overwhelming volume of information and ideologically driven information). The expansion of this function was primarily due to increased provincial, territorial, Aboriginal, municipal, and international monitoring and coordination by officials, particularly of US policies, as well as increases in monitoring and interaction with academics, think tanks, organized interests, and, to a lesser degree, the public (Johns, O’Reilly, and Inwood 2007). One particular development was more emphasis on interactions between generalists and specialists under the new focus on horizontal policy and management. When particular policy concerns dominate,

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Table 2.3 The functions and powers of intergovernmental officials Monitor monitor federal-provincial-territorial, Aboriginal, municipal, international (especially US) developments • maintain formal contacts with other governments • exchange information and research with policy-makers, academics, stakeholders • review proposals to cabinet to provide an intergovernmental perspective •

• • • • • •

Coordinate plan and prepare for intergovernmental meetings coordinate horizontal and vertical policy develop coordinating policies and courses of action for politicians serve as a liaison between governments, central agencies, and line departments, and increasingly between outside actors (Aboriginal, municipal, international) negotiate and sign intergovernmental agreements, contracts, and partnerships arrange ceremonial functions and protocol duties

Advise advise (minister/premier/prime minister) on federal-provincial-territorial issues • develop agendas and positions in preparation for intergovernmental meetings • provide policy direction and advice to and from line departments •

Source: Johns, Carolyn M., Patricia L. O’Reilly, and Gregory J. Inwood. 2007. “Formal and Informal Dimensions of Intergovernmental Administrative Relations in Canada.” Canadian Public Administration 50, 1 (Spring), 29–32.

as health policy did during the years of this study, there is the potential for increased tension between the process-related intergovernmental generalists in the central agencies and the policy-focused intergovernmental specialists in line departments – a tension commented on by Warhurst in the early 1980s (Warhurst 1983, 460). If the past is any indication of who might carry the most weight (the central generalists or the department specialists), it is the central agency officials who have typically played a key role in executive federalism, especially those in the federal PCO. Despite the lack of overall change in the actors in the intergovernmental landscape in the past several decades, as Anderson, a former federal deputy minister of Intergovernmental Affairs, has noted, there was increasing recognition by the 1990s of the need for “more attention to the practical working arrangements between federal and provincial departments” (Anderson 1996, 487). This was also noted by the 1995 federal Deputy Ministers Task Force Report Strengthening Policy Capacity, which concluded that “[c]ollaborative policy work with the provinces is a major issue requiring ­attention” and



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recommended that “the committee of deputy ministers on the role and functions of the federation, together with PCO, should develop recommendations on how joint federal-provincial strategic policy work can strengthen interactions between governments and improve the functioning of the federation” (Canada 1995A, 38–9). Federal public servants in general were being encouraged to think, act, and innovate “intergovernmentally” and some initiatives under the ­auspices of SUFA and training and development under the Canadian Centre for Management Development (since 2004 the Canada School of Public Service) attempted to diffuse an intergovernmental approach across the public service. The demographic profile, education, career backgrounds, and mobility of intergovernmental officials were, taken together, another important aspect of the landscape. Unfortunately there is no baseline data on intergovernmental executives, but a mail survey conducted in 2001 indicated that intergovernmental officials at ranks from deputy minister to senior policy analyst are a remarkably homogeneous group (Inwood, Johns, and O’Reilly 2004). The intergovernmental cohort has a median age of 46, slightly older than the federal public service average of 42 (Canada, Treasury Board of Canada Secretariat 2001). Aside from the respondent who reported his/her ethnicity as “Albertan,” intergovernmental officials are overwhelmingly white (81%) and male (71%), a fact that is inconsistent with the gender profile of the public service as a whole, although closer to its ethnic composition. By way of comparison, in 1997, fifty percent of federal public service employees were women, while five percent were visible minorities, two percent were Aboriginal, and three percent were persons with disabilities (see K ­ ernaghan and Siegel 1999, 583). The educational and career backgrounds of intergovernmental officials are also noteworthy. They are a well-educated cohort (Inwood, Johns, and O’Reilly 2004). All respondents reported ­having some post-secondary education, with 58% holding a Master’s degree. Most intergovernmental officials have training in the social sciences (over 50%), some 22% of these with political science and public administration backgrounds; followed by geography and urban planning (14%); business administration and commerce degrees (13%); and a number of other areas of study such as ­science, engineering, law, economics, and education, all below ten percent (in descending order).

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Officials’ career patterns are dominated by those who have backgrounds in policy analysis. Those who had worked as program management specialists compose the next largest cohort. Overall, they average 17 years’ experience in the public service (ranging from 6 months to 31) and 13% of those surveyed indicated some prior work experience in the private sector. However, they have an average of only 6.6 years in intergovernmental relations and the majority (56%) have been in intergovernmental relations for less than five years (Inwood, Johns, and O’Reilly 2004). Finally, some interesting data indicates that, in general, the mobility of public service elites in the provinces was increasing in the late 1990s (Wake Carroll, Bierling, and Rosenblatt 1999). This mobility also seems to be increasing between levels of government. A survey of deputy and assistant deputy ministers conducted in 2006 indicated that 39% of the public service elite had worked for another level of government: some 35% of provincial executives, 36% of federal executives, and 62% of territorial executives had worked for another level of government (Evans, Lum, and Shields 2007). Overall, the homogeneity of intergovernmental officials implies, for one thing, a commonality of values, attitudes, and beliefs in the sense of a shared culture. It may well contribute to the esprit de corps which both tacitly and explicitly acknowledges the centrality of intergovernmental relations to policy work and which helps provide the basis of the informal network system of intergovernmental relations. In 1970 Smiley observed that the benefits of the “personalized fabric” of intergovernmental relations were realized most when the turnover of officials was infrequent (Smiley 1970, 325). Yet our data suggest there was a high turnover of officials in the period of our study, particularly at the senior levels – although this was not an issue confined to intergovernmental relations (see Wake Carroll, Bierling, and Rosenblatt 1999; Bourgault 2002; Evans, Lum, and Shields 2007). A survey of deputy ministers and assistant deputy ministers in 2006 indicated that policy capacity was a concern within all jurisdictions but there was significant variation when comparing across jurisdictions related to questions about declines in policy capacity (Evans, Baskoy, and Shields 2011). Deputies in provincial and territorial governments more frequently noted their jurisdictions had witnessed declines in policy capacity when compared to federal deputies. When answering a retrospective question about policy



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c­ apacity, 38% of federal deputies, 47% of territorial deputies, and 32.6% of provincial deputies reported their policy capacity had improved over time. Some 43% of federal deputies were neutral; 37% of provincial deputies and 29.5% of territorial deputies disagreed that their policy capacity had improved over time. In terms of helping to explain deterioration of policy capacity within jurisdictions, this study found that loss of institutional memory, centralization of power, turnover of deputies, and lack of long-term planning were important variables. Finally, this study indicated that political fit between the bureaucracy and the government of the day in a given jurisdiction may contribute to loss of policy capacity within jurisdictions. The authors attribute this to less need for policy capacity and research because the policy direction is clearer to the main policy actors. In summary, the landscape of Canadian federalism and intergovernmental relations is brought to life by the various political and administrative actors which infuse the system with both continuity and dynamism. As control of public policy from the centre tightened in the 1990s, first ministers took centre stage. Ministers remain at the apex of the political-administrative interface but with varying policy influence. In addition, a large troupe of intergovernmental officials behind the scenes make federalism work on a day-to-day basis. Increasingly, however, these actors do not operate in isolation. They interact in the intergovernmental landscape with other groups and individuals from the broader public, both in Canada and beyond. The Public In addition to state actors (elected and career officials), in the landscape of federalism there are a number of different non-state actors who make up the ‘public’ of intergovernmental relations. The public includes organized groups and influential citizens. Exclusion of the public, a long-standing feature of executive federalism, has been continuously criticized as elitist and lacking public involvement and legitimacy. Although some have argued that the competitive nature of executive federalism can make various jurisdictions more responsive to the electorate (Breton 1985), historically there have been limited opportunities for the public to engage and participate in Canada’s system of executive federalism and intergovernmental

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relations. In the decade prior to the period under study, a veritable sea-change in attitudes occurred, presaged by the patriation of the Constitution and the addition of the Charter of Rights in 1982. This exercise not only involved Canadians directly (in particular women and Aboriginals, who effectively mobilized themselves to have their interests enshrined in the Constitution), but created a new discursive and political class – so-called “Charter Canadians” (Cairns and Williams 1985) – whose heightened awareness of their rights helped chip away at the edifice of elite-dominated, deferentially oriented Canadian political culture. These developments were furthered by the experiences of the Meech Lake Accord, where Canadians reacted negatively to being locked out of the process dominated by “eleven men in suits,” and the Charlottetown Accord, which saw an unprecedented level of participation by Canadians in the form of consultations and a referendum in what was once the exclusive purview of the political executive. However, the final round of the Charlottetown negotiations “resembled the closed, secretive processes of constitutional amendment that had characterized the Meech Lake process” ­(Campbell and Pal 1994, 143). Dramatic events like the Quebec referendum also increased the alienation and distrust of citizens with their political elites (Inwood 2000).Thus elitist, executive-dominated, and secretive practices encountered the impulses and pressures for greater democratization through public participation and accountability in the decade prior to our study and from 1995–2005. Declining levels of deference to authority, respect, and confidence in public officials and institutions have been well documented in the period of this study (Nevitte, 1996). The widespread growth and influence of organized interests and new social movements in the period under study has also been well documented (Young and Everitt 2004), and the emergence of concern over the so-called “democratic deficit” led to many studies on citizen participation (Lazar and McIntosh 1999; Wyman, Shulman, and Ham, 1999; Seidle, 2000; Mendelsohn and McLean, 2000; Cameron and Simeon, 2000; Seidle 2000; Pelletier 2002; Brock 2003; Smith 2004; Gidengil et al. 2004). The traditional literature on political parties as agents of mobilization, organization, articulation, and aggregation was largely supplanted by the focus on the decline of parties (Cross 2004; Courtney 2004). Some suggest that the elite accommodation characteristics of executive federalism allows for stability in the federal system, even



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if it obscures transparency in decision making and accountability (Bakvis, Baier, and Brown 2009). However, little analysis has been undertaken as to the impact of these developments on the perspectives and conduct of intergovernmental administrators, nor on the role of the public generally in this realm. Given the manner in which federalism privileges regions, the organi­zation of “the” public tends to follow regional lines. Furthermore, identities which are not regional in nature, such as gender or ethnicity, “are not part of the formal structures of federal institutions” (Smith 2004, 66). Groups that are not territorially based consequently have little opportunity to exert influence (Phillips 2003, 99). As Smith also notes, “[e]xecutive federalism is more functional than democratic” (Smith 2004, 108). Even when the public has occasionally been invited to participate, it is not clear how politicians and officials view their input or what significance this has for policy development and implementation in the intergovernmental arena. In keeping with Canadian-style executive federalism, the institutionalized activities of intergovernmental relations remain largely invisible to the public. Brief, tightly scripted communiqués following first ministers’ meetings are almost the only source of information for the public, and these are mostly filtered through the media’s limited interests and interpretations – and are often drafted before the meetings. Even the attentive observer knows little of what goes into the making of decisions. This aspect of the landscape has not changed fundamentally over time. Canadians have shown a proclivity to question the ­elite-dominated politics of executive federalism as inimical to policy (Inwood 2000) and to express their discontent. However, this does not appear to be followed up with much public interest in engaging in that participation directly. Of Canadians polled in 1999 about the SUFA – which advocated increased participation in federalism for the public – as many as seventy percent expressed a lack of awareness of the agreement (Angus Reid 1999). Likewise, when given a chance at the time by the Institute of Intergovernmental Relations to participate in an on-line discussion of SUFA, the public was decidedly not interested. Canadians have, however, expressed concern about the abilities of both levels of government to work together to achieve measurable results. In a national poll, in 2001, it was reported that “93% of Canadians think it a priority for the federal and provincial governments to increase their cooperation, and 80% think it is better for

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the two governments to work together on most issues, rather than keeping to their own separate jurisdictions” (Centre for Research and Information on Canada 2002, n.p.). Similarly, survey research in 2003 revealed that 70% of Canadians said improved federalprovincial cooperation should be a high priority – ranking this the public’s second highest priority, after increasing spending on health care. The number of Canadians who thought both levels of government worked well together declined sharply to only 42% in 2004 compared to 63% in 1998. Canadians were not particular about who was at fault for intergovernmental conflict – seven out of ten believed that both levels of government were usually to blame. Interestingly, many Canadians were not convinced of the benefit of a new institution dedicated to the representative participation of the provinces and territories. Nationally, a majority (53%) believed that the newly created COF would actually create more conflict while only 35% believed that it would lead to more cooperation (Centre for Research and Information on Canada 2004). The issue of citizen engagement in intergovernmental relations has given rise to a variety of views (Stein, Cameron, and Simeon, 1997; O’Hara, 1998). Brock asserts that the process of executive federalism has evolved with regard to the role of the public by virtue of greater than ever engagement by governments in consultations and public hearings on issues such as the budget, the voluntary sector, health, and social union agreements. “While the processes of public engagement are not as high profile as during Charlottetown,” she admits, “the policy process has changed to be more inclusive as a regular feature” (Brock 2003, 79). Phillips, however, argues that “citizen engagement in intergovernmental decision-making remains extremely rare in Canada” (Phillips 2003, 99). Overall, contemporary calls from politicians and public servants to improve openness, accountability, and public participation did not fundamentally change the landscape in the period of this study. Even the fallout from the sponsorship scandal and the new focus on accountability and ethics in government did not result in changes to the federal government’s ‘openness’ to the public. Harper made accountability one of his five campaign promises and passed the Federal Accountability Act in 2006. Still, the focus of the Act is to “clean up Ottawa” rather than to bring the public in (Inwood 2009). Similarly, the definition of ‘open’ federalism does not focus on the public. Nonetheless this is an important part of the political and



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administrative landscape, and varying levels of effort were made by different jurisdictions with regard to public involvement in the sectors we examine in this study.

RELATIONS Formal political-institutional relations and informal personal relationships have for some time been noted as very important to the landscape of Canadian federalism. This is the case at both the high politics level and the day-to-day process and policy level (Johns, O’Reilly, and Inwood 2006). Formal relations are established within the parameters of the Constitution, as noted above, which delineates the nature of official interactions between governments. Constitutionally, each level of government is sovereign in its own areas of jurisdiction, and hence relations between the two levels should theoretically respect that. But in reality, relations between the federal government and the provincial or territorial governments, while non-hierarchical “on paper,” clearly carry elements of hierarchy in practice. Otherwise, there would be little basis to the “problem” of federal unilateralism or intrusions into areas of provincial jurisdictions which were commonly alleged during the period of this study. A prime example was the CHST. Although this federal initiative was justified on the basis of cutting costs and reducing the deficit while giving the provinces and territories more flexibility to operate programs in their own areas of jurisdiction, it poisoned relations between the levels of government for years due to the arbitrary and unilateral way in which the federal government imposed it (MacKinnon 2003; Jeffrey 2006). In addition, Boismenu and Graefe argue that the decreased federal funding for the CHST in 1995 and overall federal downloading of costs signalled a retreat in the federal leadership role in social policy (Boismenu and Graefe 2004). While this is something several provinces desired, they did not necessarily want it at the cost of several billions of dollars lost to them in transfer payments. In response, provincial and territorial leaders and officials increasingly began to collaborate among themselves to respond proactively to a federal regime they perceived as increasingly arrogant and out of touch. The Canadian federalism literature has discussed these formal relations at length, naming successive periods of federalism as classical, cooperative, competitive, collaborative, and so on (Smiley 1976;

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­ reton 1985; Simeon and Robinson 1990; Lazar 1998; Inwood B 2000). Cognizant of a public which was reacting very unfavourably to successive federal-provincial-territorial imbroglios during the constitutional wars, officials began to use the language of collaboration in speeches, statements, accords, and so on. As we shall see, the practice of collaboration proved more elusive than the calls for it might have suggested at the time. Nonetheless, the era of collaborative federalism was suggested to have been upon us in the time period of our study, but proved to be considerably less than collaborative as time went on. Scholars noted considerable examples of conflict and disengagement. Overlapping and usually complementing the formal relations is an informal sphere of activity with a myriad of networks and relationships. These factors link political and administrative actors and officials across departments, sectors, and governments, and with the international realm and nongovernmental actors. For instance, alongside, or below, the formal setting of first ministers’, ministers’, and deputy ministers’ meetings where decisions are reportedly reached, there is a considerable arena of informal interaction, networking, and socializing where negotiations and ­deal-making also occurs. These more informal political and administrative relationships consist of unofficial meetings, telephone calls, emails, Blackberry communications, lunches, and so on, which defy easy analysis given their ephemeral nature. While difficult to study, the informal role of officials has been identified as significant for the “work­ability” and functioning of intergovernmental relations for some time (Simeon 1972; Smiley 1980; Dupré 1985; Pollard 1986; ­Pappillon and Simeon 2004; Johns, O’Reilly, and Inwood 2007). Among the greatest intangibles in intergovernmental relations are informal political relationships and personality. It is widely known, for example, that Chrétien and Ontario Premier Mike Harris were virtually incapable of even playing a friendly game of golf together, let alone agreeing on a range of intergovernmental policy issues. Yet, relationships between the prime minister and other premiers ranged from cordial to respectful to admiring. However, even stellar personal relationships are no guarantee of anything, as relationships can sometimes founder even during the best of times. Trust between political actors waxed and waned in the period under study and proved difficult to maintain. The precarious climate of trust was easily broken by arbitrary acts, most notably the 1996



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federal budget, about which the provinces had little advance warning (MacKinnon 2003), but also in other policy areas such as the announcements of the Millennium Scholarship Fund and the Royal Commission on the Future of Health Care in Canada (the 2002 Romanow Commission) without what the provinces and territories felt was sufficient consultation. Charges of federal unilateralism under Chrétien frequently emanated from various provincial and territorial capitals and were often seen in the press. Martin espoused a more consultative, engaged federal model, with mixed results, while Harper was also accused by some premiers of continued untrustworthiness. Clearly, political relationships matter. While it is true that the forty-year obsession with constitutional politics produced problematic results on a number of fronts, one positive consequence was the development of a community of intergovernmental relations officials who came to know one another on both a professional and, in some cases, personal level over a long period of time. Ironically, the more recent shift to non-constitutional approaches arguably saw the erosion of trust developed during the hard slogging of the constitutional negotiations and the development of many deep antipathies between officials. By the mid-2000s a certain bitterness and acrimony severely impeded cooperation between the levels of government and their officials (Stein 2006). The development of trust is central here. Cameron and Simeon suggest that “[s]uccessful collaboration depends on high levels of mutual trust among the participants and on their internalization of implicit norms. Instead there is some indication of considerable cynicism among officials at both levels with respect to the rhetorical promises of collaboration” (Cameron and Simeon 2002, 65). They go on to say: There is some evidence that the emphasis on cooperation and collaboration may often be little more than rhetoric. It has not yet become fully internalized in the way federal and provincial officials think about each other. Indeed, even though the SUFA and other agreements are full of commitments to “consultation,” “collaboration,” “trust,” and other such sentiments, the reality often seems to be high levels of mutual distrust and deep unwillingness to accept constraints on one’s freedom of action. This is much more evident at the level of first ministers and their ­central agencies than it is among line ministries and officials, who are

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more likely to share policy goals and political constituencies (Cameron and Simeon 2002, 68). Lazar has argued there was a “need to restore trust” to a system which produced a “legacy” of “mistrust between federal and provincial governments on fiscal matters” during the “deficit decades” (Lazar 2005B, 26–7). A striking feature of informal administrative relationships is the extent to which they remain in place even in the face of highly contentious political relations. For instance, even during the high-stakes drama of the 1982 constitutional negotiations, or the 2000s Health Accords, officials maintained friendly or cordial working relationships as their political bosses were fighting it out. As Clarkson and McCall point out, the officials’ “task was eased by the fact that they had been talking to one another at meetings ... for months – in some cases years – eating countless dinners together, killing bottles of Scotch ... they knew one another’s lingo ... they made up a special subculture” (Clarkson and McCall 1990, 380). Even the fact of being on opposite sides in the constitutional wars did not necessarily impede these informal relationships. Quebec may have officially boycotted federal-provincial-territorial meetings in the years after the constitutional accord of 1982 and refused to officially participate in several intergovernmental initiatives, but we were told “they were always there at the meetings” and maintained functional policy and administrative informal relationships with other governments. Finally, two other dimensions of relations and relationships evolved as part of the landscape. First, as noted above, interactions between officials in central agencies and line departments have grown as more officials in line departments and across the public service are engaged in intergovernmental policy and service delivery. Second, relations and relationships have evolved with the c­ reation of new administrative institutional mechanisms. For instance, SUFA, the COF, and other innovations have contributed to a growth in intergovernmental networks of public servants with a myriad of formal and informal relationships. In addition, these networks also sometimes branch out to include relations and relationships with academics, interest groups, or international actors. The “personalized fabric” of formal relations and informal relationships is of considerable significance.



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CONCLUSION The landscape of Canadian federalism and intergovernmental relations evolved in some important ways during the period of our study. Drawing on insights from the literatures of federalism, public policy, and public administration, and organizing them through our framework of ideas, institutions, actors, and relations, we see a number of factors which had an impact on the trajectory of federalism and intergovernmental relations. As we will demonstrate, these factors together influenced the perceptions and opinions of officials. They are also central to operationalizing our core concept of IPC, as there have been significant developments in this landscape which had implications for the ability of governments to work together on policy issues of concern to Canadians. By the end of the study period in 2005, many factors seemed to present positive conditions for IPC. They included: federal and prov­incial commitments to rebuilding policy capacity; a focus on the implementation of intergovernmental accords and agreements; increasing technological capacity; and a general cultural awareness of the importance of working horizontally and vertically in the public sector to improve policy outcomes (Johns, O’Reilly, and Inwood 2006). But at the same time, the factors which inhibited IPC seemed to outweigh those which enhanced it. This becomes evident in the analysis of perspectives of intergovernmental generalists and specialists in the various policy sectors and jurisdictions we examine in subsequent chapters. It is the perspective of intergovernmental generalists to which we now turn.

3 Intergovernmental Relations Generalists: The View from the Centre

INTRODUCTION It is clear from chapter 2 that Canadian federalism evolved with an increasing concern and emphasis on the ability of federal, provincial, and territorial governments to collaboratively develop and implement public policies which affect Canadians. We look in this chapter at the factors which affect intergovernmental policy capacity (IPC) from the perspective of intergovernmental relations generalists – those officials who work in intergovernmental ministries and central agencies – in all Canadian governments. As we noted in chapter 1, these intergovernmental relations generalists are public servants who work solely or primarily on intergovernmental business and are located in separate departments or units within central agencies; they are responsible for the coordination of relations with other governments and of intergovernmental activities within their own government (Warhurst 1983, 459). We asked these intergovernmental generalists to identify and comment on the factors they thought enhanced and inhibited IPC. Analysis of responses from the intergovernmental specialists in finance, environment, trade, and health ministries whose main role has an intergovernmental dimension are provided in chapters 4 through 7.

IDEAS While intergovernmental generalists did not articulate an explicit menu of ideational factors affecting IPC, many were implicit in comments about features of the federal system and specific developments in intergovernmental relations. The two ­dominant



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contextual ideas articulated by intergovernmental generalists related to the emergence of non-constitutional approaches to intergovernmental relations (Lazar 1998) and fiscal federalism (Lazar 2000; Lazar 2005A). Non-constitutional approaches to intergovernmental relations was perhaps the one contextual ideational element all officials seemed to agree on. As outlined in chapter 2, intergovernmental generalists’ work was conditioned by the collapse of constitutional approaches to reform after the failed 1985 Meech Lake Accord, the 1992 Charlottetown Accord, and the 1995 Quebec referendum on sovereignty. While intergovernmental generalists had invested heavily in this process for over three decades, they rather suddenly found that the political leadership and citizenry were disaffected and alienated from executive federalism and constitutional politics and so they had to, in effect, relearn their craft. As we will see below and in subsequent chapters, for some, this was a difficult transition, and one which intergovernmental specialists in policy sectors found the intergovernmental generalists in central agencies slow to embrace. The other major contextual idea related to the fiscal state of governments. The prevailing political opinions on debts and deficits, followed by robust federal surpluses, dominated as the frame within which political relations between governments shifted away from the Constitution and toward fiscal matters and eventually to the debate of whether a vertical (federal-provincial) fiscal imbalance existed in the federation. A fiscal imbalance is the condition in which federal revenues surpass expenditure obligations at the same time as the opposite situation prevails in the provinces (Lazar 2005B, 12; ­Boadway 2005; Noel 2005; Dion 2005). Profound disagreements over the rules of the game of fiscal federalism ensued. Was the ­federal budget of 1996 and the creation of the Canada Health and Social Transfer (CHST) a unilateral federal downloading of its deficit onto the backs of the provinces, territories, and municipalities? Or, was it the policy instrument those jurisdictions had long been asking for in the form of greater disentanglement and more flexibility for the provincial and territorial governments to make their own decisions about spending in their areas of legislative competence? According to intergovernmental generalists, to some degree, the inability to agree on the ideational contours of intergovernmental relations meant that progress on policy was in general impeded and revealed that IPC was lacking.

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INSTITUTIONS The Constitution Many intergovernmental generalists we interviewed had been in intergovernmental agencies involved in the constitutional Negotiations of the 1980s and through the 1990s (a few even in the 1960s and 1970s). Several noted the shift away from the Constitution as a focal point or central factor affecting IPC. As one official said, “Pre-1993 there was more progress ... between 1987 and 1992 there was considerable contact around constitutional issues. There was a meeting of the minds.” Unfortunately, according to the same official, “We got to ‘yes’ [to the Charlottetown Accord] and then lost the [public] vote.” After that and the subsequent Quebec referendum in 1995, interest in constitutional reform rapidly dissipated. This shift is clearly something federal, provincial, and territorial intergovernmental generalists desired. As one official wistfully said, “Constitutional reform: no one wants to go there. We want institutions that will rebalance.” A Quebec official commented in 2003 that “the Constitution is a store that has been closed for quite a while.” Said another official, “Chrétien walked away from that obsession, which was in large part a good thing.” Consequently, officials were casting around for new approaches to ongoing issues in intergovernmental relations. “A number of jurisdictions (had) focused on the Constitution. It failed. This has led to regrouping,” said a northern official. An inhibiting factor of constitutional politics was its complexity. As one official noted, “The Constitution is an important driver but it is multidimensional.” This multidimensionality led to irresolvable jurisdictional disputes. The shift to non-constitutional negotiation and approaches to federalism, and the emergence of economic factors (debts and deficits) shouldered aside prior constitutional obsessions. Interestingly, when asked for a list of factors affecting IPC, most of the officials interviewed did not even mention the Constitution (or the courts) as a factor. Those who did mention the Constitution in interviews did so in historical context and in terms of the enduring impacts of the constitutional negotiations of the 1960s through the 1990s on intergovernmental relations. According to several officials, the high politics engendered by ongoing jurisdictional disputes was a key factor affecting IPC. As one commentator noted, “All of Quebec’s complaints are associated with jurisdiction and high



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politics.” When asked about overall barriers to IPC, another official put it succinctly when s/he said “Quebec – another fault line.” In any event, there is a good deal of rivalry and competitiveness among federal, provincial, and territorial actors with regard to jurisdictional sovereignty. This hinders IPC. However, from an alternative perspective, one official pointed out some provinces are less concerned with jurisdictional purity if they can benefit from federal largesse, although they do so with some trepidation. Said one official in 2003, “Provinces in the east are increasingly willing to have federal program involvement, although they are afraid the feds will then cut and run.” Put another way, an official claimed that “[j]urisdiction can be a barrier or a tool.” But not everyone agreed that the newly-emerging ­non-consti­tutional approaches were conducive to rebalancing the federation. As the federal government focused on the economy, debts and deficits, and getting its own fiscal house in order, it undertook a number of unilateral initiatives which upset the provinces and territories. Said one Quebec official, “[We have] thrown out the constitutional agenda and have thrown out administrative possibilities of reform, and are acting more like a unitary state.” Another claimed, “We deal with unilateral executive federalism on a daily basis with the fiscal imbalance, health care, etc. It is the unanimous position of all three Quebec parties that we should set our own priorities.” The “near-death” experience of the 1995 Quebec referendum had a huge impact on this process. As an official claimed, “The Quebec referendum made the feds realize they were not relevant in areas that mattered to Canadians. They wanted credit for investments, especially in Quebec.” In addition, the terms of engagement changed. “With the 1990s fiscal wall, there was no flexibility ... Money consumed everything,” according to a federal official. But feeding the new monster meant a certain arbitrariness on the part of the federal government. As one provincial official claimed, “The feds put aside the constitutional division of powers and asked for more efficiency and cooperativeness among governments, but only [in pursuit of] their goals.” Once the “crisis” of the federal deficit passed, a new set of contentious concerns developed related to the constitutional convention of the federal spending power and the issue of the federal-provincial fiscal imbalance as an important dimension influencing IPC. One official from Quebec succinctly defined the issue, noting, “The feds have too much surplus money, given their constitutional ­responsibilities,

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while the provinces have the most expensive growing sectors and responsibilities.” According to a provincial intergovernmental generalist, “The provinces are very frustrated with the fiscal imbalance.” According to another, “it has created a big divide. There is an unequal capacity of the provinces to raise revenues.” Several issues were contained within this context, according to one official: “The tone and the issues have changed in 2003 from the Constitution to money and finance, governance, the Social Union Framework Agreement, and health care.” As an official from Alberta noted, “In 1980 during the constitutional talks, the federal spending power was not mentioned. By the 1997 First Ministers’ Conference, spending power controls were being used as the overriding federal instrument ... and the emphasis of provincial-territorial relations became the spending power and the dispute mechanisms.” At the same time, the federal government began to deliver an increasing number of programs directly to citizens, which further inflamed federal-provincial-territorial relations. As one provincial official complained in 2003, “Currently things are project-driven, as cheque-signing opportunities for the ‘big event.’ There is no longterm engagement on long-term priorities.” Another official noted in 2002, “The feds have pulled out of all regional economic development agreements. We used to have joint mechanisms. But the feds started going to direct delivery,” particularly in the period of the 1994 federal Program Review and, later, the CHST. According to one official, “The trend since Program Review is ... less reliance on intergovernmental transfers, and a move to direct funding for citizens for political visibility.” Another official complained, “They [the federal government] are trying to offload. Post-referendum and with a new federal context, the federal mood has changed. The 1995 budget pulled the rug out from under everyone.” After the CHST, “as funding changed, the relationships changed,” another official asserted. The federal government became “more centralist and arrogant ... in a complete reversal. It limited negotiations.” Another official lamented, in 2001, that “[i]n the last 3–4 years, the feds were dismissive of provincial concerns and interests. We are not making a lot of progress.” Even in areas of provincial constitutional authority and legislative competence such as health, natural resources, and social policy, the federal role expanded in an effort to make it more relevant to Canadians. One official complained in 2001, “The Constitution is



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irrelevant to the federal government. They are moving into all jurisdictions. You can’t name a provincial area of exclusive jurisdiction. They are limiting the power of the provinces via legal arguments or fictions. They won’t guarantee a formal role for provincial involvement, for example in [the 1997] Kyoto [Protocol of the United Nations Framework Convention on Climate Change to limit greenhouse gas emissions]. Consultation was a one-way street.” This view, however, stands in contrast to the federal initiatives from 1995–2000 whereby, as another official explained, “[t]here was devolution of program areas from federal to provincial jurisdiction, for example, with Chrétien’s initiatives around the labour market, housing, tourism, forestry, mining, recreation, etc.” Other examples of non-constitutional devolution of federal responsibilities occurred in relation to the territories during this period. “For the territories,” according to one northern official, “some constitutional responsibilities are gradually being devolved. Achieving responsible government and natural resource management responsibilities was like achieving maturity ... if only the feds would give us responsibility we could solve problems. We found out how hard that is.” Given the tenor of the times, it is perhaps not surprising that only one official suggested that IPC could be enhanced if governments engaged in a new round of constitutional discussions. But the suggestion was a qualified one, in that the official thought it should be in a limited issue-area. S/he said, “We should open the constitutional talks again, and protect Aboriginal rights agreements. Aboriginals have more constitutional status than the Territories, which don’t represent Aboriginals. A new kind of intergovernmental relations needs to develop, so they have their own voice at the table or caucus along with provincial and territorial governments.” As events transpired, however, this voice in the wilderness was not heeded. Political and Administrative Institutions In contrast to the minor emphasis officials placed on the Constitution, virtually all officials we interviewed had comments on executive federalism and the role of federal-provincial-territorial political institutions. Most officials characterized these macro-level political bodies as important and necessary in Canadian federalism. Yet, as we shall see, many officials also outlined negative impacts and dysfunctions of these institutions on IPC.

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As outlined in chapter 2, the dynamics of First Ministers’ Conferences or Meetings (FMCs/FMMs) changed notably. The early 1990s’ emphasis on constitutional reform gave way to a post-referendum emphasis on debts and deficits from the mid-1990s onward, and then to budget surpluses and the fiscal imbalance by 2005. Many of the officials we interviewed commented directly on the changes they observed related to the agendas and culture of FMCs as forums of federal-provincial-territorial relations and policy decision making. However, the overall structure and processes of FMCs have not fundamentally changed much over time, although modest attempts to deinstitutionalize them occurred after 1993 when, as we noted in chapter 2, they took on a more informal character and were referred to as FMMs (although officials appear to use the two terms interchangeably). The meetings also decreased in frequency. As an official noted, “There have been fewer FMCs under Chrétien than ­Mulroney” (see chapter 2, table 2.1). This development was not universally lauded. Said one official, “Unfortunately FMMs are irregular. We are given short notice and focus on the short term.” Another complained, “FMMs are called at the whim of the PM.” Although finances had always been of interest in FMC discussions, they appear to have taken on a primary focus in the period under study. As an official said, “FMCs are now too easily forums for issues about money rather than policy.” At FMCs, according to another official, “Jurisdiction is a problem but we just talk about money. We have better discussions on relations with the US; they are about sovereignty, etc., not about money. But national political discussions over money don’t let you do that.” Another official complained about the more prominent role of the political actors in meetings, saying in 2003 that “[i]t used to be that officials’ and deputy ministers’ forums were more involved in drafting press releases and outcomes from meetings. Over the last three to four years, politicians are taking care of more business and meeting more without officials. Setting the agenda and ­decision-making is going toward politicians.” This official did also concede, however, that “[t]his may be a good thing because they are elected and accountable. Premiers don’t want to be pre-cooked by officials. The administrative dimension is now more in follow-up and implementation.” One territorial official observed a general change in the character of intergovernmental relations that was influencing FMMs: “Recent



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changes in intergovernmental relations that I see [in 2004] are that jurisdictions are more self-interested; political development is more internal; there are disagreements over national strategy and a lack of policy development at the higher levels. Why? There is an at-home policy focus with health care’s rising costs and jurisdictional tensions created by the environment. Then there was the withdrawal of the feds and a lack of interest in policy at the national level. Plus there is a lack of opposition to government in Ottawa; lack of accountability leads to attitude.” However, one official from the north commented on the lack of leadership in FMMs, saying, “Vision and political ideology should be developed, then the intergovernmental people should give advice on how to carry it out. Shared vision is lacking in the First Ministers’ Meetings. This does not facilitate IPC. There is little acknowledgment of ideology; it is seen as a dirty word. This is a problem. There is a lot of pretending. Decision-makers lack vision and this permeates the way we do business.” For example, “there were some absolutely appalling meetings with Chrétien. There was no discussion regarding citizen access to services or sharing resources based on values. Chrétien and his henchmen cut deals and picked the premiers off one after the other. There is no opportunity to articulate our interests. A premier from the Dene nation, for example, is not used to this style.” An indicator of the level of tension and disputatious relations in the FMMs was the territorial leaders’ dramatic decision to walk out of the FMM in 2000 when they could not convince the prime minister to account for their particular needs (see chapter 7). One official commented on the frustration of the territorial premiers in this episode as well as the difficulty of getting provincial-territorial consensus on some issues, saying, “We [the territories] try to strategize with the premiers and decide at what point do we walk [out of discussions with federal government]. And then nothing happens.” In this case, the territorial leaders could not convince the provincial premiers to join them, although Manitoba Premier Gary Doer “wanted to walk out with the territorial premiers” according to an official. But the territories did subsequently get the federal government to offer a more generous deal, though one northern official disparaged it by saying, “The walk-out of the territories from the First Ministers’ Meeting got them $20 million – enough to keep the lights on in the hospitals for ten weeks. They can find $200 million

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for Canadian flags in a heartbeat, but they cannot find money for basic health care for the North.” Further frustration was evident in the voice of the official who complained, “The premiers caucus six hours before meetings, but then get screwed every time. They do it every time. The ink is not even dry on the communiqué before they realize ‘we got screwed again.’ For example, we asked for control of resources for ten years, and the feds said yes, but nothing happened. Maybe it was time to get radical, but they [the premiers] meet with the feds who say ‘you can’t really do that,’ so they don’t.” The most common problem with FMMs from the perspective of provincial and territorial officials over the period of our study was federal unilateralism. Widespread discontent with FMMs was expressed by officials with comments such as this: “With regard to structure, we [provinces] need to improve how we have our discussions with the federal government. In the FMMs, the prime minister sets the agenda, with a take-it-or-leave-it deal.” A federal official admitted, “Unilateral decision making or the appearance of it” is an inhibitor of IPC. “The federal agenda is fragmented and we don’t understand much of it,” said an eastern official, adding, “They have made no conscious attempt to communicate their general direction.” Some officials tried to explain federal unilateralism. One Ontario official said, “The feds are preoccupied with being seen as active and visible, as leaders. They can enhance their IPC, but the feds look first at the strategic political outcome.” Another observed, “The feds are governed by polls, and use money to influence the provinces.” An Albertan official said, “The feds want visibility; we end up with collateral damage.” Another explained, “The feds are positioning themselves to capitalize on the politics of credit,” meaning the federal government was moving unilaterally on various files in order to raise its profile with the public and obtain political credit for initiatives it involved itself in – even in areas of provincial jurisdiction. Several examples of federal unilateralism diminishing IPC were given by officials from the provinces and territories. For example, “With the Canadian Innovation Fund and Strategic Investment Fund [we had] no say in how the money was spent. We supposedly were consulted, but we had no influence in decision-making and no point of engagement.” An Ontario official said, “In the Kyoto Accord the feds are using unilateral implementation. They want process to drive the issue.” Another argued, “In the Kyoto Accord the



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feds played a tactic. It was not real engagement.” In any event, “[t]he feds don’t like the provinces to lead the national agenda.” Another official complained, “There have been so many bad examples [of federal unilateralism].” One such example was provided by a northern official who said a meeting was set up in which “[t]he feds notified Aboriginal representatives Thursday for a Monday meeting and didn’t tell us at all!” FMMs were not acting as an adequate mechanism to provide joint decision-making or solutions according to the official who said, “Meaningful federal-provincial [outcomes] are not happening. Problem-solving is not a focus. They [the meetings] are more cheque-signing ceremonies.” Some provinces viewed federal unilateralism and use of the federal spending power as particularly overt and problematic, while others viewed it as part of the ongoing unequal relationship between Ottawa and the provinces. One official exclaimed, “We are frustrated when the federal government doesn’t address equalization but then goes ahead and spends in other areas unilaterally.” But a few saw some advantage from it, as with the official who argued in 2002, “Ottawa holds the view that a strong central government is necessary to prosperity. We [in Atlantic Canada] do not disagree. It is to our benefit.” Another eastern official said, “Federal encroachment is increasing, but Newfoundland needs the money.” But problems occur when “[t]he feds set up a program and then leave, leaving the provinces holding the bill, for example, with the Salmon Enhancement Program; the feds walked out.” Quebec had a distinct strategy and even in a context of large fiscal surpluses continued to resist the federal spending power. “Quebec will not recognize use of spending power, and does not fear the feds,” said an official. Officials did not have high expectations in general on policy outcomes from FMMs. Some pointed out that even when faced with a common policy issue with crisis dimensions and the desire for collaboration, connecting FMMs to policy outcomes is a challenge: “With regard to mechanisms for collaboration, I agree that little came out of health, when you compare the agendas and outcomes. There is little deviation from the agenda over time. Why? There is no multilateral continuing way to advance things talked about at the FMMs. They lack time, money, and people. It is sometimes left to the sectors but they don’t follow up. There is a gap between what is asked for at the premiers’ level and the agenda of the ministers.

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Interest in following through is limited. There has been a shift from looking at policy development and outcome to a communications point of view.” Provincial-territorial strategizing and capacity-building have been important in building IPC in provincial-territorial political forums, in order to redress the perceived imbalance in capacity between their level and the federal government. Federal officials were aware of this growing IPC outside their reach. Given the “general climate of FPT relations, major provinces such as Quebec, Ontario, and Alberta now in 2001 have more developed strategies on FPT relations,” according to a federal official. One official lamented the lack of truly “joint” forums of intergovernmental interactions. “We don’t have joint institutions,” s/he said. “We have federal, provincial, and territorial institutions which bring the feds and provinces together with all their old divisions ... We need to pull new federal-provincialterritorial teams together ... start from jurisdiction and try and find common space.” Indeed, according to intergovernmental generalists, one of the political developments with the most significance for IPC is the emergence of a vibrant provincial-territorial regime. As one provincial official reported, “The provincial-territorial intergovernmental machinery is strong, and getting stronger.” Another provincial official said, “It is hugely important for the provinces to work together re policy capacity. The feds pick off provinces if they don’t stay together; we need to stare down the feds.” The enhancement of more formalized provincial-territorial institutions was gradually making them more important than federal-provincial-territorial institutions like FMMs, particularly the transformation (detailed in chapter 2) of the Annual Premiers’ Conference (APC) into the Council of the Federation (COF). APCs have been a feature of the intergovernmental landscape since the early 1960s, but were mainly limited to ­information-sharing opportunities coupled with informal socializing and networkbuilding. But in the period of our study these meetings moved toward a greater level of institutionalization and, in theory at least, IPC, and became more strategic and purposive (see Meekison 2004A). Almost all provincial and territorial intergovernmental generalists commented on the role of provincial-territorial executive interactions as being increasingly fundamental to IPC. Most provincial and territorial officials believed forums like the APC and the COF contributed to



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IPC in general, both across provinces and territories, and within their own jurisdictions; FMMs, they felt, often did not. As well, intergovernmental generalists were overall far more positive in describing the significance of interprovincial-territorial political interactions than they were about federal-provincial-territorial interactions. According to one official, “In the APC everyone has an equal voice. We have each province and territory chairing the meetings. There is a willingness to work together.” In contrast, according to another official, “It becomes more complicated when the feds get involved; the provinces are more businesslike; the feds are more strategic. APCs are more businesslike; things get done.” This is not to suggest that the provinces and territories are not also “strategic” in their more “businesslike” approach. Said one official, “More work is being done on harmonizing regulations and positioning ourselves nationally. Now 50–60% of our time is spent on positioning the premiers to act united regarding the feds.” A Quebec official offered the opinion that “[t]he APC is useful regarding a cooperative agenda on health, post-secondary education, and children’s issues. It is a very useful forum, and is more respectful of specific ways of addressing social priorities.” A spirit of cooperation infused the political leadership of the provinces and territories in response to a number of factors. According to one official: “Premiers have to come together as a team. This came from [Ontario’s Premier] Harris largely. APCs are serious business meetings with a golf game thrown in at the end. The APC emerged due to the fractured opposition in Ottawa. The officials through consensus and networks developed a sense of cooperation. There is a lot of competition but the sense of consensus or common cause comes from the premiers. No other ministers – not health, not environment, et cetera – cooperate so much.” There were many comments in the early interviews that federal actions concerning the creation of the CHST and later unilateral actions in the early 2000s did two related things. First, they united the provinces both regionally and in a pan-Canadian sense; second, they resulted in more formalized, strategic interactions among the premiers. As one Ontario official noted, “the federal position has united the provinces, especially the Western premiers.” Another official from Alberta confirmed this, saying simply, “Canada West is strong.” Another noted in 2002, “The Premiers’ Conference is used

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to counter federal policy, for example on climate change and health.” Another official gave an example where “at the 2001 Annual Premiers’ Conference, Newfoundland pushed equalization and brought the others on board.” As well, health care was politically unifying at the 2000 premiers’ meeting. Claimed one official, “The provinces wanted to work together; they identified a few key fronts. We needed to start working together on things that are easy, and try for an alliance with several provinces to do something, and then others will join.” This was no easy task, though. “It is hard to do, with all the politicians and bureaucrats, etc. You may send the people out to negotiations which may end up eliminating their work; so it has to be driven from a higher level. Legislative changes can be required, for example as with pension policy. Or you may have different rules in each province, for example with the Securities Commissions.” Attempts at overcoming these obstacles had been motivated, however, by the growing perception that Ottawa simply was not interested in playing cooperatively or fairly. As a result, the provinces and territories began to change their strategic approach to the federal government. As one British Columbia official said in 2003, “The premiers were becoming more strategic with regard to IPC. The premiers no longer tackle twenty issues at once. They now look at what citizens need, not at covering the whole waterfront. They limit their focus to a few issues.” Interprovincial-territorial relations were not friction-free, said an official, since “[p]rovinces are cooperating, but there are some tensions related to the economy, jobs, and so on.” Some officials felt the increasing tension among the provinces was a consequence of the federal government’s strategic position. Said one official, “There is a tension over federal leverage.” However, sharing a region seemed to have a unifying impact on interprovincial-territorial relations. A northern official said, “We have more cooperation with the Western premiers than with the national government, but our alliances depend on the issue. We have close ties to Alberta due to transportation and economic issues, but living beside the elephant is difficult. For example, our taxation policies must be similar.” Nonetheless, said another, “Regional meetings are important. We need to put visions and principles in place and then discuss strategies to follow. We need to recognize the differences, for example with Alberta versus Saskatchewan on health, and then identify cases of collaboration.”



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As we noted in chapter 2, in December 2003, the premiers and territorial leaders took the important step of forming the COF. Several officials commented on this formalization of relations beyond the APC. “Quebec was looking at a Council of the Federation to institutionalize provincial-territorial relations,” said an official from eastern Canada. Explained another, “The Council of the Federations is not new. It is just institutionalization and structure.” The COF “is looking more horizontally. It allows for picking and choosing of issues. We try to do that here,” said a northern official. The optimistic view was that the COF apparently liberated premiers from the shackles of interprovincial-territorial conflict. As one official noted, “Now premiers are driving policy themselves. They are more and more learning from each other, in both a business sense and best practice sense.” However, just because a new institution is created – or an old one further institutionalized – does not mean IPC is strengthened. As several officials suggested in 2004, the “COF is a fresh idea but it is still the same group. There needs to be some change there ... It is fine to ask for more money but the provinces and territories cannot decide what to do with it. They can’t articulate what they want.” Said another official, “We still need more consensus among the premiers.” “There is a sea change coming in [the] COF, with meetings to finalize structure, financing, and process,” predicted an official in 2003. But this official cautioned that “[a] COF that is heavily structured is not what the premiers want. It is not a bureaucratic structure focused on governments talking to governments. It must look at what clients and the public want.” One veteran, but jaundiced, observer said, “Over the years I have come to the conclusion that the value of premiers’ meetings was their original purpose – the golf game.” Nonetheless, a Manitoba official suggested, “Interprovincially there has been a fair bit of progress made. Premiers are now becoming more sensitive to the idea that they can’t just look to Ottawa and that Ottawa wants to work around us. The provinces are realizing they have to work together to make progress, for example on child protection legislation.” One hopeful official predicted (in 2001) that “in the future interprovincially there is going to be enhanced IPC, cooperation, and more sharing of information. Up until five years ago we waited for Ottawa to take the lead. But ­provincial-territorial linkages are now increasingly important, especially if the fiscal imbalance is not addressed.” Some officials noted that the COF had been

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particularly helpful for small jurisdictions which lack IPC of their own. “The Council of the Federation is inclusive of the territories, for example, on committees and working groups. The COF gives us a chance to lead on the Aboriginal affairs agenda. The COF is inclusive of the territories, for example, on committees and working groups. And there is an informal structure at work.” Not all assessments of the COF were rosy, of course. While great hope was held out for its potential, it soon began to reveal its weaknesses. According to one official in 2004, the “COF is about 40% effective.” Part of the problem was lack of capacity. By 2005, “the COF Ottawa office has three people with no policy capacity. On provincial-territorial collaboration the jury is out.” In interviews, intergovernmental generalists commented extensively on the significance of intergovernmental administrative mach­ inery in enhancing and inhibiting IPC. Some officials had very broad definitions of what constituted intergovernmental administrative institutions. As one official noted, “The nature of structures varies. For example there are consultation forums, policy forums, research forums, and technical or problem-solving forums.” Another official noted that “institutions like databases facilitate policy, for example the Canadian Institute for Health Information, Statistics Canada, and the Canadian Centre for Justice Statistics.” Still other officials insisted that it “depends on the issue as to whether you need a formal or informal institution. Permanent long-standing issues need formal institutions like the trade secretariat; less frequent issues like constitutional negotiations need a temporary institution.” (Note that the official here is using the word “informal” to mean “temporary,” differing from our usage throughout this book.) While many officials opined that intergovernmental administrative institutions such as those supporting FMMs were significant, many more took a more critical view. Thus, while an official argued that “[j]oint institutions seem to help, such as secretariats,” others said the existence of intergovernmental administrative institutions did not necessarily enhance IPC. The reasons varied. First, some believed that institutions and the officials therein engage in empire-building or institutional creep to the detriment of policy. Said one official, “Secretariats are not always helpful. They are a third body with their own agenda.” This official went on to say, “Personally I would want to avoid more institutions; institutions develop their own interests.” This negative view toward further i­nstitutionalization was reflected



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in the comments of the official who said, “We have too many formal intergovernmental conferences. Bureaucracies reify themselves. This is destructive to policy and decision-makers. The real issue in health care, for example, is deinstitutionalization.” Second, some officials pointed out that several sectors conducted their business without the institutionalization of intergovernmental processes. An official said “I do not think intergovernmental agencies enhance IPC. For instance Finance has done a lot without them.” Thus governments sometimes agree not to establish such bodies. For instance, one official pointed out, “Regarding institutional reform, federal and provincial governments agreed not to create big secretariats for trade, health, or environment.” S/he went on to suggest some reasons for this: “One tricky question is the benefit and cost of external neutral bodies regarding policy and the Constitution. If it has too much capacity it becomes a new player that is not accountable or elected. The Brussels Commission in the European Union is huge, and there is a democratic deficit there. This raises the question of a third party versus parliamentary institutions.” Third, the prospect of new institutions with actual capacity is sometimes resisted by officials. An official pointed out, “When the Canadian Intergovernmental Conference Secretariat was set up [in 1973] there was a debate about whether it should have policy capacity. It was decided it should not based on a fear of federal dominance.” Some made this argument from the perspective of centralization versus decentralization, saying, “National institutions do not always have good regional reputations, for example the judiciary and the Bank of Canada.” Fourth, the personal and leadership dimensions of intergovernmental relations were in danger of being lost in institutionalization, according to some officials. Said one, “We have enough institutions and mechanisms now. But we are suffering from a lack of intergovernmental leadership.” Another said, “I have more faith in personal contacts than faith in institutions.” “We have to be careful with creating bureaucracies,” warned one official, since “institutions give more technical capacity but fewer interpersonal contacts.” Fifth, in any event, it is sometimes very difficult to get the federal, provincial, and territorial governments to collaborate even where intergovernmental institutions do exist. Indeed, as we saw above, some officials rejected the characterization of federal-provincial­territorial bodies as joint institutions. One federal official argued,

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“We have joined-up FPT teams which bring federal and provincial and territorial governments in with all their divisions, but they are still not joint ... The Agreement on Internal Trade comes closest to a joint institution but it is not policy-focused; it is more programfocused.” To the extent that collaborative institutions can be built, “creating new mechanisms depends on the sector and the ability of existing mechanisms to work,” according to one federal official. Sixth, the comments related to intergovernmental machinery also reflected a dimension of the institutionalized divisions which we saw above, between intergovernmental generalists who work in central agency units and those officials who work as intergovernmental specialists in line departments. It was noted, “There is divided capacity within the federal government between central agencies and departments, for example in Finance.” Said one provincial official, “The Privy Council Office [PCO] plays a strong role with line departments, so departments feel constrained by [federal] intergovernmental officials.” There were also interviewees who felt interdepartmental issues, including “within the federal government,” inhibited IPC. Finally, several officials noted that the significance of intergovernmental institutions for IPC varied by jurisdiction (see chapter 9). Officials from some of the smaller provinces and territories stressed this. “We have a small staff, four here and one in Ottawa. We do not have a trade specialist or other specialists ... they are in line departments,” said a northern official. Smaller jurisdictions have particular concerns and strengths. One official pointed out, “Small government lacks the capacity to duplicate efforts. So a division of labour is a necessity, and this drives cooperation between intergovernmental and line departments. Plus, we are not as highly centralized as others, so we manage from the middle rather than the centre. We manage from the view that expertise lies in line departments so we need good relations with them.” Overall there was a strong consensus among officials that intergovernmental institutions were a necessary but not sufficient condition for IPC. According to one official, “On the role of institutions and actors, it all depends on political will; interest in institutions rises and falls.” Many intergovernmental generalists identified institutions as significant to IPC but clarified that having more institutions does not equate to having more IPC; rather, it is how well the institutions work that matters. How well institutions work is in part determined by their available resources, an issue to which we now turn.



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Institutional Resources One of the most important factors identified by intergovernmental generalists related to IPC is institutional resources in the form of budgets, personnel, time, knowledge/information, and technology. Almost all intergovernmental generalists commented in some way on the significance resources hold for IPC. In answer to our question about IPC inhibitors, one stated clearly, “IPC Inhibitors? Resources, resources, resources ... budget constraints, the ability to corral resources, to compete for money.” Many officials noted the broader context of public sector downsizing and declining resources but also noted that intergovernmental relations agencies were relatively protected from these general public service cuts, except in Alberta and Ontario. Where cuts did take place, according to an official, they tended to be to the policy analysts in intergovernmental units. Said one official in 2002 from a province hit by cuts, “Cutting policy staff was an easy cut. They are seen as suspicious by politicians as [intergovernmental units are] not involved in service delivery. We were slower to recognize the problem of loss of policy capacity and both provincially and federally there is evidence of this decline.” Where personnel resources are concerned, there was general consensus among intergovernmental generalists that the federal government had more policy capacity to bring to the intergovernmental tables. One official from the relatively well-to-do province of Ontario commented, “Federal-provincial work is being driven by the feds. At the FPT meetings the feds can have 350 people plus their secretariats while Ontario has ten people.” Nonetheless, despite this numerical advantage, it was noted, “The federal government does not always use resources wisely; they spend a lot to time talking to each other. They have a lot of resources going toward their own coordination.” Another official noted, “The feds have more officials to put to work, often more than the provinces and territories put together. There were about twenty-five federal officials working on SUFA. What the provinces see as federal arrogance is often just federal preparedness. IPC is very uneven across the provinces.” One veteran official said, “For my thirty years in government, the federal government has had more capacity but it has been reduced and changed in some ways ... There has been the tendency to rely on outside advice. In some cases however Ottawa is the only game in town.” A federal official, speaking of the health policy field, said it is

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“hard for provinces to innovate as the feds hold the money.” Another official noted there was “recognition that after years of restraint, this was hurting delivery of services [more than intergovernmental relations]. Other departments were not given additional resources, but we were in intergovernmental. We went from twenty-two to twentyeight staff when everyone else shrunk.” A Saskatchewan official suggested that “with reduced budgets, high policy capacity is the first to go. But budget implications have been minor [in Saskatchewan] over the last decade.” Conversely, an official with fewer resources lamented, “We (still) lack resources to look at the long term. We do not have a research unit.” Another suggested, “We are very capable analysts but not researchers.” An Ontario official said, “We have some good capacity – although our research is lacking – but it is easy to jettison.” One official said, “In spite of this unevenness, all governments are able to mobilize resources for really critical issues. They may not have good underlying analytical capacity, but they can do this.” Another noted that there was a “lack of capacity pre-September 11th.” S/he went on to say (in 2002), “In energy we have been lacking capacity at the national level since the 1980s. Provinces have had to fill the void. Health is another example. The federal government hates to admit it.” In addition to intergovernmental budgets and personnel, another important resource noted by intergovernmental generalists was time to do policy work or hold meetings. One official commented, “Time is a factor inhibiting capacity even when the issue is a government priority.” Another official noted, “Creativity gets used up simply to move agenda items forward.” Another said there is never enough time “to do the broad consultation which has to be done now in sectors like health.” Much of the work done by the support personnel for intergovernmental conference secretariats, often at the Director’s level, for example, is done in addition to the “regular job” that a person holds. Given that a considerable amount of intergovernmental policy development is reactive or crisis-oriented, the officials involved often do not have the time for proper consideration or preparation for complex policy issues, particularly as these issues are increasingly being dealt with in a horizontal (cross-departmental and cross-sectoral) manner. Officials constantly have to decide how to apportion their work since “[t]ime is split between core responsibilities and relationships.”



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Pressure is sometimes put on one government by another. As an official complained, “There is a timing issue. The feds often ask for replies in two weeks.” Another argued, “We need time to read and work on relationship building.” The constraint of too little time has intensified, according to one northern official who said that, “Ten years ago (the mid-1990s) there were only two or three negotiations going on. There was a simpler playing field ... Now [in 2004] there are eight or nine tables in play. Plus you have to add ­self-government into the mix.” Another official commented, “Capacity starts with a resource base. There has been a rise in the number of files, and people ... and there is also a timelines problem. There is a short distance between me and the premier, but the ability to get time to prepare issues is constrained.” It goes without saying that Canada is a big country, but the reality of physical geography is sometimes overlooked in calculating IPC. Despite advances in technology (discussed below), it is still very difficult for some officials to fully and easily participate in intergovernmental forums because of geography and physical proximity. According to a northern official, “physical separation from the hub” is a basic problem. “We cannot attend conferences; we lack postsecondary institutions and networks of professionals. Internet and video-conferencing overcomes costs, but a Toronto conference is a five-day commitment for us and we cannot always go.” This official went on to say, “We still have inevitable tensions between a jurisdiction operating here on the ground and one 3,000 miles away.” There was clear evidence from the interviews that technologies such as email and the internet have increased the capacity for communication between intergovernmental officials, as well as enhancing public and international participation in the policy process. The adoption of new technologies has occasionally resulted in innovative approaches to policy-making (see chapter 6). But new technologies can also be inhibitors of IPC. Some officials commented on the fact that email and websites promoting public input increased their work with sometimes dubious returns. Knowledge and expertise are important to IPC. Most policy areas are complex, and in the recently created intergovernmental central agencies, senior public officials are trained in a broad-based ­expertise and have non-policy-specific functions; they are not well versed in the details of, say, health professional regulations, environmental indicators, or trade dispute mechanisms. They must rely on

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others for this expertise. Internally, this often falls to both the intergovernmental and the non-intergovernmental officials in sectoral departments. But this, of course, creates a distance between the person at the intergovernmental table (having the minister’s ear) and the source of the information. Within that distance, which also contains competing political and institutional interests and functions, a lot can happen. Arguments were made that IPC partly depended on objective external sources of research and information for ideas. Said one official, “To enhance both intergovernmental relations and policy capacity we need more impartial analysis like the Institute for Research on Public Policy [IRPP], or the work of Judith Maxwell or David Zussman, with mechanisms to bring the community together.” ­ Others acknowledged this, but also seemed cognizant of the potential for political utilization, noting that although “reasoned argument” can sometimes promote action, research can be used both as a positive tool and as a stall. Several officials commented on the bias of the information and ideas from dominant interest groups and how that affected policy developments. Decrying the lack of knowledge in the federal system, one official noted an inhibitor to IPC was “failure to do research together, recognize common purpose and goals, varying tools, and the implementation mix.” Another also noted that dissemination of knowledge sometimes required networking, which was currently lacking. “The level of [government policy] expertise is low across Canada. To analyze, you need to know what is going on, that is, you need intelligence gathering. You need an underground pipeline, for example Charlottetown and Meech had it.” As another official noted, “Sharing information, knowledge, and ideas makes us all better off.” A deficit of new ideas due to a lack of innovative thinking can impede IPC. One official put it this way: “One important inhibitor to intergovernmental policy capacity is the starving of good ideas. We need to get other stakeholders at the table with a broader horizon, for example, get the Aboriginals to the table when talking about them. There is the fear of losing control by the intergovernmental people. They are not open-minded; they have a myopic view of the world. We need to get other views: not dreary consultation where the government has the plans and then asks for views. New ideas, for example in health, could be picked up but are not. People work in their comfort areas.”



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Another official suggested, “One inhibitor may be demographics. I am talking to the same graying network. There are not a lot of bright young academics appearing in intergovernmental relations. I still talk to the same thirty to fifty names that are getting older.” Lack of fresh sources of ideas, then, was seen as problematic for IPC. In any event, as one official stated, “If you are looking for great leaps forward, and ‘vision of the future’ type policies, you are going to be disappointed. Political timelines are five years. There are small leaps forward.” Lack of understanding of more local or cultural issues also presents a problem for IPC. As one northern official noted with disdain, “One barrier to intergovernmental policy capacity is the lack of knowledge of others of the local characteristics of the North. For example, our Aboriginals are not on reserves.” Another northern official said, “Capacity is a problem for Aboriginals, so we end up with lots of consultants, which leads to off-the-shelf solutions or reports that lead to more consulting work or solutions for the south. Some provinces are closing down their smaller communities while we are pushing in the opposite direction, to sustain smaller communities.” A few officials also commented on the way municipalities have been misunderstood, given their wide variation of characteristics and needs across Canada. Some officials felt that the quantity of resources was not always as relevant as sometimes assumed. As one official put it, “More resources would not solve the problem of high politics [tensions] ... bigger is not better.” Another official said in 2002, “There is a concern that you can have the same numbers [resources] with differing capacity. For example, Alberta has always been strong in its intergovernmental unit, but Ontario has very little longevity. Alberta’s capacity is high and Ontario’s is low.” Another official was of the opinion that British Columbia often operates below capacity. One official noted that even when downsizing has occurred, “[t]here is now more experience in place,” reflecting the reality of seniority-protected officials who managed to hold onto their positions as the cutbacks were instituted. Another official, noting the return of intergovernmental affairs bureaucracies (late in our study), warned, “Not everyone sees these large bureaucracies as progressive ... These larger bureaucracies with ‘diplomats’ representing regions are ­concerned with process rather than substance, which does not represent progress in intergovernmental relations and policy capacity; they take away from the sectors.”

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Accords and Agreements Chapter 2 and the recent literature on Canadian federalism noted the increasing emphasis on intergovernmental agreements and accords. For some analysts this alone indicates more IPC. Many officials agreed that intergovernmental relations were having an increasing impact on all policy areas and, in particular, those under provincial jurisdiction. However, intergovernmental generalists (in contrast to intergovernmental specialists in various policy areas) focused on the federal-provincial-territorial climate in which agreements were negotiated and signed. They often noted how misleading just the signing of such agreements can be in terms of indicating IPC. As one provincial official put it, “You come away from many intergovernmental agreements and have a sense of ashes in your mouth.” Another provincial intergovernmental generalist said this feeling was derived in part from the perception that “[t]here is a unilateral flavour to many of the agreements of the past decade.” Another official noted, “It is a cooperation model not a consensus model.” Nonetheless, countless intergovernmental agreements and accords exist. Considering there are so many, it is perhaps surprising that a very small number seemed to be “top-of-mind” for officials when asked about their relation to IPC in interviews. Among these, SUFA in 1999 and the 1999–2004 Health Agreements and Accords figured most prominently. In the early round of interviews we heard a lot about SUFA. As outlined in chapter 2, SUFA was touted by provincial and territorial officials as an intergovernmental agreement to mitigate the impact of federal unilateralism and place the negotiation of intergovernmental agreements on a more rules-based footing. In our early interviews feelings were mixed about its significance. But by the end of the period of our interviews, SUFA barely registered on the radar screen with officials. There was little or no spontaneous invocation of the agreement. The significance of intergovernmental agreements in the form of the Health Accords was mentioned by almost all the officials we interviewed. This was not surprising given health was the central agenda item in FMMs during the early period of our ­interviews. Comments from provincial officials related to the Health Accords were similar across provinces. One official characterized the 2000 Accord as a “transfer agreement without being a transfer agreement. It is really about government relations. The feds drove the process. The provinces did not want the detail.” Another o ­ fficial commented on



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the landmark character of the Accord, saying, “Never before have we had this kind of document in health signed by everyone. [Quebec Premier Lucien] Bouchard did not want to be seen playing the intergovernmental game in health. Unlike with SUFA, which they [did not sign because they] saw [it] as quasi-constitutional regarding the federal spending power, the Health Accord was just about health.” However, it was also noted that the Accords were more about extracting money than reforming or improving health care, a point we return to in chapter 7. Still, one intergovernmental generalist suggested, “The September 2000 Health Accord has the potential to change things. The provinces are losing control of performance measurements. We have agreed to work on common measurements.” As an example of IPC, however, the Health Accords revealed as many limitations as strengths in the area of intergovernmental accords and agreements. Relatively little was said by intergovernmental generalists about the administration of accords and agreements. This is not surprising since this task generally falls more to intergovernmental specialists and line department officials. Nonetheless, the one observation on which intergovernmental officials focused was the qualitative difference between multilateral agreements and bilateral ones. The latter were seen to have a better chance of being realized than did the former. This implies an inherent limitation in the state of IPC in Canada – it has difficulty dealing with the complexity of the federal reality. A Quebec official suggested, for example, “Bilateral administrative arrangements are recognized as the way to do business.” Another provincial intergovernmental generalist suggested that “bilateral administrative mechanisms are useful, such as agreements with the feds in immigration, the training field, culture, and infrastructure.” As we shall see in subsequent chapters, there was some variation by sector on this observation. International Institutions Most intergovernmental generalists focused their comments on the factors important to IPC within the federation. However, ­several also noted that international political factors had an increasing impact on IPC during the period of our study. As one official said, “Intergovernmental relations are now more dependent on other international factors.” Of particular importance is the Canadian-American relationship. For instance, one official noted in 2004 that “US relations are now on the agenda of every FPT meeting. Premiers are interested

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in this,” s/he said, adding sardonically, “and they want a break from health.” A Manitoba official expressed a reality common to many of his/her colleagues across the country, claiming that “more and more, Manitoba is working with state governments.” To exploit the new reality meant developing new relationships. Said a British Columbia official, “A lot of the process with the US is aimed at developing personal relations.” One federal official noted, “More federal departments are devel­ oping capacity with other countries north-south but also European. Federal departments are becoming knowledgeable about the international aspects of their policy areas.” This same official noted the discrepancy between federal and provincial capacity in this area, in 2002, suggesting that “provinces are developing [international] capacity, but provincial departments are not plugged in yet. Federal departments are more tapped in.” However, as one official from New Brunswick noted, “We are starting to develop [international] services for line departments, includ­ing an inventory of all international agreements on-line. We bring focus and corporate coordination to international affairs.” Increased global ties created the need to develop capacity to do serious work in areas which were perhaps previously thought less important. Another provincial intergovernmental generalist pointed out that the “New England Governors’ and Eastern Canadian Premiers’ Conferences used to be social affairs with golf games. It no longer is; it now has three standing committees and real work is being done.” Some governments intensified their capacity to deal directly with the American federal government. “We had our own lobbyist in Washington related to the lumber issue, as Ottawa was not representing Atlantic interests.” But this has proven problematic for governments with smaller capacities to begin with. “British Columbia is smaller on the international side so capacity is affected,” said an official, “but the current [2003] government is more international in scope and global in orientation.” For some officials, enhancing IPC to deal with increasing international interactions was a necessity of the age. But just exactly how intergovernmental officials thought their governments could enhance their capacity through international forums was a matter of some disagreement. For example, according to a New Brunswick official, “Some provinces want more formalized participation in international negotiations and Canada-US relations. Some like



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­ uebec want a formal seat at the table. But we would argue against Q that. We do not want thirteen jurisdictions at the table. We just want more say before the feds trade away something.” Others saw the federal government as falling down on its international obligations, with adverse effects for the capacity of their governments to carry on their own business. Said one provincial official, “Ottawa should manage existing relationships better, for example with the US on lumber, climate change, and Prince Edward Island potatoes.” A Quebec official expressed the concern that the federal government was using its jurisdictional responsibilities for foreign affairs as a back-door way of intruding on provincial jurisdiction. S/he said, “The federal government is using the treaty power and globalization as a means to get into provincial areas and interfere with provincial priorities, for example with Kyoto. The feds are pursuing a strategy of pushing into provincial areas through the implementation of their international obligations. The provinces are pushed aside in key industrial sectors, like energy and forest management. They are put in a ‘fait accompli’ situation.” Strikingly, though, federal intergovernmental officials made no comments on the practices of provincial and territorial governments of increasing their global relations, even though this too might be thought to be straining the bounds of their jurisdictional responsibilities. Instead, it was left to sectoral officials to draw attention to this, as we will see in succeeding chapters. In any event, with regard to the sectors on which our study has focused, one official pointed out, “IPC is being changed by globalization ... there is more attention to trade, [environment], and more and more issues in health, for example in genomics, patenting, stem cell research, and privatization.” In order to improve capacity to deal with these issues, intergovernmental ministries needed “analysts who can think and write along different lines.”

ACTORS Political and Administrative Actors One determinant of IPC that federal, provincial, and territorial intergovernmental generalists agreed on was the significance of political leadership for IPC, collectively and individually. Specifically, power relations have a profound impact. Said one long-time official, “High

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politics is about all of the high resonance tensions associated with money, jurisdiction, and political symbols. This is a zero-sum game. It is associated with raw power.” Since the timeline of our study coincided mainly with Jean ­Chrétien’s tenure as prime minister, there were, not surprisingly, numerous comments from officials about Chrétien as a leader in executive federalism. As one official from Nova Scotia stated, the “tone of FPT relations has less to do with policy, and more to do with the prime minister in Ottawa.” Another federal official simply noted, “The PM’s style is also important.” Chrétien was noted for his pragmatism and his relative lack of interest in long-term, big-picture goals. Hence he reduced the frequency of FMMs – meetings which one official characterized as “good in the past, but now irregular, brief, and focused on a few issues.” One veteran of intergovernmental relations stood out for a characterization of the period from the mid-1990s to the mid-2000s as one of good political relations, but cautioned that this had not translated into increased IPC. “I have been fretting about the lost opportunities for intergovernmental cooperation in the last decade. The goodwill between Prime Minister Chrétien and the premiers is phenomenal – the best it has been for a long time. For seven, eight, nine years we have had quite good relations. But the amount of progress on the intergovernmental front has been frightfully little.” In contrast, another official, referring specifically to the early childhood development file, said political leadership showed “a good commitment to working together” and consequently progress was achieved. It should be noted here, however, that the NCB was oft-praised for its ministerial leadership, which was said to act as a strong driver for its success. It can be difficult to distinguish between sound first minister leadership and that of the ministers behind the scenes. In the later rounds of our interviews, the prospects of a new federal prime minister and several new provincial premiers, particularly in Ontario and Quebec, were viewed as possible political developments which might enhance IPC as old animosities would potentially be replaced by more positive, fresh relations. The wasted time was noted; the continued presence of a “lame-duck” leader was thought to have slowed progress on the intergovernmental front. As one official opined at the end of the Chrétien era, “What is the point of commitment from an outgoing prime minister? The feds are delaying decisions until the new prime minister arrives, but life goes



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on for citizens.” When a new prime minister did arrive in 2003, however, he could only secure a minority government, as did his successor in 2006. The extent to which minority government affected IPC was not something which we investigated but the subject is clearly worthy of additional research. More broadly, turnover of political leaders was also identified by intergovernmental generalists as an important factor inhibiting IPC. A federal official acknowledged, “Turnover of premiers and changes in political mandates inhibit IPC.” A provincial official argued rather strongly, “A new minister does not care and is not informed. Ministers want different policy levers. The politics and philosophies change. Sometimes you get a ‘golden period’ when everyone is in sync [but this can end with an election.]” One official argued that the actors’ “relations are affected by individual PMs, premiers, and ministers and their ability to connect. Martin seems committed to making that happen.” Of course, Martin only lasted just over two years in power. An extreme case of political turnover occurred in British Columbia between August 1999 and June 2000. Noted one official, “British Columbia’s relations and position to other governments [have been affected by] four premiers in just over one year [Clark, Miller, Dosanjh, Campbell]. This has shaped British Columbia and resulted in a lack of consistency at the political level.” In the period of our study, several elections resulted in not just new premiers, but also a generational gap between much of this new cohort and the aging prime ministers. As one official explained in 2003, “The premiers are in a new mode. Capacity has not changed but there is a new generation of forty-something premiers and a new level of energy. There is a huge disconnect with the prime minister who is sixty-nine. Premiers are twenty years younger, and represent a new way of thinking that is more results-based.” Another official concurred, saying, “This younger crowd of premiers has its own way of doing business. For example, premiers [now] write their own communiqués.” In addition, every time a new premier was elected, it brought about a twofold change, reflected in the comment that both “the personality and mandate of the premier is important.” Of course, generational change did not occur in every government during the period of our study. The opposite phenomenon of familiarity breeding contempt was in evidence as well. One official pointed out, “Some premiers cannot stand each other and some long-term politicians are cynical. [Alberta Premier Ralph] Klein is tired of it

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all.” The extent to which political leaders should put aside partisan considerations was also commented upon. As one official put it, “In terms of political-level relations we have to focus on a more nonpartisan approach.” The advantage of having a premier act as intergovernmental minister was also commented on by officials. “Having the premier as [a] minister who understands us is number one in getting the job done,” said one official. Of course, IPC is not simply a case of the public servants waiting around for the politicians to provide leadership and direction. The politicians need informed support from their advisors. “Meetings between premiers are private, but they have to come out at coffee break and ask officials what things mean and what they cost.” However, as one official put it, sometimes “the premiers are frustrated with the bureaucracy not delivering. They want more informal chats, not scripted meetings with advance communiqués. But they also desire to show the taxpayer that they do more [at these meetings] than drink beer, eat pizza, and chat.” Ministers of Intergovernmental Affairs, who have close relations with the prime minister and premiers, were also singled out as having the potential to positively or negatively impact IPC. For instance, one official stated the federal Minister of Intergovernmental Affairs was inhibiting federal-provincial-territorial relations, claiming, “[Stephane] Dion does not give credit to the provinces.” Compared to relations between intergovernmental ministers, political relations between ministers at the sectoral level were said by some to be more functional. “Sectoral ministers work fairly collegially,” said an official. However, there was general concern about the policy knowledge and capabilities of ministers themselves, particularly related to IPC. “There is a lack of understanding of the need for policy capacity. Politicians’ understanding of intergovernmental relations is minimal. Politicians are not aware of the need,” said one northern official. The result, according to another official in 2003, is “policy by crisis lately,” although the same official commented that this is nothing new, since “for much of history policy has been reactive.” Lack of political leadership was referenced as a factor of importance when considering the political factors affecting IPC. One official complained, “The premier does not always see the ­pan-Canadian aspect of issues.” Some commented about political leadership at the first ministers’ level as well. “The lack of political leadership leads to crisis, and a lack of a long-term game plan. For example,



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the health care cost crisis is translating into a crisis in other areas,” said a New Brunswick official. Another provincial official pointed out the benefits of political leadership by saying, “Number one [for us] is political direction and commitment. Our current government has intergovernmental relations as number one, so our calls are answered.” Intergovernmental generalists were quite straightforward in describing their functions in intergovernmental relations and their own significance for IPC. Some officials characterized the role of intergovernmental generalists as being just like any other public servant: The role of the civil servant is 1) policy advice and 2) service delivery. A third official added, 3) “to improve the institutions in which we serve.” Most saw themselves as neutral, but politically aware, advisors with a liaison role. “We advise, analyze, review, research, and liaise with the outside, especially academics.” “Our role is to supply [policy] information,” and “we give information and strategic advice to our minister – [although] that information has to conform to what our government wants.” The interface between the officials’ and politicians’ roles is important. Consistent with the Canadian trend of centralized cabinet structures and executive styles, intergovernmental generalists often view themselves as “the premier’s people.” Relations at this politicaladministrative interface were said to have system-wide implications. As one official noted, “A change in the prime minister could change the nature of [the] PCO” and hence the relationships throughout the system. Another official said, “[We] live in a political environment; a level of tension is always there,” while another expressed the concern that “[t]here is not a clear enough line between the minister’s role and the civil servant’s role.” However, it was also noted, “Some issues are worked out by officials but facilitated by good political relations.” Several officials commented that the public servants and ministers do not always work well together, partly because of the high turnover at both the ministerial and deputy ministerial level, partly because of the complexity of the policy issues under consideration, and partly because of personality or style differences. Whatever the relationship between individual politicians and their public servants in the development of policy, “if an issue is unresolved, it goes to the political level.” As we saw above, some noted, “Premiers are driving policy themselves.” And it was also noted that while a push

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from the politicians helps move a policy along, it also tends to shape the policy event. For example, one official lamented how at a time of heightened policy awareness and need, “the health [care policy] debate was made into a debate over money” by the perceived needs of the federal election campaign and budget. The roles and responsibilities of deputy ministers of intergovernmental affairs were also commented on by intergovernmental generalists as having considerable potential to affect IPC. In describing the deputy minister’s role, one official said, “We work in a fluid world with a lot of accountabilities.” Within this world, said another, “a community of deputies leads to capacity development.” In other words, “having a core group of deputy ministers with trust can be helpful.” On certain issues, a “core group of deputy ministers can come together ... for example on Canadian blood management. [Federal Health Minister David] Dingwall wanted action and got it.” But according to another official, “You [still] need dedicated personnel to manage these relationships.” Like that of the elected officials, the issue of high turnover of unelected officials was often commented on by interviewees, both positively and negatively. One official commented, “Staff turnover is an inhibitor to IPC. We cannot bind or commit to one another.” Another noted that IPC “varies depending on the players. When there is continuity among personnel, this can lead to rich constructive and productive relationships. For example, at the social services table people have shared objectives, and common professional backgrounds.” Where an incumbent had blocked change, officials said things such as “There are not many federalists in the federal government. The new federal deputy minister of intergovernmental relations [in 2003] is a federalist. I am a cheerful pessimist and hope there will be change.” One Northern official commented, “Experienced people are required ... to see the big picture. There has not been a dramatic turnover in the Northwest Territories, but the feds have had a dramatic turnover ... [New people] bring in their southern assumptions and we have to start over.” Said another official, “Turnover of officials in PCO makes it difficult to build relationships, and there is also turnover in line departments.” Several interviewees also commented on the benefits of turnover at various ranks to “bring new personalities and ideas to the table.” As one official put it, “Deputy minister turnover can be an issue



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with regard to their being in office too long. The turnover in Ontario [in 2003] has actually helped.” One official said, “I think a certain degree of turnover is good for officials; they can bring baggage into the situation. For example, SUFA is supported by those who were invested in it.” Another official complained, “The old guard of the bureaucracy is not thinking outside the box, for example, on Alberta and Kyoto. We had it out with the Alberta team but it was the only discussion of substance. Meetings are very stifling; so much time is spent on product. We make suggestions for change but there is no willingness to change – even though the intergovernmental people are in danger of being fired.” Clearly, there is an ongoing debate in intergovernmental circles, as one official put it, as to whether it is best to keep the old guard at the helm (particularly deputy ministers and assistant deputy ministers) with the anchors of old conflicts weighing them down, or to move “new blood” up into the senior officials’ level of the intergovernmental public service. The latter would help dampen old rivalries but it would also entail a considerable loss of knowledge, skills, and corporate memory. Officials in other forums have argued that intergovernmental exposure, knowledge, cross-fertilization, and more integrated ­federal-provincial-territorial public service career paths are needed to improve relations (Institute of Public Administration of Canada 2003). However, as we saw earlier, our survey found more evidence of common backgrounds, values, and professional vocabulary and training among intergovernmental relations officials than evidence of variation (Inwood, Johns, and O’Reilly 2004). The role of officials varies somewhat according to their institutional location. Central agency intergovernmental generalists and departmental intergovernmental specialists tend to define their roles as distinct. Central agency generalists suggested they play a range of roles from more general to more specific. “Our role is to see the big picture, to look down into society.” They see themselves as fulfilling what one official called the “challenge factor: [the departmental specialists] tell us the issues and give us the information and we see how this fits with the big picture.” Several officials noted the importance of taking into account the views of the Ministry of Finance in this regard. Another official characterized the role as “a mixture of coordination and brokering information. Intergovernmental ­Relations pulls together information from across government to

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support the premier and the minister. This requires a particular kind of skill not widely acknowledged, but important.” Overall coordination of policy, according to several officials, involves the departments first attempting to solve any problems they can. As one central agency official said, “We don’t know much about health and do not want to get involved.” Another said, “The departments [do this problem solving] with full awareness and a sensitivity toward intergovernmental issues.” However, if they are coming up against the big intergovernmental – especially financial – issues, the policy assistant deputy ministers responsible for the intergovernmental file engage in debate or negotiations with the central agency intergovernmental or finance officials. One central agency official said, “Our role is multi-tasking day to day, anticipating and looking ahead. Our staff is experienced, exposed to issues and know the angles.” Although this was somewhat contradicted by their sentiments that “we are spread a mile wide and an inch deep,” and “we need to be better plugged in to departments, especially in the early stages of policy development.” It was clear from the interviews that there is an implicit hierarchy between intergovernmental generalists in central agencies and specialists in line departments, and that the line department officials were often less than enthusiastic about the central agencies’ “corporate” or “overseer” role. They complained of “losing the policy file” when it got politically “hot.” On the effects of the political dynamics, one official opined: “There are two schools of thought: One, the intergovernmental central and line department officials generally work reasonably well. Most of the tension in intergovernmental is associated not with them but rather with the high politics or raw power over money, jurisdiction, and political symbols. Two, intergovernmental officials spend too long in intergovernmental. They get worn out by the wars, and jaded. They nurse grievances and become too jurisdictional and too uncooperative. Therefore you need a turnover of people. [They are] unlike foreign diplomats who are groomed.” From the perspective of a provincial intergovernmental generalist, “The view from the line departments is very different from general intergovernmental.” Focusing on a prominent policy area, s/he noted the degree of federal-provincial-territorial cooperation between provincial line departments and federal line departments, suggesting, “The health departments are saying things have never been better [in



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2001]. They have long-standing networks, business plans, measurements, goals, etc. The line departments can work with the feds, they want targeted federal money, both to spend and to lever up the provincial money from other provincial programs the Treasury Board would not give them. Intergovernmental ends up brokering between line departments.” In other words, line departments think strategically, looking beyond their own central agencies to acquire resources not necessarily forthcoming from their own governments. Overall, the tension most often illustrated in these roles comes down to a simple trade-off. Those officials more concerned with policy issues will inevitably wish to trade some “good intergovernmental relations” for “good policy,” while intergovernmental officials will occasionally deem it necessary to trade “good policy” for “good intergovernmental relations.” The final decisions over any ensuing conflict will, of course, fall to the political leaders. The public servants are, after all, as one official put it, “the politician’s support team. It is he or she who makes the final call politically.” Although, it should be noted that this view is sometimes tempered, as evidence in chapter 4 on finance demonstrates. When asked whether these role-related tensions between central agency and line department intergovernmental officials generally enhanced or inhibited IPC, intergovernmental generalist officials saw them as doing both. The reasons for this seemed to be associated with a number of factors. First and most generally, the relationship between central agency and department officials varies depending on the particular issue at stake and the state of intergovernmental relations at the time. One official said, “Relations vary. Many intergovernmental issues are led by line departments. For example, softwood lumber is led by forestry. We do not have the expertise.” Lacking capacity in this issue meant coordination and collaboration were strained. Indeed, the softwood lumber issue was among the most intractable of issues in the period of this study. Another official commented, “Relationships between line departments and central agencies are good on hot issues ... but not on long-term anticipation and planning.” A central agency official working with Health department officials, said, “We have good relations with Health.” While another said in 2003, “We [central agency officials] have an excellent relationship with the line departments now. Earlier we did not have.” It should be kept in mind that these are the central agency officials making these comments, not departmental officials (whom

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we shall hear directly from in the sector chapters). However, we did hear some understanding of this disjunction from the central agency officials, below. Second, the inability of the central agency and departmental officials to act horizontally affects IPC. As an official explained, “an inhibitor to IPC is [that] relations between intergovernmental central agency and line departments [are filtered] through a silo mentality. We are helping them do their job but they think we are interfering. This corporate role is resisted by line departments.” Another central agency official eloquently explained, “We are a bridge, but every bridge is also a bottleneck. Our intergovernmental job is to act as a bridge, as stewards of process. We play a policy shepherding role between politics and line departments. We bring departmental needs into the room where politics happens.” But in this process, the work of both central agencies and line departments sometimes gets slowed and impeded. There is also the related issue of relinquishing traditional roles implied in greater horizontality. For example, as one official noted, “There is the issue of whether you let departments and municipalities negotiate with the feds versus having one negotiator.” There is clearly a trade-off implied in this comment. Nonetheless, officials recognized the importance of working across traditional boundaries. Said one official, “We [PCO] need to be better plugged into departments, particularly in the early stages. PCO is sometimes seen as tiresome – because of our challenge function regarding policy coordination and horizontal issues and compatibility with fiscal [needs]. But we are lagging in culture and management practices; and we are slow to break down organizational cultural barriers.” Another official pointed to the downside of intragovernmental horizontality, arguing, “Coordination inside government is also an issue ... we are tripping over each other as everything is connected.” A third factor conditioning IPC is the distance of officials from the centre of power. Some officials asserted that for keeping good relations, the closer to the premier, the better. One official said, “Sometimes I do not get information from Health, but some departments keep good relations with intergovernmental relations because they know we have the ear of the premier.” In any event, said another, “[t]here is a degree of separation between the premier and the lines, with most issues given to ministers.” But being close to the heart of power can have its disadvantages, according to one official, who



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said, “As we are part of the Premier’s Department since the deputy minister is also the clerk ... it makes it difficult to grow.” A fourth factor is found in the recurring argument by officials that IPC was affected by the emphasis placed by central agency officials on process rather than policy. Intergovernmental units in central agencies “do not do policy. They do relations, negotiations, and communications” said an official. Another (federal) official said, “We give advice and do analysis. We review research and do some of our own research. We liaise with the outside, for example with academics. We do commission a lot of work; we have close relations with the Institute of Intergovernmental Relations ... We take a lead role on files or issues that are floating. We do not advise on programs or public policies. Contrary to what [political scientist D ­ onald] Savoie claims, public servants are there to manage, to serve the minister.” Another official succinctly explained, “You need people dedicated to management of intergovernmental relations rather than policy.” In any event, “Intergovernmental Relations is a small shop with a heavy coordination role as opposed to [a] policy innovation role. We rely on policy capacity from the line departments.” Many central agency officials took pride in their ­process-oriented role, seeing it as enhancing IPC. One central agency official remarked, “Intergovernmental officials need different skills sets, linking things not normally linked at ministries. Ours is value added. We coordinate positions between ministers, resolve conflict, and strategize. This is not real policy work. A central agency is more than a typical ministry. Policy papers come to intergovernmental agencies, then they comment on them for consistency.” Said another official, “It is appropriate that we [federal central agency officials] are not policy experts. Our role is to make intergovernmental mechanisms work. Process is our value-added [contribution] ... assessing how issues play out across the country, regarding their impact.” Another central agency official said, “We are the keepers of the ‘how to.’ The thinkers are in the sectoral policy units.” A federal official claimed the two roles of central agency and line department intergovernmental relations were discrete, but collaborative. The former group focuses on the long-term process-related functions which make possible the shorter-term responsive policy work of the latter group. Thus, this official explained: “The Privy Council Office is not a place to build capacity ... The PCO’s role is to sustain demand, not do policy. Departments make policy in response

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to the immediate demands of the minister. PCO supports this, but also the PCO must create sustained demand over four to five years. It created ministers’ one-and-a-half day retreats and deputy minister retreats, and ADMs were given a six-month window to look at the big picture and ‘show us [DMs] your stuff’ with success at being listened to by DMs. You have to de-link this from short-term crisis management, but it can be done. We need a common commitment to the long term.” However, there was also considerable criticism of the process orientation of the central agencies; some feel it acts as an override rather than a catalyst to policy development. As one official put it, “The central agency people play with [process],” thus preventing “policy issues from getting into the intergovernmental sphere.” As we shall see in chapters 5 to 7, the sectoral officials were less than positive about the impact on IPC of the coordination from the centre. Some went so far as to say that the central agency’s intergovernmental functions were useless and it would be better dismantled. Said one disgruntled line department official about central input, “Nobody reads their crap. The health ads [suggesting the federal government was not paying its share of health funding] did well, but they were not developed by the intergovernmental people. An ad team was hired and it worked.” Criticisms of the ‘process’ role of the central agency intergovernmental units did not come only from the departments. It was suggested by one experienced central agency player that “[central] intergovernmental affairs units are old in their thinking – especially about executive federalism and law. They have a protocol-expert’s mindset of jurisdictional thinking and are slow to adjust from a constitutional focus to non-constitutional bargaining. They are stuck in executive federalism as keepers of the ‘how to,’ and the management of federal-provincial relations.” Another central agency official admitted, “Sometimes we are consumed by process, for example in making travel plans, and do not hear what the departments are saying.” Still another central agency official commented, “Provincial-territorial health officials are pressured by citizens. Doctors and nurses are more inclined to build something on the federal agenda than the intergovernmental relations folks who are seen as the dark side of the business.” Another admitted, “It is a fair criticism (of us) that intergovernmental



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­ fficials focus on process. Health is a case that we bombed on as o a file due to our process-orientation. Intergovernmental gets frustrated because nothing is theirs; they do not own files; and they lack detailed knowledge.” It may be that the traditional distinction between process and policy is changing somewhat. One official claimed that “more and more intergovernmental people have to know policy.” This might adjust the central agency role somewhat, but it is unlikely to create a new environment. That same official also said, “But process and strategy are still important.” The centre, by definition, will always need to look after overarching, executive concerns. That is their raison d’etre. Nothing we heard would lead us to believe the tension between process and policy will soon disappear. The Public For many intergovernmental generalists, the growing emphasis and institutionalization of public accountability and participation in the period of our interviews were not front and centre in terms of IPC. Some intergovernmental generalists did identify accountability and transparency as important factors related to IPC, but generally a schism existed between federal officials on one hand and provincial and territorial officials on the other. The federal view was essentially that the new trend in accountability to the public was on measuring outcomes. Said one official, “Before the CHST, accountability was only about how the money [transferred from the federal to the provincial and territorial governments] was spent.” Once enacted, s/he said, “the CHST treated the provinces as mature, and able to use their own auditors general” to foster accountability. Consequently the new reality was that “accountability is now to outcomes ... measuring outcomes and reporting to the public ... rather than g­ overnmentto-government. This is a very important evolution.” Provincial or territorial officials seemed to see this trend as a Trojan horse for federal intrusion into their jurisdiction and decisionmaking. Alberta officials perhaps expressed this sentiment most strongly, suggesting: “Accountability is an important shift for the federal government. Pan-Canadian accountability is one thing; accountability to provincial citizens is another thing. The feds are using the auditor general to drive policy. The auditor general is

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t­ rying to get the feds to account for their money, but accountability shifts with the transfer of money to the provinces. The provinces are not accountable to the federal auditor general.” Another Alberta official said: “We now see the application of federal intrusion into provincial jurisdiction, for example with common performance measurements. The federal auditor general needs accountability for federal dollars, but federal money is diffuse. It is a fairly intrusive task. The federal role is seen by them as guaranteeing minimum standards across the country, for example, in environmental and social areas. The courts have okayed [this]. They may want to build reporting like this into the Canada Health Act. But performance measurements are not value-neutral ... we measure what is important to Albertans.” More simply, another official said, “In Alberta, we report to Albertans.” Ironically, though, as another official pointed out, “Accountability [focused on] public objectives and outcomes has been pressured by the provinces.” Some officials were suspicious of enhanced public involvement, insisting that accountability is one thing, but transparency is another thing altogether and generally beyond the bounds of what was necessary for IPC. One official argued, “There is a difference between accountability and transparency. Governments should all be enhancing accountability, but not necessarily transparency [related to intergovernmental relations].” Direct public involvement was seen as problematic for some intergovernmental generalists. While some argued its benefits, and even necessity, others saw it as flawed. As one official noted, “The level of public debate on policy is quite simplistic.” Some saw public input as dominated by strong interest groups. Others argued that the intense negotiations and bargaining – even among officials – behind the scenes in intergovernmental relations required some shielding from the public eye. These concerns were sometimes linked to the role of the media in publicizing issues, which was generally not viewed as an ally in terms of improving IPC. Said one official, for instance, “The media and freedom of information inhibit policy capacity regarding sharing information on a confidential basis.” Another official complained, “The media did a terrible job of conveying what SUFA was. The media was against the provinces on the social union, for being decentralized with regard to national unity and national standards.” Another official noted the greater ability of the federal government to employ the media to its benefit, arguing that the “federal media machine is



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tremendous. The feds used the media machine to say there was not enough accountability in the system. The public was concerned and the feds tapped into that.” The same official also noted the “successful use of the media by Ontario and Alberta,” saying “the provinces want to explain and use the media too,” although it is easier for the larger parties to do so. Still, the provinces and territories did manage to band together to launch a series of effective media advertisements accusing the federal government of unconscionably cutting its financial commitments to health care spending (see chapter 7). Another example was particular to the Northwest Territories. An official there explained: “The feds benefit from extracting billions of dollars in royalties from the territories. And no one cares. Therefore, we must make them feel ashamed of neglecting the north. The federal government met with the Northwest Territories’ DMs only after the running of a four-part series in the Globe and Mail. The last thing they want is to look foolish in the national press. Our having to use the media is a real statement of how our federation works so badly. The territories have no political power. So we must shame the feds through the media and soliciting the support of the other premiers.”

RELATIONS The relations between the governments, institutions, and actors of the federal system are important to IPC – both formal and informal relations. Formal relations here are delineated by the constitutional parameters of the federal regime and may involve equality or hierarchy between the jurisdictions. They also involve relations between the political and administrative arms of the system as well as between the central agencies and line departments. Not surprisingly, as we saw above, intergovernmental generalists are very conscious of these relations. While the interpretation of intergovernmental relations in the Canadian federation (by both scholars and practitioners) is one of constitutional equality between the national and sub-national governments, there is a great deal of resentment over both the reality of resource inequalities (see chapter 9) and perceived hierarchies in the workings of the federation. Likewise, the textbook politics-administration dichotomy and central agency-line department coordinated roles and responsibilities are sometimes more of an ideal than a reality. While these various institutionalized roles are by design meant to complement each other, in reality, they often overlap in function

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(as we saw earlier in our discussion of actors) and carry considerable tension. The informal relationships between the individuals involved in intergovernmental relations inform the manner in which IPC is facilitated or impeded depending on whether those personal relationships are smooth or disputatious. The intangible of human relationships pervaded intergovernmental generalists’ responses. Good informal dynamics built on strong interpersonal relationships and trust were referenced frequently in intergovernmental generalists’ observations as perhaps the most important factor in IPC. Formal relations during the time of our study were, as we have seen, rather tense. Some tension is natural to a system which necessarily entails conflict and competition, acting at times as a catalyst for innovation and change (whereas too much elite cooperation and accommodation can result in stasis or the ‘race to the bottom’). However, there does appear to be a critical point where the conflict results in unwillingness to engage in policy development and coordination. We saw signs of both. Generally, prior to the mid-1990s, formal relations among governments tended to run on a business-as-usual basis despite political-constitutional tensions, but political relations became more bitter in the mid-to-late 1990s after the federal government made the unilateral decision to reduce fiscal transfers to the provinces and territories. Not surprisingly, intergovernmental generalists from provincial and territorial jurisdictions pointed their fingers at the federal government’s approach as inhibiting IPC. One official said, “FMCs are tense, with a lot of brinkmanship ... When the feds enter the room it becomes more like bridge, with everyone trying to read each other’s hand.” A federal official said, “There is still [in 2001] a culture of caution and risk aversion. It is more pronounced now than earlier. There is a chill in the system which flows from the prime minister’s heavy-handed approach and party discipline.” As one Quebec official stated, “I have been involved in FMCs since the mid-1990s. There is now more of a takeit-or-leave-it process than years ago. The purpose is to impose a common way of doing things, not cooperating. The only way of doing things is the Ottawa way.” Confusing the analysis is the fact that for several governments, most particularly Quebec and Alberta, IPC is not defined as the ability of federal, provincial, and territorial governments to work together, but rather as the ability for each government to pursue its own policy objectives without federal meddling. Disagreement



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over this fundamental point, often compounded by the use of the federal spending power, inhibited IPC. Intergovernmental generalists cited it frequently as a part of the fiscal context affecting their work and relations. The spending power, while it indicated capacity on the part of the federal government, seemed to violate intergovernmental sensibilities in many provincial and territorial quarters. One consequence, as noted above, was to push provincial and territorial ­governments into new institutional relations such as the COF. A development noted by an official from Quebec was the growing responsibility of political staff for intergovernmental relations. “Political chiefs of staff serve as the main line of contact. They do not like that part of their jobs, but they have become major ­problem-solvers, facilitated by their personal networks.” Relationships between political staff and officials, while not commented upon by many officials, were described by one as causing “the disconnect between the Premier’s Office and the Ministry of Intergovernmental Affairs.” Though only noted as significant by a few of the officials we interviewed, the role of political staff in intergovernmental relations is an interesting question which warrants further research. Relations between political leaders and administrative officials were noted as an important factor in IPC since political disagreements often affect the bureaucracies below. There was some consensus that the general character of administrative relations is more collaborative and less confrontational than at the political level. As one official noted, “In the civil service, relations are better than at the higher (political) level.” But another suggested simply, “Officials take signals from the politicians.” So a hot policy issue is “pulled up” from the line departments to the central intergovernmental agencies and then to the elite political levels where the dynamics of executive federalism dominate. Many central agency intergovernmental officials see this as a positive development. One noted in 2003, “First Ministers’ Meetings and premiers’ meetings are becoming more and more decision-making processes ... All intergovernmental files go to the premier’s or prime minister’s desk. This is happening across Canada ... Politicians are more and more putting their own say on the outcomes of meetings ... They do not want them to be ‘pre-cooked’ by public servants ... This is good with regard to democratic accountability.” But of course, this political sphere is the playing field of the central agency officials; line department officials tend to see it differently, as we shall see.

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There is a realm of intergovernmental relations which remains the domain of officials and a realm which is highly influenced by the state of IPC at the political level. As one official from Ontario put it, the policy role of officials “is somewhere in between. It is the issues we cannot resolve that go to [intergovernmental] meetings, but our input is ongoing.” This individual was implying that there is an area of intergovernmental administrative relations where things get decided and done without entering formal political intergovernmental meetings. Another official claimed that many intergovernmental issues “rarely get to the political level. [We have] good relations on an administrative level[; it is only if] problems develop, things move to the political level.” However, it is important to remember the subtle effects of the political–administrative relationship on the actions and attitudes of officials. “Freedom to do real policy work is constrained by the government of the day,” said an official from one coast, while his/ her counterpart on the opposite coast said, “The civil service takes its cue from the premiers.” Another in the west said, “Politicization ... is probably the wrong word and a simplification, but there has been a buy-in to ideologies.” A central Canadian official stated, “He who can frame the question determines the answer ... [But] you cannot be assertive or close off options if you do not know what your minister or deputy minister wants. Premiers’ meetings can make immediate decisions.” Another said, “Premiers are our main client, as opposed to line departments.” The attitudes of individual premiers toward their intergovernmental staff have a bearing on capacity issues. “[Our] premier [originally] saw the intergovernmental crowd as inhibitors. Now he sees the need for intergovernmental cooperation and quality control,” reported one official. One interesting dimension of the more formal relations set up by the institutional arrangements of federalism is the coordination role of the central agency intergovernmental units discussed earlier. Because of their position as central overseers, one official claimed that “they are the people least interested in getting along. Those engaged in the policy areas are more interested in cooperating.” As we saw, some officials also expressed concern about the process orientation, rather than policy orientation, of central intergovernmental relations offices engaged in intergovernmental negotiations. One out-rider intergovernmental generalist dismissively proclaimed, “Process is for cheese.” Overall, however, according to the central



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officials, process is important, and relations within the administrative level functioned fairly well. Interpersonal relationships among the political leaders were identified as a very important factor in IPC. Political biographies have documented this well. Some prime ministers have always gotten along with some premiers and leaders better than others. This is human nature. The personal style of the prime minister and interpersonal relationships between first ministers were mentioned by many intergovernmental generalists as important. One official from Atlantic Canada said, “Like Trudeau with patriation over the provinces, with Chrétien there was no debate, no dialogue on health care. It was dictated. There is no longer equality in the federation.” Informal personal relationships between first ministers were noted as an important aspect of FMMs. “Continuity of contact and pattern recognition is important. For example there are five new New England governors that do not know each other or the issues. By comparison that is the real value of First Ministers’ Meetings.” Trust was a strongly recurring theme in the officials’ comments. “Trust and political support are important enhancers of IPC.” Alter­ natively, distrust lingers in the environment. Dysfunctional intergovernmental relationships during the post-Chrétien years were partly the consequence, according to an official, of the fact that “there is a residue of distrust left over from Chrétien.” Three vital elements of IPC, according to another official, are “personality, capacity of individuals, and trust. These are a requirement of good IPC.” Said another official, “You can get more done in relations of trust.” A western official noted his/her province was in a unique position because “British Columbia represents different interests than the other provinces and can strike alliances based on trust. Interpersonal relationships can be built and last. This is a foundation upon which policy aspects can be built.” Rifts between leaders of the sub-national governments were also reported, even as new institutional mechanisms like the COF were being developed to forge greater provincial-territorial consensus. As an official explained, “The federal-provincial-territorial level sometimes gets along better than the provincial-territorial level. Some premiers use the national stage for local issues, for example as [British Columbia Premier Gordon] Campbell did on Aboriginal issues.” Another official suggested, “Success is based on already established human relationships,” but “the last premiers’ meeting [in 2003] was

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a failure because we did not deal with the human relations aspect before we talked politics. For example, there were no advance meetings between deputy ministers. [Federal Intergovernmental Affairs Minister Pierre] Pettigrew met with each of the premiers first, but it was not a human-capacity-building exercise.” Moreover, another official argued, “the federal system has a lot of inertia and jealously. [And the] premiers have used [this] to score points with the public and be on the stage.” The significance of human relationships is not lost on participants, even when the meetings do not turn out well. Said a British Columbia official, “Our premier hates going to things without outcomes, but understands the personal dimension.” One of the greatest intangibles in IPC is personality. Even antagonistic governments can have good relationships at the administrative level. As an Ontario official suggested, “Sometimes federal and Quebec ministers have good relations, but this is an exception. Personality matters.” In any event, officials saw it as their job to work around interpersonal conflicts between politicians. “Interpersonal relationships are important, but the official’s job is to get around that when the premiers do not like each other. Intergovernmental people are helpful, responsive, and frank, with less strategic gamesmanship.” Still, one long-serving official lamented in 2003: “Executive federalism worked pre-Meech and Charlottetown. Now a level of general malaise has set in. There is no way of advancing a national agenda ... There has been a revolution in intergovernmental relations. During Meech we had a group of intergovernmental people who knew each other. First ministers knew each other. Officials and first ministers had a relationship. There was a measure of confidence in officials’ reflections of their minister’s or premier’s views. That has changed now. There is no direct connectedness. It is hard for intergovernmental people to do their jobs now.” Despite this, many officials felt that the more informal level of personal relationships and networks, professional bonds, shared ethos, and trust ties continues to operate. As a veteran official noted, there are a lot of “informal decisions made [outside the actual] meetings, and it seems as if there was almost always a conference call [taking place].” Another commented on the “deep, rich, complicated set of relationships (forming) an elaborate infrastructure” for the FMMs. The importance of “a foundation of interpersonal relationships” was mentioned as a factor in the success of the health file; while



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even Quebec officials conceded that despite strained relations in the wake of the 1982 patriation of the Constitution, functional informal relationships continued between officials. Many officials commented on the benefits of being able to pick up the phone to talk informally to their counterpart in another government, or meet them for dinner or at a conference. Said one official, “We do a lot on the phone ... you do not want to see our phone bills ... we have so many meetings across the country without much outcome compared to the phones.” An important part of the utility of informal relationships is not only knowing your issue, but also knowing whom to avoid and who will impede progress on a file. Informal relationships highlight factors such as personality, enmity, and culture. Individuals have gotten to know each other, and can have a good rapport. One official explained, “You need to know your counterparts’ issues in the negotiations. Communication is important on many levels. Not everyone is always talking to one another. You need to identify key policy makers and involve them in key meetings ... You cannot get lost in the detail. You have to work on the big picture. It is critical to have good communication.” As one official observed, “Relationships continually inform struc­ture.” Thus new structures may sometimes emerge out of the informal networks which permeate intergovernmental relations. SUFA and the COF were cited as examples. As one official suggested, “You need effective interpersonal relations to enhance IPC. This improves intelligence gathering.” Third parties such as academics, interest groups, or international actors are also sometimes drawn into these networks. One official explained there are “networks across levels of government plus outsiders from professional fields such as engineers, scientists, doctors, epidemiologists, informatics, transportation, etc.” The opposite can occur as well; that is, informal relationships can ossify through too much institutionalization. Said an official, “The meetings of the Atlantic Provinces and the New England Governors were designed to get people to know each other, but now there is a bureaucracy to justify that golf game. Now it lacks salience and can degenerate to minor issues. It does not improve personal relationships. We need durable relationships to deal with problems as they arise.” But, generally, interpersonal informal relationships were held up as a key to strong IPC. For instance, one official recalled, “Labour policy ideas – we could not get them to the formal table. [Then]

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there were informal dinners with third parties and academics, and bilaterals got onto the table. I would not recommend dismantling this [informal structure]. You need this level of interaction and continuity. The same people move into informal meetings. People want to make things happen.” In certain cases it was suggested that key personalities were crucial to IPC. The National Child Benefit (NCB) was most often raised in this regard. Officials suggested that when strong, respected individuals championed a file, the policy had a better chance at success. However close interpersonal relationships are, they are not in themselves a guarantee of IPC. There are limits to the officials’ capacity, imposed mainly by the political world within which they function. One official suggested, “Capacity within the intergovernmental system is not ensured by the level of warmth between officials” since they must ultimately answer to their political leader. Officials spoke of the frustration of having done extensive work on a policy, only to see it lost because first ministers opt for a different course of action due to their own informal relationships. “Months of preparatory work went down the drain,” said one official, “when the prime minister came into the room, slapped our premier on the back, and said, ‘Premier, we have been friends for years – we can do a deal.’ And they did a deal.” Officials also argued that IPC is negatively affected because while “people matter, turnover is high. It is hard to establish trust” and both leadership and trust could be trumped by negative emotions associated with human relationships. Policy files which might otherwise move forward could be sabotaged by relationships tainted by personal animosities and resentments. The baggage of old conflicts and emotions could hinder new relationship-building. The extent to which informal networks transcended jurisdictional boundaries was often a sore point for officials. There was some consensus among provincial and territorial officials that the federal intergovernmental bureaucracy had more IPC than they did, but there were some who felt this did not translate into good intergovernmental relationships, given the attitude of federal intergovernmental officials. “Even aside from the politics, human factors inhibit IPC – attitudes and perceptions, for example, and federal public service arrogance; thinking they know better.” From one provincial official’s point of view, the biggest problem in relations lay with the federal government:



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“The premiers set the lead. They want to drive the national agenda. The provincial-territorial officials have been honed into an effective team over time. There are always complications, but overall the tone and complexion is positive. There is good chemistry between officials ... but it is different with the feds. They are not part of the intergovernmental network; not part of the team. They only show up for First Ministers’ Conferences. They lack the culture and personal linkages at the provincialterritorial level where officials can navigate together. The feds do not understand the provincial-territorial relationship. Chrétien’s strategy was to stay away from the provincial-territorial. [Federal intergovernmental Deputy Minister George] Anderson just did not call except when there was a problem – and then only to give orders. There is not much rapport between federal and provincial-territorial officials. The federal officials see provincialterritorial officials as plotters, obstreperous, and trying to affect politics in their line departments.” Echoing these views about the importance of ­provincial-territorial informal relationships, another provincial official said, “We run our ideas by our provincial colleagues. We have been able to engage more in interprovincial groups [than in federal–provincial groups].” One official pointed out, “The players have to be candid, and they ­ fficial who must be able to deliver on their commitments.” Another o worked at both levels of government noted, “I spent six years at intergovernmental affairs in Ottawa before they realized the need to engage the provinces.” S/he went on to suggest it took a new deputy minister with prior provincial experience to make a difference. “The new deputy minister realizes it is a time of transition. She has previous provincial experience and is a lot more open to seeking understanding with the provinces and identifying issues we can cooperate on.” Another official suggested that “since [the new deputy minister’s] appointment there has been more dialogue,” revealing the importance of key individuals in key positions who can develop trust, and good working and informal relationships. Said another official, “Intergovernmental relations are as good or bad as we make them. Relations are made by people working together for common objectives – which we lack.” Finally, the extent of the importance of informal relationships became apparent to the authors of this study when one official

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informed us of performing a “PT scan” on us through the informal intergovernmental network to “check us out” before granting an interview.

WHAT THE OFFICIALS DID

NOT

SAY

Strikingly, several factors cited in the federalism, public policy, and public administration literatures as important – such as the courts, Parliament, and political parties – did not merit a mention by intergovernmental relations generalists as affecting IPC. It is perhaps surprising that the courts were not raised, given their long history in interpreting the constitutional division of powers and their centrality to the historical trajectory of Canadian federalism. Resort to the courts in disputes between jurisdictions has been a common feature of Canadian federalism. Yet officials did not comment on the judicial branch. Parliament, on the other hand, has always played a marginal role in intergovernmental relations, as federal-provincialterritorial issues have long been the purview of the executive branch. As for parties, they have also played a marginal role in terms of IPC. Perhaps their fragmentation at the national level, and their declining significance in the political system as a whole, are good reasons why they would not be top-of-mind for intergovernmental generalists when asked about IPC.

CONCLUSION Intergovernmental generalists identified a number of determinants of IPC. Although their opinions varied on the relative significance of different factors, this subset of officials characterized various aspects of federal-provincial-territorial ideas, institutions, actors, and relations as important to IPC. For them the institutions of executive federalism were at the top of the list, with actors and relations also very significant, while ideas were only implicitly identified. This subset of intergovernmental officials also placed comparatively more emphasis on the political dimensions and institutional factors, compared to intergovernmental specialists, whom we discuss in subsequent chapters. However, even this group of officials was generally in agreement that institutional factors alone do not necessarily enhance IPC, and like officials in other sectors, intergovernmental generalists



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placed the most faith in actors and relations as factors with the most potential to improve IPC. Ideas, while not directly identified and listed as significant factors by intergovernmental generalists, were very evident in those officials’ comments. Two ideas in particular seem to be significant for them. The first was an almost complete consensus that the idea of non-constitutional approaches to intergovernmental relations and policy was not only a reality but normatively a positive idea. The second was the ideational debate about fiscal federalism and the vertical fiscal imbalance. With a few exceptions, there was almost a classic ideational divide about the idea of a fiscal imbalance, with the federal intergovernmental generalists holding onto one set of ideas about fiscal federalism and the provincial and territorial ­generalists sharing the opposite ideational ground. These ideational foundations held true related to other important ideas such as the appropriateness of federal unilateralism among a constitutionally “equal” set of players. In terms of institutions, while intergovernmental generalists tend to accept the current institutional design of FMMs, they also see them as somewhat dysfunctional and not very productive in terms of policy development. Provincial and territorial generalists cited federal executive power at the apex of intergovernmental institutions (and their concomitant unilateralism and spending power) as well as the need for more developed interprovincial-territorial institutions as examples of areas in need of improvement. However, several officials noted that just because a new institution is created, or an old one further institutionalized, does not mean IPC is strengthened. They also noted that joint institutions were not the norm and that much intergovernmental business and policy-related work occurs beyond these institutions. Overall, as we saw above, intergovernmental generalists indicated that intergovernmental institutions were a necessary but not sufficient condition for IPC. Almost all intergovernmental generalists commented in some way on the significance that institutional resources hold for IPC. They define these resources broadly. Several officials noted human resources and technology, for instance, as being both assets and liabilities in terms of IPC, depending on how they are utilized. Intergovernmental generalists also cautioned that accords and agreements do not necessarily equate to IPC, even though accords and agreements are in many

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ways the focus of their work. For some intergovernmental generalists, the multilateral or bilateral character of agreements was significant. For others, there was recognition that signing of agreements and accords was an indicator of some IPC but poor implementation could lower that assessment. Some intergovernmental generalists also identified international institutions as having a significant impact in terms of IPC, especially related to the Canada-US relationship. Some discussed the challenges that international developments presented in terms of IPC, but several others focused on the implications of these developments in terms of their own organizational structures and roles. It was also very clear from intergovernmental generalists that the background and tenure of political and administrative actors can make a significant difference in terms of IPC. With regard to political actors, intergovernmental generalists outlined that personality, background, leadership commitment, and turnover were all important. In terms of administrative actors, the generalists focused on the role of deputy ministers as intergovernmental actors and their own role at the top of the bureaucratic hierarchy in relation to intergovernmental specialists in line departments. Several noted the negative impact of turnover at the deputy minister rank, but several also noted the benefits of turnover and new professionals as actors in intergovernmental relations and what this might mean in terms of IPC. Finally, the formal relations and informal relationships between politicians and officials were factors mentioned by almost every intergovernmental generalist we interviewed. Some focused on particular aspects of these relations such as hierarchy and trust. Informal relationships in particular were cited as especially pertinent to building and maintaining IPC. Overall, despite their view of their own role as one of system oversight, intergovernmental generalists expressed considerable criticism of the state of IPC in Canada. The majority of intergovernmental generalists focused on the inhibitors rather than the enhancers of IPC. Many were critical of the ideas, institutions, actors, and relations acting as drivers in the system. This may partly be a function of the particular period in which the interviews were conducted. Or it may also be reflection of where the officials reside in the intergovernmental arena. For this reason we now turn to an examination of intergovernmental specialists in finance, environment, trade, and health.

4 Finance: Long-Standing Influence The actions taken in Budget 2007 will restore fiscal balance through long-term, fair, and predictable transfers. Mr. Speaker, the long, tiring, unproductive era of bickering between the provincial and federal governments is over. The Honourable James M. Flaherty, Minister of Finance, Budget Speech 19 March 2007

INTRODUCTION The “long, tiring, unproductive era of bickering” Finance Minister Flaherty referred to presumably meant the previous handful of years. But as Stevenson points out, debate over the terms of fiscal federalism has been a persistent feature of Canadian politics at least since Ontario demanded compensation when Sir John A. ­Macdonald offered “better terms” to Nova Scotia in 1869 ­(Stevenson 2006). While the intensity of conflict has waxed and waned over the years, one point is clear; fiscal federalism is at the heart of intergovernmental relations. Any analysis of intergovernmental policy capacity (IPC) must therefore assess the role of finance ministries. These central agencies are often at the hub of relations between governments, a feature of the intergovernmental system that has become even more pronounced in recent years. By way of context, fiscal federalism has always been conditioned by four fundamental issues. These are 1) the fundamental incongruence between jurisdictional responsibilities and sources of revenue; 2) the provincial differences in fiscal capacities; 3) the avoidance of joint occupancy of tax fields; and 4) the lack of cooperation and coordination between the two levels of government (Strick 1992, 148). The IPC to tackle these issues (and others) has beguiled the system since its onset. Sorting out fiscal capacity and jurisdictional

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responsibility in particular has been taxing (no pun intended). IPC in finance is related to the ability to negotiate and sustain the complex system of tax agreements and transfers between the levels of government while attending to notions of equity enshrined in arrangements from Confederation onward. In addition, there is an important technical-rational dimension to fiscal federalism. Fiscal federalism has traditionally been based on four elements: tax collection agreements; equalization; conditional grants (or shared-cost programs); and established programs financing. The latter three constitute about ninety-five percent of all federal transfers to the provinces and territories; they are transfer payments through which the federal government provides funding to ensure that the provinces and territories have the means to deliver essential public services such as health care, post-secondary education, and social services while allowing those governments the flexibility to provide programs reflecting their unique circumstances and needs. Transfer payments also help maintain the Canadian economic union by facilitating the mobility of people across the country, since Canadians can thereby be assured of reasonably comparable services wherever they live. But as many of the comments from finance officials show, there is a constant tug-of-war between this technicalrational dimension and the political dimension. Many officials cited the tenure of Paul Martin as finance minister as making the realm of fiscal federalism particularly difficult compared to other issue-areas. The turning point was the 1995–96 federal budget and introduction of the Canada Health and Social Transfer (CHST), which cut $7 billion in cash transfer payments to the provinces and territories in order to tackle the federal deficit (see chapter 2). The arbitrariness of this unilateral measure coupled with the federal government’s rationale – that the provinces and territories would benefit by enjoying more discretion and freedom as to how they actually spent the transfers they received – aggravated relations. It is against this contentious backdrop that we investigate the perspectives of finance officials on IPC through the lens of fiscal federalism.

IDEAS From 1995 onward, certain contextual ideational factors reshaped the relations between the national government and the provinces



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and territories in substantial ways. The capture of the economics profession by monetarists, whose members predominate in the finance departments in Canada, has been well documented (Brooks and Gagnon 1988; Clarkson 1993; Inwood 2005). Their preferences for free market over statist prescriptions set the ideational frame of the work of finance officials – perhaps the single most influential cohort of officials in the contemporary public service. Without a doubt, the dominating ideas regarding fiscal issues in the period of our study were neoconservatism, debt and deficit reduction, and reducing the role and size of the state in the economy. The consequence of this focus, according to an official, was that “capacity is not utilized. There has been a fiscally driven agenda since the 1990s with a trickle-down effect in all communities at all levels.” A dramatic political and ideological transition took place from a distributive ethos in fiscal federalism in the 1960s and 1970s rooted in the construction of the Keynesian welfare state to a neoconservative ethos focused on the reduction of the state. As one official described this transition, “Politics is a huge part of it. There has been a seachange in approaches to fiscal federalism. The 1970s saw an era of growth for fiscal federalism. In the 1980s we had to hold back the sea. The 1990s was an era of retrenchment. All were difficult times.” Another official described the transition to deficit reduction by saying, “In the 1990s finances was a huge issue. We were hitting the wall on finances. But it got dealt with. The government dealt with the budget with a long lead-up time where the public knew there was a problem so we could then do things that needed to be done. Martin had the public preconditioned – staring crisis in the face.” After the 1995 federal budget, the provinces, following Quebec’s lead, began to float the idea that there was a “fiscal imbalance” with Ottawa taking in large revenues and offloading its deficit onto the provinces, while carrying little responsibility for the delivery of expensive services. The federal government responded that the provinces had a full range of revenues available but their earlier decision to cut taxes placed them in a fiscal straitjacket of their own making. The ideational battle lines were drawn, and federal-provincialterritorial relations worsened. The very question of whether a fiscal imbalance even existed became contentious and led to tensions. Said one rather cynical provincial official in 2003, “The fiscal imbalance colours the whole process. It means that the federal government has money. Without so much money the federal government would not

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have focused on so many issues in the last budget. If the federal government did not have so much money, there would be no federal involvement in health. The feds just want more visibility, but [they want] not to be involved in core problems. For example they want a national health card but they don’t want to deal with the emergency waiting rooms crisis. The feds are interested in political rewards so the federal government suddenly becomes a philanthropist.” Compared to earlier eras, whatever ideational consensus had existed now diminished. The proliferation of highly public reports and stances articulated by different governments attests to the degree of conflict, a phenomenon characterized as more disputatious than Middle East politics, according to one observer. The dominance of neoconservative ideas influenced officials’ perceptions that the debt and deficit was the key issue of the times, even those of the provincial and territorial officials who felt the pain of federal deficit downloading. That this occurred in the framework of New Public Management (NPM) approaches to public service management meant there was a theoretical rationale on which officials could fall back. However, our research reveals officials in central agencies did not feel particularly hard hit by the imposition of constraints emanating from the application of NPM principles (Johns, O’Reilly, and Inwood 2007). As well, finance strongly held the idea that it was the key guardian of public spending, forever resisting the pressures of spender ministries and imposing fiscal responsibility on departments (Good 2007). Those with the power to enforce NPM ideas in the administration presumably agreed. Among the issues raised by NPM thinking is accountability, which was of increasing importance in the period of this study and was linked to the issues surrounding the CHST. Said one federal official, “We have seen the evolution of federal-provincial relations to the point where provinces say give us the money with as few strings as possible, but the feds want accountability – not to themselves, but to the public. If the feds can leverage increased public accountability that would be great, like in early childhood development or the Health Accords. There is lots of public accountability in these agreements. That would auger well for federal-provincial relations. This would be a powerful force. This could improve federal-provincial relations, for example in health care if the public can compare across provinces through reporting with comparable indicators.” The same official went on to argue, “In the health debate the feds were



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c­ oncerned that there was no way to hold the provinces to account. The feds created a number of funds around this for health restructuring, to get more say. The feds hedged their bets that this would [result in] accountability. The provinces didn’t want this. Their perspective was that this was ‘cuts without notice.’ There was a year’s notice. As an instrument the provinces liked the CHST but only if funding was stable and growing.” While the ideational landscape in finance came under new and severe pressures after 1996, earlier periods were not without consid­ erable controversy. There was a history of provincial dissatisfaction with elements of fiscal federalism, and in particular with shared-cost programs in terms of the distortion of provincial planning and priorities, and the difficulty of controlling the rapid escalation of program costs. The federal government had a litany of complaints as well, mainly focusing on escalating costs and lack of political credit for its role in financing programs and services for Canadians. Contending ideas catalyzed tensions between the levels of government. But the dissatisfactions with the prevailing contours of fiscal federalism came to a head in 1995–96.

INSTITUTIONS The Constitution The institutions of fiscal federalism are central to the functioning of the federation but lack a constitutional or legal basis. Conventions, some of them over a hundred years old, predominate in matters fiscal. While the flexibility granted by this approach is often lauded, many provincial and territorial finance officials complained that it has placed unacceptable constraints on the freedom of action of their governments, which have often found themselves at the mercy of particular federal finance ministers’ whims, a point which we noted above. Despite this lack of formal constitutional rules, the constitutional model crafted in 1867 has left a long shadow which continues to be felt in fiscal federalism. Unlike those of several other federal countries (the United States, Australia, and Germany, for instance), the Canadian Constitution privileges exclusive rather than concurrent fields of jurisdiction. IPC, then, has always been conditioned (some would say negatively and others positively) by the constitutional

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limitation on the federal government’s ability to legislatively impose conditions on programs delivered by the provinces. However, formally, the Constitution gives the federal government the power of “The raising of Money by any Mode or System of ­Taxation” in Section 91(3), whereas the provinces are limited to “Direct taxation within the Province” in Section 92(2). The Constitution also commits the federal government to ensuring that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation in Section 36(2). Contemporary IPC is shaped by the reality that both levels of government in Canada enjoy access to virtually all major sources of revenue – in particular various modes of taxation such as personal and corporate income tax, sales tax, payroll tax, and so on. Consequently, both orders of government have had to negotiate tax agreements so that citizens and corporations are not overburdened with conflicting taxation. Not surprisingly, then, f­ederal-provincial-territorial conflict has persisted over issues such as the tax base, Employment Insurance premium rates, resource revenues, and equalization, among others. Where intergovernmental fiscal relations are concerned, the other major conditioning feature of the Constitution is what it does not say. It says nothing about limits to the way in which the federal government spends its revenues, notwithstanding the division of powers. Ottawa thus enjoys an impressive “spending power” which enables it to spend in areas of provincial jurisdiction and/or attach conditions on grants to provinces for programs in areas of provincial jurisdiction. This led one official to comment, “Canada has responsibility for everything and nothing,” implying that the federal government could intrude in areas of provincial jurisdiction but did not accept the responsibility attendant with the intrusion. This official gave an example of the problems for his/her province, suggesting, “The federal government gets credit for money sent for roads, for example, because of the federal spending power. We need more agreement over issues like roads where there is 50–50 cost sharing. The feds get credit with their signs on roads, but who will people call when there is a pothole? There are piles of legal documents and paperwork. Federal involvement in roads means we need to do more environmental and cost assessments and legal work. Disentanglement [between the two orders of government] would be more efficient.” Nonetheless, the spending power has permitted the federal govern­ ment to institute pan-Canadian programs through redistributive



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payments to citizens both directly and indirectly. When the goals of both levels of government coincide, the collaborative expansion of programs and services is made possible – though not always without conflict. But when one government shifts from concern for saving money over concern for services, as the federal government did in the 1990s, tensions increase. Officials had a good deal to say about the spending power. For instance, an eastern official claimed, “The main issue [with regard to fiscal federalism] is the federal spending power. Programs are set up and we have no choice but to be a part of them. Then the feds leave after a while, and the provinces are left to take the blame for the end of the program.” Another provincial official explained, “There is a view in Ottawa of putting the Constitution in a drawer when it is convenient. Ottawa claims it is just being pragmatic by moving in and out of policy areas.” But a Quebec official pointed out that there is not always opposition to Ottawa spending in areas of provincial jurisdiction, saying, “The federal government has recently put money into children, sewage, transport, and housing. We all agree this is needed.” But the problems arose when Ottawa saw its initiatives as pre-eminent. The same official went on to suggest, “The struggle is not over priorities, this is not the challenge. But the priorities of the federal government are seen as rights ... The federal government goes on about how to deliver services efficiently. We agree on needs and have the willingness of both governments to do things. But [they should] give Quebec the money to deliver programs itself. Intergovernmental relations complicate issues with the process of having to agree all the time over details.” As we saw in chapter 2, federal-provincial-territorial agreement was reached in the Social Union Framework Agreement (SUFA) (except by Quebec) on placing conditions on the use of the federal spending power. These conditions, and SUFA itself, however, proved to be “more honoured in the breach than the observance.” Thus the spending power remained a source of considerable ­federal-provincialterritorial tension in the period of our study. Political and Administrative Institutions Although there are no formal rules concerning frequency or duration of meetings, agenda-setting, dispute avoidance or resolution, or even decision-making in general in fiscal federalism, Stevenson observes, “The management of intergovernmental fiscal relations,

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especially in recent years, has employed armies of officials and has led to scores of intergovernmental conferences” (Stevenson 2004, 124). The close association of finance with executive power has been on full display in the intergovernmental realm as meetings of first ministers have become increasingly important as the site of fiscal developments on fiscal transfers, revenue sharing, equalization, and so on. In 2003, one provincial finance official noted the increased attendance of finance officials at intergovernmental forums, saying, “We have input into the Annual Premiers’ Conference in July or August. We used to just send Briefing Notes, but now for the last couple of meetings we have sent one or two finance people to be on site to give advice.” One reason for this development, according to officials, was that “fiscal matters have become more central, but intergovernmental agencies didn’t have the capacity. This has led to a closer relationship between finance and intergovernmental agencies, partly because of the issue of financing health care – the one topic all provinces can agree on.” The centrality of finance to just about every policy under consideration by government was remarked upon by officials. One provincial official said, “All policy initiatives go through finance. We must find a fit between overall government priorities and spending priorities.” S/he went on to suggest, “Ultimately everything revolves around finance. Finance is involved in the lead-up to the premiers’ meetings. Policy choices by provinces involving the feds always involve dollars and therefore always come back to finance.” Another official pointed out, “Rarely does a budget go by without mention of federal-provincial relations, so we have a lot of internal discussions. It is a high-profile area.” Meetings between finance ministers have grown in number and in importance since the late 1980s. Intergovernmental mechanisms in finance predate those in most other sectors such as environment, trade, and health. Given the nature of fiscal matters, some of these mechanisms have been of necessity more technical than political, and as such have displayed a higher degree of capacity. Officials frequently referred to tax policy and pensions as areas where IPC was good, due in part to the technical nature and professional capacity of officials dealing with them. But as issues became more political and were turned over to first ministers, they became more intractable. IPC proved insufficient in many cases such as equalization, health care funding, and natural resource revenue sharing. As far as the



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machinery of intergovernmental coordination is concerned, systems painstakingly constructed starting in the middle of the twentieth century, which served ably for several decades, lacked the capacity to respond to the changed set of circumstances that prevailed in the period of this study. Nonetheless, a patina of good relations was maintained. According to one official, “Finance ministers report to their premiers on the failures of equalization and the CHST, but the communiqués are drafted in advance to be inoffensive.” There are features of the relationship between finance ministries that stand them apart from both other central agencies and line departments where federal-provincial-territorial relations are concerned. There is a high degree of secrecy – possibly higher even than in the already-secretive world of executive federalism around First Ministers’ Meetings (FMMs). Finance meeting agendas are generally not made public, nor are press releases concerning outcomes produced either before or after the meetings of ministers and officials. The federal minister always chairs the meetings; provincial suggestions for co-chairing with provincial finance ministers have fallen on deaf ears. So too have provincial demands for meaningful participation in setting the agenda of finance ministers meetings. Overall provincial-territorial input has waned since the 1980s. Without much consultation with their counterparts, the federal government has often left the distribution of the agenda literally to the last hours before the meetings began. In addition, federal officials have often presented data for informational purposes rather than consultative ones. As one provincial official complained, these circumstances adversely affect IPC. S/he said, “We need to be more equal partners to enhance capacity. We get consulted, but at the end of the day it is their file. If we get to real, joint federal-provincial-territorial work, this will improve capacity. Premiers have good relationships and this can be used to leverage federal-provincial-territorial relationships.” Another official commented on how the “political agendas were big inhibitors” of IPC. Indeed, one of the most common perspectives expressed by officials about the political institutions of fiscal federalism involved the extent to which the federal government dominated proceedings. The perspective emerged quite strongly that federal-provincial-territorial meetings were less about negotiating issues and more about the federal government presenting an offer with the provincial and territorial governments simply responding. One official claimed in 2003,

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“The federal-provincial-territorial finance conference system was set up in the late 1950s and worked for a time. Compromises were made. But now this doesn’t happen. It gives some parties some things but there is always someone unhappy. There is a negative mood and a lack of common goals and I am pessimistic this will change. There are two solitudes.” Another official said, “Federal decisions are made with consultation, but not necessarily consensus.” Another official went so far as to suggest, “As far as capacity is concerned, there could be an argument made for a provincial-territorial secretariat since the feds are so unresponsive, for example like a Premiers’ Council on Health. There have been more provincial-territorial discussions and fewer federal-provincial-territorial discussions partly because that was [Prime Minister Jean] Chrétien’s preference.” As a mechanism of IPC, finance ministers’ meetings were regarded as problematic. One official complained, “Ottawa has a vision of senior and junior governments. It sees us as a stakeholder.” An Ontario official claimed, “The whole federal-provincial-territorial process is problematic due to the federal government’s attitude. It regards ­federal-provincial-territorial relations as a nuisance.” In addition, the federal government is sometimes thought to be driven by political motives which take no account of provincial or territorial priorities, according to the official who said, “The federal desire for visibility also leads to an encroachment issue which is not consistent with the provincial agenda. What’s good is also bad.” Another official noted that the outside world perceives a different process than the one that actually exists, arguing, “The public perception is that there are negotiations, but actually the federal government is directing it. [Fiscal agreements are] reviewed every five years in consultation with the provinces. But the feds do what they think they can afford.” Even in technical policy areas, relations deteriorated in the period of our study. One Alberta official noted, “We do work on equalization, for example technical reviews of the program. This gives us an idea of where the feds are going. But they often surprise us. At the last finance ministers meeting they proposed tax changes without any discussions with the provinces at all. The feds rarely enter into discussions. It is more like ‘take it or leave it.’” A recurring theme among officials was federal control of meetings through chairing and setting agendas. A provincial official noted, for example, “The federal government chairs and sets the agenda. It is only since the [1996] cuts that provincial finance ministers started



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meeting on their own due to the need for developing a provincial consensus. We need co-chairs or rotating chairs. The feds would never agree to this. They’re jealous of their power and there’s no interest on the part of the federal deputy minister for this.” Another provincial official claimed the federal-provincial-territorial dynamic often produced stalemate rather than agreement. S/he said, “The feds tell us when the next meeting is, and we tell them we don’t like what they are doing. We state the [provincial] position, then they state the federal position, and then there is no movement.” A perhaps unforeseen consequence of federal intransigence and especially the imposition of the CHST was to drive the provinces and territories into concert with one another, resulting in more ­provincial-territorial collaboration. Provincial-territorial inter­gov­ ern­mental conferences and regional meetings such as the Meeting of Finance and Economic Development Ministers, the Atlantic Ministers of Finance Meeting, and the Provincial-Territorial Finance Ministers Meeting provided forums for finance departments to coordinate agendas on fiscal matters involving the federal government. In the aftermath of the CHST, one finance official reported, “There were more contacts between the provinces after the federal government stepped out of the process. This created a vacuum for the provinces to build consensus on issues and gang up on the feds.” As one official colourfully put it, “The provinces use the federal government as a whipping boy.” Another official reported in 2003 that provincial-territorial interactions have become “quite vibrant lately. There is a real community among provinces and territories. We cooperate on research and messaging to the federal government on what we think is important, for example the CHST, health, various studies commissioned by the provinces, etc.” As another official reported (in 2003), “We have seen provincial-territorial cooperation at an all-time high now, but it was uncommon to have a provincialterritorial common front before the 1990s. This has led to health agreements etc. The deteriorating federal-provincial-territorial relationship has led to improved provincial-territorial relationships.” The provincial-territorial backlash against what they saw as federal imperialism ultimately contributed to the creation of the Council of the Federation (COF) in July 2003. Among other things, the COF focused attention on the fiscal imbalance. An official reported that consequently the premiers became more engaged in debates about fiscal federalism. “Structures have changed and there is more

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interprovincialism. Prior to the period of the fiscal imbalance, premiers’ meetings were golf games and dinner. Now more consensus is attempted. Joint positions are developed.” One response to perceived federal intransigence was for provincial and territorial officials to use mirror bodies which met in advance of federal-provincial-territorial meetings, on the premise that “capacity would be enhanced if the provinces could be more involved.” For instance, one official reported that “there are ­provincial-territorial [meetings of the] Fiscal Arrangements Committee of Assistant Deputy Ministers [which sit below the deputy ministers’ Continuing Committee of Officials (CCO)], on a necessary basis before or after federal-provincial-territorial FAC meetings. There are provincialterritorial conference calls and emails to work out positions on various issues. These are effective. The tempo of work builds up in crises.” S/he also said in 2003, “We now have provincial-territorial finance meetings ahead of the federal-provincial-territorial finance meetings.” Many of the finance officials we interviewed indicated the provinces also display increasing, yet varied, capacity to engage in these meetings, particularly in areas such as transfer payments. The “fiscal imbalance” emboldened several provinces to aggressively challenge the dominant role of the federal Department of Finance. However, the technical capacity of provinces and territories is uneven and results in a certain degree of dependence by some smaller governments on the federal government. According to one provincial finance official, “We still rely on the feds for technical definitions. They work well with the provinces on this when you set aside the politics and focus on the day-to-day management of the tax system.” Regionalism, of course, is played out in fiscal relations. Even the provincial and territorial actors were subdivided into regional groups. As one official reported, “In western Canada the four provinces have a good working relationship. We share information etc. At the political level there is a willingness to work together and at the officials’ level there is a willingness to work together. We are small and close geographically. There is strength in numbers. The provinces are very different but there is recognition of common interests. The west is separate from Ontario and Quebec.” A federal official had a slightly different perspective on provincialterritorial collaboration, saying in 2003, “There was more [FPT] IPC ten years ago because of the increasing complexity of issues today,



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and the evolution of power and influence of provincial governments. They have greater fiscal capacity and desire to wield greater influence – and they do. The provinces are not junior partners anymore. The nature of the balance has shifted to more equal partners. The provinces combined have more fiscal wherewithal collectively than the feds. They are the big guy on the block now, and this has led to more sitting down together.” A provincial official concurred, noting, “We [provinces] have more IPC now than five years ago. There is more contact between the provinces. The federal government stepped out of the process and left a vacuum in which the provinces were able to build a consensus on various issues. This was difficult to do given their differing interests, but the provinces built linkages.” Provincial-territorial coordination was not always an easy process, of course, and in some ways even helped the federal government maintain its dominant position, according to an official who said, “It is a difficult process arriving at consensus, adding up the sum of all the complaints. The feds have argued the provinces don’t know what they want. Despite an outward-looking consensus over money, the provinces are split on the details. Indeed on tax point transfers even the equalization-receiving provinces differ. This gives the feds the ability to say there is no interprovincial consensus.” Another official similarly argued, “There is a limit to provincial capacity if you have to agree with all the provinces when your interests don’t match. This dilutes provincial strengths and keeps the provinces from making their own cases.” Differences between the “have” and “haveless” provinces result in provincial-territorial disagreement. Said one official, “At the Victoria [2001 Annual Premiers’ Conference] meeting you had the seven ‘have-less’ provinces fighting with the three ‘have’ provinces over equalization versus the CHST.” A federal official added, “The ‘have-lesses’ are more concerned about equalization first and the CHST second.” This official went on to suggest, “Provincial-territorial cooperation has diluted provincial strength and keeps each province from making its own case. Provincialterritorial cooperation is not good because it constrains us too much.” A Quebec official offered a concrete example of this conundrum, saying, “Interprovincialism does not help Quebec. It constrains Quebec too much. There are different views and different policy goals. Things are done better by pushing our own views. For example, Quebec wanted to ensure interprovincial ­collaboration

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over the CHST but to do so it had to back off its position on tax point transfers.” The same official concluded, “Interprovincial consensus may mean diluting Quebec’s strength vis-à-vis Ottawa.” More generally, asked one official in 2002, “are alliances among the provinces effective? They have some influence. The Atlantic premiers and finance ministers have formalized meetings and put forward joint positions. But the outcomes remain to be seen. There is also a less formal grouping of the seven ‘have-less’ provinces. It is made up of officials, not ministers. On equalization they are a cohesive group. But they do not really talk about anything broader.” Another official, talking about equalization negotiations specifically, said, “The system divides and conquers people into regional camps.” In any event, another official commented more generally on the existence of formal institutions and their ineffectiveness in light of the absence of any overarching national vision or agreed-upon set of principles. “IPC depends on the file. There are structures in place, for example first ministers’ and officials’ forums for talking. But they are not very efficient. There is no common view of the Canadian federation. There is an asymmetry of views. There is a view of Canada as managed from the centre regarding planning. But policies are delivered by the provinces. Quebec says Canada has no role, or only a minor role. There are differing starting points which do not allow for productive discussion. This slows the pace of reform. For example we say health ‘announcement’ not ‘accord.’ Many files finish that way.” In addition, there was a certain tired cynicism expressed by some officials, such as the one who said in 2002, “There have been some results over the last few years, for example, the 2000 Health Accord. But it was tied to the federal election. The excuse now for inaction is the Romanow Commission [the 2002 Royal Commission on the Future of Health Care in Canada].” The frustration with the political state of affairs in finance and intergovernmental relations was palpable among officials. One expressed the view in 2004: There is lots of room for improvement. Our provincial colleagues at the table have been frustrated for a long time with the deterioration of these meetings. A colleague of mine said they used to lose sleep before these meetings. I don’t care anymore. There are no decisions coming out of the deputy minister or minister’s



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meetings in finance. Why do the provinces and territories keep going? They don’t want to give the federal government the satisfaction of their pulling out, and they need to be there. It is the provinces versus the federal government on money at finance meetings ... One exception is the Canada Pension Plan. This is a legal agreement involving the provinces in serious negotiation. On equalization there is a lot of talk, but the federal government lays out the proposal and at the end it is take it or leave it. Another dimension of IPC is the institutionalization of the relationship of finance to other ministries within each government. In this regard, finance departments have long had a special role in intergovernmental affairs. One intergovernmental official reported the continuing importance of finance in the following terms: “Finance is its own master. They are key actors with their own culture. The reality is that finance is strong and close to the premier.” Moreover, the emphasis that provincial and territorial governments placed during our study on obtaining greater levels of federal funding indicates that their finance departments played an increasingly important role in intergovernmental affairs. In any event, the growing role of finance was remarked upon by the official who said, “There has been a shift in the balance of power between finance and line departments. Finance has become more important. In the 1970s and 1980s no thought was given to the costs of programs. Now finance is more involved.” Virtually all governments have delegated some intergovernmental fiscal responsibilities to their finance departments. Finance departments typically contain a division or branch that takes the lead role in fiscal matters involving intergovernmental relations, such as transfers, equalization, and taxation involving the federal government. Table 4.1 shows the machinery for ­ federal-provincial-territorial ­fiscal relations. Interviews indicate that increasingly the technical work related to fiscal federalism was being conducted by the several well-developed and active technical and policy committees of officials which reported to deputy ministers and ministers of finance. In interviews several examples of technical federal-provincial-territorial cooperation were mentioned, including the National Child Tax Credit, national health care reporting, the common drug review, toxic substance regulation, and the Canada Pension Plan (CPP). Officials distinguished between

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Table 4.1 The machinery for federal-provincial-territorial fiscal relations Central Agency Department of Finance Canada Alberta Ministry of Finance British Columbia Ministry of Finance Manitoba Department of Finance

New Brunswick Department of Finance Newfoundland and Labrador Department of Finance Nova Scotia Department of Finance Nunavut Department of Finance Ontario Ministry of Finance

Prince Edward Island Provincial Treasury Ministère des Finances du Québec Saskatchewan Department of Finance

Northwest Territories Department of Finance Yukon Department of Finance

Division/Branch/Unit Federal-Provincial Relations and Social Policy Branch Office of Budget and Management Treasury, Intergovernmental Fiscal Relations Federal-Provincial Relations and Research Division, Economic and FederalProvincial Research unit Fiscal Policy Branch Taxation and Fiscal Policy Branch Fiscal and Economic Policy Branch Fiscal Management Branch Office of the Budget and Taxation, Personal Income Taxation and Fiscal Arrangements Branch, FederalProvincial Relations Economic, Statistics and Federal Fiscal Relations Fiscal and Budgetary Policy and Financial Institutions Budget Analysis Division, Taxation and Intergovernmental Affairs Branch, Federal-Provincial Agreements and Aboriginal Affairs Branch Fiscal Policy Fiscal Relations and Management Board Secretariat, Fiscal Relations

issues of a technical nature and those which were more political. “The tax policy side works better than the transfer side of things. Transfers are more of a ministerial or first minister’s prerogative. It is more politicized.” They did concede, though, that even technical issues could occasionally become politicized. Said an official, referring to tax changes quietly made at the behest of some of Canada’s richest families, “But even on tax policy there are some surprises. For example there were secret negotiations on family trusts.” Speaking of the CPP, one official offered the comment, “We work well together; the CPP is a successful model for intergovernmental relations. It is not as highly charged and provides benefits in the interests of both federal and provincial governments. It is not a zero-



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sum game.” Another noted, “the CPP committee is a good example of an intergovernmental committee that works. There are equal partners who are not driven by the fiscal agenda. It is a successful and rewarding committee. Both levels’ views are incorporated as equals. The dynamic is unlike that around the CHST and transfers. It is not a case of one party controlling the purse strings. Each has a piece of control for the betterment of the federation. There is an equal partnership role.” Said another official, “The Canada Pension Plan is working well. There are good governance structures there. It is run more like a corporation than a bureaucratic entity. There are clear rules for the federal government and clear timelines.” The provinces display good IPC to engage these meetings in particular areas, according to one finance official. Each has “one or two people quite experienced to represent the province. And the federal government is quite supportive of the needs of the smaller provinces, helping with numbers and analysis.” At the apex of the finance system sits a coordinating mechanism led by deputy ministers of finance through the Continuing Committee of Officials (CCO) and supported by a series of sub-committees in functional areas like economic and fiscal data, fiscal arrangements, taxation, and the Canada and Quebec pension plans. Explained one Alberta official, “The CCO made up of deputy ministers goes back 130 years. Sectoral councils are a more recent innovation of the past twenty or thirty years.” A federal official reported, “In the Departments of Finance we have the Continuing Committee of Officials. The deputy ministers of finance have met since Confederation. They have a long tradition of working together. Other departments didn’t have this tradition, but they relied on the federal Department of Finance.” While one federal official suggested, “Finance deputy ministers like getting together since they have a minimum common goal of controlling spending,” a provincial counterpart was somewhat less Pollyanna-like. Said this official, “There must be more willingness to meet on a regular basis and enhance our dialogue with the federal government. That dialogue used to be poor. It had deteriorated but has improved in the last six to eight months [2003–04]. There is a willingness to meet and talk, and make existing arrangements work better. A finance ministry Secretariat has been created to look at the fiscal imbalance. Regular meetings of finance had become less frequent for a while under Martin but they are getting more frequent.

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There are some joint finance and health meetings but my expectations are conservative regarding new mechanisms of IPC.” Another related development has been the coordination of activities by finance officials and intergovernmental officials resulting in the bringing of finance departments at the provincial-territorial level much more directly into the realm of intergovernmental relations. As one Quebec official reported in 2004, “the CHST played a large role. Our finance people wouldn’t be at intergovernmental relations meetings ten years ago, but the CHST brought finance into the discussions much more.” But another Quebec official noted, “Interprovincial collaboration is a lot of work. Finance is not as happy with this as Intergovernmental Relations is.” According to some officials, there is flexibility in the system to be gained by having both first minister and finance minister forums for the handling of major fiscal issues. But some finance officials express frustration with the manner in which their intergovernmental counterparts deal with issues. “The bureaucratic protocol involved in collaboration is a little frustrating. Finance wants to know simply, who holds the pen? Intergovernmental Relations have thirteen computers changing a single word here and there.” Overall, with regard to administrative institutions, doubt was cast on the capacity of the institutions to achieve the goals they were intended to serve. One official noted, “Arrangements are not conducive to moving things along. We need a commitment to making things work.” Institutional Resources The issue of resources as a factor in IPC was particularly germane in the period of this study, coming as it did on the heels of the federal Program Review, a major cost-cutting exercise launched in 1994 which saw every federal department except Indian and Northern Affairs suffer substantial cuts to its budget. Provincial governments also enacted cuts of varying degrees around the same time. Consequently, staff levels and budgets were affected. As one official noted in 2004, consistent with NPM precepts of the time, “Intergovernmental units in finance departments tend to be smaller now than in the 1980s but staff are doing a hell of a lot more.” Scale was mentioned as another factor affecting IPC. Simply put, there is a wide variation in the size of governments in Canada (see chapter 9). The first and most obvious difference is between



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the ­federal government and all the rest. One official from a smaller jurisdiction explained, “There are limited resources among the provinces. The federal government has a large organization but the provinces are more limited in scope. For example, we have two people in intergovernmental relations in finance – myself and an analyst.” Even an official from one of the better-endowed provinces pointed out this difference, saying, “The federal-provincial economic unit and statistics unit report to me. There are a total of eleven people. Compare this to the hundreds of people in the federal finance ministry.” Another official from a large province said in 2003, “We have a relatively small team of people, perhaps half a dozen in the ­federal-provincial group tracking payments from the federal government and forecasting revenue from the CHST, and identifying issues and advocating for the province. Within finance we are probably smaller in terms of bodies but more tuned up in working with provincial and federal governments. We are working with six staff now, although at one point we had ten.” A provincial official admitted, “I have respect for the technical work of [the federal department of] finance. It is excellent and I envy their resources.” Part of that excellence was derived from an effort by the federal Department of Finance in the 1980s and 1990s to carefully recruit and nurture new staff (Bakvis 2000, 80). Budgets make a big difference in terms of IPC. In the face of cutbacks though the 1990s, explained a Quebec official, “The question of who has the dollars drives policy differences among provinces. [Among the provincial governments] Quebec is well resourced. We like to put out concrete proposals on the table. We have the capacity to produce technical data to support positions. Quebec is technically well-prepared with papers and research.” One provincial official noted the nature of dependence experienced by the provincial and territorial governments, saying, “There is a lack of policy resources among the provinces. They depend on the federal government for basic analysis. The provinces don’t have the capacity to do detailed analysis but they have the capacity to use it and assess it.” The connection between the need for increased research and IPC was articulated by the official who said, “To have more people to do more academic research would be great. Research is important, for example on how far the federal government stretched its rules for Employment Insurance across the country.” The problem, however, was that in an era of cutbacks, the request

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for increased resources for research meant that something else had to be sacrificed. The official, who came from one of the larger provinces, went on to explain, “But it is hard to argue for research in the fight over resources. Ten years ago our federal-provincial group would not have been doing much work on, for example, premiers’ meetings. In the last few years we have taken on a greater role. The expectation is that we can do more with less. With increased capacity we probably could. With more capacity we could do more. The capacity is what the organization thinks it needs. The more we are asked for, the more resources we are given. We are at capacity for this. But we lack research capacity.” One response has been to look to outside “experts” for research and advice and to lend legitimacy to positions. For instance, Quebec created a Commission on Fiscal Imbalance which enlisted the aid of the Conference Board of Canada and which issued the Seguin Report in 2002 arguing that the federal government was enjoying a surplus at the expense of the provinces (Quebec 2002A). Ontario had agitated as early as the early 1990s for “fair-shares federalism,” with Premiers Rae, Harris, and Eaves complaining that it was not receiving its proportion of federal funding for shared-cost programs. Various academic and professional studies were commissioned to support this view. Later, Premier Dalton McGuinty took up the cause, asserting that Ontario was being discriminated against by the federal government in the allocation of funding for health and postsecondary education. McGuinty complained that a “fiscal gap” existed between its provision of services and the funding the federal government provided for those services relative to what it provided to other provinces. In 2006 the federal government countered with its own “Expert Panel on Equalization and Territorial Formula Financing” (Canada 2006) while the COF created an investigative panel consisting of academics and former public servants and released its own report, “Reconciling the Irreconcilable: Addressing Canada’s Fiscal Imbalance” (Council of the Federation 2006). Meanwhile, various academics and other interested bodies weighed in on the debate. Conferences, research studies, and fact-finding initiatives abounded as governments sought to supplement their own weak research capacity with these outside sources. One official observed, “Some think tanks like the [right-wing] Fraser Institute have their own perspective, but some balance occurs.” As the debate on the



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f­iscal imbalance was heating up, the [left-wing] Canadian Centre for Policy Alternatives weighed in with a report entitled “The Art of the Impossible,” while the Conference Board of Canada, from the opposite end of the ideological spectrum, produced a report entitled “Mission Possible: Successful Canadian Cities.” Others strove for the centre ground. The Institute of Intergovernmental Relations sponsored a major conference and produced a series of working papers and studies on fiscal federalism in 2006. These initiatives underscored the inherent weakness of the coordinative research capacity of the intergovernmental system, since existing intergovernmental mechanisms proved unable to resolve the issues, and since governments’ use of outside experts helped generate differences rather than reconciliation. Technological innovations, of course, also affected the work of officials. One explained, “Communications has improved and become faster due to email, though sometimes there is conflict and even war over email. We share papers and information more effectively. This has somewhat replaced meetings. Meetings are a chore, for example getting to the finance meeting in Corner Brook, Newfoundland, when Paul Martin deigned to call us together.” The use of the internet to fight public relations battles was also evident. For instance, Ontario launched a web site calling for fairness in fiscal relations and supporting its case that a “fiscal gap” existed for Ontario. Accords and Agreements Among the important agreements between the governments in finance are tax collection agreements. A system of a common tax base and agreed-upon taxation rules was constructed in the post-war era, renewable every five years after ­federal-provincial-territorial consultation. The system worked well for the most part, but in the period of our study, cracks began to show. As one official explained, commenting in 2004, “There are competing interests between provinces regarding tax collection agreements. For example, the small provinces want them more constricting so that they can compete with the bigger provinces. [Furthermore] tax collection agreements are not yet a success due to the lack of interest by Ontario, which is not connected to the exercise. It is not engaged and the federal government wants to wait for Ontario. We also had senior federal o ­ fficials t­ aking

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rigid positions and being unreasonable, [such as] asking Alberta to give up jurisdiction in one area. The issue was a power struggle with vested interests.” The nine provinces with tax collection agreements with the federal government advocated more flexible terms which would allow them to vary their tax rate and bracket structure. For its part, the federal government responded by accommodating many different tax credit and deduction regimes constructed by the provinces, and replaced the practice of calculating provincial tax as a percentage of the federal tax with a new practice in which the provinces are allowed to impose a direct tax on income (Brown 2008). Said an official in 2004, “Tax collection agreements are moving better now. The federal government backed off and Ontario became more engaged.” By 2006, Ontario signed on to a single federal-provincial system for the collection of corporate income tax, and by 2009 had decided to harmonize its provincial sales tax with the federal Goods and Services Tax as well. Equalization also became a very contentious issue during the period of this study, as the universality of Canadian social programs and the progressivity of the income tax system was gradually eroded, and as the cuts to the CHST took effect. A divide opened up between the “have-less” provinces who sought enhancements to equalization and the “have” provinces who insisted the focus should be on reversing the cuts to the CHST. The eight provinces receiving equalization in the early 2000s formed a common front to argue that there was a vertical fiscal imbalance, suggesting the federal government had more money than it required to discharge the functions for which it is responsible, while the provinces did not have enough resources to fulfill the tasks for which they are constitutionally responsible. While they received increased transfers through mechanisms like the Health Accords (see chapter 7), Newfoundland and Labrador, Saskatchewan, and Nova Scotia all saw their equalization transfers clawed back because of increased oil and gas revenues. In 2004, the Martin government made bilateral agreements with Nova Scotia and Newfoundland and Labrador as part of the Atlantic Accords which provided that any revenues received by these provinces from offshore oil and gas would not affect their equalization transfers. Newfoundland and Labrador also received a payment of $2 billion to retire a portion of its debt. These deals were criticized as subverting the principles of equalization since they went



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beyond its multilateral formula for all provinces. Also in 2004, the federal ­government released “A New Framework for Equalization,” which unilaterally changed the terms of equalization, placing a cap on the amount of equalization to be paid each year with a fixed rate of increase of 3.5% for ten years (Canada 2004E). The long-time use of a set multilateral formula to determine equalization was to be abandoned in favour of an “expert panel” which would make recommendations as to the amount of transfers. Until the panel made its recommendations, the transfer amounts would be set on a per capita basis. Meanwhile, rich provinces like Ontario and Alberta agitated for changes to program transfers such as the CHST so that payments there would be determined on a per capita basis, while resisting suggestions to enhance equalization. The federal-provincial-territorial processes of dealing with these complicated matters became very political. As one provincial official noted in 2004, IPC was uneven, but entrenched positions developed such that “in the equalization process the federal government prepares and analyses and presents data, then the provinces criticize it. They do all the work and we criticize it.” This official argued, “We need to work jointly. Most of the equalization issue is not controversial. We could have the provinces do some of the work. Provinces also need to show greater flexibility, for example, not just rejecting changes to equalization out of hand.” But the contentiousness of the issues defied easy solutions. The prospects of reaching federal-provincial-territorial fiscal accords and agreements were seriously compromised in the period of our study by federal arrogance and unilateralism, according to provincial and territorial officials. For instance, an Ontario official reported, “[Overall,] there is a degree of frustration with the federal government at the provincial government level – broad provincial frustration.” Another official commented upon the proclivity of the federal government to produce “surprises” shortly before meetings. “There is a litany of surprises from the feds. On the evening before a deputy minister finance meeting, the feds announced the Canada Customs and Revenue Agency had made a mistake in not debiting T3 refunds for thirty years. This put the provinces in a difficult position. They also dumped a new proposal at the last finance ministers’ meeting with separate envelopes for each province. But they did not share the information from each province. An hour before the first ministers’ meeting, the feds gave out a revised equalization

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payment plan costing the provinces $2 billion. It is this game playing that shows that the provinces are not respected by the feds.” For their part, a federal official noted in 2003, “The provinces put a lot more pressure on the feds now. They are increasingly sophisticated and are using new strategizing and new tactics, including public relations. They arrive before the federal-provincial-territorial meeting and have ‘secret’ meetings and more strategizing and work on common communications regarding both the federal government and the public. It is always thirteen to one, although this partly depends on the timing of elections and various political aspirations.” As a consequence of this climate, bilateral agreements between the federal government and individual provinces declined, according to officials, as the provincial and territorial governments sought agreements among themselves instead. Said one official in 2004, “The provinces’ response has been to band together and seek a consensus. This has been quite effective in the last few years. There used to be primarily bilateral relations with Ottawa so the feds could do whatever they wanted.” Provincial-territorial accords and agreements were often commented upon. One official said, “The provinces work well together, for instance through the Western Premiers’ Conference. The western finance ministers’ joint reports are prepared by the finance ministry in each province.” The same official also expressed the desire to extend the process of provincial-territorial agreements into the federal-provincial-territorial realm, saying, “But we have not been able to translate this to the federal-provincial-territorial level. A joint cooperative approach would be an effective tool.” Another official expressed the view that working in federal-­provincial-territorial forums was not as good as working in provincial-territorial forums, because at provincial-territorial meetings, “[w]e have conference calls, identifying research areas and dividing up the research load and tasks. When we go to federal-provincial meetings it is cordial but we just don’t do the same work ... when the federal government is added to the mix.” When the levels of government can work collaboratively, the result is often an accord or agreement which can be either bilateral or multilateral in nature. But in the finance realm, the proclivity of the federal government to act unilaterally often undermined IPC by alienating potential partners from the other level of government.



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As one official complained in 2004, “Unilateral federal encroachment is a big inhibitor to IPC. The feds had some successes, but it weakened the federal-provincial-territorial relationship. There has been a marked decline in federal-provincial-territorial officials’ ­relationships over the past ten years. Most provinces see the feds as having a vital role in the success of the federation regarding transfers and funding for services. But supports have been questioned since the 1990s. Some provinces say, just ask for tax-point transfers and be done with it. This led to the fiscal imbalance question ad nauseam. Support for the feds deteriorates without transfers.” This official lamented, “What a change there has been in the past ten years – frustrating drastic change.” While there was near-unanimity among provincial and territorial finance officials that the federal government was a major problem in terms of IPC due to its attitude and unilateralism, a few provincial officials excused the federal government for its behaviour. For instance, one Alberta official said, “The feds do get unfair criticism for some actions. There is often an automatic reaction that the feds are bad. But that is not always true.” Commenting upon an advertising campaign organized by the provincial and territorial governments to convince the public that the federal government no longer paid its fair share for health care, the official noted, “For example, the Premiers’ Health Council ads claimed the feds paid only 16% of health care costs compared to 50% in the past. But this was unfair comparison ... Finance came up with the 16% figure and told ministers it was not fair to compare it to the 50% figure. But they did compare anyway. It was like poking the feds with a stick. But the provinces don’t sit at the federal cabinet table when the dollars are being doled out, so we have to use the media.” However, an Ontario official did concede, “We do get a lot of information from the federal government, and we do exchange data.” An Eastern provincial official went so far as to say, “There is greater capacity as the feds desire greater visibility and a greater number of programs. There is support for a strong federal government among most provinces.” A federal official observed, “The Atlantic Provinces are generally more amenable to their federal counterparts, while others are less worried about their relationship with the feds.” There were many positive comments made, particularly by finance and other central agency officials, on the fiscal success of the early

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2000s Health Accords and child tax credit agreements associated with the National Child Benefit (NCB) agreements. In 2005, one finance official said about the latter, “The NCB is an example of high IPC. Our minister, who was the minister of social services, refers to this as cooperative.” S/he added, however, “But there are not many recent examples [of cooperation] from the last two to three years on the federal-provincial front.” The Social Union Framework Act had potentially important implications for fiscal federalism. Among its provisions were general principles proscribing the use of the federal spending power in areas of provincial jurisdiction. But as we noted in chapter 2, the impact of SUFA was negligible in general and specifically in finance. One official said, “Some agreements are fairly hollow, for example SUFA. I was not impressed.” A Quebec official recalled that “Quebec was against the dispute resolution mechanism in SUFA because the issues are in Quebec’s constitutional jurisdiction. We don’t want a third party interfering. We do not want to be at the mercy of political dynamics, so we talk and talk. This is inefficient and frustrating.” The capacity to reach accords and agreements was often inhibited by a single-minded focus on money, according to an official who suggested in 2004, “Today’s tensions are always over money. The feds are accused of causing the provinces fiscal problems, causing a ‘fiscal imbalance’ ... Finance would be happy to see light at the end of the financial abyss. As long as money is an issue, there is no attention turned to other things. As long as officials know they’ll get the dollars they are not concerned with what they will do with [them]. Money is discussed first, and everything else falls away. Money occupies the pre-eminent place in discussions. We need some attention to what we buy for the money we spend, i.e. substance needs some work. When David Dodge was the deputy minister, documents actually did say something; but all you hear about now is money.” The difficulty of achieving agreements in this atmosphere was evident in the comment that “nothing would make the Finance Minister happier than progress in policy areas like health, if the health ministry would just get on with it. As long as finance is the central issue they never get to the policy. The provinces balk and only sign on to substance if they think they are getting money. What are you going to do with it? Provinces want things as ‘stringless’ as possible.”



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International Institutions The overarching international context of federal fiscal relations involved the trend toward trade liberalization in the context of globalization, the immediacy of international fiscal and monetary issues for the domestic national and sub-national economies, and the position of Canada as an open, trading economy. However, few finance officials commented on any of these factors as having an impact on IPC. To the extent that comments were made, they were reflective of the official who said simply, “IPC is being changed by globalization.” This official also made the startling comment that in the face of rapid change brought about by globalization, “the analyst’s job is to make it up as you go along.” S/he moderated this statement, though, by explaining, “But it is not just ad hoc. Experience and knowledge and background come into play.” Some officials referred explicitly to the influence of the United States. Said one, “A big international factor is the US economy. [Just] keeping up with the tax and competitiveness issue is huge.” Interestingly, one provincial official distinguished between the impact of globalization on the national economy and on provincial economies, saying, “Globalization is not felt at the provincial level. It may impact on the federal system, but its impact is indirect on the provinces – globalization is not an issue. NAFTA has not affected us. We are not involved and not consulted on the softwood lumber issue, etc. Tax incentives might have to be considered illegal under NAFTA. But this is on the periphery.” This official did note international drivers, saying, “Free trade is a driving issue, as is Kyoto; more issues in health are coming into play, for instance patenting genomes and stem cell research.” International events did play a very significant role in the C ­ hrétien government’s decision to pursue deficit reduction in the 1995 budget. In 1994 there was a severe currency crisis with the Mexican peso, and in the same year, the Wall Street Journal referred to Canada as a “banana republic,” and the credit-rating agency Moody’s announced it was reviewing Canada’s credit rating in early 1995. These events caused the Canadian dollar to fall and interest rates to rise. Interestingly, given the contentious politics around finance issues, one provincial official opined in 2004, “But overall things are not so bad. We had a visit from Indian government officials

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regarding ­equalization. They want to adopt the Canadian model. Other countries are impressed with it.”

ACTORS Political and Administrative Actors The pre-eminence of finance ministers in intergovernmental ­relations alongside first ministers and the Canadian tendency for a strong executive shows up at both the federal and provincial levels, “[a]s finance ministers receive an increasingly receptive hearing from their first ministers and cabinet colleagues in the face of budgetary and competitive challenges” (Graeffe 2000, 5). Even (or perhaps especially) in periods of economic decline, finance ministries have been strong actors, but the rise of debt and deficit politics in the 1980s and 1990s certainly helped reassert the traditionally powerful role of these central agencies. An indication of this pre-eminent position in the galaxy of power in Ottawa was provided by Jean Chrétien who once said he could “not allow any light to show between his minister of Finance and himself” (cited in Savoie 1999, 156). The character and persona of individual political actors can have an important bearing on the IPC of fiscal federalism. One official pointed out, “The process of change is defined by the politicians and officials, with officials’ committees working on the technical aspects. Substantive change is driven by the political level, but the relationship of the actors is important.” During the period of this study, Martin’s occupation of the federal finance minister’s chair inspired a certain reaction in officials who had to coordinate fiscal issues with the federal government. One official said in 2003, “Finance is unique in that the federal finance minister has an imperial view of the world.” Said another, “Martin is impressive, but dogmatic. Relationships will hopefully improve, but at the highest levels it is a royal pissing contest.” Another official reported that “Martin’s arrogant attitude was a problem. As PM, things do not look positive for federal-provincial relations. His typical view as finance minister was [to] just say no to requests for money. He views the provinces as irrelevant. He is more concerned with the World Bank and International Monetary Fund. It is clear that when we got big chunks of money it was Chrétien, not Martin.”



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Martin drew the ire of many provincial and territorial officials who blamed him for the poisonous atmosphere that prevailed in ­federal-provincial-territorial fiscal relations for many years. Speaking of the finance sectoral council as an agent of IPC, one official ­complained, “Finance is different from other sectoral councils. Meetings are at the whim of the federal finance minister who is the sole chair and sets the agenda. The provinces have pushed for change. Martin has had a change of heart as prime minister and is now willing to work with the provinces. But we went almost two years without any federal-provincial-territorial finance ministers meetings because Martin would call a meeting and just get yelled at.” Another official suggested, “Meetings are good for building relationships. But Martin only held one or two finance ministers’ meetings per year.” When the provincial and territorial governments sought greater input and control of meetings, they were rebuffed. Explained one official, “Our opening gambit was to suggest the provinces chair or co-chair the finance meetings, but Martin was the worst [federal finance minister] for ignoring the provinces. One time we talked about meeting in Ottawa and having an empty chair for Martin.” An Eastern official said in 2003, “There are barriers to IPC – like no co-chairs in finance committees. There was a push for co-chairs five years ago. The feds control the agenda, and provinces do not have an equal say or role. Martin’s attitude was ‘why should I call meetings when everyone is just going to beat up on me?’” Having the federal government set the agenda for meetings often meant provincial-territorial concerns were well down the list according to an official who pointed out, “We want to talk about the CHST but it is always last on the agenda just as people are leaving to catch their planes. The federal government can then tell the press it listened to the provinces. The federal government is totally unresponsive and maintains no interest in talking about the CHST.” Moreover, it was suggested that, “Only officials from the federal department of finance take the minutes at the meetings, and then they do not always share the minutes.” A federal official, however, took the view that “these tensions are always over money. The provinces blame the feds for their financial problems. There is now a debate over the fiscal balance/imbalance, and over where officials get their numbers, for example they say the federal governments’ fourteen-cent argument [of health care funding] is a crock, but it

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is a simple story, effectively communicated. However, the provinces do not care what the truth is about the money. They did not like the way of doing business.” Another important factor shaping the views of finance officials was their sense of professional non-partisanship having been coloured by the politicization of their work. This brought to mind the politics-administration dichotomy and the level of power and influence exercised by officials in what is, after all, the most significant central agency in government. However, the p ­ olitics-administrative dichotomy, as the theoretical explanation for the relationship between politicians and public servants – with the former as policymaker and the latter as policy implementer – had little resonance for finance officials where IPC was concerned. As one said, “Most policy is driven by the bureaucracy. Most ministers don’t step in. They lack the ability to do so. The policy committees of cabinet have support staff who advise ministers and the ministers need that support as well as the concurrence of their officials. They [the politicians] are the bosses, but they stay out of policy-making. We have a good working relationship with our ministers.” This official went on to say, “If a deputy minister thinks an initiative is a good thing, the minister leaves it with him. There is little political interference.” Although another noted, “When it is closer to a political event like an election, ministers are involved more.” A western official said, “To improve IPC we need to get a common understanding, and better working groups, and try to de-politicize the analytical work,” citing the provincial-territorial advertising campaign which took the federal government to task for its cutbacks to spending in health care. “I have reservations about the provincial health care ad campaign, ­ e-politicize too.” for instance. Some federal officials would want to d Officials noted that when political actors get involved, it can have a beneficial or deleterious impact. Said one official, “Political posturing has an effect on the officials’ relationships. Joint federal-provincial-territorial successes are difficult. It is more difficult to get work done due to political fighting, but there is a difficult balance because political fighting does create some successes too.” When politics intrudes on federal-provincial-territorial relations, some officials pointed out that dissatisfied jurisdictions can be inspired to seek their own solutions to fiscal issues. Thus, for example, an Alberta official pointed out, “Alberta has another issue, namely the ‘firewall exercise.’ This is regarding Alberta’s place in the ­Constitution.



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­ embers of the legislative assembly have been soliciting views on M our own personal income tax, our own police force, and our own pension plan. This could get in the way of the timing of Alberta signing a new tax collection agreement.” As well, ministerial continuity was commented upon as a positive factor enhancing IPC. A federal official noted, “Canadian finance ministers tend to stick around a long time [and] there is change because of common goals regardless of ideology. There is probably less turnover of finance officials ... We have had a long-serving and knowledgeable minister [Martin] which is a blessing ... [however,] it is not a club. For the provinces there are fourteen jurisdictions with someone changing all the time due to elections. But [even there], there seems to be less coming and going than in other ministries.” Regarding the importance of finance ministers, it is interesting to note that three former finance ministers from the 1990s went on to become premiers, three were runners-up in leadership campaigns, and one became prime minister. The rate of turnover of bureaucratic officials was also regarded as impeding IPC. One commented, “There is always a high level of bureaucratic turnover. Officials’ shelf life is about two to three years. We are most successful in areas with a long-range view with incremental change over five years.” Said another official in 2003, “There is only a small group of people involved in federal-provincialterritorial relations in finance. There are different levels of capacity in different provinces. Clearly some provinces are stronger than others; smaller provinces have smaller resources. It also depends on individuals, and some have more human resources than others. All it takes is one person to leave, for example the chief person in British Columbia left, and then it becomes difficult.” Finance officials, like those in the line departments we interviewed, noted the process-oriented function of officials in intergovernmental relations with whom they had dealings. One official asked rhetorically, “Have you ever sat in on one of their conference calls? It is all process. The line departments are doing all the stuff while intergovernmental people organize and coordinate.” Explained one official, “The role of intergovernmental agency offices is different from departmental intergovernmental roles. The role of intergovernmental agency offices is evolving; there is a whole new dynamic. It is the broad versus the technical. The premier’s office is tied into intergovernmental relations where broad framework thinkers g­ enerate

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a lot of paper, but are not moving forward. Papers containing a lot of wiggle room are being generated – some of the best arguments are drafted on the backs of envelopes. There is a p ­ rocess-oriented approach.” To the extent that intergovernmental officials do get involved in sectoral issues, according to one finance official, the result is less than satisfactory. “Intergovernmental drills down too far into sectoral issues. They lack the background and knowledge of the sectoral actors who are being squeezed out. Finance feels it too. Things are happening which we are not aware of. Our successes are mainly at the technical table, more so than at the other level. But this creates more work as we must explain things to intergovernmental people. A lot of resources are dedicated to intergovernmental education rather than on our technical issues which really make money. The amount of materials and briefings has increased.” Senior finance officials are typically caught in a politically-charged atmosphere, but must retain a detached, non-partisan professionalism to do their jobs. Finding a balance between these conflicting impulses was a challenge upon which many officials commented, particularly in the heated atmosphere of intergovernmental relations. The prominent role of first ministers in fiscal federalism sometimes led to frustration among officials. They live in a high-pressure world, particularly when first ministers meet. One official explained, “The process of executive federalism is frustrating. The premiers go to lunch and give us the night to come up with something.” Adding questions of money only intensifies the situation. Despite the challenges posed by working under these conditions and trying to find a balance, one federal official reported, “Relations [between federal and provincial finance officials] were always professional.” This official went on to say, “My work was in a political climate, but ninety percent of the work of officials is resoundingly professional, putting forward the case of the government. You must know the political environment, and must put forward the case of your government, but you can look at other issues too – educating ministers and trying to help ministers understand, for example, documents on fiscal federalism, and then bringing about consensus.” However, “We cannot do some things when there is a federal-provincial tussle and you cannot get agreement, for example on the fiscal imbalance – and we all know why. You cannot get agreement in an arena where there are hard feelings or distrust or dishonesty.”



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Some officials expressed the view that their committee work was more effective in the past. One official noted in 2003, “At the assistant deputy minister and deputy minister level, committee meetings used to be more academic in a way. They looked at other issues and involved information sharing. Committee meetings are now just a process to inform the next meetings. There used to be subcommittees doing work and research; there used to be more substance.”­ S/he gave the example of one of the sectoral subcommittees, saying, “The Fiscal Arrangements Committee of Assistant Deputy Ministers meets one to two times per year. It seems to be preparatory before political meetings. It is more about process and less about substance. It is not a working group.” Another official drew some interesting comparisons on the differences between the federal and smaller provincial public services, while also acknowledging the presumptive attitude of central agency officials in both jurisdictions. “There is also a question of culture. The federal finance ministry has an elitist attitude. The culture change from the federal to the Alberta government was minimal in terms of the way you worked and the standards and attitudes toward other government departments – we are all arrogant. That is part of being a central agency. But there is a big difference in the nature of the organizations in Ottawa and Alberta. It is very hierarchical in Ottawa. You only saw the minister or deputy minister once a year. Here I walk down the hall and knock on the door. There is a flatter, more fluid organization in Alberta. The feds have many layers of seniority. This might be good for your career path but it could be changed in the federal government. Give people trust and authority. I have the flexibility to make this possible here.” The Public Finance officials, not surprisingly, expressed a mixed set of views on the advisability of public engagement and, consequently, on the extent to which IPC is enhanced by public involvement in fiscal federalism. The role of the public in finance-related issues has been growing in recent years. For instance, the budget process, once the most closed of exercises, has been opened to a range of public input in pre-budget consultation at the federal level and in many provincial and territorial governments as well. Said one federal official,

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­ Government in Canada is open. Public servants are open. Before “ each budget there is consultation. It takes various forms. Martin used the Finance Committee in Parliament for his budget consultations with an open door policy. Canada has amazingly open doors. I cannot imagine a government more open than Canada. Anyone who wants to see me can.” This official insisted there were a number of formalized mechanisms in place now to facilitate public consultations, suggesting, “There are budget consultations, the Standing Committee of Parliament. There is a process which varies by ministry.” In any event, another official argued in 2003 that failure to consult the public was no longer really an option. “Things have evolved. You cannot take an issue to cabinet now without the role of the public being taken into account. For example, web-based consultations are now being worked out in the federal Department of Finance. You have to gauge public reaction. How does this happen? With consultation in some areas, and focus groups.” Given the prominent role of health issues in the period of our study, and their definition as a fiscal problem, it is not surprising that finance officials drew on this issue as an example of where public engagement has become significant. Said one official, “People have voted with their voices on the health care issue. We must respect the democratic process.” A contrary view emerged among some officials who argued that the direct involvement of finance officials with intergovernmental responsibilities with the public is limited. Explained an official, “In terms of finance and intergovernmental relations, there is no public participation, except within each province’s jurisdiction. For example in health care there are lobby groups on side pushing the same argument, which is helpful. The health minister is in touch with these groups. But we don’t have anything to engage groups in finance regarding fiscal arrangements. We get public participation from the minister who asks for participation on the budget, but we do not have public involvement in the intergovernmental finance sector.” In 2003 another official said, “Our work is mostly behind closed doors but this may change. There is more public awareness. Secrecy could change, for example, regarding our papers on equalization. At the last premiers’ conference the provinces got a position paper two weeks in advance, but there was no phone number on it so we couldn’t reply to anyone. We could improve the process by opening it up to the public. There is a lack of consultation



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and sharing of information.” In any event, said another official, “the approach of the federal government to policy development with the provinces tends to be secretive.” Another official explained, “We have no operational or public side. We are almost purely [an internal] policy group.” Whether the public should or should not be more engaged, one official noted that it expects to be, and that it is better equipped to be. “The nature of issues today requires closer, more thoughtful coordination. Canadians’ expectations have increased. Even though they don’t care who does what, they want something done. Canadians were more content in the past to let governments get on with tasks. This is no longer true. The public and interest groups are more sophisticated now. An example is the Canada Pension Plan consultations across Canada.” These expectations were driving some measure of change in intergovernmental relations, according to the official who said, “A strategy for interprovincial cooperation is needed because people are tired of governments fighting. The pressure is on politicians to collaborate. They need a better impression for the public.” On the other hand, some officials argued that Canadians are not all that engaged in the political process and, moreover, do not particularly want to be. As argued by one official, “the public has a role and some interaction on various files, but a large percentage does not want to be educated. Some are educated; some are interested. But besieging the public with information on an issue is not helpful. For example, look at the fiscal imbalance.” Another said in 2004, “Policy is increasingly complex and difficult to communicate and explain; for example, electrical deregulation. The path Ontario chose was dangerous in that it was sheltered from market prices so investors were reluctant to invest. It is difficult to give guarantees on implementation to the public in the age of ten-second sound bites. Fiscal, energy, and agriculture policy, all are more complex.” For this same official, the media does a poor job of explaining issues. “The media do not do justice to policy because they spin it and it’s gone. Real opinion is on PBS. For example interest in an Alberta pension plan is hard to explain to people.” Another official claimed, “The public’s role has more to do with the politicians, less with the technical issues. They are not prepared and don’t understand the issues. We had a slew of consultations with the public which culminated in a bunch of reports, but the outcomes were not clear. We did not get

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good advice because the public lacks knowledge. And the academic experts do not have the technical knowledge and lack appreciation of the nuts and bolts of issues.” At least one official recognized lack of public sophistication might not be unrelated to lack of efficacy, saying, “The public does not have a hunger to participate if the government is not seen to respond.” The limitations of public consultations associated with executive decision-making were identified by the official who said, “You can consult, but at some point, decisions have to be made. At some point you have to have more federal-provincial decisions. Consultations can happen beforehand.” Reflecting the culture of executive federalism, this official also said, “If decisions have to be made, especially federal-provincial, you have to get together in an environment with nobody watching. That stage of the process has to occur. But people can be brought in beforehand; you still need to meet with them.” The role of interest groups (rather than the generic “public”) was mentioned by several officials. One said, “Interest groups have to be heard. They are closest to the action. Governments must determine their priorities with the help of interest groups. For example health forums were held prior to the [2003] Health Accord. They were by invitation only, but they were pretty broad, though some interests may have slipped through the cracks.” But that same official also conceded that in his/her government, “finance is not involved in interest group consultations. It is more the sectoral department’s concern ... Interest groups are not so much oriented toward finance.” Provincial and territorial officials frequently complained in interviews that federal officials betray a condescending attitude toward them by lumping them in with interest groups rather than treating them as sovereign equals. Provincial and territorial officials also expressed the concern that national interest groups often aligned themselves with the federal government, although provinces sometimes deliberately align with interest groups against the federal government. As one Alberta official commented, “We sometimes are aligned with a sector against Ottawa but sometimes not. At the political level, the [Alberta] government is more aligned with Alberta industry than with the federal government.” Interest groups were alternately lauded for their contributions and vilified for their shortcomings. Said an official, “Regular stakeholder interests are increasingly sophisticated. You have to know your stakeholders. In my



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previous job [in another ministry], you could not move without taking into account vocal stakeholders. They are very smart.” But another official insisted, “Stakeholders bring work, and inform discussions, but have a narrow focus.”

Relations The formal intergovernmental relations between governments in the finance realm involve the institutions of the system and the political relations therein. Finance officials definitely expressed the view that the relations between the federal finance department and provincial and territorial finance departments were de facto if not de jure hierarchical. Similarly, the relations between the political and administrative arms of the system as well as between this powerful central agency and line departments were also perceived as hierarchical. As for the informal set of relationships between the individuals involved in intergovernmental finance positions, officials noted the ways in which good or bad interpersonal relationships could enhance or impede IPC. Good formal relations and informal relationships are a cornerstone of federal-provincial-territorial interactions. When they are lacking, IPC suffers. In finance, it appears, there was a lot of suffering in the period of our study. This message was reiterated by finance officials repeatedly and, indeed, by officials in all the sectors we interviewed. As noted above, Paul Martin occupied the federal finance minister position for most of the period of this study. Political relations between him and his provincial-territorial counterparts started out warmly enough in the period from 1993 to 1996. One of the few former finance ministers to write memoirs of her experience reported, “It’s hard not to like Paul Martin, even when he is cutting your transfer payments. Besides his obvious charm, he always made provincial finance ministers feel as if they were important players in federal decision making” (MacKinnon 2003, 155). As Martin’s position evolved through 1994 and 1995, it became evident that drastic cuts were coming to transfer payments. As an indication of storm clouds on the horizon, by 1994, the western provinces had formed their own unofficial finance ministers’ club, meeting annually and before each national meeting to strategize together. When the storm broke in the 1995 federal budget, it catalyzed a broader and stronger set of ­provincial-territorial finance minister relations. The same ­former

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finance minister cited above suggested, “If there was one word to describe the reaction to the 1995 budget in Saskatchewan and many other provinces it was the Regina newspaper headline ‘DEVASTATED’” (MacKinnon 2003, 215). As MacKinnon noted, “Martin’s budget was a unifying force among provincial finance ministers. Gone were the regional divisions so prominent in debates about the tobacco tax and the GST. Finance ministers from all regions and all political ­parties united in their anger at the budget’s unfairness” (MacKinnon 2003, 205). The disputatious atmosphere prevailing in federalprovincial-territorial finance relations in the period of this study could not, apparently, be overcome with existing IPC. This debate was also part of a broader struggle over centralization versus decentralization. The federal government argued it was granting the decentralization that the provinces and territories had long been asking for. The provinces and territories, for their part, were angry that this decentralization was accompanied by such a severe cutback in overall funding that their autonomy would continue to be circumscribed – bringing to mind the age-old aphorism, “Be careful what you wish for.” A repeated theme from finance officials was that unilateral federal action created adverse conditions for more collaborative intergovernmental relations. An official said, “[Federal] unilateralism reached an apex with the CHST. The resulting weakened relationship inhibited capacity.” As a consequence, another official noted, in 2003, “provincial-territorial relations have been quite vibrant recently. There is a real community among the provinces and territories. We cooperate on research and messaging to the federal government on what we think is important, like health, CHST, and studies commissioned by the provinces. A lot of studies are coming from interprovincial work.”Another official claimed, “The provincial-­territorial lobby is a major factor now [in federal-provincial-territorial relations]. The federal government has never faced as formidable an opponent. The feds will not stay strong forever. It will deteriorate.” Growing antipathy toward the federal government coupled with closer provincial and territorial relations was commented upon by the official who said in 2003, “Staff relations are good at the interprovincial level. What is stopping federal-provincial relations? I don’t know. We seem to be on different teams. The same kind of relations we have between provinces would be helpful at the federal-provincial level. It used to be different.”



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One official, drawing on the more uplifting aspects of public service, noted that “the [federal] professional public service of Canada has a huge competitive advantage. The provinces have come to this more lately and vary in their capacity. Non-partisan bureaucracies help to carry on discussions. It allows for a professional dialogue and you understand the rules of the game and how far you can go.” A few admitted, however, that relations soured when issues became very ‘hot’ politically. As an official indicated in 2003, “overall the political fighting influences and trickles down to the officials’ level.” Another official said, “I am never sure if the officials are being untruthful or just following the orders of their political masters.” In any case politics often intrudes: “What we lack is a common view of Canada. We have an asymmetry of views. So we talk and talk. This is inefficient and frustrating. It is a process of purely political dynamics.” On the role of finance as a central agency, one provincial finance official said, “On the transfers side we do internal support work with other ministers, the premier’s office, the cabinet office, intergovernmental relations, health, and other departments. We are fairly close to the centre. We act as a coordinating point. We act as a control for the budget as part of the federal-provincial agreement process. We want any plans, for example in health, to fit the government’s fiscal plan. We play a co-operative role with intergovernmental. We are both relatively small departments (intergovernmental and our unit in finance). Intergovernmental handles strategic [intergovernmental] positioning, and we handle the financial side.” The pull of the centre was commented upon by the official who said, “There is a constant need to go back to the centre – the premier’s office and cabinet office to a lesser extent – for approvals. These offices are playing a larger role. They have a top-down approach versus a negotiating approach with the other provinces. Building consensus with other provinces is difficult with this top-down approach.” The tension between finance departments and line departments within the same government was also noted. One Quebec official said, “There is an increased struggle between line departments and finance. This leads to bizarre behaviour. Line departments know there is money in Ottawa so they seek dollars from the feds, knowing the big picture regarding the sovereignist government in Quebec. But they run to Ottawa anyway. They do an end run around the Quebec government to achieve their priorities.” Other officials

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reported the practice of line department officials bypassing their own government’s finance department to approach their federal government counterparts directly to get a share of federal funding for certain programs. One official argued that the role of finance in intergovernmental relations leads line department to “go to the feds, for example for health equipment funding or money for research.” An eastern finance official noted in 2003, “Relations between finance and the sectors are pretty good in New Brunswick. We are respected by the sectors. For example, with health, we had one interpretation and health had another one, so intergovernmental played a coordinating role. But if an issue is financial, finance usually wins over line departments.” An Ontario official noted the role finance plays with regard to line departments by saying, “Minor transfers are handled by line departments. We get involved with hot issues or cabinet submissions. Our position with line departments is ‘no don’t do that’ as it costs money! Shared cost programs cost money and have budget implications. Our role is mostly to say no to line departments wanting new cost-sharing programs with the federal government. Those [shared cost] fifty cents must still somehow be found.” A Quebec official noted in 2003 the increased involvement of finance in intergovernmental relations as well as in line departments, suggesting, “Finance people would not be at [sectoral] meetings ten years ago. There was more discussion in line departments. Recently finance has been brought in to discussions.” This works both ways, as the same official commented, “The fiscal imbalance debate has led to more discussions with line departments. Every line department wants to make a contribution to the debate about the f­iscal imbalance.” Another official suggested, in 2004,“Where relations between officials are concerned, some line agencies get frustrated with finance. We are the ‘no, no, no’ ministry. Some departments in general get along with finance better, for example health, where there is a good working relationship. The environment department can be a maverick ... It is often convinced of the rightness of its positions.” Relations between officials in central agencies and line departments were often described by finance officials as smooth and cordial – in contrast to the view from many line officials outside finance. One eastern finance official said, “We do not get any flack over our involvement. We are a small province. We all work well together. There is no competition.” Another official from a larger province claimed, “We have very good relations which are ­coordinated by



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intergovernmental relations. Finance has a large role about what gets said and done. We try not to play a complete control role, but we do have to sometimes. Our relationship is good at the ministerial and officials’ level.” Another official suggested, “There is consultation with line departments for example in health, and children’s services over the NCB. They have no reluctance to involve finance. Finance also works closely with intergovernmental affairs, including bringing intergovernmental people in to finance meetings. Personality factors in too.” The same official noted, “We have weekly deputy minister breakfast meetings, and there is movement between departments.” One Western official commented on relations between finance and intergovernmental relations by suggesting, “I deal with our International and Intergovernmental Relations [IIR] person. He is often the hub for intergovernmental dealings and brings in other departments. We have bits of fights with IIR, but they have to deal with Ottawa more than we do in finance. Finance does have disputes with IIR sometimes. They read the Ottawa tea leaves differently than us. They see nefarious plots – whereas finance tries to take things from Ottawa more at face value. I’d start out dealing with Ottawa at a moderate level. Then after a while I’d become much more radical.” One official noted, “We could improve relations by having a more clearly defined role for intergovernmental. They must see that the technical expertise resides in the line departments. Intergovernmental gets overwhelmed by material. It should play a more broad technical role. Intergovernmental agencies do not have the appropriate background. They need to define all roles more clearly.” But there was also the process question of relations with other departments. Said the same official, “We do a good job of jointly identifying priorities in our province, but more work is generated because we have to brief two groups – intergovernmental agencies and the line departments. There is a dichotomy between the broad perspective and the technical perspective. Intergovernmental is successful at the broad role, but it has an oversimplified understanding of the technical issues which leads to damage control or the technical issues getting all the way to the premier’s table because intergovernmental gets ahold of it when they should not be in the technical areas at all. Getting the corporate picture should be their role.” The deterioration in formal relations noted above caused a rupture in informal relationships between officials. Several provincial and territorial officials complained about the presumptuous attitude

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of the federal Department of Finance and the difficulty this caused in maintaining good informal relationships, and therefore IPC. An official remembered, “We have had to deal with unusual characters over the years from the federal government. For example a former deputy minister from intergovernmental relations used the phrase ‘you people’ when referring to the provinces. There were people I could not respect. I worked for many years in finance in Ottawa. I was amazed at who got promoted there. They lacked diplomacy and basic interpersonal skills. One talked about the Fiscal Arrangements Committee as dysfunctional. A former comptroller sat through one meeting and said never again.” This official also said, “Some federal attitudes really infuriate me, for example the general director’s attitude in response to moderate proposals is ‘Who do you think you are? You can’t tell me what to do.’ Personalities do matter.” Concluded one official, to improve IPC “new mechanisms are not needed; we need a new mindset.” Another called on the federal politicians to work toward improved relations, saying, “The public is tired of intergovernmental bickering. The players at the top must build relationships. You don’t build relationships through the officials at the bottom. You need to create good joint programs. The feds have closed files they should open up, for example health funding and equalization. They need to make them more joint efforts. Fiscal issues and personal relationships are important.” This is not to suggest that the provinces and territories are all necessarily in sync. A Quebec official observed, “The idea of a premier’s consensus is a bit overdrawn. Interprovincial collaboration is a lot of work and finance is not as happy with this as intergovernmental relations is. The bureaucratic protocol is frustrating. Intergovernmental relations creates an industry. We need to informally pursue our objectives through good personal relationships – even with federal bureaucrats.” Another finance official complained that “every time a document is circulated among the provinces, it somehow ends up in the feds’ hands.” Therefore, trust across levels of government as well as within the provincial-territorial level is an important issue. Finally, personal contacts and networks also facilitate relationships. As one official explained in 2003, “We work with some provinces more than others. Working well with some provinces depends on the people involved. I worked in Manitoba and have a friend there who went to British Columbia. But Ontario is unique in that



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it has no one else to turn to. Maybe Alberta sometimes, which can be close in terms of policy interests, but not the other provinces.” Another official said, “We need more willingness to listen and work with provinces. At the officials’ level we can park some of the constitutional jurisdictional things and look at national issues. A key issue is good government by qualified people. Look at Enron. Trust is key. You must tell when you make a mistake.”

WHAT THE OFFICIALS DID

NOT

SAY

Apart from the issues raised above, there were a few factors which might have an effect on IPC but about which the finance officials said little or nothing. For instance, the courts have played an important role in fiscal federalism by, for example, upholding the spending power as a legitimate tool in the federal government’s arsenal. But a gradual tendency to use the courts less and less in intergovernmental disputes has been evident in the last thirty years. Not surprisingly, then, the impact of the courts on IPC in the finance realm went virtually unmentioned by finance officials. They did not perceive the judicial branch as having a significant role in affecting IPC and their work. An issue of some concern to those worried about the quality of Canadian democracy is the extent of control over the public purse by the elected representatives of the people in Parliament. Given the executive-dominated nature of our political system, this issue has strong resonance. The role of Parliament is limited. While at the federal level the Parliamentary Standing Committee on National Finance has a fairly high profile, it is dominated by members of a majority governing party (during the study period, the Liberal party) and, given the strength of party discipline, has therefore typically reported from a perspective favourable to the government. Although the Committee has a long pedigree stretching back to 1919 and its mandate includes the investigation of government spending, it and Parliament in general were not seen as playing a significant role in IPC by finance officials. Indeed virtually the only mention of Parliament by finance officials in our interviews concerned the extent to which the Committee on National Finance made public participation in the deliberations of fiscal federalism possible (discussed above). And even here, this was only mentioned by a single official. The Senate and the provincial and territorial legislatures were

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similarly left out of the story by finance officials. Clearly, Parliament is not a factor in the minds of finance officials as far as IPC is concerned. The dearth of commentary about Parliament by officials reflects the marginalized role this institution has historically played in intergovernmental relations generally. As was the case with the courts and Parliament, political parties received little comment from finance officials as a factor affecting IPC. One official suggested in 2003 there was little to distinguish the main federal political parties in any event. “A change in party won’t make that much difference in the relationship with Ottawa and Canada. The three main federal parties hold the same line. The reaction to the [2003] federal budget was the same across all the parties. There is a lack of opposition in Ottawa.” Despite the concerns of academics about the salience of the courts, Parliament, and political parties for Canadian federalism, officials were little inclined to worry about their impact on IPC.

CONCLUSION No less an authority on Canadian federalism than Donald Smiley once wrote, “I have nothing to say about the crucial matter of fiscal federalism – a subject which I once tried to comprehend but which, I am now convinced, is so complicated that one should either cultivate it as a full-time specialty or leave it alone entirely” (Smiley 1987, xi). We have chosen to address it in this study because of the long reach finance officials have in affecting IPC. We hope we have found a compromise between cultivating it full-time and leaving it alone altogether – that is, letting the experts explain it in their own words. Finance officials expressed a variety of viewpoints about the ideas, institutions, actors, and relations detailed in this chapter which enhance and inhibit IPC from their vantage point. One Alberta official summed up the core problems of IPC in this way: “There are three barriers to IPC. First, the number of governments makes it difficult to get agreement. Second, there are competing interests of the various provinces. And third, there is paternalism by the federal government.” An Ontario official expressed a high degree of frustration in 2003: The fiscal imbalance is increasingly an argument. For instance this February we thought we had an agreement. The feds deny



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it. The feds deny there is a fiscal imbalance. There is a lack of sensitivity to the dilemma related to health care funding from a fiscal policy point of view. We see it as a huge problem. We are not down on them – but to say it is not a problem is ridiculous and shows a lack of sensitivity. They do not deliver services. They do not run front-end programs. Even their benefit programs are short-term, for example Employment Insurance. Old age security and pensions are funded, controlled programs. Runaway cost items are not in their reality basket. I find it incredible we cannot crack that exterior. They say increase [provincial] taxes. But this is not a very good solution. To be non-competitive on the tax front is not a good long-term program. The result is we do not work together. They have a lot of capacity with good people, but we seem to be in our two solitudes. This is not a comprehensive list of complaints, but it reflects some key aspects of the attitudes expressed by a number of finance officials for this study. Ideas did not reveal themselves to be of central concern to finance officials, in the sense that the officials operated in a particular climate of ideas, but did not consciously discuss the implications of that climate for IPC. Neoconservative ideas of debts, deficits, and fiscal restraint framed IPC during the early period of our study. Eventually, the federal surplus and the “fiscal imbalance” issues emerged as central and contested ideas. (And later we would see the return to the troubled days.) As officials housed in a powerful central agency used to applying technical-rational solutions to policy problems, finance officials found themselves in the perhaps unaccustomed position of having to deal with the more political nature of the ideas swirling around them. The traditional role of guardians of the public purse animated federal officials who, first, held responsibility for decreasing the federal debts and deficits (which set the federal and provincial officials at odds over “downloading”), and second, held increasing federal surpluses (which set their provincial and territorial counterparts in a debate with them over the new contours of “fiscal federalism”). The resulting ideational climate was tense. Where institutions are concerned, finance officials focused on issues like the constitutional convention of the federal spending power, which was creating considerable tension in the latter part of the study. They also spoke to the significance of the structures of

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f­ iscal federalism and the way in which these facilitated work between the levels of government or – in the case of Martin’s finance minister years – failed to do so. They noted the capacity of these institutions to do good technical work, but also described how they became dysfunctional as fiscal issues increasingly were dragged into intergovernmental policy disputes. The dominance of the federal finance department through its superior institutional resources was frequently commented upon, as was the idea of reforming the basic institutions of fiscal federalism to allow for greater p ­ rovincial-territorial input. These issues were the subject of much rancour and debate. Indeed, the creation of the COF is partly rooted in the disputatious nature of fiscal federalism and resentment over federal ­“unilateralism” during the time of this study, according to officials. In other words, the failure of one set of institutions led to the creation of a new one, although with uneven results for IPC. The realization of accords and agreements in finance was negatively coloured by this climate. As the many comments about Finance Minister Martin indicate, for better or worse, finance ministers are p ­ re-eminent actors in intergovernmental relations alongside first ministers. Finance officials regarded political actors as less than efficacious when it came to IPC, although they regarded themselves as a positive influence overall. Working in a politically-charged atmosphere was not, however, seen as an advantage by finance officials, who disparaged this climate for IPC. They also expressed concern about turnover of senior officials, a factor which complicated the search for good relations and relationships. In addition, while acknowledging the growing importance of the public, finance officials did not see far beyond the traditional view of their issues as being highly technical and necessitating closed, even secretive, deliberations. As far as relations are concerned, many of the observations above indicate the deterioration in this area between federal officials and their counterparts at the other level of government. Formal relations were strained; informal relationships followed suit. Clearly, the overwhelming contextual factor for finance officials was the federal budget of 1995 which set the tone and style of relations for years to follow. On the basis of the officials’ own words, it is reasonable to conclude that IPC in finance suffered from the extent to which this unilateral federal initiative coloured interactions between the two levels of government. As we saw earlier, one provincial official



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expressed this sentiment clearly, claiming in 2004, “The federal government has pulled some breathtaking stunts in the last few years.” Despite the barriers to overall IPC which were remarked on by finance officials across our four factors a federal official pointed out, “IPC is amazingly adaptive to the realities of the day, for example a separatist government in Quebec, or the fair shares fiscal federalism position of Ontario – we got through that – or the equalization status of British Columbia. The ‘have-less/have’ regional balance is always an issue. It is an amazingly adaptive system.” This positive statement provides a reminder of the dual role played by Finance in IPC, as both a sectoral player with a policy making role (in specific economic and fiscal policies) and a central agency oversight role for the finances of the government. In the former role, the IPC may be seen to be high, whereas in the latter role, it may vary from the vantage point of the assessor. As we shall see in chapter 7, some officials saw the early 2000 Health Accords as illustrative of high (fiscal) IPC, while others saw them as illustrating low (policy) IPC. Having looked at the two central agencies of intergovernmental relations and finance, we now turn to a comparison of IPC in three line departments – environment, trade, and health.

5 Environment: High Expectations, Low Deliverables

INTRODUCTION Issues such as climate change, water pollution, biodiversity, and the regulation of toxic chemicals highlight the importance of intergovernmental policy capacity (IPC) in environmental policy. Since the 1960s, federal-provincial-territorial relations and policy agendas related to the environment have evolved amidst the ebb and flow of public attention and political will of various leaders. There is a welldeveloped literature on the history and significance of federalism in this policy area outlining periods of collaboration, disentanglement, and unilateralism in Canada’s environmental union (Harrison 1996; Fafard and Harrison 2000). Indeed Canada’s environmental union can be characterized by a ”blend of cooperation, competition and concurrency” (Bakvis, Baier, and Brown 2009, 208). Comparative studies have revealed “vertical fragmentation” and low levels of policy capacity in this relatively decentralized policy area (Hoberg 1997; Rabe 1999; VanNijnatten 2000; Johns 2000, 2008; Botts and Muldoon 2005) with some variation depending on the specific environmental policy issue. While cooperative relations were partially achieved related to environmental issues such as Great Lakes clean-up, flood control, wetlands mapping, air quality regulations, and acid rain, conflicts emerged in the 1980s related to environmental assessment, regulation of toxic substances, and the growing policy capacity of the provinces. By the 1990s, Ontario, Quebec, Alberta, and British Columbia were noted as “having solid overall capacity,” yet “other provinces, especially those in Atlantic Canada, often looked to the federal Department of Environment for help in terms of both e­ xpertise and



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money” (Doern and Conway 1994, 93). The territories and First Nations had even less policy capacity, except on selected issues and events such as the Berger Inquiry, which focused on the northern MacKenzie Valley gas pipeline controversy in 1978. Overall, during the 1995–2005 period covered by this study, environmental issues remained low on the political agenda, focused mainly on implementing the Canada-Wide Accord on Environmental Harmonization through the Canadian Council of Ministers of the Environment (CCME) and intergovernmental institutional capacity-building outside CCME through the Joint Ministers of Energy and Environment related to climate change and the Kyoto Protocol. In was in this context that officials expressed their opinions about the impact of various political and administrative factors in relation to IPC and environmental policy in Canada. Interviews with intergovernmental specialists in environment ministries during the ­2001–05 period indicate that a variety of factors have contributed to the slow progress in developing IPC to address environmental problems. Although the other policy areas covered in this study also received their fair share of budget cuts during the 1990s, virtually every official interviewed commented on the comparative scale of cuts to environmental policy efforts and the significance of these cuts in terms of IPC. Officials highlighted how progress continued on some fronts and engagement was occurring on some issues like climate change, yet almost all noted declines of IPC between 1995 and 2005. Not surprisingly, there were various opinions expressed by officials on the political and administrative factors that were determinants of IPC in this policy sector.

IDEAS Developments in this policy area during the 1995–2005 period of this study occurred amidst some very important ideational shifts. By the 1990s all jurisdictions in Canada had established command and control regulatory regimes to deal with issues such as environmental assessment, toxic pollutants, and municipal and industrial air and water pollution. In the early 1990s, environmental ideas were very salient to Canadians and environmental issues were on the political agenda at all levels of government. This was reflected in legislative and policy activity such as the federal government’s Canadian Environmental Protection Act (CEPA) in 1988, Green Plan in 1990,

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and Canadian Environmental Assessment Act (CEAA) in 1992. Provinces and territories were also engaged in new legislation and policy development related to environmental protection, as the public had a heightened awareness of environmental concepts. Ideas such as the ecosystem approach, integrated environmental management, and multi-stakeholder approaches were central to environmental policy discourse and provided a policy logic for multiple jurisdictions to work together to address the collective action dilemmas that environmental problems posed. However, despite calls for more collaborative approaches from environmental groups and policy scholars, there were also ideas percolating related to the seemingly inevitable trade-off between environment and economy. The ideas and discourse related to environmental protection began to change significantly after the 1992 UN Brundtland Commission Report. Sustainable development was increasingly framed in political ideas about the role of the state in the economy more broadly, ideas about how best to address environmental problems, critiques about command and control approaches, and the appeal of marketbased policy instruments. These ideas were parallelled by economic and neoconservative ideas related to debt and deficit reduction and international competitiveness. In the mid-to-late 1990s, the salience of environmental ideas declined and environmental issues fell off the political agendas of all governments in Canada. There were significant cuts to environmental budgets across virtually all jurisdictions, and given the fiscal condition of many governments, the discourse in environmental policy shifted to deregulation and disentanglement to ­ eliminate inter­ governmental duplication. The preoccupation with deficit reduction and deregulation in the late 1990s resulted in the targeting of the environmental bureaucracy federally and in many provinces. There was a shift toward the idea that market-based approaches and instruments were better suited to address environmental problems, given the perceived lack of results from environmental regulation. At the same time, the administrative ideas associated with New ­Public Management (NPM) resulted in the application of business practices and values in this policy area. Partnerships, contracting out, alter­ native service delivery, and deregulation were all ideas which had appeal to federal and provincial policy makers in a broader effort to downsize environmental bureaucracies and adopt market-based policy instruments.



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Many governments were focused on internal reductions and restructuring of their environmental bureaucracies, and not on external relations with other governments. Environment Canada increasingly became an interdependent and networked institution due to four main factors: the pressures of NPM and public sector reform; the imperatives of budget and personnel cuts; the emphasis on the innovation agenda federally; and the need to institutionalize the sustainable development paradigm (Doern 2002). Similar ideas resulted in similar policy instrument shifts and institutional changes in provincial environment ministries. These ideas related to broader reform of the administrative state were tempered somewhat in the 2000–05 period. Events like water pollution in Walkerton, Ontario and North Battleford, Saskatchewan and the fact that many jurisdictions began to record budget surpluses caused policy makers to question the hegemony of these ideas, the state of the environment, and the faith in market-based ideas by the end of the study period. As evident in the following sections of this chapter, these ideational shifts had important implications for IPC and environmental policy. Although most officials did not specifically identify a list of ideas, many referred to the “climate” or “context” which contributed to cutbacks, downsizing and deregulation and the impact this had on IPC. These ideas made their way into interviews with officials from all jurisdictions.

INSTITUTIONS The Constitution At the time of Confederation, environmental issues were not even conceptualized as public policy problems and were not explicitly included in the constitutional division of powers. As a result, both levels of government developed policy regimes to address environmental problems under various related constitutional powers. De facto shared constitutional authority under a number of constitutional authorities is thus an important institutional factor which some argue is the foundation of IPC challenges. Constitutional ambiguity has also meant that both levels of government could claim jurisdiction when it suited them, or “pass the buck” when it did not (Harrison 1996).

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During the 1995–2005 period there were ongoing debates about the appropriate scale of environmental problem-solving and the complexity this poses for policy-making and implementation at the national, sub-national, and international levels of governance. Yet environment officials surprisingly had very little to say about the Constitution as a determinant of IPC. Although the federal government’s constitutional authority to act in this area has been upheld by the courts, there was still some resentment from provincial officials about federal legislation like CEPA, which passed despite provincial opposition. The new CEPA in 1999 also generated some intergovernmental conflict related to the Constitution, as noted by one official who was critical of the potential scope of this legislation, stating, “CEPA allows the feds to regulate toxics but the feds have used CEPA to unilaterally act on toxics.” As noted above, by the mid-1990s environmental issues were off the agendas of governments as the focus was on the fiscal situation at the federal and provincial levels. As a result, there was very little new environmental policy development which generated c­ onstitutionalbased conflicts. Although the federal government wanted to centralize on certain policy issues like climate change, there was a general trend of decentralization on most other environment issues. Differing IPC among the provinces and territories also complicated the possibilities of decentralizing authority over environmental issues, while lack of leadership at the federal level made it hard to centralize authority. As described below, there were provincial threats regarding the constitutional basis of Kyoto, but overall, there was some implicit consensus among federal, provincial, and territorial officials that both levels of government have legitimate constitutional bases of authority and that intergovernmental cooperation is increasingly important. In any event, the fact that very few officials mentioned the Constitution as central to IPC in this policy area was also indicative of the shift to non-constitutional approaches during the period of this study. Political and Administrative Institutions Although environmental issues have occasionally been on the agendas of First Ministers’ Meetings (FMMs), the primary institution of intergovernmental environmental agenda-setting and negotiations is the CCME. Compared to other policy areas, this is a long-standing



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intergovernmental institution, first created as the Canadian Council of Resource Ministers (CCRM) in 1961, then changed to Canadian Council of Resource and Environment Ministers (CCREM) in 1972, and finally to the current CCME in 1989 (see figure 5.1). CCME brings ministers together annually and is supported on a more regular basis by officials in committees, task forces, working groups, and a small secretariat who in turn conduct consultations with the nongovernmental community of stakeholders on a wider range of issues. The products of some of these efforts move forward to the agenda of environment ministers for intergovernmental decision-making. Decisions are made on the basis of bargaining and consensus, typically no votes are taken, governments can refuse to take part, and agreements cannot be enforced in law (Bakvis, Baier, and Brown 2009, 211). Nonetheless, primarily through CCME there has been a constant, yet varied, effort to pursue federal-provincial-territorial cooperation on many environmental issues. It is not surprising that many intergovernmental generalists and every environmental intergovernmental specialist interviewed commented on CCME and its role in IPC, since it is Canada’s pre-eminent body for multilateral intergovernmental action on environmental issues. Formally, the federal, provincial, and territorial governments participate as equals in CCME, with the chair rotating annually and the secretariat in Winnipeg jointly funded. Its institutional role was strengthened in the late 1980s, and in response to f­ ederal-provincialterritorial tension surrounding environmental assessment, CCME finalized a Statement of Inter-jurisdictional Cooperation in Environmental Matters which pledged harmonization of environmental leg­ islation, regulations, policies, and programs in 1990 (­Vanderswaag and Duncan 1992). The 1990s was a decade that witnessed ongoing attempts to harmonize policies through CCME. But its role and contribution to policy were a subject of debate for both scholars and practitioners. Although intergovernmental relations were highly institutionalized in this policy area compared to other policy areas, by the mid-1990s there was mounting concern about the economic implications of overlap and duplication; this concern was an important driving force behind the proposed Environmental Management Framework Agreement (EMFA) (Fafard and Harrison 2000). That effort engaged a wider range of stakeholders in intergovernmental

Figure 5.1 The Canadian Council of Ministers of the Environment, 2008



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policy-making, and in the aftermath of the failed agreement, a new intergovernmental process emerged which placed less emphasis on stakeholder engagement and more emphasis on harmonization and decentralization. The resulting Canada-Wide Accord on Environmental Harmonization signed in 1998 by all jurisdictions except Quebec ushered in a period in which relations were less conflicted compared to the late 1980s and early 1990s (Winfield 2002) in the broader context of a shift to non-constitutional approaches in the federation. The 1990s were a period of reflection about CCME. By its third decade of existence, its institutional capacity had been weakened by the declining support of several key jurisdictions for both fiscal and ideological reasons. Every environmental official interviewed had something to say about CCME’s role in enhancing or inhibiting IPC. Some officials argued that along with declining policy capacity across all jurisdictions in this policy area, CCME’s role and significance had diminished. As noted by a CCME official, “There is a struggle to keep the limited agenda moving forward.” An Ontario official commented that “in the past, individual issues got worked on, broader issues did not.” One official from Alberta noted that during Sheila Copps’ tenure as federal Minister of Environment there was explicit discussion about “not wanting a third level of national environmental institutions.” A federal official concurred, ­saying, “There is real caution about institutionalizing a joint agency.” Another federal official noted, “Ministers hate to view CCME as another level of government.” Characterizing the evolution of CCME in the past ten years, a federal official said, “CCME has gotten over its paranoia. There has been some progress and a commitment to move ahead without consensus. Previously consensus was used as a veto, now with five to eight jurisdictions on board things will go ahead.” Overall, interviews revealed mixed opinions about the general contribution CCME makes to IPC. First, related to the policy role of CCME, one official noted that “CCME is not an organization with a policy explicit mandate. CCME meets as peers ... however the federal government is unequal among equals.” Another official noted, “CCME is a separate bureaucratic institution jointly funded but is an administrative mechanism not a policy-making institution.” A federal official however noted that the policy role of CCME was beginning to change, stating, “Ten years ago CCME started with technical documents, but it is now doing more

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policy documents. CCME’s staff has grown to nineteen and they are beginning to take on a policy role. But, a challenge is for the secretariat to appreciate what deputy ministers and ministries need. It took Alan Nymark [then deputy minister of Environment Canada] some time to adjust and recognize the value of CCME.” However, this same official noted, “Currently CCME is not viewed as a place to build capacity.” A provincial deputy minister noted, “CCME doesn’t add to policy capacity. It is more of a clearing house.” However, a CCME official expressed that “CCME has no ambition or capacity to do it all.” Several others agreed with the sentiment expressed by the official who stated, “The Secretariat’s role in policy capacity is to act as both grease and glue ... keeping working groups moving ... the role in the policy process is to focus on next steps.” Another agreed, saying, “CCME is a stabilizer. It ensures that ‘fed-prov’ relations continue. Its main occupation is to push the agenda. It is dedicated to process as opposed to outcomes.” Second, several officials viewed CCME as a model of a welldeveloped, well-functioning institutionalized intergovernmental forum, although some were skeptical of this characterization. For example, one territorial official noted, “CCME is quite unique and in FPT it is one of the models.” Another official from Ontario commented, “In intergovernmental relations CCME is seen as a model.” Another thought CCME was a model in terms of agenda-setting, saying, “CCME has been successful at shaping agendas followed by work on harmonizing agendas ... it is somewhat helpful in identifying issues that need work but slow in developing standards. The CCME secretariat does make a difference ... compared to Energy Ministers [for example] which don’t have a secretariat.” An official from Ontario noted that it is not the only model and stated, “In the Justice sector they hired a consultant to look at the federal-provincial-territorial process and decided it [CCME] was not a good model. Justice is co-chaired and secretariat support is housed in the federal Justice Department. I prefer the Justice approach.” On the whole, there was no consensus on whether CCME was a model for IPC among intergovernmental specialists from this sector or in the opinion of other intergovernmental officials who mentioned the environment. Third, some officials said the role of CCME was very important in enhancing IPC in terms of technical capacity and policy work. An official from Quebec noted, “On technical issues there is a great



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job being done by CCME.” Another official from British Columbia said, “Funding of task groups is a very effective model. CCME is a meat and potatoes organization ... it gets things done.” One official noted, “What makes it work is a dedicated pool of resources,” while another observed that “constant support for CCME helps.” There was some consensus that CCME helped to build technical capacity at the intergovernmental level and in some jurisdictions and has given provincial and territorial officials a national perspective when they held the rotating chair. Fourth, certain provinces saw CCME as more valuable than others in terms of IPC. According to one federal official, “provinces say it is the best mechanism and then don’t participate and Quebec acts as an observer.” Alberta officials expressed mixed reviews of CCME’s role in IPC and argued it was a federally-dominated institution. An official from Alberta commented that CCME’s “agenda is susceptible to federal direction ... there is a problem with uneven resources.” Another official from Ontario disagreed, “I don’t think it is seen as a federally-dominated organization. Ontario and Quebec cut contributions related to the relevance and value but also the political direction of the day. The attitude was, we do better ... who needs them?” An official from Manitoba confirmed that commitment had declined from Ontario. “There has been a bit of retrenchment ... for example, Ontario is less interested in CCME.” The smaller jurisdictions seemed to be most supportive. As one territorial official stated, “Yukon is a strong supporter.” Finally, there was a general sense that one factor which CCME contributes as an institution to IPC is its emphasis on multilateral approaches and agreements. As noted by one CCME official, “CCME is not involved in bilateral agreements.” This is an important feature, given that a lot of IPC in this policy area is outside the auspices of CCME and, as officials pointed out, CCME seems to have more impact on IPC in certain environmental areas and not in others. There has reportedly been progress particularly related to the sub-agreements negotiated under the Canada-Wide Accord in areas such as environmental assessment, but many environmental issues are not covered under this multilateral agreement. As one official noted, “CCME is a consensus forum but ultimately it is not very effective since it is not all-encompassing ... it leaves out water, wildlife, forestry, health, etc.” On other issues CCME’s role in IPC has been more challenging. As an official from Manitoba noted, “At CCME we [indicating the

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collective identity which the institution fosters] have been unable to ­galvanize specifics on what to do about water. Jurisdiction continues to get in the way ... our minister would welcome an agreement on national drinking water standards but it is not a priority to push this in provincial legislation across all provinces.” By the end of the study period there had been some multi-level progress on the water file related to municipal effluent standards. In addition to CCME there are also a series of other intergovernmental institutional arrangements that potentially contribute to IPC. As one official correctly pointed out, “CCME is only one intergovernmental forum; there are additional forums working parallel to the CCME process.” Another observed, “CCME in a sense competes with others agendas ... like climate change.” Another official described things similarly, saying, “Climate change is outside of CCME because it is an energy and environment issue. A joint committee was created in the early 1990s and CCME did perform a secretariat function before Kyoto. Now CCME sits in but has no responsibility. Two times per year deputy ministers meet related to climate change and typically have phone meetings prior to that. There is also a working group at the assistant deputy minister level.” This was central as this file gained momentum by the end of the study period. In addition, as one provincial deputy minister of environment noted, “we are members of seven national sector councils. Ministerial councils such as the Parks Ministers’ Council, the Wildlife Ministers’ Council, and the Canadian Council of Forest Ministers play an intergovernmental role in environmental policy related areas. Joint councils such as the Joint federal-provincial-territorial Energy and Environment Ministers Council is another institutional forum which has been working on air and climate change issues.” In addition to ministerial councils and deputy minister committees, several officials noted other important institutions related to IPC. Another national forum, the National Roundtable on Environment and Economy (NRTEE), although not an organization with an intergovernmental mandate, does have a diverse regional membership and may be an indirect or potential contributor to IPC. One CCME official noted that “NRTEE is working on indicators,” and a deputy minister noted that “we couldn’t get this [NRTEE indicators] on the agenda of CCME but ministers made a difference and got action through NRTEE.” Another federal official noted, “The Roundtable on Environment and Economy does more analysis on policy issues.” An



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official from CCME also noted that environment reporting work in some provinces has an intergovernmental dimension. Although not a clear contributor to IPC, there has been little scholarly analysis of NRTEE and its potential to contribute to the intergovernmental arena, particularly related to issues of policy research and indicators. Another political institution which officials noted could play a role in IPC is the Commission for Environmental Cooperation (CEC) under the auspices of the North American Agreement on Environmental Cooperation (NAAEC) under the North American Free Trade Agreement (NAFTA). The International Joint Commission (IJC) was also noted by a few officials as contributing to IPC. One federal official commented that “there are also de facto arrangements in some more specialized areas, emergency response, forest fire network, and weather services for example.” More specialized intergovernmental environmental forums like the Canadian Endangered Species Conservation Council (CESCC), formed in 1998 by federal, provincial, and territorial Wildlife Ministers, are also possible contributors to IPC. Various pieces of federal legislation also have provision for the establishment of issue-specific federal-provincial-territorial institutions such as the Canada Water Act and CEPA. Some even noted that IPC is also enhanced by other institutions and networks with environmental policy research capacity, such as the federal government’s Policy Research Initiative (PRI) and the Canadian Water Network (CWN) established during the period of this study. Although officials overwhelmingly focused on CCME as the primary political institution impacting IPC, this analysis confirms that in terms of other institutions with intergovernmental mandates related to the environment, there is clearly a need to identify the capabilities and limits of the various policy institutions (Parsons 2000, S141) to fully assess IPC beyond CCME. The question that stems from the officials’ observations and the numerous political institutions in this area with mandates to improve intergovernmental approaches to environmental policy is whether this collectively amounts to more or enough IPC. Although compared to other policy sectors in this study, the environment is well-endowed with long-standing intergovernmental institutions to set policy agendas and initiate multilateral action, officials argued that one needs to examine the implementation side of policy and environmental outcomes before a full picture can be sketched and conclusions can be drawn about IPC in this policy sector.

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Administrative institutions responsible for environmental policy implementation have existed in the federal and provincial governments since the 1970s and as described above, the ministers of these agencies have had intergovernmental connections through CCME and its predecessors. There are many ministries and agencies with environment-related mandates, many of which are engaged in the intergovernmental domain. The sheer number of ministries and agencies which make up the environmental administrative state has posed a challenge both within and between levels of government (Doern and Conway 1994; Phaelke and Torgerson 1990, 2005). Several officials noted these horizontal challenges of administrative institutional arrangements. In particular, this was seen as a challenge for the federal government. One federal official noted, “The federal family has to get its act together horizontally – Environment Canada, Natural Resources Canada, Health Canada, Agriculture Canada ... it is like herding cats.” Another federal official noted, “There are also interdepartmental issues, for example, between ­Natural Resources Canada and Environment Canada.” Some noted that this is particularly evident in the regions: “Environment Canada has less capacity than Agriculture Canada, which has stronger regional capacity. But Environment Canada has more capacity than Natural Resources Canada. There has been a loss of regional capacity of Natural Resources Canada.” Another federal regional official agreed, “Natural Resources Canada does not have intergovernmental capacity.” This is consistent with reports from the federal Office of the Commissioner of the Environment and Sustainable Development which have indicated the lack of IPC in this policy area (Canada. Commissioner of the Environment and Sustainable Development 2005). Although interdepartmental capacity was mentioned as more of an issue for the federal bureaucracy, officials at all levels commented on inter-agency and horizontal collaboration as issues which negatively impact IPC. In summary, it is clear that political and administrative institutions of executive federalism are central to understanding the state of IPC in this policy area. All officials noted the significance of CCME and in general most felt it contributed to some IPC, particularly multilateral capacity. Officials also noted the increasing number of intergovernmental institutions developing outside CCME and, interestingly, felt that bilateral relations were less developed but developing. What was also very clear from officials in this policy area is that more



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institutions does not necessarily equate to more IPC. Beyond the ­formal structures to facilitate IPC, virtually all the officials we interviewed indicated that the resources endowed to these institutions was a more important factor in determining IPC than design. Institutional Resources As federal, provincial, and territorial governments became increasingly engaged in environmental policy, additional resources were allocated to the growing number of institutions with legislative, policy and program mandates related to the environment. By the late 1980s, most jurisdictions had mature bureaucracies endowed with significant resources tackling a wide range of environmental problems. Although the 1990s was not the first time environmental ministries and agencies had experienced significant budget cuts, many officials identified resources as a very significant factor in explaining IPC during the 1995–2005 period. Resources in terms of budgets, personnel, scientific knowledge, and technical capacity were mentioned by virtually every federal, provincial, and territorial official we interviewed in this policy area. In the early 1990s when the federal government was aggressively resourcing the implementation of the Green Plan and other environmental policies the provinces generally objected, but at the same time they “welcomed Department of Environment (DOE) money and scientific input” (Doern and Conway 1994, 93). “While Ontario, Quebec, Alberta, and British Columbia had solid overall capacity, other provinces, especially those in Atlantic Canada, often looked to DOE for help, in terms of both expertise and money” (Doern and Conway 1994, 93). At the same time many provinces and territories were focused on building their own independent policy capacity. The decline in the resources and capacity of these ministries and agencies was the focus of those we interviewed related to administrative institutions during the 1995–2005 period. The first significant cuts came at the federal level under Program Review in which 31.7% of Environment Canada’s budget was cut between ­1994–95 and 1997–98 and another 3.5% in 1998–99 (Savoie 1997). As stated by one federal official, “Post-Program Review there was a move to decentralize and Program Review was an important part of the context for the EMFA and the Harmonization Accord.” Although negotiations continued, another federal official noted, “We have

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less ­capacity in terms of ‘the doing.’” As noted by one official, “cuts federally resulted in a loss of subsidizing provincial participation, resources for travel, etc.” A Manitoba official pointed out that at the same time there was the argument that jurisdictions were “taxed to the limit beyond the capacity to fulfill objectives.” As noted by a federal official, “The driver of one taxpayer became a reality. There was a provincial view of rampant duplication and overlap.” Resource declines were also noted as an important factor for many provinces and territories. A federal official noted in 2001 resources varied across provinces, suggesting, “It [funding for environment policy] was not equal in all jurisdictions. In Quebec it was sustained. Cuts were more noticeable in Ontario, Alberta, and British Columbia.” Another federal official noted that as a result, “now some provincial jurisdictions are focused on relationship maintenance not capacity building.” Cuts to already small environment budgets were significant in some jurisdictions. As one official from Manitoba said in 2002, “There has been retrenching ... which systematically ravaged policy capacity in the past ten years.” A territorial official noted that resources significantly impacted their IPC, saying, “The challenges for us are scientific support, budgetary issues and administration issues.” An official from British Columbia agreed, explaining in 2004, “We have seen 33% in cuts with the new government under Premier Campbell [related to the environment] but there has been a greater focus on intergovernmental relations because of reduced policy capacity in general and the need to avoid duplication and overlap.” Interestingly most officials indicated resource reductions resulted in more focus internally but for some jurisdictions reducing intergovernmental commitments was also important. Resource declines in the 1990s were felt throughout intergovernmental relations, and impacts on CCME were reported. One CCME official said, “Generally staffing levels are down ... they peaked in the early 1990s.” A federal official also noted this, stating, “The size of CCME was cut in the mid-1990s.” As noted above, some provinces in particular scaled back support of CCME, causing CCME to become more strategic. There was also variation during the later interviews we conducted. Although the federal government was in a much better fiscal position at the time interviews were conducted, many provinces and territories were struggling to balance their budgets. Many officials



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focused on the lasting impact of budget and personnel cuts. Despite some reinvestment in the 2000–05 period, resources for environmental policy implementation were still identified as an important determinant of IPC. Many officials noted this with regard to the implementation of intergovernmental agreements. Accords and Agreements Intergovernmental agreements, both multilateral and bilateral, have long been an important component of intergovernmental relations in this policy area. Section 7 of the federal Department of Environment Act allows the minister of the environment, with the approval of Cabinet, to enter into agreements with provincial governments or agencies respecting the carrying out of programs for which the Minister is responsible (Vanderzwaag and Duncan 1992, 8). Other federal statutes such as the Canada Water Act of 1970 contain similar provisions and provincial ministers have similar statutory authorities. Since 1975 and the Federal-Provincial Accords for the Protection and Enhancement of Environmental Quality, federal-provincial accords were signed with all provinces except Quebec, Newfoundland and Labrador, and British Columbia, the former two on constitutional grounds and the latter because of fisheries conflicts (Doern and Conway 1994, 95). The federal government has also had longstanding natural resource agreements with the territories that were subsequently brought into federal-provincial-territorial forums. By the mid-1980s accords and agreements were viewed as “having some selected areas of success, but overall were not decisive in the federal-provincial relationship,” and quoting a senior policy official in the early 1990s, Doern and Conway argued “their value is mainly symbolic” (Doern and Conway 1994, 96). One official we interviewed whole-heartedly agreed, stating, “There is not a ton of value in agreements but they are a reason to be at the table together.” Nonetheless, the emphasis on agreements continued in the period of our study and the opinion expressed by officials was mixed in terms of their centrality to IPC. As noted above, despite the failed attempt to develop national standards through the EMFA in the mid-1990s, the interest and momentum in finding common ground through multilateral negotiations was sustained (Fafard and Harrison 2000). As one official stated, “EMFA was a different beast; the vision guiding it was more

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lofty which led to its demise.” Another observed, “Alberta wanted EMFA to define roles and responsibilities but [federal Environment Minister Sheila] Copps rejected the whole process because it would name lead governments on different issues.” Ultimately the multilateral agreement approach was sustained resulting in the 1998 Harmonization Accord (HA). According to a federal official, “The Accord generated a culture of cooperation, as dividing the turf wasn’t an option.” However, as noted by a Quebec official, “Quebec didn’t sign the Harmonization Accord. We were involved in drafting it between 1993 and 1997 but didn’t sign because the feds were implementing laws in violation of the Accord. For example, under both CEPA and CEAA the feds were duplicating provincial initiatives.” Another Quebec official concurred, saying, “We are reluctant to engage on environmental harmonization because it officially recognizes a federal role in environmental assessment. Quebec has its own system with an arm’s-length process. On regulations we are asking for comments from federal departments but we don’t want to ‘officialize’ the bilateral assessment process.” For some observers, the signing of the Harmonization Accord (HA) itself indicated some level of IPC. Clearly the Accord was a mechanism which kept officials engaged on the multilateral front; however, many officials had both positive and negative comments about how the Accord had evolved during its implementation and whether it enhanced or inhibited IPC. One federal official suggested that the HA was not able to meet the challenge of policy development and implementation. S/he said “For two or three years from 1996–98 the Harmonization Accord dominated the agenda, then we began looking at implementation issues and the agenda exploded.” At the same time, the environmental administrative state was contracting as budgets and personnel were reduced. After more than five years of implementation, officials interviewed between 2002 and 2005 had enough time to reflect on the significance of the Accord and its impact in terms of IPC. According to one official, “one of the things the Accord did in the long run was to build capacity with a multilateral approach ... [including] Canada-wide standards, technical capacity and intergovernmental capacity.” An official from Alberta, however, stated, “Alberta is lukewarm on the Harmonization Accord as it is watered down. We originally supported a definition of roles and responsibilities approach [in the EMFA].” According to an official from Manitoba, “the ­process



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of the Accord was more important than the Accord itself. Trust developed through the process.” The same official also said, “However, there is a degree of intergovernmental cooperation regardless of the Accord. It is not a document that is a reference point.” An official from Ontario argued, “The Accord has value, if only symbolic. It is a framework for a number of standards. It is not legally binding but as the players change it is an ongoing commitment.” An official from Alberta commented that “considering the time in developing the Accord, it didn’t go as far as expected.” An official from British Columbia agreed, saying, “CCME sub-agreements have not gone far enough.” Another official from Alberta commented, “The Accord has led to a menu approach ... the feds chose different processes: CCME, bilateral, other ... we need agreement on objectives then capacity ... without agreement we can have a great deal of process but not much capacity. Given bilateral agreements it is difficult to tell if they are under the Accord or not.” Another official pointed out, “The Accord started out as multilateral and then evolved into bilateral, based on principles, then bilateral agreements.” A federal official commented that “the framework is useful and will endure. Compared to SUFA which is not having a lasting impact, the Accord’s success is on sub-agreements.” Collectively, the comments from officials indicated that the implementation of multilateral and bilateral agreements is where one needs to look in order to gauge IPC. Beyond the context of the Harmonization Accord, there were clearly some officials who thought the multilateral approach was required to build IPC while others argued a bilateral approach works best. For example, one provincial deputy minister argued that “a multilateral approach is more important ... a foundation is fundamental ... otherwise it is a crazy quilt approach.” Another official from New Brunswick agreed: “Some provinces are impacted differently by multilateral agreements so we end up with bilateral agreements but there are problems with consistency across jurisdictions.” A federal official disagreed and argued, “Multilateral agreements get watered down ... four to five stronger bilateral agreements are better to get things done. Bilateral agreements are not necessarily piecemeal and Ottawa’s view is one size does not fit all.” Another federal official commented, “There is a sense that it is better to do bilaterals than struggle with multilaterals.” Two different officials from B ­ ritish Columbia agreed, noting that “bilaterals are necessary because of

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different approaches and needs” and “multilateral agreements set direction and then bilateral agreements are where the action occurs.” This last opinion seemed to capture the general consensus. By the mid-2000s there was a change in the discourse surrounding multilateral negotiations and agreements, as one federal official noted, “People don’t like to use the word harmonization anymore.” This was reflected in communiqués and reports on CCME’s website by 2005. An official from CCME noted that there has been a “shift in focus since the Accord ... it is more transaction oriented ... we are now starting to focus on being a forum for discussion of broader, horizontal issues. Technical products will remain a mainstay but we are trying to reorient away from Canada-wide standards to focus ministers on larger issues and then pick the tools.” Even though the Harmonization Accord had been in place for years, some argued that shortly after its implementation it was producing lowest-common-denominator results (Fafard 2000). This paralleled the decline of the country’s environmental performance during the period of this study as IPC was devolved from the multilateral to bilateral levels. There is evidence that this was the case across several policy areas and several intergovernmental agreements (Botts and Muldoon 2005; Winfield and MacDonald 2008; Johns 2009). Interestingly, the focus of officials’ comments was on federalprovincial or federal-territorial bilateral arrangements and capacity. In contrast to other sectors and the perspectives of intergovernmental generalists, very few officials mentioned the significance of interprovincial-territorial IPC in this area. One official from Quebec highlighted that “Ontario, Quebec, and Alberta tend to cooperate, others tend to follow the feds.” This same official stated, “We are trying to get regional cooperation where provinces meet before ­federal-provincial meetings but [the] feds seek to divide and conquer” and because there is a “trend towards sub-national units circumventing national governments, the feds fear losing control.” This may attest to the IPC of CCME and to a lack of interprovincialterritorial IPC. Although the Council of the Federation (COF) was established in 2003 (see chapter 2) with several priority agenda items, it was only in May 2007 that energy and climate change were added to the agenda for interprovincial-territorial discussion. As noted above, climate change is one environmental issue that has



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been beyond the mandate of CCME and thus may lend itself to more interprovincial-territorial collaboration. Other administrative mechanisms less formal than intergovernmental agreements yet used to foster intergovernmental cooperation in this policy area include memorandums of understanding (MOUs) and pilot projects. The Greenhouse Gas Emission Reduction Trading Pilot and the related MOU was an example noted by one official. This is also an example of an intergovernmental agreement where a provincial government (British Columbia) has taken the lead and the federal government is one of seven participants (Environmental Commissioner 2000, 7–21). Overall, many officials commented on the significance of intergovernmental agreements in this policy area. There were many who felt the Harmonization Accord and multilateral approaches were a significant indicator of IPC. Yet many also felt bilateral agreements were where the real IPC was being developed. It is difficult to gauge the aggregate contribution of bilateral agreements in terms of IPC. Indeed it is very difficult even to get a sense of how many federalprovincial or interprovincial-territorial agreements and MOUs exist. Based on the comments from officials it seems as though more federal-provincial bilateral agreements exist, but the collective contribution of these in terms of IPC is difficult to assess. One finding that is clear from officials is that the mere existence of agreements does not indicate IPC. The fact that implementation of agreements is not legally binding is also a factor and may also explain why very few officials identified the courts as being significant in terms of IPC. The Courts As outlined in chapter 2, the courts have played a role in intergovernmental relations in many policy areas. The role of the courts in the environmental sector is well documented in public policy and environmental law scholarship. It was thus surprising that very few officials identified the courts as significant in terms of IPC. Court cases related to the Rafferty and Alameda Dams in 1987 in Saskatchewan and the Oldman River Dam in 1989 in Alberta are classic battlefronts which show how central the courts can be to environmental policy and IPC. One Quebec official commented specifically on the impact of these cases, saying, “The Supreme Court

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rulings give legitimacy [to the federal government] to interfere with provincial jurisdiction, like the Oldman River ruling regarding shared environmental assessment of major projects, yet hydro is under ­Quebec’s jurisdiction for environmental assessment.” As an official from Alberta noted, “The way the environment is shaping up, the provinces are likely to lose. This is murky jurisdiction; the courts are ruling in favor of the federal government, for example, the regulation of toxic substances can transform to criminal law.” Another Quebec official commented, “We are reluctant to have courts involved due to centralist bias of the Supreme Court ... the Supreme Court is like the Tower of Pisa ... it always leans one way.” However, most of the officials interviewed did not identify the courts as an institutional factor related to IPC. Perhaps this is not surprising given the fact that the courts did not play a central role during the period of our study. Although Alberta Premier Ralph Klein had threatened to use the courts when the federal government signed the Kyoto Accord, there had been little court involvement in environmental intergovernmental relations during this period. One federal official noted that “we are still hearing ‘we will take you to court’ from some provinces like Alberta and ­Quebec.” Combined with the dearth of comments related to the Constitution, this may reflect the fact that there was very little new policy and legislation during this period, perhaps a recognition by officials that jurisdictional overlap is a given in this policy area or perhaps because of the preoccupation with intergovernmental efforts in other institutional contexts such as ministers’ forums and international fronts. International Institutions According to environment officials, the other institutional factor that is increasingly significant in terms of IPC is international institutions. By the mid-1990s the sheer growth in the number and scope of international institutions, protocols, conventions, agreements, and interactions, in almost every area of environmental policy, indicated that “few domestic environmental policies can now be developed without taking international factors into account” (Toner and ­Conway 1996, 109). Several international developments and agreements such as the Kyoto Accord and the United Nations Convention on Biological Diversity were noted by officials as having a significant impact on IPC.



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During the period of this study there was an increase in international influence on domestic environmental policy due to three primary developments. First, the capacity of organized environmental and business interests to play an advocacy and policy role on the global stage, enhanced by rapidly advancing communication technologies; second, international ideas such as sustainable development; and third, the convergence of environmental, ­economic, and trade agendas contributing to internationalization and redefining environmental protection and governance in the context of international economic regimes (Parsons 2000, S133–4). There was a consensus among officials that there has been an increase in the international influences on domestic environmental policy and intergovernmental relations. Almost all officials we interviewed in this policy sector noted this important change. As one federal official observed, “International factors are very important [particularly on certain issues like climate change].” Another official from Manitoba noted, “The necessity of an intergovernmental approach will continue to rise ... it is internationally driven, from agreements etc ... this necessity is only going to get stronger.” As noted by one official, “international pressures are not new, they were always there ... for example acid rain.” It was pointed out that “international drivers vary on certain issues, such as climate change, and POPs [persistent organic pollutants] protocols.” The federal government has longstanding powers in international relations related to international agreements such as the International Boundary ­Waters Treaty Act, the Migratory Birds Convention Act, and the International Rivers Improvement Act. One interesting observation was from a federal official who noted an “international level push to bring environment and health ministries together and environment and agriculture ministries together.” Thus international determinants are important not only for IPC but also for horizontal capacity within jurisdictions. It was also clear from interviews with officials that provinces and territories want more involvement on issues with an international dimension. As stated by an official from Quebec, “There is a challenge in a federal state to engage in international relations. Natural resources are provincial jurisdiction and we are trying to get the ­federal government to consult more on international issues but there are underdeveloped consultation mechanisms in the environmental area.” The same official noted more success with cross-border

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r­ elations than federal-provincial-territorial relations, saying, “Quebec has cooperation agreements with some US states; we are a member of the Conference of New England Governors and Premiers and various Great Lakes Governors agreements and we sometimes use this to lobby federal and US governments on environmental issues.” Another provincial official noted, “Manitoba is taking an active lead in international participation. There is a need to meet a new continental approach, particularly given pressures from the US.” In British Columbia, an official said, “We are doing more networking with state officials.” Even officials from smaller jurisdictions like New Brunswick noted an increase in their “ability to participate on certain issues, for example Kyoto and international affairs generally.” A Nova Scotia official commented, “More human and financial resources are now used to provide support to advance the provinces’ position in international interactions.” Even a federal official conceded, “Provinces are participating. They don’t want to be observers; they want part of the action.” As noted above, a major area of intergovernmental relations during the 1990s which fell outside of the Canada-Wide Accord and the scope of CCME was related not to an intergovernmental agreement but an international agreement. Intergovernmental relations related to the climate change file was mentioned by virtually every intergovernmental specialist we interviewed in this policy area. As noted by some, there was some amicable work through Joint Meetings of Energy and Environment Ministers with the development of the National Action Program for Climate Change (NAPCC) between 1993 and 1997. Said one provincial official, “In 1989 Energy and Environment together established a national air issues c­ oordinating committee which worked for three years and then fell apart prior to Kyoto.” Another provincial official noted that there was some consensus that IPC did “build up” related to climate change policy through administrative committees supporting the Joint Meetings of Energy and Environment Ministers. As noted by one federal official, “between 1998 and 2000 there was an investment in climate change federally and the provinces followed suit.” In 1998 the federal government established the Climate Change Secretariat to coordinate its own actions horizontally and the Joint Meetings of Energy and Environment Ministers created the National Climate Change Secretariat and engaged in multi-stakeholder consultations. Some sixteen national ‘tables’ with intergovernmental and nongovernmental ‘stakeholders’ were set up by the federal government



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and after three years a National Implementation Strategy and Business Plan was signed by all parties except Ontario and released in October 2000. This plan was characterized as a “roadmap to nowhere” (Simpson, Jaccard and Rivers 2007, 63) and shortly thereafter federal-provincial-territorial cooperation on climate change began to unravel (Winfield and MacDonald 2008, 275). It was clear by 2001 that the federal government was taking a course not supported by several provinces. On 23 July 2001 as 180 countries, including Canada, discussed the Kyoto Protocol in Bonn, Germany, Alberta Premier Ralph Klein announced that the adoption of the Accord would cost the provincial economy billions of dollars (Smith 2002). Nonetheless, later that year at a UN-sponsored conference in Morocco, environment and energy ministers from nations all over the world, including Canada’s David Anderson, reached an agreement on the details of the Kyoto Accord (Smith 2002) and the federal government started down the path of unilateral regulation (Winfield and MacDonald 2008). Chrétien’s move to act unilaterally in ratifying the protocol in 2002 was not based on a well-developed plan for implementation and “his actions soured the intergovernmental mood in Canada” at the time (Bakvis, Baier, and Brown 2009, 214). As noted by one deputy minister of intergovernmental relations in 2001, “on climate change the federal government is pushing hardest and doing most of the work.” But another federal intergovernmental generalist argued in 2001 that “in climate change, there is a need for more machinery.” By 2003 the National Climate Change Secretariat had been disbanded and there were no longer any institutional mechanisms for multilateral coordination of climate policy. As a federal official noted in 2004, “the federal perspective on climate change is increasingly being challenged within the federation.” In keeping with the approach of Premier Ralph Klein during the period of this study (Rabe 2007, 438), Alberta officials were the most outspoken of the officials we interviewed on this issue. One official said from the outset there was “enormous mistrust on the file” and spoke of being “suspicious of the feds that they would ratify it without knowing how to implement it and knowing emissions controls will be unilaterally imposed.” Another Alberta official said, “In the run up to Kyoto the federal government committed to the Kyoto option, analytical work became internally focused and bureaucratic progress eroded.” Alberta during this period was developing its own policy capacity in this area but not in alignment with the Kyoto

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Protocol. An official explained, “The Clean Air Strategic Alliance [CASA], a not-for-profit corporation, was formed in Alberta and it was consensus-based.” This marked the beginning of a “made in Alberta” policy and a decision to build independent policy capacity related to pursuing a different path (Rabe 2007, 439). Other provinces expressed similar views. An official from Nova Scotia stated, “The feds abandoned the provinces related to Kyoto. They moved ahead without provincial support.” A Quebec official commented, “Kyoto, for example, pushes the feds into provincial areas in implementing international obligations. Provinces were pushed aside and put in a fait accompli situation.” Another provincial official noted, “Kyoto’s been signed but is a stellar example of unilateralism.” Annoyance with federal intransigence was evident, as in the comment of the official who said “Alberta put forth a nonKyoto alternative but the federal government refused to discuss it.” However, interprovincial angst over Kyoto was also palpable, as one official noted that “on Kyoto, Newfoundland is in bed with Alberta as an energy-producing province.” The lack of provincial-territorial unanimity on Kyoto and climate change was also very evident. As one territorial official noted, “Climate change is an example of an inability to move forward on the part of provinces and territories ... making clear that the individual concerns of provinces and territories are very broad.” Interprovincial-territorial conflict and disagreement was clearly a factor related to IPC on this issue. One official suggested, “Kyoto is another example where time and process are dysfunctional. We set aside technical functions and spent more time worrying about what the communiqué would say.” Officials also highlighted how IPC was undermined by politicization – heightened by the international dimension of this issue. As one official noted, “The political profile of the issue [climate change] and the desire to politicize it makes it difficult to work towards solutions.” It was cited as an example of the significance of the political-administrative interface in IPC. As one official stated, “In environment, officials are working away doing practical things. This breaks down when we start talking about high-level issues.” Because of this politicization, combined with federal unilateralism and Alberta developing policy capacity in opposition to Kyoto, IPC on this issue ultimately declined. As observed by others, this lack of IPC limited progress on climate change policy at both the federal



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and sub-national levels (Rabe 2007). After the breakdown of multilateralism between 2003 and 2006, federal efforts to negotiate and fund bilateral agreements with the provinces and territories emerged (Winfield and MacDonald 2008, 278). As officials noted, the level of internationalization evident in environmental policy in Canada varies depending on the subset of environmental issues under examination. During the period of this study, federal government officials were involved in negotiations related to POPs, the Great Lakes, biodiversity, and climate change, yet the lack of implementation capacity after signing these international agreements and conventions is well-documented. At the same time it was increasingly evident that the provinces and territories had some very specific concerns about how the federal authority to sign international agreements on environmental issues would impact their own implementation capacities. The two areas where internationalization seemed to impact the administrative state and the world of officials most significantly were related to the international drivers of the Harmonization Accord and the Kyoto Accord. The international dimensions of implementing intergovernmental agreements were recognized in the development of the Harmonization Accord, where a proposed sub-agreement on international agreements was discussed in the late 1990s, but not pursued. No officials commented specifically on this, but the volume of comments on international developments and institutions clearly show they did play a role in reforming the intergovernmental administrative machinery within jurisdictions and reforming the role of CCME. Many officials commented on the administrative machinery that was developed in response to internationalization of climate change policy. By 2005 there was an Intergovernmental Climate Change Impacts and Adaptation Working Group co-chaired by officials from the Government of Alberta and Natural Resources Canada with representatives from all the provinces and territories working on a ‘National Climate Change Adaptation Framework’ at the administrative level despite the fallout at the political level (Intergovernmental Climate Change Impacts and Adaptation ­Working Group 2005). This group reported that “governments have both separate and shared responsibilities”; that “collaboration improves communication and the exchange of knowledge makes more efficient use of the country’s intellectual and financial resources”; and that “there is an ongoing need for a core intergovernmental group at

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the policy level” related to climate change in order to meet Canada’s international obligations. The group itself recommended additional resources, the support of a secretariat, and an intergovernmental website for sharing information (Intergovernmental Climate Change Impacts and Adaptation Working Group 2005). Not much has changed since 2005 in terms of IPC related to climate change. The Harper government stepped back from the Kyoto agreement signed by the Liberal government. International meetings in Copenhagen in 2009, where several provincial and territorial premiers were on hand criticizing the federal government’s position, indicate international institutions are not moving much further on this agenda item and the pressure for intergovernmental action at home seems to be dissipating as provinces and territories take their own positions and go their own way on climate change policies. Overall, international institutions and agreements have been significant factors related to IPC in this policy area. Climate change became a lightning rod for intergovernmental relations while many other environmental issues were not on the intergovernmental agenda during the period of this study. It was also clear that in the international realm, that individual actors such as premiers and mayors were challenging the federal role. The significance of political and administrative actors in general was a factor many officials identified as significant for IPC.

ACTORS Political and Administrative Actors It is the political and administrative actors in this policy area who bring the institutions above to life. The significance of actors was another factor identified by the majority of officials we interviewed in this policy area. The role, character, and tenure of political and administrative actors are factors many officials identified as significant. Others have documented the role of individual federal leaders ­ ifferent and their ministers related to environmental policy and the d approaches they have taken – some more cooperative and some more competitive and conflictual over the decades ­(Harrison 1996; VanNijnatten and Macdonald 2003). It has also been noted that very few federal political leaders have been willing to take strong,



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­ nilateral, centralized action on environmental issues. Similarly, there u have been few provincial and territorial leaders who have themselves made the environment a central priority or given environment ministers a high profile in their cabinets. The status, mandate, profile, and turnover of environment ministers and their senior bureaucrats have also been identified as a significant set of factors in understanding the evolution and capacity of Environment Canada (Doern and Conway 1994). The consensus expressed by most officials was that political actors, primarily ministers, inhibited IPC in this policy area, despite the admirable intentions of some. Most agreed with the comment of one official who noted that “ministerial interaction is important ... exchange is very valuable in terms of information sharing,” but for jurisdictions where ministers were trying to make progress, officials characterized IPC as being negatively affected and spoke to lowest common denominator outcomes. One official from Ontario noted that “episodic political involvement” is highly problematic. Another official from New Brunswick stated, “Our minister favours protecting the environment but among many ministers decisions are made for political reasons and many policy documents are ‘adjusted’ for political reasons.” A federal official attributed this to the ministerial focus on the communiqué, saying, “They should scrap the concept of a communiqué ... there is too much focus on it.” The turnover of ministers was also an issue which some officials argued had a negative impact on IPC. A CCME official noted, “Ministers change ... they don’t have much long-term impact given the oneto two-year turnover of ministers.” Doern and Conway have noted that from 1971 to 1993 the average federal ministerial tenure was sixteen months (Doern and Conway 1994, 39) and “the sheer high rate of ministerial turnover in DOE was hardly conducive to consistent or convincing priority setting” (Doern and Conway 1994, 58). From 1993 until 2005, covering the period of this study, the tenure of federal ministers actually increased to an average of twenty-seven months, with David Anderson serving as federal minister of the environment from 1999 to 2004. However, even the relatively long tenure of the federal Liberal ministers of the environment d ­ uring the study period did not seem to enhance IPC at the federal level. Several officials also mentioned turnover of ministers at the provincial and territorial levels as equally significant a factor related to IPC. One federal official noted, “I have been at the ministers’ meetings. I don’t

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think they contribute [to IPC] as no relationships are built given the range of turnover at both levels of government.” The tenure of political leaders was also coupled with the status of environment ministers during this decade. As Doern and Conway have noted in reference to the policy capacity of the federal government, individual ministers themselves and the significance, or lack thereof, of the environment portfolio in cabinet both affect policy capacity (Doern and Conway 1994, 39). For one official this was not only a factor in determining IPC but a reason for necessitating more IPC. As he/she put it, “Given the pecking order of environment ministers, an intergovernmental approach is vital.” The significance of ministers in terms of IPC in environmental policy was also explicitly linked to the lack of political will and the location of environmental issues on the political agenda. An official from Manitoba said, “One of the real struggles is how to fully engage ministers,” and went on to say how they are focused on their own constituents and issues within their boundaries. But s/he also concluded that “for the worka-day issues, ministers are less important and there is progress at this level.” Not surprisingly, in contrast to their view of most political actors and IPC, officials viewed themselves as important to IPC. They also emphasized the importance of strong bureaucratic leadership and well-functioning networks of officials. One long-serving deputy minister stated that “given environmental issues in many departments I interact with fifty or sixty deputy ministers regularly ... four to five times per year deputy ministers meet and networks develop.” Officials primarily identified the significance of executive interactions as a factor that has the potential to both inhibit and enhance IPC. Turnover of deputy ministers, however, was mentioned as a factor, although not as often as turnover of ministers. From 1995 to 2005 there were six deputy ministers of Environment Canada, the l­ ongestserving of whom was Alan Nymark from 1999 to 2003 (serving a long-serving minister, David Anderson, for the duration of his tenure). One official noted that it is not just the frequency of deputy minister turnover, but that backgrounds and personalities matter. “Deputy ministers change but also [good relations] depend on their backgrounds. At the senior levels assistant deputy ministers and deputy ministers know each other but personalities can often conflict at that level. For example, Nymark leaving created a new dynamic around the agenda.”



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Others noted that officials below the deputy minister level contribute more to IPC. As one federal official observed, “There is more continuity at the assistant deputy minister level which makes a difference.” An official from CCME had the same observation: “Below that [deputy minister] level there is more consistency and ability to build relationships and trust.” One federal intergovernmental generalist commented that the technical background of officials also makes a difference, suggesting, “In environment there is a consensus model and the technical nature of issues is a factor.” Another official from British Columbia noted, “At the level of managers and directors we get a lot done but I have been burned taking things up.” An official from Manitoba agreed, saying, “There is a fair degree of continuity particularly at the staff levels.” However, not all agreed that staff contributed to IPC and that it depended on whether the interactions were formal or informal. “The presence of staff formalized the process at deputy minister meetings. At a recent deputy minister meeting there were no staff which allowed for more free speaking, and no one taking notes and we could go off script.” Overall, in contrast to the world of intergovernmental generalists, personalities and informal relations among officials seemed to be more of an issue than turnover related to IPC in this policy area. This may have something to do with the career trajectory differences in central agencies and various sectoral ministries or the technical nature of this policy area. Political and administrative actors were clearly seen as important to IPC in this policy area. Officials overwhelmingly focused their comments on these state actors. Non-state actors such as the public (organized interests and citizens) were not mentioned by the majority of officials related to IPC. Nonetheless, for some the public was important as an indirect determinant of IPC. The Public In the early 1990s, mobilization of public opinion around environmental issues pressured governments to work together to respond to environmental challenges. Environmental groups increasingly had a place at the intergovernmental table and watchdog organizations were beginning to make a difference (Harrison 2003). There was also a conscious effort to engage the public and interest groups in environmental policy making and significant commitments in time

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and resources to develop policy capacity within federal departments and to consult and negotiate with provincial and territorial governments, industry associations, and organized environmental interests (Doern and Conway 1994). However, very few officials identified the public as significant in terms of IPC. Some officials did offer comments on the public but they were more in a general context. One Quebec official observed, “Stakeholders and NGOs are now more involved in the policy process. Most rely on formal public consultations but there are more meetings with NGOs now ... the feds and provinces have their own processes. There are national NGOs who want the feds to control everything. Some NGOs need issues to survive to have a payroll.” The same official also observed that “There is also a divide between provincially-based and national organizations. For example, on Kyoto, Greenpeace Ottawa versus the regional Greenpeace office in Montreal.” A federal official also noted that certain issues are resulting in new stakeholders and new intergovernmental relations, suggesting, “Climate change has also engaged municipalities and new groups.” The majority of officials interviewed did not mention the public (citizens or organized interest groups) as significant in IPC. This was somewhat surprising, given CCME has instituted many public consultation forums related to intergovernmental files and the Harmonization Accord has an Annex explicitly committing to public accountability and stakeholder participation (Canadian Council of Ministers of the Environment 1998; DiGiacomo 2005). However, as noted by other observers, engagement of stakeholders has waxed and waned and environmental groups in the aftermath of the Harmonization Accord “continued to harbour serious doubts about the effectiveness and legitimacy of the process” (Winfield and ­MacDonald 2008, 274).

Relations In the environmental policy area, officials also identified formal relations and informal relationships between politicians and officials as another significant determinant of IPC. Some officials commented on formal relations between politicians and officials through their formal roles in institutions and interactions. Informal relationships, in particular trust built through those relationships, were identified



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as significant by virtually every official we interviewed about the state of IPC related to the environment. Some officials commented on the significance of formal political relations, particularly between first ministers and environment ministers. As noted above, some officials earmarked the personal style of ministers. A few also had specific comments about relations related to the agendas of various ministers and the Harmonization Accord. A federal official made the comment, “The Accord provides a coherent framework for working relationships.” Another official warned, “There is value in having the umbrella piece [the Harmonization Accord] but signing more agreements will not change relationships.” For some, institutions set the framework in which relations were discussed. For most, however, informal relationships were more important to IPC. Formal relations between ministers were only indirectly identified as significant by officials. As one federal official said, “There is a relationship game ... the higher up the more politicized it gets. Work done at the program and project level can be derailed as you go up. Provinces seem to commit up front and then politics plays a role.” This quote highlights the other domain in which relations and relationships seem to matter – the political-administrative interface where the political and administrative factors which impact IPC intersect. Informal administrative relationships were mentioned by virtually every official we interviewed from this sector as playing some role in IPC. Culture and informal personal relationships were the two most commonly mentioned factors. Some noted that cultural variation is significant for relationships and thus IPC. As one veteran official from Manitoba noted, “The culture of different organizations, particularly federal departments, is a factor ... Environment Canada, for example is first among equals and differs from the Department of Fisheries and Oceans and Natural Resources Canada.” This same official noted, “There is a kind of culture in sectoral councils – each is different.” Another official noted culture as an important factor related to CCME, saying, “There is an emphasis on collegiality, and consensus based decision making.” One federal official noted how perceptions of federal officials are a very important part of culture and interpersonal relations, saying, “Some federal officials seem arrogant. There is a need to recognize the knowledge of ­provincial

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officials.” Another federal official noted that “positional negotiating and bad faith” inhibit IPC and expressed the need for “being open with the provinces and territories.” An official from Ontario expressed the same opinion, stating, “Human factors, different attitudes, and perceptions make a difference. For example, the arrogance of the federal public service thinking they know better.” In general, a more inward-oriented culture in many jurisdictions and environmental institutions as a result of resource constraints during the period of this study also affected formal relations and informal relationships. As noted by one official from New Brunswick, “Contacts with other provinces are expensive but we help each other – you scratch my back and I’ll scratch yours.” One official from Quebec noted, “There are good personal relationships despite disagreements on policy. Informal relations are important ... they are the hidden part of the iceberg.” The trust between individual officials engendered by informal relationships was noted as being an important determinant of IPC. One federal official claimed, “Trust is a key factor.” Another noted, “It is easier to build relationships and trust at the program and project level.” These relationships are “stronger at the regional level” and although only mentioned by a few, also at the interprovincial-territorial level. An official from Alberta articulated how these informal networks are reinforcing and stated that “horizontal policy capacity enables more intergovernmental policy capacity.” Building this takes time, though, according to the official who said, “Familiarity and relationships are important ... meeting once a year is not enough.” As noted above, personalities of deputy ministers and informal relationships between executives and other officials were noted as important dimensions of IPC. A federal official commented, “Individuals can make a difference ... [mentioning a senior federal official] is very good at not presenting an Ottawa-centred view.” A few noted directly or indirectly the significance of networks and the movement of personnel between the levels of government. An official from British Columbia noted, “We have constant interactions with Environment Canada and the Department of Fisheries and Oceans. The regional director general of Environment Canada used to be an assistant deputy minister in our ministry.” One interesting comment related to how officials used these networks strategically to build IPC within their jurisdiction, “Occasionally we use the feds to get the involvement of other ministries in British Columbia.”



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Overall, many officials in this policy area identified the formal relations and informal relationships between politicians and officials as very important to IPC in environmental policy. The formal relations between these actors was influenced by a number of other factors such as culture, ministerial turnover and status, and general institutional resources available during the period of this study to support the development and sustainability of such relations.

WHAT THE OFFICIALS DID

NOT

SAY

It is also interesting to note that in relation to IPC in this policy area, there were no comments on Parliament or provincial legislatures. Despite the existence of a federal Parliamentary Committee on Environment and Sustainable Development, there were no observations by environment officials on how federal members of Parliament affected IPC in this area. Similarly, the Senate has a Standing Committee on Energy, the Environment, and Natural Resources and has produced reports which have highlighted the lack of IPC, for example, related to water policy (Canada, Senate 2005), but the Senate was not mentioned by any of the intergovernmental generalists who spoke about the environment or the intergovernmental specialists in environment departments and agencies. Similarly, no officials mentioned provincial legislatures. Again, this is perhaps not surprising given intergovernmental officials are part of the executive branch and live in the world of executive federalism. Likewise, only a few environment officials commented on the significance of political parties for IPC. An explanation for this is perhaps reflected in the comment from a Quebec official who noted, “Related to the issue of Quebec separatism we are seen as having our own agenda by other provinces and Ottawa, but policy on environment has always been the same no matter which party is in power. For example it was the provincial Liberal government [in Quebec] which pulled out of CCME.” There were also a few officials who mentioned party ideology as being important in terms of IPC, noting that many jurisdictions like Alberta and Ontario had parties in power whose political ideologies at the time moved environmental issues and policy off their political agendas. However, another official from Ontario noted that IPC really depends on the government of the day: “In terms of political ­support, with this new [Dalton McGuinty Liberal] government in

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Ontario there is more emphasis on intergovernmental relations and federal cooperation and given the position of [Quebec Premier Jean] Charest and the Council of the Federation this area is a priority for Quebec and Ontario.” A few officials interviewed in 2004 and 2005 mentioned that changes in government and parties may change intergovernmental relations in this policy sector, but noted that environment was still not high on the political agendas of any of the parties or governments of the day. Despite the fact that Stephane Dion made the “Green Shift” the focus of the Liberal platform in the 2006 federal election, the public was not ready or willing to make the environment the focus and no premiers seem to be either.

CONCLUSION Environmental problems are increasingly complex and multijurisdictional, requiring long-term, preventative, intergovernmental approaches. Overall, officials characterized the state of IPC in environmental policy during this period as exhibiting low capacity, low conflict, low cooperation, and inaction on many fronts. For generalists who commented on the environment and specialists who deal with intergovernmental dimensions of environmental issues on a daily basis, ideas, institutions, actors, and relations were all to varying degrees determinants of IPC. For most officials, institutions, institutional resources, and relationships were the most important determinants during the period of this study, highlighting the significant relationship between the policy capacity of various jurisdictions and the IPC within, between, and across them. Actors, particularly state actors, were also seen as important to IPC. Even though scientists and policy analysts recognize that ideas such as the ecosystem approach and sustainable development require intergovernmental action if Canada is going to address past, present, and future environmental issues, officials saw ideas related to environmental protection as being secondary to those related to deficits, economic growth, and public sector reform which prevailed during the period of this study. Even in the later period of the study when ideas began to shift and the issue of climate change found a place on the political agenda, ideas about other environmental issues and the environment in general remained secondary to economic growth and other pressing policy issues such as health care



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and f­oreign policy. This became even more evident after the 2008 economic downturn. Institutions were also seen as significant determinants of IPC. Many officials focused their comments on CCME as the primary political and administrative institution under executive federalism charged with developing IPC in this policy area. Collectively there was some consensus that CCME played an important role in enhancing IPC in the mid-to-late 1990s, but its role and significance were clearly being questioned during the period of this analysis. Interviews revealed that while institutionally comparatively well-endowed, CCME has much scope for improvement and “the scope, limits and conditions for environmental policy coordination and harmonization remains to be mined” (Parsons 2000, S133). Intergovernmental agreements might be viewed as indicators of IPC, but as officials noted, the existence of multilateral and bilateral agreements is not an accurate indicator here. Despite the political milestone of the signing of the multilateral Harmonization Accord in 1998, the lack of political will and administrative infrastructure made building IPC difficult in a period when other critical policy areas like the economy and health were facing crises and dominating the intergovernmental agenda. The institutionalization of collective priorities through the Harmonization Accord was generally felt to indicate some progress and capacity on several long-standing policy issues which had been the source of conflict in the past. The Harmonization Accord was seen as ushering in a new era in IPC but, in the opinion of officials, in only a limited number of environmental policy areas where sub-agreements were possible. The multilateral political agreement implemented primarily through bilateral action was also significant for officials who noted that IPC varies at these two levels. The federal role in the institutions of executive federalism was also top-of-mind for many officials. Despite some unilateralism related to climate change, Ottawa did not have the capacity to challenge or act in a leadership role related to most environmental issues during this period. Consistent with the historical pattern, there are continued areas like the Kyoto Protocol, water policy, and other environmental policy areas where the federal government is reluctant to exercise the environmental authority it clearly possesses. ­Significant pollution events like Walkerton, Ontario in 2000, when

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seven people died and 2,000 became ill, and North Battleford, Saskatchewan in 2001, when thousands of residents became ill due to drinking water pollution, were followed by public inquiries. This did not change the federal government’s involvement in water policy (Johns 2008A) and seemed to reinforce the preference of the federal government to allow provincial governments to take responsibility for environmental issues. The evacuation of the Kashechewan First Nation in northern Ontario in 2005 highlighted the federal government’s lack of policy capacity related to environmental issues for First Nations, but was also a case which highlighted the state of IPC related to First Nations communities generally and environmental policy more specifically. Overall there was also consensus that the existence of intergovernmental institutions is a necessary but not sufficient condition for IPC. While CCME garnered a lot of comments from officials related to IPC, several officials also noted the growing significance of institutions beyond CCME. In addition, there were some institutions that were only identified by a few officials as having an impact on IPC in this policy area. Surprisingly, the Constitution and the courts were only mentioned by a few officials. This likely reflects the fact that there was very little new policy and legislation during this period, a recognition by officials that jurisdictional overlap is a given in this policy area or perhaps the preoccupation with intergovernmental efforts in other institutional contexts such as ministers forums and international fronts. The climate change case was front and centre both in terms of the state of IPC domestically but also related to the significance of international institutions. Many officials commented how, after a tenyear period of some progress at the bureaucratic level, an issue can be thwarted when embroiled in political conflict at the first ministers’ level and when put under the international spotlight. Both the harmonization and climate change cases highlight the limits of IPC (Winfield and Macdonald 2008) and illustrate how two different envir­onmental issues and policy arenas can result in two different pictures of IPC within the same policy area. Although we received many comments from officials about the importance of political actors, most officials viewed political actors as inhibitors to the development of more IPC. The fact that environment ministers were not charged with significant policy mandates during the period of this study is clearly an important factor in



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explaining IPC. In contrast, officials placed significant emphasis on the role of officials as actors and the contribution both bureaucratic leaders and policy officials play in IPC. Interestingly only some officials identified the public as significant for IPC in this policy area. Those who did identify the public placed an emphasis on organized interest groups, and some noted the engagement of municipalities and new groups. Citizens were not identified as significant to IPC in this policy area. The significance of relations between the two levels of government was stressed by officials. Federal unilateralism was a factor that several officials said undermined IPC, particularly related to Kyoto. There were also several officials who agreed that the degree of cooperation depends on the motivation and strategy of the federal government, as academic analysis has also suggested (Winfield and Macdonald 2008, 284). However, provincial unilateralism in some cases such as climate change was noted as equally significant in explaining the state of IPC in this policy area. As others have observed, there are also some issues such as water exports where some level of IPC has been developed at the sub-national level through some provinces taking the lead. The result is a considerable degree of similarity in policies across jurisdictions (Heinmiller 2003). However, comments from environment officials suggested they were not fixated on interprovincial competition or cooperation and in keeping with other observers there was not much evidence that officials thought in terms of a “race to the top” or “race to the bottom” (Olewiler 2006). Perhaps the most surprising finding from interviews with officials in this policy area was the significance of informal relationships. Almost every official identified interpersonal informal relationships and trust as very important to IPC. Finally, it should be noted that many officials also stressed that federal-provincial-territorial relations and thus IPC are highly variable depending on the jurisdiction and environmental issue being discussed or evaluated. Analysis during the 1995–2005 period indicates that indeed intergovernmental interaction between governments on environmental issues can take different forms (Bakvis, Baier, and Brown 2009). However, this analysis also indicates that even related to some issues like climate change, relations and IPC can vary at different points in time. While variation in IPC depending on the issue is not surprising given the geographic and economic size and diversity in Canada,

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there are significant internal and external pressures on several fronts. The findings of this analysis are also consistent with other observations that intergovernmental relations have been most cooperative when federal and provincial governments have been least committed to the environment (Harrison and Fafard 2000; Harrison 2002). While this was generally a period of low conflict (with the exception of Kyoto) as Harrison has noted, harmony and cooperation does not necessarily contribute to environmental protection (Harrison 2002, 139). There is clearly a difference between active and passive cooperation. Ultimately, the reality of environmental policy “under conditions of shared and overlapping authority, between levels of government and between state and societal actors” (Parsons 2000, S141) remains an important challenge in this policy area. Although officials are well aware of these intergovernmental challenges and the significant variation in IPC across issue areas and jurisdictions in the federation, a serious challenge remains in terms of enhancing IPC related to environmental policy. We have seen, for example, the challenges posed in the late 2000s by minority Conservative federal governments and a downturn in the economy.

6 Trade: Measured Cooperation

INTRODUCTION It is perhaps a truism to say Canada is a trading nation. It always has been. It is also the case that no other country has a more concentrated pattern of trade than does Canada, with almost 82% of Canadian exports destined for North American markets. Of that total, only about 2% went to Mexico while about 80% were sent to the United States in 2006. In the period of this study, perhaps no other policy was of greater importance to the overall economic well-being of the nation given the global focus on trade liberalization. There are two dimensions to trade policy to be assessed when considering the state of intergovernmental policy capacity (IPC) in this area: international (or external) and interprovincial (or internal). In both cases, some important developments significantly altered the context of policy-making and thereby affected IPC. Globalization and continentalism had a profound impact on trade policy, which was dominated by a global thrust toward liberalized trade and by the Free Trade Agreement (FTA) in 1989 between Canada and the United States and the North American Free Trade Agreement (NAFTA) in 1993 between Canada, the United States, and Mexico – as well as ongoing negotiations for multilateral trade liberalization at the World Trade Organization (WTO) and various bilateral initiatives. Domestically, the Agreement on Internal Trade (AIT) was negotiated and implemented during the period of our study. In interviews, intergovernmental specialists in trade ministries flagged a variety of ideas, institutions, actors, and relations as having an impact on IPC between 1995 and 2005, although not all commented on all of these factors, and some factors received very little comment at all.

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Nevertheless, the proliferation of trade agreements in the setting of an increasingly globalized and continentalized economy meant governments at all levels had to scramble to exercise whatever IPC they already had while also developing new IPC to deal with a dynamic and rapidly changing landscape.

IDEAS Certain broad, contextual ideas predominated in the realm of trade policy in the period of our study. In particular, the ideas of trade liberalization and globalization in the context of neoconservative ideology reinforced IPC in a climate of collaborative approaches to international trade policy by federal, provincial, and territorial governments. As one official explained, “Where internationalization is concerned, there is more and more provincial involvement in international affairs due to globalization. There has been a restructuring of the national economy toward the outside world and more connections to the international economy, for example 95% of [Canadian manufacturer] Bombardier’s business is outside Canada. The federal and provincial governments are facing this globalized economy.” In many cases, this meant charting waters heretofore unknown. For instance, in the late 1980s, although foreign treaties fall under federal jurisdiction, provinces and territories began to get more involved with international trade negotiations. “The softwood lumber issue involved the provinces directly, as did some GATT [General Agreement on Tariffs and Trade] panels,” said one official. “The feds led, but there was increasing acceptance of a provincial role. It was a period of changes in which these factors necessitated enhanced policy capacity among the provinces,” said another. The rise in neoconservative ideology in Canada created a receptive climate for trade policy reform. Economic crises in Canada from the 1970s onward fostered conditions for a serious re-examination of the basis of Canadian economic development policy. The mobilization of interests for and against free trade in the 1980s reflected the debate over prescriptive policy flowing from a polarized society. The decision to reverse over a hundred years of trade policy (the tariffs of the National Policy of 1879) for continental free trade was a signal moment for Canada (Inwood 2005). Putting aside the political and economic debate about the merits of this course of action, the noteworthy point is that a growing need for IPC was met with more



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collaborative federalism. The federal government invited the provinces and territories in to negotiate key trade-related concerns before turning its attention to the Americans, and later to the Mexicans and others. The phenomenon of “Team Canada” trade missions followed shortly thereafter, wherein premiers and their officials accompanied the prime minister and his officials on foreign junkets in search of trade opportunities. Team Canada was also seen as a consensusbuilding forum with membership from business, labour, consumer groups, and academics. We elaborate on these developments below. This ideational climate also affected interprovincial trade policy, with neoconservatism leading to the push for intergovernmental policy collaboration within the Canadian federation. Indeed, the main mandate of the sweeping Royal Commission on the Economic Union and Development Prospects for Canada (the Macdonald Royal Commission) of 1985 was initially to investigate the internal economic union in light of the numerous barriers to trade provincial governments had erected. In keeping with neoconservative economic thinking and with the dynamics of executive federalism, a political agreement on internal trade was struck between the prime minister of Canada and the provincial premiers in 1993–94. Consistent with the idea of trade liberalization, the AIT was meant to reduce barriers to internal trade and establish a rules-based regime to monitor and govern this issue-area, although compliance remained voluntary. For public servants, the implication of neoconservative ideas based on the primacy of free markets with regard to trade policy was simply that capacity needed to be devoted to facilitate free trade both internationally and internally. While officials had few explicit comments about ideas animating trade policy, they frequently commented uncritically on the policy desirability of free trade and accepted it as their ideational and paradigmatic frame as a result.

INSTITUTIONS The Constitution The constitutional framework for trade policy backed by judicial rulings since the 1937 Labour Conventions case, places restrictions on the federal government’s scope to unilaterally implement international trade agreements in areas of provincial jurisdiction. The constitutional conundrum emerging from this case essentially

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determined that the federal government has the power to enter into treaties with foreign entities, but the provinces have to agree to implement relevant sections which impinge on provincial jurisdiction. The result is a system of consultation over trade matters, followed by negotiations between Ottawa and foreign interests who take into account provincial concerns. As one official commented, because of the Labour Conventions case, “management of trade policy is more complex ... Provincial participation and consultation and mechanisms for information sharing are important.” The Labour Conventions case produced this famous judicial statement outlining the relationship: It must not be thought that the result of this decision is that Canada is incompetent to legislate in the performance of treaty obligations. In totality of legislative powers, Dominion and provincial together, she is fully equipped. But the legislative powers remain distributed and if in the exercise of her new functions derived from her new international status she incurs obligations they must, so far as legislation be concerned when they deal with provincial classes of subjects, be dealt with by the totality of powers, in other words by co-operation between the Dominion and Provinces. While the ship of state now sails on larger ventures into foreign waters she still retains the watertight compartments which are an essential part of her original structure. (A.G. Can. v. A.G. Ont., (Labour Conventions) [1937] AC 354). [emphasis added] The need for federal-provincial-territorial cooperation mattered less when trade negotiations primarily concerned tariff reductions. The period of intensified global trade negotiations following from the GATT in 1947 focused initially on reducing tariffs and defining trade rules. These responsibilities fell within the gambit of the federal power. Consequently, there was no provincial involvement and no permanent mechanism for trade policy consultation. Informal discussions between trade officials and business representatives took place, but not in any formalized manner. By the Kennedy Round of GATT negotiations from 1964 to 1967, the federal government determined that a formal mechanism was needed given the evolving nature of trade negotiations, and so the Canadian Trade and Tariffs Committee (CTTC) was created to receive information and hold



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hearings to prepare for negotiations. Those negotiations broadened further after the Tokyo Round of GATT talks from 1973 to 1979, when tariffs were substantially eliminated, and trade policy began to reveal a broader social dimension. Discussions turned to internal or domestic policies that distorted trade, such as certain provincial regulatory regimes. The CTTC began to solicit views of business groups like the Canadian Exporters Association, the Canadian Manufacturers Association, and the Chamber of Commerce, as well as pro-business think tanks like the C.D. Howe Institute. By the 1980s, the range of issues considered within the purview of trade policy broadened to include energy, transportation, services, telecommunications, and other areas. Gradually, obligations incurred by the federal government in international trade treaties increasingly impinged on areas of provincial jurisdiction, and required some measure of provincial concurrence as a result. As one official creatively suggested, “There is a greater need to consult the provinces now because of the jurisdiction of provinces ‘internestically.’” The result is some collaboration, even if only of a consultative nature, facilitated by an Office of the Canadian Coordinator for Trade Negotiations set up by the federal government. According to one federal official, “Federal responsibility for foreign policy is not challenged by the provinces at all, except Quebec. The feds do not have an obligation to consult with the provinces, but the practice has evolved that consultation often occurs in the name of efficiency abroad; thus a joint approach is used.” Further institutionalization of this arrangement has been sought by some provincial governments. According to an official from Alberta, “since the mid-1980s there has been an initiative by Alberta to institutionalize agreements with the feds over negotiating in trade areas. But provincial governments want to ‘participate’ while the feds just want to ‘consult.’” Nonetheless, provincial involvement in trade negotiations has steadily increased over time, with some provinces desiring more decision-making authority to the point of sitting at the international negotiating table with the federal government. But the federal government wants to retain for itself the current powers it enjoys, while remaining cognizant of the need to keep the provinces on board. Constitutional restrictions on the federal government’s scope to implement international trade agreements in areas of provincial jurisdiction was problematic, according to the perspective of one federal official who said, “The Constitution impedes policy capacity.

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Quebec uses the 1937 Labour Conventions case to argue for its own role in international relations, for example on labour policy, by saying that if the feds cannot implement treaties in areas of provincial jurisdiction, provinces should be able to negotiate directly with sovereign countries over those areas.” But the same official went on to suggest, “The offsetting benefits of constitutional reality are that it promotes competition between governments over jurisdiction.” Another official said, “There is a need to develop ideas together, but the consensual route is not vital since responsibility lies with the federal government in this very dynamic process as part and parcel of policy-making itself. Federal-provincial relations forces policy ­makers to develop policies that take into account various levels of competitive forces.” But in any event, the overwhelmingly continental context of trade policy means that the traditional constitutional parameters of trade policy were altered or even rendered obsolete by new supra-national institutions. NAFTA contains not just provisions regarding trade rules, but also regulations regarding investment, economic, and other activities among the parties, innovative provisions for dispute settlement, institutions for ongoing governance, and incentives for further policy harmonization whose measures in some cases supersede the political constitution. Provincial governments generally lack official standing before these bodies. Of necessity, then, they must seek the assistance of the federal government in the event of disputes with their North American trade partners. Thus the impact of NAFTA has been to increase the extent of intergovernmental negotiation and bargaining. Collaborative federalism has become further entrenched in the trade sector due both to the prevailing constitutional regime and the new continental regime which is superseding it. As we will see below, there are significant gaps in the IPC to deal with this emerging reality. Where interprovincial trade is concerned, Section 121 of the Constitution ensures the free movement of “All Articles of the Growth, Produce, or Manufacture of any one of the Provinces” across provincial boundaries. But the courts have generally interpreted this to exclude trade in services and non-tariff barriers, and it has been determined not to apply to labour or capital. The federal trade and commerce power, Section 91(2), has been used to strike down provincial legislation restricting interprovincial trade. But overall, the Constitution is less relevant to interprovincial trade than to international



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trade. Typically, a regime of provincial favouritism has historically prevailed, as revealed by a sometimes ingenious array of government procurement, residency, labour market, and other regulations and policies erected at the behest of particular economic interests in each province. Repeated federal-provincial-territorial negotiations to break down interprovincial trade barriers met with little success until the mid-1990s – and even then success was qualified (discussed below). Free trade advocates (mainly economists and some business interests) have long noted that internal barriers to trade presented greater obstacles to trade between the provinces than did barriers to trade between Canada and the rest of the world. But entrenched provincial advantage proved resistant to change, particularly in the absence of an interested public to put pressure on governments. The courts have interpreted Section 121 of the Constitution as a general principle forbidding the erection of interprovincial tariff barriers by both levels of government. This has permitted a range of non-tariff barriers to be erected, impeding the free flow of certain factors across provincial boundaries. But overall the issue is more political and administrative than constitutional. Said one provincial official, “The feds’ focus was on strengthening the internal economic union as part of their well-established constitutional agenda. But they failed constitutionally in the Charlottetown Accord and so moved it to an administrative process focused on internal trade.” Political and Administrative Institutions Federal-provincial-territorial relations began to be significantly affected over trade during the negotiation of free trade with the United States beginning in the 1980s. To foreclose potential provincial opposition, provincial views were solicited by the federal government through the Continuing Committee for Trade Negotiations (CCTN) and later through First Ministers’ Meetings (FMMs). The provinces saw an opportunity to expand their involvement in trade negotiations and so asked for a system of co-chairing a proposed committee of trade ministers, but were not successful in convincing the federal government of the utility of this approach. Nor were the provinces successful in their request to have a representative participate directly in international trade negotiations. Explained one official, the provinces and territories eventually made this issue a topic of the Annual Premiers’ Conferences (APC), which “produced

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a common front in communiqués that the provinces want a bigger role in trade policy.” But the same official also pointed out that not all governments share exactly the same view on this, since several lack the IPC to undertake it. “The smaller provinces are not quite as strong advocates of this. It is a capacity issue. The consensus is that there should be a formalization of the relationship with protocols and we should try to get regular meetings and notifications.” Even Ontario expressed some reservations. One official explained in 2005, “Ontario is not pushing for a more formal role in international trade. Ontario is ambivalent. We do not want a consensusmaking forum as this would cripple us, and we don’t want to deal with issues that do not concern us.” A federal official took the view that “there is a need for stronger mechanisms for the provinces to be comfortable with the federal government negotiating for them, for example on softwood lumber where it is hard to maintain a national position. While we don’t allow the provinces access to the negotiating table with the Americans, the provinces are fully briefed by [Foreign Affairs and International Trade Minster] Pierre Pettigrew. This mechanism works well.” Still, a set of political institutions was developed which allowed provincial governments (and non-state actors) to participate, within limits, in the external trade file. According to an official, “Practical relations have evolved. The Canadian position has been worked out through convention over the past fifteen years. The provinces, though, want to institutionalize consultations. The feds have resisted this. They say the provinces should resolve internal trade first. In major negotiations over the WTO, the Uruguay Round of GATT, the FTA, NAFTA, the Free Trade Agreement of the Americas (FTAA), et cetera, and bilateral agreements, the role of the provinces has steadily increased, but only to the point of participating at the table. But it has never been formalized.” Furthermore, federal, provincial, and territorial ministers responsible for trade do not meet regularly. Consequently, there is informality to the process, to the chagrin of some provinces. As one official noted, “On policy formulation, the provinces are informal players, and this frustrates them. For example, Ontario, Quebec, and British Columbia especially are interested in fluid, open borders with the United States, but in the post–9/11 era, the feds needed a new strategy. So the feds kept the provinces informed, but design and engagement with the US was done by the feds.” The same official did concede, though, that “the provinces



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were invited to consult at the local level over border institutions, for example with governors of American states.” Quebec and Alberta in particular have challenged the extent of provincial autonomy in this arrangement, according to officials. Said one official, “Alberta and Quebec are the most assertive of the provinces.” Their positions were explained by another official in this way: “Quebec argues that many areas of provincial jurisdiction are extensions of the international scene, and this leads to confrontation. This is not the case with the other provinces, although Alberta made a similar claim during the time of the National Energy Program and even threatened to join OPEC [the Organization of Oil Exporting Countries].” The official went on to suggest, “Quebec says because of globalization that the need for independence is greater than ever as Quebec needs to be present at negotiations. It uses the examples of Scotland and Spain as the most European-oriented of regions. Quebec wants to bypass federal government authorities in international bodies to achieve their domestic goal of separation. This appeals to youth in Quebec. But other provinces are establishing their foreign presence too.” One important institutional development in intergovernmental political relations, according to officials, was the Team Canada trade mission whereby the prime minister, premiers, and their officials, along with business representatives, undertook foreign junkets together in search of foreign trade opportunities. The early genesis of the Team Canada trade missions is interesting. According to an official, “In the late 1980s the four western provinces created a senior officials’ trade forum because initiatives on trade from a federal perspective were seen as the Ontario and Quebec perspective. The feds were not there for Western Canada. The Western Canada premiers’ mission evolved into the Team Canada approach. There has since been a change in the federal government attitude in recognizing regional differences and they now support sectors they did not support before. But the four western provinces had to build up their own capacity first, and this ultimately led to improved relations with the feds.” Team Canada trade missions thus became an example of the IPC of governments working together, with both formal and informal opportunities for first ministers to facilitate intergovernmental relations. It stands as an example of multilateral approaches being favoured over bilateral ones, or of IPC across governments. An

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­ astern Canadian official suggested, “We work well with our federal E and provincial colleagues. The federal government tries to make it an inclusive process. The feds have their own agenda – trade is very political; sometimes it is a vehicle for relations with other governments in other areas. So the ‘Team Canada’ approach is preferred over a bilateral approach.” It emerged at a time when departmental trade promotion activities were being cut back due to deficit reduction strategies instituted by most governments. For instance, Ontario and Alberta reduced the number of stand-alone trade promotion offices they had previously each maintained in favour of the more economical trade promotion opportunities on the Team Canada bandwagon. There were seven Team Canada Missions between 1994 and 2005: Russia and Germany in 2002; Beijing, Shanghai, and Hong Kong in 2001; Japan in 1999; Mexico, Brazil, Argentina, and Chile in 1998; South Korea, the Philippines, and Thailand in 1997; India, Pakistan, Indonesia, and Malaysia in 1996; and China in 1994. The Team Canada approach to drumming up business abroad for Canadian capital has been called “Ottawa’s key weapon to pry open doors for timid Canadian exports,” even though Statistics Canada figures show that these missions had little visible impact on trade between Canada and its trade partners (Janigan 2001, 30). Nonetheless, this practice was institutionalized in the Federal­Provincial-Territorial Committee on Trade (CTRADE), whose secretariat is located in Ottawa and which coordinates Team Canada trade missions. CTRADE is chaired by a senior federal official from the Department of Foreign Affairs and International Trade (DFAIT), while its agendas are jointly agreed upon by all partners. However, as one federal official said, “CTRADE is a federal responsibility and the feds do not want to give the impression that trade is a shared responsibility.” Meetings are held quarterly and information disseminated over a secure website. According to a federal official, “The CTRADE mechanism – trade ministers’ meetings supplemented by quarterly assistant deputy minister and deputy minister trade officials’ meetings, encrypted websites, and regular phone calls between officials – is effective regarding policy capacity. It allows the provinces to gain insight into each other’s positions and for the federal government to appear to be transparent to the provinces.” Other officials are less convinced of the efficacy of CTRADE, though. For instance, one pointed out that attendance at meetings by provinces was occasionally spotty. “We used to have meetings where only four or five



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provinces would show up at the deputy minister level,” according to a federal official. “Only the provinces with strong interests would show up.” In addition, any institution is only as effective as its leadership, and one provincial official complained about CTRADE that “much depends on the personalities. There was a change in the chair six months ago. We are still trying to figure him out. The last two chairs were fabulous. Even when disagreeing they had a respectful and collegial atmosphere.” Canada Trade Missions follow the same format as Team Canada Missions but are usually smaller in scale and are led by the minister of international trade. Provincial trade ministers are invited to take part in these missions. Canada Trade Mission destinations between 1995 and 2005 included India and China in 2005; Brazil in 2004; South Africa-Nigeria-Senegal in 2002; Mexico in 2002; India in 2002; Morocco-Algeria-Spain-Portugal in 2000; HungarySlovakia-Czech Republic-Slovenia in 2000; Russia in 2000; Australia in 2000; Ireland in 1999; United States (San Francisco, Silicon Valley) in 1999; Saudi Arabia-United Arab Emirates-Israel-West Bank/Gaza in 1999; Poland-Ukraine in 1999; Italy in 1998; and Brazil-Argentina-Chile in 1995. But there is not always a congruence of interests between Ottawa’s foreign trade priorities and those of all the provinces. For instance, an official pointed out that for British Columbia, “Japan is the main trade partner,” yet Japan is conspicuously absent from the list above. Moreover, the official noted, “When Team Canada went to the American western states [in 1999], a separate British Columbia delegation went to Houston instead.” In any event, another official noted, “these kinds of institutional mechanisms are conditioned by differences among the governments regarding their own self-interests and are conditioned by the fact that provinces are prevented constitutionally, according to the feds, and by convention, from engaging [in] negotiations with foreign countries. Institutions are conditioned by differences in selfinterest and by the sectorally specific nature of some issues.” At the federal level, the minister of international trade and DFAIT are principally responsible for trade policy and trade negotiations. There is, however, the practical necessity of horizontality in the execution of the department and minister’s mandate, given the number of other ministries whose roles involve international trade issues. This horizontality involves consultation and consensus-building within the cabinet and among all departments involved in trade

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policy. The increasing complexity of trade negotiations over time has resulted in a growing number of departments involving themselves with DFAIT and the negotiation process. For instance, four Canadian departments were involved in the 1973–79 Tokyo Round of multilateral trade negotiations. The Doha Ministerial Meeting of the WTO in 2001, by contrast, involved twenty-four Canadian departments and agencies. Of necessity, the increased number of federal bodies involved in the process makes the intergovernmental dimension that much more complex, as provinces and territories expect to be fully appraised of the federal position, which itself is multi-layered and informed by a growing chorus of voices from within. And the provinces and territories have developed their own means of interdepartmental coordination (see below). At the administrative level, departmental and central agency roles in the formulation of international trade policy have evolved recently, and as such, some officials in trade remarked on this and its implications for IPC. One official pointed out the differences in approaches between his/her trade ministry and that of intergovernmental relations. S/he argued that “there are differences between intergovernmental and economic development approaches to trade. Trade people in intergovernmental agencies can get roped into fights. The intergovernmental agencies approach is derived from [the failed] Meech Lake Accord, etc. It is a conspiracy game of secrets and back-room deals, and this has an influential current in intergovernmental affairs in Canada. Trade in Ontario has tried to resist this intergovernmental agency approach.” At the same time that greater federal-provincial-territorial collaboration was evolving in trade, Ontario was engaged in a political fight with Ottawa over issues related to fiscal federalism (see chapter 4). This led an official to observe, “Ontario tries to be credible and collegial to have more influence and to show its contribution positively and help make progress. But we needed to fight internally over our collegial position – there were pressures to be less cooperative due to the fiscal imbalance fight between Ontario and the feds. But trade resisted and pushed back when intergovernmental tried to get trade to be less cooperative.” A common complaint among officials who interact with intergovernmental relations departments was that “there is far more emphasis on process and structure than there should be.” But another



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official felt this was as it should be, since “there is always the question of process versus policy-related issues. There is a need to ensure that the conduct of governments is transparent and consultative, and there is need for a process focus in order to develop policy. Process is prior to policy. If the process is contested, policy cannot move forward.” Another official noted that because enhancing consultation was a choice made by governments, “you have to recognize that process needs more time and resources. But policy capacity will be better because you can sustain and gain legitimacy for your position.” Officials also commented on those structural aspects of their ministries which they felt affected IPC. Typically, trade and industrial policy have been institutionally linked, and have felt the influence of finance. Said one official, “Finance is crucial to policy capacity due to its control over the dollars. This is the most important aspect. We have to have a strong connection with the finance people within our government. Fiscal restraints seem to be a reality for the foreseeable future. Finance is frequently in control with intergovernmental relations.” At the federal level in the 1990s, the Department of External Affairs became the lead ministry on the free trade file in the federal government. After 1993, DFAIT was principally responsible for foreign affairs, while trade was relegated to a second tier. At the provincial level, the location of political and bureaucratic actors varies significantly. In some jurisdictions, intergovernmental relations departments take the lead on trade policy; in others, ministries of economic development or of industry do. The cross-cutting nature of trade policy also means that a wide variety of other ministries can be drawn into the orbit of trade officials, such as energy, transportation, natural resources, environment, and so on. The importance of departmental organization should not be underestimated in the IPC of governments. A historical example illustrates this well (see Doern and Tomlin 1996). In the early 1980s, the federal government initiated a review of its overall policy. Within this review, the Department of Industry, Trade and Commerce (ITC) looked at trade policy, while the Department of External Affairs (DEA) reviewed Canada-United States relations. Coincidentally, departmental reorganization in early 1982 brought the trade elements of ITC into a reorganized DEA as a new trade and economic wing reporting to its own Minister for International Trade. Now that trade policy was removed from its traditional bureaucratic home in

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ITC which had traditionally demonstrated a protectionist attitude, the prospects for free trade were increased. Consequently, that portion of the government review emanating from the DEA flirted with free trade as an option in a way that was unlikely to have emerged from ITC. The result was to open the bureaucratic door enough that subsequent initiatives toward free trade were given some extra impetus previously lacking. Once the breakthrough of the FTA had been achieved, pressure mounted for other agreements. Departmental reorganization on a functional basis was effected in the 1990s to deal with the increasingly important array of trade negotiations without having to develop a new structure every time a new agreement was sought. In addition, some governments reorganized for other reasons. For instance, “the Nova Scotia government reorganized trade. There was a disassociation of trade promotion from trade policy.” But this had an adverse effect on IPC since “this left two people doing trade policy.” Another example of departmental reorganization was i­dentified by provincial official as contributing to IPC. “In 1995 Foreign Affairs developed a trade law division which facilitates good relations with the provinces, and makes the provinces’ roles easier. Highly technical issues are easier to foster cooperation over. There are differences of opinion on strategy, but it does a good job overall. Technical differences are easier than policy differences to deal with in terms of federal-provincial relations. A rules-based system creates a means of dealing with issues.” Another structural element in trade involves the creation of overseas trade offices by governments. This may involve stand-alone offices or facilities shared with another provincial or even the federal government. A federal official explained, “We developed the principle of co-location of provincial representatives in Canadian embassies to share costs, for example between Ottawa and Alberta. There is a renewed interest in federal-provincial cooperation with the provinces looking for economical options for foreign representation. The exception is Quebec.” Reported a provincial official, “Where structures are concerned, we sometimes have our foreign trade offices in federal offices, sometimes we go it alone abroad; British Columbia currently has three foreign offices. The offices are full-service, and have now moved to the core business of a defensive marketing strategy on lumber etc. The office in Tokyo is a stand-alone office whereas previously it was in the Canadian embassy since most Japan



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business is in British Columbia. We trade in building products and environmental technology, and we market the British Columbia lifestyle. A third office in Taipei Taiwan supplies services in education and tourism.” The growing importance of trade offices for IPC is revealed in the comment by an official that, for his/her government, “the international offices budget is now as great as the entire trade budget was in the 1990s.” It was also indicated by a Manitoba official that where trade policy is concerned, economics trumps ideology since “we have a memorandum of understanding with New Brunswick for a joint mission to Chicago and Atlanta, which transcends ideology since they are a Conservative government and we are an NDP government.” As we noted above, with the FTA and NAFTA, collaborative federalism was enhanced in that the provinces and territories were invited to discuss key trade-related concerns prior to its negotiations with the Americans and, later, the Mexicans. CTRADE coordinates consultation between the levels of government and is chaired by a senior official from DFAIT. The agenda is proposed by DFAIT as well, although there is input from the other two levels of government and the agenda must ultimately be accepted by all members. The Committee meets once a year at the ministerial level, and more frequently at the official’s level. Explained an official, “deputy ministers meet twice a year, ministers meet once a year, and officials meet four times a year. The provinces are kept informed of developments.” When intergovernmental issues heat up, though, more meetings may be called, such as when the FTAA Summit of the Americas took place in 2001. At that time, the prime minister appointed an official to act as a special liaison to consult with provincial and territorial deputy ministers of intergovernmental relations as preparation for the Summit. In addition, about forty specialized or sectoral committees were established under NAFTA requiring considerable intergovernmental cooperation. Said an official, “There is ongoing consultations at all levels, conversations and meetings, frequent ministers meetings, and cabinet negotiating strategies, and there are federal-provincial and sometimes industry meetings.” The post–9/11 period saw an intensification of institutional responses to federal-provincial-territorial coordination. As one official noted, “There was an increased need to inform the provinces so we created ad hoc mechanisms with deputy ministers and the clerk of the Privy Council to share information and coordinate and

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share views, including sector-specific coordination, for example on transportation and border issues. We had teleconferences and inperson meetings, which were seen as a good example, according to the provinces, of the opportunity to gain knowledge and information, and to develop a joint federal-provincial strategy regarding the response to the United States. This also allowed for a coordinated and reinforced message to the United States on Canadian interests.” On internal trade, officials noted insufficient IPC meant that the pace of progress was slower than in international trade as far as developing effective political and administrative institutions was concerned. This is despite the fact that more than a dozen federalprovincial-territorial and interprovincial ministerial and interdepartmental committees were developed to oversee the implementation of the AIT. Incremental political agreements within the framework of the AIT moved issues forward an inch at a time. But this slow pace caused the premiers to take up the cause in the Council of the Federation (COF). In 2004, the COF provided a work-plan for ministers responsible for internal trade to address domestic trade barriers. According to an official, “The Council of the Federation increased the amount of intergovernmental traffic at the premiers’ level. They moved from annual meetings to four meetings in one year.” Internal trade was deemed a central preoccupation of the COF, though with mixed results. Said an official, “We are now more active. But our policy capacity may not have increased so much as the volume has.” Nonetheless, the AIT stands, as noted, as the key administrative agreement in internal trade. It is supported by a Winnipeg-based secretariat established to provide administrative and operational support to the functioning of the agreement. According to an official, “The formal AIT secretariat was set up partly because there was a lack of trust in Industry Canada. So a secretariat was set up to play a neutral role.” However, not all governments were happy with the establishment and ongoing support for the Secretariat. An Ontario official reported, “We tried to reduce our transfer payment to the Secretariat because the utility of the Secretariat was questioned,” arguing that barriers to internal trade were better resolved internally. Perhaps the most prominent effect for IPC of developing political and administrative institutions is the enhanced communications capacity they promoted. On both international and internal trade, there is a flow of information and dialogue, according to the official who said, “We don’t necessarily support the federal position on all



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issues but AIT provides a process for provinces to voice opinions. We talk with Ontario, Quebec, Manitoba, and Alberta via email and we have quarterly meetings organized by the feds to review key issues, discuss the WTO and new initiatives and decisions that impact trade. We have both multi- and bilateral teleconference calls to disseminate information to the provinces. This is a forum for commenting on federal trade policy.” Institutional Resources Consistent with the tenor of the times, trade officials were concerned about the impact of “doing more with less.” As an Ontario official reported, “IPC across the provinces has decreased due to downsizing.” A federal official suggested, “We need more time and resources for better policy in order to reflect the views of more stakeholders.” Institutional resources were an issue affecting IPC in that budgetary pressures were present. According to one federal official, after the conclusion of NAFTA and the Uruguay Round of trade talks in 1994, resources were cut back. The federal Program Review costcutting exercise reduced DFAIT’s budget by twenty percent between 1994–95 and 1997–98. But also the increased number of trade deals meant “demands were still there, and we had to impress upon the deputy minister and minister the need for resources.” The impact of an expanding portfolio for trade officials was revealed by the official who said, “Financial realities also drive policy capacity. It is not just a factor of reductions to funding, but that growth is greater than resources.” The fact of increased horizontal policy management also came up, as witnessed by the official who reported that negotiations for free trade in services required the participation of seventeen departments. However, one federal official did argue that her/ his government committed fiscal resources to trade policy capacity. S/he said that where IPC is concerned, “there is an elaborate federal architecture so if policy is not good, it is not because dollars are not being spent on it.” This contrasted with the view of a provincial official who felt the impact of reductions in departmental budgets by saying, “The dollars have decreased. We are not even hiring external consultants. For example, we have a law office in Washington, but we can’t ask the same quantity of questions to legal counsel because of high legal fees. Travel has been cut back too. We have no international travel, for example to the WTO, Geneva, etc.”

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The disparity in size of governments across Canada came up as a factor affecting IPC in terms of resources (see chapter 9). As one official noted, “We must be selective in our choice of issues in contrast to Ottawa which has specialty staff in various areas.” Because the federal government is so large, other jurisdictions have trouble merely identifying with whom to deal. As one official noted, “We are a simple organization so one person can say what needs to be done, but no one person at the federal level speaks on a given file.” This means that simply getting answers can be time-consuming and frustrating. But in addition, the discrepancy in size among provincial and territorial governments means that not all want the same things. Said one official, where mechanisms for a provincial role in international trade issues are concerned, “British Columbia wants a more formalized role and mechanism. But others are not on side. For example, Nova Scotia and New Brunswick cannot afford it.” Getting around this basic conundrum of Canadian federalism was an ongoing concern for officials. But one official argued for a different approach, suggesting, “Financing and size are important, but it is how you use your resources” which fosters IPC. Another official illustrated this point by drawing attention to his/her unique comparative advantage, saying, “I am lucky to be small because I can talk to my minister across the hall. There are fewer ‘level’ anxieties here. I know I can make a commitment.” The growing emphasis on trade policy as something beyond just tariff reductions meant that the provinces had to build up their IPC. One provincial official noted that “in the 1980s it was hard to take an active role in trade due to a lack of resources. But we wanted federal-provincial consultations [over the FTA] and this opened the door for the provinces. It raised the consciousness of [provincial] governments regarding trade policy and its intergovernmental relations element as areas to be managed.” Moreover, while it created the conditions for federal-provincial-territorial coordination and collaboration in trade, it was not equally possible for all governments to take advantage of this climate and set of opportunities. One official pointed out in 2004, “The provinces generally agree on the need for the feds to provide provincial involvement on trade relations, but the provinces won’t and cannot engage in every issue. We must have the staff to do this, but we are in an era of fiscal restraint due largely to health, so we have had to make tough choices.” A federal official argued federal-provincial-territorial collaboration in trade had



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another important dimension to it, saying, “Overall working with the provinces has resulted in improvement in delivering the Canadian position [to our trade partners]. That this is done on a caseby-case basis is important since some provinces have fewer resources than others.” However, one provincial official also pointed out that collaboration with the federal government was difficult because “the feds rotate their people too much.” Staffing levels in trade departments were a concern among officials. One official pointed out that “high turnover is a problem. The corporate knowledge is hard to maintain.” Another official claimed, “Government cuts affected resources and policy capacity. There are fewer human resources plus more things to do with the same number of people.” S/he went on to suggest that policy capacity meant the capacity to analyze and make recommendations on international trends, “but there are fewer resources available even though there is increased involvement in communications and more information being provided. These lead to less policy capacity.” Another official pointed out, “Ontario has sixteen people to New Brunswick’s one. Our personnel resources are stretched. The feds have four-hundredplus people. New Brunswick has one!” On the other hand, though, one official, tongue in cheek, pointed out, “Our policy capacity is increasing – our staff doubled from one to two.” Interviews toward the end of our study indicated some movement was occurring in hiring. An Ontario official reported in 2005 that prospects for the future looked bright, saying, “There is a remarkable quality of candidates; really good people competing for positions from a variety of backgrounds – legal training, public administration, international relations, economists, resources, the environment. The range of backgrounds is a strength of the branch.” However, there was still an uneven capacity to take advantage of this new development. The same official suggested, “We can attract quality people, though many in international trade go to Ottawa. Smaller jurisdictions have greater problems attracting people.” Having discrepancies in resources is also a factor in terms of a department’s ability to impress upon other departments within the same government that its file is important, or to work horizontally, as indicated in the comments of the official who said, “Ontario contracts out for legal help; Alberta has three lawyers; our ­attorney-general’s office lacks trade law experts or experience. This is an inhibitor to capacity. Our one person cannot lobby within our

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own government while in Ottawa or other provinces. Politicians and intergovernmental relations officials are interested in outcomes, but the promotion of trade issues within the government is hard due to limited resources.” At times, the attention of politicians and officials is consumed by hot issues, with the consequence that “if there is no big ‘problem’ [in trade] we cannot get attention like they do with health care.” Moreover, according to another official, “cooperation is the way you want to go, but resources are remaining static so you need to partner more.” Put another way, “horizontal management of issues is important.” However, “horizontal coordination is important, but there is a lack of leadership in this.” The federal government’s DFAIT employs hundreds of officials in a variety of trade-related roles. Its capacity to generate information is, not surprisingly, unmatched by the other jurisdictions. Of note, though, is the view among officials that the federal government is willing to regularly share that information, and thereby contribute to greater IPC. Said one federal official, “The feds always provide information to provinces, and take provincial positions into account, and this contributes to policy capacity.” A provincial official concurred, suggesting, “The Canadian government gives out a lot of information.” The generation of that information is assisted by the academic community. Individual experts supply technical studies and advice, while think tanks provide contending forums for debate and policy analysis. Publication of academic research plays an increasingly important role for officials. The use of technology to facilitate trade policy and federal-provincial-territorial relations, and to dissem­ inate research, was remarked upon by officials. Web-based mechanisms are used to facilitate discussion, and occasional papers are published to disseminate knowledge using peer review mechanisms combined with cross-departmental horizontal collaboration, studies and analysis on trade. In 2001, the federal government started publishing an annual compendium of trade-related research conducted by the World Trade Issues Working Group under the aegis of the Global Challenges and Opportunities Network, launched as part of a broader research initiative, the Policy Research Initiative (PRI). The PRI was designed to advance the general objective of enhancing the policy research capacity of the Canadian government. However, one official pointed out the importance of “talking the language of



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others so they understand you. There is a highly specialized lingo in trade policy that leads to a lack of understanding.” Much of the trade-related research is disseminated technologically. Said one official, “There is a protected web site to share information on the WTO and FTA; and other consultations for example on services, or on disputes, for example on dairy issues. There is a sophisticated and vigorous network at play in which technology is used to maximize efficiencies.” Another official concluded that “online government contributes to policy capacity through greater transparency and access to information.” Of course, as noted by officials in all the sectors we investigated, this is a two-edged sword. As one trade official said, “Some of it [technology] increases policy capacity, but it can also provide information overload.” The growing reliance on new technology, though “leads to a resource question – electronic communications both enhance and inhibit policy capacity due to the sheer volume of material from other governments and from citizens asking questions. It has become a question of information management, not knowledge management.” Another problem was identified by the official who pointed out that for every 3% of materials that are visible online, there is another 97% of invisible work behind the scenes to get them there. The smaller provinces lack the capacity to provide that level of support. “So when the feds wanted a single web portal for any business, the provinces didn’t have the resources to put it on-line and support it.” Accords and Agreements Where international trade was concerned, as we have noted, the provinces and territories sought an agreement to put themselves more directly in the picture of international trade negotiations. As the COF reported, though, “in this regard, despite the federal government commitment made in 2004 towards developing a federal­provincial-territorial agreement framework, provinces and territories are still waiting for results. Provinces and territories continue to support the development of a formal agreement with the federal government as a necessary step to provide clarity, certainty, and continuity in their relationship with the federal government in Canada’s international activities that affect provincial and territorial jurisdictions, responsibilities and interests” (Council of the Federation 2005).

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But perhaps the larger issue for IPC was the extent to which international agreements compromised the sovereignty of all the provinces by invoking obligations, according to officials, that they could not always fulfill or even foresee. Citing NAFTA as an example, an official expressed the concern that “there are all kinds of areas where provinces are not in compliance with NAFTA, for example with procurement policy, notification of regulatory changes, notification of subsidy programs, etc. This is a part of capacity – systems are overwhelmed by obligations. The feds sign these deals without thinking about the provincial implications, leaving a series of ‘ticking time bombs.’” Consequently, either the federal government would have to step into the breach, or a quiet undercurrent of failure to respect the provisions of foreign agreements and treaties would cumulatively grow over time, perhaps resulting in a challenge by a foreign entity. For another official, this raised issues of accountability. “There is an embryonic process for accountability in place. International rules from the 1980s based on GATT, WTO, and NAFTA started covering areas governed by provinces and other areas of joint responsibility like environment.” But it also raised questions of sovereignty and IPC, since “international rules are increasingly dealing with internal regulatory regimes of all governments.” New international agreements have added another dynamic to federal-provincial-territorial relations over trade policy. This is the issue of dispute resolution. On occasion, provincial governments have disputes with their trade partners, but must rely on the federal government to initiate action. As one official pointed out, “Subnational governments have no right to invoke dispute resolution mechanisms.” Where countervailing duty cases are concerned, provinces can represent themselves to American bodies and can appeal to American courts. “But NAFTA took away the top level of dispute resolution,” noted an official, who went on to point out that “the federal government is obligated to act if asked to do so. But in other disputes other than countervail, it must be the feds who take the case forward, although they have to work with provincial governments to do so. Thus federal-provincial cooperation is necessitated.” The centerpiece of political agreements in internal trade was the AIT. Repeated use of non-tariff barriers to internal trade for political reasons (creating employment locally, protecting nascent industry, rewarding supporters) had historically confounded attempts to



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construct an internal economic union unencumbered by trade barriers. Breaking through the labyrinth of barriers had proven futile in the absence of political will. This will began to emerge in the 1990s partly as a consequence of the general tenor of the times – neoconservative ideas, liberalization of trade, globalization, and so on. Moreover, the absence of an internal agreement on trade provided an excuse for the federal government to forestall further institutionalization of provincial-territorial involvement in international trade negotiations, according to officials. Regular meetings on internal trade policy are held with provincial and territorial governments at the officials’ level, and at least once a year at the ministerial level. To date, the AIT has been only modestly effective, given uneven interest in the issue due to the disparate economic bases of the provinces, the lack of an interested public (even business interests have failed to champion the cause, with but a few exceptions), and little electoral advantage to be gained from reform of the internal trade regime. Despite the collaborative efforts of the two levels of government which resulted in the AIT, internal barriers persisted. IPC here seemed to be lacking, and further collaboration on internal trade veered off to provincial-territorial tables as bilateral agreements emerged. There was initially some cause for optimism when the AIT was first developed. According to one official, “the AIT is a success story compared to international trade and WTO negotiations which move at a snail’s pace. We got an agreement on the AIT in one year.” But the AIT suffers too from the disparate interests it tries to accommodate across governments. For instance, one western official noted, “Internal trade is a problem for British Columbia. British Columbia held out on the AIT over MUSH [municipalities, universities, schools, and hospitals]. We wanted to keep Alberta license plates off British Columbia construction sites due to non-union companies. The purpose was to protect construction interests with union companies which provide the bulk of NDP funds and to support pensions for unions.” Saskatchewan and Quebec took the view that “there were trade-offs between efficiency considerations and a provincialrights orientation” to internal trade and so hesitated to sign until these were addressed. This represented a debate between the ideology of free trade and the principles of federalism, according to officials. For instance, “Saskatchewan focused on crown corporations as tools of economic development, while Ontario wanted to

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­ reserve its c­ ompetitive advantage in Canada and therefore did not p want rules. Saskatchewan and Quebec together opposed the federal government view that reform of the economic union shouldn’t just focus on internal trade but also on instruments of redistribution too.” Another official noted, “Alberta wants more of a rules-based liberalized trade approach in international trade and is most zealous in favour of this model. This is consistent with the federal government position and our preferred model for the AIT too.” As noted above, slow progress on the AIT led to the involvement of the COF, according to officials, one of whom said, “The Council of the Federation has prioritized internal trade. Efforts on interprovincial trade had been bogged down. We were not meeting. This was a new opportunity for the premiers to take positive action. The ministers had not met for two years before they finally met in December of 2003. Going in, Manitoba co-chaired the negotiations [with New Brunswick] and stayed as co-chair. We are a small province that carried a big load. Our premier [Gary Doer] played a moderator role in bringing people together. It was a priority for Manitoba since there were few trade barriers within the province itself. Manitoba’s role was important as a facilitator of the deal.” Another issue of concern was the enforceability of the AIT since compliance is voluntary. According to one official, “It is not clear in the AIT what would happen if a government was found to violate rules and didn’t comply with it. Enforceability in interprovincial disputes is not possible through the WTO. Securing compliance with panel rulings is lacking in the AIT. International rules go further and are more developed than in the AIT; the dispute resolution process is more rigorous internationally. The AIT is still a work in progress.” Overall, then, another official concluded, “The AIT agenda is manageable, but cannot get wheels under itself. There has been a little bit of success here and there. But while premiers are focused on it, stakeholders are not engaged. They don’t come here and talk about it. There is little pressure for action or results so we take baby steps with it.” In any event, as another official pointed out, “The ministers leading internal trade don’t control ninety percent of the issues because other ministries are involved.” Consequently, the lack of horizontal capacity within governments served as a barrier to progress in this area. Thus, concluded one official, “We can talk in general concepts about internal trade but we lack the capacity for actually making things happen technically.” The limitations of the



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AIT is perhaps most graphically illustrated by the need felt by the two westernmost provinces to negotiate a separate bilateral agreement in 2006, the British Columbia-Alberta Trade, Investment, and Labour Mobility Agreement (TILMA), and to offer it as a model for other provinces to speed the process of reducing internal trade barriers. And in 2009, Ontario and Quebec struck the Ontario-Quebec Trade and Cooperation Agreement. The Courts Relatively few officials mentioned the role of the courts in terms of IPC in trade. Those who did, noted that both levels of government have been loath to test the Labour Conventions doctrine before the courts, fearing a zero-sum outcome. There was some consensus that the federal government would win any such challenge. According to a federal official, “it could now be argued that the 1937 case is outmoded and could be challenged. The courts could be used to clarify the trade and commerce power whereby the feds would likely win.” But the political consequences of launching such an action were judged as too costly. Said another official, “The federal government could challenge in court the rights of provinces to be involved in international trade. But practitioners fear creating tensions. Trade is more and more in provincial competencies and the feds need the provinces on board.” Thus the dance of the seven veils goes on, creating a form of forced collaboration which both sides see fit to continue. On the internal trade front, the courts have turned to Section 91(2) of the Constitution – the regulation of Trade and Commerce – to strike down provincial legislation restricting interprovincial trade of goods. But overall a similar reluctance to go before the courts as with the Labour Conventions case prevailed. The politics of internal trade barriers seemed to trump the economics of establishing legal rules. Said an official, “The Trade and Commerce power should be used to strike down internal trade barriers since the Agreement on Internal Trade is an ineffective mechanism. The AIT is an example of institutional interdependence; but it is weak in terms of policy capacity partly because of government’s tendency to follow public opinion. The Quebec construction workers are an example. Quebec is unable to cooperate with other provinces due to internal political pressures derived from the nature of the construction industry.”

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International Institutions The growing number and role of international institutions affecting trade policy is a feature of this sector, but it took on an interestingly Canadian manifestation – the perennial question of Quebec’s foreign relations. Officials noted that the thorny question of Quebec sovereignty was a constant in the era we review. Sometimes it had adverse consequences for Quebec’s capacity to effect trade policy. For instance, at the Summit of the Americas meetings in Quebec City in 2001 to promote negotiations for the FTAA, a federal official noted, “There was contention by the Quebec government over the protocol of the FTAA meetings. Interestingly, the preoccupations of youth and their values were the agenda issues of the meeting, but the preoccupation of the Quebec government was with its own status at the meeting. The Summit of the Americas was perceived as an event regarding the new international economy and the public was interested in this, but the Quebec government missed the point.” According to another official, Quebec cited globalization as an argument to promote the need for sovereignty. This official said, “The federal government counter-argument to globalization as independence is that it is better for countries to go out in the world united. For example, the feds organized official government-to­government trade missions. But the Quebec people don’t see this since [Premier Bernard] Landry portrays himself as a head of state on these missions. The federal government is always looking for the reaction from our trade partners over this; it does not want to present a divided country.” The proliferation of international administrative bodies meant there were new and more actors about which trade officials had to be cognizant. An international administrative machine has grown up in the past few decades to coordinate global trade and related economic issues. As a result, trade officials came to realize that “there is a shift to a greater communications function due to globalization; and the need for accountability and consultation,” because “global interdependence is an important factor.” Therefore, the general view was that more IPC was needed. For instance, increasingly officials looked to the WTO for dispute resolution. Said one official, “Most dispute resolution now goes through the WTO – even disputes from NAFTA obligations with the US go through the WTO. Institutional rules are more developed in the WTO



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than in NAFTA or FTA.” The softwood lumber dispute was a case in point. Said the official, “For instance, softwood is appealable to both bodies but NAFTA can only review existing compliance with US law, so the WTO provides the only option.” For tariff reduction issues, Canadian governments turn to NAFTA, “but high profile disputes end up in the WTO. Middle-ground issues could go to either body.” The official explained that “there is a discrepancy between the WTO and NAFTA. Substantive rules formed in the FTA in 1989 have not kept up with changes, so the WTO is the only route to take. In the early 1990s there were changes in perceptions [about NAFTA] when [dispute resolution] panels split along national lines. In bilateral issues it is difficult to establish independent impartial dispute resolution processes. The WTO is seen as more impartial and faster.” In addition, new supra-national institutions now exist and the developing countries are building their own capacities to engage the developed countries in trade negotiations. The development of IPC to work with international institutions fostered some unusual alliances. On certain points even Ottawa and Quebec could work together. For instance, according to an official from Quebec: In the cultural field, Quebec is very active. The US has taken up the issue multilaterally in Geneva [at the WTO]. An “entertainment as business” view prevails. This is a politically sensitive issue. The feds and Quebec are active in trying to find a way such that the WTO does not conclude that culture is business. They are also working with other countries to define an international instrument in the WTO to not define culture as business. Quebec thought the cultural exemption clause in NAFTA would protect it, but this proved to be worthless. A series of shocks happened – first, the end of the 1994 Uruguay Round, then the magazine case, and third, the intention of the US to put culture on the table at Seattle, though the media did not notice. Thus culture became an issue at the WTO. Canada and Quebec were at first alone, but French, Italians, and Belgians joined them. An international group on cultural policy was formed by [Heritage Minister Sheila] Copps.” Hence even the federal and Quebec governments could forge a relationship, and mobilize IPC to pursue a common cause.

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External political factors manifest themselves in internal trade as well. The shift in orientation from east-west to north-south trade means that all the provinces save Prince Edward Island were now trading more with their American counterparts than with each other (which explains in part the low level of enthusiasm for the AIT). Increasingly, sub-national state international relations emerged in various policy areas. For instance, there is the Conference of New England Governors and Eastern Canadian Premiers (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont, New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island, and Quebec), the Council of Great Lakes Governors (Illinois, Indiana, Michigan, Minnesota, New York, Ohio, Pennsylvania, and Wisconsin plus Ontario and Quebec), joint Western Premiers Conference/Western Governors Association meetings, and the Pacific Northwest Economic Development Council (Alaska, Idaho, Montana, Oregon, Washington, Hawaii, Alberta, British Columbia, and Yukon). As a result of these institutional innovations, a wide variety of cross-border provincial-territorial-state agreements and relationships has emerged which were remarked upon as requiring enhanced IPC as information-sharing and idea-generating bodies. The question of the role of these institutions is worthy of further research, but they represent the tip of a very large and growing iceberg whose submerged body consists of a network of bureaucratic relations which reach across the Canada-United States border.

ACTORS Political and Administrative Actors The importance of political leaders, as in the other policy fields examined in this study, was cited as sometimes playing a significant role in moving a file forward (or stalling it), and thereby affecting IPC. For instance, one official noted that “politicians like Pettigrew are committed to regular consultations and engagement, conference calls and so on. It works well when the politicians are committed.” Another official offered that “the issue is political will. For example with Prime Minister Brian Mulroney and free trade, it got done when the feds put their shoulder to the wheel.” Differing ideologies among premiers occasionally affected the capacity of governments to effect trade policy. For instance, in B ­ ritish



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Columbia, NDP Premiers Mike Harcourt and Glen Clark differed in their perceptions of the role of trade policy compared to their successor, Liberal Premier Gordon Campbell. As an official whose career transcended all three regimes reported, “Harcourt and Clark had differing ideological views from Campbell. Trade was seen as a defensive strategy against competitors as opposed to an offensive strategy for opening up markets.” Trade officials commented upon their roles vis-à-vis their political masters, noting in particular the extent of influence they have over ministers. Said one official, “In theory you look for direction from the minister, but you are writing their notes and positions. Ministers ask you what to say. They have a lot of other issues to deal with.” The culture of politicization may have been reinforced by the increased interactions between intergovernmental and trade officials as indicated in the comment by the official who said, “Our trade officials work on intergovernmental issues regularly. We are involved in intergovernmental meetings and premiers meetings.” Of course, this state of affairs led some officials to question who was making policy – politicians or officials? Said one official, “A lot of policy is determined by officials – too much of it – politicians cannot do it all – and is conditioned by who gets appointed, as either political or professional appointments.” Another official noted, “Ministers set policy. It is the politics-administration dichotomy with shades in between. Civil society wants answers but cannot get them from public servants. The ministers are too busy; and they need longevity in their jobs to have time to change policy. But this leads to a good dynamic. Ministers do set policy, and the bureaucracy contributes to refinements in committees. A position is established with ministers; the extent of powers of officials depends on the file, on the minister, and on officials. Officials can have a huge influence, though partly it is a question of timing.” Interestingly, the politicized nature of trade in the 1990s, pitting as it did avid free marketers against nationalists who favoured state activism, found expression in some of the bureaucratic personalities involved in bringing the free trade negotiations to fruition. The ideological predilections of key bureaucratic actors as revealed in several memoirs, published works, and public speeches indicate the extent to which ideology infused the upper echelons of the federal trade bureaucracy (see Hart and Dymond 1994; Burney 2005; Ritchie 1997). While the politicization of intergovernmental officials has

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already been remarked upon (see chapter 3), trade officials could also be characterized in this way. Due to the rapidly expanding agenda of trade policy and the increasing involvement of provincial and territorial governments, there was an intensification of trade officials’ work. As one federal official put it, “It is a more intense file now. There is daily contact with the provinces and full-time officials deal with provincial emails, conference calls for consultations and debriefings and for gathering views in advance of meetings. The job is full time now. Five years ago, a person could do another job as well.” Clearly the role of communications took on enhanced importance in the period of our review. One official explained, “The job of the policy person has changed dramatically. We expect more with regard to their communication skills.” Officials generally complained that as a consequence of restructuring, they were often given these new communications functions in addition to their policy roles. One went so far as to suggest, “The substance of communications comes from policy people.” The importance of conveying messages to and through the media became more important as the trade issues generated immense public controversy. Managing communications through media briefings, newspaper and internet publications, and identification of supporters of government policy all took on greater importance, without in many cases the IPC to sustain it all. The Public Lord Macaulay wrote in 1824 that “[f]ree trade, one of the greatest blessings which a government can confer on a people, is in almost every country unpopular” (cited in Burney 2005, 132). The 1988 election politicized trade to a degree seen only rarely before in Canadian history. The Mulroney government initiative to adopt free trade with the United States resulted in the mobilization of publics both for and against, and a national debate that was widely engaged. The effect was to elevate trade as an issue of contention in which a great number of voices pressed for a hearing. Hence, the role of the public in this once relatively secretive and esoteric field suddenly became germane. While traditionally business interests in Canada have been influential, though not united, in their approaches to trade policy, the general public had been largely marginalized. But the advent of a vocal and well-organized anti-free trade and, later,



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anti-globalization movement caused trade officials to modernize their approach to the public. High-profile, very public, and sometimes violent civil actions erupted in the 1990s and early 2000s. The demonstrations against the World Trade Organization meetings in Seattle in 1999 combined with the defeat of the Multilateral Agreement on Investment (MAI) in 1998 following the global mobilization of popular sector groups opposed to it, caused one official to note, “The feds have needed to be seen as accountable since the failure of the MAI and Seattle.” To the extent that the public can be considered to be represented by interest associations, the business class in Canada has always had a privileged position in trade policy making. National business federations, sectoral business associations, and individual corporations all engage in consultations with the government over trade policy. The main actors here have included the Business Council on National Issues (now the Canadian Council of Chief Executives), the Chambers of Commerce, and the Canadian Manufacturers Association (now the Canadian Alliance of Manufacturers and Exporters). During the negotiations for the FTA the federal government sought input from business associations through the creation of fifteen Sectoral Advisory Groups on International Trade (SAGITs) and a thirty-eight-member International Trade Advisory Committee (ITAC). Originally conceived as mechanisms to incorporate a variety of perspectives from business, labour, and education interests, they ended up becoming virtually exclusively business consultative mechanisms. Still, their establishment created the precedent which resulted in ongoing broad-based discussions of trade policy. Sectorspecific businesses are also organized with representation in Sectoral Advisory Groups created by the federal government. Officials have developed networks with these actors, as well as with individual corporations, which occupy a considerable amount of officials’ attention. There is a heightened demand from civil society groups that the governments conduct their affairs more collaboratively, according to the official who noted, “There is now recognition of the need for working together. There is increased demand from the business community.” In the post-Seattle world of global trade negotiations, consultations were opened up to wider audiences and the view emerged that these were essential to hear diverse views (Wolfe and Helmer 2007; Weston 2005). There is now a much wider field of interest

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groups, provinces, municipalities, individuals, and other opinionmakers including environmental groups, human rights advocates, anti-globalization movements, and Canadian nationalists alongside the traditional constituency of business interests. Officials also liaise with labour representatives, including the Canadian Labour Congress and the Quebec-based Congrès des Syndicats Nationaux. Since the 1980s, labour groups in Canada have generally opposed free trade (contrary to their historical position in the 1930s and 1940s, or in the 1911 free trade election, for instance) and have agitated for side deals in trade agreements to protect the interests of their members. Trade officials acknowledged having to be increasingly cognizant of the position of this sector of Canadian society, as with civil society generally. Officials have thus found themselves lobbied by business associations seeking to advance the economic interests of their members through support of free trade, and by civil society groups seeking to further their public policy goals through opposition to free trade and, more generally, globalization. Participation in trade policy development was also widened through new technologies, including an innovative federal government website that actively sought out the participation of a variety of societal interests beyond business groups. These developments together led to the need for ever-increased coherence in policy formulation across institutions. Issues like horizontality, accountability, and transparency took on greater importance, in the view of officials. Thus there has been a shift in focus in IPC, which is wider now than it was before. Some officials suggested the need for and significance of public engagement in trade policy was starting to be met. For instance, one official noted, “The British Columbia record on consultation is very good. In the 1980s consultation was mainly with industry. There were not many NGOs around. In the 1990s government tried to be more inclusive, for example with environmental groups and labour etc. But we still need a more inclusive process. British Columbia has not moved on this yet.” However, others argued that most decisionmaking around trade policy was of necessity secretive and that there was not much value added by inviting the public to consult. Therefore, they suggested, IPC could actually be impeded by expanding public involvement. In any event, some of the smaller jurisdictions lacked the capacity to accommodate public interest in trade policy, and so were reluctant and largely unable to actively seek it out. The



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issue of IPC being impeded by the necessity of public consultations was broached by officials. An Ontario official said, “We have built processes to facilitate public consultations but that slows the process.” But in any event, due to a lack of capacity, even when governments do consult “we are not always able to do anything in response to issues that industry raises.” Trade officials identified a handful of factors affecting IPC related to the public. First, provincial officials were sometimes suspicious that the federal view was that “stakeholder” was an amorphous term which included provinces. The provinces, naturally, preferred to be considered as sovereign actors and not to be grouped in with civil society actors. Said one official, “The feds say they are accountable to stakeholders, and they lump provinces in with them sometimes; but provinces object to this. A major point of contention is whether provincial governments are ‘stakeholders’ to which the feds are accountable.” This point of contention resulted in strains which sometimes deflected officials from the issues they needed to deal with, thereby draining capacity from areas where it was needed. But in any event, many interest groups are more oriented toward Ottawa than the provinces – even the big provinces. Said an Ontario official, “Many NGOs don’t think about Ontario, nor do industry groups. They go to Ottawa.” Second, the public was sometimes understood in electoral terms as a function of political aspirations. One official said, “Our international business strategy was a function of domestic politics. Nine ridings in British Columbia are Chinese-dominated; and India has become a focus too.” This view, however, was not widely commented upon by trade officials, reflecting the earlier observations over the disagreement about whether the public actually matters in trade policy. In any event, the extent to which the public voice was discernable was contested. Said one official, important issues included “transparency, accountability, and consultation. But the public is not interested enough. Its views are filtered by the media, but the media is lazy and suffers from concentration of ownership.” Third, the question of capture by interest groups sometimes arose among the officials. The observation was made by officials that these interest groups are sometimes better resourced than government departments. For instance, one said, “There is uneven capacity. Stakeholders have the best capacity. They are more sophisticated, have good people, and lots of money. We sit across from lawyers

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representing their clients as experts in the field. Catching up is needed by governments.” Another worried that “we assume clients treat us fairly, but they are astute in playing governments against one another.” Clearly, in this emerging world of public engagement and participation, trade lacks the IPC to fully exploit whatever benefits may be otherwise gained.

RELATIONS The formal intergovernmental relations relevant to trade policy are facilitated by various political and institutional features of this policy area. But as important, or perhaps more so, are the informal relationships between officials within and across governments and central agencies and line departments. IPC is heavily conditioned by strong formal relations as well as strong informal relationships, as trade officials made clear. The latter seemed to preoccupy them much more than the former, however. Formal administrative relations between officials across governments merited a few observations from interviewees. Reporting on their relations with DFAIT, one provincial official said, “Our relationship process is good with DFAIT and our communications process is good too. But provinces want input on the agenda and a heads-up on information.” Another official noted, “We work closely with the DFAIT trade office.” A federal official reported, “On trade the feds do now consult. There has been an attitudinal shift required from the top down. This has happened in DFAIT over the past fifteen years. There are meetings, documentation, and consultation now.” An Ontario official reported that “the small provinces have limited capacity so the feds buttress them.” An official pointed out that even if formal political relationships are strained, public servants can go about their work effectively. “The political context is always important regarding relations between the prime minister and the premiers. If the [political] relationship is bad, there are still often intergovernmental officials which allow for conversation to take place ... but officials feel the effect of bad political relations, for example between [Prime Minister Jean] Chrétien and [Ontario Premier Mike] Harris.” Another official put it this way: “You need receptiveness on all sides – political and bureaucratic. If ministers don’t get along, it is difficult. Leadership makes things work, but sometimes they hate each other’s guts.” The degree to which informal political relationships set the conditions under



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which bureaucratic relations existed was often commented on by officials as affecting IPC negatively or positively. Moreover, relationships between politicians and bureaucrats are also important. Said one federal official, “Relations between politicians and bureaucrats develop the tone and architecture, and personal relations function to influence public servants’ roles. They produce extremes of love and hate.” In the minds of trade officials, there is no doubt as to the significance of informal relationships for IPC. One official said, “Access is important and personal relationships are key. On the intergovernmental relations side there is a really important need for face-to-face meetings at the political level with Ottawa and the other provinces. But alliances are difficult to maintain.” In this regard, trust was mentioned as important to cultivating IPC. “It is important to cultivate trust. Pettigrew fostered trust.” A counter-example was offered by an official who said, “Once a federal minister made a major money announcement without telling his Ontario counterpart. This destroys capacity due to the lack of trust. It works all through the system.” Another official illustrated the importance of trust in relationships in the following way: Public servants follow the tone set by politicians. Public servants develop trust and non-partisanship. Federal ministers from each province try to influence officials with log-rolling over issues. For example, the European Union is aggressively seeking greater access to the Canadian wine and spirits market, despite its $500 million share. The provinces want to be in on negotiations and threaten the federal government that they won’t implement any deal with the EU unless they are involved. This leads to thorough consultations between the feds and provinces, and then the feds go into the next room alone with the EU to strike a deal. This raised a problem with Kyoto when the feds negotiated Plan A with provinces, but came back with a Plan B deal, which led to outrage in energy-producing provinces, especially Alberta. This also reflects the importance of trust relations; Pettigrew worked very hard and successfully to build trust with provinces. The human factor is important. Typical of the comments on the importance of informal relationships was the one by the official who said, “Personal relationships are important to doing things we can co-operate on.”

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Part of the imbalance between jurisdictions can be overcome through informal relationships. In trade, as in other sectors, provincial-territorial relations in particular have been fostered. ­ Said an official, “There are some genuine issues of concern to provinces regarding NAFTA, for instance investor rights. But other provinces have the expertise in this. This has led to greater collaboration among provinces in trade. We will go to dinner together, for instance, in Ottawa before we meet with the feds. There is less federalprovincial collaboration of this sort.” This view was also reflected in the comment that policy development “depends on federal-provincial ministers and officials to develop good working relationships. There are regular meetings of ministers and trade officials, but the feds still guard their jurisdictional control.” Another official, though, suggested a healthy relationship existed between her/his province and the federal government, saying, “We have a good working relationship with the government of Canada. It responds to our needs rather than with cookie-cutter prescriptions. The feds recognize our needs are different. Personal relationships are important in this. We have worked at that, with people who wanted to make a difference.” An Ontario official reported that due to a lack of IPC, “We have to rely on others informally to pick up on some issues. There is an informal division of labour by province.” Said a Quebec official, “A lack of networks is career-limiting; officials need to get involved in intergovernmental networks.” Another official said, “We have a long-standing relationship with the feds because of key individuals. Our provincial colleagues are very competent.” Another observed, “We have a good relationship with our federal counterparts. We watch each other’s backs.” Internally within governments, personal contacts and relationships can be helpful. Said one official, “Personal relations are important. Our clerk of the Executive Council and our assistant deputy minister came from finance, as did our director of Intergovernmental Relations.” Another official reported, “I worked in finance and in cabinet office, and I have friends in other places, including central agencies, that make things easier. We have good informal relations.” One official noted the evolution of the tone of the dialogue between governments, saying, “Trade discussions have evolved from the early stage of FPT policy people talking at one another to now talking to one another. We have moved from the feds simply dumping information at meetings to an exchange of ideas. It is getting



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­ etter. Each forum has had to find a comfort level and common b ground. We all needed to evolve from the old mindset and develop trust.” A federal official said, “The policy capacity process takes time in building relationships. It is important to find a balance to work cooperatively.” As noted above, the Team Canada model was cited as a good forum within which both formal relations and informal relationships could be fostered. As we have seen, however, this harmony can be elusive. For example, when a separatist government reigned in Quebec, relationships could be tense. Speaking of those days, an official said relationships tended to be more functional at the political rather than bureaucratic level, pointing out: The level of cooperation [between Quebec and Ottawa] is difficult due to the political situation, but there is recognition grudgingly at the elected official level, though less at the bureaucratic level. At the official level, there is a discreet level of cooperation, for example in culture policy. The process of cooperation is rooted in “understatement,” that is things not said. There is not much contact with the feds, and it has diminished over the past five years. Officials consider it risky to talk to others. There must be very little written down. At the ministerial level and PMOs the chiefs of staff serve as the main line of contact. They don’t like that part of the job, but have become major problem-solvers. This has been facilitated by personal networks, for example [Chrétien’s chief of staff] Jean Pelletier was the former mayor of Quebec City. As another official said, “Nova Scotia has a very good relationship with the feds. We work on a number of issues together, though we don’t always see eye to eye.”

WHAT THE OFFICIALS DID

NOT

SAY

It is interesting to note those factors which trade officials did not regard as significant to IPC. For instance, the dearth of influence of political parties in the trade policy realm was indicated by the total absence of comments by officials in this area. Officials seemed to feel that IPC is not appreciably influenced by political parties. Likewise, the role of Parliament in trade policy can be summed up

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s­uccinctly: there is very little involvement of a substantive nature on the trade file. Legislators, subject to party discipline, essentially rubber-stamped executive agreements in international and interprovincial trade. Consequently, officials in trade ministries had virtually nothing to say about Parliament. For example, the Standing Committee on Foreign Affairs and International Trade (SCFAIT) of the House of Commons was available as a channel of influence for groups interested in federal policy. It is composed of members of Parliament from all parties in the House, with a majority of members from the governing party. Its role is mainly to provide advice to cabinet on international trade and foreign policy. The committee held hearings on the WTO meeting in Seattle, the FTAA, and other relevant issues. But trade officials had nothing to say about its role. This might reflect the executive-dominated nature of Canadian politics, wherein Parliamentary Committees largely get their mandate from Cabinet (although they may establish their own agendas), the strength of party discipline in Canada means that the governing party’s position typically prevails. No comments emerged about the role of the Senate Committee on Foreign Affairs and International Trade either, even though it was active in examining the government’s trade policies over the period under review. The committee itself has a long pedigree. It was first established in 1938 as the Committee on External Relations, later the Committee on International Relations, then the Committee of Foreign Affairs, and in 2006 the Committee on Foreign Affairs and International Trade. The mandate of the committee is to examine legislation and matters relating to foreign and Commonwealth relations, including treaties and international agreements and external trade, among other issues. In 1994, the committee received an order of reference to monitor and report on the implementation and application of NAFTA as well as any other related trade development. Yet despite the work of this Parliamentary committee over the years, trade officials saw little relevance for Parliament to IPC. This was regarded by one official as reflective of the electoral system combined with the unique political constellation of the times. “There is weakened policy development because of the splintered opposition in Parliament. Maybe we need proportional representation.” Lack of legislative involvement in trade was not unique to Canada, though. In 2001, the first global parliamentary meeting on international trade was held in Geneva, involving over 180



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­ arliamentarians from around the world who met to discuss the role p of legislators in trade issues (Inter-Parliamentary Union 2001). Perhaps both recognizing and helping to ensure the futility of such an endeavour, no Canadian parliamentarians attended. Interestingly, however, the governments of Quebec and British Columbia proposed that trade agreements which infringe on provincial jurisdiction should have the formal approval of provincial legislatures. In addition, Bloc Québécois members introduced private members’ bills on three separate occasions stipulating that the government of Canada consult provincial governments before negotiating or concluding treaties in areas of provincial jurisdiction or affecting provincial legislative authority (see Skogstad 2008). Nothing came of these initiatives, however.

CONCLUSION Clearly the capacity to conduct trade policy is heavily conditioned by federalism. One official claimed there were three contextual factors for trade officials where federal-provincial-territorial relations are concerned: “First, the historical [relative] weakness in the federal position regarding the constitutional division of powers; second, the necessity of working together with other governments; and third, Quebec’s role in seeking independence in foreign policy.” The most important ideas animating trade officials’ perceptions derive from recent developments in the evolution of the global trading system, and include globalization, continentalism, and free trade in the context of neoconservative ideology. A general preference among officials for a rules-based liberal economic regime favouring free markets prevailed. Given the high degree of dependence of the national, provincial, and territorial economies on trade, this is a rational choice. But it has important implications for IPC. While officials were generally uncritical on the policy desirability of free trade and accepted it as their ideational and paradigmatic frame, they also recognized that it required IPC building and maintenance. In short, it reinforced the requirement that the two levels of government work together. The division of powers in the Constitution directly affects the nature of trade policy in a unique way by essentially forcing collaboration. Given the constitutional framework and the growing complexity of trade policy, the levels of government have had to

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effectively pool their policy capacity. They have been forced to work together. Consequently, an array of political and administrative institutions has evolved to facilitate this, including Team Canada, CTRADE, and others. Officials regarded these developments as generally beneficial to IPC. Interestingly, though, no officials cited supply management in agriculture, where since the 1970s both federal and provincial governments have worked together in managing several agricultural commodities like dairy and poultry. Despite being an area of increasing importance in WTO negotiations and of particular importance for Quebec, this issue was not mentioned by officials. However, the pooling of IPC is still a matter of some contestation, in that some provincial governments want a more institutionalized and formalized process involving their governments directly in agenda-setting and even in negotiations with foreign powers. There is no unanimity about this, though, and in any event it is generally thought that a court challenge to the Labour Conventions case would result in the federal government winning expanded powers to implement treaty obligations even in areas of provincial jurisdiction. Therefore the status quo prevails. Institutionalization of the internal trade regime has not resulted in the expected benefits, however. Where political conflict has persisted, it tends to affect IPC in internal trade policy. Despite the efforts of governments for over ten years to extend trade liberalization from the international to the interprovincial arena, frustration at the rate of progress remains. To some degree, the slow rate of progress can be attributed to the persistent political dimension which infects internal trade. Regimes of local favouritism constructed for political advantage have resisted attempts to move to a rules-based liberal economic regime, despite making internal trade one of the first items on the agenda of the COF when it was created in 2004. In this case, IPC seems more negatively affected by political than administrative factors. Consequently, some jurisdictions have opted for bilateral agreements. IPC in trade was also tested by the institutional variation of the sector combined with the increasingly horizontal nature of the field. Trade officials also spoke to the necessity of dealing with the increasing number and type of trade agreements in the context of cutbacks to institutional resources. The issue of sovereignty was raised by officials, as they saw international agreements bringing forth unforeseen obligations. This was particularly worrying for Quebec sovereignty, which added another complicating dimension to the sector. Formal and informal



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mechanisms and approaches evolved as a result, extending IPC in some areas, and adding impediments and barriers to IPC in others. Trade officials also noted the emergence of an increasing number of sub-national state international relations and cross-border contacts as having an impact on IPC. The actors intimately involved in trade policy have evolved recently, according to officials, with uneven consequences for IPC. The active championing of international trade by Chrétien led to Team Canada and Canada Trade Missions abroad. But trade with the targeted nations did not appreciably increase. Officials also described having to develop the IPC to draw on and accommodate a growing number and type of non-governmental actors. Business, labour, the popular sector, academics, and others have lent capacity to the effort to construct and implement trade policy. Officials were unsure whether the enhanced role of the public was overall an impediment to IPC or not. Collaboration between the levels of government also underpinned the thinking of trade officials. The virtual elimination of tariffs (a federal responsibility) and the addition of countless other issues to the trade regime – areas impinging on provincial jurisdiction – have had an immense impact on creating conditions for collaboration between Ottawa and the provinces and territories. Collaboration was reinforced in practice by the relevant institutions affecting trade officials. As far as political relations are concerned, officials said they can still function effectively while remaining cognizant of the political climate by maintaining conversations among themselves even if the political climate is bad. Trade officials also expressed some recognition of the importance of horizontality in their work. Breaking down traditional silos, however, was not something about which they had many recommendations; they simply acknowledged it was important to do so. Officials did note the emergence of numerous federal-provincial-territorial committees struck to facilitate IPC, as well as an emerging bureaucracy around international and internal trade agreements. These made good administrative relations a greater necessity. But they regarded informal relationships as more significant to IPC, including politician-to-politician, politician-topublic servant, and public servant-to-public servant relationships. There was also a generalized feeling that good federal-provincialterritorial relationships were basic to IPC. In the complex milieu of trade policy, the potential for intergovernmental conflict seems ripe. Yet comparatively, trade policy

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has been less contentious than finance, environment, or, as we will see in chapter 7, health policy. We can speculate that this is so partly because there is a technical dimension to trade policy which requires bureaucratic rather than political intervention. Once the political debate over “free trade yes or no?” had been resolved, officials could draw on the set of technical skills, professional norms, and informal relationships fostered in the field to facilitate policy. In any event, the salience of trade policy in a globalized and continentalized economy heavily dependent on economic relations with the US and other foreign countries meant increasing pressures for the utilization of existing, and the development of more effective, IPC.

7 Health: Money and Turf Wars

INTRODUCTION Health policy played an important role in intergovernmental relations in the 1990s and early 2000s. Like many intergovernmental policy developments, this one raised heightened concerns for money and jurisdiction. Constitutional jurisdiction for the design and delivery of health care rests predominantly with the provinces, but the federal government plays a key role in funding this ever-expanding sector with federal fiscal transfers and the conditions laid out in a federal statute (voluntarily signed by the provinces), the Canada Health Act (CHA), to ensure equal access to quality health services across the country. So the government with the least policy jurisdiction has the most money to spend. Not surprisingly, this has had considerable impact on both the policy field and intergovernmental relations. Intergovernmental relations in the health sector range from co­opera­tive to disengaged to unilateral, or to put it another way, friendly to neutral to unfriendly. There was considerable collaboration between governments from the 1960s to the 1980s with the development of a publicly funded system, provincial buy-in to the federal CHA, and a system of federal-provincial-territorial cost­sharing. However, federal funding cutbacks in the mid-1990s left the provinces in financial difficulty as health care costs were taking increasingly large portions of provincial budgets. As a result, the political climate was marked by considerable jurisdictional wrangling and provincial dissatisfaction with federal fiscal controls, as health care financing came to dominate the First Ministers’ Meeting agendas. In the end, federal money was pulled out and then returned several years later, but little was done to restructure the health care

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system along the lines long recommended by policy-makers and analysts. Nor did the effect this had on intergovernmental relations soon fade.

IDEAS The ideas which have played an important role in intergovernmental policy capacity (IPC) in the health sector are predominantly those related to state financing, sectoral restructuring, and public management. Given the history of a strong state role in the public funding of an insured system where Canadians are guaranteed access to approximately seventy percent of total health services, including hospital and physician services (Canadian Institute for Health Information 2006), a considerable amount of political debate has revolved around how much health care should remain publicly funded and how much privatized. This question took on new importance in the mid-1990s’ debt and deficit climate, but it had been growing prior to that as the costs of health care escalated. The provinces and territories, as the providers of health care services, were particularly concerned with what they saw as the impending health care fiscal “crisis.” Although some analysts refute the existence of such a crisis, the fear of unrealizable fiscal demands has been very real for the provinces and territories, fuelled by health care rising from approximately 28% of provincial program spending in 1975 to 40% in 2006 (Canadian Institute for Health Information 2006). So when the federal government initiated funding cutbacks in the mid-1990s as we saw in chapter two, the provinces and territories responded with calls for, on the one hand, federal fiscal “responsibility,” and on the other hand, further “privatization.” This was played out politically in intergovernmental relations as well as in a series of health care reports and federal and provincial elections. The federal government, as the defender of the public system guarded by the federal CHA, stuck to its status quo position, while various provinces advocated a rebalancing of the public/private mix of either services or funding or both. Today, the ideational fight goes on, although the provinces backed off considerably when the federal government restored funding transfers in the early 2000s. In principle, right-wing politicians and governments tend to support further privatization while most middle and all left-wing governments stand behind the predominantly



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public system. In practice, however, no federal government, including the conservative governments, have dared, come election time, to dismantle the Canadian “sacred cow” of public health. The ongoing debate has been aggravated by court decisions which appear to provide strength to the privatization advocates, as we shall see below. Several major health care reports released in 2002 attempted to tackle the public/private issue, as well as other ongoing structural problems with the health care system. But they did little to break the deadlock over the privatization debate, and indeed further widened a divide between governments, increasing federal-provincialterritorial tensions. One official commented on the lack of acceptance by some provinces of the recommendations of the “federally dominated” Royal Commission on the Future of Health Care in Canada (the 2002 Romanow Commission), although saying the Senate Standing Committee on Social Affairs, Science and Technology Report by Senator Michael Kirby (The 2002 Kirby Report) had been more acceptable to those same provinces. “The Feds bought into the Romanow [recommendation] that more money would fix things, but the provinces didn’t. Privatization is a raging grannies issue. We need a willingness to look at the fundamentals of the CHA. It worked in [former Saskatchewan Premier] Douglas’s day but it is no longer appropriate. It needs an update. The feds haven’t worked this out, but they have never run a hospital.” Some provinces produced their own reports, such as the Premier’s Advisory Council on Health Report (the 2002 Mazankowski Report) out of Alberta, and then stood solidly behind the reports’ recommendations. In a sense, then, these reports served more to mirror existing ideational divisions than to overcome them. The political debates around health care also involved the idea of restructuring in order to make it more cost efficient and patientcentred. However, there has been an especially marked dearth of IPC with regard to health sector restructuring. The intergovernmental agreements of the early 2000s contained some targets for system coordination (considerably more modest than changes proposed by the federal and provincial reports of the day), but these have run up against zealous guarding of jurisdictional territory from provinces who see restructuring as their domain. Officials commented on the lack of IPC of the system to look beyond the immediate financial arrangements to the big picture. As one official put it, “Even as the governments worked together, for example on ­pharmaceuticals,

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there was no grand scheme or clear sense of priorities.” Rather than any major overhaul of the system after the many years health care has stayed on the intergovernmental agenda, only very limited restructuring has been realized. (As we shall see below, this took the form predominantly of enhanced, but still very limited, provincial and territorial accountability for federal funds through reporting mechanisms and targeted areas such as patient “wait time” reductions for the delivery level of health care.) Perhaps the most striking evidence of the overall lack of restructuring impact of the reports is provided by the fact that the three most politically relevant reports released in 2002, the Romanow, the Kirby, and the ­Mazankowski, were delivered between two major intergovernmental Health Accords in 2001 and 2003, and if one compares these two accords there is little change from one to the next. Plus, the follow-up Health Accord in 2004 (which might, given the added time, have taken up more of the recommendations of these various reports) is even lighter in its policy demands than were its predecessor agreements. Clearly, at the political level, attention was drawn to ideas about funding, not restructuring. For the officials, the focus varied. One provincial official, while aware of the larger dynamics at play, put forth the conclusion often heard from provincial officials: “There are elements [of the health care system] we do not want to lose. Canadians don’t want to buy into the dysfunction of the American system with so much of the middle class having no coverage. We want a new framework around it and we need a margin of flexibility for regional difference. There is a short list of issues where federal government engagement will add value.” By contrast, a federal official spoke of larger connections when s/he said, “I’m not sure we have the right answers to our questions about health care and it will be core to federal-provincial relations. We have an aging population with rising incomes. They will spend their money. They will use it on health. In terms of market forces, how can we reconcile public expectations with accessibility? With regard to technology, we have a lot available but we do not necessarily have good cost benefit from it. We have two options with regard to costs. Option A is to tell the public we need a debate about money and the quality of life. What can we afford? What is reasonable? Option B is, can we find someone else to pay or to blame ... the feds?” As we can see, whether or not health care is in crisis and who ought to be doing what if it is, are much contested ideas.



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With regard to the overall thinking of the administrative officials, interestingly, one official said, “In health, the ideological split goes deep into the bureaucracies. Some bureaucracies were disappointed with Romanow’s false dichotomy of our choice being either the CHA or US-style health care, which is nonsense. Kirby was much better.” Mostly, however, there was little said by the officials about broad contextual ideas – perhaps in keeping with the notion that the ideational climate of a workplace is often rarely observed. It just is. The administrative ideas which have played an important role with regard to the IPC of the health sector are predominantly those related to New Public Management (NPM) which held sway during the late 1990s and early 2000s, and although the “downsizing” or “public participation” precepts of NPM did not appear to affect intergovernmental administration much (Johns, O’Reilly, and Inwood 2006), there is some evidence of the effects of the push for “accountability” and “performance” or “outcomes.” It is important to keep in mind the distinction here between the accountability and outcomes of the federalism structures/actors themselves, and that of their products. The closed intergovernmental system itself has little or no accountability or performance measurement. As one official put it, “The accountability of the federal-provincial-territorial [executive] is zero.” Another official had much the same to say of his/her (provincial) Department of Health: “The DOH ... will maintain an arm’s-length relationship in the accountability framework.” Others noted that the regional health bodies were where accountability should be enhanced. Where accountability did show up in the intergovernmental activities of the last decade and a half on health policy was in the policy output; in fact it was virtually the only policy output aside from financing – and the two were linked. One official commented that accountability became more of an issue “following a 1988 federal Auditor General’s critical comments on the weak accountability measures backing up the CHA, accompanied by the black hole argument that the federal government was pouring money into health, while the premiers just kept coming back year after year.” By the late 1990s, the federal government was demanding its fiscal transfers be accompanied by accountability measures, particularly the reporting of specific health outcomes and procedures. As one official said, “Accountability set the context for the Health Accords.” Interestingly s/he went on to say, “It had a great symbolic value for

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the intergovernmental people.” Another official noted its nature: “The accountability framework has shifted to expectations about outcomes.” This was not without criticism by officials. Some admitted that no one had really figured out what this new accountability framework meant. One critical official suggested there is a need to “flip the framework” and “stop worrying about supply and demand and use patient needs as a [basis for] decision making in health care restructuring.” More broadly, the provinces were quick to argue that they were not accountable to the federal government for the delivery of health care, which falls under provincial jurisdiction; thus they would “report to the public” not the federal government. However, at least one official admitted the two could not be separated, saying, “We are now more accountable to the public and to the federal government too. They are holding our feet to the fire with rigid rules, for example, reporting on health indicators. They want data but we don’t have it.” The linking of accountability to outcomes raises problems about knowledge and expertise. If you are going to release your data to either the federal government or the public for scrutiny and comparison across jurisdictions, you have to have the data and it has to be comparable. As we will see below in Institutional Resources, this knowledge generation and utilization is rife with problems.

INSTITUTIONS The Constitution The Canadian Constitution awards the bulk of the responsibility for the management and delivery of health services in Canada to the provinces and territories (Section 92). Federal jurisdiction is limited to health protection, disease prevention, health promotion, health research projects, and the delivery of health services to specific groups such as Aboriginals, military personnel, penitentiary inmates, and refugees (Section 91) (Health Canada 2006). The federal government, however, does have control over a key variable which directly affects all health care policies in the country. Under the constitutional convention of the federal spending power (see chapter 4), the federal government transfers funds to the provinces and territories to finance health care management and delivery. It may also



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transfer funds direct-to-citizen, if it chooses. It also alone, as the national government, represents the “universal” Canadian served by “medicare.” This institutional division between the power of the purse coupled with the power of national standards on the one hand and the power of design and delivery on the other hand ensures the ongoing importance of the Constitution in this field. While a lone rich province could hypothetically “go it alone” by pulling out of the CHA and supplementing the resources provided by the federal government, as Alberta has occasionally threatened, it is unlikely that the two levels of government will ever see much of a divorce from each other. Shared constitutional authority is thus an important institutional factor in the determination of IPC in health care. That being said, however, it was not much on the minds of intergovernmental officials interviewed, except perhaps as it pertains to the clarification of the respective constitutionally derived roles and responsibilities (“R and R”) of each level of government. In the post-Canada Health and Social Transfer (CHST) bitterness of the late 1990s (see chapter 3), a review of the R and R of the two levels of government was undertaken. It showed little overlap of functions between the governments (Federal Provincial Territorial Working Group on Roles and Responsibilities 1998). Despite this, a considerable number of officials called for “some clarity on the federal role” and stated that “we [in the provinces and territories] don’t know what this role is. It should be public health, licensing, surveillance, Aboriginals, and financial sustainability, but not micromanagement.” It would appear that the call for clarity is really shorthand for provincial resentment over federal “interference.” What is really “at the heart of the matter regarding R and R,” as one provincial deputy minister of Health put it, “is federal unilateral intervention in provincial fields of social jurisdiction.” The provinces strongly defended their jurisdictional sovereignty in program management and delivery, refusing for a long time to accept further federal money if it was directly attached to national (read federal if you are in the provinces) “pharmacare” and/or “homecare” programs. Interestingly, after the large federal transfer fund was secured in 2003, the premiers “challenged” the federal government to establish a national pharmacare program, “giving responsibility for (soaring) drug costs to the federal government” (Mackie 2004, A1). The federal government was quick to decline the challenge. Driven by fear of interference, the provinces had missed their chance.

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So while the written Constitution is fairly clear on jurisdictional matters, ironically this clarity has contributed to limited intergovernmental policy capacity in the sector. The provinces argue intergovernmental health policy capacity (aside from the larger funding transfer disputes) ought to be provincial health policy capacity. It is a waste of resources, they argue, to have two governments doing what one is quite capable of doing. They further claim that the constitutional division of responsibilities warrants a reduction of federal power. As one official put it, “Given their (few) constitutional responsibilities, the feds have too much surplus money, while the provinces have the most expensive, growing sectors and responsibilities.” Aside from the questionable overall provincial policy capacity being demonstrated by the provinces in the health care field to date, even in areas where it is obvious the provinces could use some help – for example, in pharmacy and homecare – ongoing tensions over the constitutional federal spending power have resulted in a climate less than conducive to intergovernmental policy development. Political and Administrative Institutions Of the federal-provincial-territorial institutional forums which play key roles in IPC, the most powerful roles in intergovernmental health policy decisions are those performed by the First Ministers’ Meetings (FMM) and federal-provincial-territorial Finance Ministers’ Meetings or conferences. The federal-provincial-territorial Health Ministers’ Meetings feed into, or through, as is often the case with Finance, these other two institutions. Both FMMs and Finance tend to focus on crisis-based financial concerns rather than more longterm programmatic issues, as witnessed by the late 1990s and early 2000s Health Accords. As one territorial official put it, “The Canada Health Act is a money act. The feds bribe us with the appearance of money. We are all there [at the FMMs] like paupers. We lack a vision as to who is driving the train.” Provinces and territories often complained in our interviews of the federal dominance in the FMMs. The federal government calls – or does not call – these meetings as well as sets the agenda for discussion. Although the Health Accord in 2003 was given as an example of a process in which “the feds did listen and it was good,” many others expressed a different view. As one provincial official put it, “During the Health Accords the provinces were forced to do a lot of rationalization from a sense of crisis.



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The feds took advantage of this and used money to get more control.” The resentment over what the provinces and territories saw as “federal unilateralism” persisted long after the federal funding to the CHST (now separated into the CHT for health and CST for social programs) was restored. There was considerable mention by ­federal, provincial, and territorial officials of the enduring effects of the broken trust of these years (see relations below). The general lack of trust in the system resulted in the provinces and territories turning more to inter-provincial and territorial forums, both pan-Canadian and regional. Annual provincial-territorial meetings, formerly called the Annual Premiers’ Conference (APC) and now called the Council of the Federation (COF), provided a forum where provincial-territorial agreement could be nurtured, or from the point of view of the federal government, where the provinces and territories could “gang up on the feds.” The COF was born during the heyday of the Health Accord FMMs (see below) and was originally meant to include the federal government and act as a means to both settle the health care disputes and establish “protocols of conduct” between the federal, provincial, and territorial governments, “presumably similar to what had been set out in SUFA [the Social Union Framework Agreement] in 1999” (Marchildon 2003, 1). However, in keeping with the traditional provincial-territorial forums, early assessments of the COF suggested it had quickly settled into an old role of reacting to the federal lead rather than providing a forum for innovative thinking and action (Meekison 2004A; Marchildon 2003). One official referred to the provincial-territorial forum in 2003 as “pretty useless as the decision-making body. We do briefing notes and they always seem so content-less. What can we really brag about or beat up the feds about?” In the end, the new provincialterritorial forum seems to have made no more progress on the more difficult health care issues than did the federal-provincial-territorial iteration. As one health official put it, “On health issues, there is as much divergence among the provinces as there is between the provinces and feds.” Another said, “The different political agendas make it difficult.” Where the provinces and territories were able to come together, not surprisingly, was in pushing for more money from the federal government. They had little to lose in speaking with one voice on this demand. Their techniques, however, were greatly resented by the federal government and contributed to the sour relations at the

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time. In an unprecedented move, the provincial and territorial governments placed large damning advertisements in major Canadian newspapers accusing the federal government of spending only fourteen cents of every revenue dollar on health care. This they compared to the fifty percent shared costing the federal government had provided years earlier – unfairly since the federal government had handed over considerable tax transfers to the provinces in the 1970s, leaving the comparable federal share closer to twenty-five than fifty percent. So while the federal government was busy “poking the provinces in the eye with a stick ... with its direct [unilateral] social spending in the increasing transfers to individuals, over the objection of the provincial governments ... and simultaneously mouthing platitudes about collaboration and cooperation,” the provinces for their part were busy “[publicly] embarrassing the federal government” (McIntosh 2004, 30). The provinces pushed for conflict resolution mechanisms for the seemingly intractable conflicts arising between the federal and provincial governments. There was a working group set up with Health Canada and Alberta as joint chairs. As we saw earlier, this was a central element of SUFA, but in the end it remained little developed. According to the officials, the federal government did not want formalized dispute resolution mechanisms. “[Federal Minister of Health] Alan Rock took a hard line on this.” The 2004 First Ministers’ Meeting on the Future of Health Care ends with an obscure reference to an internal “exchange of letters in April 2002” which formed the basis of the “governments’ formalized ... agreement ... on dispute avoidance and resolution” which, besides speaking volumes to the lack of public transparency in the intergovernmental processes of the federation, indicates there was a process to be followed (First Ministers of Canada 2004). Baier sheds some light on the political background to these letters (Baier 2008), but allin-all the dispute avoidance and resolution mechanisms appear rather weak and do little to settle the disputes in health care policy or elsewhere. The lack of IPC of the FMMs specifically elicited complaints from the officials about their limitations and the lack of long-term planning or broad mandates. One provincial official quoted a federal senior official as saying, “I have no mandate to talk about mandates.” He then went on to say this official “got his orders from [senior policy advisor to the prime minister] Eddie Goldenberg.” FMMs



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tend to neglect planning and issues such as health promotion or illness prevention which have a long payoff period. On the latter, one official said, “We spend no time talking about it.” Instead, they focus on “hot issues,” and many officials noted this was particularly true for health care issues, where for example the Hepatitis C issue dominated the FMMs for several years. The same is true of the financial “crisis” issue which resulted in the complete dominance of the FMMs by financial agreements from 1999–2003. This being said, one official made the following interesting observation regarding the 2002 Romanow Commission on the restructuring of health care, “There was nothing hotter than Romanow, but it didn’t get dealt with [in the FMMs].” The tension between central and sectoral influence in intergovernmental relations is, of course, played out in the intergovernmental administrative institutions involved in health policy issues. Many inter­­ governmental health officials commented negatively about the role of the central intergovernmental offices and officials, noting their priority for intergovernmental relations and process over policy outcomes, which did not sit well with officials whose overriding concern was with health care sustainability. One line department official put it this way, “Relations between the central agencies and line departments are always strained because the intergovernmental guys behave like they’re going to a UN conference. They would do anything to avoid conflict so they cut off decisions.” Another said, “Intergovernmental likes a single big issue, not complex ones, and [it likes] process, like accountability. In the Accords, intergovernmental was interested in money and accountability only. They let health do the specifics, the indicators. We set up an Intergovernmental Policy Indicators Review Commission to figure out how to do it. [Central intergovernmental people] don’t know much about health and they don’t want to get involved.” Another said, “Finance and health processes are isolated from each other.” Some of the sectoral officials went so far as to recommend that the intergovernmental institutions be abolished, although some also said that the “corporate perspective” coming from intergovernmental relations was “good” for the more singularly focused departments. Also, one of the above critics added that central officials do have a useful role in communications and input. Overall, though, not surprisingly, the sectoral officials tended to argue that “we need policy capacity to come from departments that know the policy.”

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Perhaps surprisingly, given the furor over funding issues, finance was given higher billing than the intergovernmental central agencies. As one provincial health official put it, “Our relationship with finance is pretty reasonable. We had a couple of guys wearing their twenty-five-year pins who would turn a hundred and eighty degrees toward the past to say why we could not do something, but generally finance sees health as a health file not an intergovernmental file.” Another provincial official said, “We have a much closer relationship with finance than with the intergovernmental central agencies. We talk every day with the deputy minister. They are more pragmatic about the long term and they look at trends. Their agenda is more straightforward. We know each other’s interests and issues. There is more trust and understanding. Finance has the closest ties to the premier. Health has high access to the premier and it will stay on the agenda, because of its major economic impact, but, of course, intergovernmental also has such access to the premier.” The health sector has a long-established support secretariat which feeds into the FMMs. Ongoing policy discussion and research occur here in a federal-provincial-territorial Conference of Health Ministers forum which is supported by a parallel committee of deputy ministers, advisory officials, and provincial liaison officers. At the time of our study, the Conference of Health Ministers would meet regularly two or three times a year, or more during crises, to share information and where possible to effect intergovernmental policy coordination. Policy decision-making is optional and there are no formal mechanisms to ensure compliance with any agreements reached at these tables. However, these conferences do feed into the FMMs, particularly when they are being held jointly with Finance Ministers. On the positive side, many officials noted that when linked to the pressures of the Health Accords which came out of the FMMs, the federal-provincial-territorial Health Conferences have had considerable capacity for particular projects; the national common drug review, blood supply, and disease surveillance were given as “best practice” examples. As one provincial official said, “There was a lot of energy put into policy development of these areas; there was a lot of capacity and good work done.” On the more negative side, the federal-provincial-territorial health conference system has limited overall capacity. There has been a notable lack of IPC to deal with either the broader governance issues (such as long-term sustainability) or the difficult programmatic issues (such



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as primary care or pharmaceutical cost-containment) which are of considerable concern. They appear on the agendas but not much in the output (O’Reilly 2001B). Officials noted the more scientific or technical issues “have less room for disagreement.” One official, who had been a very long term participant in both health policy and the conference activities, claimed, “The federal-provincial-territorial health conference is a dysfunctional group. It has a high turnover and a very reactive structure. It is [supposed to be] the main forum for providing policy advice but we don’t have the infrastructure for that. Health Canada has a large secretariat that supports the committees, thank god, but there’s not enough coming out of the system. Our committee has never been challenged to provide long-term big policy advice.” Other officials commented on the conference system’s “meagre output” and inability “to do much with [health care] restructuring.” Another claimed, “The deputy minister forum could make collaboration happen but it is kept at the level of the trivial while waiting for a push from the political actors. The advisory committee structure doesn’t work because the feds swamp us. You have a bunch of low-level provincial bureaucrats overwhelmed by wellorchestrated federal strategy.” In commenting on the factors inhibiting the capacity of the advisory councils which feed into the FMMs and the ­federal-provincialterritorial health conference system, one federal official said, “The earlier advisory councils were freelancing and the reporting was vague. The deputy ministers have tried to get a hold on this. They saw that the priorities were changing and the advisory councils were not keeping up, plus the provinces were complaining that the meetings were taking too much time and effort, and the system was expensive, although the feds were carrying a large portion of the cost. The restructuring preceded the January 2003 [FMM] agreement. The structure is now more coherent but there is still a lot of pettiness being played out politically.” Participants argued that the advisory councils that provide research for the f­ederal-provincial-territorial ministers and deputy ministers meetings had little “standing or ongoing capacity” partly because “they are staffed part-time [producing tensions with their regular jobs] and they require considerably more expertise than they presently have.” Plus, it was said, they only meet three times a year. “The scope of the (federal-provincialterritorial Conference) work is immense and it can’t be done by its advisory councils.” An official added, “The level of government

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policy expertise is low across Canada. To analyze, you need to know what is going on, i.e., intelligence gathering.” Each advisory council has its own limitations, for example, the key Human Resources Council was noted in 2003 to have “no credibility with health professionals.” An official summed it up, saying “It’s all about money, and advisory councils do not hold the purse strings.” The 2003 Health Council of Canada (HCC) which grew out of the FMMs and Health Accords was introduced to “enhance the federal-provincial-territorial health policy capacity.” The official mandate is to act as “an independent council informing Canadians on health care matters while promoting accountability and transparency” (Health Council of Canada website 2007). It is composed of twelve federal, provincial, and territorial health ministers (Quebec and Alberta declined) and nine non-government “expert and citizen” representatives. According to its website, “The members of the council – federal, provincial, and territorial health ministers – are rather like a corporate board of directors, performing a liaison function between the Council and Canada’s first ministers, as well as approving the council’s budget.” The 2002 Romanow Commission and others had recommended the creation of the health advisory council as “an external-to-governments council of informed citizens, to monitor developments in the health system, to take leadership for the development of public accountability measurements, to report annually to the public on the performance of the health system and its emerging issues, to serve as a facilitator/mediator in health intergovernmental disputes, and to advise all levels of governments on the public’s views of priorities for development in the system” (Adams 2001, 283). Notably, the Romanow Commission’s objectives had included the creation of “an intergovernmental body that could minimize the conflict, mistrust, and dysfunctionality that currently characterize federal-provincial relations on health care” (Canada 2002, 52–8). The annual performance report was to include “issues in dispute among governments in Canada and how they are ultimately resolved” (Marchildon 2003, 3). However, one eastern official commented, “Saskatchewan was the only province that really wanted the Health Council. The rest of the provinces didn’t, although [most of us] supported it in the end. It seemed to be without clear vision and function.” Another official said, “There has been fundamental disagreement about where it is going. There is no consensus. The council’s role is only to monitor, but the feds want more



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and so does [Director Michael] Decter.” Predictably, provincial fears were raised about federal “interference” via this new structure and we were told the federal government threatened unilateral action to get consent for it. Prior to its inception, officials expressed skepticism. One said, “It will be problematic. It will mean more work for us, with increased demand for data.” Another argued, “I am not ­certain Romanow was right in recommending more machinery. The new advisory council may become too constrained by the deputy ministers’ agendas. It may not develop the capacity it needs, [for example] to do studies to feed the policy-making processes. You have to have some degree of depoliticizing for this to work; you can do it with a feed-in to the federal-provincial-territorial yearly meetings. Right now we rely on the Canadian Institute for Health Information (CIHI) and it helps, but we could go further. We need more neutral expertise both for jurisdiction-specific and collaborative work.” Another official said, “Once you create a federal agency, it becomes politicized by the national lobby groups; for example, the Canadian Medical Association influences all national debate. This makes collaboration difficult. The feds could make national programs work, but there is some crazy decision-making.” One official recommended using Statistics Canada for information as is done in education, rather than having a CIHI or the HCC – saying both of the latter were “designed to politicize data collection.” Several officials commented that they thought “extra groups” such as the Health Council or even the COF were “a waste of time: there is too much politics.” Perhaps the hopes for the HCC were just too grand. Marchildon has commented, “In reality the HCC was originally conceived as a vehicle to resolve some of the most difficult intergovernmental disputes that had bedevilled the provinces and Ottawa in recent memory. In terms of objectives and structure, the HCC as originally proposed was in many respects as ambitious an undertaking as the Council of the Federation” (Marchildon 2003, 2). Other, more targeted, mechanisms for cooperative work on health care have been set up in recent years, including the CIHI, Canadian Blood Services, the Canadian Coordinating Office of Technical Advancement, Canadian Health Infoway, the Patient Safety Institute, the Canadian Partnership Against Cancer, and the Mental Health Commission of Canada. The Public Health Agency of Canada, which was at one point supposed to be a federal-provincial­territorial agency, became a federal Health Canada agency. While

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the arm’s-length institutions have potential for downplaying some of the politicization of other forums and have enhanced potential for public input and scrutiny, they are not without criticism, particularly concerning representation and accountability. Regarding the former, there is a conflicting need to have both a competencybased and a constituency-based board of directors, and some of these agencies choose to have a board composed largely of senior public servants (or ministers for the HCC). Also, the stakeholder base for health care is large and diverse and, as such, does not lend itself readily to representation in small agencies. Concerns are also raised about fiduciary accountability being too internal to the board, especially where the board is dominated by federal public servants and appointees, or channels of constituency-based appointees’ “answerability” to the public. Similar concerns were raised by officials about administration at the health delivery level. For example, one official commented that the regional boards and hospitals are being told to collaborate but “you can’t make them collaborate by just telling them to.” In some cases joint boards (for hospitals, for example) have been recommended to ensure collaboration. But “it always comes down to money.” One official commented, “Some of these new national entities are diluting the intergovernmental dynamics and tensions ... but the intergovernmental people tend to pick minor projects, such as foreign accreditation. We need governance structures that deal with issues like primary care. The trick will be to have these projects relevant to political agendas but not run by short-term hot politics.” Another said, “There are areas where we have good reason to engage but we have conflicting views. If success means consensus, we don’t want it. We are all pursuing our own interests.” On the positive side, despite the fragmenting effect of federalism, policy analysts have noted that this pursuit of each jurisdiction’s own interest has allowed for enhanced innovation and experimentation (Tuohy 1989, xii; Banting and Corbett 2002, 30; Maoini in Bakvis and Skogstad 2008, 162). Institutional Resources Improved resources for the institutions were seen by many officials as a means to improved IPC. Health related policy issues were, relatively speaking, given greater resources than many other policy issues



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during our period of study. This could often be seen visually in the proximity of key health offices to the centres of power. But, as seen above, officials also commented on the insufficiency of resources for the task they perceived to be at hand. They commented on the need for research and data collection and analysis resources for both the immediate accountability requirements that were built into the Health Accords and for the long-term understanding of the needs of the health care system – or even just to keep up with the ongoing debates. Officials also, as we have seen, commented on the limited resources available to deputy ministers and the advisory councils of the federal-provincial-territorial health conference system. Many officials complained about the lack of time to develop long-term plans or projects. One commented, “Email doesn’t help. It is a great window on the world but a lot of time is lost. We are losing the ability to read and be reflective. Knowledge helps to inform good policy.” Another said, “There has been a rise in the number of files and time-line problems,” while yet another claimed, “There is a timing issue. The feds often ask for replies in two weeks.” The provincial and territorial officials also complained about lack of resources in comparison to those of the federal government, some saying this was a “major disadvantage.” One official complained about “the Fed’s ability to throw people at issues.” The smaller provinces and territories are particularly disadvantaged. An Eastern official commented, “This is not an equal playing field. It is like David and Goliath.” A Manitoba official commented in 2004, “Manitoba has four staff on federal-provincial relations; Health Canada has four hundred staff on federal-provincial healthcare policy.” An official from another of the smaller provinces admitted, “On our own we would provide mediocre advice.” Territorial officials commented on their even more difficult circumstances and limitations, given their travel distances and smaller populations and resources. But it is not just the smaller or less well resourced provinces and territories that feel this disparity. One official commented, “The provinces lack reciprocal capacity. Atlantic Canada is the worst off [of the provinces], but even Ontario and Quebec can’t compete.” Another official from a relatively well-endowed provincial government noted, “The feds have ten people on each file; I have one person on three files.” Officials noted that this difference in resources affects more than just data collection. As one official put it, “Health Canada has ­amazing

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capacity to develop frameworks and models.” Another official commenting on the same federal capacity said, “These frameworks get used to develop policy.” Overall, the provinces and territories commented on their “inability to create or sell policy, to communicate, and to make use of outside institutions or academics to win support for their arguments.” Knowledge and expertise are seen by officials as important institutional resources. However, access to these resources does not guarantee policy clarity. Macro-level arguments persist, for example, about the financing needs of the sector and whether or not there is a “crisis” of sustainability in health care, and if so, its implications. A provincial official commented, “Sometimes the issues are so complex it is difficult to get a consensus, for example on homecare there was a lot of effort on a national direction but it was so complex that it fell apart. Not every jurisdiction could buy into the same set of services.” Another official commenting on the 2000 Premiers’ Council on Health Awareness “cost drivers paper” said, “The premiers put out this paper so that they could show they were interested in controlling spending but the cost drivers were beyond their control, for example, an aging population and new technologies.” At the micro level, NPM ideas of accountability through reporting have caused dispute about the nature of that reporting and the collection and compiling of the requisite data. For example, most of the health care providers such as hospitals and medical offices had never been coordinated in the type or usage of data collection on patients. The records offices of hospitals next door to each other were not using compatible software programs, so telling them to make panCanadian data comparisons resulted in predictable reactions and dilemmas. One territorial official commented (in 2004), “Performance indicators has become an industry in itself, but this has been a failure [for us]. The measures were meaningless for us.” And, of course, some organizations were not happy with their unfavourable ratings once the data comparisons had been made. Nor does everyone agree on what is being measured. One official noted, “Science can measure quantity, but it cannot measure social benefit.” One health official recommended “less developing of science to fit the policy, rather than the other way around.” Academic and public interest groups have, not surprisingly, been more positive about the production of data and surveys such as those produced in the yearly



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national Maclean’s magazine issue aimed at revealing the facts on health care outcomes to the Canadian population. Accords and Agreements Taking into account the overall collaborative work of the federation during the mid-1990s and early 2000s, a considerable portion of intergovernmental energy was spent on the health care file. It dominated FMM agendas and resulted in new institutions and regulations. The contamination of the Canadian blood supply and consequent legal repercussions dominated FMM discussion in the late 1990s and resulted in an intergovernmental agreement to set up a new national blood authority in 1997 and collaborate on financial assistance to Canadian Hepatitis C victims in 1998. More broadly, by the 1997 meeting of the federal-provincial-territorial Conference of the Ministers of Health, the governments claimed to be focusing on the problem of the “crisis” in health care sustainability. Their self-entitled “Take Action” plan stated the governments had agreed to “work together in sustaining and revitalizing the Canadian Health Care System” (Federal Provincial Territorial Conference of the Ministers of Health 1997). Although this mandate might easily be interpreted as a fairly ambitious project, provincial reluctance to go beyond the narrowest interpretation of the collaborative effort was clearly present. As Russell King, the Minister of Health and Community Services for New Brunswick, was quoted as saying in the same press release, “Our aim is to make the system better by sharing ideas and building on experiences and best practices across the country” (FPT Conference of the Ministers of Health 1997). Mechanisms for information exchange were already wellestablished, if underutilized, in the federal-provincial-territorial ­ health conference system, so it was unlikely that such “crisis intervention” as this would result in any alteration of the long-term sustainability prospects of the health care system. What would make a difference, in the minds of the provincial and territorial politicians and officials, would be the infusion of money from the federal government. This, then, became the focus of the FMMs from 1999 to 2004. By 2003, the big money deal had been made, with the provincial governments winning a sizable transfer of money from the federal government. The 2004 “ten-year plan” was a ­continuation of

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the thinking and overall funding which had gone into the s­ eries of agreements and accords, with targeted issues and regional areas more clearly demarcated for enhanced funding (including the North), and accountability and reporting requirements restated, as well as agreement over some of the terms of the new Canada Health Council (First Ministers of Canada 2004). Overall the outcome of the five years of focus on what had been referred to in 1997 as an intergovernmental collaborative “sustaining and revitalizing” of the health care system, found the health care system richer by a promised $34.8 billion; that is, in much the same place as it might have been had things been left entirely alone. As Tuohy has pointed out, if real public per capita spending, which declined dramatically from 1992–96, had simply increased in secular fashion from 1992 to 2000, federal and provincial governments collectively would have spent about $30 billion more than they did (Tuohy 2002). Plus when all is said and done, McIntosh predicted, “the system will likely absorb the new dollars without changing how services are delivered and organized” (McIntosh 2004). For the officials’ part, opinions varied regarding the success of these Accords. Those with a more financial bent viewed the Accords as successful in that they had returned a considerable amount of money to the health-care coffers for the provinces and territories – although some claimed the funding was still insufficient to keep up with demands on the health care system. Others with more interest in long-term planning and restructuring of the system were critical of the agreements. As one official said, “Every jurisdiction needs primary care reform independent of federal money. In 2001 we had federal-provincial-territorial agreement on this goal and there was federal money to provide incentives for change.” However, s/he went on to say, “The federal money is helpful but is not necessary to fix this part of the system. Primary Health Care does not require an intergovernmental dimension unless the provinces ask the federal govern­ment for assistance. I am cynical about their role. The hoops we have to jump through for the money are annoying. We are not afraid of accountability but it depends on what they mean by accountability. We do a lot of reporting already. As a driver to interfere it is not good.” As for credit, a provincial health official said, “The 2000 Accord and money were coalesced by intergovernmental and finance, with health along for the ride. There was a ‘Costs Paper’ and C ­ hrétien and [federal Minister of Health Allan] Rock indicated they wanted a



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deal. The health people did the goals and principles, led by Saskatche­ wan. They lifted the list from the federal-provincial-­territorial health conference work ... Accountability set the context ... for the [central agency] intergovernmental people.” As Goldenberg put it in his memoirs, “In 2000, as the demands for the new healthcare dollars were seemingly insatiable, there was a reluctance in the caucus, the cabinet, the finance department, and the health department for Ottawa to simply issue more blank cheques to the provinces, without some understanding as to how the money would be spent” (Goldenberg 2006, 325). In 2003, a federal official said, The principal products of the last five years have been two action plans or Accords in 2000 and 2003. Are these the product of long-term collective effort? It was a drill. The provinces wanted more money and the federal government wanted more efficiency to square the circle of resources and good care. Output depends on money and conditions. The provinces talk money and the feds talk conditions. The 2003 agreement was a more robust agreement. It went over and above money. It had policy priorities and collaborative promises to maintain the system. But it was not very radical. There was collaborative action in particular subject areas such as pharmaceuticals where the common drug review was needed to ensure health care organizations had more or less the same drugs on their list and that “no means no” with regard to the public funding of certain pharmaceuticals. The feds and provinces came up with this mechanism together and at the political level all the ministers agreed. “Yes means maybe.” The difficulty is that there is no grand scheme with a clear sense of priorities. The work on pharmaceuticals indicated positive movement but primary care reform, for example on credentials and manpower planning, was not dealt with. Complaints were voiced about the “raised expectations” from the Accords and the “one size fits all” approach inherent to them. One official said, “Our premier didn’t want to sign the 2003 Accord. We had other priorities.” Another said, “The construction and apparatus of the health care system are cumbersome and outdated. [In 2005] the federal government and four jurisdictions, Quebec, B ­ ritish Columbia, Alberta, and Nova Scotia, had private clinic services.

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­ hrétien was going to go this way with MRI clinics but [Finance C Minister Paul] Martin was against this; he wanted to reconstitute the deal, but in reality little changed. It is more about symbolism than change.” Another official commented, “Non-insured services are very different across the country. For the 2003 meeting, the federal government had asked for a report on homecare – what it means to Canadians – but we don’t even have this type of data. The provinces don’t want to commit to something they can’t do. The feds leave and we think, ‘What do we do with that?’ In terms of implementing it, it is nowhere. I would love to turn the Health Canada people loose to apply their planning principles at the provincial level.” Others commented on larger factors. On the question of IPC for federal-provincial-territorial collaboration, one federal critic commented the Accords were “more about negotiation than collaboration.” Another federal official complained, “You can’t even get acknowledgement that collaboration is desirable. The Accords were signed to get the money and get out of town rather than a collaborative signing-on to a joint project or vision.” One official contrasted intergovernmental work in education with that in health, saying, “There has been a high degree of collaboration in education, with contact at all levels, open conversation, and searching for common projects. We see the exact opposite in health, with little cooperation, little open conversation, struggle over who pays, and ideologically driven tactics.” A federal official claimed, “There is very little tolerance for bilateral agreements in health. There is not much tolerance from the federal government for differences. That is difficult, especially in health. For example, with regard to catastrophe drugs and setting national norms, the federal money raises the bar in the east and for the ‘haveless’ but nothing will change in Ontario.” A provincial official complained, “On the national immunization strategy the feds want the money to go strictly for immunization of only the people they are responsible for.” However, quite a number of provincial officials also recommended a very minimalist role for the federal government which would have them active only in the areas where the provinces “have no capacity, for example work with human subjects, stem cell and genome research, or international files.” Specific federal-provincial-territorial cleavages on health care issues played a significant role in the Health Accords. Some of those noted by officials include differences of opinion on, for example:



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Population health: where the federal government pushes for national standards and vaccinations which the provinces do not always feel they can afford. • Human resources: where the federal government tends to deal with the national associations but the provinces see them as vested interest groups overriding “the public interest.” • Reporting: where provinces and territories are concerned about appearing to report to the federal government rather than their public; they also expressed concern about inter-provincial and territorial “stealing” of health professionals after open reporting. • User charges: where (in general) many provinces feel the need for them but the federal government often calls on the CHA to stop this practice; (more specifically) “the feds were willing to think about this for MRI but not abortion.” • Services moving out of hospitals: where the federal government wants these shifted services to fall under the CHA, but the provinces are concerned about the cost of such a move. • National pharmacare or homecare programs: where the federal government wanted to contribute and get credit but the provinces were afraid it would invest initially and then drastically reduce or pull out the funding. • Information technology: where there is provincial fear of federal leverage. • Genetics: for some it is about the patent or industry, not health. •

In the 2003 Accord, the provinces insisted on including a statement which read, “Nothing in this document shall be construed to derogate from the respective governments’ jurisdictions. This Accord shall be interpreted in full respect of each government’s jurisdiction” (First Ministers of Canada 2003). One official noted, “Intergovernmental agreements are inhibited by the realities of Canada. The federal government is dealing with thirteen jurisdictions, all with different capacities. Our different electoral cycles are not helping.” Others commented more specifically on federal power and interests, saying, “the feds are the biggest wild card” and “the feds need visibility. They have no way of getting into the hearts and minds of people. People see them taking in the money and want to know what they’re doing with it. The 2002 FMM press release was not a policy framework. The feds wrote it and then leaked it. The Globe and Mail knew more than the provinces. It was at best endured by the provinces and territories.”

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While there are many cleavages between the federal, provincial, and territorial governments, there was also note made of the differences among and between the provinces and territories. Provincial officials commented on the variation of stances and opinions among the provinces, and a territorial health official claimed, “There is no policy unity between the provinces and territories.” As we shall see in our discussions of jurisdictional differences and commonality in chapter 9, there tends to be more shared interest among both regional provinces and territories and similarly sized and resourced provinces and territories. The Courts The Canadian courts can act as important factors in IPC. Although they are not uppermost in health officials’ minds, they are of some interest. Federal-provincial tensions over constitutional and nonconstitutional limitations are occasionally heightened by legal disputes. For example, following the 1995 decrease of federal funding, legal challenges to the federal interpretation of the CHA or to the “privatization” of health care came increasingly to the fore ­(Manfredi and Maioni 2002). Two key cases were decided in the mid-1990s and mid-2000s respectively. Alberta’s Health Care Protection Act (Bill 11), which allowed for the Alberta public health care system to contract work from private clinics, was taken to the Supreme Court of Canada for a decision as to whether Alberta’s private hospital service delivery constituted a violation of the CHA (Alberta Bill 11 2000). Despite considerable expectation to the contrary, the Supreme Court decided the province’s actions did not constitute a contravention of the CHA. In 2005, the Chaoulli decision of the Supreme Court of Canada (Chaoulli v. Quebec, [2005] 1 SCR 791) argued that Quebec’s prohibition of private health insurance for publicly funded services violated section 7 of the Canadian Charter of Rights and Freedoms. These, coupled with federal Auditor General’s reports criticizing provincial lack of enforcement of the CHA, left officials concerned about the strength of the CHA and the implications this held for public health service funding and delivery. While many of the officials to whom we spoke indicated their interest in these developments, few took sides. Some saw the enhanced role of the courts in health care policy as positive. One official noted the “increasing use of litigation to define services – for behaviour



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modification, access to reproductive services, and blood services, for example, is useful. Litigation makes a common cause. It ensures similar legislation, portability, and reciprocal rates across the country. It is a helpful mechanism.” Other non-health-related court cases on government responsibility or negligence were being watched by officials. One provincial health official commented on the pressure they felt from a British Columbia court case in the late 1990s on government negligence (about boulders being left on the road) because the court had decided “the government could not say it would do acts and then not do them. Years later this had governments concerned.” These types of decisions were being closely monitored by both sides in the privatization debate as provincial governments, particularly those with neoconservative agendas, looked to overcome the provincial policy limitations placed on them, not by the Constitution, but by the combination of the federal spending power and the CHA. Provincial policy capacity is, of course, linked to IPC. Interestingly, with regard to these court decisions, they are inversely related.

ACTORS Political and Administrative Actors Both political and administrative actors play important roles in IPC. The personalities, will, and good faith of its actors are therefore important to the workings of the system. One official commented, “Things change rapidly in the political realm. You have small numbers with large egos. A couple of players can really change the dynamics.” The health file demonstrated the power of the executive, particularly the first ministers and finance ministers who sometimes dominate policy, as they did with the Health Accords and the development of dispute resolution mechanisms. Health officials complained that work was “taken over” from the ministers of health by the first ministers and finance and then returned as those officials saw fit. There is very little check on this power, and while the officials were inclined to take this as a given, they also recognize the fine ­ ecision-making and line between appropriate (democratic) political d overly political decisions. They expressed concern about the lack of long-term planning and policy knowledge and experience of some members of the political executive who were making key policy decisions. Those members could either enhance or inhibit IPC. One

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official commented, “When the feds became more articulate about accountability for [federal] money being put back on the table, then it became obvious to the premiers that they had to get involved rather than leave it to the health ministers, so intergovernmental people became much bigger players in health, providing advice for the premiers and FMM. Now [in 2004] we have grumbling from health because their jobs have been taken over by intergovernmental types.” While one official noted, “The advantage to the intergovernmental official taking over it is that it gives more profile to health discussions,” another commented on the “lack in government of people who will think and challenge their colleagues and cabinet.” A common complaint, then, is that the “political,” while a legitimate and necessary part of the equation, comes to dominate policy decisions. As one health official put it, “The biggest impediment to intergovernmental policy capacity is the reality of the federation. How many prominent advocates of intergovernmental cooperation in health can you name?” Officials were also critical of their own capacity for developing sound policy. One provincial health official claimed, “Our policy capacity is dreadful. Policy analysis is the life stream of a bureaucracy but the life stream can dry up. You have to grow IPC.” Another said, “Public servants tend to be defenders of the status quo and incremental change to make sure politicians don’t go too far wrong. Today in 2003 with the absence of policy direction, we are struggling.” One deputy minister of health said, “What we need is a strategic process, lead by governments – deputy ministers especially – with policy people and futurists who can ask: What are the strategic issues one has to manage? Deputy ministers need to reevaluate their role, as policy directors. We don’t know how to engage the policy talent. Elected people are not really a bright bunch of folks; they are municipal councillors who want to be micro-managers. The academics are also limited; they are not pragmatic enough.” Other officials commented that the deputy ministers are underutilized and short-tenured; the conference secretariat advisory councils are under-resourced; and expertise is in short supply. One deputy minister commented that s/he was the sixteenth deputy minister under one premier’s reign, and another said that while the duration for his/ her job is approximately eighteen months, it had taken him/her one year “just to learn the portfolio.” The high level of turnover was also noted for the federal assistant deputy minister level. “I am amazed at



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the turnover of assistant deputy ministers in Health Canada. People are on an accelerated program; the job is just a steppingstone.” One health official asked, “Where is the federal Canadian Health Services Research Foundation program for the bureaucracy, to talk about policy and present options? You need to take the managers out of the daily firefighting to think and protect themselves from burnout.” Another official said simply, “Too many files, too few people.” Nevertheless, it was also noted that even when there was a high turnover of actors or a period of time when the political leaders were relatively disengaged, there is a body of administrative officials across the country which tends to provide considerable continuity to projects with “policy advice, background issues, research, and brainstorming,” keeping in mind, as several officials reminded us, that “governments make policy; officials have the ability to influence policy but not make it,” and “public servants defer to ministers.” One provincial official referred to the deputy minister needing to have both a “strategic unit for long-term work” and a “SWAT team for quick and dirty deputy minister policy initiatives.” It was noted, “You have to distinguish between sharing program initiatives and policy development; many officials believe they are involved in policy development but that only happens at the deputy ministerial level.” Overall, though, many senior level officials commented on the competency of their public service. As one said, “I am always impressed at the professionalism of the public service. They are very good at the technical level. In [intergovernmental] situations where political posturing is involved, you can disagree but still work together the next day. The understanding and support of your [intergovernmental] colleagues is there.” The Public With regard to public actors, intergovernmental relations in general are not, of course, known for their open style of governance, and interactions with the health care public are no exception. FMCs are a prime example of executive federalism where the public is simply notified of what the first ministers choose to do . Intergovernmental structures such as the federal-provincial­territorial health conference system are also virtually closed to public input into policy development (O’Reilly 2001B). Where the public is being informed, if not directly involved, is through new public

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accountability and public reporting mechanisms. As reports come out and are picked up by the media they may have a policy feedback input. As well, there are a number of non-government agencies, such as the HCC and CIHI (which does this public reporting), which are run by a Board of Directors with some public membership and/or public mandate. Overall, officials varied in their regard for the value of public participation. Some officials called for more participation in the ­system. One said, “We need to engage stakeholder lobby groups and get them into the tent to think about managing social change. We’re still doing incremental first-order change.” Others were concerned about the fragmenting effect of public participation in an area as complex as health care. An official said, “Although the public has a lot of detailed knowledge, they don’t understand the contradictions and complexities of the system. They want a health system they can’t afford. We have not communicated well with them. Consultation is easy, but how do you get engagement?” One provincial health official said, “Our District Health Regions operate the most complex organizations in the province, and they don’t operate on public input.” All politicians, of course, make reference to the importance of the public or “the public interest,” and SUFA, as we have seen, made considerable reference to the need for “full and active public participation” with “effective mechanisms ... and meaningful input into social policies and programs” (First Ministers of Canada 1999, section 1). However, as with other intergovernmental initiatives, SUFA was negotiated behind closed intergovernmental office doors. One official commented, “[In health care], the best exercise for dialogue was the Romanow Commission which tried to balance citizen and interest groups [provider stakeholders] and government interests. We don’t effectively listen to the public, but we need to learn how to engage for serious needs-based community development in order to move from dependency on governments to assistance from government.” Public opinion, as garnered from opinion polls and the media, does appear to affect IPC considerably in health. It is notable that although there is little or no public input into the federalprovincial-territorial health conference system itself, the policy areas which have received the most attention there in recent years, particularly blood-Hepatitis C and reporting of wait times, had a high degree of public exposure attached to them (O’Reilly 2001B). This



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exposure comes and goes. One Atlantic official commented in 2003, “For the last three years if we didn’t have four pages in the newspaper that day, we were having a slow day. Now we appear about once a week.” Officials often emphasized the important role played by public opinion and the media, although how this is played out is not always clear. For example, one official said, “The public dislikes federal-provincial-territorial fighting and although it is not clear what effect this has, this gives the provinces more ability to emphasize provincial accountability to the public to manage health care better. The public voice is powerful in shaping provincial health policy.” Some officials spoke very critically of the media, saying, for example, “The media is bad news. It works to destroy any opportunities to make change.” Others commented that it skewed priorities, encouraging an ad hoc approach to intergovernmental policy output. All of this is complicated by the fact that although the provinces hold legal jurisdiction over the delivery of health services, the public tends to view the federal government as the guarantor of “national standards” in health care and a high percentage of Canadians want “improved federal-provincial cooperation (to become) a high priority” (Centre for Research and Information in Canada 2004, 6). As one official said, “You can’t be right in public policy if the public thinks you are wrong.” Referring to an infamous episode when Prime Minister Brian Mulroney was forced to back down on his plan to de-index old age pensions after a publicly broadcast dressing-down by a senior citizen, this official added, “With the old age pension, people’s perceptions of fairness counted more than the facts.” Some officials valued this input, “The public know more now and they are more sophisticated. Policy can now be what the minister decided to do after talking to the public.” A provincial official commented that there seems to be a disjunction between provincial and federal public input. “Premiers set up tables for local input and ideas but this input seems to stay in the provinces unless key public servants decide to take the initiative to take the issue to the feds.” For their part, by 2007 (four years after the “success” of the Health Accords), “both federal and provincial governments receive relatively low ratings for their performance on health care, though Canadians have [in 2007] slightly more confidence in their provincial governments to make positive changes in the future” (Soroka 2007, 3). The role of the public or public interest is further complicated by the fact that there is no “the public.” There are various, sometimes competing, publics and interests across the federation. As one

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official pointed out, “The public is divided by location or territory, for example, the north versus south; urban versus rural; wealthy region versus poorer region, and this pits them against each other in the fight for health care resources. Governments have to make tough choices about budget allocations such as sinking money into hospitals in the North. Then electoral calculations come into play.” Another official said, “There are a lot of competing public demands but no-one is orchestrating it, except the vested interests.” Because of the high profile of health policy issues and the powerful interest groups involved, elected and unelected officials alike have to share the field with other influential actors, such as health care institutions, health practitioners, and private business interests. All of this puts considerable “underground” pressures on the officials (O’Reilly 2001A). Some officials felt that “the involvement of stakeholders places too much burden on the ­[federal-provincial-territorial health] conference system.” One official commented, “Executive federalism is closed ... accountability is zero. Putting interest groups into this executive system only compounds the sin.” A considerable number of them commented particularly on the relationship between the governments and the medical profession. As one official said, “Physician power is very important.” On the one hand officials saw their role as positive. “MDs bring validity and balance to discussions.” “We need to include the professions in our discussions.” On the other hand, there was considerable criticism and concern about the government’s “old boy network with the professional associations,” inhibiting policy progress. Several provincial officials complained of the strong federal connection to the national associations, saying, “The national associations are listened to by the feds, but they are often shallow. Their voice speaks to their own interests, for example the Colleges of Physicians and Surgeons and other provider voices.” Another provincial official said, “The feds are captive of these national interest groups [such as the Canadian Medical Association or the Canadian Nurses Association] thus inhibiting any federal role as an arbitrator between them and the provinces.” When commenting on the power of the medical profession, one provincial official claimed that “governments are afraid of them.” Another federal official said, “We need intergovernmental collaboration in order to have the payers have some control rather than MDs. Romanow didn’t dare do this. No



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individual governments have been able to deal with MD power. Only the governments together could deal with this central issue.” A territorial official commented, “The power of the MDs and nurses is very important. They believe they run the system. The politicians can’t win this fight; they won’t take on the MDs, nurses, etc. [To do so] they would have to educate the public.” One official commented that a particular intergovernmental policy group had avoided placing public members on their body in order to better represent the public interest because experience had shown public interests tended to become dominated by medical interests. Some officials complained of the fact that Aboriginal groups have gotten caught up in the jurisdictional disputes of the federation. While Aboriginals fall under the jurisdiction of the federal government, health care delivery is a provincial or territorial responsibility (and even municipal responsibility in some cases – with provincial downloading of certain social services). This leaves room for each government to claim the other is responsible for Aboriginal health. Aboriginals feel left out of the system because of their particular needs. Despite references to them in APC communiqués and federalprovincial-territorial Health Ministers Conferences in the late 1990s and early 2000s, Aboriginals saw little progress on their issues by the time of the 2003 FMM (Premiers’ Meeting 2003). To the surprise and in some cases consternation of their own officials, the territorial leaders walked out of the 2003 FMM because of this. They refused to sign the Accord. This was followed by a “Blueprint on Aboriginal Health” from the first ministers and Aboriginal leaders in 2005 which was “intended to guide future decision-making by federal, provincial, and territorial governments, First Nations, Inuit, Métis, and other Aboriginal leaders in achieving the stated “vision” of closing the gap in health outcomes through comprehensive, holistic, and coordinated services” (Meeting of First Ministers and Leaders of National Aboriginal Organizations 2005). A federal-territorial working group on the policy capacity of health in the north was set up and further federal transfer funds were designated for Aboriginal health, but this simply narrowed the gap a bit rather than closing it. The overall living and health conditions of Canada’s Aboriginals changed little as a result of the years of focus on health in the intergovernmental institutions, and negotiated results with the successive Conservative government have been limited. As one territorial

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­ fficial put it in 2004, “The federal government talks about Aborigo inals; there is lots of talk, but I have not seen any policy for individual Aboriginals in a long time.” Overall, it is really too early to tell whether IPC in health will be enhanced or inhibited by increased public participation or the public watch. While the involvement of the public could lead to more responsive policies, it could also lead to fragmentation of decisionmaking, resulting in a less accountable and effective government (Delacourt and Lenihan 1999). It could also, particularly in health policy, lead to the overriding of the general public interest by that of the dominant interest groups of the sector. Aboriginal health, however, appears to be in need of considerably more sophisticated and concerted IPC, and of a better effort at listening to the various voices of the Aboriginal people of Canada.

Relations Intergovernmental relations at the political level have always been important in federalism. As we have seen, the mid-1990s disputes over health care funding were strongly marked from the beginning by a decision of the federal government to move unilaterally to lower federal transfer money to the provinces under the CHST. Lazar notes that the health sector has been the subject of high politics since the 1980s, and has “outweighed an intergovernmental tradition in the health sector that had been relatively cooperative on matters within the purview of health ministries” (Lazar 2006, 33). He argues that the changeover to more contentious politics was the result of unilateral federalism in the form of the Canada Health Act (CHA) in 1984 and the CHST in 1995. Lazar finds that the health sector is the most hierarchical of all the policy sectors he examines. The high politics follow health policy because of the “huge amounts of money and important symbolism at stake” (Lazar 2006, 33) We have seen how the CHST fight had a damaging effect on relations between the federal, provincial, and territorial governments for many years. “We were not going to prostitute ourselves for fourteen cents on the dollar,” said one provincial official. Many officials commented that provincial-territorial public service relationships are often very positive, while federal-provincial relations are much more strained. Provincial officials commented they feel they are being watched by federal officials and are often unfairly accused



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of allowing extra billing. When they press the federal government on this, they often do not get any answers or what they consider to be reasonable explanations. When asked about overall federalprovincial-territorial collaboration in the system, one official commented, “There is collaboration in the deputy minister conference system but there is none at the first ministers’ conferences. The feds arrive with a position paper which they refuse to change and then find it bizarre when the provinces refuse to implement it. There was no collaboration in the Chrétien years.” Provinces often complained that there is not enough notification or agreement on issues. For example, we were told the provinces did not agree with the general legislation the federal government produced on reproductive issues, but the legislation went ahead anyway. A federal official noted critically, “No one in the federal government admitted relations were poisoned by the federal refusal to admit problems with the CHST; [this] had a toxic effect. Every federal-provincial-territorial meeting of the first ministers was driven by this vituperative dialogue about that CHST. Then the federal sectoral people were sent out to this provincial environment. And the same thing [happened again] with the fiscal imbalance. SUFA was supposed to give us a better way of working together but in reality we are not taking our cues in health from SUFA.” A provincial official commented, “The capacity of the federal government to influence the provinces and health through money declined during the CHST days, but less ability to buy political change meant they [the federal government] became more clever and aggressive in negotiating. For example, in the negotiations over the Health Council the feds threatened unilateral action.” Overall, “When they can get away with it, they change the rules, for example with regard to certain expenses, and leave the provinces to tell the people they [the provinces] can’t provide the services.” The general lack of understanding between the federal officials and the provincial officials was also commented on as a factor affecting IPC. Several provincial officials recommended “the federal people come to the provinces and work with the provincial people,” noting it tends to be the other way round, with the provincial officials going to work with the federal officials. Interprovincial and provincial-territorial political and adminis­ trative relations have tended to be good with regard to health care issues, aside from fiscal issues related to funding and ongoing

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c­ ompetition over the hiring of health professionals. Regional groups especially have developed in the East and West, with connections to American counterparts in the same region. One eastern official commented, “The ministers and deputy ministers of the four Atlantic provinces have done [by 2003] good economies of scale work on regional cooperation on the Drug Review and Wellness Strategy, for example.” Of course, it should be said, one would expect better relations among the provinces and territories in a policy area where they tend to share the same general concerns. Even in the North, the services are essentially the same, albeit more costly and scarce with variation of population need patterns. Compared to policy areas such as energy, industry, or immigration, for example, where the policy issues vary considerably by province and region, one would expect less competition and therefore better relations. Also one would expect better relations between people in less dependent relationships such as those among the provinces and territories, than in federal-provincial-territorial relations where the federal government controls a substantial portion of the purse, setting up a more hierarchical relationship. One federal health official commented, “One key dynamic is that of the relationship between the intergovernmental central agency people and the sectoral people. The sectoral people say that things get done despite intergovernmental interests. Sometimes the federal intergovernmental people are a pain in the neck and other times intergovernmental people in the provinces get in the way, arguing not to have strings attached.” This official expressed a rather jaundiced view, arguing further that “a lot of time gets wasted. For example at one point the [federal] health people were arguing for a modest amount of accountability to the public and the PCO intergovernmental people were no help. In the end we negotiated with Quebec to take some of the money. Ottawa intergovernmental is in fairyland about the state of the nation. The PCO intergovernmental people often get in the way on hot issues and the provincial central agency intergovernmental people are the same, so worried about autonomy they won’t sign.” Some smaller jurisdictions appear to have better relations between the central agencies and line departments. For example, one health official said, “The central agency does not keep an eye on the day to day. It keeps an eye on the first ministers’ and premiers’ agenda. In Newfoundland there is a good r­ elationship



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between central agencies and departments. We prepare briefing notes together and make up strategies together. I have noticed the communication is not so good in other provinces.” However, that same official did go on to say, “Intergovernmental people are playing out the premiers’ finance agenda rather than health policy. You have two different worlds here. In the Health Accords the deputy ministers were left out.” Likewise another small jurisdiction official from the Northwest Territories said, “The ‘process versus policy” problem isn’t as big an issue here.” But then that same official went on to say, “The intergovernmental people can be pompous, like the feds. ‘Let me make some observations.’ They only talk about process – until you forget what you were talking about. When a document is transferred from intergovernmental to health, there is no content talk.” One eastern provincial health official said, “We have had some friction with finance on how the health accord money would be used. Finance wants money in the name of health.” The importance of informal relationships in the dynamics of federalism was often commented on by health officials – as it was by other sectoral and central agency officials. As one official said, “The real work is done at the dinner where you can be candid. That is when things move. We need more informality, although the officials are better at it because they have developed collegial relationships even when they differ.” Informal relations are carried out on an ad hoc basis between the various offices found in both intergovernmental and health departments of both levels of government. Not surprisingly, this has been little studied, given both the complexity of the interactions and the cloud of secrecy that tends to surround intergovernmental bargaining and negotiations. However, interviews of intergovernmental officials involved in the health sector do indicate considerable policy information sharing, discussion, and debate at the informal level. One official commented, “There is a belief one has policy development capacity by virtue of one’s [formal] professional status, but that is a perception only. We need to ask, ‘To what extent is policy made through informal, unsanctioned arrangements and networks?’” Another official noted, “The feds have a huge network/set of working groups. They sometimes invite the provinces in. Often this is only fact-finding but sometimes you can have policy influence through the backdoor, in the Stockholm syndrome approach.”

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WHAT THE OFFICIALS DID

NOT

SAY

With regard to the larger parliamentary institutions, academics and policy analysts have been calling increasingly for intra-governmental representation and voice in the central governing organizations of the federation, such as Parliament (see chapter 10). However, the officials made little or no mention of parliamentary factors with regard to IPC in the health sector. One official did comment, “Minority governments give the provinces power to force more money from the federal government for health care. A majority is different; we saw weak unfocused negotiations for the first seven years of the Liberal mandate.” Another official mentioned that parliamentary committees could play important roles from time to time. There is a House of Commons Standing Committee on Health established in 1994, with a mandate to study and report on all matters relating to the mandate, management, and operation of Health Canada, as well as provide oversight for five agencies that report to Parliament through the minister of health: the Canadian Institutes of Health Research (CIHR), the Patented Medicine Prices Review Board (PMPRB), the Hazardous Materials Information Review Commission (HMIRC), the Public Health Agency of Canada (PHAC), and the Assisted Human Reproduction Agency of Canada (AHRAC). The Standing Committee on Health has the power to review the Estimates of Health Canada and all the associated agencies, and it works in cooperation with the auditor general of Canada. The most relevant committee in the Senate is the Senate Standing Committee on Social Affairs, Science and Technology, which traces its origins back to 1908 when a Committee on Public Health and Inspection of Food was first established. It has a mandate to examine legislation and matters relating to social affairs, science, and technology, including health and welfare. Under the leadership of Senator Michael Kirby, this committee produced a thoughtful report in 2002. Although the Kirby Report discussed both the financing and the restructuring of the sector, and it, like the Romanow Report which was released the same year, was given considerable press, the political focus remained predominantly on the privatization debate and the role of the federal government in financing the health care system, rather than on the restructuring recommendations of either report. (Interestingly, the Chaoulli legal case was backed by a group of senators (Manfredi and Maioni 2002).)



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Not surprisingly, then, for the most part, the provinces remained wary of any committees linked to the federal government, seeing them as federal rather than national. So rather than contribute or take seriously their recommendations, some provinces preferred to set up their own committees. But as with their federal counterparts, provincial and territorial officials had little to say about legislatures and IPC. Officials also said little about political parties as a factor driving IPC, except to say that party ideology seemed to have little consistent effect. This stands in contrast to Tuohy’s finding in 1989 that “[o]ne of the most significant intersections of influences on Canadian health policy is that between federalism and the party system” (Tuohy 1989, 143). More recently, Banting’s work illustrates the importance of party ideology in his account of historical health care developments (Banting 2008, 146–7) – where parties on the right are more accepting of privatization than parties on the left. Perhaps there has been a shift over time, or perhaps the role of ideas is a better methodological tool here, rather than the role of parties. The idea of privatization is alive and well, but the attachment of it to particular parties is more ideational than it is realized in practice. Some officials did refer to the ideological fight over privatization of the health care system (although they do not appear to distinguish between ideological and ideational). One official referred to the public/private debate as “an ideological problem that will not go way.” S/he went on to say, “Other non-ideological issues are less susceptible to political manipulation, although this does happen.” Overall, though, we were told the party dichotomy over privatization appears to break down fairly quickly under pressure from the electorate to maintain the current public health care system. Several officials commented that the Liberals and Conservatives appear to act alike with regard to health care when in power – with neither altering the public health care system to any greater degree than might be expected of the NDP were they to get in power. One western official did comment on tactics in intergovernmental forums where, for example, “Saskatchewan’s [NDP government] will sometimes veto Alberta’s [Conservative government] for ideological reasons.” Another commented on the role of ideology in the administrative side of governance (see below). However, a lot of the division referred to by officials related more to provincial or regional differences of ­culture (Quebec versus

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others) and “resource capacity” (Alberta and Ontario versus others), as well as the oft-mentioned federal-provincial and territorial policy jurisdictional divide, than to party differences over health care. International factors do play some role in Canadian health care. International health agreements, like trade agreements, fall largely under federal jurisdiction. Health Canada interacts with foreign governments both formally and informally, particularly with the United States. Collaboration occurs in a number of areas of joint concern such as “access to and affordability of pharmaceuticals, health security, tobacco control measures, the safety of food and consumer goods, the environment, and human resources in the health sector” (Health Canada 2007). Interaction occurs formally through bilateral institutions, such as the North American Free Trade Agreement Sanitary and Phytosanitary Technical Working Group on pesticides, or agreements, such as the First Nations and Inuit Health Branch’s Memorandum of Understanding (MOU) with the Department of Health and Human Services on Aboriginal health. Other notable bilateral MOUs include the Canada-US MOU regarding Cooperation related to the Safety of Consumer Products, and the MOU regarding the Sharing and Exchange of Information about Therapeutic Products. In 2004, Health Canada established a departmental Health Canada-US Relations Network to facilitate more efficient sharing of resources and information, and to improve consultation and coordination between Health Canada and its agencies, and their American counterparts. Health Canada has also entered into several multilateral institutions and agreements, through multilateral organizations such as the World Health Organization, the Pan American Health Organization, and the Global Health Security Initiative. These institutions and agreements focus on areas such as environmental cooperation, health protection, and health promotion. As of 2008, Health Canada’s website noted that Canada has entered into MOUs and Memoranda of Agreements (MOAs) with nine countries or organizations, including Australia, China, Council of Europe, France, India, Mexico, Singapore, South Africa, and the United States. In addition to providing technical assistance in the development and design of specific projects, a major focus of Health Canada’s international activities is to assist in building capacity in other countries to “address serious health issues such as communicable and non-communicable diseases, human health resource training



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and disease surveillance, and reporting mechanisms” (Health Canada 2007). The scope and frequency of collaboration between health o ­ fficials from different jurisdictions varies by institution and agreement. Bilat­erally, collaboration can take place at the ministerial level, at meetings of senior officials (ADMs), at meetings of regulatory officials, through the creation of Joint Emergency Response Plans, and at meetings with international relations offices. Some meetings are scheduled regularly, others are ad hoc. Communication occurs ­frequently by telephone, email, web-based discussion boards, and online information-sharing systems and databases. Multilateral insti­tutions tend to meet regularly, typically at annual conferences. Joint committees and action groups established from these institutions and agreements to focus on specific areas of collaboration meet and communicate more frequently. Although one might expect the World Health Organization to have some potential influence on Canadian health policies, evidence would suggest this is not true, except in worldwide health emergencies. The fact that the WHO definition of health as holistic and preventive has been oft quoted in Canada while remaining consistently neglected, gives some indication of the clout behind the quotations. Intergovernmental friction over pandemic control and vaccination has arisen in Canada. One provincial official commented that during the time of our interviews, “The federal government unilaterally reduced its role and offloaded public health functions and national health emergency responses to SARS, ‘Mad Cow,’ and ‘West Nile.’” More recently, questions of jurisdictional responsibility have been raised about the cost and distribution of pan-Canadian h1n1 vaccinations. Overall, although this international collaboration appears to represent considerable international activity on the part of federal government, it is not clear that it represents much in the way of international influence on IPC. In fact, there was little mention by officials of these international institutions or actors as having much positive or negative impact on IPC. A few officials commented on the importance of having suitable administrative arrangements to deal with world diseases and pandemics, but most saw this as a fairly technical issue and made little or no reference to international drivers on the capacity of our domestic health care system. Where

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one might see more and more international influence on domestic health policy would likely be in international comparisons of standards, performance indicators, and accountability mechanisms as they come to take on increasing importance within Canada. Banting and Corbett note that international involvement in the Canadian health sector is largely limited to intellectual information exchange (Banting and Corbett 2000). Minor trade issues have arisen with the United States, for example, with “cross-border” internet shopping for pharmaceuticals from Canada by Americans, but these have largely affected American buyers, rather than the Canadian health system. More seriously, legal advisors have warned that experimenting with privatized modes of health care provision could result in challenges from Canada’s North American Free Trade Agreement partners for more access to Canadian markets. Legally, health practitioners are private entrepreneurs although many opt into the public health care system, so this leaves the system open to larger market forces. Likewise, speaking to larger factors, one prescient official pointed out (before 2008), “The United States’ deficit and debt, largely foreign owned, as well as oil prices could have a negative impact on Canadian policy capacity, particularly in a sector like health.”

CONCLUSION The characterization of federalism in the health field could be said to cover the entire spectrum of intergovernmental relations. It has been cooperative, conflictual, disentangled, and unilateral. Marked by disputes over jurisdiction and money, cooperation occurred – but only after a long battle – on federal transfer funding for the provinces and territories. The factors which have kept IPC low are predictable, given the jealously-guarded jurisdictional ownership and power relations of the actors. The Constitution separated the funding from the delivery of the system, and while later political and judicial decisions have shifted the balance of these two factors somewhat, the division remains strongly entrenched. Part of the battle was rooted in ideational factors. Deeply held opinions about the advantages and disadvantages of further privatization of the health care system helped create an enduring political stalemate – with neither end of the spectrum forcing a new direction. Even agreeing whether a “crisis” existed in health care itself formed part of the ideational landscape. Ideas derived from NPM



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about accountability were also on the minds of officials. In the wake of the Health Accords, officials expressed concerns about performance measurement and efficiency as well. Power dynamics were being played out in both the political and administrative institutions of intergovernmental relations, particularly the FMMs where the political players met on rare occasions to make important decisions. The health officials from both levels of government were clearly aware of the limitations of FMMs: namely, turf wars and an inability to deal with the big picture. Health succeeded, with the help of finance, in navigating out of the debt and deficit years with the fiscal agreements of the Health Accords, but as policy analysts have demonstrated, this essentially replaced the money which would likely have been there anyway had the federal government not removed it in 1995. This is the much celebrated success of close to a decade of intergovernmental work, leaving many to wonder about the overall IPC of the executive level of the system. The administrative level at the federal-provincial-territorial health conference system which backs up the FMMs provides some balance for that politicized executive world, but it is too ill-resourced to compensate for the lack of vision and long-term goals at the top – goals which a former public servant argued are “essential to providing the overall health system with a sense of direction and purpose” (Adams 2001A, 7). The IPC of the conference system under direction from the political leaders did indicate potential capacity. The system had done some good work in particular technical areas. However, its overall capacity did not impress many officials, especially those concerned for it as a whole. In any event, the perceived need to hand off important health issues to bodies like the Romanow Commission and the Kirby Inquiry revealed the lack of IPC in the institutions of heath care governance. Even institutional innovation could not begin to address the fundamental lack of IPC in health. Since its creation the HCC was mired in political controversy, and its membership is missing two key provinces. Nonetheless, officials felt there was some potential here. Uneven institutional resources were characteristic of health departments across the country, as well as some dependence on the federal health department on the part of some jurisdictions in the context of, first, cutbacks, and then increased funding. No other sector received a similar infusion of cash. But can this continue? Overall, officials were guarded about the utility of this intergovernmental initiative

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for IPC and the effect of the Health Accords generally – particularly around the issue of accountability. Enhanced accountability requirements attached to federal fiscal transfers may be providing a backdoor into the delivery of health care for the federal government, and this has upped the ante for the turf wars between the two levels of government. Where international institutions are concerned, the Canadian health care system has remained relatively isolated, compared to trade and environment, except in cases of international health emergencies. Otherwise, the international influence rests mostly in the diffusion of international knowledge and research, for example in genomics and stem cell research, and in best-practice comparisons made around the world. However, the business aspects of health care related to research and patenting do have an effect on Canadian health care which can play a role in its IPC in the future. Health ministers were busy during the period of this study, since health was the topic du jour. They had to keep a close eye on intergovernmental and finance decisions, as well as the media and the electorate. Some officials felt this politicization of the issue inhibited IPC, even in light of throwing large pots of money at the problems of the health system. Both the political and administrative actors of the intergovernmental system found continuity a challenge. A high turnover rate and “little time to think” for ministers and deputy ministers both served to deplete the knowledge and leadership of the institutions. Policy development was further inhibited by the process-orientation of the central intergovernmental public servants, which tends to override the policy concerns of the sectoral intergovernmental public servants. Interest group pressure was felt by officials, especially from the organizations representing health care professionals, but they felt general participation in the health debate by the public was low. Some noted the Romanow Commission had had extensive public consultation, but this commission’s advice was perceived by non-federal officials (and a few federal officials) as biased. Others noted that the real public influence on the health file comes from public opinion polls and focus group research used to further the electoral interests of the first ministers. In any event, officials were unsure about the advisability of increasing public participation on the file. The relations of the intergovernmental system have been played out with regard to the health sector in much the same way as we



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have seen with our other policy issues. Both the formal relations and the informal relationships form an important background force which massages any and all decisions. That may be both a strength and a weakness, given the realities of the federation and the personalities within. Good cooperative work between governments has been seen on particular targeted projects, indicating that if the will is there, IPC is also. The significance of political relations in particular during the CHST discussions was highlighted by health officials who felt the vituperation which flowed from this federal policy decision. Some officials viewed the system to be in crisis, and this perspective clearly affected relations. Ministerial turnover did not help matters; nor did the assumption of the health file by first ministers and finance and intergovernmental relations departments, which increased ongoing centre versus departmental tensions during the Health Accord negotiations – although finance seemed to have evaded some of this criticism, perhaps because they were “just being finance.” In turn, poor formal political relations had a negative impact on informal relationships. Leadership and trust within these intergovernmental relations appeared to be in short supply between the two levels of government. The health care battle left its mark on the relations among the participants at both the political and administrative levels. It also left little time and energy for any major restructuring projects within the health sector. And while provinces and territories argued that any restructuring of the sector falls under their jurisdiction alone, it is not clear they have the capacity to engage in such a large project. Many years have gone by while policy analysts and public servants alike have repeatedly warned of the need for overarching, long-term planning of the system that requires difficult and unpopular choices which neither the public nor the powerful interest groups of the sector readily accept. Health care costs continue to rise and the accords will regularly require renegotiation whenever they expire, placing the health file back in the spotlight. The need for IPC will not go away.

8 Comparative Analysis Across Policy Sectors: Similarities and Differences

INTRODUCTION The scholarship at the interface between federalism, public policy, and public administration has long recognized the challenge of drawing theoretical and empirical generalizations even within one policy area, much less across several. Likewise, many intergovernmental generalists who deal with multiple sector files also cautioned about making generalizations across different policy areas. However, many of their comments, woven together with those of finance specialists and policy specialists in environment, trade, and health, tell an interesting comparative story of intergovernmental policy capacity (IPC) in Canada. This chapter presents some of the findings outlined in chapters 4 to 7 in comparative context. In some instances the comparisons show similar capacity issues across policy areas, and in others there are some very interesting differences. We compare the sectors through our framework of ideas, institutions, actors, and relations.

IDEAS IPC in all of the policy sectors during the period of this study (1995– 2005) was influenced by the dominant economic, political, and social ideas which permeated Canadian federalism. Only a few officials directly articulated the impact of ideas on IPC, and for those it was primarily political ideas which resonated. As outlined in chapter 2, neoconservative ideas which prioritized debt and deficit reduction in the aftermath of the early 1990s recession were dominant in the early period of this study. The central political ideas related to



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constitutional politics and political sentiments in Quebec preoccupied intergovernmental relations into the early 1990s, but were then replaced by non-constitutional ideas of how to make federalism work. In this broader context, there were interesting comparisons and ideas which influenced IPC in each of the sectors. The ideas and politics of Quebec sovereignty and constitutional approaches were still very present in the comments by some, while interestingly absent in the comments of new professionals who had recently joined as intergovernmental generalists. By the end of the interview period, it was evident that the set of ideas had changed for this subset of officials. Administrative ideas found expression in the language of public sector reform and New Public Management (NPM). Compared to officials in the policy sectors we investigated, intergovernmental generalists tended to focus more on political ideas about the federation. They focused mainly on the fiscal state of the federation and non-constitutional approaches to intergovernmental relations. However, they did offer remarks on important NPM administrative ideas such as accountability to the public, and “doing more with less,” in a general way to describe the impacts of administrative change on intergovernmental relations. Although some of these officials commented on how “downsizing” and “restructuring” influenced the policy capacity of their own governments and in turn their IPC, many officials in central agencies did not appear to feel the imposition of constraints and reforms emanating from the application of NPM ideas and principles as much as those in line departments. It may also be that the line between the political and the administrative is so blurred for central agency officials as to be barely visible. For finance officials there were some significant ideas which clearly framed IPC in their field. While a redistributive ethos conditions Canadian fiscal federalism in general, during the early period of this study the ideas of debts, deficits, and fiscal restraint framed IPC. Neoconservative ideas heavily influenced officials’ perceptions that the debt and deficit were the key issues of the times, as well as framing the potential solutions. This was true even among those provincial and territorial officials who felt the pain of federal deficit downloading. By the mid-1990s, however, governments were focused on the federal surplus and the “fiscal imbalance” became a central and contested idea in finance. As a result, a tug-of-war ensued in finance between a technical-rational approach to problems of fiscal

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federalism and the dominant, though controversial, political ideas of the time. Even the transition to surpluses for many governments did not alleviate the tensions which had built up between governments. In general, finance officials maintained their traditional idea that they are the key guardians of public spending, responsible for imposing fiscal responsibility on departments. Environment was influenced by the general priority of economic rather than environmental ideas during this period. Early on in the study period ‘sustainable development’ did hold some currency as an idea in intergovernmental relations, but by the mid-1990s it was replaced by ideas and debates related to national standards, duplication, deregulation, and the negative perception of jurisdictional overlap. The idea that governments needed to rely more on the private sector for voluntary self-regulation and partnerships to protect the environment, rather than the environmental bureaucracy at the federal, provincial, or territorial levels, was the frame for much of the period of this study. Interviews revealed the lasting impact of these ideas in the policy mindset. Overall, several officials agreed with the sentiment that the importance of “the environment waxes and wanes” as public interest, opinion, and the salience of environmental ideas shift over time in relation to the state of the economy. In line with this, during the study period, ideas related to the responsibility of government toward the environment were beginning to shift, particularly after highly publicized water contamination tragedies in Ontario and Saskatchewan and as climate change discourse evolved. Ideas related to climate change were beginning to permeate the comments of intergovernmental officials during the later interviews conducted with officials between 2003 and 2005. Ideas of globalization, continentalism, and free trade had a strong impact on trade policy in the period of this study. Neoconservative ideology and the notion of the primacy of free markets dominated trade policy and were reflected by officials’ comments that IPC needed to be devoted to facilitating free trade both internationally and internally in order to be “competitive” in the global economy. Although not uncontested, the idea that the free-market model was a given under globalized trade had the impact of increasing the emphasis on building IPC accordingly. As a result, officials were generally uncritical on the policy desirability of free trade and accepted it as their ideational and paradigmatic frame. In turn, they had little to say specifically about administrative ideas.



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IPC in health was heavily influenced by the ideas, debate, and discourse related to the political idea of a “crisis” in publicly accessible health care and the debates about privatization. This sector also was influenced by broader administrative ideas of NPM. Health officials were focused on administrative ideas of performance-based accountability and efficiency as these became central to health care funding, particularly following the Health Accords when federal dollars began to flow to the provinces and territories with the expectation that the funds would be used to reduce patient wait times and improve quality of care and patient satisfaction. Several officials commented on how these were being designed into intergovernmental policy. At the political level, this resulted in disputes over who was accountable to whom, with the provinces and territories making it clear they would be accountable to their public, not the federal government, for health reporting and outcomes. Although the ideas related to health care reform very much dominated intergovernmental relations for several years during this study, both during the debt reduction and federal surplus days, health officials also commented on the polarization of the ideational divide over public funding of health care. Here, political ideas were being played out at the administrative level. As summarized by one official, the ideological orientation of some governments and the debate over privatization “goes deep into the bureaucracies.” When comparing across all the interviews in analyzing IPC, perhaps the most striking shifts in ideas had to do with the shift away from the preoccupation with and thinking about the Constitution toward non-constitutional aspects of federalism. The idea of nonconstitutional approaches to intergovernmental relations was perhaps the one ideational element upon which all officials agreed. This important shift played out and influenced IPC in all policy areas. However, despite prevailing ideas about “making federalism work” and a public appetite for more collaborative work by governments across policy and service delivery areas, IPC remained a challenge. Moreover, the other important shift – away from economic insecurity to more fiscal confidence in a period of economic growth and surpluses – heightened tensions rather than alleviating them, and posed new and considerable challenges to IPC. Overall, very few officials explicitly identified ideas as determinants of IPC. This is one area where only indirect quotes and discourse analysis of the interview text reveal the implicit impact of ideas as

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determinants of IPC. Ideas are not something officials think much about, yet they are influenced by them in decisions, resource allocations, and intergovernmental relations. The role of administrative ideas seemed to resonate most with officials who had experienced the period of downsizing of government in the 1990s, and in later interviews it was clear that administrative ideas related to accountability began to permeate thinking on IPC. Most viewed the ideas resulting in downsizing as a negative force in IPC and ideas related to performance and external accountability as a positive force in building IPC.

INSTITUTIONS The Constitution Notwithstanding the recognition that the Constitution itself is the foundation on which the federation rests, it was not identified by most officials as a determinant of IPC nor as a tool for the development of IPC. This was true across the intergovernmental central agencies, the policy sectors, and all jurisdictions. It was striking how few officials even mentioned the Constitution. Those who did comment on its relationship to IPC primarily mentioned it as important in setting the jurisdictional parameters for various policy battles. As we saw in chapter 3, intergovernmental generalists referred to constitutional factors with regard to the high politics of jurisdictional disputes. They also mentioned the impact of constitutional history, non-constitutional approaches, devolution of jurisdictional responsibilities in many areas, the federal spending power, and postCanada Health and Social Transfer (CHST) context as influencing IPC. But all shied away from the prospect of constitutional reform as a factor in future IPC. Finance officials focused on the lack of a constitutional basis to fiscal federalism and particularly the federal spending power. They also focused on the constitutional basis of equalization, which was becoming a source of tension in the later part of the study. As in other sectors, finance officials expressed relief that the constitutional politics of the past had receded. Indeed, this may have created space for finance to become front and centre in intergovernmental relations again.



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The Constitution was viewed by trade officials as creating both problems and opportunities for IPC related to external trade. Legally, it limits decision-making authority on external trade to the federal government, but politically it requires consultation or “forced collaboration” with the provinces. There were very few comments about the constitutional influence on internal trade, which by comparison is more political and administrative than constitutional in nature. In the environment and health sectors, very few officials mentioned the Constitution as a factor influencing IPC. Officials saw the Constitution as a given, resulting in either distinct (in the case of health) or shared (in the case of environment) constitutional authorities. Very few environment officials mentioned the Constitution and ranked other political and administrative factors more highly in terms of determining levels of IPC. In health, there were many comments about health delivery being an area of predominantly provincial jurisdiction. The concern was expressed that the federal government was attempting to push its constitutional spending and fiscal transfer powers into this provincial jurisdiction, but there were no suggestions that either order of government pursue constitutional change as a means of improving IPC. Political and Administrative Institutions In contrast to the limited comments on the significance of the Constitution by officials, virtually every official we interviewed mentioned the political and/or administrative institutions of executive federalism as important determinants of IPC. There was considerable concern that political institutions of executive federalism often inhibited IPC – especially for issues going beyond money – while generally administrative institutions enhanced IPC, particularly regarding the technical aspects of policy development and implementation. The other interesting comparative finding was that provincial-territorial IPC had grown in intergovernmental relations, finance, trade, and health, but was less significant in environment. Another comparative finding was the increasing recognition in all policy sectors that horizontality and inter-agency coordination within jurisdictions were central to IPC and executive federalism. This was noted by several officials in environment, given the number of agencies with political interest in the issues: climate change was one example. In trade,

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the execution of ministers’ mandates is linked to a number of other ministries whose roles involve international trade issues. Health officials mentioned this less, but many officials were made conscious of the horizontality of health when the SARS pandemic threatened the country in 2002–03. Horizontal policy realities faced by executive federalism were noted as being out of sync with the vertical ministerial forums of the institutional sub-structure. Across all sectors, it was clear the independent policy capacity of a given jurisdiction in a particular policy area also mattered. It is not surprising that intergovernmental generalists had much to say about the significance of the political institutions of executive federalism in terms of IPC, given that they work in the day-to-day environment of federal-provincial-territorial political institutions. The central political institution of intergovernmental relations underwent a metamorphosis from First Ministers’ Conference (FMC) to First Ministers’ Meeting (FMM), a less institutionalized and more ad hoc structure than its predecessor. Intergovernmental generalists characterized these macro level political bodies as important and necessary in Canadian federalism. But frustrated by federal unilateralism and other perceived sins of commission and omission within these institutions, provincial and territorial generalists were fairly critical of them in terms of IPC. Hence the move toward greater provincial-territorial engagement as represented by the evolution of the Annual Premiers’ Conference (APC) into the Council of the Federation (COF). The significance of intergovernmental administrative machinery related to IPC was also the subject of comments by intergovernmental generalists, who tended to view the intergovernmental bureaucracy as central to IPC. They noted the growth of administrative institutional infrastructure as an important indicator of IPC. All told, they had very broad definitions of what constituted intergovernmental administrative institutions, ranging from highly formalized structures to more ad hoc arrangements for policy, service delivery, and technical and information databases. However, many intergovernmental generalists noted that administrative institutions were not a sufficient condition for IPC and that it is sometimes very difficult to get jurisdictions to collaborate in policy development and implementation even where intergovernmental institutions do exist. There was a sentiment expressed that simply adding more administrative institutions will not necessarily mean more IPC. Opinions



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also differed between intergovernmental generalists who worked in central agency units and those who worked as intergovernmental specialists in line departments. For finance there was both a stated and implicit message from officials that the administrative institutions of executive federalism have higher IPC that the political ones. Many officials noted the lack of equality felt by provincial and territorial governments in finance ministers meetings since the federal government called the meetings, set the agenda, and chaired the meetings. One notable shift was the closer connections between finance ministers and first ministers, with the implication that the FMM, which had placed finance at the centre of agendas and decisions, had replaced the need for finance ministers’ forums. Finance officials distinguished between issues of a technical nature and those which were more political where institutions were concerned. They noted that intergovernmental finance work was increasingly handled by a system of technical and policy committees, for instance for the Canada Pension Plan (CPP), the National Child Tax Credit, national health care reporting, the common drug review, toxic substance regulation, and tax collection agreements, and that these committees generally enhanced IPC. They also noted the increasing coordination between finance officials and intergovernmental officials. All governments have delegated intergovernmental fiscal responsibilities to their finance departments. As noted in chapter 4, an important coordinating mechanism identified by officials and led by deputy ministers of finance is the Continuing Committee of Officials (CCO) made up of deputy ministers. The provinces and territories had increasing, but varied, capacity to engage in these meetings. Nonetheless, the issue of “fiscal imbalance” gave rise to several provincial and territorial governments aggressively challenging the institutional dominance of the federal Department of Finance. Their capacity to do so as a united front was compromised, though, by uneven technical capacity and some dependence of some smaller governments on the federal government. However, long-standing veterans noted that capacity in the administrative institutions of finance has been central to IPC more broadly. One official even went as far as to say that “the intergovernmental side of finance held the country together in some of the past troubled times. Finance departments are important and do interact regularly, and it was intergovernmental in finance that was the glue that held

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communications together.” Noting that finance is the grandfather of federal-provincial relations, this same official, with fifteen years’ experience in fiscal policy in his/her department of finance, regretted that despite this there was still not sufficient IPC to deal with many ongoing policy issues. For the environment, FMMs were not the forum of political action, not even related to the Kyoto Accord. The ministerial level was viewed as the central arena in which IPC could grow or diminish. The Canadian Council of Ministers of the Environment (CCME) is one of the longest-standing forums of executive federalism, second to finance. But the role and significance of CCME was challenged and diminished between 1995 and 2005. From 1990 to 2000 there was concern about the additional level of bureaucracy and about federal dominance of CCME. There was a general observation that CCME’s contribution to IPC waxed and waned along with the environmental agenda, but in later interviews it was judged to have more of a policy role. There were mixed opinions; some thought CCME was important to IPC, particularly on multilateral issues, others thought not. Overall, officials did not place much faith in CCME on large agenda items but did on specific issues and technical policy capacity. Certain provinces saw CCME as more valuable than others. As noted in chapter 5, energy and climate change were added to the agenda of the COF, indicating CCME’s inability to address this important agenda item multilaterally or interprovincially-territorially. The other important finding was that other intergovernmental institutions were noted as places where IPC was being developed. These included other ministerial councils with environment-related mandates; the International Joint Commission and Great Lakes forums; the National Roundtable on Environment and Economy; and the Commission for Environmental Cooperation set up under the North American Free Trade Agreement (NAFTA). Another striking comparative finding related to the environment was that interprovincial-territorial forums of executive federalism were not reportedly significant. In environment, officials noted that IPC suffered after a period of downsizing and decentralization of the environment bureaucracy. This general loss of policy capacity within jurisdictions was significant and mentioned by almost all the interviewees from this sector. The lack of horizontal coordination within jurisdictions was also an issue which many mentioned negatively affected IPC. In terms of



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building IPC in this policy area, some noted during later interviews the beginning of a reinvestment in administrative institutions within jurisdictions and the positive effects this was having on IPC. Compared to those related to environment, intergovernmental political forums related to external and internal trade are relatively new. But the changing nature of global trade policy and negotiation of free trade with the United States led to new realizations about an expanded provincial-territorial role in international trade. The Continuing Committee for Trade Negotiations (CCTN) was created during FTA negotiations to include provincial and territorial governments. It developed into a set of political institutions which opened the door to greater provincial-territorial government (and nonstate actors’) participation in the international trade file, although some provincial governments generally wanted even more formalized participation. Other notable forums were the Team Canada and Canada Trade Missions, and the Federal-Provincial-Territorial Committee on Trade (CTRADE). A measure of IPC was institutionalized in these forums. Despite some criticisms, it was noted by officials that they often provided opportunity for intergovernmental dialogue. One official claimed that a great deal of intergovernmental business on all topics was discussed, and even decided, on Team Canada sojourns. On internal trade, IPC proved insufficient to move the file forward more than incrementally. Political agreements within the framework of the Agreement on Internal Trade (AIT) were reached and a secretariat was established, but an overall lack of policy progress led the premiers to shift internal trade to the ­newly-created COF in 2004. Consequently, discussions resulted in a work-plan for ministers responsible for the file to address domestic trade barriers, although, again, little concrete progress resulted. Interestingly, internal trade was one of the first priority items for the COF. This raises an important question given the existence of the AIT secretariat. In comparing this to the environmental area, this may indicate that CCME may be more effective than the trade secretariat on the provincial-territorial front. Trade officials observed that departmental and central agency roles in the formulation of international trade policy had evolved. At the provincial level, the location of political and bureaucratic actors varies significantly, with some intergovernmental relations departments taking the lead on trade policy for some governments,

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while in others it might be ministries of economic development or of industry. In Ottawa, trade is linked to foreign affairs in a single large department but was characterized by officials as a junior player therein. The fact that trade policy by its nature cuts across many functional areas means many other ministries are drawn into its purview, as noted by trade officials when talking about the challenge of horizontality and IPC. In addition, intergovernmental collaboration is fostered by both senior-level administrative committees and about forty specialized or sectoral committees created under NAFTA and requiring considerable intergovernmental cooperation. It is not surprising FMMs became central to IPC in health, as the agenda of these meetings was dominated by this policy area for several years. While some officials, particularly those in finance, saw this period as an example of good IPC because of the eventual transfer of considerable funds to the provinces and territories, other officials noted that the focus on fiscal concerns and agreements tended to divert the discussion away from health policy and long-term planning, thus producing very limited IPC. The forums were also dominated by the federal government and its money; thus it was criticized by some for its lack of intergovernmental collaboration. Efforts to present a common front against the federal government did result in provincial-territorial collaboration in pushing the federal government for more money and over smaller, more technical issues. But there was considerable divergence between and among the provinces and territories over the specifics of health care delivery. For example, because of a lack of attention to remote, Northern health care issues, the territories initially refused to sign the 2003 Health Accord although it was signed by the federal government and all of the provinces. Even Quebec was supportive under the new Charest government, which pushed for the accord to include specific language recognizing Quebec’s unique status and needs. Not surprisingly, the federal-provincial-territorial secretariat of ministerial and deputy ministerial health meetings and advisory councils which feeds into the FMMs was also affected during this time by the financial focus leading up to the Health Accords. Finance ministers attended health ministers’ meetings, and deputy health ministers had, likewise, to attend to their financial direction. In contrast to other sectors with ministerial and deputy ministerial forums which were free to go on about their business (at least at the sub-level of administrative activity), the health institutions were overshadowed by the fiscal focus of the FMMs and the emergence



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of several parallel political institutions, such as the Senate Standing Committee on Social Affairs, Science and Technology (the 2002 Kirby inquiry) and the Royal Commission on the Future of Health Care in Canada (the 2002 Romanow Commission), which elicited similarly strong fiscal and privatization concerns from the media and the politicians. In health, the federal-provincial-territorial conference system was seen as doing good work at the more particular, technical level such as the national blood supply or national disease surveillance, but was criticized for its lack of overall IPC, particularly with regard to long-term planning or larger funding issues. Health officials echoed the complaints of officials from other sectors regarding tense department/central agency relations where the centre was seen as too process oriented, thus stymieing policy development. Interestingly, given the negotiations and heated debates related to health care funding during the period of this study, relations with finance were given a better billing. Health experienced some institutional innovation during the period of our study, as we saw in chapter 7. Not surprisingly, these new bodies have produced some concerns. For example, the Canadian Institute for Health Information (CIHI), established in 1994, was criticized by the provinces as being “an instrument of federal policy” – although we were told “health people see it as more neutral.” The collection of national health data and the uses to which it is put is as much a political concern as a policy concern. Likewise, the Health Council of Canada (HCC), created in 2003, raised questions about federal domination and reach into provincial jurisdiction of the delivery of health care. There have also been concerns raised regarding increased demands from these new agencies for management and administration of new machinery and data collection and utilization, as well as the role and lopsided input of various health care provider groups and public stakeholders. Comments ranged from officials’ opinions that new bodies “such as the HCC ... are a waste of time because they are too politicized” to praise for the enhanced public accountability engendered by CIHI’s published data of the workings of the Canadian health care system. Overall, it is probably safe to say, there was some sense that gradually “health mechanisms are improving.” In general, officials from all sectors indicated that the political institutions of executive federalism are central to IPC in all the policy areas we examined. For finance, despite long-standing ­institutions,

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there seems to be a desire by the provinces to further formalize their intergovernmental political forums. However, the centrality of finance ministers to FMMs has served as a substitute for more­institutionalized ministerial-level contributions to IPC. For environment, the long-standing CCME has been the subject of much debate related to IPC but compared to the other sectors it has a regularized political agenda, and as noted below, a secretariat to support IPC although on a limited number of files. It has been supplemented by other political institutions with intergovernmental and transboundary mandates. The challenge for environment has not been at the ministerial level but at the FMM level. Compared to trade, however, environment has seemed to build interprovincial-territorial IPC through well-developed bilateral policy processes. Trade also has trade ministers’ meetings but has a variety of other political institutions which collectively form the foundation of IPC in both external and internal trade. According to officials, there is more IPC in the political institutions of executive federalism related to external trade than in those related to internal trade. Despite the existence of the AIT and secretariat, the political institutions on this issue were dysfunctional to the point that the COF had to take on this role in the interprovincial-territorial context. Finally, the political institutions at the ministerial level in health had unprecedented access to FMMs during the period of this study. However, while serving to enhance financial intergovernmental capacity, this did not serve to enhance IPC in general. Although there were some intergovernmental institutional innovations in the health sector, these were more limited in trade and environment, which both already had well-developed intergovernmental administrative institutions. In environment, officials focused their comments more on capacity issues related to existing intergovernmental environmental institutions and the rise and fall of intergovernmental administrative infrastructure related to climate policy. Although the federal government created the Climate Change Secretariat, its existence was short-lived due to both intergovernmental and horizontal, inter-agency challenges (Bakvis and Juillet 2004). Administrative institutions seem subject to less change and innovation in finance. This may be the reason for the comments from officials that the administrative and technical institutions in this policy area work quite well.



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The other finding mentioned by officials across all of the sectors with regard to administrative institutions was the observation that, largely due to poor relations with the federal government, there had been a growth in interprovincial-territorial administrative institutions, in particular the COF, and that this was, on the whole, enhancing a form of IPC. Poisoned federal-provincial-territorial relations led to increased provincial-territorial finance work and collaboration and creation of mirror bodies. One official claimed, “[The friction over] health cemented the relationship between the provinces.” However, how the COF was structured seemed to be a factor. “In the COF two premiers co-chair and work with lead ministers. Direction is translated into action – unlike traditional methods where ministers have to go back to premiers.” However, the success of this structure was not realized across the board. One official claimed in 2004, “In health we have the same COF model where two premiers cochair, but [Ontario Premier Dalton] McGuinty and [British Columbia Premier Gordon] Campbell co-chairing is not working so well [compared to trade]. Trade is the most functional provincial-territorial cooperative sector right now.” Institutional Resources For many officials, the key determinant of IPC was not political or administrative institutions; it was the resources allocated to, and utilized by, those institutions. Collectively, officials defined resources related to IPC broadly to include budgets, personnel, time, knowledge, skills, leadership, and technology. One official even defined IPC as “the ability to muster resources to collaboratively or effectively address critical public policy issues.” For some the definition of resources was narrow, including budgets and personnel. For others it was broader, including information, knowledge, and expertise. There were also some interesting variations with some emphasizing political resources and others administrative resources across the sectors. Intergovernmental generalists ranked resources highly in terms of IPC, not only their own internal resources but the policy resources of various jurisdictions and sectors. Many noted the state of independent policy capacity of governments as central to the resources and capacity at the intergovernmental tables. This included the resources required to do research and thinking for the longer term. Some

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intergovernmental generalists interestingly noted the issue of staff turnover and its impact on the state of knowledge and the retention of expertise related to intergovernmental relations and policy issues. These central agency officials did not feel the sting of the downsizing exercises as much as some of their department colleagues in the 1990s and early 2000s, who saw a decrease in Ontario and Alberta – although they still spent more than other provinces or territories. In finance, resources are seen as being at the centre of IPC. As in other sectors, finance officials noted differences in scale among governments as an important conditioning factor of these resources. The wide variation in the size of governments in Canada, most obviously between the federal government and all the rest, was noted as having considerable implications for IPC, particularly where it necessitated a level of dependence on the federal government for some provincial and territorial governments. Where knowledge and information is concerned, finance departments themselves tended to be well-resourced, but they also looked to outside academics and think tanks for analyses. Of the sectors compared in this study, environment officials commented the most on the negative impact of budget cuts on IPC undermining policy capacity generally and intergovernmental relations across all jurisdictions. In particular, environment officials observed that research capacity was low across the system and that there had been a decline in federal leadership as a resource in this area. There were comments on how the loss of both federal capacity and resources for CCME had influenced certain provinces and negatively influenced IPC. Variation of resources across provinces, with Ontario, Alberta, and British Columbia experiencing the most significant cuts, were also identified as significantly affecting IPC. Trade officials were concerned about the impact of “doing more with less” and they suggested that budgetary pressures affected IPC. As well, the increased number of trade deals meant an expanding portfolio of intergovernmental work for trade officials. Trade officials noted that while collaboration among officials was seen as important, it was sometimes difficult due to the rotation of personnel, insufficient staffing levels, and growing communication, information, and technology requirements. There was a considerable flow of information coming from the federal government, foreign governments, and external academic and policy research sources, and this placed resource demands on the sector which it was not always able to meet. In addition, uneven IPC resulted from the disparity



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in the size of governments across Canada as resources were differentially distributed for trade. But there was disagreement among provincial officials as to just how formalized their role should be in international trade negotiations, and therefore how much IPC was needed to engage this area. Overall, there was broad recognition that the growing emphasis on trade policy beyond just tariff reductions meant that the provinces and territories had to build up their IPC in order to take advantage of collaborative opportunities. In health the story was similar to other sectors, with varying resources in terms of personnel, budgets, and intergovernmental specialists in departments across the country. There was also some dependence by all provincial and territorial governments, but particularly the less wealthy, on the federal government for resources. However, given the importance of the profile of health to intergovernmental dynamics during much of the time of our study, there was not much complaint about resources when compared to the other policy sectors. Resources had been swung toward health. Of course, officials had plenty of ideas on how further resources would improve IPC, and given the limited nature of the intergovernmental work done on restructuring the system as a whole, this was probably a valid complaint. The utilization of knowledge and expertise was a c­ ommon concern across the policy sectors, especially given the continued growth of readily available knowledge. Each sector has its own his­tory of knowledge disputes. For example, intergovernmental relations contains disagreement over the division of powers, consti­tutional jurisdiction, and centralization versus decentralization of the federation. Finance has the ongoing debate between right and left economic ideas. Environment has a long-standing dispute over the science and measurement of environmental degradation, embodied in the idea of the precautionary principle, and about the existence of climate change. Trade has been marked by nationalist and continentalist disagreement on the social and economic impacts of free trade. Finally, health has been embroiled in disputes over the appropriate role of the state and the private sector in health care. Accords and Agreements Just as most officials mentioned the institutions and resources of executive federalism as determinants of IPC, they also mentioned political accords and agreements as having an impact. In all of the

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policy areas we examined, during the course of our study, several new accords and agreements were signed by the federal government, the provinces and the territories. For some officials, political accords and agreements epitomize IPC; for others they are less-than-effective instruments. The administration of accords and agreements was generally commented on in terms of capacity to implement intergovernmental agreements. This, not surprisingly, was highly variable by sector, jurisdiction, and agreement, and directly related to the policy and bureaucratic capacity of the specific government. Overall, there was a mixed assessment of their long-term significance. Intergovernmental generalists focused their comments on the federal-provincial-territorial climate in which agreements were ­ negotiated and signed. Despite the considerable efforts of these officials in both multilateral and bilateral negotiations, they did caution that the mere signing of such agreements can be misleading in terms of indicating IPC. There were also differences in opinion between federal and provincial intergovernmental generalists on the value of agreements, particularly related to the Social Union Framework Agreement (SUFA), where the provinces were left feeling embittered by lack of federal follow-through. Overall, it is not surprising that intergovernmental generalists felt intergovernmental accords were an important indicator of IPC in terms of setting broad national policy goals while allowing for federal-provincial-territorial adaptation in implementation. As outlined in chapter 3, relatively little was said by intergovernmental generalists about the implementation of accords and agreements, probably because this task generally falls more to line department officials. Nonetheless, the one observation on which intergovernmental officials did focus was the qualitative difference between multilateral and bilateral agreements. While the focus of much of the work of intergovernmental generalists is on multilateral agreements, many of them felt bilateral agreements had a better chance of being implemented and contributing to IPC. However, it is not clear from this group of officials whether a number of bilateral agreements add up to more IPC or if they indicate lack of capacity at the multilateral level. Finance is involved in the political discussions of all federalprovincial-territorial agreements, and the Health Accords and ­ equalization kept them particularly busy. As we saw, unilateral action on the part of the federal government made progress on intergovernmental accords and agreements difficult, according to



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many ­provincial and territorial finance officials. Equalization agreements were ­significantly affected by the post-CHST context, which was overwhelmingly seen as problematic from the predominantly angry and alienated provincial-territorial viewpoint. But provincialterritorial solidarity was tested when some governments argued restoring funding cuts to the CHST was the top priority, while others claimed reforming the equalization formula was of paramount importance. These issues became embroiled in the larger question of whether a fiscal imbalance existed. The general observation was made that the more technical an issue, the easier it was to reach agreement on it, for instance tax collection agreements and the Canada Pension Plan. However, even relatively technical agreements such as those in tax collection, which had historically been negotiated fairly smoothly, became disputatious in the earlier period of our study. Also, the failure of traditional accords and agreements resulted in resorting to special commissions of inquiry by both l­ evels of government into equalization, the fiscal imbalance, and health care, and showed a lack of IPC in existing mechanisms. Overall, fiscal federalism became increasingly politicized, to the detriment of both process and policy. Existing IPC in this area proved to be too limited to adapt to the new realities. In environment, there was a mixed assessment of the significance of the Canada-Wide Accord on Environmental Harmonization and various other intergovernmental agreements for IPC. The signing of the Accord as a multilateral agreement indicated a political commitment to prioritize the environment, but at the same time environmental issues fell off the agendas of all jurisdictions. CCME and downsized bureaucracies were left to implement agreements without political leadership, commitment, or resources. On the implementation of the Harmonization Accord, there was no clear consensus, but several officials expressed the preference for using bilateral approaches in implementing sub-agreements under the multilateral Accord. There were also some comments on implementation capacity related to other intergovernmental agreements outside the Harmonization Accord, such as the Great Lakes Water Quality Agreement. Officials generally echoed the observations of others that there had been a decline in bilateral intergovernmental efforts related to the Great Lakes and on intergovernmental environmental agreements generally (Botts and Muldoon 2005, Canada CESD 2005; Johns 2009). There were also many comments

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on the international Kyoto Accord related to implementation noting that despite the fact that the federal government signed on, implementation must involve the provinces, but interestingly no officials suggested an accord or agreement was the way to develop IPC on this issue. In external trade, IPC was generally thought to be more developed in all jurisdictions during the period of our study, (with regard to international trade agreements), particularly as the provinces became more actively part of the trade policy process. Team Canada, Canada Trade Missions, and CTRADE were seen as important in enhancing IPC on the external trade front. Yet the policy achievements of these innovations were moderate to poor. In internal trade, which politically was viewed as a field requiring more IPC, the AIT did not result in much IPC at the multilateral level or bilateral level. However, one long-term, pragmatic official did believe that “there was a reasonably good balance in AIT. Nobody got everything they wanted but everyone got something they wanted. Maybe that is all you can get in a federation.” The AIT was bedevilled by repeated use of various barriers to internal trade for political reasons. Attempts to construct an internal economic union free of trade barriers stalled, and collaboration proved difficult due to the varying economic bases and interests of the provinces, the lack of an interested public, and little electoral salience from reform of the internal trade regime. The lack of IPC related to the AIT and the inability to implement its goals, led to the prioritizing of this issue on the agenda of the COF. But officials noted that little progress was being realized by the end of the study period, resulting in bilateral agreements between British Columbia and Alberta (Saskatchewan was added later), and between Ontario and Quebec. Politically, the Health Accords took on an important role in intergovernmental relations from 1997 to 2004. Comparatively, no other policy sector was recipient of this level of fiscal attention from the federal government. Multilateral agreements related to health care, while specific to funding, were key developments in the politics of executive federalism. The amount of money that was put back into the system was recognized as significant by the officials, even though it was not much more than would have been there if funds had followed the pre-1995 trajectory. The other significant elements of the Accords were the performance reporting and accountability mechanisms required of the provinces and territories as ­requisite



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to federal funding. Perhaps not surprisingly, since they were predominantly money transfers, there were very few comments on the implementation of these agreements. However, the accountability requirements were noted as a factor of concern for many provincial health officials. One official predicted that although there is now a “policy frame for some larger parts like science-based benchmarks, indicators, and reporting ... each province will go its own way.” Others commented that fear of federal “interference” was not the only deterrent to information sharing. Given the scarce supply of health professionals, provinces and territories were concerned the central registry of health professionals would result in interprovincial “poaching by richer provinces.” Overall, despite the political agreements, some officials noted that these Accords represented more a classical process of intergovernmental negotiation than intergovernmental collaboration, and criticized the Accords for doing little with regard to the needed restructuring of the healthcare sector and building of IPC. Almost all the officials we interviewed identified political accords and agreements as important indicators of intergovernmental activity but not necessarily IPC. There was less consensus, however, on the meaning of such agreements. As we saw for health, some were concerned about the development across sectors of financial agreements at the expense of policy agreements. Many noted the shift in style of such agreements from mostly unconditional to increasingly conditional in terms of accountability frameworks, offsetting some of the lifting of conditions on federal transfers from the federal government during the post-CHST chill. There was also some consensus across the policy areas that multilateral agreements, though difficult to negotiate, enhanced IPC through broad policy goals, but bilateral agreements still played an important role in the system despite not receiving much media, public, or academic attention. Multilateral agreements seemed to be preferred at the political level, and bilateral at the administrative level. For some policy areas such as environment, accords and agreements seemed to be the main way of building IPC, although on a limited number of issues. CCME pushed for multilateral rather than bilateral agreements but with limited success. Bilateral agreements existed on many issues. For others, like trade, they seemed to be less important to officials. In trade, external agreements had direct implications for internal agreements but IPC related to ­agreements

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remained c­omparatively low. For health, the agreements such as the multilateral 2003 Health Accord were primarily fiscal agreements, and officials noted that there was very little interest in bilateral agreements, particularly with the federal government, given the jurisdictional concerns of the provinces. Finance clearly played an increasing role as “guardian” across all the sectors, and intergovernmental agreements related to fiscal transfers and equalization were central in determining IPC. In finance there was also a notable move away from the multilateralism of previous federal transfers to a set of bilateral deals on equalization that had some officials concerned. Overall, there was some consensus across all the policy areas that multilateral agreements, as difficult as they are to produce, could enhance IPC through sharing policy ideas and developing collective goals, but bilateral agreements still play an important role in policy sectors and must be factored in as contributing to IPC. Put another way, this highlights the importance of the ongoing debate over the symmetrical versus asymmetrical model of federalism (Institute of Intergovernmental Relations 2005). The Courts As with the Constitution, overall we were surprised that few officials identified the courts as an institutional factor affecting IPC. Despite our survey findings in 2002 in which just over fifty percent of intergovernmental officials (when choosing from a list of factors) thought the courts would be a significant or very significant actor in intergovernmental relations in the coming decade (Inwood, Johns, and O’Reilly 2004, 262), this same group in interviews (with unsolicited factors) mentioned the courts in relation to IPC even less than the Constitution. Among those few who did cite the courts, there was little consensus on their effect on IPC. Their use and role in mediating federal-provincial-territorial conflict caused some concern, but the implications of this for IPC remained vague. Despite the historically important role of the courts in adjudicating the division of powers, intergovernmental relations generalists said nothing about the judicial branch. None of the finance officials interviewed identified the courts as enhancing or inhibiting IPC. In the environmental policy area the occasional threat of using the courts was mentioned by a few officials as inhibiting IPC. In trade officials generally felt that more IPC is needed in this sector, but that



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the courts were not likely to play an important role in attaining it. None had an appetite for testing the 1937 Labour Conventions case or Trade and Commerce power which broadly set the parameters for federal-provincial trade policy relations. In health it was noted that the courts had been helpful in terms of IPC in litigation cases such as provincial challenges to the federal government’s interpretation of the Canada Health Act (CHA), particularly with regard to the provinces’ room for privatization (Alberta’s Bill 11) and the Charter rights of patients (Chaoulli v. Quebec, [2005] 1 SCR 791). Overall, those officials who did mention the courts tended to view them as a last-resort conflict resolution mechanism related to jurisdictional disputes or public litigation over damages, malpractice, or policy failure. Most gave the impression that involvement of the courts indicated low levels of IPC and failure in the other institutional venues in which IPC is developed. Given the shift to non-constitutional approaches and the almost tacit acknowledgement of jurisdictional and policy overlap in an increasing number of policy areas, it may be that the courts will become less central to jurisdictional conflict in many policy areas and other institutions will become increasingly important. However, officials did not offer much insight on this. Parliament and Political Parties Given the day-to-day world of intergovernmental generalists and specialists in the context of executive federalism, it is not surprising that there were very few comments on the role and significance of Parliament as an institutional forum for intergovernmental policy development. Few of these officials, particularly intergovernmental generalists, interact with Parliament and parliamentarians. This was reflected both in our survey findings regarding the perceived lack of significance of legislatures and legislators in intergovernmental relations (Inwood, Johns, and O’Reilly 2004) and in personal interviews. Parliament was only mentioned a few times by intergovernmental generalists with regard to IPC; Parliamentary Committees were not mentioned by any. For the vast majority of intergovernmental generalists we interviewed, Parliament was not even on the radar, ranking below the courts and the Constitution in terms of significance for IPC. One official did note that it was not that first ministers, ministers, and intergovernmental officials do not see Parliament as

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important, but rather that Members of Parliament do not see intergovernmental relations as important. There may be some truth to this, but it does not adequately explain why this forum was not noted by officials as a potential route to improved IPC. For finance officials, the executive-dominated nature of the Canadian political system leaves Parliament with little direct role in IPC. At the federal level the Parliamentary Standing Committee on National Finance has a fairly high profile, but neither it nor Parliament in general were seen as playing a significant role by finance officials; neither were the Senate, nor the provincial or territorial legislatures. Clearly, Parliament is not a factor in the minds of finance officials as far as IPC is concerned, reflecting the marginalized role this institution has historically played in fiscal concerns within executive federalism. No environment officials mentioned Parliament’s role in their list of factors important to IPC, although one did mention the contribution of the Senate on a couple of important environment issues and the Commissioner of Environment and Sustainable Development as an important Officer of Parliament related to IPC. Where trade policy was concerned, there was almost no mention of the impact of Parliament on IPC. Officials felt that, due to the constraints of party discipline in an executive-dominated system, there was very little involvement of a substantive nature by parliamentarians on the trade file other than to rubber-stamp executive agreements in international and interprovincial trade. Parliamentary Committees, despite having a partial mandate to investigate trade issues, left little impression in the minds of trade officials. In health care the sentiments were similar. Parliament and the Senate were not placed on the open IPC factors list. Although in health care the Kirby Senate Report did contribute to the public policy debate over privatization, it was treated as another “external” report and had little overall impact on intergovernmental decisions on health policy. Another common finding across all the policy sectors related to the significance of political parties for IPC. They were very rarely identified as a factor in enhancing or inhibiting IPC. Any partyrelated concerns expressed by officials were not about the extent to which party organizations and/or officials influenced IPC, but rather on the effect of party ideology or platforms on working relation-



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ships of officials and politicians, and the impact of changeovers in party leadership on IPC. There was a general consensus that parties in power did make a difference, particularly which parties were in power federally and in Quebec. But exactly what impact this had on IPC was not articulated. There was a sense in the later interviews that changes in governments and parties might act as IPC enhancers, and there was a sense of optimism in new governments, for example the Jean Charest Liberal government in Quebec, the Dalton McGuinty Liberal government in Ontario, and the Paul Martin Liberal government in Ottawa, but this was only vaguely articulated and was largely unsubstantiated. Some officials in environment, trade, finance, and health mentioned party ideology and changes in the governing party as a factor directly or indirectly. All political parties had the same low priority for the environment during the period of this study, and some interviewees noted this was a factor related to both policy capacity within jurisdictions and IPC. Environment being generally not part of party and electoral platforms during the study period, it was not surprising that most environment officials did not identify political parties as significant in terms of IPC. Finance and trade officials made no comments about political parties, indicating the virtually non-existent salience of this factor in their thinking. In health, where political parties were pushed by public concern to build electoral platforms responding to the “crisis” in health care, officials made little mention of the direct role of parties in IPC. Several commented on the ideological divide over privatization as having seemingly played a role in hampering the development of much-needed restructuring policy for the sector, but others noted that, once in office, both ruling political parties acted much the same. International Institutions Although the vast majority of intergovernmental generalists focused on the political factors related to IPC within the federation, intergovernmental specialists in environment and trade in p ­ articular noted that international factors were increasingly important as deter­minants of IPC. A few intergovernmental generalists expressed concern that this area was a weak spot for IPC and that their intergovernmental ministries were increasingly thinking about how to

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incorporate these international factors and relations into their organizations and work. Some intergovernmental agencies were noted as having been restructured along these lines. Manitoba, for example, had reflected the increasing focus on external relations (Canada-US and international) in its intergovernmental machinery. None of the officials in finance mentioned international determinants of IPC. This is particularly interesting given the internationalization of markets and finance during the period of this study. It may reflect the inward orientation of finance officials, being focused on transfer payments, taxation policy, and equalization, and taking the external financial variables as a given. It may also reflect the fact that during most of the period of this study, international finance was fairly stable and economic growth was robust, despite the Mexican peso crisis preceding the 1996 federal budget. Although Finance Minister Martin responded strongly at this time to the threat by the International Monetary Fund (IMF) to downgrade Canada’s credit rating, officials did not cite this case in interviews. Presumably the discourse and the salience of this factor for finance officials would have likely heightened after the period of our study with the international economic crisis of 2008. The one topic mentioned by almost all environment interviewees was the international politics of the Kyoto Accord and how this affected IPC. While a few environment officials noted that the international dimension is not new in this policy area and had been a significant factor in relation to the Great Lakes, toxic chemical regulation, and other environmental issues such as biodiversity, officials had many comments about the significance of international institutions and agreements for IPC. Many focused their comments on the challenges that international agreements like Kyoto present for intergovernmental relations and IPC. Several officials cited Kyoto as an example of how internationalization increased in the 1990s and noted that in general, international institutions and actors had created pressure for more IPC in environment. Kyoto and climate change were a source of intergovernmental conflict during the period of our study. Provincial officials were very critical of federal unilateralism, but also mentioned divisions between provinces. Ironically, at the same time, conflict on this issue resulted in some provinces such as Alberta investing in independent policy capacity to counter federal unilateralism, which had a negative impact on IPC. Several provincial officials also noted increased north-south ­interactions



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with individual US states on environmental issues, and intergovernmental forums outside of CCME with a transboundary and international dimension, though no officials commented directly on the international capacity of CCME. In trade, international institutional machinery has grown up in the past few decades to coordinate global trade and related economic issues, straining IPC. Many trade officials observed that international agreements often compromised the sovereignty of the provinces by bringing forth unforeseen obligations such as new regulatory responsibilities, or challenges to traditional procurement practices, or subsidies. This was particularly worrying for Quebec sovereignty. One other dynamic brought to the fore by trade policy was dispute resolution. Because of federal jurisdiction, when provincial governments have disputes with their trade partners, they must rely on the federal government to initiate action. In addition, the intensified continental orientation of trade meant that the old east-west economy was giving way to north-south relations. Trade officials in particular, like environment officials, noted the increasing amount of sub-national state international relations emerging in various policy areas, adding new challenges to IPC. The increasing number of formal and informal cross-border contacts that public servants initiate, respond to, and maintain was mentioned by officials as having an impact on IPC. This activity, which used to be more limited to those working in the federal Department of Foreign Affairs and International Trade (DFAIT), now affects line department officials across virtually every portfolio who make contact with their counterparts in foreign jurisdictions, especially the United States. Concern has been raised of a subterranean North American bureaucracy emerging in trade. Most of the officials in health did not mention international institutions as playing a significant role in IPC. What was mentioned was the role of internationally available knowledge of various health funding and delivery systems. Some officials referred to the role of international information, statistics, and data being used in national debates about standards, performance indicators, and accountability mechanisms. Some emphasized the importance of understanding developments in, and engaging with, other countries as potentially beneficial to IPC – with the note that Health Canada is increasingly knowledgeable about policies around the world and uses this knowledge in intergovernmental debates. Other officials mentioned the potential influence of the World Health Organization (WHO) but in

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general remarked that it plays little role in Canadian health care decisions except in the case of worldwide pandemics. With regard to the continent, there was some mention of the potential influence of NAFTA on future health care funding and delivery modes. Some officials also noted that the United States economy could become important as a factor related to IPC as jurisdictions compete for health resources, expertise, and technologies. There was clearly the view among some officials that interna­ tional institutions and agreements were increasingly influential in IPC in various ways and across various policy areas, while other ­officials, namely in finance and health, barely acknowledged them. For environment and trade, the impact has been significant. International political developments, agreements, and commitments, both formal and informal, add an external pressure on domestic governments to cooperate. In the case of trade, this seems to have resulted in increased IPC; in the case of environment, it has not. For all policy sectors, it adds one more dimension of complexity to ­multi-jurisdictional issues. However, officials still placed primary emphasis on the domestic factors in explaining the state of IPC in general and in various policy sectors.

ACTORS Political and Administrative Actors One factor that federal, provincial, and territorial officials agreed on was the significance of political and administrative actors for IPC. Irrespective of the policy area, officials claimed that political actors could make or break IPC and that administrative actors were likewise important. The background, tenure, and skills of political and administrative actors were seen as important determinants of IPC in all of the policy sectors. Interestingly, there was some subtle variation between intergovernmental generalists and intergovernmental specialists across the policy areas on the significance of state actors and non-state actors as determinants of IPC. Overall, officials viewed themselves as enhancers of IPC. Intergovernmental generalists saw political leadership as one of the most important determinants of IPC. It was not surprising, given their proximate position thereto, that they ranked the role of political actors very highly. They spoke a lot about the role of individual first



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ministers and ministers while noting factors which make progress on IPC challenging. Ministers of intergovernmental affairs who work closely with the prime minister and premiers were particularly singled out as having the potential to positively or negatively impact IPC. One interesting assertion was that intergovernmental ministers did not work together as well as ministers at the sectoral level, whose work was said by some to be more functional. Changing of the guard and turnover were mentioned by many intergovernmental generalists as being both positive and negative in terms of IPC, in that new ideas are replenished but experiential knowledge lost. These officials also noted that not all politicians are interested in or skilled in policy development, and that there was variation in their engagement in intergovernmental relations. Intergovernmental generalists were quite cautious in describing their functions and power in intergovernmental relations and characterized their own impact on IPC as dependent on three factors: their ability to work cooperatively with other officials from other governments; their working relationship with politicians; and the turnover of officials. Intergovernmental officials themselves were also aware of the perception and sometimes concurred with the line department officials’ concern that “process” tended to override “policy.” The predominant position of finance ministers in all Canadian governments and the overlap between finance and intergovernmental issues mean that finance ministers play a large role in intergovernmental relations. Some finance officials noted that long-standing working arrangements and increasing coordination between finance ministers and intergovernmental ministers generally enhanced IPC. Others noted finance-intergovernmental agency collaboration was not always helpful to IPC because of a clash of approaches and cultures. Some key actors were targeted for criticism; for example, Paul Martin’s “arrogance” was credited by some with poisoning intergovernmental relations during his tenure as federal finance minister – although in fairness, anyone wielding the axe to funding might be expected to elicit considerable resentment. Turnover of finance ministers was less significant as a factor affecting IPC, given that the tenure of finance ministers tended to outlast the tenure of ministers in the other sectors we examined. But overall, finance officials often complained that good work at the technical officials’ level was hampered by poor political relations. Finance officials also had a positive view of their role and despite operating in a heated political climate

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around transfer payments, equalization, and the fiscal imbalance, finance officials claimed working with intergovernmental agencies and policy officials in line departments was always possible, and that this enhanced IPC. However, while financial considerations were recognized by everyone as a necessary feature in the system, many commented on the lack of balance between short-term fiscal concerns and policy planning. In environment the high turnover of ministers was noted as a factor which inhibited IPC. In contrast to health, finance, and trade, there was very little political leadership at any level in environment. Environment ministers had a low profile during the period of this study. After the Harmonization Accord, federal unilateralism related to the Kyoto Accord further damaged the capacity of ministers to work together. In commenting on the importance of political leadership in trade, several officials noted the significance of political champions. For instance, Jean Chrétien and his trade minister Pierre Pettigrew were seen to take important leadership roles in fostering the Team Canada initiative. However, trade officials also noted the limiting impact of differing ideologies among premiers on internal trade, where protectionism proved difficult to overcome. Although not entirely debilitating, it could impede progress on the trade file and thereby affect the IPC of governments to effect trade policy. A key characteristic of trade policy at the administrative level has been its politicized nature. Prior to our study, the FTA and NAFTA political battle among the political actors and civil society pitted free marketers against nationalists; once the battle was won by the free traders, some of the bureaucratic personalities involved in free trade negotiations displayed distinctly ideological orientations. Key bureaucratic actors later revealed in memoirs, published works, and public speeches the degree to which ideology infused the upper echelons of the federal trade bureaucracy during the development of the FTA and NAFTA, and this had a lasting effect. The trade officials we interviewed noted the extent to which the politics-administration dichotomy had little relevance to their day-to-day work, often revealing a degree of bureaucratic influence over their ministers which turned the doctrine on its head. Health officials had a different perspective on the significance of health ministers in terms of IPC. This was shaped by the fact that during the period of this study health ministers had a high profile;



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health was high on the FMM agenda and intergovernmental relations related to health were being watched by the media and the public. Election platforms reflected this public interest. While it was noted that this gave extra weight to the advice of the key actors from the health sector, it also tended to subsume sectoral interests for broader national and political interests. Some officials felt this “overpoliticization” inhibited IPC, although it was offset by the advantage of having more money put into the sector. There were several points upon which officials from all areas concurred. First, many intergovernmental generalists and specialists felt that a lack of political leadership and focus on politics rather than policy inhibited IPC in general and on many policy issues in specific. Related to this, most officials also expressed a concern about the policy knowledge and capabilities of ministers and about their high turnover. Second, almost all officials commented on the importance of the deputy minister in enhancing IPC. For example, finance officials pointed to the role of the CCO, composed of deputy ministers, as an important enhancer of IPC. However, these same officials also saw these actors as generally underutilized in the intergovernmental system. The status of deputy ministers one-to-another was also a factor, with deputy ministers of finance and health, for example, having more potential to influence policy than ministers of trade and environment. As with ministers, a main cause for concern was the high rate of turnover of deputy ministers. Some senior health officials were highly critical of the inability of the health deputy ministers to move beyond the daily firefighting and come up with serious longterm planning for the sustainability of the system. They thought the overall policy capacity of the deputy ministers was far lower than it could or should be. There was also some concern expressed that the high rate of turnover of officials with policy and intergovernmental knowledge and skills was not just a factor at the ministerial and deputy ministerial level, but throughout the senior public service. Having said this, however, there was, thirdly, considerable confidence placed in administrative actors at assistant deputy minister and lower levels. An environment official commented on the “consensus model” related to the assistant deputy minister and working committees in the sector. Health officials noted that competent lower level officials provide continuity to projects and thus enhance IPC. There was also, in both environment and health, faith placed in the

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ability of officials to work across governments and build capacity on technical issues. An official explained, “In health, our ­[provincial] officials have good working relations with Health Canada officials ... There has been a lot of federal-provincial work on a number of fronts. Because health is provincial jurisdiction, the provinces have a lot of expertise but they need research assistance from Health Canada. [However], this slows when it gets to the political level.” Not surprisingly, officials generally viewed themselves and their roles as enhancing IPC. There was some interesting disagreement here, however, between central agency officials (in this case, finance and intergovernmental generalists) and intergovernmental specialists in line departments. When the function of the central agency officials as gatekeepers or guardians of the system’s output was referred to, this was often seen by the generalists as enhancing IPC and often seen by the specialists as inhibiting IPC. The Public When asked to identify key determinants of IPC, very few officials identified the public. Nevertheless, from those who did, one observation was that public interest and participation in intergovernmental relations had increased in the 1990s. In all policy areas there were some comments about how participation in intergovernmental policy development had become more inclusive through new technologies, particularly for interested stakeholder groups. Although many officials appeared sympathetic to the idea of public engagement, those who did comment often expressed reservations and opinions that public involvement, particularly in the form of interest group engagement did not necessarily enhance IPC – in fact, often inhibited it. Most cited reasons related to the practical challenges of public engagement and the problematic process of including interest groups and stakeholders in the intergovernmental policy process. The degree of public participation and opinions about whether it enhanced or inhibited IPC did vary somewhat by sector. Intergovernmental generalists tended to view public participation and interest group participation as a potential inhibiter rather than an enhancer of IPC. The number of issues where public participation was thought to contribute positively to IPC was strikingly limited. These officials tended to see the public in the context of policy development in intergovernmental agreements rather than with



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regard to implementation and service delivery issues. This is not surprising since any dealings they would have with the public and interest groups would be related to intergovernmental negotiations, agreements, and events. As outlined in chapter 3, the comments on this factor were primarily in the form of concern for the challenges public and interest group involvement created for the necessary negotiations and diplomacy of intergovernmental relations. Very few finance officials mentioned direct involvement with the public. Some referred to it in regard to the budget process but not in relation to IPC issues such as equalization, transfer payments, taxation, or the fiscal imbalance. Officials did note that the growing role of the public in budget consultations added to the capacity of governments to budget, but that public involvement in this area was not actually intergovernmental in character. These officials did not see the public as highly significant to IPC and instead spoke of the relatively specialized, highly complex nature of their work, which militated against public participation or engagement. Finance officials expressed a number of reservations about public involvement in their field: the public does not understand the complexities of fiscal federalism; interest groups are too narrowly oriented or are aligned with particular governments and therefore do not really represent the “public”; there is a fuzzy border between consultations and actual decision-making, the latter of which officials regarded as within their own purview; etc. Nonetheless, whether the public should or should not be more engaged, officials suggested it increasingly expects to be. In environment there were also very few comments on the role of the public. Despite some formalized mechanisms for engaging the public through CCME (primarily interest groups but also other stakeholders) in intergovernmental policy development and implementation, there were no officials who identified the public as a factor related to IPC unless prompted with a question. Interestingly, although CCME has instituted many public consultation forums related to intergovernmental files, none of the CCME officials interviewed mentioned public participation as significant in terms of IPC. A few officials did mention the watchdog and accountability role that interest groups had played in enhancing IPC on some issues and a few mentioned how, paralleling the environmental agenda, public engagement in the intergovernmental realm waned as environmental issues dropped off political agendas. Although not noted by any

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­ fficials directly, involvement of stakeholders was mentioned more o in the context of multilateral policy initiatives, and a few provincial officials mentioned that they felt involvement of environmental groups in particular was biased toward more federal government involvement on a wide range of issues. Compared to finance and health, there has been more public and stakeholder involvement in intergovernmental domains of environmental policy, but there was not sustained public involvement in intergovernmental forums during the period of this study, and therefore this factor was not top-ofmind for officials in this sector. Trade policy-making, while traditionally the purview of a small, closed set of officials and business actors, opened up to a much broader public during the period of this study, straining the IPC of governments as a result. Several officials noted this change, initiated by the advent of a vocal and well-organized anti-free trade and, later, anti-globalization movement. Provincial and territorial trade officials were sometimes suspicious that federal officials tended to lump their governments in with interest groups in general, as “stakeholders,” rather than viewing them as equal, sovereign entities. There was also some disagreement about whether the public actually matters in trade policy. Some commented that the business class in Canada has always had a privileged position in trade policy making and that officials have developed networks with these actors as well as with individual corporations which occupy a considerable amount of trade officials’ attention. Other officials noted that they have had to be increasingly cognizant of the position of labour, environmental groups, anti-globalization activists, and civil society more generally. However, some officials greeted these developments with skepticism, arguing that IPC was actually impeded by expanding public involvement since smaller jurisdictions lacked the capacity to accommodate public interest in trade policy and so were reluctant and largely unable to actively seek it out. Health policy has a high level of both general public and specific interest group influence, but this is constituted by more indirect political/electoral pressure and lobbying within jurisdictions than by direct participation by the public in intergovernmental forums. Despite this lack of direct public participation some officials did comment on the need for feedback from the public on health policy issues. Officials had both positive and negative comments about increasing direct public participation: positive regarding d ­ emocracy



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and potential patient satisfaction but negative with regard to the power of interest groups. Powerful interest groups in the health field were noted as having the potential to affect IPC, particularly medical doctors’ groups, although health care institutions such as hospitals and other provider groups such as nurses can also play dominant roles. As noted by one official, “We [the federal government] tried to do a national study and public consultation on primary care but received opposition from physician groups.” Apparently that was enough to end it. Some officials mentioned the increasing role of the public in accountability. Others noted the rise of citizens’/patients’ responsibilities and obligations, rather than just citizens’/patients’ rights, in moving toward both a more sustainable health care system and a healthier population, reflecting different views on the role of the public in enhancing or inhibiting IPC. In health, as in all of the policy areas, indirect public involvement through public opinion polls and the media affected IPC because the governments paid attention to them, particularly during elections. (At press time, in the spring 2011 election campaign, health care was again ranked by the pollsters as the number one issue for the public.) There were also a few officials who mentioned the marginalized public in intergovernmental relations. Several officials from the territories and Western provinces commented on the fact that Aboriginals had been particularly adversely affected by historical decisions in health care but they continued to lack the political weight to get much progress on Aboriginal interests. As we saw in chapter 7, despite some federal-provincial-territorial action on this front, real progress appeared to be limited. Aboriginals continued to be caught in the jurisdictional disputes of the federation. Seniors were also referred to with regard to their marginalization in health care policymaking. Despite the rise of “grey power,” they were unable to penetrate the intergovernmental policy decision-making machinery to the extent of gaining much ground on the homecare issue, for example. Although resources remained inadequate for the elderly across Canada, a push by the federal government to institute a national homecare program was quashed by the provinces. Overall, intergovernmental officials across all the sectors did not identify the public as playing a significant role in intergovernmental relations, nor as an important determinant of IPC. There was a general awareness of the significance of the public in policy development and implementation, but the fact that so few officials identified the

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public as a factor when asked about enhancers and inhibitors of IPC indicates most officials continue to view the public as a s­ econdary or even tertiary set of actors when compared to political and administrative actors engaged in intergovernmental relations.

RELATIONS There are two dimensions regarding relations which affect IPC. The first are the formal intergovernmental relations between governments which are delineated by the constitutional parameters of the federal regime and may involve equality or hierarchy between the jurisdictions. They also involve relations between the political and administrative arms of the system as well as between the central agencies and line departments. They are institutionally based. The second dimension involves the informal set of relationships between the individuals involved in intergovernmental relations – that is, the interpersonal relationships which inform the manner in which IPC is facilitated or impeded, depending on whether those relationships are smooth or disputatious. For instance, the personalities of deputy ministers and the informal relationships between executives and other officials were noted as important dimensions of IPC. Individuals clearly make a difference. Several officials noted the significance of networks and the movement of personnel between the levels of government. The degree to which informal political relationships set the conditions under which bureaucratic relations existed was often commented on by officials as strongly affecting IPC either negatively or positively. Intergovernmental generalists in the central agencies, more so than intergovernmental specialists in the policy areas we examined, used various descriptors of intergovernmental relations. Some referred to collaborative versus disentangled federalism; centralization versus decentralization; or constitutional versus non-constitutional approaches. The choice of descriptors varied among officials somewhat, but an important theme throughout the comments was that the power of the federal government illustrated through unilateralism and the spending power was an important reality in which political and administrative relations and relationships were played out. The major consequence of federal unilateralism during the period of this study was that it aggravated both formal relations and informal relationships between politicians and officials, leading to concerted



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efforts to build relations and relationships elsewhere, for example within greater interprovincial-territorial cooperation. In addition, given the prevailing power dynamic, there was some consensus that the general character of administrative relations was more collaborative and less conflictual than at the political level. Intergovernmental generalists spoke a lot about the character of political relations between first ministers and ministers, citing the importance of things such as “goodwill” and “good relations.” They also made some comments on formal political relations between political leaders and intergovernmental officials, noting that political disagreements often affected the bureaucracies below. Nonetheless, intergovernmental generalists asserted that in most jurisdictions they were mainly able to continue on a business-as-usual basis, despite the several irritants in federal-provincial-territorial relations at the time. They made the observation that officials generally worked well with their political masters, even when an issue heated up and became politicized. Overall, a certain degree of politicization is inevitable since intergovernmental officials move in the circle of the prime minister and premiers, but they also noted that administrative relations tended to be more collaborative than political relations. As in other sectors, intergovernmental generalists noted the disparity in resources between governments as a factor affecting formal relations. Although constitutionally equal, the different governments in Canada in reality exist in an implicit hierarchical relationship. Intergovernmental generalists also felt that the process orientation of their formal roles was a strength of intergovernmental relations, while many line department officials thought that this was a problematic feature of intergovernmental relations. Where relations between Ottawa and the other governments were concerned, there was an expression of resentment by many provincial and territorial officials that their federal counterparts had a presumptuous and arrogant attitude. They pointed in particular to federal unilateralism as a disturbing practice which poisoned formal relations (and therefore informal relationships). One consequence was to push one level of government – the provincial and territorial – into the new formal institutional COF – which came to life after SUFA failed to institutionalize a more formalized set of relationships between the two ­levels of government in the federation. Hierarchy is characteristic of the relations between the federal finance department and provincial and territorial finance

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­ epartments, even though it is not formally or legally prescribed d as such. Moreover, as arguably the most powerful central agency, finance is seen as perhaps the most important institutional actor in government in all jurisdictions. Finance officials were well aware of the implications of this unique circumstance for formal relations in the federal system. They noted that the impact of political relations between the federal minister of finance and his/her counterparts is felt throughout the system. When relations were problematic, as they were during the tenure of Finance Minister Martin, one consequence was to catalyze stronger formal provincial-territorial finance minister relations, which consequently became quite vibrant, leading to calls to revamp the formal mechanisms of fiscal federalism to include co-chaired meetings and shared agenda-setting. However, these provincial-territorial relations proved difficult to maintain when it became clear that other fiscal divisions were brewing over equalization transfers. Nonetheless, the provinces and territories did develop the capacity to cooperate more on research and coordinating their positions vis-à-vis the federal government. At the administrative level, finance officials praised the work of the intergovernmental technical committee system. They commented that deputy minister and assistant deputy minister interactions were generally helpful, even when there was a decline in the use of political finance mechanisms during the darkest days of the CHST disputes. The tension in the relations between finance departments and line departments within the same government was also noted. Views varied. Some line departments get frustrated with finance, as it is the “guardian” of the public purse and sometimes plays that role with gusto. Relations between officials were described by officials outside finance as sometimes problematic, while those working within finance often described those relations as relatively smooth and cordial. Despite long-standing political institutions such as CCME, formal relations between politicians in the environment sector are underdeveloped, according to officials. This cohort commented on the influence of particular ministers who could act as champions, and on the extent to which environment was on the broader political agenda of the day (or not), as factors important to IPC. Horizontality was of particular concern for environment officials given the broadly cross-cutting nature of their policy field. Developing relations within individual governments as well as across governments is



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a challenge. At the federal level alone, dealing with Natural Resources Canada, Environment Canada, Fisheries and Oceans, and numerous other departments and agencies with environmental mandates has proved taxing, but it was particularly difficult in the context of the cutbacks which afflicted the environment sector during the period of this study. Technical policy capacity was negatively affected by resource constraints, according to environment officials, thus negatively affecting relations as they focused on doing more with less – less money, less staff, and less time – and this had a strongly deleterious effect on maintaining formal relations. In trade, while generally content with the tenor of formal relations, some officials insisted that the provinces and territories had a right to a more direct say in foreign trade negotiations and policies. This position was not universally subscribed to, and was rejected by the federal government, but it was nonetheless a thematic undercurrent of some officials’ perceptions about improved IPC. Trade officials also noted that the horizontal nature of both the internal and external trade files meant they needed to establish relations with a large variety of other ministries. As a result, more than a dozen federal-provincial-territorial and interprovincial-territorial ministerial and interdepartmental committees were struck to oversee the implementation of the AIT. As well, an emerging intergovernmental bureaucracy had developed around NAFTA. This horizontality made formal administrative relations an increasingly important part of the official’s reality. At the centre of administrative relations was the federal Department of Foreign Affairs and International Trade (DFAIT). Provincial and territorial officials reported that generally they enjoyed good relations with this ministry, in contrast to complaints by officials in several other sectors about federal highhandedness or imperiousness. Moreover, interestingly, trade was cited as an area where departments generally had relative independence from the reach of intergovernmental central agencies. Health was at the center of the hottest political relations of the day during this study. Health officials not surprisingly noted the significance of political relations during the CHST and Health Accord negotiations. Fiscal downloading by the federal government damaged relations in general, but particularly with regard to health, since it was seen by the provinces and territories to be in fiscal crisis. Other comments focused on the ministers and particularly the negative impact turnover had on their own formal relations. Although

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the manner in which the health file was seized by first ministers, finance, and intergovernmental relations meant that formal relations fostered within health ministries were largely bypassed. Indeed, neglected relations between health policy officials and central agency officials were identified as undermining IPC. Antipathy between federal officials and their provincial-territorial counterparts heavily conditioned attitudes toward formal relations in health. Relations between the federal government on one side and the provincial and territorial governments on the other were quite strained. This started at the political level, and made administrative working relations below that more difficult. Relations between the provincial and territorial governments, on the other hand, were strengthened. As for informal relationships, the intangible of human relationships pervaded intergovernmental generalists’ discussions of IPC. Good informal dynamics built on strong interpersonal ties and trust were seen frequently in intergovernmental generalists’ observations as perhaps the most important factor in enhancing IPC. Almost all of the intergovernmental generalists and specialists mentioned the importance of personal relationships, networks, professional bonds, and a shared ethos as central to the state of IPC. One of the most important, yet amorphous, elements of informal administrative relationships was the significance of trust. When it was low, so was IPC, according to officials not just in intergovernmental relations, but in all sectors. These informal relationships provide the glue of the more formal system. Officials who commented on informal relationships in intergovernmental relations (and again in all sectors) often noted that even when there was political conflict over some aspect of federalism, informal administrative relationships were maintaining progress on other fronts. Given the acrimony between the federal government on one hand, and the provincial and territorial governments on the other in the ebb and flow of our study period, informal provincial-territorial relationships were also identified as crucial to sustaining a working system. Intergovernmental relations generalists were highly cognizant of the role informal relationships played in their world. They generally saw these relationships as imperative to the building and maintaining of good formal relations. These officials are close to the centre of executive power. Thus they were aware of the impact of good or bad relationships between first ministers on IPC. I­nterestingly, they



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s­uggested even political antagonists could achieve policy goals if solid informal bureaucratic relationships underpinned their interactions. The example of Ottawa and Quebec City was often cited in this regard. But these informal relationships require fostering and human capacity-building exercises. Some officials pointed out that executive federalism worked in the pre-Meech Lake and Charlottetown era. During the heyday of constitutional negotiations, intergovernmental generalists got to know each other well, as did their political masters. Officials and first ministers had good relationships rooted in confidence and the assurance that there was a national agenda worth working toward. But that had all been lost in the current climate of suspicion and distrust. Intergovernmental generalists also pointed to the need for knowing with whom to deal on a file. That is, knowing whom to avoid could be as important as whom to contact. Being able to pick up the phone or send an email based on a developed informal relationship makes federal-provincial-territorial interactions easier. Personality matters according to officials. Having a good rapport and being able to communicate were vital attributes for our interviewees. However, officials also warned against the ossification of relationships through over-institutionalization. In pointing out the connection between formal political institutions and informal relationships, the intergovernmental ­generalists claimed that even if the former were dysfunctional, the latter had been made to work in the development of SUFA, the COF, and the National Child Benefit (NCB) – as the product initially of solid infor­ mal relationships between first ministers supported by those at the admin­istrative level. They also argued that policy failure can be the consequence of the inability to exploit good human relationships in advance of political considerations. Old emotional “baggage” between actors can interfere with progress, and personal animosities can sabotage policy files and new relationship-building. Finally, the disparity in resources between governments also conditions relationships, according to intergovernmental generalists, noting the federal “father-knows-best” attitude, backed by its resources, impeded good informal relationships across levels of government, leading to a lack of trust within the federation. In finance, informal relationships were said to be a definite enhancer of IPC, particularly at the issue and technical levels, but disputatious formal relations between federal Finance Minister Martin

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and his counterparts caused deterioration in informal relationships between officials. This drove the provinces and territories closer together, a development which was fostered in no small part by the growth of informal relationships there. Many finance officials called for a new mindset to repair the formal political relations, and saw informal relationships as an important potential route to achieving this goal. But there were also difficult relationships between officials at the provincial and territorial levels at different times. This led finance officials generally to invoke trust fostered by personal contacts and networks as a key variable in smoothing ­federal-provincialterritorial interactions. In the environment, the critical role of deputy ministers was often cited in fostering informal relationships. Others mentioned the regional dimension whereby officials with common regional concerns could more easily build relationships. The fact that environment encompasses so many different aspects means that informal relationships varied by environmental issue. Different sectoral councils with environment-related agendas (CCME, forestry, energy) uphold different cultures. Horizontality was mentioned too as sometimes acting as a barrier to IPC, although sometimes enhancing it, but always affecting the construction of informal relationships. Several officials commented that CCME working groups and other technical and project-level arrangements were helped by informal relations. Culture, personal relationships, and trust were among the most oftmentioned issues. Again, the perceived arrogance of the federal government was cited as a barrier to good informal relationships in this sector. A common feeling of being the victim of significant resource constraints and cutbacks also helped develop a measure of informal solidarity among environment officials, and its concomitant lack of solidarity with others. Trade officials echoed the importance of informal relationships and personal contacts for IPC. They started with the view that negative informal relationships among political leaders could be problematic for officials. They felt openness and receptiveness on all sides – political and bureaucratic – was important to advancing a file. Moreover, relationships between politicians and bureaucrats were important in developing the tone of engagements with counterparts from other governments, and influenced the role of the public servant. Interestingly, trade officials noted that even large imbalances between “have” and “have-less” jurisdictions could be overcome if informal



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relationships could be struck and maintained. In particular, provincial and territorial officials could find common cause as against the more powerful federal government by striking informal relationships and sharing the vital resource of information and knowledge. They commented approvingly on the trend toward greater provincialterritorial collaboration fostered over dinners and golf games in advance of meetings with federal officials. At the same time, though, good working relations with the federal government could also be fostered through positive informal relationships and networks. The Team Canada model was cited as a good forum within which both formal relations and informal relationships were fostered. Given the high politics of health during the period of our interviews, it was not surprising that health officials noted how informal administrative relationships were influenced by the formal and informal political relationships at the time. Health officials regarded the cultural dimension of informal relationships as very significant. The opportunity to speak candidly in a collegial atmosphere was highlighted. Moreover, they maintained that these relationships (perhaps necessarily) cut across levels of government, and across health ministry and intergovernmental and finance central agency lines. They also cut across rank when lower-level officials were given the opportunity to influence others above them in a less hierarchical or rigidly structured setting. Officials exchanged ideas, information, viewpoints, and even gossip. However, intergovernmental specialists from health also complained that these relationships were ad hoc, dependent on the whims of the executive power brokers.

CONCLUSION It is clear from this analysis that ideas, institutions, actors, and relations show both similarities and differences in their importance as factors related to IPC across all the policy sectors for intergovernmental generalists and specialists in intergovernmental relations, finance, environment, trade, and health. Attempting to generalize from the highly varied perspectives of all the officials we interviewed is a challenge; nonetheless, there are some similarities and differences which are notable. The interviews reveal that although political and administrative ideas are evident as a determinant of IPC, the perspective of most officials, irrespective of their policy area, is that they impact IPC

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only indirectly. A few officials were conscious of the role of ideas as a determinant of IPC, but for most, ideas are subtle and contextual and mentioned along with other more readily identifiable political or administrative factors. For some, certain ideas were mentioned frequently. The question of non-constitutional reform was an idea central to intergovernmental generalists, and the ideas of continentalism and globalization have obvious import in intergovernmental dimensions of trade policy. In certain policy areas, ideas were the centre of intergovernmental policy debates. The fiscal imbalance in finance and privatization in health care come to mind. For the environment, the lack of ideas or variation in meaning of ideas such as sustainable development seems to negatively impact IPC. Administrative ideas of the day like NPM could be seen reflected in the thinking of various officials. Ideas related to visions and goals were seen as underutilized in Canadian federalism, to the detriment of our IPC. However, the actual impact of ideas on IPC remains difficult to measure. In terms of institutions, the sheer variation of institutions across policy areas is revealing. Clearly the institutions of executive federal­ ism are perceived by most officials to be the primary arena for IPC, rather than the legislative or judicial branches of government. This is not surprising given the central policy role of our executive branch, including both political and administrative arms of the executive and the fact that our subjects were situated within these institutions. In the context of these institutions, intergovernmental general­ists have a bird’s-eye view of this variation and thus innately offer comparative and cautious tales about placing faith in the existence and level of institutionalization as an indicator of IPC. Finance, despite criticisms from officials about the ministerial level, witnessed enduring institutional influence on the first ministers’ level and had a ­wide-ranging impact on intergovernmental policy making across many policy areas. Officials also noted the contribution of technical administrative institutions to IPC at a more micro level. Environment, despite having long-standing political and administra­ tive institutions, highlights the limited scope and capacity of either of these institutional levels in terms of IPC and the need to address intergovernmental dimensions of environmental issues in an increasing number of institutions both domestically and internationally. Trade has a wide range of political and administrative institutions for dealing with intergovernmental policy issues related to external and internal trade, but IPC related to external trade is more



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developed than internal trade. Environment and trade highlight that even within policy areas there is significant variation in terms of IPC on various issues. Health has attempted a certain degree of institutional innovation, but it is not yet clear whether this is enhancing IPC. Early indications are that many of the intended innovative elements of these new institutions have been watered down such that not much has changed. The existence of institutions per se was thus only part of the IPC equation across policy areas. For most officials the resources, actors, and relations associated with various institutions were primary determinants of IPC. Resources were mentioned by officials from all sectors – budgets, personnel, time, and knowledge were viewed as necessary components of IPC, although some also warned that resources alone were not sufficient to improve IPC dramatically. Perhaps the most striking finding from the interviews across all policy sectors is the significant role that officials themselves feel they play in the political and administrative realms in terms of enhancing IPC. Although we might have expected officials to suggest institutions and agreements as having high salience for IPC, they said (by sheer volume of comments) that relations and resources were the most important determinants of IPC in general and across policy areas. Ironically, although relations between politicians were viewed as very important to officials and were sometimes the prime movers in policy change, the “high politics” of political relations was often seen as undermining the ability of governments to work together to address important long-term intergovernmental policy problems. Formal relations and informal relationships between officials were viewed as an important foundation of IPC in general and in specific policy sectors which over time created intergovernmental cultures which could either build or undermine IPC. Officials sometimes saw the politicians as undermining the good faith they, the officials, had built up over time across governments. Although there was clearly variation here across policy areas, the common voice emerging from the interviews was that informal relationships and formal relations were particularly important to IPC. The other finding across all the policy areas was that the significance of ideas, institutions, actors, and relations for IPC was variable by jurisdiction. The next chapter outlines some of this variation by jurisdiction and then revisits these general comparative findings in the conclusion.

9 Intergovernmental Policy Capacity and Jurisdictional Variation: Fourteen Stories

INTRODUCTION Jurisdiction matters. This is one sentiment we heard from many officials we interviewed. In addition to the variation by policy area outlined in chapter 8, one cannot easily characterize the intergovernmental policy capacity (IPC) of the federation without considering jurisdictional differences. While not asked directly to compare IPC across jurisdictions, officials often did so. However, in considering the significance of jurisdiction, a caveat must be attached to the officials’ comments. While they were being asked specifically about IPC, some spoke more generally of the independent policy capacity of jurisdictions, which clearly is related to IPC but different. For some of the officials we interviewed, jurisdictional variation was important to understanding IPC, and the variation itself inhibits IPC. In the opinion of one long-time federal intergovernmental generalist who ranked the IPC of the jurisdictions in 2001, “IPC is uneven across provinces. Quebec, Saskatchewan, and Alberta are the three largest intergovernmentally. Ontario, Newfoundland, and British Columbia are smaller. British Columbia has always punched below its weight. Prince Edward Island, Nova Scotia, and Manitoba run by the seat of their pants.” This same official argued that jurisdictional variation is not surprising, particularly along federal­provincial lines as “managing the federation is a higher priority for the feds than the provinces. Provinces have less sense of commitment.” Conversely, an official from Newfoundland and Labrador characterized this as “smaller provinces and territories tending to take the ‘what works’ approach.” An official from Yukon noted, “We need to pick and choose issues due to our limited capacity.” It



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was these kinds of statements in interviews that pushed us to do further analysis of jurisdictional variation and IPC. To better understand the relevance of jurisdiction to IPC, we begin this chapter with a general comparative review of political economy and intergovernmental infrastructure in terms of machinery and resource allocations. We then examine IPC in each jurisdiction, revealing that a constellation of factors underpins significant variation in both the IPC and the independent policy capacity of various jurisdictions. We then reflect in the conclusion on how our ideas, institutions, actors, and relations framework helps us understand the jurisdictional variation in IPC noted by so many officials.

POLITICAL ECONOMY: TO HAVE AND HAVE LESS Regionalism is a defining characteristic of Canadian politics. Coupled with an uneven distribution of population, this has resulted in political, economic, and social cleavages which form the foundation of a unique political economy in Canada and each of its jurisdictions. This variation has divided the country into what are termed “have” and “have-less” provinces. Table 9.1 depicts the major socio-economic features of Canada and the provinces and territories. To overcome disparities and inequalities, “have-less” provinces have frequently demanded that the national government provide funds to specific regions, provinces, and industries. As outlined in chapters 2 and 4, in 1957 the federal government established the Equalization Program, the principles of which were entrenched in Section 36 of the 1982 Constitution. Equalization consists of annual cash grants, or payments, from the federal government under its revenue raising and spending powers to “haveless” provinces to ensure an equitable level of taxation and public services across the country. Payments are determined by measuring a province’s fiscal capacity or its ability to raise revenues against the mean fiscal capacity of all the provinces – currently, a ten-province standard is used (Canada 2008). Provinces whose fiscal capacity is above the mean do not receive payments, while those below receive payments equal to the difference in their fiscal capacity and the tenprovince standard. (For further information on federal transfers see Appendices 9.1, 9.2, and 9.3.) In general, the assumption is that the “have” provinces in terms of population and economic wealth would have more independent

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Table 9.1 Provinces and territories: basic socio-economic features 2007

Canada Newfoundland and Labrador Prince Edward Island Nova Scotia New Brunswick Québec Ontario Manitoba Saskatchewan Alberta British Columbia Yukon Northwest Territory Nunavut

Population

Provincial Revenue from Federal Transfers (%)

Unemployment Rate

per capita

Average Weekly Earnings ($)

31,241,030

18.1

6.1

38,495

770.82

500,610

32.2

12.5

35,243

714.65

134,205 903,090

39.7 35.8

9.6 8.2

28,106 30,833

628.90 673.38

719,650 7,435,900 12,028,895 1,133,510 953,850 3,256,355

40.4 18.6 15.8 34.7 17.1 10.5

8.9 7.5 6.4 4.2 4.1 3.6

29,900 33,856 40,346 32,708 36,749 54,075

707.93 725.29 803.46 701.93 724.03 835.52

4,074,385 30,195

16.2 71.0

4.5 –

35,041 45,790

761.01 882.47

41,055 29,325

75.2 93.0

– –

98,295 38,312

1,004.63 948.68

GDP

Source: Herman Bakvis, Gerald Baier, and Douglas Brown. 2009. Contested Federalism: Certainty and Ambiguity in the Canadian Federation. Toronto: Oxford University Press, 52; and Canada. Human Resources and Skills Development Canada. 2009. Indicators of Well Being in Canada. http:// www4.hrsdc.gc.ca/[email protected]?iid=26#M_2. Accessed 15 December 2009.

policy capacity and thus potentially more IPC. There are another set of “have” and “have-less” factors that can be hypothesized as important determinants of IPC. As described in chapter 2, all jurisdictions in the Canadian federal system have some level of infrastructure to leverage for IPC. By infrastructure we mean the intergovernmental agencies, intergovernmental units in line departments, and resources (budgetary and human) devoted to intergovernmental affairs – each of these with the potential to influence the IPC in a given jurisdiction. Most jurisdictions developed this infrastructure in the 1970s and 1980s. For the purposes of our analysis we focus on the intergovernmental machinery and resource allocations in the 1995–2005 period.



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As outlined in chapter 2, in the 1990s governments in Canada became focused on debt and deficit reduction motivated largely by ideational and financial pressures. By the end of our study period, many governments were in a better fiscal position. If we look at this impact on resource levels in intergovernmental agencies in each jurisdiction, the results are intriguing. As outlined in tables 9.2 and 9.3, there is considerable variation in the expenditures on machinery and personnel related to intergovernmental relations (see Johns, O’Reilly, and Inwood 2007). But these fluctuations do not necessarily coincide with what officials told us about levels of IPC in different jurisdictions, as we will see below. Aggregating and comparing the actual spending and personnel devoted to intergovernmental management is a challenge, given the different types of intergovernmental agencies across governments and their differing budgetary reporting styles in public accounts. In some cases the data was available directly from intergovernmental agencies, but in other cases not. Intergovernmental expenditures and staffing levels in those jurisdictions with ministries are generally easier to track. Data was collected from public accounts, annual reports, and performance reports of respective jurisdictions. The federal government, Quebec, Ontario, and Alberta are the largest spenders on intergovernmental agencies (Johns, O’Reilly, and Inwood 2007) despite a reduction in spending in the provinces of Alberta and Ontario. In 2004–05 the federal intergovernmental agency in the Privy Council Office (PCO) had expenditures of $25 million; Quebec had expenditures of $11.8 million and Alberta $8.1 million. Ontario spent $13 million in 2004–05, nearly doubling its budget of $6 million from 2003–2004. In contrast, smaller jurisdictions spend considerably less on intergovernmental agencies. For all jurisdictions, as a percentage of the total budgets, the expenditures on intergovernmental agencies remain quite small (in all cases less than .01 percent) (Johns, O’Reilly, and Inwood 2007). As outlined in table 9.2, some units experienced budget decreases and some had budget increases, but most saw stable resource allocations during the period of our study. With regard to personnel, table 9.3 also indicates that most intergovernmental units did not decrease their numbers in the period of our study. Alberta and Ontario are the exceptions. For the other governments, staffing levels remained constant or even increased. Quebec, Manitoba, Nova

Table 9.2 Annual expenditures of intergovernmental agencies 1995–2005 (in millions) 95–96

96–97

97–98

2.9   5.8 5.8 0.8   0.4 0.4 1.0 1.9     3.7

3.0   4.5 5.1 3.9   0.4 0.4 1.2 1.1      

3.4   5.6 5.0 4.9   0.4 0.3 1.4 0.9 0.2    

98–99

99–00

00–01

01–02

02–03

03–04

04–05

3.8   4.6 5.1 33.5   0.4 0.4 2.0 1.0 0.2 1.3 6.8

3.7 13.4 4.5 5.2 29.2   0.5 0.4 2.6 1.3 0.2 2.4 5.5 7.7

4.0   4.5 6.1 34.7   0.5 0.4 1.5 1.4 0.2 1.6 0.2 11.4

4.4 11.0 4.8 5.9 51.9 3.4 0.4 1.1 1.7 1.4 0.2 0.8 0.6 11.4

5.0 11.8 4.1 6.0 0.5 3.1 0.4 1.3 1.9 2.3 0.2 1.1   8.6

5.3 12.0 6.0 6.5 0.4 2.5 1.2 1.8 2.8 3.0 0.5 0.8 1.3 9.7

5.6 12.7 13.0 8.3 1.6 2.5 2.0 1.9 3.1 2.1 0.3 1.0   10.3

Jurisdiction Federal* Quebec Ontario Alberta Saskatchewan BC Manitoba Nova Scotia New Brusnwick Nfld. and Labrador PEI Yukon NWT Nunavut

Source: data collected from annual reports, business plans, performance reports and public accounts Notes: Empty cells indicate no data available or separated out in public accounts Federal government figures for amount appropriated to Canadian Intergovernmental Conference Secretariat in PCO. IGA expenditures not separated out from PCO expenditures. Quebec total appropriated to Intergovernmental Affairs Program in the Conseil Executif Ontario expenditures increase in 2004–5 due to increased allocations but also related to Chair of COF in that year Saskatchewan data fluctuates due to consolidation of IG with other units and then separation of IG unit reporting in 2002–3. NWT Intergovernmental Affairs not separated out of Executive in 95–96; 98–99; and 99–00 Nunavut Intergovernmental Affairs not separated out from The Department of Executive and Intergovernmental Affairs

Table 9.3 Personnel in intergovernmental agencies 1995–2005 (FTEs)    Jurisdiction Federal Quebec Ontario Alberta Saskatchewan BC Manitoba Nova Scotia New Brusnwick Nfld. and Labrador PEI Yukon NWT Nunavut

95–96  

96–97  

97–98  

98–99  

99–00  

00–01  

01–02  

    66 77 13 66  5     20        

31   43 55 38.9   5 3 9 14        

31   40 90 40.9   5 3 12 13        

30   35 90 75.1   5 4 14 13        

30   35 94 75.6   5 3 14 17        

30   37 54 77.8   5 2 10 18   7.5    

30   41 54 85.6   5 4 13 20   7.5    

02–03   30     53 20     8.7 25 27   7.5    

03–04  

04–05  

31     53 20     16.2 25 14   7.5    

31     58 24     16.6 32 13   7.5    

Source: Data collected from annual reports, business plans, performance reports, public accounts (actuals), and via email requests to various jurisdictions. Missing data is not available. In some cases repeated requests were made to IG units for this data. Saskatchewan data fluctuates due to consolidation of IG with other units and then separation of IG unit reporting in 2002–03

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Table 9.4 Intergovernmental agency structures and accountabilities 2006

Jurisdiction Canada Yukon Northwest Territories Nunavut British Columbia Alberta Saskatchewan Manitoba Ontario Québec New Brunswick Nova Scotia Prince Edward Island Newfoundland and Labrador

Year IGR Agency First Established

Intergovernmental Agency Structure (2006) Central Agency

Directly to Premier

1968 1974 1980

X X X

X X

1999 1975

X X

1972 1974 1999 1965 1961 1971 1979 1969 1973

Line Department

Accountability

X X X X

X

X

X X

X

X X X X X

Minister of IGA

X X X X X X

X X X

Source: Adapted from Carolyn M. Johns, Patricia L. O’Reilly, and Gregory J. Inwood. 2007. “Formal and Informal Dimensions of Intergovernmental Administrative Relations in Canada.” Canadian ­Public Administration 50(1), 23; and John Warhurst. 1987. “Managing Intergovernmental ­Relations” in Herman Bakvis and William M. Chandler, Federalism and the Role of the State. Toronto: University of Toronto Press, 265.

S­ cotia, New Brunswick, Newfoundland and Labrador, and the territories remained at constant levels since the mid-1980s. ­Saskatchewan actually doubled its personnel between 1996 and 2002 (Johns, O’Reilly, and Inwood 2007). However, as illustrated below, intergovernmental budgets and personnel are only two indicators of IPC. Another factor, also noted in chapter 2, are the institutional features of the given jurisdiction. Table 9.4 reveals the year each government established an intergovernmental agency, and the agency structure and lines of accountability in the machinery of intergovernmental relations in each jurisdiction in 2006. As described below, these institutional factors do seem to contribute to the levels and state of IPC in a given jurisdiction. The growing importance of intergovernmental relations across jurisdictions is revealed in figure 9.1, which shows that in all



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Figure 9.1 Number of departments/ministries with intergovernmental units by jurisdiction 1985 & 2003 Source: Carolyn M. Johns, Patricia L. O’Reilly, and Gregory J. Inwood. 2007. “Formal and Informal Dimensions of Intergovernmental Administrative Relations in Canada.” Canadian Public Administration. 50, 1 (Spring), 21–41.

j­urisdictions the number of departments with intergovernmental units increased between 1985 and 2005, possibly indicating decentralization of intergovernmental affairs from central agencies or perhaps an overall increase in intergovernmental machinery, personnel, and capacity in the system as a whole. This data also indicate that some jurisdictions such as Quebec, Alberta, British Columbia, and Newfoundland and Labrador have seen a proliferation of intergovernmental units in their line departments, which may be a significant factor in IPC. In general, the assumption is that the “have” provinces in terms of political economy, independent policy capacity, and intergovernmental machinery and resources will be those who have more IPC. In some cases this held true. In other cases, certain jurisdictions seemed to have considerable independent policy capacity, yet this did not

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necessarily translate into IPC. In other cases, “have-less” jurisdictions seemed to have a disproportionate amount of IPC. What emerges in the jurisdictional profiles and comments of officials below are some very interesting and somewhat surprising findings regarding which jurisdictions seem to “have” IPC.

CANADA The Federal Government As detailed in chapter 2, the national government in the period of this study underwent considerable changes on the political and economic fronts. However, from its constitutional foundations, the federal government has always had a commanding control of the federation’s politics and the economy. Although its independent policy capacity has been high by historical and comparative standards (Prince 2007; Howlett 2009), the federal government experienced some important changes which had an impact on its IPC. Particularly during the late 1990s and early 2000s, the impacts of budget cuts on the federal government’s own policy capacity and its transition to the post-deficit context allowed for more use of the federal spending power, affecting the policy capacity of other jurisdictions and the IPC of the federal system as a whole. Politically, in the post-1995 Quebec referendum and post-Canada Health and Social Transfer (CHST) period, stability in government was a feature at the national level, with Jean Chrétien’s Liberals winning three successive majority governments. Combined with a weak and fractured opposition and a strong fiscal position, the federal government found itself in a particularly strong position in terms of IPC. One consequence, according to some officials, was that the “real” opposition to the Chrétien Liberals was the provincial and territorial premiers. However, turnover mitigated this in the later part of our study with a changing cast of premiers in many provinces and territories. The election of a federalist party in Quebec in 2003 was significant, and the creation of the Council of the Federation (COF) as a counter-force to the federal government had an impact on federal IPC. By the end of the study period, scandal plagued the national government, resulting in the Gomery Commission of Inquiry and in considerable internal focus in Ottawa on political and administrative accountability reforms.



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Managing the federation under these changing conditions on a day-to-day basis was the responsibility of the long-standing machinery of intergovernmental relations whose origins date to the 1960s. In 1968 a secretariat was formed within the PCO charged with supporting the work of a new cabinet committee on federal-provincial relations chaired by Prime Minister Pierre Trudeau (Pollard 1986, 113–14). In 1973 the federal government also established the Canadian Intergovernmental Conference Secretariat by an order-incouncil with the mandate of providing administrative services for the planning and conduct of both federal-provincial-territorial and provincial-territorial conferences. By the mid-1970s, ten federal government departments had federal-provincial relations units (Schultz 1977, 234). As Savoie notes, “Federal-provincial relations have enjoyed a strong presence in Ottawa’s decisions-making process” (Savoie 2005, 19), particularly when the branch in PCO became a separate entity, the Federal-Provincial Relations Office (FPRO) in 1975. The prime minister acted as the minister for federal-provincial relations, and for most of the period from 1977 to 1980 and from 1986 to 1991, the position of minister of state for ­federal-provincial relations existed in the federal cabinet. In the interim, from 1980 to 1986, Prime Minister Trudeau held the post himself during the height of constitutional negotiations. From 1991 to 1993 Joe Clark held the post called minister of constitutional affairs. In 1993 the FPRO was abolished by Chretién and its responsibilities folded back into the PCO. Marcel Massé (former Clerk of the Privy Council 1979–80 and Deputy Minister of Finance in New Brunswick) was appointed minister of intergovernmental affairs from 1993 to 1996. Stéphane Dion held the post for most of the period of our study (1996–2003), followed briefly by Pierre Pettigrew from 2003 to 2004 and Lucienne Robillard from 2004 to 2006. The federal minister of intergovernmental affairs is supported by a deputy minister and two assistant deputy ministers. There were five federal deputy ministers whose tenure overlapped the ­period covered by this study (Ronald Bilodeau May 1994 – August 1996; George Anderson August 1996 – May 2002; Claire Morris May 2002 – May 2004; Marie Fortier May 2004 – May 2006; and Louis Levesque May 2006 – December 2008). They are responsible for providing advice and support to the prime minister and minister on policies, communications, and affairs relating to federal-

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­ rovincial-territorial relations. While one ADM is responsible strictly p for intergovernmental policy the other is responsible for intergovernmental operations and works with other branches of PCO, as well as numerous federal, provincial, and territorial departments and agencies (Canada 2007, 2–3). As with all the other jurisdictions, it was not clear from officials’ comments how much impact this particular institutional machinery of the federal government had on IPC. However, as indicated in previous chapters, we did receive comments that the prime minister, federal minister, and deputy minister had personal styles and approaches which impacted IPC. Many federal officials commented on the decline of the independent policy capacity of the federal government in the 1990s and how this affected federal IPC. However, there was some consensus among many officials that the federal government, despite a significant loss of policy capacity, still had more compared to other jurisdictions. One federal official qualified this, however, by saying, in 2001, “The federal government remains the locus of policy capacity with the exception of education and health.” Officials from other jurisdictions generally concurred that federal IPC was highest in finance and trade, lower in environment, and lowest but growing in health. There was, however, variation noted, particularly related to the increasing IPC of some of the provinces in certain areas, as we see below. Speaking of trade policy, a federal official said, “In the old trade agenda the focus was on tariffs and the dominance of the federal government until the early 1990s and the Free Trade Agreement [FTA]. With the new trade agenda, the FTA, and the World Trade Organization [WTO] rounds, the provinces became more active. The feds have powers to sign agreements, but the provinces implement them.” Another federal official concurred, saying, “The federal trade department has its provincial counterparts. The provinces are on trade delegations. They are not in meetings but are consulted and this works pretty well.” A federal official noted that given the federal government’s greater policy capacity, “there is a lot of cooperation, but we can force the issue. Politics can turn into brinksmanship.” Another official, commenting on the Agreement on Internal Trade (AIT), made some similar observations, for example, “AIT cooperation is due to the feds’ ability to force issues and avoid the ‘joint decision trap.’” There is a two-edged sword to the federal government’s IPC. On one side, it can dominate with its greater resources, at times



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­ verwhelming the less-endowed jurisdictions. One provincial official o asserted that “‘consultation’ by the feds is last-minute; it is impossible for either the provinces or the feds to absorb.” On the other side, federal IPC allows it to be seen as the benevolent helper for jurisdictions unable to marshal their own resources. In commenting on the increasing role of the federal government in health, one federal official commented, “Smaller provinces are keener [for federal help] as they have less capacity.” As we noted in chapter 3, the federal government’s increased use of its spending power in areas of provincial jurisdiction, particularly to execute direct transfers to individual Canadians, exacerbated relations with provincial and territorial governments. But federal unilateralism of this sort, as unpalatable as it may have seemed to premiers, is nonetheless an example of the IPC of the federal government. As a response to both declines of federal IPC on some files and increases on others, several provincial and territorial jurisdictions acted increasingly as a collective front challenging the federal government, and in turn this affected IPC. But the varying capacities of the provinces and territories meant a kind of pecking order prevailed. As stated by one official, “When a push comes for policy, the bigger provinces push hard and the feds listen. The larger provinces have the ear of the feds. Everything in Ottawa gets put through the Quebec filter; also now [2002] through the Ontario filter and more and more through the Western filter.” Being an Eastern official, s/he added, “They never put anything through an Atlantic filter.” This opinion, however, was qualified somewhat in 2005 when Premier Danny Williams began to voice his province’s new-found (land) powers (see Bakvis, Baier, and Brown 2009) and by some other elements of regionalism examined later in this chapter.

CENTRAL CANADA Rightly or wrongly, a perception exists in parts of Canada that Confederation was intended to enrich the central Canadian provinces of Quebec and Ontario at the expense of the rest of the country. This theme recurs in many assessments of so-called ­centre-periphery characterizations of the nature of Canadian political, economic, and social power and relations. There are, of course, notorious cases of the influence of central power in Canadian history, but some of the “weight” of the centre stems from constitutional distribution of

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House of Commons seats based on population, and of Senate seats based on region wherein Ontario and Quebec each constitute distinct regions. The Ontario-Quebec composition of the federal House of Commons is 59% and their composition of the Senate is 46%, leaving the other eleven provinces and territories to share the rest of the seats. Not surprisingly then, although the concept of federalism holds that the partners are all equal, the reality of this sort of distribution does affect the dynamics of the federation. Historically blessed with large populations, abundant and varied resources, robust economies, and political power, Quebec and Ontario also, it might be assumed, enjoyed significant IPC. This assertion holds for one of the two provinces but, surprisingly, not the other during the period of our study. Quebec The place of Quebec in the federation has always inspired strong feelings, both inside and outside the province. Quebec is Canada’s second largest province by landmass and population; it has a diversified economy grounded in natural resources, manufacturing, and research, and is home to the French language and culture in North America. Since the 1960s, Quebec has evolved from an inwardlooking, rural, conservative province to an outward-looking, urban, liberal province, with a strong state apparatus and well-developed bureaucracy (Bernier 2005). Protecting its culture manifests itself in nationalism, which plays a prominent role in Quebec politics and society. Quebec is also ethnically and religiously diverse, and has historically relied on immigration to sustain its population as its growth rate until recently has been decreasing (Canada, Statistics Canada 2003 and 2006A). This concerns nationalists in the province with regard to the future of Quebec’s cultural and demographic clout in the federal system. Although technically a “have-less” province in terms of equalization, for a variety of reasons most officials viewed Quebec as a “have” province in terms of IPC. Over the period of our study, four premiers governed Quebec – successively, three from the Parti Québécois (PQ) and one Liberal. The first, Jacques Parizeau, focused less on the province’s $5 billion deficit (Dunn 2006) and more on his party’s separatist intentions, but was forced to resign after his 1995 Quebec separation referendum defeat. The next premier, Lucien Bouchard, determined



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to get the finances of the province under control, introduced funding reductions across the government (Dyck 2006, 71). By 1999, ­Bouchard delivered a balanced budget, and the province’s 2000 budget increased funding in key social areas while providing a tax cut (Dyck 2006, 73). During this period, relations with the ­Chrétien government in Ottawa were not warm and Quebec opted out of many intergovernmental forums and agreements. However, during the same period Quebec received increased equalization payments and Chrétien launched the now infamous Sponsorship Program to promote federalism in the province. Bouchard resigned for health reasons in 2001 and was replaced by his finance minister, Bernard Landry. The PQ government lost francophone support and the 2003 election, which produced a Liberal majority headed by federalist Jean Charest, former leader of the federal Progressive Conservative Party. We heard optimism from several officials in interviews at this time about what Charest’s arrival in power might mean for intergovernmental relations. Charest re-engaged Quebec in many intergovernmental policy forums after a decade of opting out and adversarial relations. He was instrumental in the creation of the COF in 2003; pursued an agenda of government modernization; and worked to “reengineer the state” and tackle a $4.3 billion deficit. Refusing to implement tax cuts, Charest was successful in balancing the budget with no tax increase by cutting non-essential spending, reducing economic intervention by the state, and tightening union laws (Dyck 2006, 73). However, Quebecers protested that Charest’s transformation ran counter to the statist tradition of Quebec (Bernier 2001, 147–8), resulting in a minority government for Charest in 2006. All Quebec premiers and politicians are expected to guard Quebec’s interests at both the provincial and federal level. More so than in other provinces, intergovernmental relations is of particular importance in Quebec due to its place in the federation and the historical disputes the province has had with the federal government. As indicated in table 9.4, it has the longest-standing intergovernmental central agency. The Ministry of Federal-Provincial Affairs was created in 1961 and constitutes the beginning of Quebec’s intergovernmental affairs apparatus. In April 1967 the department was renamed the Ministry of Intergovernmental Affairs (Balthazer 2003, 465) and the minister responsible was charged with coordinating the activities of the government outside of Quebec. In 1974 the department was

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divided into three branches: Canadian Affairs, International Affairs, and Administration. In 1984, the PQ government disbanded the ministry. Relationships with other governments in Canada became the responsibility of the Canadian Intergovernmental Affairs Secretariat, part of the Ministère du Conseil executif under the direct control of the premier. The secretariat is headed by an Associate General Secretary who is responsible for the administration of the secretariat to the Minister responsible for Canadian Intergovernmental Affairs, Aboriginal Affairs, Francophones within Canada, the Reform of Democratic Institutions, and Access to Information. The Associate General Secretary is supported by three Assistant Secretaries and three Directors (Quebec 2007A) and the secretariat is responsible for “advising the Government of Quebec on all Canadian intergovernmental matters, coordinating Quebec government activities in Canada, assuring the defence and promotion of Quebec’s interests, and collaborating to strengthen links with Canada’s francophone and Acadian communities.” As well, it is also responsible for representing Quebec in constitutional discussions (Quebec 2007B). The Secretariat maintains representation through a network of offices across Canada and is focused on five central policy groups: the Bureau du secrétaire général associé; the Direction des affaires économiques, culturelles et sociales; the Direction de la francopho­nie et des Bureaux du Quebec au Canada; the Direction des poli­ti­ques institutionnelles et constitutionnelles responsible for maintaining Quebec’s constitutional policy and analyzing federal government policies and programs from the standpoint of Quebec; and finally, in coordination with the previous four policy groups, the Direction de la réflexion stratégique (DRS) is responsible for strategic development and thinking in order to allow the government to “better situate and orient its positions and interventions with regard to federal-provincial and interprovincial relations as well as constitutional matters” (Quebec 2007B). In addition, Quebec has witnessed a proliferation of intergovernmental units within many of its government departments. Officials from across the federation concurred on the perception that Quebec had a high level of IPC. As one federal official said, “Quebec always has had strong policy capacity compared to other provinces.” Part of Quebec’s IPC, according to some officials, has come from its ability to play the nationalist card in its relations with



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the rest of Canada. A federal official claimed, “All of Quebec’s complaints [in the federation] are associated with jurisdiction and high politics.” As one Quebec official said, “Quebec has a desire for political autonomy and it is better able to deliver on social objectives by its own means in health, education, and economic development.” Another said, “Quebec is quite successful in the social policy field and can do more, better. It does not want an agenda set by the feds.” Another Quebec official put it this way: “There is a way to achieve objectives and national standards but Quebec has wanted to preserve its autonomy.” A key aspect of preserving autonomy for Quebec officials was seeing to it that jurisdictional boundaries were properly observed. In this, Quebec was sometimes joined by like-minded governments in pooling IPC. Another Quebec official claimed, “Quebec’s relations with other provinces are very good. It has special relations with Ontario and with Alberta as they are concerned with respect for the Constitution.” Another official expressed it this way: “‘Cooperative’ has a different meaning in Quebec including determining broad common objectives but being respectful of jurisdiction.” It should also be noted that Quebec is the only province with its own federal political party in the Canadian House of Commons. A Quebec official argued that since policy capacity stems from its own jurisdiction, Quebec did not want outside interference, saying, in 2003, “The progressive agenda in Quebec is jeopardized by national programs. For example student debt is not a problem in Quebec due to grants and low tuition.” This comment reflected provincial reaction to the federal Millennium Scholarship Fund for university students, which was seen as federal interference. A Quebec finance official reiterated this point, saying, “Quebec already had a good scholarship program for people in need. Ottawa’s onesize-fits-all approach misallocates resources and priorities.” Clearly the implication was that Quebec had sufficient independent policy capacity in this area to sustain its own successful programs. Other officials also noted Quebec’s particular policy capacity related to immigration policy and childcare policy. The issue of asymmetrical federalism, though not identified as such, was a repeated theme in comments about Quebec. Asymmetrical federalism is a condition in which different jurisdictions in a federation exercise different policies as a result of intergovernmental agreements that apply only to certain provinces or territories (see Institute of Intergovernmental Relations 2005). A Western official

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commented, “Quebec uses its unique position to [leverage] a better position than the other provinces and territories.” However, this official also noted this does not always translate into superior outcomes: “Although Quebec has gained more than the other provinces, the difference between Quebec and the other provinces on health care is not important.” A Quebec official commented, “The Quebec way of doing things creates some jealousy and love-hate regarding resources to intervene in the intergovernmental file and in always waiting for Quebec’s position. Some use Quebec’s position or feel betrayed if Quebec is not on board, with SUFA [the Social Union Framework Agreement], for example. Others like to see Quebec go through the door first.” An Ontario official said, “Quebec, although a ‘have-not’ province, is not as dependent [on the federal government compared with the Maritime Provinces], but has close ties with the federal government. Quebec has an independent view, not so much a dependent relationship.” There is also the proclivity of successive Quebec governments to expend IPC through seeking relations with foreign countries. Quebec officials, however, were cognizant of the watchful eye of the federal government in ensuring this was not used as a basis to legitimize sovereignty. As one official said, “It is difficult for provinces to get into international bodies. The feds are always present at international meetings. [Still] in trade we are very active internationally. The feds accept provincial involvement in international trade due to the 1937 Labour Convention case” (see chapter 6). The Quebec government also used existing federal-provincial-territorial institutions to its advantage when possible. For instance, a Quebec official pointed out that “Quebec is fully participating on Team Canada [overseas trade missions]” with Ottawa and the other provinces and territories. Another said, “Quebec accepted the Team Canada approach. It was not our first choice but we saw the interests of Quebec and created our own team.” Unlike several other “have-less” provinces and territories, Quebec had the IPC to do so. Many officials identified Quebec as the jurisdiction with the most IPC, next to the federal government. This is not surprising, given that: Quebec has the longest-standing intergovernmental expertise and machinery; Quebec has always put a concerted effort into intergovernmental relations in many different policy areas; the Quebec intergovernmental machinery is generally well endowed with regard



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to budgets and personnel; and Quebec has made a sustained effort to increase its international relations as part of its intergovernmental approach to policy. Ontario Ontario has benefited from a diversified economy, including an abund­ance of natural resources in the north and prime agricultural land in the south (Dyck 2009, 27). A skilled labour force and proximity to the United States helped to produce a large manufacturing sector, and the province has long led in the tertiary sector, in areas such as finance, services, and the knowledge economy. Ontario’s preeminent place in Confederation could be attributed to its economic size as the “engine of Confederation” and its population, which gave it the largest number of seats in Parliament and thereby assured its interests and those of the federal government were often congruent. These conditions prevailed until political and economic circumstances changed in the 1980s and 1990s. In 1984 the Conservative Party under Brian Mulroney came to power federally with a coalition of voters forged from among alienated Westerners and soft nationalists from Quebec, eroding Ontario’s traditional political power base with the federal government. ­Mulroney instituted a new national economic policy of free trade with the United States which helped transfer economic power and influence out of Ontario. In addition, the new-found wealth of Western Canada, especially Alberta, due to high world prices for resources intensified the shift in the balance of economic power in the federation. The emergence of Ontario as a North American region state (Courchene and Telmer 1998) meant that, like many other jurisdictions in Canada, its historical east-west orientation has been increasingly supplanted by a north-south one. Consequently, Ottawa and Ontario have apparently less and less in common. Moreover, these developments have been accompanied by the ­province’s assertion that it needs more federal dollars to remain economically competitive, a supplication that remained largely unheeded. The result is that by the mid-1990s it was said Ontario’s “position of dominance is threatened, its interests no longer necessarily coincide with those of Ottawa, and Ontario has its own grievances to pursue and its own interests to defend” (Cameron and Simeon 1997, 159).

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­ onetheless, Ontario was an important player in intergovernmental N relations with long-standing machinery and expertise, and a comparatively large budget and personnel. During the period of our study, Ontario’s Conservative Premier Mike Harris carried on the fight initiated by his predecessor, New Democratic Party Premier Bob Rae, to increase federal funding to Ontario in the post-CHST context, despite poor relations between Premier Harris and Prime Minister Chrétien. Harris engaged in public sector cutbacks and government downloading, with the consequence that provincial policy shops were “badly hit.” In addition, he engaged the federal government in a fight over tax harmonization and the new round of tax collection agreements then being negotiated with Ottawa. When the Conservative government lost power to a Liberal government under Dalton McGuinty, many officials we interviewed during this period commented optimistically that this would change Ontario-federal relations and Ontario’s relations with other provinces and territories. However, McGuinty inherited a difficult fiscal situation. His government decided to put the “fiscal imbalance” fight with the federal government front and centre in intergovernmental relations. The vertical fiscal imbalance is the difference between what Ontario contributes to the federal government’s coffers through taxation and what the province receives back (per capita). First identified by Premier Rae in 1995 and pegged at $2 billion, by 2003 this amount ballooned to an estimated $23 billion (Ontario Chamber of Commerce 2005). Ontario asserted that the vertical fiscal imbalance compromised its ability to provide quality public services, threatened its economic competitiveness, and severely constrained its ability to provide health care services and to work with municipalities to upgrade aging infrastructure. In 2005, the Ontario Chamber of Commerce recommended Ontario band together with Alberta to lobby the federal government to address the fiscal imbalance (Ontario Chamber of Commerce 2005, 13). But little came of Ontario’s efforts; the constellation of political and economic interests which had aligned in the past to ensure Ontario a place of “preeminence” (Noel 1997) had passed. Since 1961 when the Ontario Department of Economics and Intergovernmental Relations was created, the province has had dedicated resources and staff for intergovernmental relations. The institutional home of intergovernmental relations in finance went through



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v­ arious changes until 1978 when a separate department was split off and a separate Ministry of Intergovernmental Affairs (MIA) was created. The MIA originally had responsibility for municipal affairs, but this was changed in 1981 when the Ministry of Municipal Affairs and Housing was created. Since 1985 the ministry has had an International Relations Branch and by the 1990s was composed of three main divisions: Canadian Intergovernmental Relations, Intergovernmental Policy Coordination, and International Relations and Protocol. The MIA’s primary goal is to provide strategic policy advice on intergovernmental issues. The MIA went through some significant changes during the period of our study. The budget for the unit declined by 53 percent between 1990 and 2002, from a high of $10.1 million to a low of $4.5 million (Johns, O’Reilly and Inwood 2007). Budget cuts had direct implications for intergovernmental personnel (see tables 9.2 and 9.3) and the staff complement went from a high of 87 in 1990–91 to a low of 40 by 1997–98 (Johns, O’Reilly, and Inwood 2007). However, despite these cutbacks in Ontario, its expenditures on intergovernmental units still exceeded that of the other provinces and territories. Despite the fiscal imbalance with Ottawa, after the election of the McGuinty government, there was a new outlook on the need to improve relations with Ottawa and re-invest in intergovernmental affairs. Several officials commented on this changing of the guard (combined with the election of Premier Jean Charest in Quebec) in the hope that it might bring about improved relations, and therefore greater IPC. In 2004, an Alberta official said, “The ability of the provinces to stick together depends partly on the new Ontario government. The previous Ontario government had poor relations with both Ottawa and its own bureaucracy. It could evolve now to ease tensions.” Some Ontario intergovernmental officials felt the MIA had the right level of staffing, despite funding reductions to the ministry between 1995 and 2002. Regarding the number of employees, an Ontario official commented, “The feds have overkill. Quebec has twice the numbers of Ontario.” The implication was that Ontario got by well with fewer resources. Another Ontario official noted that numbers are not the only indicator of IPC, suggesting, ­“Federal IPC has increased in the last decade and Ontario’s IPC is smaller in terms of machinery, but we have capacity in terms of thinking – thinking outside boundaries.” The veracity of such a position is, of

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course, impossible to measure, and indeed a federal official disputed the claim, saying, “Ontario has less knowledge due to its down­sizing of capacity. You can see it in health where they are overwhelmed. Now health is floundering because Ontario doesn’t have the capacity.” Still, a finance official from Ontario remarked, “Relative to other provinces, our policy capacity is quite comparable, and perhaps better than many.” Another official, however, expressed concern over Ontario’s IPC, saying “Our IPC is not good. Policy is so large. There is so much thinking out there. It is hard to know who is being brought in. There are so many technical factors, so many dimensions, change, and global aspects.” Ontario’s shifting position in the federation was commented upon by several officials, including one from an eastern province who said in 2003 that the following factors were affecting its IPC: “Harris’ fair share federalism and the movement away from cost-share federalism and a focus on equalization; the lawsuit regarding the cap on the CAP [Canada Assistance Plan] launched by Ontario; the move to a notion of mathematical equality under the CHST; and Ontario’s north-south trade flows and internal trade balance.” An Ontario official noted, “The fiscal imbalance is increasingly an argument. The result is we do not work together [with the federal government]. They have a lot of capacity with good people, but we seem to be in our two solitudes.” Because Ontario insisted the provinces and territories coordinate their efforts to restore funding to the CHST rather than increase equalization, another official asserted, “Ontario being against equalization creates tension.” However, Ontario officials’ comments indicate a high degree of cooperation overall between Ontario and the other provinces, a factor which contributes to overall IPC. One Ontario official said, “Ontario’s relations with other provinces are [such that we have] personal and professional networks and candid relations. We can rise above problems if people are honest.” S/he did caution, though, that “trust is important. Relations vary with some jurisdictions.” Of its neighbour, Quebec, one Ontario official remarked in 2001, “Quebec isolates itself, but relations are good between officials.” By the end of our study period Ontario seemed to be reinvesting in IPC. In 2004 the ministry’s budget was $13 million, reflecting also Ontario’s role as co-chair of the COF that year. There were indications that the ministry was also reflecting on its capacity strategically (Ontario 2007) and had established an internal “community of



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­ ractice” initiative to connect the growing number of intergovernp mental officials across various ministries. However, Ontario’s antagonistic relationship with Ottawa did not ease, and seemed to sour after the election of the minority Harper government in 2006, when the province found itself increasingly isolated over the issue of equalization. The fact that Ontario moved into the ranks of the “have-less” provinces by 2010, a development unprecedented in its history, simply confirmed the significance of the shift going on in the Canadian federation. In any event, the undiplomatic comment by federal Finance Minister Jim Flaherty (former Ontario finance minister under Mike Harris) in 2008 that Ontario was not a good location to do business infuriated Premier McGuinty and his government. So too did the claim by federal Environment Minister John Baird (another former Harris cabinet member) that McGuinty was the “small man of Confederation.” These incidents signalled the persistence of the rift which had opened up between Ottawa and Ontario. Likewise, without increased federal transfers, Ontario’s ability to deal with an aging infrastructure and increased demands on the health care system remained questionable. However, sensing the need to win more urban Ontario seats, by 2008 Prime Minister Harper was seeking to mend relations with Ontario, while McGuinty was seeking new fiscal arrangements as the province prepared to enter the ranks of the “have-less.” The two governments agreed in 2009 to harmonize the provincial sales tax with the federal Goods and Services Tax and worked together on infrastructure stimulus programs, signalling p ­ erhaps yet another new turn in the Ottawa-Queen’s Park relationship.

THE WESTERN PROVINCES The three Prairie provinces and British Columbia have long been thought of as a region with a shared set of policy goals in federalprovincial-territorial relations. Although there are many factors that have contributed to Western alienation and regional cooperation (Elton 1988), contrary to conventional wisdom, the four Western provinces do not always constitute a region for the purposes of intergovernmental relations. Although all four have similar historical economic foundations which often led to tensions with Ottawa (Elton 1988), they differ markedly in ideological and

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­ olitical ­characteristics, “have” versus “have-less” status, demogp raphy, bilateral relationships with Ottawa and with each other, as well as other factors. Treating the Prairie provinces as a cohesive region has for some time been criticized (Gibbins 1980). “Over time the West has become increasingly four distinct provincial societies, economies, and political cultures and less a homogeneous region which approaches the national government and participates in intergovernmental processes on the basis of a shared agenda and common set of concerns” (Thomas 2008, 7). While geographically these four provinces can be characterized as “Western,” despite collaboration on some intergovernmental issues and having an institutional forum in the Western Premiers’ Conference (WPC) to do so, they each fundamentally pursue their own goals, partly due to partisan differences and less willingness of premiers and provinces to pursue joint action through the WPC (Meekison 2004). For most of the period of our study all but Alberta were “have-less” provinces, but since then, only Manitoba has consistently remained a recipient of equalization payments. These developments highlight the need to analyze each of the Western provinces individually in examining IPC. Alberta Alberta has a unique and interesting demographic position as a mid-sized province in the federation. Its population has consistently grown, particularly during the period of our study, with its 3.5 million residents accounting for just over ten percent of the national population (Canada, Statistics Canada 2006A). Its distinctive political culture and unsurpassed prosperity from resource revenues make it a province pas comme les autres in the Canadian federation. Alberta is a “have” province and, as in other jurisdictions, politics and the economy are entwined. Economically, Alberta was historically an agriculturally based economy producing wheat, other grains, and livestock. In the 1980s, 1990s, and into the new millennium, Alberta emerged as an economic powerhouse due to development of the oil sands and rising oil prices. Although the economy in Alberta diversified during the past two decades, a political economy of resource exploitation, a unique political culture, and deep-rooted feelings of western alienation which are “central to the regional identity of Albertans” (Gibbins 1992, 70) has frequently produced



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tense federal-provincial relations and defined a certain type and level of IPC in Alberta. Politically, the province is accustomed to long periods of one-party dominance, first with the Social Credit Party (1935–71) and then with the Progressive Conservative Party (1971-present). “Successive provincial governments have adopted a position best described as one favouring provincial rights. Indeed, Alberta has been unswerving in its belief that strong provinces make a strong federal system” (Meekison 1992, 248). This position has been reflected in the mandate of Alberta’s intergovernmental machinery. In 1972 the Department of Federal and Intergovernmental Affairs Act formalized a minister’s office “to monitor activities in this area and to assess the consequences of federal spending for provincial priorities” (Meekison 1992, 251). Alberta was the first jurisdiction to put the mandate of a specialized department and officials into law, although other provinces like Quebec and Newfoundland and Labrador soon followed (Warhurst 1987, 264). The department was restructured several times throughout the 1970s and 1980s, and its purview expanded. During the constitutional negotiations in the 1980s and 1990s, like other jurisdictions, it enhanced its IPC as reflected in its growing machinery of government, budget, and personnel levels­ (Pollard 1986). During the period of our study, the economy preoccupied the Alberta government and had an impact on its IPC. The role of government in Alberta society and in the federation was clearly influenced by the neoconservative ideology of privatization, deregulation, and a withdrawal of the state from the economy. As part of declaring war on the provincial deficit, Conservative Premier Ralph Klein began a series of public sector cutbacks averaging twenty percent of government department employees between 1994 and 1996 (Smith 2001, 297). By 1995 the size of the Alberta public service was less than 20,000, down significantly from just over 35,000 in the early 1980s (LeSage 2000, 401). Budget reductions had a significant impact on Alberta’s internal and external policy capacity. Some foreign offices closed (except for those in the Asia Pacific Rim, indicating the province’s new regional economic priorities), and offices and departments were consolidated and reorganized (Elton and McCormick 1997, 217). From 1990 to 2002, the Alberta Ministry of International and Intergovernmental Relations saw a thirty-nine percent decline in expenditure and a seventy percent decline in personnel (Johns, O’Reilly, and Inwood 2007).

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By 1997, the department consisted of two sections: International Relations and Canadian Federalism. The department also consisted of two major policy teams: the Trade Policy Team and the Social and Fiscal Policy Reform Team. Major restructuring of the department in 1998 added a new responsibility reflected in a new name – the Department of Federal and Intergovernmental and Aboriginal Affairs – but by 2001 Aboriginal affairs were transferred to the newly created Ministry of Aboriginal Affairs and Northern Development. The ministry’s several reorganizations, and especially those between 1997 and 2005, reflect an increasingly specialized approach to achieving Alberta’s intergovernmental and international goals. By the end of our study period, the Ministry of International and Intergovernmental Relations consisted of five divisions: Canadian Intergovernmental Relations, International Relations, Trade Policy, Corporate Services, and Corporate Communications. The ministry’s main goals were: to advance Alberta’s interests in the federation at the COF and First Ministers’ Conferences; to promote the idea of an elected Senate; and to advance Alberta’s interests internationally by opening an international office in the United States, by participating in trilateral North American energy summits and trade missions to China and Korea, and by promoting trade and investment liberalization domestically and internationally (Alberta 2005A, 11–13). Between 1995 and 2005, the department’s budget remained relatively stable, as indicated in table 9.2, despite cutbacks in Alberta’s expenditures in many other sectors. Alberta’s IPC was also directly affected by the steadily increasing price of oil post-2000, as the province’s total income (GDP) rose 43% between 2002 and 2005 (Cross and Bowlby 2006, 3.1) making the province the wealthiest in the federation. Alberta’s financial position during the period of our study was the brightest in Canada, with soaring oil prices, rising grain prices, and a growing service and technology sector. Alberta was an ally with Ontario over “fair shares federalism” and the fiscal imbalance, particularly when the Harris and Klein governments were both in power. For most of our study period the two provinces were the only “have” provinces in the nation. Intergovernmental tension ensued, however, over Alberta’s position on environmental policy, especially regarding the Kyoto Accord; health care, especially regarding privatization; and fiscal federalism, especially regarding equalization and the province’s rapid economic growth. By 2005 Klein was able to eliminate the provincial debt. For



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one official the provincial finances were an important factor in IPC. “We have had success in finance,” s/he said in 2004, “We have $13 billion in assets that are well-run and a great success. Good corporate governance is important. Klein has put a good structure in place regarding accountability etc.” However, this official cautioned, as did other officials, that money does not always translate into IPC. “But even when dealing with billions of dollars there are still no guarantees you will not have problems,” s/he concluded. Unique to Alberta was the sense of frustration articulated by officials over the negative characterization resulting from its economic success. One official complained, “The problem in Alberta is economic growth. We are almost penalized for it.” Revealing one of the fault lines which make it difficult to achieve interprovincial unity under Alberta’s leadership, this official went on to say, “We are frustrated when the feds do regional development stuff. We have a philosophical objection. The government is bad at picking winners and losers. There is better potential if money goes to research and development and universities. This is more [regional economic development] in Quebec and Atlantic Canada.” Another qualified Alberta’s position on equalization by placing it in an ideological context, suggesting, “Alberta doesn’t complain about equalization in general. The anti-regional development stance is about staying out of the business of business.” One official noted the impact of Alberta’s economic position on IPC, saying in 2004, “We are taking a long-term view on fiscal policies. Social policies require a short-term response due to pressures. You try to get the right mix. We are not interested in just trying to buy jobs.” A few officials commented on Alberta’s relations with other provinces and how these affected its own IPC: “With regard to provincial relations, in the 1990s Alberta’s relations were best with Ontario and Quebec,” said an official, further explaining, “We all want to preserve provincial policy flexibility. Our independent means and political cultures are unique to the country.” However, sustaining any kind of big-province partnership was a challenge, as this official explained in 2001: “The Ontario-Alberta alliance comes and goes. Ontario is acting in its own self-interest and Alberta is doing the same. Alberta, Ontario, and Quebec have different motivations.” S/he also noted, “There is a new alignment coming, forcing the ‘have’ provinces, the larger provinces, together. This is showing up in other places like the federal-provincial-territorial ­conferences. In

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S­ eptember 2001 [at the FMM] we had a ‘have’ and ‘have-not’ split. It is tough for the Atlantic Provinces to play a big role. We are moving to big provinces playing hardball.” There was also some resentment building toward the Atlantic provinces. This same official from Alberta noted in 2001, “The focus is shifting for the feds to horizontal equity rather than vertical equity, to the point where the Atlantic provinces are asking why we [the wealthier provinces] are getting CHST money.” Yet, as a “have” province bursting with wealth, Alberta’s new-found power and status meant its l­ ong-standing grievances finally had to be addressed, according to an official in 2004: “As [equalization] contributors, Albertans want to be listened to.” Alberta has increasingly assumed a mediating position between Ottawa and the provinces, according to one official in 2004, due to Ontario’s relinquishment of this role as of late, most notably over disputes about the fiscal imbalance. Explained an official, “Ontario used to be the diplomatic centre, but federal-Ontario relations turned sour [in the late 1990s and early 2000s]. There was more of a ‘what’s in it for Ontario?’ attitude. So Alberta took the role of a moderating influence between some provinces who want everything through equalization and Ontario who wanted funding through the CHST. Alberta is in the middle.” Like other jurisdictions, Alberta has bilateral relations and alliances which are part of its strategic IPC. Said an official in 2004, “There is a British Columbia-Alberta alliance. For example, the executives of health departments have met.” But there are limits to regional alliances according to the same official, who also noted, “However, a Western bloc doesn’t make sense. There is little in common between Alberta and Saskatchewan or Manitoba. We are very different. The latter two always line up with the feds. There is a British Columbia, Alberta, Northwest Territories, and Yukon alliance with some shared political agendas and we have some things in common with other provinces that are non-political. But the health agenda is unique since it is so narrowly ideological. In environment [with the Kyoto Accord] the bureaucrats are not so ideologically split. We all agreed on a plan but disagreed with the implementation timetable.” Overall, policy capacity in Alberta seems to be comparatively high, particularly in the policy areas we examined, and this has translated into some IPC. In some policy areas like environmental policy, this IPC has been characterized as negative (Rabe 2007). This is p ­ artially



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explained by the history of Alberta in the federation and by its own policy capacity as a “have” province – particularly during the period of this study. It may also be partially explained by the longstanding politics and political leadership of Premier Klein. Political capacity related to finance, organizational capacity related to trade, aggressive policy against Kyoto, and intergovernmental confidence and defiance related to health all contributed to defining Alberta’s role in IPC during the 1995–2005 period. Finally, Alberta officials seemed to focus specifically on the significance of Alberta’s role in regional and interprovincial-territorial dimensions of IPC for leverage against the policy actions and directions of the federal government. Not unlike Quebec, Alberta illustrates the case of having high capabilities for IPC, but a preference for limited policy engagement with the whole federation. Manitoba Manitoba joined Confederation in 1870, following the suppression of the Riel Rebellions. In the hundred years that followed, Manitoba evolved into a thinly populated province with fairly cooperative relations with the federal government and good working relations with its western neighbours and Ontario. Like its two neighbours to the west, Manitoba’s economy has been dominated by resource extraction and export, agriculture, and forestry, along with hydroelec­ tricity and some manufacturing and service-based industries. Sixty percent of the population of the province is located in the Winnipeg capital region, representing almost seventy percent of the province’s political economy (Thomas 2008, 9). The 1990s were a period of significant political and economic change in Manitoba. The decade began with the Progressive Conservatives in control of the provincial legislature under Premier Gary Filmon. In response to the economic slowdown in the early 1990s, Filmon’s neoconservative government made extensive budget cuts to education, health, social services – pleasing some and alienating others (Netherton 2001, 227). Blunt though his policy instruments may have been, Filmon balanced the province’s books by 1995, reported a surplus, and was re-elected in 1995. However, by 1999 there was a growing discontent with the extremity of the cuts made to the province’s social services and the ideological orientation of the Filmon government, and Gary Doer and the NDP were elected.

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Premier Doer’s approach to intergovernmental relations has been described as “pragmatic, problem-specific, cautious, and driven by the political dynamics of the issue under consideration rather than by some overarching theory of federalism ... [where] networking, negotiations, the mobilization of support, and creative accommodation of differences are central to this approach. Avoidance of strong, fixed initial positions and of personalizing disputes is also a feature of this approach” (Thomas 2008, 13). The fiscally conservative, socially responsive, and balanced approach of the Doer government was also popular with the electorate and won him re-election in 2003 and 2007. In addition, for most of this period many of the economic and social policy positions supported in Manitoba matched up closely with those on the national policy agenda. Doer’s expertise at bringing together different groups and reaching a consensus on policy directions, and his lengthy tenure as premier, positioned him as a leader in the Canadian federation. Doer was one of the most ardent supporters of Quebec Premier Jean Charest’s idea of the COF as a forum for provincial and territorial leaders. The friendship between Doer and Charest dated back to the Meech Lake Accord days and “their shared belief in a new style of politics which abandoned traditional left-right debates and searched instead for governing approaches which would work” (Thomas 2008, 14). Doer also conducted “extensive bilateral relations with other premiers and their governments” (Thomas 2008, 13). For example, he also worked with Progressive Conservative Premier Bernard Lord of New Brunswick (1999–2006) in opposing federal government unilateralism and ad hoc funding arrangements with the provinces, also illustrating that governments of different political and ideological orientations in the federation can have similar positions and alliances. While officials from other jurisdictions sometimes labeled Manitoba as a bit too “simpatico” with the federal government, this “have-less” province has played a role as a champion of provincial and territorial interests and as a mediator of federal-provincial­territorial conflict. In Manitoba, the premier serves as the Minister of Federal-Provincial Relations, overseeing a unit within the Premier’s Office. Jim Eldridge held the post of Deputy Minister of Federal-Provincial Relations from 1991–2004, with responsibility for carrying out the intergovernmental priorities set by the premier and cabinet. During part of this tenure he also served as Secretary to Cabinet. Eldridge’s



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long tenure is unusual compared to other deputy ministers in intergovernmental relations, and in some interviews we heard this had a positive impact on the level and nature of IPC in Manitoba. This relationship element was also important at other ranks in the public service. “Mutual understanding, trust, and confidence between the premier and senior public servants have been an important basis for the scope of activity and degree of influence achieved by Manitoba” (Thomas 2008, 16). Manitoba also has an intergovernmental unit in the Ministry of Finance, the Federal-Provincial Relations and Research Division. According to officials from both units, there are good day-to-day working relations between intergovernmental officials in finance and the Federal-Provincial Relations Office. The two central agency units also reportedly have good working relations with line departments and Manitoba’s Ministry of Intergovernmental Affairs (created in 1999 by the merger of the Department of Urban Affairs and the Department of Rural Development), which is responsible for provincial-municipal relations in the province. The inclusion of municipal relations was a strategic decision to signal the increasing importance of local governments in intergovernmental relations, although federal-provincial-territorial relations continued to reside with the premier. In addition, during the period of our study, the Federal-Provincial Relations Office was increasingly orienting its work toward Manitoba-US relations. Interestingly, in 2009 Prime Minister Stephen Harper appointed Doer Canadian Ambassador to Washington. Officials from Manitoba also noted that they had good working relations with Ottawa, particularly at the departmental l­evels. According to one official, “A benefit in Manitoba is every department has relationships with other provincial and federal departments.” But part of Manitoba’s IPC has been dedicated to inter-provincial policy work. As one official explained, “What we have been able to do interprovincially has been remarkable, without involvement of the federal government, for example in health and post-September 11th.” Manitoba has also been strategic with its IPC; being a small juris­ diction, this is a necessity. According to one Manitoba ­inter­governmental official, “Policy capacity is commensurate with the size of the jurisdiction.” This key factor can be problematic for small governments seeking to play large roles. As one official complained, “The government trumpets diversification; I curse it because

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if the government has new issues, we get them. We have few policy resources, but a large demand. So we must pick our spots.” Interestingly, it has also recently been noted that “the province has more often looked east rather than west to find allies on intergovernmental issues and to engage in ‘policy borrowing’ from other jurisdictions” (Thomas 2008, 15). Manitoba seems to be particularly strategic related to IPC in trade policy and, like other jurisdictions, has been increasingly engaged in north-south intergovernmental work. The province has applied a “networking approach” to expand its activities in the c­ ross-border and international arena (Thomas 2008, 16). Bypassing Ottawa and Washington, Manitoba initiated bilateral and multilateral relationships with American states like Texas and Illinois in recognition of their key importance both to the economy and on issues like the environment and security (Doer 2005). This accounted for a growing expenditure of IPC in Manitoba in the period of our study. Overall, several factors contribute to a disproportionate level of IPC in Manitoba. The long tenure of the premier and s­enior intergovernmental officials are particularly notable. The small scale and good working relationships between the central agency intergovernmental officials and line department officials are also ­notable. Strategic orientation on certain policy files, a general outward orientation, and more emphasis on interprovincial-territorial relations, are also evident. Finally, the development of north-south inter­governmental networks in the past decade reflects Manitoba’s IPC. Clearly “skilled leadership, friendships, and trust relationships make a significant difference to the success of a smaller provincial ­government like Manitoba” in “punching above its weight” within the ­federal system (Thomas 2008, 17–18). Saskatchewan With a political economy characterized by resource-dependency, Saskatchewan has historically suffered a repeated boom-and-bust cycle in its history as a province since 1905. Primarily an agriculturally based economy producing wheat, other grains, and livestock, as with Alberta, oil and petroleum production has also been of increasing significance to Saskatchewan’s economy, along with the mining of potash and uranium. Manufacturing and service-based sectors have also emerged in the province, although, natural resources



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c­ ontinue to dominate. The font of Canadian socialism, this sparselypopulated province developed its intergovernmental infrastructure later than other provinces (Leeson 1987) but has frequently played a larger role in intergovernmental relations than its size suggests. Intergovernmental relations in Saskatchewan has long been influenced by the ideological goals of the party in power and the fusion of political and provincial economic interests (Leeson 1987, 419). The 1991 election of the NDP under Roy Romanow marked a new period in Saskatchewan’s political economy wherein state autonomy was reduced due to a number of factors, including globalization, neoconservative ideology, and reductions in federal transfers ­(Rasmussen 2001, 242). The resultant reorientation of the state’s role from active player to passive participant effectively meant the end of the entrepreneurial state in Saskatchewan, one that dominated from the 1944 election of Tommy Douglas and the Cooperative Commonwealth Federation (CCF) and lasted through Grant Devine’s Progressive Conservative regime (Rasmussen 2001). Romanow had been intimately involved in the constitutional wars of the early 1980s when, as Attorney General of Saskatchewan, he helped negotiate the famous kitchen deal which resulted in patriation of the Constitution in 1982. As such, he held an abiding interest in questions of national unity and intergovernmental relations (Marchildon 2004). As a vocal critic of the Devine administration’s fiscal mismanagement, the Romanow government had little option but to tackle the province’s rapidly deteriorating financial situation. The Romanow government faced internal pressure to continue propping up failing crown corporations, spending on a variety of social programs, and deficit financing, at the same time as the provincial public began to realize the impracticality and fiscal consequences of the province spending money it did not have (MacKinnon 2003). In the 1990s, the government therefore initiated a series of major public finance reforms that included the reorganization and sale of some of the province’s major crown corporations, across-the-board reductions in spending (except in social program spending), public sector layoffs, and tax increases. The 1993 budget was successful in leading to a balanced budget three years later. Coupled with factors external to the province (such as decreased federal social transfers, the impact of NAFTA, and pan-Canadian budgetary constraints) massive public service firings of the paranoid Devine regime (which were ­undertaken to wipe

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out all vestiges of the former NDP government) had resulted in a diminished strategic focus for policy-making activities ­(Rasmussen 1999, 335). The Romanow regime was followed by NDP Premier Lorne Calvert from 2001 to 2007. Calvert took a fiscally cautious approach to governing. Like his counterparts in Nova Scotia and Newfoundland and Labrador, he engaged the federal government in a war of words over the clawback of non-renewable resource revenues from the equalization formula. Rasmussen’s interviews with senior public servants in Saskatchewan reveal awareness among the officials of the process-challenges facing the province’s public service at the time (Rasmussen 1999). Attraction and retention of highly competent individuals was one part of the challenge, but other factors also contributed to Saskatchewan’s diminished policy capacity. A prolonged, narrow focus on balanced budgets and debt reduction meant other public policy goals were secondary, if considered at all. No long-term strategic plans were undertaken, resulting in policy paralysis. Added to this was a lack of clear communication of the government’s goals and vision from cabinet to deputy ministers, which resulted in simmering tensions between the centre and the departments. Rasmussen does point out, however, that senior policy officials in Saskatchewan were aware of the challenges facing them, and demonstrated a desire to bring more rigour to their internal policy process (Rasmussen 1999), and our interviews revealed a reinvestment in the public service in the early 2000s. Interestingly, IPC appears to have been enhanced during this time of diminished provincial policy capacity; but first some background. The machinery of intergovernmental relations in Saskatchewan is marked by a series of almost non-stop restructuring exercises. Prior to the 1970s, most intergovernmental relations were handled by the Department of Finance (Leeson 1987). The first Intergovernmental Affairs unit in Saskatchewan was established in 1974–75, in the Planning and Research unit of the Executive Council Office with a Director, three officers, and two clerical staff, as a research not an operational agency, with no legislative mandate (Leeson 1987). In 1977–78 the unit’s responsibilities were transferred to the new Office of Intergovernmental Affairs reporting directly to the ­premier, in the context of the Parti Quebecois being elected in 1976, heightened constitutional negotiations, and the provincial government pursuing an entrepreneurial agenda related to its new



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ownership of several crown corporations in the natural resource sector. Extra staff were hired, including an expert on Quebec (­Leeson 1987, 409–10). In 1979 a formal Department of Intergovernmental Affairs was established and was initially composed of three separate branches: the Constitutional Branch, International Affairs Branch, and Intergovernmental Coordination Branch. Although the legislation establishing the department was modeled on Alberta and initial proposals for staffing considered a department comparable to that in Alberta with a complement of forty people, internal tensions with the Department of Finance resulted in a staff of twenty. Thus the new department “was considerably smaller and had less authority than its counterparts in Alberta, Quebec, and Ontario” ­(Leeson 1987, 411). The department expanded and reorganized several times during the 1980s. Although its functions broadened to include, among others, responsibility for Aboriginal affairs, it was characterized as “primarily a program department, and its program is the constitution” (Woolstencroft 1982, 79). In 1983 the department was dismantled and became a Branch in the Executive Council Office, which it remained for the 1980s. The Intergovernmental Affairs Branch in the Executive Council saw a 48 percent increase in its expenditure from 1990 to 1996. In 1996, the Department of Intergovernmental Affairs was ­re-established and between 1996 to 2002 expenditures increased by 13 percent (Johns, O’Reilly and Inwood 2007). Personnel also more than doubled in the period 1996–2002, as the Department of Intergovernmental Affairs grew from thirty-nine full-time equivalents (FTEs) in 1996 to eighty-five FTEs in 2002. In 2002, portions of the Department of Intergovernmental and Aboriginal Relations and the Department of Municipal Affairs and Housing were brought together to become the Department of Government Relations and Aboriginal Affairs. In 2005, the Department of Government Relations and Aboriginal Affairs was split into the Ministry of Intergovernmental Affairs, the Ministry of First Nations and Métis Relations, and the Ministry of Municipal Affairs. The Ministry of Intergovernmental Affairs at time of writing had two main divisions: Trade and I­ nternational Relations, and Federal-Provincial Relations. It is not clear from interviews how significant these ongoing restructuring initiatives may have been for IPC. To the extent that officials commented specifically on Saskatchewan’s IPC compared to other jurisdictions, the comments tended to

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suggest that this small province, like Manitoba, punched above its weight. One Saskatchewan intergovernmental official summarized the nature of this capacity, in 2002, by suggesting: In Saskatchewan we have had more than ten years of quality and commitment of resources. Using my own definition of IPC, [I would say] most other provinces are weaker. Why? In Saskatchewan Premier Romanow valued the significance of federalism and being influential in federal-provincial relations. He valued the application of intellect to these questions. He brought in good people, senior academics and lawyers. His key departments had intellectual capacity and a broader commitment to a professional public service. He established Government Relations and Aboriginal Affairs as a separate department in 1993–94. It took the lead on the Social Union Framework Agreement and an ADM position was created to support this work in 1999. In short, as we saw in Manitoba, political will and interest in intergovernmental relations meant that this province exercised IPC to a greater degree than its size might indicate. Saskatchewan is a jurisdiction that is small, but strategic. Its intergovernmental machinery places an emphasis on quality of personnel, not quantity. Officials from across Canada often spoke highly of the quality of the Saskatchewan public service, and referred to movement of personnel between the Saskatchewan government and the federal and other governments, noting the positive effect this, and other intergovernmental personnel exchanges like it, had on the IPC networks across the country. In addition, Saskatchewan possessed a well-respected and committed premier in Romanow who, after a period of downsizing, valued investment in intergovernmental relations. The province has also long fostered the development of a cadre of professional intergovernmental officials. All of these factors added up to an impressive quotient of IPC. British Columbia British Columbia is geographically, politically, and culturally a province apart from the rest of Canada. Situated on the Pacific coast, ­British Columbia is Canada’s westernmost province. Having a smaller population than Ontario and Quebec, and therefore



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r­elatively less political influence nationally, and a resource-based economy alternately exploited or ignored by central Canadian economic interests, British Columbia has at times had strained relations with Ottawa and a sense of alienation. Great expanses of forests have made the province a leader in the forestry sector while also specializing in the mining of natural gas, copper, and coal. Fertile valleys carved out of the Rocky Mountains have encouraged the development of an agriculture sector while fishing is also a significant industry. Several dams have been erected on provincial rivers to produce hydroelectricity while manufacturing primarily supports the forestry, mining, and agricultural sectors (Dyck 2009, 26–7). British Columbia was a “have” province for most of the 1980s, but poor economic conditions in the 1990s and early 2000s saw it become a “have-less” province. British Columbia has been described as having moved from a frontier staples, to a mature staples, to a post-staples political economy (Netherton 2001, 326). Marked by a history of regionalism and preference for provincial, over federal, politics, British Columbia is in many ways an outlier in the Canadian federation. The political landscape there has been described as ideologically polarized and support for federal and provincial political parties is volatile, and can shift from one party to another between elections and therefore affect the premier’s position in executive federalism. In 1975 the Office of the Premier established a department to oversee intergovernmental relations, executive council administration, and constitutional reform issues. These responsibilities were transferred to the newly created Ministry of Intergovernmental Relations in 1979. Political leadership changes (discussed below) resulted in changes to the intergovernmental machinery and personnel. In 2002, the Ministry of Intergovernmental Relations was disbanded and its responsibilities transferred to the newly created Intergovernmental Relations Secretariat, a central agency in the Office of the Premier. The secretariat is composed of five sections: federal-provincial relations, international section, strategic services section, protocol and events branch, and francophone affairs. With five different premiers from 1995 to 2005, three of whom resigned because of scandal, provincial politics in British Columbia could be described as anything but dull. The sixteen-year reign of the Social Credit Party ended in 1991, as NDP leader and ex-Vancouver mayor Michael Harcourt was elected premier and served until 1996,

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when he was forced to resign over allegations his party was using charity funds improperly. His successor, NDP leader Glen Clark, alienated his supporters by increasingly concentrating ­administrative authority for decision-making in the premier’s office, and not taking a consensus-building approach as had Harcourt (Brownsey and Howlett 2001, 323). Public embarrassment over a police investigation and charges in 1999 that Clark was involved in an inappropriate granting of a casino license, and allegations of fudging the books and reporting a surplus when the government was running a deficit, finally culminated in Clark’s resignation. The short terms of NDP ­Premiers Dan Miller (August 1999-February 2000) and Ujjal Dosanjh (February 2000-May 2001) followed. British ­Columbia elected former Vancouver mayor Gordon Campbell, leader of the Liberal Party, in 2001. Campbell was re-elected in 2005 and 2009, and resigned in early 2011. This turnover of political leadership reportedly had a negative impact on British Columbia’s IPC. By 2003, British Columbia was boasting an economic growth rate consistently higher than the Canadian average and its economic prospects were increasingly positive during the latter period of our study. By 2005 the economy was more diversified, less reliant on primary industry and more on goods production and services. Almost three-quarters of the province’s GDP came from the service sector (British Columbia 2008). However, external factors such as the high Canadian dollar, resulting in declining export values, declining prices for natural gas and lumber, and a skilled worker shortage in the construction and housing sector, were new challenges for British Columbia, especially as many skilled workers were moving to Alberta (British Columbia 2008). These developments made trade and economic issues central to British Columbia’s position in intergovernmental relations. To this end, the intergovernmental affairs secretariat was actively involved in the COF, the Pacific North West Economic Region, the Council of State Governments (West), and the Western Governors’ Association. These regional associations were increasingly important in helping British Columbia further its economic interests. The degree to which British Columbia is engaging its regional neighbours, and the other provinces and territories, through the aforementioned associations recasts the image of British Columbia as narrowly concerned with its own interests and disengaged from the larger political landscape (Resnick 2000, 18).For example, in 2004



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British Columbia signed an Accord with Yukon to share information and cooperate on issues of mutual concern regarding health care, regional economic development, tourism, transportation, trade and commerce, resource management and environmental issues, and resource development. In 2006, Canada’s two westernmost provinces signed the British Columbia-Alberta Trade, Investment and Labour Mobility Agreement (TILMA) to foster economic relations between the two jurisdictions. In 2010 this agreement was replaced by the New West Partnership Trade Agreement (NWPTA) which added Saskatchewan to the deal. Although the Campbell government did introduce some stability in political leadership, it may not have been enough to overcome the deep feelings of alienation the British Columbia government frequently felt. The acerbic comments of one British Columbia official interviewed in 2001 may have overstated the case, but does capture the significance of federal-provincial politics in fostering this feeling of alienation: Federal-provincial relations are worst with British Columbia. The [federal] Liberals do not need British Columbia so Chrétien ignores British Columbia. There are abysmal relations. [Federal Environment Minister and regional political minister for British Columbia David] Anderson is Ottawa’s man in BC, not BC’s man in Ottawa; and [federal Minister of Fisheries and Oceans] Herb Dhaliwal is not experienced enough. There is not one single federal agency based in British Columbia. The feds gave $60 million to operate airports for other provinces, for example Dorval in Quebec. But British Columbia cannot attract federal support. Our infrastructure problems are huge, but the feds cannot be engaged. British Columbia is schizophrenic in its relationship with the feds. It wants to be like Alberta but doesn’t have the resources. There have been differing priorities over the last ten years: leaky condos, drug problems, lumber, fish, etc., which have been ignored. [Federal Minister for International Trade Pierre] Pettigrew has been reluctant to engage us. Aboriginal issues remain unaddressed – 105% of lands are under dispute. This affects British Columbia’s ability to offer security to investors. It makes investors unsure. There is a fifteen-year process to get mineral extraction under way due to environmentalists and Aboriginals.

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There were very few comments from British Columbia officials about how its IPC compared to other jurisdictions. External officials commented about the regional approach in British Columbia, and Alberta officials mentioned the British Columbia-Alberta alliance. However, as noted earlier in the section on Alberta, it was the opinion of one Alberta official that “British Columbia is the outlier. It has always punched below its weight. They don’t care about things beyond their borders.”

ATLANTIC PROVINCES The history of federal-provincial relations in the Atlantic region is well-documented (Savoie 1986; Bickerton 1994; Makarenko 2008). Prior to Confederation, Atlantic Canada was a centre of economic and political activity. Maritime Union was an idea premiers first flirted with in 1864 as an alternative to Confederation. Economic decline and political alienation in the twentieth century resulted in a revival of the idea from time to time, often advocating greater economic ties and integration on policy files such as health care and education. The Council of Maritime Premiers (CMP) was the first regional forum for inter-provincial collaboration established in 1972. The goal of the CMP was to ensure maximum coordination of the three Maritime provinces (Nova Scotia, New Brunswick, and Prince Edward Island) through cooperation creating regional organizations, harmonizing provincial policies and programs and having common positions (Council of Maritime Premiers 2010). In May 2000 the CMP was replaced by the Council of Atlantic Premiers (CAP), and Newfoundland and Labrador joined with a mandate to promote Atlantic Canadian interests on national issues through a focus on economic development, public services, and three-year action plans to strengthen the region (CAP 2010). All four provinces are also members of the Conference of New England Governors and Eastern Canadian Premiers, which brings together eleven Eastern jurisdictions related to issue of trade, environment and energy. These institutions have formalized long-standing relations between the Atlantic provinces. As one official from Ontario noted, “The Atlantic provinces are particularly wired together.” However, with small economies and small populations (most with smaller budgets and populations than some of Canada’s cities), IPC in the Atlantic Provinces has often been



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defined by relations with the federal government. The predisposition of the Atlantic premiers in the 1990s to conclude major bilateral agreements with the federal government resulted in an unfortunate “province-first” or “beggar-thy-neighbour” effect, where one province benefits at the expense of its neighbour(s) (Bickerton 2001, 68). Perhaps a more troubling issue is the tendency for some officials from outside the region to see some kind of Atlantic-federal government collusion in federal-provincial-territorial relations. One finance official from Ontario asked, “To what extent do the Maritimes see themselves as beholden to the federal government and think of themselves as colleagues of the feds, or perhaps colonies of the federal government?” Evidence of such collusion was offered: “There have been suspicions. Every time a document is circulated among provinces it somehow ends up in the feds’ hands.” The reason most often cited for this possible partnership was simply money. As an official pointed out in 2003, “The four Atlantic Provinces and the three territories receive half of their revenues from the federal government.” This was contrasted to Ontario, which at the time received fourteen percent. These comments were made by non-Atlantic officials, but although the Atlantic Provinces were cognizant of the need to remain on good terms with the federal government, they did not see their provincial governments as beholden to it. One official complained about the generalized approach of the rest of Canada to Atlantic Canada: “The East gets treated as a region, lumped together, and we are not given equal treatment.” Still, the perception of a regional political economy in a dependent relationship coloured assessment of IPC in the region. However, despite this commonality, like the Western officials, many Atlantic officials highlighted variations and the unique political and administrative factors which characterize the state of IPC in each jurisdiction. Nova Scotia Although historically Nova Scotia’s traditional industries include fishing, shipping, agriculture, pulp and paper, coal, and steel, in the post-war period Nova Scotia grew increasingly reliant on fiscal transfers and economic development policies from the federal government. In addition to pursuing vertical intergovernmental linkages, Nova Scotia has looked to its Atlantic neighbours in efforts to increase horizontal linkages that may benefit the province and

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region as a whole. Cultivating relationships with political leaders in Ottawa has been a major strategy of local and provincial elites, vital to securing financial resources and establishing economic development ventures. For some observers, however, this vertical political and bureaucratic integration with the federal government came at the expense of horizontal linkages, thereby limiting the ­intra-provincial cooperation, innovation, and resource-sharing that could otherwise have been realized (Bickerton 2001, 59–60). Like in other jurisdictions, political factors clearly had an impact on IPC in Nova Scotia. Unlike New Brunswick, which was not supportive of the federal government’s proposed mega-constitutional agenda in the Meech Lake and Charlottetown Accords, Nova Scotia was consistently supportive and was one of the few provinces where there was majority support in favour of the Charlottetown Accord in the 1992 referendum. Not all relations were positive with the federal government, though, particularly those connected to greater decentralization of regional economic development and the issue of declining fiscal transfers from Ottawa. In the early 1990s, with the notable failures of Devco (Cape Breton Development Corporation) and Sysco (Sydney Steel Corporation), two federal Crown corporations, and the privatization of Nova Scotia Power, the Conservative political leadership tried to move the province away from its reliance on coal and steel. The 1993 election of Liberal Party leader John Savage continued the emphasis on public sector reforms in the name of reducing the deficit and fighting the debt. The impacts of provincial budget cuts were compounded by the reduction in transfers from the federal government during the same period. By the late 1990s, the minority Liberal government under Premier Russell MacLellan lost to John Hamm’s Progressive Conservatives. Premier Hamm restored funding to health care and education, made some modest tax cuts, and sold Sydney Steel. The election of 2003 resulted in a minority government, in need of NDP support. Hamm announced his resignation in 2005 and was replaced by ­Rodney MacDonald as leader, who won another minority government in 2006. It is noteworthy that none of these leaders were known for their work in the intergovernmental realm. The Nova Scotia Office of Intergovernmental Affairs was first established within the Executive Council in 1979. In 1982, during the constitutional heyday, the premier assumed the position of minister of intergovernmental affairs, but the following year the



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Office was eliminated and its responsibilities were transferred to the Policy Board, a committee within cabinet. In 1991, almost a decade after it had been dismantled, the Department of Intergovernmental Affairs was re-established and the position of deputy minister of Inter­governmental Affairs was created. By the end of the 1990s, the Department of Intergovernmental Affairs was headed by the premier who was assisted by a deputy minister. The department experienced a 125 percent increase in its budget between 1990 and 2001. By 2005, Nova Scotia was spending $2.1 million on intergovernmental affairs and was committed to expanding IPC in many of its departments (Johns, O’Reilly, and Inwood 2007). Although expenditures are still less than many other jurisdictions, the department has a mandate to promote Nova Scotia’s interests in various sectors and with other governments and coordinating intergovernmental issues across line departments within the province (Nova Scotia, Department of Intergovernmental Affairs, 2008). In addition to providing strategic policy advice and other support to the Premier’s Office in preparation for meetings of the FMM, the COF, the Atlantic Premiers’ Conference (APC), and other regional conferences in which the province is a participant, the Department is responsible for promoting provincial economic development internationally. It is also charged with ensuring fairness for Nova Scotians in negotiations with the federal government. Given that Nova Scotia receives approximately thirty-five percent of its revenue from the federal government, and since the government of Canada had been experiencing a series of surpluses, during the latter part of our study, the importance to the province of intergovernmental relations cannot be understated (Nova Scotia 2005, 5). In 2006 the Department established a permanent office in Ottawa, to facilitate relations. By the end of our study period the Department was composed of five core divisions: Regional Relations; Social and Environmental Affairs; Economic Policy and Analysis; Strategic Policy; and Trade Policy. Intergovernmental officials from Nova Scotia noted a regional approach was important and a viable way of doing intergovernmental business, particularly on certain policy files. “An example [given in 2003] was softwood lumber. The feds made an agreement without considering the four Atlantic Provinces, so we responded as a group.” Another official noted the institutional mechanisms with a regional focus. “We have formalized the role of regional director to

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deal with issues in the Atlantic.” But s/he also pointed out, “Cooperation in the Atlantic goes in cycles. You get a flurry of new projects, then a new group of premiers.” At the same time, ironically, officials expressed their dismay at being grouped as a region for the purposes of federal-provincialterritorial relations. One Nova Scotia official complained, “It is offensive that federal-provincial relations lump the Atlantic Provinces together. It all depends on the issue, and one size does not fit all.” Moreover, suspicion of smaller provinces by larger provinces, which are often accused of blindly supporting the federal government to retain federal transfer dollars, did not escape the attention of intergovernmental officials in Nova Scotia. One noted, “Nova Scotia gets accused on occasion of being too friendly to the federal position, for example, on the Kyoto Accord. There is a suspicion on the part of larger provinces that smaller provinces are for sale for federal dollars.” Of the smaller jurisdictions, Nova Scotia seemed to have developed considerable IPC during the period of our study, perhaps second only to Saskatchewan. According to officials, this was primarily through strategic positioning in certain policy areas. For example, as noted by one official, “there has been a growth in trade policy capacity. Nova Scotia made a strategic decision in this area.” Well-developed federal-provincial and regional relations, long serving intergovernmental officials, a specific focus on certain policy areas and tightknit relations between intergovernmental affairs central machinery and policy departments seem to have contributed to a disproportionate amount of IPC for Nova Scotia. New Brunswick Although the political economy of New Brunswick is in some regards similar to that of the other Atlantic Provinces as a small, dependent “have-less” province, it has some unique features which impact its engagement with other jurisdictions. Given its French, Mi’kmaq, and English foundations, it is the only province to have both English and French as official languages. Linguistic dualism and the fact that at slightly over fifty percent the province has the largest Catholic population outside of Quebec (Canada, Statistics Canada 1991 and 2001) mean New Brunswick has sometimes found itself aligned with Quebec on some issues. Historically its economic base of shipping,



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fishing, and other resources has kept its economy small. There is a rural-urban divide between the north, which is dominated by natural resources, and the south, where service-based industries prevail. Federal transfers make up forty percent of revenue for New Brunswick, and the province has often been supportive of the policy initiatives of the federal government. Two families have supported much of the province’s economic activity: the Irvings and the McCains. Politically the province has a tradition of alternating between Liberal and Progressive Conservative leadership of the province. In 1987 New Brunswick elected the Liberal Party and leader Frank McKenna with every seat in the legislature. He was premier for a decade – to the day. A disciple of New Public Management (NPM), McKenna took a cautious approach to government spending, kept a tight rein on government expenditures, and enacted balanced-budget legislation, resulting in the 1995–96 balanced budget, a first in recent New Brunswick history. McKenna saw his primary objective as premier as the modernization of the New Brunswick economy, the creation of jobs, and the reduction of the province’s dependence on the federal government for transfers. McKenna encouraged citizens of New Brunswick to prepare for the demands of the knowledgebased economy, focusing on the information superhighway, embracing the Free Trade Agreement (FTA) and the North American Free Trade Agreement (NAFTA), actively persuading businesses to relocate to New Brunswick, and supporting the call-centre industry in the province. The premier was also preoccupied with the constitutional negotiations of the day, “and was considered particularly astute both in surrounding himself with talented individuals and in networking and negotiating with other governments” (Bakvis, Baier, and Brown 2009, 52). McKenna was elected after the Meech Lake Accord. He campaigned on the need to amend the Accord and announced that his government would not ratify the agreement without changes. Three years later, after significant negotiations, McKenna came on board and the New Brunswick legislature ratified the Accord in 1990. Ultimately it was too little too late. With regard to the institutional aspects of governance, McKenna insisted on strong capacity at the centre to direct the entire provincial public service of approximately ten thousand – which, to put it in perspective, is only slightly bigger than the average federal department (Savoie 2000, 273). However, he removed the

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I­ntergovernmental Affairs unit from the Cabinet Secretariat Office and gave it a separate and independent agency status. Despite these economic and ­public sector reforms, there remained several serious challenges to the economic health of the province: the province had higher unemployment rates and a lower GDP than the Canadian average. McKenna resigned in 1997 and like Manitoba’s Doer, he received an appointment as Canadian Ambassador to Washington. After McKenna’s resignation in 1997, his ‘right-hand man’ Ray Frenette took over as leader of the Liberal Party and Premier until 1998. On his retirement, Camille Thériault won the leadership race for the Liberal party and served as premier until 1999. Pledging to act on twenty promises in one hundred days (later revised to two hundred days) (New Brunswick Legislative Library 2008), Progressive Conservative Bernard Lord was elected premier in 1999. Removing highway tolls, cutting taxes, hiring more nurses and teachers, and recruiting more physicians were among Lord’s chief campaign promises (Mellon 2001, 103). Like McKenna, the new government regarded the role of the public service in a positive light, contributing to the province with a “have” public service in a “have-less” province – although the appointment of a defeated Conservative candidate as deputy minister of intergovernmental affairs and regional development “raised a few eyebrows in the provincial public service” (Savoie 2000, 281). Despite this, many New Brunswick officials had positive comments on the role of the political leadership as it related to their IPC. Lord was re-elected in 2003 and led a minority Progressive Conservative government until the end of our study period. Since its establishment in 1971 as a part of the Cabinet Secretariat, the New Brunswick intergovernmental affairs unit has expanded into a separate department. Given the increased engagement in constitutional and intergovernmental policy discussions, the secretariat was restructured into the Department of Intergovernmental Affairs in 1989. As the focus on constitutional change began to fade in 1993, the department’s goals shifted back to regional issues, and the department’s primary function was to support the Premier’s Office in preparing for APC and other multilateral intergovernmental meetings. In 1994, the Department of Intergovernmental Affairs was reorganized, and renamed the Department of Intergovernmental and Aboriginal Affairs. A separate Aboriginal Affairs Secretariat was



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c­ reated in the Executive Council in 1999, and ministerial responsibility for Aboriginal people was given to the Minister of Justice. Since 1999 the Department of Intergovernmental Affairs has consisted of three main divisions: North American, Trade Policy, and International Relations and la Francophonie. The North American division has three branches: Atlantic Cooperation, FederalProvincial-Territorial Relations, and United States Relations. The reorganization of the department itself highlighted the regional and trade policy priorities of intergovernmental relation in New Brunswick. Advancing the province’s French language interests in the federation has also been a preoccupation of its Intergovernmental Affairs Department. Over the period of our study New Brunswick built provincial­territorial IPC, particularly with provinces outside of the Atlantic region, and also cross-border intergovernmental relations. New Brunswick is a member of several regional and international intergovernmental associations, including the Council of Atlantic Premiers, the Conference of New England Governors and Eastern Canadian Premiers, and the International Organization of la Francophonie. Contrary to the stereotype of insular Atlantic intergovernmental relations, officials from New Brunswick noted the alliances their government has with jurisdictions outside the Atlantic region, such as its interprovincial agreement with Manitoba. One official from New Brunswick said, “We do differentiate from the other Atlantic provinces. Sometimes we have more common interests with Ontario and Alberta.” Nonetheless, the same official also said, “But Atlantic ­unanimity is important. New Brunswick stayed out of the offshore oil issue and we have different views on other issues tempered by the desire for Atlantic cooperation. The dynamic of the late 1990s was to ­protect New Brunswick interests, [but] balance these Atlantic interests at many different provincial-territorial and federal-provincialterritorial tables.” This same official went on to comment on the significance of provincial-territorial cooperation, saying, “Provincialterritorial has been an amazing success and it has meant less need for Atlantic cooperation.” This cooperation was necessitated, according to this official, by the federal cutbacks of the mid-1990s. S/he said, “Provincial-territorial success is based on federal support having dwindled. The federal share went down while the public priority went up and this led to the fiscal imbalance. There are razor-thin

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surpluses in the provinces while the federal government is flush [in 2003]. It is not so much the money but the case that the feds have a role and should step up.” Overall, IPC in New Brunswick is commensurate with its size and status as a small, “have-less” province. Continued reliance on the federal government for research, data and information was evident in the comments of New Brunswick officials. New Brunswick selectively played a role on different files, but never quite as prominently as some of the other smaller jurisdictions. This would indicate a fluctuating but comparatively low level of IPC overall, buttressed by regional and increased provincial-territorial cooperation. Prince Edward Island Geographically Canada’s smallest province, with the lowest provincial population and a budget smaller than those of some of Canada’s large cities, it is understandable that Prince Edward Island often feels overlooked in Canadian intergovernmental relations. While descriptions of Prince Edward Island as Canada’s garden paradise, the gentle island, and Canada’s greenest province (Prince Edward Island 2008) are quaint and may be accurate insofar as describing its physical beauty, this imagery points to a traditional and pervasive aspect of island localism. In the last half century Prince Edward Island has struggled with adhering to the myth of the garden while watching the “erosion of the traditional farm economy and community life” (Milne 2001, 113). Attempts at instituting a fish-processing plant, canneries, and chicken-processing plants (provincial initiatives heavily reliant on federal government funding) were unsuccessful at replacing the dominant role agriculture has historically played in employing Islanders and maintaining the Island economy (Milne 2001, 115). Tourism, it was eventually realized, was the most viable economic prospect for the Island and has replaced agriculture in providing employment for Islanders and stimulating economic activity, such as infrastructure improvements (Royal Bank of Canada 2008). The localism pervasive throughout the Island’s history, which augments the type of appealing imagery that attracts millions of visitors each year, is rooted in the Island’s politics. MacKinnon has noted that Prince Edward Island “has four political parties: ­Liberal, Conservative, Catholic, and Protestant” (MacKinnon 1978, 237). ­Wiseman



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further posits, “For decades, one could not foretell the winning party in Prince Edward Island elections, but one could be certain that twenty-one Protestants and nine Catholics would be elected” (Wiseman 2006, 38–9). Wiseman also comments on Prince Edward Island’s intense partisanship, and likens politics to sport in this province. Prince Edward Island’s small geographical size facilitates this partisanship, as political candidates can, and are expected to, knock on each and every door in their riding. Patronage is a well-known feature of Prince Edward Island politics, and until recently, public servants of the losing stripe were subject to mass firings after provincial elections, as the incoming premier thought it his or her right to stock the public service with party faithful and others who helped the premier come to power (Milne 2001, 126–7). A 2006 ruling by the appeal division of the Prince Edward Island Supreme Court declaring this practice unconstitutional has tempered this tradition (Prince Edward Island. Supreme Court of Prince Edward Island – Appeal Division 2006). In the period of our study, Prince Edward Island continued the historical pattern of partnering with the federal government to undertake major infrastructure programs. An example is the Confederation Bridge, which opened in 1997 as the longest bridge over iced waters in the world. The Island’s small population results in lower provincial income via taxation than other provinces, which in turn produces reliance on other governments for equalization payments and other transfers. This dependent relationship has endured and looks likely to continue in the absence of major economic changes such as the discovery of oil and gas deposits. Intergovernmental relations, therefore, are critical to maintain. Prince Edward Island’s intergovernmental machinery is calibrated to support positive relations with Ottawa and its Atlantic counterparts. Intergovernmental administrative machinery in Prince Edward Island dates to 1969, when the Department of Development was established to implement a long-term umbrella agreement involving the federal government (Pollard 1986, 152). The Comprehensive Development Plan, negotiated under the leadership of Premier Alex Campbell, was a federal-provincial initiative to modernize the social and economic structure of the Island, in response to the beginning of what would be the farm crisis. The department was responsible for implementing parts of the agreement until 1980, when it was disbanded.

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The Intergovernmental Affairs Office, established in 1979 in the Executive Council Office, took over responsibilities for implementing the Development Plan. The Intergovernmental Affairs Office operated under a cabinet directive with no statutory provisions until 1983 when it was disbanded due to a reorganization of government. Functions of this Office were transferred to the Cabinet Office. The Cabinet Office, established in 1981, provided review and analysis for the Cabinet and its committees on a range of issues including those with an intergovernmental dimension. Intergovernmental Affairs operated as a separate unit within the Cabinet Office and was made up of only two employees. In 1994, Intergovernmental Affairs moved back to the Executive Council Office, and has stayed there. The premier is the minister of intergovernmental affairs. He is supported by a deputy minister of intergovernmental affairs, a deputy minister of strategic initiatives, and a director of intergovernmental affairs. The mandate of Intergovernmental Affairs is to ensure Prince Edward Island’s interests are represented in regional, national, and continental policy discussions. To this end, it coordinates and develops strategies, policy positions, and briefing materials for FMMs, the COF, the Council of Atlantic Premiers, and the New England Governors and Eastern Canadian Premiers meetings. The Office also undertakes research, strategic planning, and development activities as required. Despite – or perhaps because of – their province’s dependence on the federal government, intergovernmental officials in Prince Edward Island expressed their frustration with the federal government, and identified this as a common sentiment in Atlantic Canada. One official commented in 2003, “We are getting increasingly upset in Atlantic Canada. We are getting short shrift on lumber, fish, equalization, and out-migration.” Another official complained, that same year, “The feds have abandoned us, with respect to national programs, transport infrastructure, privatized ports, and airports, and the rail system has fallen into disuse. They have officially loaded their debt on us.” Intergovernmental officials took particular exception to the basis upon which equalization payments were calculated at this time, “If allocation is done on a per capita basis, Prince Edward Island gets left out; we get lost in a 1.7% per capita population. The feds have created this situation.” Thus provincial officialdom in this jurisdiction portrayed a slightly paradoxical view



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that the federal government was the bane of its existence on certain issues, but that enhanced IPC in the provinces was problematic in its own right because it impeded the federal government’s ability to act. Overall, there were not many comments from external officials about Prince Edward Island or its IPC. As the federation’s smallest province, with a population of 140,000 and an annual budget of $1.4 billion (Canada, Statistics Canada 2006A,B and 2008), it seems that Prince Edward Island is one case where size of jurisdiction seems to be the primary factor that determines its IPC, irrespective of the political and administrative factors we have identified. Newfoundland and Labrador Newfoundland and Labrador’s unique path to Confederation, dualistic political culture, geography, and particular economic challenges make this province yet another distinctive jurisdiction in the Canadian federation. Newfoundland and Labrador, otherwise known as “the Rock,” has struggled to diversify its resource-based, seasonal economy, and relations with the federal government have been a central part of this effort. For most of its history, the province has been a “have-less” recipient of federal transfers, and this economic dependence partially explains why Newfoundland and Labrador is at times on side with the federal government, and why it sometimes finds itself on the outs with Ottawa. The 1980s and 1990s were particularly difficult for Newfoundland and Labrador. Escalating interest rates and the depletion of the fish stock due to federal mismanagement and foreign over-fishing resulted in massive layoffs for fishers and in related industries (Summers 2001, 39). However, in 1979 the Hibernia oil fields were discovered off the coast and the newly elected Progressive Conservative government under Premier Brian Peckford began efforts to acquire the right to drill for offshore oil and gas. Peckford argued the province was entitled to the revenue from oil and gas because it had retained this right upon joining Confederation in 1949. The Supreme Court, however, disagreed and effectively closed the legal route to acquiring the right to drill. The political route was then assumed as Peckford courted Mulroney, who was then gearing up for the 1984 election, and even campaigned on Mulroney’s behalf. Peckford’s efforts were fruitful, and resulted in the Canada-Newfoundland Atlantic Accord in 1985 (the Canada-Nova

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Scotia Atlantic Accord was signed at the same time). “Under these agreements, the federal government retained constitutional ownership of offshore natural resources but the provinces were allowed to tax offshore oil production in the same way other provinces (such as Alberta) tax their onshore natural resources” (Makarenko 2008, 16) and not be penalized in terms of equalization (Baier and Groarke 2003). The 1989 election of Liberal Clyde Wells marked the end of the Conservatives’ seventeen-year rule of the province. As premier, Wells’ major preoccupations were economic recovery, mega-constitutional politics, and cutbacks in government spending. The collapse of the cod fishing industry and subsequent rise in unemployment was disastrous for the provincial economy. By the mid-1990s, fighting the provincial deficit resulted in cutbacks to provincial spending on social services, freezing public sector wages, and other economic restraint measures. Wells was re-elected with a focus on education reform (Thomason 1995). His resignation in 1996 resulted in Brian Tobin’s installation as premier. Under Tobin, the nickel deposit at Voisey’s Bay and the offshore oil and gas brought unprecedented economic prosperity and the province enjoyed its first surplus in 1998. Around the same time a new Accord provided Newfoundland and Labrador with transitional protection for a twelve-year period beginning in 1999–2000 from large reductions in total equalization that would otherwise have resulted once the province’s offshore revenues began to grow. Tobin won re-election in 1999, but suddenly resigned in 2000 to run for the federal Liberals in an election that year. In February 2001, Liberal leader Roger Grimes was elected. In an effort to identify the areas in which increased cooperation between the federal government and Newfoundland and Labrador could result in economic gains for the province, Grimes struck the Royal Commission on Renewing and Strengthening our Place in Canada in 2002, known in some circles as the “blame Canada commission.” The Commission’s mandate was to develop a vision for the future of Newfoundland and Labrador to achieve prosperity and selfreliance, and to renew and strengthen its place within the Canadian Federation (Newfoundland and Labrador 2003, 2). Fundamentally, the Report urged a new relationship between Canada and the province, one based on the principles of equality, openness, dialogue, and trust. The Commission rejected the idea of separation from Canada, signaling its preference for intrastate federalism. To this end, the



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Report proposed increased participation of Newfoundland and Labrador in Canadian institutions, including in an elected Senate. The report also suggested more frequent COF meetings and that Newfoundland and Labrador should work with other provinces on matters of common interest, have a greater presence in Ottawa, and assemble a strong team headed by the premier or deputy premier to do this (Newfoundland and Labrador 2003, 144–9). The Royal Commission itself as a strategic policy exercise targeted enhanced IPC but no officials commented on this as a significant factor. Regarding the fiscal situation, the Report indicated it was unsus­ tain­ able to consistently run a deficit and add to the province’s mounting debt. A recovery strategy for the province’s fisheries, it was argued, must be undertaken. More federal dollars for research were needed to help Newfoundland and Labrador compete in the new global economy. The economic transformation of Newfoundland and Labrador during this period is notable. In 1990, Newfoundland and Labrador had the lowest GDP per capita in the country. By 2003, however, it sat with the top four provinces in Canada in GDP, behind only Alberta, Ontario, and Saskatchewan (Makarenko 2008). In 2003 the province elected another premier, Conservative Danny Williams, ending nearly fifteen years of Liberal governments. ­Williams was very supportive of the major recommendation of the Commission that the oil and gas offshore agreement be changed to allow the province to collect revenue without equalization clawbacks. Williams launched a bitter and acrimonious campaign to get a better deal for his province, at one point ordering that Canadian flags be removed from all provincial buildings in December 2004. Two years after the Report’s publication, the campaign paid off, as the government of Liberal Prime Minister Paul Martin struck a deal (extended to Nova Scotia) in February 2005 which ensured that for a time-limited period the provinces’ equalization payments would not be reduced as a result of increased royalties from oil and gas production (Plourde 2006). This, according to the federal government, was in recognition of the unique economic and fiscal challenges facing the province (Canada Department of Finance 2007). While Newfoundland and Labrador was delighted by the agreement, other provinces balked at the federal government making such bilateral deals, and argued for increased federal funding to their own provinces. The case illustrates the effectiveness of a small province when it is backed by a strong political champion who commits resources

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and political will to an issue, and who harnesses public opinion to the cause (Bakvis, Baier, and Brown 2009, 52). In 2006, however, the struggle was re-engaged when Williams accused the new federal government of Conservative Stephen Harper of reneging on the terms of the Accord. As the province’s relations with the federal government and other jurisdictions evolved, so too did its intergovernmental machinery. In 1974 a Director of Intergovernmental Relations was established in the Planning and Priorities Committee Secretariat of the province. In 1975 a governmental reorganization established the Intergovernmental Affairs Secretariat as one of three secretariats in the Executive Council. After a brief shift to the Department of Consumer Affairs and Communications in 1980–82, the Intergovernmental Affairs Secretariat was moved back to the Executive Council in 1983. Since then, the secretariat has been the primary source of intergovernmental policy support for the province. The Secretariat works closely with policy departments and is also responsible for international activities. In addition to FMMs and the COF, the Secretariat facilitates the province’s involvement in the Conference of Atlantic Premiers and New England Governors, and the Eastern Canadian Premiers’ Conference. Three divisions comprise the Secretariat: Social and Fiscal Policy, Resource and Economic Policy, and Intergovernmental Policy (Newfoundland and Labrador 2006). Although expenditures of the Secretariat declined by seventy percent between 1990 and 2000, the unit did see an increase in its budget by forty-six percent by 2002 (Johns, O’Reilly, and Inwood 2007) and officials noted that other kinds of investment had a positive impact on IPC in this jurisdiction by the end of our study period. Officials in Newfoundland and Labrador share some similar perspectives with their neighbours about being a small province in a region of small provinces. They felt this made it necessary to be strategic about IPC, seeking alliances with other jurisdictions and being aware of limitations on certain policy files. This was noted by one official as especially true in health: “The four Atlantic provinces have done a lot of work together on health. There is more similarity [that is, less conflict of interest] in health than in environment and fisheries or tourism.” Similar to opinions expressed by other officials in the region, Atlantic neglect is a common sentiment, and Newfoundland and Labrador often feels its interests are either bypassed or altogether



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ignored when it comes to federal decision-making. As one official put it, “The small provinces’ issues versus those of the country as a whole, or regional interests versus national, do not get a fair shake. For example, the breakdown in the fishery had a ripple effect on other sectors. This colours all relationships.” Another official predicted in 2003 (incorrectly, as it turned out), “The offshore fiscal fairness drum will be beat but to no end.” S/he also went on to suggest that political credit for funding initiatives was a key driving force of federal involvement in Newfoundland and Labrador, but “with the end of regional economic development agreements, the feds can’t get credit. We don’t care if the feds get credit, as long as they send the cheque.” Newfoundland and Labrador officials also offered some comparative comments on the regional dimensions of IPC. One official claimed in 2003, “Western Premiers’ Conferences have had more success than Eastern Premiers’ Conferences. Eastern meetings have had a more technical, service delivery focus. In the Western meetings you have direct accountability of each province at the meeting, and no secretariat. Provinces are personally responsible. Eastern meetings have a secretariat, but we don’t know what it does.” An official from Prince Edward Island in commenting in 2003 about Newfoundland and Labrador’s new economic position in the federation also noted that “Newfoundland is very nationalistic” and that this has also changed the dynamic in the Atlantic region and with the federal government. The Newfoundland and Labrador case suggests small jurisdictions can effectively draw attention to their plight if they have vocal, assertive political leadership. Their IPC can thereby be enhanced, even if they otherwise lack the budgets and personnel to effect intergovernmental policy. This case also reinforces the benefits and limitations of regional alliances. Similarities between jurisdictions are present, but limited in the way they can be used to enhance IPC; and indeed at times they can be counterproductive.

THE TERRITORIAL NORTH The political culture and institutions in the Territorial North are “in important ways qualitatively different from those in Ottawa and the provinces” (White 2001, 81). These societies are unique, and given the very small populations in the Northwest Territories, Yukon, and

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Nunavut, it is not difficult to understand their historical position in the federation. In the three territories combined, barely 100,000 people are spread across small communities which dot the four million square kilometre land mass (White 2001, 82). The inhospitable climate, isolation, poor transportation facilities, and very small, resource-based economies have resulted in economic development which has also tended to disrupt the traditional and self-sufficient activities of northern Aboriginal peoples, such as hunting, trapping, and fishing. Land claims settlements and increased autonomy from Ottawa have been recurrent themes as has been allowing the territories to respond to local needs while facilitating development (Dyck 2009, 28). Politically, the territories are “something of ‘proto-provinces,’ autonomous self-governing entities exercising a wide range of jurisdictional powers, but they lack formal constitutional status. Their constitutions are federal statutes.” White goes on to note, “very high proportions (up to 90% in the case of Nunavut) of territorial revenues come as transfers from Ottawa ... The territories exercise almost all important province-like powers ... The principal – and in the North critical – exception is lands and resources ... Ottawa retains ownership of Crown lands and the non-renewable resources under them. Federal policy aims at complete devolution of land and resources to the territories ... though progress has been slow” (White 2001, 83). Although, “a strong sense of being northern, and distinct, pervades the three territories” (White 2001, 82), there is a tendency in Canadian federalism to cluster the territories. Officials from the territories wanted to make clear that they should not just be lumped together, despite having similar positions in the federation and similar levels of IPC. One official said, “Northern jurisdictions have similarities but differences too.” The notable regional dimensions to IPC in the North were geographic separation, small populations, small economies, tightly knit political and administrative communities, and feelings of alienation from the federation. Perhaps the boldest act of solidarity among the territorial leaders occurred in 2003 when the three premiers jointly agreed to walk out during an FMM when they failed to get satisfactory terms while negotiating the Health Accord with Prime Minister Jean Chrétien. Officials also noted informal Northern networks at play as well as some interchange of officials. However, there were some notable and distinct differences in each of the territory’s IPC.



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Northwest Territories With abundant natural resources, a distinctive political system, a sparse, young population with a high birth rate, and an Aboriginal population of approximately half of the total population, the Northwest Territories faces unique challenges and opportunities in the Canadian federation. The Northwest Territories was officially admitted as a territorial jurisdiction within Canada in 1869 with the Northwest Territories Act. Its borders were redrawn and overall area reduced significantly several times, most recently, in 1999 when the Territory of Nunavut was created (Tardi 2006, 342–3). Since the inception of the Northwest Territories, control of natural resources has been held by the federal government. The Northwest Territories relies on federal transfers received through formula financing, a special form of territorial equalization, which has traditionally accounted for approximately half of the Northwest Terri­ tories’ total revenues. Own-source revenues make up the bulk of other revenue, and other transfers to a lesser degree contribute to overall territorial revenue (Northwest Territories 2003, B1). Despite a surplus in 2000–01, the government of the Northwest Territories struggled with expenditures exceeding revenues in most of the period 1995–2005. However, the territory’s high value of natural resources, including gas, gold, and diamonds, and its relatively low population resulted in it having the highest per capita GDP in ­Canada, at $98,295 in 2007 (see table 9.1). With the recent opening of two diamond mines, the territory is the third largest producer of gem diamonds in the world (Northwest Territories 2006, 1). These statistics, however, overlook the extreme deprivation and poor access to basic social services that challenges a large portion of the population. The Northwest Territories has a traditional consensus-based government system which is distinctive because of the absence of political parties. Since 1975, members of the Legislative Assembly (MLA) in Yellowknife have been elected in nineteen constituencies and choose seven cabinet members and a premier by secret ballot. The Cabinet has been responsible to MLAs only since 1986. Some scholars are critical of consensus-based government, arguing this type of system can lead to corruption because of the adherence to tribalism, in which commitment to one’s own kin is emphasized over all others regardless of the circumstances. Others argue that ­consensus-based government and accountability is compatible with traditional Aboriginal decision-making (White 1999). Notably for

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our study, this system can have the effect of removing effective control over policy-making capacity from the legislature and placing it with the bureaucracy. Another political issue is the complaint that there is too much power vested in the hands of a select few, many of whom are non-Aboriginal and from southern Canada, removed from the realities of the North. Clancy describes the relationship between elected officials and the bureaucracy: “Part of the reason for (government stability) has been the complex interweaving of the political and administrative branches of the state, as the dominant bloc in the Assembly has treated the public sector as a tool of economic development” (Clancy 2001, 352). Indeed, the government of the Northwest Territories is a major employer and has substantial purchasing power. Officials we interviewed viewed consensus government as enhancing IPC, given the close working relations of the political and administrative arms of government and combined with the efficiencies a small decision-making apparatus allows. In 1980, the Department of the Executive was created to provide administrative support to the government of the Northwest Territories and to improve Cabinet decision-making processes. The Department initially included an Aboriginal Rights and Constitutional Development Secretariat, and later in 1985, an Office of Devolution was established. Responsibilities for intergovernmental relations were later assigned to the Intergovernmental Affairs Office located in the Government Leader’s Office in the Department of the Executive. Intergovernmental Affairs initially consisted of a Liaison Office in Ottawa and a Protocol Office in Yellowknife. In the early 1990s, the intergovernmental function was transferred to the Ministry of Intergovernmental and Aboriginal Affairs. The ministry spent significant time and resources implementing components of the Sahtu Dene and Métis Comprehensive Land Claims Agreement which gave land in circumpolar regions, royalties from resources, and self-negotiation rights to Aboriginal people in the Northwest Territories (Canada, Department of Indian Affairs and Northern Development 1995, 1). In 1996, the ministry’s intergovernmental function was transferred to the Department of the Executive and its name changed to the Ministry of Aboriginal Affairs. Aboriginal Affairs and Intergovernmental Relations have since fused into one ministry – the Department of Aboriginal Affairs and Intergovernmental Relations, whose mandate is to “manage and ­coordinate the



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participation of the Government of the Northwest Territories in all land, resource, and self-government negotiations” (Northwest Territories 2008). The department is comprised of five main divisions: Directorate; Negotiations; Implementation; Intergovernmental Relations; and Policy, Legislation, and Communications. Federal-territorial relations have increasingly focused on the Northwest Territories’ struggle to gain more control of its natural resources from the federal government, especially with the prospects of large revenues from the Mackenzie Gas Project. This desire was formally expressed in 1999, in the document Agenda for the New North: Achieving our Potential in the 21st Century which expressed the concerns of the territorial government, Aboriginal leaders, communities and industry (Northwest Territories 1999, 6). A major part of the debate over natural resource ownership involved settling land claims with the federal government. Major resource extraction projects, like the Mackenzie Gas Project, have progressed slowly because of the intergovernmental negotiations that must take place to settle land claims. A major sentiment of the Agenda was “getting governance right,” which meant the federal government and the Northwest Territories achieving mutual respect and cooperation on a nation-tonation basis by recognizing the Aboriginal right to self-governance (Northwest Territories 1999, 16). Cooperation among the territories is also important, as the 2003 Northern Cooperation Accord illustrates. The Accord was signed by all three territorial governments and reaffirmed the unique and important role of Aboriginal people, the intention to promote cooperation and information sharing on matters of mutual concern, and the recognition of each other’s different histories, needs, and capacities (Yukon 2003, 3). The Accord is clear not to create any financial, legal, or contractual obligations for its signatories, and states that there shall be an annual Northern Premiers’ Forum (Yukon 2003, 3). The three northern premiers have met annually since 2002 at the Northern Premiers’ Forum to discuss matters of shared concern, like climate change, infrastructure, devolution, and relations with the federal government. As for IPC, intergovernmental officials in the Northwest Territories emphasized their small size and interest networks. One official commented, “In the Northwest Territories we are small. We sort things out. Our allies change by topic, by day, and by sector. There is also some tit-for-tat.” Another intergovernmental official commented

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on the effects of limited representation in federal institutions, since “we only have one MP in Parliament,” making it that much more important to foster various kinds of connections. Another noted the importance of alliances with other small jurisdictions: “We have worked a lot with Prince Edward Island. We are both a small people with per capita crumbs.” In the end, though, in the view of this official, “money drives everything.” Overall, the Northwest Territories’ IPC is low and, like the other two northern jurisdictions, it retains a relatively small role in intergovernmental relations. Yukon Like all of the territories, Yukon has distinct features. First, since its creation as a territory of Canada in 1898 by the Yukon Act, its borders have never been altered, unlike the Northwest Territories. Also unlike Nunavut and the Northwest Territories, the nonAboriginal population exceeds the Aboriginal population, owing to large influxes during the Gold Rush in the 1890s and to the pull of Yukon’s resource sector, including forestry and resource extraction. While an early political goal of Yukon was province-hood, this gave way to the current prevailing political goal of territorial administrative and financial control. In 1967 Ottawa agreed to the establishment of the Federal Interdepartmental Coordinating Committee, chaired by Commissioner James Smith. The Committee did not measure up to Smith’s hopes in the early years of its operations, and in 1974 the Directorate of Intergovernmental Affairs was established in the Department of Administrative and Legislative Support Services (Moodie 1987, 145).  “The creation of the Intergovernmental Affairs Directorate was symptomatic of the greater complexity of Yukon ‘s relationship with Ottawa and of Commissioner Smith’s belief in the need for greater co-ordination between the territorial government and federal departments operating in Yukon” (Moodie 1987, 106) Increasing political awareness by Yukon’s Aboriginal community, composed of eight Yukon First Nations (YFN) groups representing fourteen tribes and clans, was evident in 1972 when “a petition was submitted to Parliament by the Aboriginal people of northern Yukon concerning the damage that they considered oil and gas exploration was causing in their traditional homelands” (Cameron and White 1995, 27). Meanwhile, demands for responsible government in the



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1970s led to the 1979 “Epp letter,” the first formal recognition by the federal government that “elected MLAs, rather than the Commissioner, should run the territorial government” (Cameron and White 1995, 23). But confounding Yukon’s ability to determine its own political destiny since that time has been the territory’s reliance on the federal government for funding. In 1985, a formula financing agreement was negotiated with Ottawa. The formula gave the territorial government autonomy over its budgeting and direction of funds toward social services and education to meet the needs of its constituents (Cameron and White 1995, 24). In 1993 Yukon and the federal government concluded the Northern Accord for the management of offshore oil and gas and revenue sharing for offshore developments. The federal government also moved to shift responsibility for provincial-type programs to the territory, however, this process was complicated by another major political issue, that of Aboriginal self-determination, which at times conflicted with non-Aboriginal self-determination and found expression in territorial politics and constitutional development (McCormick 2001, 371). In 1993, the Government of Canada and Yukon government also signed the Umbrella Final Agreement (UFA), which would have Aboriginal groups trade their Aboriginal rights, specifically the right not to pay income tax, for land ownership and resource rights. The UFA had to be ratified by every YFN group, and as of the time of writing, three YFNs have yet to sign the agreement. Current federal-territorial relations between Canada and Yukon have been modernized by a new Yukon Act, proclaimed in 2002. The new Act gives the territory the legal authority to exercise its powers gained through devolution, modernizes the language in the Act (for example, instead of referring to a “council” the new Act refers to the “legislature”), enshrines the principle of responsible government, and confirms the position of the Commissioner as akin to a ­provincial Lieutenant-Governor, albeit a federal government representative, not one of the British Crown (McCormick 2001, 375). Clearly the intergovernmental dimension looms large in Yukon’s history, and is dominated by federal-territorial relations. To facilitate those relations, the Directorate of Intergovernmental Affairs was created in 1974 in the Department of Legislative and Support Services (Moodie 1987, 145). It became part of the Executive Council Office in 1978, and in 1981 was merged with the Pipeline Branch and Land Claims Secretariat to form the Department of

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I­ntergovernmental Relations. In 1982, the Department joined with the Department of Economic Development to become the Department of Economic Development and Intergovernmental Relations. In 1983, Intergovernmental Relations was redesigned to become part of the Executive Council Office, where it would become the principal government unit responsible for Yukon’s federal-territorial affairs. Currently, the Intergovernmental Relations Branch of the Executive Council ensures Yukon intergovernmental relations are executed in a manner that understands and considers the particular goals and objectives of Yukon. It coordinates the premier’s participation in FMMs, consults and assists other departments with respect to federal, provincial, and territorial meetings, works to advance Yukon’s key interests in Ottawa, and arranges for meetings of ministers and senior officials from Yukon with federal ministers. During our study, Yukon intergovernmental officials exhibited a keen awareness of their limited IPC compared to other jurisdictions. This found expression in the type of issues they chose to pursue. One official commented, “We need to pick and choose issues due to our limited capacity.” Another observed that “physical distance and lack of human relations should never be underestimated in terms of limiting policy capacity and intergovernmental relations.” Another summed up Yukon’s predicament by saying, “We are a small jurisdiction with limited capacity to engage in discussion. We are new on the scene. But we began our involvement in federal-provincial­territorial relations twenty-five years ago and we are now an equal partner in [the] COF.” In noting the potential for regional cooperation and collaboration, an official commented, “With a small public service for f­ ederalprovincial and territorial issues, each of the territories have their own perspective, although there is an Accord between the three territories regarding northern issues and our perspectives on larger national issues such as health care.” However, the reality for Yukon is that “the limiting factor is that we are a ‘junior jurisdiction’ in an adolescent phase of development.” This is compounded by the fact that, according to an official, “there is a lack of understanding of the need for policy capacity by politicians.” Some attempts have been made to establish relations outside the North. For instance, “Yukon has been a member of the Western Premiers’ Conference since the late 1980s and we have had discussions with Newfoundland and Labrador regarding northern issues,” according to one official.



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In assessing the major issues commanding attention in Yukon in 2004, one official said, “The big issues for Yukon ... are a less robust economy than in the Northwest Territories, the early 1998 Faro mine closing, low mineral prices, and less economic activity. The three main issues in the last twenty years have been responsible government, land claims, and devolution. There have been a number of devolutions since the early 1980s in power and health care. We completed devolution with the federal government in April 2003 over mines, forest, and lands.” But these accomplishments were not easily realized, according to an official, since “responsible government and devolution required the territories to have policy capacity to understand their own and others’ interests through information sharing.” This speaks to a basic, even elemental, barrier to IPC for these smaller, northern jurisdictions. One advantage of being small is the ease with which internal networks can be built and used to facilitate policy. A Yukon official pointed out, for instance, that “small government means access to the premier, unlike Ottawa which is influenced by mid-level bureaucrats who never touch the top. We are responsive and I can point to changes I make.” The capacity in the North also varies by policy sector. As one official explained, “There is a northern health fund, beyond the national health funding level, due to particular issues ... we lack economies of scale compared to rural and remote jurisdictions; waiting lists are not on the top of our file; prevention is a high priority in Yukon due to northern circumstances – however, this is not seen as a ‘health’ issue.” Another health care example was offered by the official who said, “We have a new doctors’ agreement in Yukon to get them to come and stay. The national discussion needs to speak to particular concerns of various jurisdictions like ours which are different than Toronto’s.” As a result, the distinctiveness of issues means that ­provincial-territorial collaboration may not always be a ­factor enhancing IPC. Said one official, “[The] COF is concerned about the future of health care but it has different priorities” than those in Yukon. S/he went on to explain that some of these issues also distinguish the territories from each other, saying, in Yukon, “we have small community level-of-care issues. Yukon has a different mix of population and better transport than in the Northwest Territories or Nunavut. Our proximity to Alaska also makes us different, with improved transport and a land link to Alaska.” Hence a nuanced

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understanding of particular Yukon-specific concerns in intergovernmental forums was needed. But the territory lacked the IPC to effectively convey this. Nunavut Nunavut, Canada’s most recently created territory, was established in 1999 by the Nunavut Land Claim Agreement (NLCA) whereby the Inuit received title to 350,000 square kilometres of land and their right to harvest wildlife in Nunavut, and $1.173 billion over fourteen years, in exchange for relinquishing alternative Aboriginal claims (Canada 1993, 217). Except for a small portion that would flow to Inuit claimants in Nunavut, revenue from natural resources belongs to the federal government. Consisting of nearly two million square kilometers, carved out of the Northwest Territories, Nunavut is inhabited by 30,000 people, eighty-five percent of whom are Inuit (Canada, Statistics Canada, 2006A). Like that of the Northwest Territories, Nunavut’s political system operates on the basis of consensus government, rather than political parties. The two territories also share many other challenges of having a young, dispersed, mainly Aboriginal population. The Canadian government provides most of the government of Nunavut’s financial resources under the Territorial Funding Formula, accounting for over ninety percent of all territorial revenue (Timpson 2005, 224). This dependence on federal funding compromises Nunavut’s ability to act as a full partner in intergovernmental affairs. The result of this is deep entanglement between the federal and territorial government, evident in the structure of Nunavut’s government. Between 1993 and 1999, the federal government set up the Office of the Interim Commissioner of Nunavut (OIC) with a mandate to oversee the creation of a Territorial bureaucracy to “integrate Inuit values and interests into the work of the new public government” (Timpson 2005, 211). In delivering public services, Nunavut was to be attentive to the particular needs and cultural sensitivities of the Inuit, and consult elders whenever appropriate. Formally, Nunavut’s head of state is a Commissioner appointed by the federal minister of Indian and Northern Affairs Canada. However, this is more of a symbolic than functional role. The premier is elected by the legislature. Nunavut’s first legislative assembly convened after the



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15 ­February 1999 election. The first premier of Nunavut was Paul Okalik, who served for the full period of our study. There is a prospect of long-term dependency on the federal government because of the difficulty of creating economic ­opportunities in Nunavut, the highly dispersed population, and the limited infrastructure to support economic development that would reduce the territory’s reliance on federal transfers. This compromises Nunavut’s IPC and its authentic participation and acceptance as an equal partner at the table in intergovernmental forums. Despite this, it is important to note that Nunavut has a different legal status than the other two territories, and thus attracts special constitutional protections, for example, against other provinces or territories looking to expand their boundaries (Loukacheva 2007, 74). From the outset the territory has had an intergovernmental machinery to build IPC primarily with the federal government but also with other territories and provinces. The first director of Intergovernmental Affairs was appointed to the Department of Executive and Intergovernmental Affairs (EIA) in 1999. An autonomous intergovernmental affairs unit, however, was not established within the Department until January 2000 (Timpson 2002, 8–10). The ­deputy minister of intergovernmental affairs was established to lead the newly created Intergovernmental Affairs Secretariat in EIA. The Intergovernmental Affairs Secretariat became the first departmental division in the Government of Nunavut to be headed by a deputy minister. Upon its establishment, the Intergovernmental Affairs Secretariat confronted key challenges with respect to incorporating Nunavut into the Canadian federation. For example, the Secretariat spent considerable time and resources in creating strategies to guide the territory’s involvement in the Council of Atlantic Premiers and Western Premiers’ Conference. The original mandate of the Secretariat also involved lobbying Ottawa and the other provinces for funding to develop infrastructure, ensuring that Nunavut was well represented in intergovernmental working groups and federalprovincial-territorial meetings, and developing key bilateral relations with other governments such as the Northwest Territories. In 2001, the Intergovernmental Affairs Secretariat’s priorities shifted to conventional intergovernmental issues such as land settlement agreements, federal-territorial fiscal support, Aboriginal relations and Cabinet support. The institutional home of the Secretariat,

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EIA, provides advice and administrative support to the Cabinet and the Government of Nunavut on a broad range of issues. Besides Intergovernmental Affairs, it is composed of several other divisions: a Directorate; Cabinet Registrar; Support Services; Evaluation and Statistics, which are each separate divisions but part of the Policy and Planning division; Senior Personnel Secretariat; and Nunavut Cabinet and Executive Office. Intergovernmental Affairs manages the Government of Nunavut’s relations with other governments. Timpson argues that because of the considerable time spent on negotiations and consultation with other governments, the division spends insufficient time developing government-wide intergovernmental strategy in consultation with other departments in Nunavut (Timpson 2002, 11). She argues in favour of greater consultation between government officials in Nunavut in hopes that the sharing of knowledge would facilitate a more holistic approach to intergovernmental affairs. Like in other jurisdictions, one area where there is considerable coordination in Nunavut is between intergovernmental officials and finance. The Nunavut Department of Finance handles major fiscal responsibilities (which are shared with the federal government), and consults with Intergovernmental Affairs to develop policy to advance increased federal funding. Its Fiscal Management Branch lends support to the Government of Nunavut on business planning and budget development processes. The Fiscal Policy Program administered by the Branch manages the Territory Formula Financing Agreement with the federal government (Nunavut 2008). The Nunavut Senior Officials Working Group was established as a trilateral meeting between deputy ministers of the federal Department of Indian and Northern Affairs, Nunavut Tungavik Incorporated (NTI), and the secretary of Cabinet to the Government of Nunavut. Nunavut is also involved in multilateral relations. It is an active participant in Arctic politics and has developed connections with such organizations as the Russian Association of Indigenous Populations of the North and the Working Group on Indigenous Populations within the United Nations. The EIA manages these bilateral, trilateral, and multilateral relationships, as they are considered essential to the economic and cultural well-being of the territory (Timpson 2002, 5–8). Also like other jurisdictions, Nunavut is a member of several international organizations that represent a variety of economic, cultural,



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educational, and environmental interests. These include: the Arctic Council; the Canada-Greenland Joint Commission on the Conservation and Management of Narwhal and Beluga; the United Nations through the Permanent Forum on Indigenous Issues; the United Nations Economic, Scientific and Cultural Organization (UNESCO); the International Labour Organization (ILO); the Inuit Circumpolar Council; the International Arctic Science Committee; the Northeast Atlantic Fisheries Commission; the Northwest Atlantic Fisheries Organization; the International Whaling Commission; and the World Council of Whalers (Loukacheva 2007, 111–12). Geography is a fact of life in Canada. Perhaps no jurisdiction feels this more acutely than Nunavut, where a basic impedance to IPC is the ability of its officials to travel to meetings and participate in intergovernmental deliberations in person. Cost and time can be overwhelming. Other than this point and the general comment that its small capacity and so-far largely marginal role left it disadvantaged in intergovernmental forums, there were no comparisons of Nunavut’s IPC to other jurisdictions by officials. It remains to be seen whether the Nunavut project will facilitate the meaningful selfgovernment, sustainable economic development, and healthy communities envisioned in the creation of the territory (Hicks and White 2001, 433). What is clear, however, is that intergovernmental relations and the need to enhance IPC are important to the territory’s ability to achieve its economic and social goals.

CONCLUSION While jurisdiction matters, in the view of officials, comparing jurisdictions for IPC can be a bit of a mug’s game. The tendency is to look for patterns and answers about what “best practices” and indicators exist to determine how much IPC a given jurisdiction has and what this means for IPC more broadly. The concept of IPC is relative here. Clearly there is wide variation in levels of IPC and no magic formula or secret mix of ingredients that guarantee IPC for jurisdictions or the federal system as a whole to address intergovernmental policy problems. Nonetheless, there are some important insights into IPC which can be gained by making comparisons across the jurisdictions that make up the federation. First, population size did not matter as much as one might expect. A large jurisdiction such as Ontario had lower IPC than might be

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expected, while smaller jurisdictions such as Saskatchewan, Manitoba, and Nova Scotia had higher IPC due to political leadership, strategic alliances and investments, institutional knowledge, and veteran intergovernmental officials with high regard for both policy expertise and good working relationships. Second, being a “have” province in terms of equalization does not guarantee IPC. Wealth in IPC needs to be measured broadly. Some “have” jurisdictions were concerned that some “have-less” jurisdictions were too closely aligned with the federal government due to their reliance on the federal government for a significant portion of their revenues. Meanwhile, some “have-less” jurisdictions felt the federal government was not doing enough to help them improve their contribution to overall IPC. Third, while there was no agreement on the precise level of contribution to IPC by various jurisdictions, differing ways of organizing the intergovernmental machinery and levels of resources across jurisdictions are not necessarily the key variables in determining IPC. Intergovernmental administrative institutions and resource allocations do matter but only to a point. There was some agreement that IPC was negatively affected by public sector constraints and restructuring initiatives in many jurisdictions during the early part of our study period, mainly regarding the relationship between independent policy capacity and IPC. Most jurisdictions restructured their intergovernmental machinery at least twice during the period of our study, but there were only a few comments from officials that this enhanced or inhibited the IPC of their jurisdiction. In addition, growth of intergovernmental machinery at the department level may indicate decentralization of IPC or growth of IPC in certain policy areas. Fourth, comparison across the jurisdictions reveals that actors and relations matter. Comparatively high levels of IPC are evident in jurisdictions where there was strong political will and political leadership, often exemplified by an interested and engaged premier and an intergovernmental machinery in proximity to this leadership. Factors like well-developed federal-provincial and regional relations, longserving intergovernmental officials, a specific focus on certain policy areas, and tight-knit relations between intergovernmental affairs central machinery and policy departments seemed to be contributing factors in comparing IPC across jurisdictions. Regional alliances were thought to both bolster and impede IPC, yet most provincial



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and territorial officials felt that increased ­interprovincial-territorial interaction had enhanced their IPC. Finally, it is clear that having independent policy capacity (i.e., at the level of individual governments) does not translate into having the more collective level of IPC. One official made the intriguing observation in 2003 that “there is now more policy capacity in the system, but it is less productive. Quebec, Alberta, Newfoundland, Ontario, and New Brunswick have improved their capacity in the last decade. However, the system is less effective due to the emerging provincial counterforce to the federal government, for example, with Alberta’s dominance in terms of disagreement on climate change and Newfoundland on fishing and offshore oil.” In other words, more actors and jurisdictions with greater independent policy capacity may in fact impede or even paralyze IPC rather than facilitate it. Clearly there is wide variation in the independent policy capacity and IPC of the federal-provincial and territorial governments in the Canadian federation. What this jurisdictional analysis and comments from officials indicate is that those jurisdictions with some strategic alignment between ideas, institutions, actors, and relations as determinants of IPC had comparatively higher levels of IPC. Actors and relations in particular emerge as particularly significant from this jurisdictional analysis. Strategic positioning and relationships seems to be critical, particularly for the smaller jurisdictions. This chapter only scratches the surface in examining the IPC of each jurisdiction in the Canadian federation through some comparative analysis and insights from officials. There is clearly room for more research on this front and at other sub-national levels including the IPC of Canada’s Aboriginal and municipal governments. Officials themselves offered some interesting insights and recommendations on how jurisdictions, policy sectors, and the federation as a whole may be able to enhance IPC in the future. We turn to these next in the concluding chapter.

10 Findings, Recommendations, Conclusions, and Challenges

INTRODUCTION Intergovernmental policy capacity (IPC) is a concept embedded with assumptions about current and future policy-making in Canada. Does Canada need more IPC? The answer presented in this book is yes. There may be specific cases where more intergovernmental capacity may not be required, where the sub-national governments or the national government have the independent policy capacity to deal with particular issues within their own jurisdiction and the introduction of intergovernmental elements becomes cumbersome or inefficient. However, the governments of the federation clearly have to be able to work together in virtually every policy area; indeed, it is difficult to identify any policy areas where more IPC is not required. In most policy areas it is no longer a question of exclusive jurisdiction of federal, provincial, or territorial governments, but a question of how jurisdiction, responsibility, accountability, policy purposes, and public resources are shared. Calls for more multilevel policy intelligence and action with a longer-term policy focus as well as enhanced management capabilities to effectively deliver that policy are not new, but the thinking on how to attain these goals is underdeveloped by both practitioners and scholars. Policy lesson drawing and sharing policy knowledge between jurisdictions are needed, as many analysts of the system have pointed out, but if we have learned anything through our collective efforts in Canada to solve complex policy problems, it is that “sharing” is just a starting point. We need considerably more than that. As the world becomes more networked and policy issues increasingly transcend national borders, all nations need the capacity to engage in multilevel policy making. If we do not



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learn to work within, between, and across governments more effectively, we will not be functioning well at home or in the world. This book presents IPC as a complex, yet useful concept for analyzing the state of the federation in Canada. To investigate and operationalize it, we placed it at the nexus of federalism, public policy, and public administration where practice and theory intersect. As discussed in chapter 1, the strength of the Canadian federalism literature is its focus on institutions and relations, particularly those of the state, where executive processes, power dynamics, political outcomes, formal institutional relations, and informal personal relationships play important roles. Public policy contributes its own strength through neo-institutional analysis which holds together a wide set of institutional and social factors, as well as having a focus on policy process, outcomes, and performance. The literature on policy capacity brings in a focus on resources, knowledge utilization, and the learning systems of a networked world marshalling those resources for policy action – action which is not only reactive, but also proactive. Public administration brings in the administrative dimension of intergovernmental governance, the resources, and the management of intergovernmental networks, partnerships, and relationships within a context of broader administrative institutions, cultures, and ideas. We use this combined focus on ideas, institutions, actors, and relations found in the three bodies of literature to set them against both the focus of contemporary policy capacity literature and the factors we observed during our investigation of the administrative world of federalism. Our survey and interviews of pan-Canadian intergovernmental officials tell us something of what those working inside the system have experienced as key factors in IPC. The simple definition of IPC as governments working together to develop policies is a useful starting point, but we hope we have demonstrated that a richer definition of IPC, one that grows out of the intergovernmental officials’ experiences and perceptions, as well as the scholarly literatures, will take us further in our understanding of the workings of the federation and its potential policy successes. Looking to the intergovernmental officials for a definition of IPC uncovered the fact that this was not a concept about which officials in general had given much thought – but then, neither have scholars. This is perhaps not surprising, since the concept of policy capacity per se is likewise underdeveloped. It is, nevertheless, somewhat worrying, given the increasing need in today’s networked world for

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collaborative action on policy problems, both state-to-state and state-to-society. At the opening of the interview, when asked, “How would you define intergovernmental policy capacity?” most officials either responded in partial terms or simply commented that is was a slippery term to define. Interestingly, many officials conflated their own government’s independent policy capacity per se with IPC. Many had to be reminded during the course of the interview that we were asking them about intergovernmental policy capacity rather than their own jurisdiction’s policy capacity. This is understandable since, in order for each jurisdiction to develop the capacity to engage in the intergovernmental relations of the federation, it must draw on its independent policy capacity. So, the two tend to run together in the minds of those engaged in IPC. However, the distinction is important. Another distinction that is important is the differentiation between types of IPC. Our interviews revealed the richness of many bilateral and multilateral forms of intergovernmental interactions: federalprovincial-territorial, federal-to-provincial, federal-to-territorial, prov­in­cial-to-provincial, provincial-to-territorial, and territorial-toterritorial intergovernmental relations. Officials made it clear that all of these forms of interaction within, between, and across jurisdictions were important. All jurisdictions had some awareness of their comparative capacity and how this factored in to their IPC and the IPC of the system as a whole. Many officials commented on how their jurisdictions were becoming increasingly strategic – particularly inter-provincially and internationally. We conclude, therefore, that more attention needs to be paid to these interactions in order to more fully understand the contemporary state of IPC. That is, we need to understand IPC within, between, and across jurisdictions. We will return to these distinctions and interactions below, but first, it is worth noting which factors elicited concern from officials, as well as any recommendations, however minor, they might have for improving IPC. These concerns and recommendations are also contrasted to those noted in the scholarly literature to more fully examine the determinants of IPC. In summarizing our findings we will see that some particular aspects of the Canadian intergovernmental system held salience for the officials, while others did not. When we look across the span of the ideas, institutions, actors, and relations affecting the IPC of the system, it was the relations, especially informal relationships,



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which were seen by the officials as most salient to IPC, followed by the political and administrative institutions and actors, and resources of budgets, personnel, and time. However, although the officials commented on the importance of these factors for IPC, they provided few recommendations to sustain or improve either the relations of the federation or the political or administrative institutions and actors. Having said this, what they did recommend should be taken seriously, even if it came from only one official, since it might contain the germ of an important innovation. The fact that we elicited few concrete recommendations from the officials does not mean to imply that they were anything but professional, intellectually astute, and often “street smart” well beyond their immediate administrative roles. It is likely that if we were to interview a group of academics, they, too, would have difficulty coming up with concrete recommendations for coping with the long-term needs of the Canadian population in a rapidly changing world. It is obvious when talking to this impressive group of professional public servants that the limits of broader thinking may be strongly systemic, that is, stemming from a lack of time, training, and encouragement to think about the broad picture of federalism and its output. There is plenty of ability in the intergovernmental public service – keeping in mind that as public servants their ability to affect change would always be limited by their political leaders. Thought needs to be given as to how to encourage a broader sense of intergovernmental identity and community in the public service which would supply some of this group with the tools to engage in the future policy communities of the networked world. Another interesting finding in our comparison of officials’ concerns and recommendations with the concerns and recommendations from the literature, is that there is a considerable disjunction between the two. Public servants reveal a more circumscribed view as to what is significant for federalism and IPC than do the academic analysts. While officials are focused on the relations and resources of the existing executive and administrative institutions and actors of federalism, scholars and analysts, while sharing the focus on formal political (i.e., power) relations between governments, are also focused more externally on social, international, and political party actors, parliamentary and constitutional or judicial institutions, and other factors affecting policy-making. We will return to these differences in our conclusions.

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COMPARING THE OFFICIALS’ CONCERNS AND RECOMMENDATIONS TO THOSE OF THE LITERATURE In the course of discussing key factors which enhance or inhibit IPC, officials were asked for their recommendations for improvements to the system. Care was taken during interviews by the researchers not to assume a normative position toward IPC, particularly since some officials felt there was little or no need for enhanced IPC in the system. Many, however, were quite concerned about the lack of IPC. Of these, some offered a few recommendations for improvement.

IDEAS Regarding the role of contextual ideas in policy-making and how they affect IPC, there appears to be little thought given by officials to either the political ideas in good currency, such as debt and deficit reduction, or the dominant administrative ideas of the day, such as New Public Management (NPM). This is not to say they do not use this language, only that they do not much reflect on it. This stands in contrast to considerable concern by scholars about: the role ideas play in determining policy outcomes (Stone 1997; Hall 1989; ­Bradford 1998; O’Reilly 2000; Bhatia and Coleman 2003; White 2004; Inwood 2005); the decrease in policy capacity in ­Canada associated in the 1990s with a politicized and ideological style of policy making (Aucoin 1988; Savoie 1994); the “dysfunctional politicization of the issues” in the institutions of ­federal-provincial-territorial cooperation in the mid-1990s (Canada, Canadian Centre for Management Development 1996A, 36); or the intergovernmental arena as a forum for the exposure of competing public ideas (Lazar 2003, 39; see also Smith 2004). Some observers argue that “the capacity to generate, analyze, and manage ideas is a crucial part of a government’s overall policy capacity – and a strong policy capacity is one of the more important resources available to governments during intergovernmental negotiations” (Bakvis, Baier, and Brown 2009, 61). Concern was expressed by officials about the lack of vision statements or guiding principles for policy related decisions, but like scholars who have documented the difficulty of producing f­ederalprovincial-territorial vision statements and shared principles ­ (O’Reilly 2001B), they provided no actual recommendations for achieving this. When pressed as to why some projects such as the



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National Child Benefit (NCB), which many cited as a best practice example, had succeeded in laying out ideas and goals while bringing the intergovernmental actors together to produce a policy output, many said they thought leadership had been the driving factor, but no one had any concrete recommendations as to how to produce leadership in the system – a common problem in scholarly calls for leadership (Dutil 2008). To paraphrase Mark Twain: like the weather, everyone talks about it, but no one does anything about it. Overall, the centrality of ideas to IPC was not explicitly but subtly identified as important – often bound up with discussions of institutions, actors, and relations.

INSTITUTIONS The Constitution Very few officials suggested a need for constitutional reform, and most did not see it as an important variable affecting IPC. Those who did, like their fellow academics, had very little appetite for reopening constitutional negotiations. However, the maintenance of the principle of jurisdictional integrity, or the division of powers, was recommended by officials. Indeed many officials treated it as a “sacred cow” and often called on respect for the existing constitutional jurisdictional divide as the answer to improved IPC rather than considering any revamping of this division of powers or acceptance of the need to better address existing and growing overlap in many policy areas. This is notwithstanding academic assertions of a networked, multi-level world where the division of powers is an impediment. At one time, calls for constitutional reform were commonplace in the federalism literature – indeed it was a veritable growth industry. Those few academics who still advocate for modern-day constitutional reform (Russell 2006; Choudhry 2008) appear to have stirred up little interest from most contemporary government and academic quarters. Political and Administrative Institutions There is a general sense among many officials that the overall design of the main political institutions of executive federalism, particularly the First Ministers’ Meetings (FMMs) and the ministerial and

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deputy ministerial conference tables, works reasonably well, with a few caveats. In fact, some officials thought the existing mechanisms have been underutilized. Those officials who would improve the system expressed concern about the prevailing balance of power in the FMMs. Some provincial officials recommended more access to the existing structures through mandatory annual co-chaired FMMs with co-developed agendas by federal, provincial, and territorial governments, and, for some, linking them to the Annual Premiers’ Conference (APC) agendas. Some officials recommended the development of dispute mechanisms to settle conflicts (more in Agreements and Accords). Others recommended “strengthening” the federalprovincial-territorial conference systems that feed into the FMMs in order to “depoliticize the higher-level debates with calmer emotions.” In contrast, others thought a more developed provincialterritorial subsystem was needed to offset the federal power in the existing federal-provincial-territorial institutions – while also arguing against national councils. Even cases seen as successful in terms of policy output, the NCB for example, seemed to garner little in the way of institutional recommendations. Although it was recognized that the institutional subsystem had fed into the NCB success, informal relationships were often given the credit for bringing the policy to fruition. Likewise the 2000 Health Accord’s success in public accountability was seen as more a product of the informal power disputes of the executive than of any commitment to public participation. Notably, recommendations on how to replicate these few successes were not forthcoming, and given the ad hoc nature of the FMMs, seem problematic. The governments were said to be working with distinct purposes rather than collaboratively. One official claimed, for example, that the federal government prefers sectoral forums but some provinces want cross-sectoral forums, and “this can become dysfunctional.” Some officials did express concern about the overall capabilities of the existing executive institutions. Most of these officials were from the policy sectors and found the institutions inadequate to the task of dealing with long-term complex policy problems, particularly overall restructuring of policy sectors. Some suggested restructuring the FMM so it could “give a needed jolt to the system,” but no specifics were given. Others recommended more focus in the FMMs on long-term planning to “look at national economic and political priorities.” In a different but related vein, one official recommended



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more involvement from cabinet “to help facilitate political capacity through cabinet decision making.” In contrast to these recommendations, there were those who were opposed to any further institutionalization of the system for fear of the nature of institutionalization itself, that it gets “attached on” and gets captured by interest groups or becomes unaccountable. One official commented, “Executive federalism is closed, and this is why we should not institutionalize it anymore.” Scholars of federalism have suggested that over the long term, the main institutions have provided a relatively effective forum for dealing with fiscal relations and specific financial agreements between governments, although often entailing a long and arduous process and with sporadic rather than sustained successes (Brown 2007; Leslie 2004). In the 1980s, some scholars commented on the failure of summitry – the high-level politics that surround the FMMs. Dupré acknowledged that it was “in disarray,” but highlighted that it was mainly about fiscal federalism: politicians wanting to accept credit for money received and pass blame for money denied. This led Dupré to develop a “fiscal relations model” of federal-provincial summitry, revealing the unique trust ties that are generated by finance officials and ministers (Dupré 1985, 17). Dupré argued that such summitry and fiscal federalism made executive federalism to a great degree unviable to the extent that central agencies without the requisite trust ties take over a file from functional or line departments where those trust ties have been cultivated (Dupré 1985, 20). Today the central agencies, including finance, appear to be more connected, leaving the line departments in need of developing stronger ties with them as a whole. In the 1985, the Royal Commission on the Economic Union and Development Prospects for Canada (the Macdonald Commission) recommended the establishment of a more formal, core framework of federal-provincial mechanisms to support first ministers in three fields: finance, economic development, and social policy (Canada 1985, 400), but nothing came of this. More recently, some scholars have also argued that these institutions have been less than effective in dealing with any long-term complex policy problems, particularly restructuring of policy sectors, and are therefore “underdeveloped” or incapable of the task (Papillon and Simeon 2004, 114; Brown 2003, 3, 7; O’Reilly 2001B). This sentiment was echoed by some officials concerned with the lack of capacity of the existing system.

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One long-time senior official said, “More and more, we cannot handle cross-disciplinary problems.” Academics and former officials have been more inclined than the officials to encourage the fostering of innovation and laboratories of experimentation in new policy mechanisms and institutions ­(Banting 1998; Decter et al 2003: Brown 2003). Motsi and Plumptre point out, “There is an increasing requirement at the federal level for transparency and accountability to Parliament whenever the federal government participates in shared governance arrangements. In cases where the organization has been created through legislation, annual reports from the organization must be tabled in the House of Commons. As of 2007, the Treasury Board of Canada also tables an annual report to Parliament on shared-governance corporations” (Motsi and Plumptre 2008, 5). They conclude, “These organizations represent something relatively new and interesting on the governance horizon. Governments are forever wrestling with the problem of how to deal with public policy issues that cross jurisdictions and involve multiple stakeholders. Conventional intergovernmental mechanisms tend to work poorly. Perhaps these shared governance arrangements offer a solution” (Motsi and Plumptre 2008, 6). Scholars have also called for greater public participation and accountability to be structured into the existing institutions of executive federalism (Papillion and Simeon 2004; Smith 2004) than that which we saw recommended by the officials. Notably, no officials suggested, as had Papillon and Simeon, that the FFMs be more directly linked to the parliamentary legislative process (Papillon and Simeon 2004), or as Leslie has recommended, that external avenues of dispute resolution be enhanced via political parties or the judiciary (Leslie 2004), or as Brown has suggested, utilizing legislaturetype voting procedures in intergovernmental forums (Brown 2003). Competing views about whether executive federalism should be reformed by strengthening institutions versus strengthening trust ties between ministers are also evident in the federalism literature. The first view suggests formalizing the FMMs as a way to establish decision-making rules and to increase openness and transparency, as we noted above (Papillon and Simeon 2004; Brown 2003). This is where the federalism scholars and the officials part ways. The former tend to advocate greater institutionalization out of which it is expected trust ties will be fostered. The latter tend to advocate trust ties out of which further institutionalization may emerge, but even



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if it does not, this is not considered terribly problematic to the IPC of the federal system. For the officials, the first order of importance is that personal relationships are strong; institutions are secondary (see Relations below). Closer to the officials’ position is that articulated by Lazar (a former official himself) who takes the view that the lack of institutionalization is often the very ingredient for success in the Canadian federation since, he argues, some ambiguity is essential (Lazar 2004). The federalism literature also addresses the way in which line depart­ments and central agencies work together – or not. In the 1970s, Smiley argued that intergovernmental agencies are adversarial by nature, although he was assessing federalism in the context of intense constitutional battles (Smiley 1979). The stakes are now supposedly much lower, and thus, some scholarship suggests that intergovernmental agencies can be seen as facilitators for the specialized program departments (Bakvis, Baier, and Brown 2009, 120–2). Our findings tell a slightly different story: while the intergovernmental relations generalists may see themselves as facilitators, the line departments often see them more as meddlesome, processobsessed interferers. One of Dupré’s key points is that the shift from the departmentalized to the institutionalized cabinet triggered the conflict between the central agencies and line departments for control over the intergovernmental dimensions of policy. In the departmentalized model, cabinet ministers are given a specific portfolio which they use to expand the public sector in that area, as client interests build (Dupré 1985). Here, ministers do not tend to share information with their colleagues, and the same mentality also prevails at the bureaucratic level. In contrast, the institutionalized cabinet promotes information sharing between central agencies and budgeting authorities; but it also creates two classes of ministers: “central agency” and “special interest.” Accordingly, “intergovernmental decision-making becomes not only collegial, but acquires a competitive, adversarial flavour” (Dupré 1985, 4). We did see continued signs of this, but we may be entering a period of transition. That is, we may have moved beyond the institutionalized cabinet model in recent times, with implications for IPC beyond those articulated in earlier literature. The trend toward ever greater concentration of power in the Prime Minister’s (and Premier’s) Office has been duly noted (Savoie 1999, 2008; White 2005). The rise of political staff and their increasing influence in the centralization of power

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has also been noted (Dutil 2006; Aucoin and Savoie 2009). But the effects of these developments for intergovernmental relations have not been adequately assessed. The intensification of intergovernmental conflict in the period we study may be related to the management of the drive toward horizontality in the context of a less institutionalized cabinet and a more centralized control by first ministers. In other words, being asked to coordinate both across ministries and across governments by a more commanding imperium at the apex of power may make smooth relations more difficult overall. Bakvis, Baier, and Brown offer some useful comments on the tensions between line departments and central agencies as well. In their discussion of the intergovernmental framework, the authors note the importance of intragovernmental relations on the outcomes of intergovernmental relations. Central agencies manage the broad agenda of intergovernmental relations, “but the sheer volume and complexity of the intergovernmental issues that arise means that many of them must be handled by various agencies and line departments” (Bakvis, Baier, and Brown 2009, 48). The point here is that, since the latter will have less of an intergovernmental central focus and more of an intragovernmental policy focus, the issues and their solutions will likely be perceived differently by the line departments – as our analysis of the health sector most clearly shows (see chapter 7). However, we would add the caveat that the centre appears to have the power to “pull up” a file if it chooses, leaving the line departments to follow their lead rather than the other way around. Again, this was clearly illustrated in the health sector. With regard to administrative institutions, the officials were divided on whether creating new or reforming existing administrative institutions holds much promise for enhancing IPC. For some officials, reforming administrative institutions using accountability and performance measurement mechanisms would be one way to enhance IPC. There were also a few recommendations from officials related to the administrative secretariats attached to the executive institutions. Some said the federal-provincial-territorial sectoral tables, or conferences as they are often called, need to produce and process more rigorous analyses of important policy issues. The suggestion was made to pull joint research teams together with a CEO accountable to a management board –“someone or some persons would have to drive it.” However, there was also concern about keeping the size of the secretariats to a minimum, as noted by an official who



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said the federal government and provinces had agreed in the 1990s “not to create big secretariats for trade, health, or environment.” One official recommended more intergovernmental generalist interactions with more interdepartmental coordination, and all-cabinet submissions being received by the ministry of intergovernmental affairs. Finance officials indicated that their long-standing set of technical committees, and the coordinating mechanisms led by deputy ministers through the Continuing Committee of Officials (CCO) and its series of sub-committees, had worked well and were perhaps worth emulating in other sectors. They recommended de-politicizing issues wherever possible and emphasizing the technical aspects of a case. Some also recommended involving the provinces more. However, they recognized that the problem of the uneven technical capacity of the provinces and territories needed to be addressed first. Alternatively, one official made the rather provocative suggestion to abolish intergovernmental relations departments, suggesting that filtering everything through the intergovernmental forums disengages the participants: “it reframes them and filters them through the intergovernmental lens.” Interestingly this is not far from Eddie Goldenberg’s comment in his memoirs that “the best way to achieve concrete results in federal-provincial negotiations is to keep most Intergovernmental Affairs departments at a great distance” ­(Goldenberg 2006, 330). At the very least, it was suggested by an official that, since provincial intergovernmental people are “just running around figuring out how to ‘piss off’ the feds,” decentralizing management of the intergovernmental process to intergovernmental specialists in line departments would “offer more in terms of IPC.” This official went on to say, “This is not likely, under a model that is centralized around the policy whims of first ministers.” Others shared the concern that the central control in the system and the resultant alienation of the actors involved be addressed, both between central agencies and line departments, and between the federal and regional governments. Although some departmental officials commented on their “strong connection” to finance, others complained they did not feel strongly connected to either central intergovernmental or finance and this ought to be improved. But the institutional means to attain this objective were never spelled out. Recommendations for any development of federal-provincial­territorial administrative institutions were tempered by the concerns of several jurisdictions about existing national institutions and

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the role of the federal government. A review was recommended for national institutions such as the “whole regime of federal appointments to boards, commissions, etc., with their bias toward the centre.” One official commented that the federal bureaucracy has many empires and it has a hard time coordinating everything, saying, “It needs control levers.” The nature and type of these controls was not specified, although external accountability institutions and horizontal institutional arrangements were noted as holding significant potential. The delegation of more power by the federal government to its regional offices was recommended in order to both give more coherence to the output of the system and to give the provinces a sense of engagement in national policies. Some officials recommended institutions based on regional groupings so that provincial and territorial governments could speak to the federal government from a position of “strength in numbers.” However, examples of the splintering of provincial-territorial solidarity, such as with climate change, equalization, and the CHST, were also noted. Some centre-to-region coordination has been institutionalized by the federal government through Federal Councils created in the early 1980s “as a result of the need for senior federal officials in the regions to share information with one another about developments in Ottawa ... [acting] largely as executive networking groups” ­(Canada, Treasury Board of Canada Secretariat 2006). The councils could play an “enhanced role ... in a number of different areas, including policy development, the coordination of regional communications, and in experimentation with various alternatives service delivery models ... providing a federal interdepartmental forum, or gateway, in the regions, for provincial, territorial, and municipal administrations to access the federal government” (Canada, Treasury Board of Canada Secretariat 2006). However, in interviews only one or two provincial intergovernmental generalists and a few officials from the policy sectors even mentioned Federal Councils. One provincial official from the Atlantic region criticized the ability of these councils to fulfill their promise of regional input from the viewpoint of the provinces and commented, in 2003, that federal efforts had dropped off. Although an environment official noted that Federal Councils had a positive impact in that policy area, few specific recommendations were offered related to their future role in IPC. The administrative institutions that had developed in relation to particular policy sectors were noted by some officials. Interestingly,



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despite many comments on the Canadian Council of Ministers of the Environment (CCME) as the most institutionalized administrative secretariat in the intergovernmental realm, few officials recommended it as one to emulate. One federal official did comment in 2001 that the National Roundtable on Environment and Economy might offer more potential in building IPC, particularly its work on indicators. Provincial trade officials also recommended maintaining good, strong links with the federal Department of Foreign Affairs and International Trade (DFAIT) which had the resources and knowhow to assist them with their trade policy ventures. They also commented that the technical nature of many trade issues made it easier to facilitate good institutional relations between governments and across ministries. On internal trade, some officials expressed dissatisfaction with the Internal Trade Secretariat, without however recommending other means by which to resolve issues. Some officials claimed the Secretariat was an effective mechanism for dialogue and communications between governments, but as we have seen this seems to be the minimalist fall-back position for positive assessments of any of the institutions and in no way guarantees anything but ongoing conversations. There have been some noted federal institutional and capacitybuilding efforts in the health area and experiments with mechanisms and innovation, particularly in health information systems and health research. However, one of those institutional innovations, the Canadian Institute for Health Information (CIHI), received mixed reviews in terms of IPC. Many provincial officials saw it as federal rather than intergovernmental. Similarly, some worried that the new advisory council, the Health Council of Canada, would become too constrained by deputy ministers’ agendas, or that any of the information sharing efforts would run up against jurisdictional interests. Some officials recommended intergovernmental “pilot projects” and the creation of a “secretariat for research.” Overall, though, regardless of the existence or potential of these bodies, officials noted the limitations of those working on advisory councils, pilot projects, and other intergovernmental institutions as distracting attention from their “real job.” It was also noted that these bodies “have no standing and no ongoing capacity.” They can as easily be ignored as listened to. Although it should be noted, several officials also warned that we not forget the power of the media. Much of CIHI’s ­effectiveness has been in its exposure of health care results through the media.

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The literature suggests that because public administration (Dobell and Bernier 1996; Delacourt and Lenihan 1999) and public policy (Johns, O’Reilly, and Inwood 2006; Stein 2006) are increasingly intergovernmental and horizontal (Bakvis and Juillet 2004), the federation may require more innovative institutional changes. Academics raise concerns about institutional innovations, for example regarding traditional accountability frameworks (Thomas 2007; Aucoin and Jarvis 2005; Savoie 2004; Bakvis and Juillet 2004), but they also see some success stories. It has been noted that finance has well-developed administrative institutions that seem to function quite well at the operational level (Leslie, Neumann, and Robinson 2004); and Kukucha concludes that where trade policy is concerned, “the institutions of Canadian federalism have responded successfully to ... international and domestic pressures” (Kukucha 2008, 194). However, in the literature on sectoral intergovernmental administrative institutions there is no consensus that most of the administrative bodies, even those that are long-standing and highly institutionalized like the CCME secretariat, make significant contributions to IPC and have the capacity to address complex intergovernmental problems which are highly variable by jurisdiction. In trade, academic analysis has recommended strengthening the AIT to move it beyond voluntary compliance (Doern and MacDonald 1999). However, ­recommendations to move more aggressively to reduce internal barriers to trade by instituting binding enforcement mechanisms have been countered by recommendations against this approach on the grounds that it might privilege investor rights and impede democratic decision-making by governments (Sinclair 2007). In environment, analysis of the Climate Change Secretariat highlights why its contribution to IPC and horizontal policy even within the federal government were limited, noting interdepartmental and central agency leadership as key issues (Bakvis and Juillet 2004). In health, the institutional product of the FMM early 2000s Health Accords, the 2003 Health Council of Canada, was originally recommended as a body to go beyond the function – to which the CIHI had been held – of collecting and publishing health information and data, to a much stronger role as a mediator of intergovernmental disputes (Canada 2002, 52–8; Adams 2001A, 283; Marchildon 2003, 3). The council was rejected by Quebec and Alberta and then watered down to the same policy-learning function as all of the administrative intergovernmental machinery in health care. As discussed in



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chapter 7, this appears to have been mainly due to the usual fears of politicization of the arm’s-length body as well as federal interference in provincial jurisdiction. Again, as with all of these “innovative” institutional bodies, political will to be truly innovative appears to be seriously lacking. An interesting and, perhaps, intuitively obvious institutional limitation to IPC is simply the mosaic of departments and agencies responsible specifically for intergovernmental relations in Canada, as well as the variety of administrative institutions across governments in similar policy fields. We have noted the wide variety of structures across governments serving the same essential purpose: for example, in one place they use a ministry; another uses a central agency; another uses a secretariat; and they use different names or combine several functions under a single entity in ways other jurisdictions do not, sometimes combining trade with economic development, for instance, or intergovernmental relations with international relations or municipal affairs, etc. There is, in short, a significant variety of organizations across the two levels of government, and even between governments at the same level. The hodge-podge of departments, ministries, secretariats, and central agencies at each level and/or the lack of a counterpart at the other level affects IPC. While the officials did not draw much attention to this, academics have observed it may impede policy making (Bakvis, Baier, and Brown 2009). The time and energy lost in formulating and reformulating bodies, reassigning personnel, developing new organizational responsibilities, and then building the new relationships to sustain the work of the new creations is noteworthy. This may occur at the higher level of central agency or departmental reorganization; but it may also be a problem at the level of new accords and agreements which necessitate new implementing and monitoring bodies. “In short, an organizational mismatch between the two orders of government can be highly problematic” (Bakvis, Baier, and Brown 2009, 126). On balance, given the apparent needs of the system, there was limited institutional innovation in intergovernmental relations during the period of our study (Johns, O’Reilly, and Inwood 2006). Examples include the Council of the Federation, Team Canada, the Canada Health Council, the Agreement on Internal Trade Secretariat, the transition from FMCs to FMMs, and the increased formal linkages to various American bodies. There was also reorganization of

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the forms of institutions used to house intergovernmental relations in all governments. But none of these stand as important innovations cited by officials as transforming the system to a condition of strengthened IPC. Perhaps the simple call from a long-term practitioner for “more attention to the practical working arrangements between federal and provincial departments” needs to be heeded (Anderson 1996, 487), or the call from the American literature for institutionalizing a more intergovernmental public service (Gage and Mandell 1990). Rather than being more of a specialty, intergovernmental dimensions of governance would be considered more of an integral part of the public service of a federation. Institutional Resources The officials clearly saw institutional resources such as budgets, personnel, and time as important to IPC. They recommended more money, staff, communications technology, time, and arenas as well as access to external academic studies, for planning, direction, and leadership. As outlined in chapter 9, officials from the less wealthy provinces and territories were concerned about the differentiation in the resources of governments expected to handle new intergovernmental policy demands. They recommended more federal government support and provincial and territorial sharing of information to help bring them up to the level of the more well-to-do participants at the intergovernmental table. Where institutional resources are concerned, it is easy to assume that greater wealth allows a province “to invest in developing other critical resources, such as expertise and the capacity to use it” (Bakvis, Baier, and Brown 2009, 51). In other words, governments that have more money to spend on intergovernmental relations should be able to run more sophisticated, well-resourced departments. Another aspect to this is that provinces and territories in better financial situations are less needy of federal government money, and therefore are more able to decline to cooperate with the federal government. However, greater policy capacity is not automatically acquired through financial resources; rather, it may be the strategic use of a government’s limited financial resources that makes a difference in IPC. Quebec, for instance, has traditionally been a “haveless” province of limited fiscal capacity, yet because it has often been willing to devote significant resources to negotiation preparations,



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it has often displayed more capacity than its resources would predict. For example, its investment of IPC resources produced a better pension plan than the one the federal government was proposing (Bakvis, Baier, and Brown 2009, 51). Some evidence points to the Atlantic Provinces as examples of how poorer and smaller provinces can also make significant headway by capitalizing on their small size, as we suggested in chapter 9. If they appeal to core values like fairness or equity, and/or act strategically, they can leverage concessions or terms favourable to their own interests, as Premiers Danny Williams of Newfoundland and Labrador and John Hamm of Nova Scotia did with regard to offshore resource revenues and equalization in 2005. Premier Frank McKenna of New Brunswick, another leader of a small province, effectively built institutional resources through networks and sought out talented people in pursuit of his government’s goals. Saskatchewan premiers such as Roy Romanow have also been able to wield greater intergovernmental influence than might be expected by a tally of provincial resources alone. Over the course of history, many premiers have managed to punch above their weight on issues of central importance to their governments. What was also recommended by officials with regard to institutional resources was sometimes simply the time and means to reflect on “specific goals and objectives.” The 1996 federal Deputy Ministers Task Force Report Strengthening Policy Capacity recommended enhanced arenas, time, and space either in the officials’ daily work schedules or with structured retreats for managers to enable them think, discuss, and debate ideas about ­federal-provincial-territorial relations and future plans and directions (Canada, Canadian C ­ entre for Management Development 1996A, 36). Duane Adams, a former public servant, argued the development of long term goals and objectives is essential to good intergovernmental policy making (Adams 2001B, 7). Likewise, Flumian argues that “today there is an even greater need for government to explain decisions about the greater good in the context of the individual” (Flumian 2010, 176). Officials were also concerned about the sharing and utilization of policy knowledge. They suggested that both internal and external communications’ needs and information management require additional resources and perhaps training. The specialized “lingo” of policy discourse and the difficulty in finding a common language in which to talk to others across policy sectors and policy ­communities

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was commented on. These points have been noted in contemporary policy and public administration literature on discourse or interpretive policy analysis (Yanow 1996; Ospina and Dodge 2005). The use of technology and infrastructure for enhanced information ­sharing and outcomes-based approaches to policy through what has been called “technology-enabled federalism” (Brown 2010, 533) was r­ ecommended by officials. Investments and linkages to existing data collecting agencies and universities, as well as general intellectual exchange with universities, think tanks, and policy centres, and even an “intergovernmental secretariat for research” were all recommended by officials. Strengthening Policy Capacity made similar recommendations for theoretical research, statistics, applied research and modelling, environmental scanning, forecasting, trend analysis, new commu­ nication and analysis technologies, and policy and science ­(Canada, Canadian Centre for Management Development 1996B, 4–8, 13). Some officials also recommended better institutional mechanisms “with direct connections to the FPT deputy ministers’ tables,” to ensure the utilization of policy knowledge. Others thought it likely more efficient to focus on regional provincial-territorial sharing and dissemination of knowledge and expertise, citing the success of Western or Atlantic premiers’ collaboration (including adjacent US partners). Interestingly, when queried about the resources of intergovernmental institutions and their contribution to enhancing IPC, some officials, particularly in health, turned to agencies outside the public service such as the Institute for Research on Public Policy (IRPP) to provide a mechanism “to bring the community together and make people think dispassionately.” Government recommendations also suggest that arm’s-length institutions like foundations offer some potential to build IPC (Canada, Policy Research Initiative 2007). Notably, however, the federal government’s Policy Research Initiative (PRI) was supposed to have an intergovernmental outreach component but this organization has remained focused on building policy capacity for the federal government (Bakvis 2000; ­Canada, Policy Research Initiative 2008) and has not become the kind of arm’s-length intergovernmental policy institution that many officials recommended – instead fuelling the long-standing impression of the provinces that such federally initiated bodies will primarily serve federal interests. Academics have noted that the  use of



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institutes, foundations, agencies, research networks, think tanks, centres of excellence, etc. have introduced some interesting innovations, some  with intergovernmental features (Johns, O’Reilly, and Inwood 2006). This concern for knowledge transfer is in keeping with recent scholarly work on knowledge utilization and policy capacity (Bakvis 2000; Painter and Pierre 2005; Howlett 2007, 2009). In studying the policy capacity of the Canadian government, Peters recognized the need for institutional structures to cope with and utilize the vast amount of knowledge available to, or even deliberately withheld from, the government. At one point he implies these channels would best be developed in the administrative rather than the political wing of government, given the overly ideological, non-analytical bent of contemporary Western governments, and the lack of experience and expertise of Canadian ministers, including management and leadership skills (Peters 1996 14–16, 32–3). Organization theorists have also warned that the new communication technologies are a doubleedged sword, in that they allow for more knowledge and information transfer at the same time as they increase personnel accessibility and workload (Towers et al. 2006). Thus, although a world of information resources is now at everyone’s fingertips, many professionals are too busy to assimilate and translate it. Accords and Agreements Although several agreements and accords were signed during the course of our study, the signing of the Health Accords of 2000 and 2003 constituted one of the high-water marks of intergovernmental efforts in the period we reviewed. Despite this, no recommendations for enhancing IPC were forthcoming from health officials regarding either the process or outcome of these accords. This may reflect the fact that the heavy slogging in these negotiations was conducted mainly by first ministers and finance ministers and often taken out of the hands of health officials, but it also reflects the overall lack of assessment of accords and agreements by intergovernmental officials per se. When asked, officials named intergovernmental agreements and accords from which lessons of enhanced IPC might be drawn, including the National Children’s Agenda, the National Child Tax Credit, the Agreement on Internal Trade, and the Social Union F ­ ramework

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Agreement, as well as the Health Accords. Officials also referred to Canada’s intergovernmental s­uccess with sectors beyond our investigation, for example, ­security, agriculture, fisheries, immigration, and infrastructure. Examples of decreased IPC, for example federal-provincial-territorial collabora­ tion on economic development agreements, were also noted. However, officials had difficulty extrapolating the key factors and variables which contributed to the success or lack of success, and were therefore unable to offer substantive recommendations to enhance IPC through these accords and agreements. Their examples warrant further study. In general, officials highlighted the utility of accords and agreements as a mechanism to enhance both greater horizontality and IPC. Some recommended more formal intergovernmental accords and agreements but expressed frustration at the federal government’s disinterest in this. Bilateral accords were seen by some to be more effective than multilateral ones. One official commented that “multilateralism is good for goal setting, while bilateralism is good for action.” However, there were neither clear recommendations on the utility of intergovernmental agreements nor a consensus on how to make implementation of intergovernmental agreements more binding or accountability based. More particularly, some officials recommended limiting the scope of agreements and accords – as happened with the Health Accords. One official noted that the agreements in fisheries had been successful because the range of topics for cooperation remained restricted. A finance official said the same about intergovernmental tax agreements. A few suggested a stronger role for information gathering and utilization, including non-government sources. Concerns were expressed by officials about the politicization of the processes involved in developing intergovernmental accords and agreements. Speaking about the Kyoto agreement, one official recommended “more attention be paid to policy substance rather than political posturing.” A provincial official cautioned that accords and agreements always exist in the shadow of the federal spending power, “which colours IPC in overt and subtle ways,” and went on to recommend disentanglement as “more policy efficient” than collaboration through agreements, that is, agreement on not taking action in certain areas. During our early interviews, intergovernmental generalists were still preoccupied with the fundamentals which underlay the 1999



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Social Union Framework Agreement (SUFA), although the agreement itself was often seen as “dead” by the end of our study period. Clearly provincial and territorial governments felt more formal arrangements for intergovernmental federal-provincial-territorial interaction at the executive level were needed. Many, mostly provincial, officials were interested in pursuing joint investigation into mechanisms such as formal notification, dispute avoidance and dispute resolution mechanisms. Only a very few supported the idea of third-party arbitration mechanisms to overcome deadlock in ­federalprovincial-territorial decisions. The latter was received by the federal government decidedly coolly, while the provinces or territories varied from mild support to caution. Although the federal government did sign SUFA, even the least disputatious of these mechanisms – consistent federal notification to the provinces and territories of its intentions with regard to policy fields not under federal jurisdiction – failed to be elicited and caused considerable anger and irritation for the provinces and territories. Our early interview subjects in the provincial and territorial governments made considerable reference to this and although the federal government was reluctant to admit to this accusation of their failure, there were numerous examples of such unilateral actions (see also Boismenu and Graefe 2004; McIntosh 2004; Facal 2005, 16). Over and over, provincial and territorial officials called for intergovernmental agreements and institutions to limit federal unilateralism. Where they were divided was whether those institutions should promote collaboration or disentanglement. While complaints were many, concrete recommendations were few. Despite considerable work on dispute avoidance and dispute resolution mechanisms by the provinces, the governments had had difficulty coming to agreement on what these mechanisms might entail, and this was reflected in the lack of development of the thinking around this mechanism in the officials with whom we spoke. A few intergovernmental generalists recommended the use of dispute resolution mechanisms utilized by international bodies such as the United Nations, where decisions are sometimes binding and sometimes use suasion. Others were less optimistic about international models, given the Canadian experiences with American reneging on NAFTA dispute agreements. One official claimed that the principles of SUFA were implemented in the development of the Early Childhood Development and Nation Child Benefit agreements, both

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showing “commitment to collaboration, sustained funding, involving a spectrum of stakeholders, more transparency, accountability to the public, and a framework for sectoral ministers to avoid disputes and resolve them.” In fact, both grew out of the national agenda of the 1995 Provincial-Territorial Council on Social Policy Reform and Renewal, which was also linked to health care reform initiatives. Some officials did argue that IPC would benefit from “resuscitation of the social union,” although most officials saw it as having failed to live up to its promise, and remained skeptical of any thirdparty participation in the closed circles of federalism. Concrete recommendations for further development of SUFA-like mechanisms to intergovernmental mediations to enhance IPC were few and far between. Scholars have noted that SUFA had little effect on either social policy per se or on the processes of making social policy – the latter being its main purpose (Lazar 2003, 2; Facal 2005). Processes that were agreed to in principle by both levels of government appear to have had no teeth – recommendations for concrete mediation mechanisms were replaced by fact-finding, and calls for voluntary compliance appear to elicit few facts and little compliance. Surprisingly, no officials made recommendations to formalize intergovernmental agreements, as suggested by scholars for “improving the enforcement of intergovernmental agreements by embedding them in uniform federal and provincial legislation” (Brown 2003, 7). Also, no officials recommended formalizing decision rules in intergovernmental forums, although several did note the success of intergovernmental processes like the Canada Pension Plan where, as Little has shown, qualified majority decision rules helped produce policy in the field (Little 2008). In contrast, the literature continues to recommend more structured and institutionalized rules for federalism which might necessitate intermediary bodies (Brown 2003; Papillon and Simeon 2004; Simeon and Nugent 2008; Bakvis, Baier, and Brown 2009). ­Poirier recommends that bringing in a more explicit legal framework would provide more reliability to intergovernmental agreements and accords (Poirier 2004). Lazar and St-Hilaire have offered process recommendations for “reconstructing the ­federal-provincial partnership,” which include recommendations from Cameron and ­McCrea-Logie for dispute resolution mechanisms (Lazar and StHilaire 2004). However, caution has been expressed regarding mediation mechanisms. Skogstad argues that ultimately ­institutions



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like trade dispute mechanisms are no substitute for “interstate diplomacy at the official and highest ministerial level” (Skogstad 2008, 229). Baier warns that dispute settlement institutions minimize the legitimate role of the courts and the Constitution, and have legitimacy and transparency problems of their own (Baier 2008). The environmental policy area offers some suggestions for accountability reforms in agreements such as the CanadaOntario agreements related to the Great Lakes and in the transboundary context whereby international accountabilities may be used to drive intergovernmental accountabilities (International Joint Commission 2006). In the end, details of how to overcome the problems which “killed” SUFA (from both the design and the implementation standpoints) and improve the outcomes from intergovernmental agreements are rarely offered by either public servants or academics. Lazar did look at the roadblocks to fulfilling SUFA and concluded it may not have been a “failed experiment” if understood more for what it has taught us than for its output, but he also warns against thinking that such agreements could “change voluntarily long-­established and deeply engrained modes of behaviour” (Lazar 2003, 3–5). In the light of Savoie’s findings on the pervasiveness of central power in the Canadian executive (Savoie 1999), one might be skeptical of the likelihood of any diminishing of central power in intergovernmental agreements, increased involvement of legislatures, or enforcement of binding rules or dispute resolution mechanisms by the courts. The Courts The courts have periodically played an important role in many intergovernmental policy disputes, but the few officials who were concerned about the courts tended to see their use as an indicator of poor IPC and the failure of bargaining and negotiation between governments. This is in keeping with Baier’s observation that it is not surprising, given the limitations of judicial review (such as the reluctance of the courts to enforce intergovernmental agreements), that the governments prefer “intergovernmental negotiation and strategy as the best tool for individual governments to achieve their goals” (Baier 2008, 35). Thus, it is not surprising that very few of the officials we interviewed mentioned the courts in terms of IPC.

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Parliament and Political Parties There is no requirement in Canadian executive federalism for ratification of non-constitutional intergovernmental agreements by Parliament. Overall, officials had little to say about the role of our Westminster parliamentary institutions in the workings of executive federalism, although some officials did suggest the need for change within broader government institutions. One atypical official did recommend Senate, Parliamentary Committee, and electoral reform. Interestingly, although utilizing the existing Parliamentary Committee system would not necessitate reform, officials had little or nothing to say about it. In contrast, academics have been increasingly calling for restructuring of the governing components of the Cana­ dian parliamentary system in ways which would provide more balance between the executive and the legislature, or between the centre and the regions, and more executive oversight and accountability to the legislatures and the public. Their recommendations, which have been well documented elsewhere (see for example, Watts 1987; Cameron 2004; Franks 2004; Meekison, Telford, and Lazar 2004; Smith 2004; Simeon 2005; and Leo 2006), have targeted a number of proposed reforms around both intra-state federalism and interstate federalism. Simeon proposes some of these recommendations as “counterweights” to the existing institutions of executive federalism. For example, he suggests setting up standing intergovernmental committees in all legislatures (with better reporting to Parliament); regional federal-provincial-territorial-municipal meetings for regional interests; a Canadian inter-legislative forum; Senate reform, and electoral reform with more proportionality – all as measures to balance off the power of the first ministers of federalism (Simeon 2005). Other suggestions include the holding of debates or committee hearings on intergovernmental issues before FMMs; legislative ratification of all major intergovernmental agreements; and the participation of Opposition members on government negotiating teams (Cameron and Simeon 2000). Few officials mentioned the political parties per se in their factors affecting IPC, although they spoke of the politicians and leaders, and, occasionally, political ideology. As we saw in the case of health care, ideas associated with long-standing political ideologies – such as public funding versus privatization – can play a role in aspects of policy debates, but on the whole political parties did not come



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to mind for officials as important drivers of IPC. Likewise, difficult relationships between political leaders were often more attributed to personality and leadership differences than to party affiliations. Officials do not seem to place any faith in the party system for enhancing IPC. Academics have lamented the fact that the process of intergovernmental policy-making itself “has worked to fragment the parties” as electorates are represented along territory-based lines rather than national lines (Carty and Wolinetz 2004, 66). International Institutions Recommendations that were made for the involvement of international institutions in Canadian intergovernmental relations mainly emanated from provincial and territorial officials, especially those in more global policy areas such as trade and the environment who felt their increasing involvement in international policy areas was important, particularly with regard to international agreements. The Team Canada model of promoting foreign trade was seen as a useful forum for the prime minister, premiers, and their senior officials to engage in both formal and informal interactions, but recommendations on extending this model to other policy areas were not forthcoming. Perhaps this is related to the less-than-stellar results of that model in terms of failing to appreciably diversify Canadian trade. Officials spoke positively about the various cross-border regional groups to which they belonged. In fact, collaborative trans-boundary intergovernmental relations were often held up as a model for Cana­ dian intergovernmental relations. These included the assorted meetings of premiers and American state governors in particular. Given the growing interdependence of Canadian-American relations, some officials vaguely recommended developing intergovernmental institutions to help facilitate and expand this relationship. For instance, it was recommended that there be “‘joint advocacy days’ for a more coordinated approach where reports for US meetings would be sent to federal and provincial governments.” Officials also referred to broader international interactions within the Commonwealth, la Francophonie, and other multinational forums, although they did not have recommendations as to how to facilitate these ties. Indeed, one official complained that, when in power, Prime Minister Paul Martin had been more concerned with the WTO and IMF than he was with the provinces and territories. Jean Chrétien and his senior

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policy advisor both extolled the virtues of the Team Canada model in their respective memoirs (Chrétien 2007; Goldenberg 2006), but this has to be contrasted to the constant lament of Canadian media business commentators over Canada’s notable lack of success in the new economic powerhouses of China and India, and our continued economic dependence on one neighbouring country. There is evidence that the evolution of administrative machinery in Canada reflects the trend toward greater use of international forums (Johns, O’Reilly, and Inwood 2006; Kukucha 2008). Case study approaches to discrete policy areas have been undertaken to test the degree of continentalization of institutions in North America ­(Clarkson 2008), and there is a small but growing literature which has noted the increasing impact of international actors on the domain of public policy in Canada, particularly in regard to joint Canadian and American policy making (Doern, Pal, and Tomlin 1996; Gattinger 2004; Heyen and Higginbothom 2004). Some literature has noted the potential loss of policy-making autonomy in light of greater continental integration in North America (­Halligan 1995; Simeon 1997; Stein 2006), although caution has been expressed about the tendency to over-estimate this impact (Hoberg, Banting, and Simeon, 2002). Overall, despite the call for emulation of “best practices” abroad, there are few concrete recommendations from politicians, officials, or scholars for improving IPC through the development of international mechanisms and relationships.

ACTORS Political and Administrative Actors Perhaps not surprisingly, there were few recommendations from the officials regarding the political actors in the federal system, except by way of inference to problems of trust, leadership, and commitment to collaboration – the implication being that these characteristics ought to be sought in a potential intergovernmental executive. Many officials cited political leadership as a key factor in IPC, but leaders are usually seen as simply growing up out of the system. They just appear. The political executive is, of course, picked by the electorate and the abilities of its members vary. For instance, ­Chrétien was noted for his disinterest in long-term policy goals. One senior federal official described him as “incremental, reactive, and



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non-conceptual.” Another thought the premiers of the day were “a weak crowd of leaders” lacking interest in engagement. Scholarly analysts of political leadership are also long on concern and short on prescriptive recommendations as to how to produce these leaders, although some small headway appears to be being made (Alvesson and Sveningson 2003A; Rouillard 2007; Dutil 2008; Thomas 2008). Since the political actors of executive federalism are all elected outside the institutions of federalism and the control of officials, it is perhaps not surprising that there were no recommendations related to changing their composition and roles. For instance, officials had no recommendations about the attention generally paid by first ministers to designing cabinets, appointing intergovernmental ministerial positions, or selecting ministers in particular sectoral portfolios with an eye to their intergovernmental capabilities. As Meekison, Telford and Lazar point out, “Canadian prime ministers have not designed their cabinets to facilitate the process of intergovernmental relations” (Meekison, Telford, and Lazar 2004, 12–13). With regard to their own role as administrative actors in the ­federal-provincial-territorial system, officials expressed considerable concern but little in the way of recommendations. There was concern expressed about consistency in the policy role of administrators on particular files when the file gets moved out of the hands of the policy specialists and into the hands of the political or process specialists. Some line officials agreed with Simeon that intergovernmental agreement may well be “easier to reach among program­oriented professionals in particular fields” (Simeon 2006, 3), but that this was being prevented. Looking at health, Lazar showed there was a significant gap between line officials in departments and officials in the central agencies, including finance. He suggests that program-specific specialists working in the line ministries see a positive-sum game because they have common goals, whereas those in finance see such intergovernmental collaboration as a zero-sum game (Lazar 2006). Savoie has referenced some recommendations from those involved in the government to diminish the power of the central actors. For example, Robertson and Manion have recommended keeping the PCO small, with a more limited role than it now enjoys, but Savoie also warns that overall “while the centre is quite prepared to recommend major surgery to the line departments, it is much more reluctant to recommend major surgery on itself” (Savoie 1999, 154).

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Officials were also concerned about the high turnover and background of deputy ministers. Some officials recommended requiring longer tenures, although they saw this as not likely to be well received because the shorter tenures have been institutionalized into officials’ career development paths. Others recommended setting up new teams and networks with regularized interaction for policy learning and focused broad policy objectives rather than “just management platitudes” – which we take to be this official’s description of the existing DM forums. One official suggested moving away from the standing committee structure for deputy ministers, replacing it, as has been done in education, with project teams working on a particular project agenda. This idea of “building on the community of intergovernmental officials” has been taken up in Ontario with an intergovernmental community of practice of its central agency and departmental intergovernmental officials including those below the assistant deputy minister rank (Ontario 2007). At the time of writing, we were told British Columbia was also investing in a similar venture “to address their capacity issues.” More intergovernmental and external interaction and exchange was also recommended, in, for example, “the federal people going to the provinces and working with the provincial people” as they do with the territories. The federal government had apparently been thinking about building collaborations within its own ranks and with other jurisdictions (Canada, CCMD 1995; Canada, Policy Research Initiative 2007). Likewise, some officials saw this interchange as necessarily extending beyond the public sector to the private and academic sectors. Interestingly, although recruitment, retention, and intergenerational integration of future public servants were mentioned by officials as necessary to IPC (and despite well-documented demographic storm clouds gathering on the horizon for the public service) no recommendations toward this were forthcoming. The public administration literature has viewed this problem as central to policy capacity within governments. Aucoin and Bakvis, writing about the effects of NPM on public sector recruitment and retention, warn that the contracting-out of complex policy issues will diminish policy capacity, and suggest that “a top priority of a professional public service must be to recruit and retain its share of the best and brightest – it must invest in and develop its own leaders” (Aucoin and Bakvis 2005, 200). Lindquist and Desveaux echo this point, and add that “an essential precondition [to successful recruitment strategies]



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is to have in-house management and policy expertise of the highest quality and aligned to the tasks at hand” (Lindquist and Desveaux 1998, 45). One official did recommend internship programs “to find the next generation of policy analysts” but no additional recommendations were offered about how the next generation of administrative actors might enhance IPC. The federal government and several provinces and territories are thinking about this and about how the new generation of “more socially networked” officials may change the face of the intergovernmental administrative actor, with all public servants becoming more intergovernmental in the future (Canada, Policy Research Initiative 2008). Alongside the need to recruit the best and the brightest, Lindquist commented on the importance of the maintenance of a professional culture in the public service. Interestingly, he concluded from his investigations that the public service is a “resilient institution” and has overcome “moments of crisis and distrust over the decades, and did so through professionalism, flexibility, and by demonstrating loyalty to sitting governments,” and is no longer wrought with intense partisanship (Lindquist 2006, 68). Therefore, Lindquist concludes that “restoring confidence will require sustained political and bureaucratic leadership,” and a thoughtful, long-term strategy (Lindquist 2006, 67–8). It will also need to include a better understanding of the policy work done by the professional civil service. As Howlett and Lindquist have pointed out, there is a lack of understanding of the “actual work of policy analysts in contemporary Canadian governments” (Howlett 2007, 6) which may be shifting towards increased emphasis on policy process design and network management activities (Lindquist 1992; Howlett and Lindquist 2004). Findings from a recent survey of public service executives at the federal, provincial, and territorial levels have also shown independent policy capacity is also a concern (Evans, Baskoy, and Shields 2011). The Public Many officials did not identify the public as a factor in IPC unless prompted. Even then, most admitted the system is weak with regard to public participation, and many were skeptical about the fit between executive federalism and public engagement. Definitions of “the public” varied. Some defined public participation as group

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involvement in federal-provincial-territorial policy forums, others as more general public and citizen involvement. Likewise some made reference to direct participation while others emphasized indirect political representation. Lack of clarity regarding their roles in public engagement was a common concern of officials. Many are confused as to just what they are supposed to do with public input, even if it were to be professionally and systematically collected and analyzed, which it generally is not. Officials expressed concern that direct public participation may raise unrealistic expectations in a world of scarce resources and irreconcilable competition between society’s individuals and interest groups. According to some officials, the role of stakeholders in the intergovernmental forum is also suspect. Provincial and territorial officials claimed the large interest groups or NGOs are used by the federal government to offset their (provincial or territorial) power; while they themselves were accused of failing to increase public or municipal participation because it would lower their (provincial or territorial) influence. One common concern was that of the damaging nature of public scrutiny into difficult and emotional negotiations among politicians which some officials thought more productive because of their closed nature. Moreover, some officials regarded the public airing of issues in the media as inimical to IPC. As one official explained, “We are often fighting through the media and therefore it is difficult to improve relations. This is a major inhibitor of IPC.” In this climate of concern, it is perhaps not surprising there was little in the way of recommendations for furthering public participation in federalist forums. One official recommended replicating both Newfoundland and Labrador’s Strategic Social Plan and its Partnership Forum. The former puts together government, NGOs, business, labour, and others to discuss social policy, “for example, jobs.” The latter is a premiers’ forum involving government, business and labour which is “meant to encourage talk instead of posturing” and was claimed to have worked well on equalization discussions. Overall, intergovernmental officials seemed to favour less direct, more rules-based mechanisms for public involvement in the form of more transparency, public reporting, and external public accountability. Reporting and auditing by auditors general, particularly of policy outcomes to the public, for example in the Health Accords and the Early Childhood Development Agreements, were often given positive reviews. One official commented on the fact that the collection



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of good information requires a good network base and recommended mechanisms for encouraging this kind of expertise-based public input. In contrast, the absence of public participation and engagement has been identified by scholars as a long-standing problem for federalism. Between 2004 and 2006, a major academic press in Canada published a nine-volume series on the “Canadian Democratic Audit” by leading scholars, including a monograph on federalism (Smith 2004). The lack of inclusiveness, responsiveness, and participation in the institutions of executive federalism are enduring concerns of analysts and many arguments were made in the period of our study for improved citizen participation and consultation in intergovernmental forums (for example, Cairns 1995; Dobell and B ­ ernier 1997; Lazar and McIntosh 1999; Wyman, Shulman, and Ham 1999; Seidle 2000; Mendelsohn and McLean 2000; Cameron and S­ imeon 2000; Seidle 2000; Pelletier 2002; Brock 2003; Smith 2004). Public surveys have come up with some interesting findings, for example that ­Canadians outside Quebec have “little respect for the classical federal principle and little interest in attempting to implement ‘watertight’ jurisdictions” (Cutler and ­Mendelsohn 2001, 29); they just want things to get done (Centre for Research and Information on Canada 2004). Many academics and analysts have focused their recommendations for improving the “democratic deficit” on institutions external to executive federalism such as the Parliamentary houses or the judiciary, or in new non-constitutional, bottom-up, “governance” routes to intergovernmental relations (Simeon and Robinson 2004) such as that noted by Papillon for Aboriginals ­(Papillon 2008). Others called for “civic fora comprising representatives of voluntary organizations engaged in policy development and service delivery; citizen juries and panels; regular rather than oneoff meetings with individuals and organizations on particular issues; involvement of representatives of national voluntary organizations in working groups under the Federal/Provincial/Territorial Ministerial Council; and convening of regular meetings of the Ministerial Council and the Sectoral Tables with leaders from the voluntary ­sector on key issues” (Phillips 2003, 100–1). From another perspective, some officials noted the importance of the public’s influence through the utilization of public opinion polls and the media, as was strongly evident in the health care battles. Scholars have noted the strategic use of public opinion in ­achieving

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goals associated with intergovernmental agendas (Bakvis, Baier, and Brown 2009). For instance, there is a long-standing tradition of provincial premiers basing an election campaign on some real or perceived slight from the federal government. Some premiers have leveraged their popularity with voters to extract commitments from the federal government, as Premier Danny Williams of Newfoundland and Labrador was able to do with Prime Ministers Paul Martin and, later, Stephen Harper, over offshore resource revenues leading up to the 2004 and 2006 federal elections. Among the tactics Williams employed in his battles with the federal government over public opinion was to place advertisements in newspapers asking “Steve” (Prime Minister Harper) to be fair; appearing on talk shows to lambaste the prime minister; urging citizens of his province to vote for anyone but their Conservative candidates in the 2006 federal election; walking out of FMMs; and lowering the Canadian flag on provincial public buildings in Newfoundland and Labrador. Not many premiers have gone to these lengths, but many have seen the political advantages to be gained by playing hardball in the court of public opinion.

RELATIONS The formal relations between the intergovernmental actors are circumscribed by the rules and roles of the federal system and predicated on legal-constitutional grounds. But the relations are played out in a constant battle for positioning wherein participants are marked by wide inequalities in wealth, size, and power. Therefore the practice of intergovernmental relations, as officials often complain, is less than egalitarian; turf wars result and this affects IPC. There was a great deal of concern expressed by the less powerful provinces and territories about the unilateral or bilateral policy decisions made by the more powerful federal government and provinces. While relationships among administrative officials were often reported to be good, there were signs of the reproduction of the political turf wars at the administrative level. A hierarchy of ­strong-jurisdiction officials versus weaker-jurisdiction officials which followed the general political hierarchies and relations of the federal system was noted, particularly in times of dispute. Interestingly, these hierarchies are sometimes crossed by competing loyalties or shared purpose. We saw above that the central agencies and line departments are



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s­ometimes at odds with each other, and this can mean each may have more in common with its counterpart in another jurisdiction. For example, at the time finance central agencies across Canada had a strongly shared purpose of debt and deficit reduction, health care departments across Canada had a shared purpose of expanding the funding for health care. These shared purposes cross-cut the old ­federal-provincial-territorial hierarchies. One can see that these relations can be complex and multilayered. There were few concrete recommendations as to how these power dynamics could be addressed – although one might assume the recommendations for improved institutions and mechanisms we saw above are meant to lead to improved overall relations. Several officials recommended keeping the policy debates at the technical level as much as possible to avoid politicization of policy issues, and this has worked well in some instances such as taxation and pension policy, but this does not address the more complex policy files where needed decisions are more political. Scholars of federalism have long discussed and debated formal “inter­governmental relations” (see chapter 2) and made various recom­mendations about improving these relations. Sometimes their position depends on where they have placed themselves in these ongoing disputes, especially the centralization versus decentralization, or jurisdictional autonomy versus intergovernmental dependence debates. For example, the literature has been influenced by policy analysts concerned with “national [policy] standards,” leading them to favour more central control, while the decentralists argue there have been many cases of best policy practices resulting from provincial action. Advocates for better relations can be either centralist or decentralist depending on where they see their best mode of access, either the federal government or the local, provincial, or territorial level of government. (For the pros and cons of this debate, see DiGiacomo and Flumian 2010; and Hubbard and Paquet 2010). Recommendations for enhanced relations of equality between governments sometimes lead to recommendations for mechanisms for increasing or offsetting the power of the governments. Pelletier, for example, stresses the importance of recognizing equality among governmental partners, and suggests transparency and accountability are two key principles that must guide intergovernmental relations (Pelletier 2002). Some scholars, like some officials, call for less effort at intergovernmental “collaboration” and more recognition

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of the importance of intergovernmental “disentanglement” where respect, equality, and independence are maintained by each level of government going its own way as much as possible (Courchene 1996). Bakvis’s study of the “transformation” of post-secondary education provides an example of enhanced policy capacity stemming from the decision of the provinces to virtually absent themselves from the policy-making process (Bakvis 2008). Other work has addressed the issue of asymmetrical federalism, wherein it is suggested governments recognize that “one size does not fit all,” that policy prescriptions for one jurisdiction may not be appropriate for another, and that this realization does not compromise the federal principle of equality of governments (Institute of Intergovernmental Relations 2005; Peach 2010 50–4). Scholars and officials alike call for clear jurisdictional designations of the roles and responsibilities of the federation’s governments, but the concern seems to result in little change, perhaps because clarity is not the real problem. We were told that all of the efforts to “clarify the R&Rs” showed there was little confusion after all. More ephemeral phrases such as “the will to collaborate,” “the need for trust,” and “the importance of leadership” are perhaps closer to the real issue here, rather than clarity per se. These phrases were often used by officials and scholars, but few had concrete recommendations as to how to attain them. The 1996 Deputy Minister Task Force on Strengthening Policy Capacity suggested that “building trust ... requires time, openness, and careful attention to the interests of all parties; working within existing mechanisms of cooperation, such as standing committees of officials organizations [like sector specific associations]; and a shared sense of a need to collaborate. Difficulties have been frequently caused by the inconsistent quality of provincial participation, weak management of group dynamics, and a dysfunctional politicization of the issues” (­ Canada, C ­ anadian Centre for Management Development 1996A, 36). In 2005, after protracted federal-provincial-territorial fiscal transfer battles, Lazar recommended trust could be enhanced in the federal system by increased federal transfers and direct spending initiatives with clearly set out amounts, form, and reliability. He also recommended the establishment of an independent finance commission to provide analysis and review of the financial position and outlook of federal and provincial governments (Lazar 2005, 27–9). Scholars who note the disjunction between the constitutional rules and roles of the federal system and the actual practices found there



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(or as Erk refers to it, the difference between the “unworkable codes and the uncodified workings” of the system) point to the more subtle “workings” as an important area of study for the understanding of intergovernmental relations (Erk 2006). Many officials remained pessimistic about the likelihood of any institutional modifications which might shift the power relations in the system. SUFA had represented an attempt to create formal mechanisms where informal relations had broken down, but this was met with little success. Some officials recommended more informal interaction among the political and administrative leaders in intergovernmental relations, claiming this was more productive than formal structures and processes. Overall, the informal relationships of federalism are seen by officials as very important to the system and to IPC. Some thought the friendship built up over dinner or a golf game was necessary to developing the trust needed in the formal institutional interactions, citing the “good, long-term relationships and networks” in the social services group as one of the key factors in the success of the NCB. One official recommended taking notes from insurance salesmen – “using cold calls, contacts, and personal networks.” The federalism literature did focus, at one point, on the importance of informal relationships in shaping the output of the system. This was a central concept, for instance, in Dupré’s reflections on the workability of executive federalism (Dupré 1985). Dupré’s essential point is that intergovernmental relations are not “workable” without the existence of strong “trust ties” at both the bureaucratic and the political level (Dupré 1985, 22). More recent scholarship has concurred with earlier analysis over the significance of trust (Lazar 2005; Leslie 2004; Stein 2006; Johns, O’Reilly, and Inwood 2007; Bakvis, Baier, and Brown 2009). Bakvis, Baier, and Brown agree with Dupré that the development of “trust ties” is essential for the effective functioning of federalism, stating that “regardless of whether intergovernmental relations are elite accommodation or broader agreements, a workable federalism requires the generation of trust ties, mutual respect and understanding, and a willingness to accept that decisions should be based on mutual consent” (Bakvis, Baier, and Brown 2009, 17). These trust ties are developed largely through the informal interactions between officials as they work on projects, coordinating details and sharing information through ­ in-person meetings, phone calls and electronic contacts. Human relations play a role in determining the results of these interactions (Bakvis, Baier, and Brown 2009, 54). Dupré described three ­conditions under

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which these ties developed: “Trust ties can be a function of shared professional training and norms ... they can be a function of geographical proximity and of shared desire to extract results from a vague mandate ... and they can be the function of a shared vocabulary of macroeconomic analysis and a common interest in managing the spending ambitions of operating departments” (Dupré 1985, 22–3). More recent analysis, though, suggests greater differences between the cohort of officials we studied and those about whom earlier academics were writing (Johns, O’Reilly, and Inwood 2007). Our survey showed that intergovernmental officials have a fairly wide variety of educational backgrounds. Moreover, the data reveals career trajectories are far more diverse than the early literature assumes, with most officials remaining in intergovernmental relations for only relatively short periods of time (under 6.5 years on average). If the theory of trust ties is accurate, then something may need to be done to bridge the current professional gap in norms, training, and outlooks that now prevails between this increasingly diverse and mobile set of officials. The other important point is that these trust ties are generally developed between the administrative officials, and not as much between the political ministers. Consistent with the views expressed by many officials, some scholars argue that this needs to change: the spirit of cooperation needs to be expanded and extended among the first ministers and ministers who are at the height of the hierarchy (Bakvis, Baier, and Brown 2009). The interactions among officials should ideally lead to trust between them, which in turn should help foster a cooperative working relationship that accelerates solutions. In other words, trust among officials and also between ministers and first ministers is essential because it leads to a better functioning, more workable federalism. It is, in fact, an important determinant of IPC. Having noted this prevalent assumption, however, further study on its validity is called for. Close contact may not necessarily result in cooperation and cooperation may not necessarily result in sound long-term policy.

COMPARATIVE ANALYSIS When compared, the officials’ recommendations reveal a few interesting findings. Regarding the factors affecting IPC, we were interested comparatively in, first, which sectors produced the most recommendations; second, which jurisdictions produced the most



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recommendations; and third, which sectors and jurisdictions combined produced the most recommendations. A breakdown of the intergovernmental generalists, finance, environ­ment, trade, and health officials’ volume of recommendations shows overall that officials made no recommendations at all in two-thirds of the categories they could have commented upon. In the remaining one-third, they made few recommendations. (Note, few could mean as low as one.) No officials made recommendations at all in the following five categories – ideas, the Constitution, the courts, political parties, and political actors. Intergovernmental generalists were the most forthcoming with recommendations; they supplied comments in ten categories – political institutions, administrative institutions, institutional resources, accords and agreements, Parliament, international institutions, administrative actors, the public, formal relations, and informal relationships. Not surprisingly, given that they are closest to the key structures of executive federalism, they were most vocal about institutions and their key actors. Finance officials supplied recommendations for political institutions, administrative institutions, institutional resources, accords and agreements, and formal relations. Environment officials made recommendations for administrative institutions, institutional resources, accords and agreements, formal relations, and informal relationships. Trade officials suggested recommendations for administrative institutions, institutional resources, accords and agreements, and administrative actors. Health officials supplied recommendations for political institutions, administrative institutions, institutional resources, and accords and agreements. Of the categories, only three – administrative institutions, institutional resources, and accords and agreements – contained recommendations from all five sets of officials. Political institutions received recommendations from three sets of officials. Administrative actors and informal relationships each received recommendations from two sets of officials, while Parliament, international institutions, and the public each received recommendations from one set of officials. When comparing officials’ recommendations by jurisdiction, we found that federal officials provided the largest number of recommendations from any single jurisdiction. But the total number of recommendations coming from provincial and territorial officials was just under three times as many as the number from federal officials (bearing in mind over four times as many provincial and territorial officials were interviewed as federal officials – 25 federal officials

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compared to 114 provincial and territorial officials). One interpretation of this variation is to suggest that, while our data shows that provincial and territorial officials were the most vociferous in their criticism of the federal system and specifically the federal government, it was federal officials who proposed the most recommendations for improvement. The other notable finding here is that the majority of recommendations by all officials centred on reform of the institutions of the federal system. There were almost twice as many recommendations about institutions as there were for ideas, actors, and relations combined. One of the interesting things that stands out here is that, while the officials are concerned about the relations of the sector, they did not provide many recommendations about how to improve those relations, either formal or informal. Instead they turned to recommendations for relatively minor institutional changes which might result in improved relations over time, despite the fact that such adjustments to the system in the past have so far failed to change the overall behaviour and relations of the actors therein. In comparing officials’ recommendations by sector and jurisdiction, we found that federal environment officials provided the greatest number of recommendations, followed by Prince Edward Island intergovernmental generalists. Yukon intergovernmental generalists and federal health officials were close behind. But overall, no clear pattern emerges here as to which sector and jurisdiction leads the federation in suggestions for improvement to IPC in Canada. Interestingly, though, apart from the federal government, it is the smaller provinces and one territory which made the greatest number of recommendations – in particular, Prince Edward Island, New Brunswick, Nova Scotia, and Yukon. As chapters 8 and 9 show, there is wide overall variation across policy sectors and jurisdictions in Canada. Besides immensely complicating any comparative analysis of IPC in Canada, these differences affect the system profoundly. It is not clear, however, from the officials’ comments or from the literature what, if anything, can be done to mitigate or exploit these differences to enhance IPC. Indeed, it may be possible that this variation gives the system dynamism it might not otherwise have. But the task is to harness that dynamism to enhance IPC. In comparing jurisdictions, patterns and answers about “best practices” are hard to discern. There are different ways of thinking



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about policy. Even the style of approaching policy issues was said to vary between levels of government. A federal official said that the federal government “tends to want to focus on issues one by one but the provinces tend to want to aggregate issues.” Another official commented in 2004, “In environment, the bureaucrats are not ideologically split, like in health. In environment, they all agreed on a plan but disagreed on an implementation timetable. In health, the ideological split goes deep into the bureaucracies.” There are also, as we saw, different ways of organizing the intergovernmental machinery and levels of resources across jurisdictions. In the end no “one best way” seems to emerge. Using categories such as “have” and “have-less” produces no hard-and-fast rules about IPC. Being a “have” province in terms of equalization does not guarantee IPC. Nor does size of jurisdiction seem to matter as much as one might think. The smaller provinces had a smaller number of people to coordinate and a shorter path from the sector to the centres of power. Rather than lesser-abled they are sometimes simply differently-abled. One thing that does seem to matter for IPC is strong political will and leadership, often buttressed by intergovernmental machinery in proximity to this leadership. Jurisdictions where there are well-developed federal-provincial and regional relations also revealed stronger IPC, but these were relatively rare phenomena. More often than not, those jurisdictions with long-serving intergovernmental officials also revealed good IPC, as did those with a specific focus on certain policy areas. In situations where there were good close working relations between central agencies and line departments there seemed to be good IPC, as in situations where there were well-developed interprovincialterritorial relations. But each of these generalizations could be tested further. Overall, there were marked differences in IPC within, between, and across governments in the federation.

LOOKING AHEAD: FUTURE CHALLENGES TO INTERGOVERNMENTAL POLICY CAPACITY We conclude with our findings about intergovernmental policy capacity in Canada and the challenges posed for the future. IPC is an ill-defined concept. Although not wishing to impose our own categories onto the officials’ interpretations of the ­workings of federalism in the findings we have presented above, we have

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concluded that the vagueness around the concept of IPC should be addressed. More clarity would help practitioners and scholars alike in thinking about IPC. To this end, we propose, first, a clearer distinction between a jurisdiction’s independent policy capacity and its intergovernmental policy capacity . That is, each of the national and sub-national governments has its own independent policy capacity which it may bring to bear on any given policy issue. Quebec, for example, demonstrates considerable policy capacity in many policy fields, and the federal government has the potential to develop significant policy capacity because of its large resource base. This independent policy capacity, however, is not the same as a jurisdiction’s IPC. Governments with strong independent policy capacity will only have strong IPC if they choose to expend the resources necessary to develop and utilize that IPC. Secondly, we propose a clearer differentiation between types of IPC. We suggest a three-way distinction when referring to a federation’s IPC. The three types are: The internal IPC within a jurisdiction developed to be taken to an intergovernmental forum or used intergovernmentally; • The joint IPC between two or more governments working together in an intergovernmental forum; • The collective IPC across all of the federation working as a whole in an intergovernmental forum. •

All three types of IPC (internal IPC, joint IPC, and collective IPC) are fed into by the independent policy capacity of the relevant government(s), and, most importantly, all interact with each other. Internal IPC is first developed within each government before it is taken to the external intergovernmental forum. With the help of the government’s intergovernmental and line department policy makers and analysts, a capacity is developed, for example, to engage in FMM debates about pending health or environment accords. As we saw in chapters 3–9, this internal IPC varies for different governments (and even within governments), and the strength of a government’s IPC at any point in time is not directly correlated to its independent policy capacity. A government may choose to focus its resources ‘at home,’ or it may choose to focus its resources intergovernmentally, or both. We found, for example, that during the downsizing years, while many federal, provincial, or territorial line department



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policy units were downsized, most of the intergovernmental central agencies of those same governments were not (Johns, O’Reilly, and Inwood 2007). A government’s internal IPC is also not necessarily used in cooperation or consultation with other governments. We have seen how the federal government has often been accused of having the (unfair) internal IPC to bypass intergovernmental forums and develop and fund policies which in their implementation necessarily cross into the jurisdiction of the sub-national governments. By joint IPC, we mean that some governments – for example, the Western provinces – are working in a joint fashion between governments. The combined forces of engaged governments here will result in IPC. We have seen some of the bilateral and multilateral arrangements of various combinations of the jurisdictions of the federation, as well as an increasingly robust set of regional institutions and relationships dedicated to intergovernmental issues. The existence of “bilateral federalism” has been observed in some policy areas (Wood and Klassen 2009). It is important to realize this joint work can either add or subtract from IPC. There can be, and often is, a narrowing of the agenda in joint interaction, as for example Meekison demonstrates in his study of the history of the premiers’ meetings which tended to be more politics-responsive than p ­ olicy-innovative ­(Meekison 2004). Likewise, although referring to the nation-state in their study of policy capacity, the work of Peters and Pierre is informative here. When they looked at “the state’s total governance capacity,” they found that multi-level governance both challenges state policy capacity (by increasing the complexity and creating multiple veto points, for example) and “offers opportunities to regain policy capacity at other levels of governing” (by piggy-backing, mobilizing resources, leveraging actions, etc.) (Peters and Pierre 2005, 39–49). We saw evidence of this in our interviews where intergovernmental officials tended to make suggestions which, if implemented, would give their own government or level of government in the federation a greater advantage or role, as opposed to recommendations which might have lifted other governments up with them and produced more additive gains. As well, provincial and territorial officials often spoke of the sub-national organizations such as the COF as arenas in which they could gain (what we are calling here) internal and joint IPC through combined forces in order to diminish the IPC of the federal government. Of course they can and occasionally do combine forces and cooperate with the federal government,

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especially when all fourteen governments have a shared purpose, such as working against American protectionism (Benzie 2010). The shared purpose case is a relatively easy one, however. Likewise, it was hardly surprising the provincial and territorial governments could cooperate in demanding more money from the federal government in the health care and fiscal federalism debates. The difficulty comes when national and sub-national governments hold competing interests among themselves. As Premier Brad Wall of Saskatchewan put it during the 2010 meetings with the US National Governors Association, “There are a lot of disparate cats in the room at the Council of the Federation, [and it is] difficult to herd these in terms of building consensus among us just because the country so big and our interests are so different” (Benzie 2010). There was also no substantive talk from the officials of collectively gaining from whatever recommendations could be implemented across the system as a whole – or that they might occasionally consider a “win” for the “other side” if that should benefit the federation. There seems to be little recognition that IPC might also be realized as collective IPC – by which we mean that all the governments of the federation working together across the federation. Joint IPC, although potentially additive, is sometimes indicative of a failure to come to terms with collective, full-federation policy development. We have a lot of the former in the federation, but not much of the latter; and the latter may well be being traded off for the former. Interestingly, even when all fourteen of the governments work together on policy, they are sometimes working more on the model of joint IPC than collective IPC. Like the nature of federalism itself, which has been described as both a legalistic, constitutional joining together and a shared membership in a community or collective (see chapter 2), the IPC of federalism can be either all-for-one or one-for-all. It is interesting to ask, for example, whether the first ministers’ work on health care in the late 1990s and early 2000s (where all of the governments of the federation came together to find a solution to a serious policy problem) represents an attempt at joint IPC or collective IPC? True, the issue was not hived off into various bilateral and multilateral deals, where only joint IPC could be realized, but how much serious attempt was there to address the policy problem as a collective, Canadian problem? This multi-governance effort involved the focusing and marshalling of a considerable amount



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of ideational, institutional, actor and relational resources, and yet it portrayed a marked incapacity to move beyond the ‘throwing money at the problem’ solution to the ‘crisis’ in health care. Was this the best the federation could do? Is this the best it will be able to do in the environmental ‘crisis’ or the economic ‘crisis’? This is not to romanticize collective IPC. It does not imply these collective efforts would be without conflict and competition. Shared communities are not without conflict. Nor would attempts at collective policy-making, in and of itself, change the dominant ideas, institutions, actors, and relations of Canadian federalism. FMMs could still be very executive-dominated, central, finance-oriented, and so on, since all of this is embedded into the federation. We are conscious that “the collective” of IPC is a defined and contested conceptualization of who belongs in the collective. At the moment it is fairly strongly defined as “executive” despite ongoing calls for expanded or “deep federalism” where a broader set of actors are included (Leo 2006). Collective IPC in and of itself would not solve the problem of line departments being overshadowed by central agencies. Nor would it necessarily include municipalities, Aboriginals, and public actors who feel shut out of the system. Nor would collective IPC necessarily solve our big policy problems. We are not suggesting here that there is one best practice. Rather, we are suggesting that practitioners and scholars need to give more thought to these divisions between types of IPC and the dynamics and trade-offs they entail. Bilateral and multilateral agreements can and do act as laboratories for innovative policies, but at what cost? Who are the bi- and multi-governments in these dynamics and what is their individual and combined policy capacity? How much asymmetry and bilateralism is tolerable for policy success? Where is the Canadian collective in these agreements, or is it there at all? In a rapidly changing world it would be reassuring to know our government(s) have the capacity to respond to those changes if need be with some degree of collective IPC. More attention to the occurrence of these types of multi-level dynamics in the Canadian federation would also contribute to ongoing contemporary debates about the nature and outcomes of various types of multi-level governance around the world – a world the Canadian state is increasingly engaged with over global policy issues. Practitioners and scholars are struggling with questions of state-to-state and state-to-society relations and capacities in this mix.

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A new approach, a new type of inquiry, and new concepts are needed to discuss and debate these questions. Related to this, ongoing contemporary debates about how to conceptualize and analyze ‘policy change’ would be helpful in thinking about the policy capacity of the Canadian federation. We need to be both learning from and contributing to these debates. Power struggles are alive and well in executive federalism and they are reinforcing old divisions between the national and subnational governments, and central agency and line officials. This study also reveals that despite the assertions of constitutional equality of the governments in the system, the players are not entering these arenas as equals. This is an internally divided hierarchical system, and attempts to overcome these divisions are generally met with resistance, particularly from the centre, at both the political and the administrative level. There is nothing new in making this claim about the political level of government interaction. One need only watch the news. What is somewhat surprising in our findings is the fact that the acrimony at the political levels appears to be replicated to some degree, especially in particularly heated times, at the administrative level. There is an impression given in the literature of fairly harmonious relations among intergovernmental officials – we too have made note of this – but perhaps it has been overstated. During our investigations, we found that although there is a great deal of cooperative, intelligent work done at the intergovernmental administrative level, there is also evidence that a number of officials, especially those working in central agencies, seemed to have assimilated the hardnosed views and forms of behaviour of their political leaders. Some years ago, Smiley said that in trying to serve the cause of accommodation between governments, intergovernmental agencies instead promote conflict, and he attributed this to the heat of the constitutional issues of the day (Smiley 1979). Our findings shows that Smiley’s characterization still holds true to some extent, even though the Constitution is no longer the focus of their attention and even though literature suggests intergovernmental agencies see themselves as facilitators. This raises an interesting and important question that needs to be addressed in further study: Are the officials currently entrenched in the intergovernmental system more likely to be part of the problem than part of the solution with regard to any reforms which might be adopted in order to improve the IPC of the Canadian federation?



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Intergovernmental officials have a particular set of factors which they believe influence the intergovernmental policy decisions and actions of the federation, and there appears to be a considerable disjunction between the concerns and recommendations on which the intergovernmental officials are focused and those on which many of the scholars are focused. Another interesting finding of our study is that when asked which factors influence IPC in the Canadian federal system, the officials engaged in the work of the federation were strongly focused on the internal relations and workings of their own institutions and actors. Although we found concern from the intergovernmental officials about the running of the federation, and some recommendations for change, Canadian intergovernmental officials as a whole are internally focused and show little interest in expanding this focus, even if it would result in increased IPC. Intergovernmental generalists are strongly process-oriented, an approach which, not surprisingly, frustrates the intergovernmental specialists’ in the line departments. The intergovernmental generalists lack of “big-picture” thinking was revealed in the sometimes long pauses in interviews when officials were asked to think about what recommendations they would make for improving IPC, followed by either silence or a few tentative suggestions based, most often, on their own sector or central agency. They seemed little used to thinking “outside the box” or reflecting more broadly, either regionally, nationally, or globally. They appeared to have given little thought to the IPC of the system in which they were working to solve the problems on which they were working. This is not to say that the officials do not understand their own reality; we are assuming they do. The things about which they expressed concern clearly affect their work. However, the fact that outside observers have seen and documented other factors indicates a lack of fit between an internal and an external focus on the IPC of the federal system. This speaks to both the scholars and the practitioners. Scholars are somewhat out of touch with what is really happening inside intergovernmental relations, and intergovernmental officials are somewhat out of touch with what is happening outside of their own intergovernmental context. As we saw, the officials showed little interest in the Constitution, courts, Parliament, political parties, international influences, the public, and the role of ideas. Even where there is some fit between the practitioners and the scholars, there seems to be little meeting of the minds about

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improvements to the system. This is somewhat unsettling. At best it reflects the differing roles of the two groups, with practitioners more focused on their internal intergovernmental processes and relations, and the academics more focused on broader, multi-level governance, institutions, and state-society relations. At worst, it reflects two sets of actors who are often focused on the same set of policy issues but are scarcely in communication with each other. Furthermore, because the officials’ views of the factors affecting IPC are somewhat limited, so too are the potential resources available to them, and those they advise, to enhance IPC. Notwithstanding both governments’ and external analysts’ invocations for all governing actors to think and act horizontality and intergovernmentally in their work, intergovernmental officials are thinking and operating under a limited set of variables. For example, the development of collective long-term policy goals and objects was seen by some officials as needed in the system, but there seemed little systematic thinking about the role these ideas could play in enhancing existing IPC. The role played by political, economic, and administrative ideas is little assessed by those employing them. Nor are our parliamentary institutions or the public seen as potential resources for overcoming difficult public policy problems. Intergovernmental officials, perhaps pragmatically, are not focused on the restructuring or reform of the existing structures and relations of executive federalism. Even within the limits of the focus of intergovernmental officials, there is little thinking from within of any serious restructuring of the existing structures and relations of executive federalism. This may be a reflection of their positive assessments of the workings of the system (nothing needs to change) or it may be a pragmatic assumption that things are unlikely to change in the near future. However, neither idea fits with the expressions of concern we heard from some officials about the overall IPC of the federation. There seems to be little attention to ‘best practices.’ Even identifying success stories appeared to be a challenge for officials. The NCB was the example that stands out in the minds of officials but, even here, there was little evidence of analysis of this case and nothing in the way of substantive recommendations. Although some officials were still interested in the potential for SUFA-like mechanisms for settling difficult disputes, there appears to be little enthusiasm for another SUFA or the redistribution or sharing of power this might



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entail. Further comparison of a number of accords and agreements would be useful. One comparative case which would be interesting would be the Canada Pension Plan (CPP). Bruce Little has provided a well-documented account of the CPP where he demonstrates the importance played in this agreement by factors such as a shift in thinking or “mental model,” mandatory public financial reporting, constitutional requirements for intergovernmental cooperation and decision-making, extensive controlled public consultation, and a committed and knowledgeable public service which demonstrated leadership in keeping the file on the intergovernmental agenda over the two and a half decades in the making of the agreement (Little 2008). This case speaks to the importance of institutionalized modes of decision making or decision rules which encourage actual policy output, and we have seen how the provinces pushed to no avail in the late 1990s and 2000s to set up more regularized protocols, decision rules, and dispute resolution mechanisms to counter federal unilateral actions. Although a few intergovernmental and finance officials did refer to the qualified majority decision rules of the CPP (or other federations such as Switzerland, Germany, and Australia) as an important factor in the success of the CPP, and despite the overall process orientation of intergovernmental officials and their concern for the dispute resolution mechanisms in NAFTA, there seems to be little serious consideration of this within the federation. Even the more particular institutional recommendations made by officials were vague, with very little ‘how-to’ supplied. Few officials suggested actual mechanisms or spelled out concrete actions that could be taken to implement recommendations, and those who did spoke of bits and pieces of practice rather than any coherent project that might be undertaken. For example, in recommending the restructuring of intergovernmental meeting chairs and agendas, which provincial and territorial officials sought in order to strengthen their position in the FMMs, they failed to explain how these changes would overcome the larger competitive, zero-sum game of the existing meetings and negotiations. It might even the score somewhat, but it is not clear it would result in improved policy. As scholars have pointed out, the policy challenge lies in acknowledging the complex and messy realities of federalism and creating shared policy space across levels of government (Stein 2006) or arenas (Bakvis, Baier, and Brown 2009) where contested concepts can be played out (Stone 1997).

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Most current observers agree that, in the absence of constitutional change, if there is to be any meaningful reform of intergovernmental relations, part of the solution lies in strengthening intermediary bodies. However, not one official, even when asked, recommended thirdparty mechanisms for the resolution of disputes, even those disputes that resulted in impasse and therefore failed entirely on coming up with policy solutions. The provinces and territories have suggested the institutionalizing of more formal rules of diplomacy and courtesy to keep the governments talking to each other, but even these recommendations appear to have been abandoned for lack of success. During the period of our study, the intergovernmental officials did not appear very willing to push for experimentation or question their political leaders on this. The Conservative Harper government was known for its secrecy and toe-the-line, top-down control, so it was unlikely there would be any change to this situation during its tenure. Overall, reform or restructuring of the intergovernmental system in a direction that would improve IPC does not appear to be taken very seriously. As Brown warns, “If reform is only cosmetic, the default position will continue to be competitive federalism, [and] Canada will fall further behind [in its] capacity to participate effectively in multilevel governance” (Brown 2003, 8). There are exceptional professional public servants in the ­system concerned and frustrated by the lack of opportunity to deal with today’s policy realities and the new world of complex, multi-leveled governance with which they are confronted. Having said all this about the limits of the existing climate of thinking in the Cana­ dian intergovernmental system, it is important to note that one of the resources the system does have – one which also appears to be under-utilized – is an outstanding professional public service, many of whose members are concerned with the system’s inability to provide opportunity to deal with today’s complex policy realities and the contemporary governance issues with which they inevitably will be confronted. It is not just public servants with policy responsibilities who need to keep intergovernmental realities in the forefront of their work. Networking and information exchange with colleagues across jurisdictions is essential and the art and skill of intergovernmental n ­ egotiations are critical and should be a central element of training and evaluation (Simeon 2010, 418). The federal system, with its entrenched behaviour patterns, is likely to be slow to adapt institutionally to a new generation of



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‘wired-up,’ ‘networked’ professionals eager to deal with the world of public policy today where “policy knowledge is not simply information as facts; it is factual information within the context of a theory of causes and effects” (Aucoin and Bakvis 2005, 192). Innovative thinking is being hampered, as we have seen, by even the most basic understanding of what it is that policy professionals actually do. We have described the functions and powers of the intergovernmental officials as monitoring, coordinating, and advising (see table 2.3). However, we do little more than describe it and note changes over time. More research needs to be done on the requisite role and present functioning of intergovernmental officials, policy officials, and public servants and the structural limitations of the federal system in nurturing and utilizing them. On the latter, critics claim governments and their administrators are ill-positioned for the demands of today’s policy problems given the 1990s “hollowing out” of the state in the NPM years by downsizing, decentralization, and public sector reforms (Hall 1989; McBride and Shields 1997; Weiss 1998). In the Canadian case, we, like others, have lost – and are not well-positioned to regain – a high level of professional capacity or “collective intelligence” in the public service with which to pursue more demanding goals (Aucoin and Bakvis 2005; 185–204, see also Lindquist and Desveaux 1998). We are reminded of the officials who commented that IPC once lost is difficult to regain. We are seeing some interesting attempts in Canada in the public service to develop “communities of practice” within jurisdictions, as we saw above. Likewise, governments and universities are ­creating more forums for exchange and interaction with the public service. Public service managers are also doing considerable work and sophisticated thinking on problem solving in complex multilevel systems (Bamford 2009). One official recommended internship programs for young professionals entering the public service, and this is something universities are helping coordinate. It does appear that the system and its existing professionals need more exposure to incoming ideas than to the old embedded ones. The universities are designing new graduate policy programs (some ­interdisciplinary) that educate this cadre of young networked professionals to operate within complex interconnected systems. Having said this, however, as university faculty attempting to do just this, we are now faced with frustrated graduate students who enter the public service with big ideas and run hard up against what seems to them to be a

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very old system of entrenched ideas and practices which they cannot penetrate – reminding us that ultimately both the established and the new professionals in the public service have to operate within the existing parameters of the system – which is why it is important to understand it more fully. New studies are looking at both the barriers to quality of work conditions for (overly) networked professionals (Duxbury 2006) and the difficulty of on-the-ground coping with the “wicked networks” of policy-making, particularly where there are numerous jurisdictions involved (van Buren, Klijn, and Koppenjan 2003; Weber and Khademain 2008; Dawes, Cresswell, and Pardo 2009). Despite all this work, however, we are not seeing much in the way of results, or much deviation from the old ways of doing things, at least not in federalism. The challenge of navigating two sets of incentives, to collaborate and to compete (Simeon 2010, 418), clearly remains for public servants. At the same time as there is a wide commonality across Canadian jurisdictions and sectors with regard to ideas, institutions, actors and relations which are central to IPC, there is also considerable variation between jurisdictions and sectors, and the implications from this are ill-understood by officials and scholars alike. We have seen how various jurisdictions and sectors all meet in the arena of C ­ anadian federalism where they share broad ideas, institutions, actors, and relations. But they also enter this shared arena with considerable differences. As shown by jurisdictional and sectoral variations revealed in this study, asymmetry is a reality in Canadian federalism. But ­lesson-drawing from the different approaches and experiences across jurisdictions and sectors which can be brought into the shared arena of federalism seems to be in short supply. This variation by jurisdiction and sector begs an important policy question – should solutions to policy problems be symmetrical or asymmetrical? This is the old federalism-policy question about the need for central coordination/direction/insurance of national standards versus provincial-territorial jurisdictional autonomy and room for innovation and experimentation which allows for best fit with regional variation. Both levels of government, as we saw, had a great deal to say about this old debate, each in its own interest. However, they seem to be talking more at each other than with each other. Likewise, this debate is alive and well for scholars (Hubbard and Paquet 2010; DiGiacomo and Flumian 2010).



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Coping with or harnessing the differences which exist in the institutions of the various jurisdictions and sectors is largely absent from the officials’ thinking. Prior to and during our study there were reorganizations of the peak intergovernmental agencies in all governments. What is striking is that no government seems to have hit upon the optimal institutional form for the conduct of intergovernmental relations after decades of experience, nor does there seem to be much consensus on how these various institutional formulations will fit into an overall system ostensibly designed with the sole purpose of intergovernmental interaction. Although our Canadian system has a greater degree of institutionalization than any other federation, it has also been pointed out that it is more ad hoc, less integrated, and has less capacity for authoritative decision making than other federations (Cameron and Simeon 2002). Comparative analysis of policy experiences in the federation’s institutional processes is lacking. There needs to be more thought put into addressing the issues that arise due to the unique mix of commonality and variation across the federation and what impact this is having on policy. Comparative analysis of the functioning and output of the intergovernmental processes might also yield some best practices. For example, our study raises some interesting questions about the effects of policy issues being drawn into the intergovernmental process. What happens to a policy when it is ‘hot’? What happens to a policy when it is not? During our study, health was a hot issue and there was considerable pressure for a new deal. Trade and environment were under the intergovernmental radar, with the former having a robust deal in NAFTA and an AIT deal to which no one was paying much attention. Environment was about to exit a quiet period under international pressures, but only its own officials seemed to notice this. Fiscal policy was simmering in the federation. One official warned us (rightly) as early as 2001 that fiscal federalism would be the next big intergovernmental issue. What we saw here was that the policy high on the intergovernmental radar got all the attention, and resources were marshalled by those who had the will and capacity to do so. But at the same time the politics (of jurisdiction and money), old relations (the turf wars), and ideational fights (over privatization) also heated up, and other actors outside the executive system drew near. This all affects IPC; but not just for the file getting the attention. Policy files left off the intergovernmental

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agenda may also have needed ongoing attention. For example, the fact that trade and finance were experiencing done deals and quiet times, where underlying economic assumptions and international relations were taken as givens, left them ill-prepared for the economic shock of 2008 and beyond, where our deep reliance on continental trade proved to have been dangerously narrow and the old ‘debt and deficit reduction’ wisdom proved inadequate to the task of averting a world economic crash. At the same time, environment, which has long been thought of by many as a ticking time bomb, demonstrated its weak and fractured IPC on the international stage. All of this suggests the need for more careful comparative policyrelated analysis in federalism. Methodologically, the study of IPC needs to ‘catch up’ with the new literature coming out of federalism, public policy, and public administration, and the new managers in the public service, and push for more reflection on the part of both the practitioners and analysts of IPC. Intergovernmental policy decisions are being made and carried out at the nexus of federalism, public policy, and public administration. Theoretically and methodologically, each area brings its own particular strengths to an enhanced understanding of IPC. As we have seen, combined they allow a sophisticated analysis of ideas, institutions, actors, and relations. This combination raises interesting questions for IPC. We have seen how the ideas of the day were both utilized for policy choices and circumscribed other choices across sectors and jurisdictions. In some cases there was an overall fit of dominant ideas and in some cases there were clashes of ideas. This raises questions about their utilization for IPC. It is clear that political actors have the power under certain conditions to harness ideas in their policy pursuits, but do the administrative actors have the same? Public servants cannot write the script but they can present alternative narratives and provide facts with regard to the existing narratives. They do have an important role here. The relationship between institutions and IPC also raises interesting questions. The fact that many officials seemed focused on institutions and their possible reform for improved IPC is telling. The assumption seems to be that a positive correlation exists between strong institutional capacity and IPC. Yet others disparaged more institutions or institutional reform as creating their own set of ­problems, and there was a clear disinterest expressed in any third-party insti-



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tutions. The balance between over- and ­under-institutionalization is a difficult one in any political system, but the Canadian federation seems to be under-utilizing its institutions with regard to IPC, and over-utilizing them with regard to process. The existing institutions are designed for jurisdictional and nation-building process disputes, not policy development. The shift from constitutional to ­non-constitutional activity in the peak institutions of the federation has shown up this weakness in design. The institutions of federalism need to adapt, at both the political and administrative levels, or process will continue to win out over policy. Furthermore, it is obvious that both practitioners and scholars of federalism need to utilize the more sophisticated understandings of institutions coming from today’s neo-institutional literature, where institutions are understood as more than just formal independent entities with set roles and rules. They are interactive arenas where ideas, interests, and relations are played out through representation, interaction, negotiation, exclusion, and so on. This sort of analysis would better understand that while institutions per se were not much targeted for reform by officials concerned about lack of IPC, relations being played out within those institutions were. The role of both internal and external actors in IPC raises interesting questions. Internal actors, as we have seen, operate in an environment of central control. We saw this as a recurring theme in our interviews. While central coordination and direction are a necessary and important part of the system, does the ability of the political center to pull up ‘politically hot’ policy files from the departments decrease the capacity of those most familiar with the policy field to come up with new or improved solutions to policy problems? Are the actors with the greatest policy expertise and ability the least likely to influence the most important policy decisions of our day, precisely because they are such important decisions? It would appear so. The role of actors external to executive federalism at both the global and local levels raises questions about real, perceived, and potential contributions to IPC. Some policy fields are more directly affected by both international and public actors so their role in IPC necessarily needs to be accounted for, but others are less directly affected. What is the force of the international factors doing to ­Canadian IPC? We need more studies of this nature (see Hoberg, Banting, and Simeon 2002). We also need more realistic assessment

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of what role the public can and does play in IPC. Right now, it is playing little of a direct role. Is it an underutilized resource in the federation? What would it take to coordinate and utilize public input into an institutional structure that needs to come up with policy solutions? The answers to this problem are not easy, but some of the new thinking on the limits of public participation and “wicked networks” is developing new methodologies to improve the capacity of analysts to address them more fully. Likewise, questions about the role of both formal relations and informal relationships in IPC are not easily answered. For example, it is common-place to hear calls for more “trust” and “leadership” in the federal system in order to increase its capacity to make decisions and act on them. However, these calls seemed based more on an intuitive sense that more of these qualities would enhance the system, rather than an explicit articulation of the link between more trust or leadership and IPC. Just because there is trust in a relationship does not mean that policy outcomes will result. It could be that more trust among the provinces and territories would lead them to more effectively “gang up” on the federal government such that provincial-territorial joint IPC would be strengthened, but the IPC of the federal government – or even the collective IPC of the system as a whole – would be weakened. It could also be true that more formalized institutional relations of reporting and consultation among jurisdictions, such as that attempted by SUFA, would institutionalize the necessary courtesies to improve collective IPC, but it may simply result in more ‘skirting’ of these formalities at the informal dinners and golf games. We do not have readily available methodologies for understanding human emotions in political “science” since our traditional investigations have mostly focused on more tangible factors such as institutions, but clearly it is time to develop some. Perhaps, more importantly, when we look at IPC in this broad context it is the interaction between and among these factors that most affects the capacity of the players there. Intergovernmental institutions are the arenas where actors and ideas interact in all their relations, and where the parameters are set by these interactions. Any reform of institutions meant to enhance IPC would have to take into account the ideas, actors, and relations there, including pressures from vested interests that fear any change to the existing structures. Even if you do change the institutions, if the old norms of behaviour among the key actors remain intact, there may be little in the way



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of enhanced IPC. Likewise, well-meaning accords and agreements may hit up against strongly held ideas and internal and external actors and institutions which limit their implementation. A thoughtful report from a Commission of Inquiry or a parliamentary body will land in the existing institutions and actors playing out their own set of relations and ideas. And so on. We need a methodology, or methodologies, big enough to understand all of this. We need some new thinking from the next generation of scholars in all three of these fields – not to throw out the old and start over, but to rethink some of the old assumptions. For example, the new generation of scholars, in which we like to include ourselves, are looking beyond the old hierarchies and policy silos to “situated knowledge” (Haraway 1991 cited in Orsini and Smith 2007, 8) through a questioning of the old rationality projects. We are less concerned with preserving the old institutions and relations of the federation, and more interested with how they might be adapted and transformed to produce intelligent and meaningful outcomes. The new managers in the public service are asking not about “known challenges” but about the management of “uncertainty” and models for adapting with “foresight” and “anticipation” to the unknown (Bamford 2009). They are asking about what Bourgon has referred to as building capacity through institutional capacity, organizational capacity, anticipative capacity, innovative capacity, and adaptive capacity (Bourgon 2010). The new thinkers and practitioners will still need to understand and address the power of institutions and their actors set in their ideational and relational milieu, but they will be more open to new methodologies and approaches to do so. There appears to be little political awareness, will or capacity in the federation as a whole to deal with today’s policy realities on anything but an ad hoc, crisis-led basis, and even then, the success rate is less than impressive. There are pressing policy problems that need to be addressed in Canada today, but it is not clear that our intergovernmental system has the requisite capacity to deal with them. What we need is careful, considered policy output. What we see is reactive crisis management resulting in partial, short-term fixes in some policy sectors; little or nothing in others. Yes, the f­ederal ­system has to be ‘workable,’ but too often the participants and scholars alike get so focused on this, they forget that the ­federation is meant to produce a better life for its citizens; why else put up

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with all the battles? In the mid-1980s Dupré’s definition of a workable intergovernmental system was one which nurtured institutions and processes “conducive to negotiation, consultation, or simply an exchange of information” (Dupré 1985, 1). More recently, Bakvis and S­ kogstad examined the effectiveness, the performance, and the legitimacy of the federal system to meet pressing policy needs (Bakvis and ­Skogstad 2008). This is an important development, but focuses on the “capacity of federal institutions to produce results in the form of agreements” (Bakvis and Skogstad 2007, 3). We argue that producing results needs to be broader than exchanging ideas, managing intergovernmental conflict, or reaching agreement on some issues. We need more than these means; we need actual policy end results. The federation needs to take ideas more seriously and deal with them more systematically. It needs to manage its own internal conflicts better and ask what these conflicts are doing to its productivity. It needs to function outside its own closed circles better. There are a lot of people pushing at the gate, both from ‘below’ at the local level and ‘above’ at the global level. Just what this means is not clear. It is a fairly strong gate; one which has resisted external pressures for a long time. It often seems we academics and external analysts are ‘whistling in the dark’ when we call for reform; the Canadian federal system has been very successful in managing diversity and external forces thus far. Maybe, though, the gate is coming down and isolation is less and less of an option, in which case we need more than the occasional ad hoc agreement in whatever sector happens to make it onto the intergovernmental agenda. This is not to say that the institutions of executive federalism could deal with all of our difficult policy problems at once, and at the same time build preventive capacity for potential or pending policy problems throughout all of Canada’s policy sectors. This is of course unrealistic. There are, and will always be, instances where governments are well positioned to act alone, but this is not the case with the growing realities of complex public policy problems (Bourgon 2010, 208). Perhaps, however, it does call into question the wisdom of leaving policy problems to one jurisdiction, one level of government, a few peak institutions which rarely or briefly meet, or an administration preoccupied with avoiding or putting out the fires of intergovernmental relations. At the very least, a good starting point would be recognition by the political leaders in Canada that today’s policy problems are bigger than our present IPC and general policy



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capacity to deal with them. As the president of the Public Policy Forum, David Mitchell put it in 2010, “Where have all the policymakers gone? ... Think hard: What were the policy and governance highlights of the past decade? It’s a short list” (Mitchell 2010, A21). The federation needs to be more productive, and we need to take policy output more seriously in measuring the success of the federation. This is why we have focused on the IPC of the system, in the hope that it will provide some needed groundwork for assessing policy output. IPC is important. We need to have it, know it, and grow it. We need our leaders to have the will and authority to use it – at all three levels, within, between, and across all sectors and jurisdictions, so that it can be utilized not just internally, or in joint actions, but also collectively in the interest of the whole community. This is the key challenge for both practitioners and academics.

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appendices

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Provincial Equalization Prior to 2004

Appendix 1 Provincial equalization prior to 2004 Source: Department of Finance Canada

Appendix 2 Territorial transfers prior to 2004 Source: Department of Finance Canada

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Appendix 3

Appendix 3 Federal transfers 2006–07 Source: Department of Finance Canada, May 2006

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Index

Aboriginals: health care policy and, 289–90, 335; lack of knowledge about, 101; rights agreements, protecting, 85 academics, recommendations of: accords and agreements, ­433–7; ideas, 418–19; institutional resources, 430–3; institutions, 419–30; IPC, views on, 417; knowledge transfer, 433; Parliament restructuring, 438 accords and agreements, 52–6, 237–41; bilateral agreements, 55; comparative analysis, 317–22; disentanglement, 434; environment, 193–7; examples of, 54; finance, 151–6; health policy, for, 277–82; IGR generalists and, 102–3; intergovernmental control of regulatory policy, 55–6; legal and political status, 53; ­literature, revamped rules for federalism, 436–7; money, focus on, 156; multilateral vs. bilateral approach, 195–6, 321–2, 434; nature of, 52–3; partnerships and, 56; politicization of development processes, 434;

provincial-territorial, 154; successful examples of, 433–4. See also Social Union Framework Agreement. accountability, 37, 306; call for, 422; Canada Health Accords and, 279–80; CHST and, 134–5; communication increase and, 52; decline of Parliament’s, 58; federal government, 354; federal intrusion, 117–18; Harper government and, 74; health policy, 263–4, 276, 320–1; IGR generalists, view of, 117–18; interest groups and, 333–4; intergovernmental agreements and, 48; international trade agreements and, 238; outcomes and health policy, 263–4; performance indicators, health policy, 276–7, 305; reforms, environmental policy, 437; stakeholders, defining, 249 actors, 65–78, 440–3; comparative analysis, 328–36; environmental policy, 204–8; external, and IPC, 467–8; finance and, 158–67; first ministers, influence of, 65; health policy and,

520 Index

283–90; IG ­generalists and specialists, roles of, 66, 67–8; IGR generalists and, 105–19; IPC and, 20, 467; political and administrative see political and administrative actors; the public, 71–5; trade policy and, 244–50; trust between, 76–8 Adams, Duane, 431 administrative agencies: role and features, 45–6 administrative institutions: environment, 190–1; innovative, 427; examples, 426–7; policy sectors and development, 426–8; recommendations re, 424–7; sector structural change and innovation, 428–30. See also political and administrative institutions. Agreement on Internal Trade (AIT), 23, 54, 96, 217, 219, 311; central role of, 238–41; diverse interests, accommodating, 239; effectiveness of, 320; enforceability of, 240; institutionalizing internal trade regions, 232, 256; limitations of, 240–1; limited success of, 239 Alberta: bilateral relations, 372; finances and IPC, 371; as “have” province, 368; intergovernmental relations, history and structure, 369–71; intergovernmental tension, 370–1; interprovincial relations and IPC, 371–2; mediating role, 372; Ministry of International and Intergovernmental Relations, 370; negative views of its economic success, 371; neoconservative influence in, 369;

opposition to Kyoto Protocol, 201–2; overview, 368–9; policy capacity and IPC, 372–3; political leadership, 369; western alienation and, 368 Alberta Bill 11 case, 57 alternative service delivery: intergovernmental partnerships and, 56 Anderson, David, 201, 205, 206 Anderson, George, 68 Annual Premiers’ Conference (APC), 43, 90–2; features of, 91; growing strategic role of, 90–1; health care (2000) and, 92; political leadership/premiers and, 91–2; provinces’ role in trade policy, 223–4; reaction to federal government action, 91–2 asymmetrical federalism, 55, 448; defined, 361; Quebec and, 361–2 asymmetry: formal relations of, 21 Atlantic Accords, 55, 152 Atlantic Provinces, 384–99; beggarthy-neighbour effect, 385; collusion with federal government, 385; federal-provincial relations, 384–5; IPC levels, 384–5, 431; New Brunswick, 388–92; Newfoundland and Labrador, 395–9; Nova Scotia, 385–8; overview, 384–5; Prince Edward Island, 392–5; as regional political economy, 385 Auditors General: provincial, 50 Baier, Gerald, 56, 268, 437 Baird, John, 367 Banting, Keith G., 295 Barker, Paul, 52



Index 521

Berger Inquiry, 179 bilateral agreements, 55 bilateral federalism, 455 Blueprint on Aboriginal Health, 289 Boismenu, Gerard, 75 Bouchard, Lucien, 103, 358–9 British Columbia, 380–4; alienation of, 381, 383; economy, 382; as “have/have-less” province, 381; intergovernmental relations, history and structure, 381–2; IPC comparisons, 384; overview, 380–1; political landscape, ­381–2, 383; political turnover in, 107; public engagement, 248; trade and economic issues predominant, 382–3 Brock, Kathy L., 74 Brundtland Commission Report (UN, 1992), 180 Brussels Commission (European Union), 95 budget(s): impact of 1995 federal, 167–8, 176–7; IPC and, 149–50, 345 bureaucracy: intergovernmental, 10; negative views, 94–6. See also public administration; public service. business associations: FTA negotiations and, 247 Business Council on National Issues, 247 cabinet, federal: departmentalized, 66; unifying role of, 59 Calvert, Lorne, 378 Cameron, David, 77–8 Campbell, Alex, 393 Campbell, Gordon, 123, 245, 382

Canada, 354–8; Central Canada, 357–8; contemporary policy issues, 4; executive federalism, 3–4; federal government, 354–7; federalism literature, 5–7 Canada Assistance Plan: Supreme Court decision re, 53 Canada Food Inspection Agency, 47 Canada Health Act (CHA), 259; unilateral federalism and, 290 Canada Health and Social Transfer (CHST), 23, 34, 265; fiscal federalism and, 81; IG relations, negative effect on, 75, 290–1; as unilateral measure, 132 Canada Health Council, 278 Canada-Newfoundland Atlantic Accord, 395–6 Canada Pension Plan (CPP), 145, 146–7; comparative case, 461; public consultations on, 165 Canada Revenue Agency, 47 Canada Trade and Tariffs Committee (CTTC), 220–1 Canada Trade Missions, 227, 257, 320 Canada-US administrative relationships and ties: study of, 62–3 Canada Water Act (1970), 193 Canada-Wide Accord on Environmental Harmonization, 23, 54, 185, 319 Canadian Alliance of Manufacturers and Exporters, 247 Canadian Blood Services, 273 Canadian Centre for Justice Statistics, 94 Canadian Centre for Management Development (CCMD), 50

522 Index

Canadian Centre for Policy Alternatives, 151 Canadian Coordinating Office of Technical Advancement, 273 Canadian Council of Chief Executives, 247 Canadian Council of Ministers of the Environment (CCME): budget cuts, effect on, 190–3; climate change and, 188; culture and, 209; enhancing technical capacity of IPC, 186–7; harmonizing environmental legislation, 183; history and nature of, 182–3, F184; institutional/policy capacity, 185; as intergovernmental forum, 186; IPC and, 185–8; multilateral approaches and agreements, 187–8; policy role of, 185–6; variable provincial attitudes to, 187 Canadian Endangered Species Conservation Council (CESCC), 189 Canadian Environmental Assessment Act (CEAA) (1992), 180 Canadian Environmental Protection Act (CEPA), 179; provincial resentment re, 182 Canadian federalism, see executive federalism; federalism; federation Canadian Health Infoway, 273 Canadian IG Conference Secretariat (CICS), 48, T48; policy capacity and, 95 Canadian Innovation Fund and Strategic Investment Fund, 88 Canadian Institute for Health Information (CIHI), 94, 273, 313, 427 Canadian Intergovernmental Affairs Secretariat, 360

Canadian International Trade ­Tribunal, 61 Canadian Manufacturers Association, 247 Canadian Medical Association (CMA), 273, 288 Canadian Nurses Association, 288 Canadian Partnership Against ­Cancer, 273 Canadian School of Public Service, 50 Canadian Water Network (CWN), 189 Carroll, Barbara Wake, 29 Carty, Kenneth R., 59 CCME, see Canadian Council of Ministers of the Environment central agencies: coordination role and formal relationships, 122–3; finance and, 169; health policy and, 269–70; inability to act horizontally with line departments, 114; process-oriented role of, 115–17; relationships depend on issues, 113; tension with line departments, 112–17 Central Canada, 357–8 centralization: formal relations of, 21; institutional analysis and, 7; intergovernmental structures, 65 challenges/findings re IPC, ­453–71; best practices not identified, 460; best practices, identifying, 465–6; collective IPC, 456–7; differentiate types of IPC, ­454–7; dispute resolution not mentioned, 462; distinction between policy capacity and IPC, 14–18, 454; innovative thinking not fostered, 462–4; intergovern-



Index 523

mental ­conflict, 458; internal IPC, ­454–5; IPC ill-defined, 453– 4; joint IPC, 455–6; methodology needed, 469; need to catch up with literature, 466–70; officials internally focused, 459–60; policy output needed, 469–71; poor understanding of policy professionals’ role, 463; restructuring not considered, 460–2; sectoral/jurisdictional variations, 464–6; success stories not identified, 460; symmetrical vs. asymmetrical solutions, 464 Chambers of Commerce, 247 Chaoulli decision (SCC), 57, 282, 294 Charest, Jean, 43, 212, 359, 365, 374; COF and, 374 Charlottetown Accord, 34, 38, 72 Charter of Rights, 72 checkerboard federalism, 55 Chrétien, Jean, 34, 37, 39, 41, 76, 158, 280, 439; disinterest in policy goals, 440–1; federal unilateralism, 77; IGR generalists and, 106; Mike Harris and, 76, 250; pragmatism, 65, 106; relationships and, 123; Team ­Canada and, 330 CHST, see Canada Health and Social Transfer CIC Secretariat, 95 citizen-centred approaches: intergovernmental partnerships and, 56 Clarity Act (2000), 39 Clark, Glen, 245, 382 Clarkson, Stephen, 78 Clerk of the Privy Council, 14–15

climate change, 63, 196–7, ­212–13; administrative machinery for policy on, 203–4; intergovernmental conflict and, 326–7; intergovernmental relations and, 200–1; interprovincial-territorial collaboration, 196–7; IPC and, 204; Kyoto Protocol, federal unilateralism, 201–2; National Implementation Strategy and Business Plan, 201; politicization of and IPC, 202–3; provincial-territorial unanimity lacking, 202; provincial unilateralism, 215 Climate Change Secretariat, 200, 314, 428 COF, see Council of the Federation collaboration, 142–3, 257; health, international consultation, 296, 297; Health Accords and, 280; levels of, 76, 77–8; provincialterritorial finance meetings, 141, 142–8; trade policy and, 219, 255–6; trust and, 77–8 Commission for Environmental Cooperation (CEC), 189 Commission on Fiscal Imbalance, 150 communication: capacity, trade policy and, 232–3; enhanced role for, 242, 246; fiscal relations and, 151; trade policy and, 242–6 communications technologies: IPC and, 99; warnings about, 433. See also technology. comparative analysis, 22–4; actors, 23–4, 328–36; courts, ­322–3; four policy areas selected, 22; generalist vs. ­specialist

524 Index

­ erspectives, 22; ideas, 22, p ­305–6; institutional analysis and, 22–3; institutional resources, 315–17; institutions, 306–28; international institutions, 325–8; jurisdictions, 24–5; methodology, 22–4; Parliament, 323–5; political and administrative actors, 328–32; political and administrative institutions, 307–15; public, 332–6; relations, 24, 336–43 Conference Board of Canada, 150, 151 Conference of Health Ministers, 270 Conference of New England Governors and Eastern Canadian Premiers, 61, 62, 244 Conference of the Ministers of Health, 277 Constitution, 19, 135–7, 306–7; environment and, 181–2; federalprovincial fiscal imbalance, 83–4, 129; finance and, 135–7; health policy and, 264–6; IGR generalists and, 82–6; interprovincial trade and, 222–3; jurisdictional integrity, maintenance of, 419; neoconservatism and, 34–5; particulars of federalism, 34; policy capacity, Canadian federalism, 37–8; privileges exclusive over concurrent jurisdictions, 135; reform of, little call for, 419; trade policy and, 219–20 constitutional politics: demise of, 38–9; IPC, effect on, 82–3; jurisdiction: vs. contemporary policy issues, 38; watertight compartments, 38, 220

continentalism, 217, 255 Continuing Committee for Trade Negotiations (CCTN), 223, 311 Continuing Committee of Officials (CCO), 142, 147, 425 Conway, Thomas, 193, 205 Copps, Sheila, 185, 194 Council of Atlantic Premiers (CAP), 384 Council of Great Lakes Governors, 61, 62, 244 Council of Maritime Premiers (CMP), 384 Council of the Federation (COF), 43–4, 90–1; differing assessments re IPC, 93–4; environment/climate change issues, 196–7; formation, 93; health policy and, 267; importance of, 93; internal trade, prioritizing, 240; internal trade mechanisms, 232, 256; IPC, enhancing, 315; Ottawa office, 94; provincial-territorial backlash and, 141–2; provincialterritorial linkage, as a, 93–4 court decisions: federal power, supporting, 57; market, favouring, 57; on national unity, 57 courts, 437; comparative analysis, 322–3; environment and, 197–8; finance and, 173; health policy and, 282–3; internal trade policy, 241; trade policy and, 241 cross-border: agreements, 199–200; linkages, 61; regional groups, 439; relations, 63 CTRADE (Federal-Provincial-Territorial Committee on Trade), 226–7, 231, 320; mechanism of, 226



Index 525

decentralization: bilateral agreements, 55; Canadian federation, 39; environment and, 182, 183, 185; finance and, 168; institutional analysis and, 7; internationalization, effect of, 61–2; NPM and, 37 Decter, Michael, 273 deficit downloading, 134 deficit reduction, 133, 134; ­Mexican peso crisis and, 157 democracy: citizen engagement and, 7–8 democratic deficit, 72, 95, 445 departmentalized cabinet, 66 Department of Foreign Affairs and International Trade (DFAIT), 226, 227–8, 229: administrative relations with, 339; provincial relationships with, 250 deputy ministers: informal relationships, fostering, 342; IPC, enhancing, 331; of intergovernmental affairs, 110; meetings of, 49; turnover among, 206, 442 Deputy Ministers Task Force Report Strengthening Policy Capacity, 15, 68, 431, 432, 448 Devine, Grant, 377 DFAIT, see Department of Foreign Affairs and International Trade Dingwall, David, 110 Dion, Stephane, 108, 212 dispute avoidance: mechanisms re, 435 dispute resolution: health policy, 268; internal trade agreements and, 238; NAFTA and, 242, 243; recommendations re, 435–6;

World Trade Organization and, 242–3 diversity politics, 8 Dodge, David, 156 Doer, Gary, 65, 87, 240, 373; appointed US ambassador, 375; intergovernmental relations, approach to, 374 Doern, G. Bruce, 60, 193, 205 Dosanjh, Ujjal, 382 Douglas, Tommy, 377 downsizing, 15, 97, 101 Drug Review and Wellness ­Strategy, 292 Dupré, J. Stefan, 66, 421, 423 Eastern Premiers’ Conferences, 104 Eaves, Ernie, 150 Efficiency of the Federation Initiative (1994), 35–6 Eldridge, Jim, 374 environment: accords and agreements, 193–7, 319–20; administrative institutions, 190–1; budget cuts, 180, 191–2, 316; Constitution and, 181–2; councils and committees, 188, 189; courts and, 197–8; cross-border agreements, 199–200; decentralization, 182, 183, 185; ecosystem approach, 180; federal-provincial accords, 193; formal political relations underdeveloped, 338; harmonization, 183, 185, 196; horizontality, challenges, 190, 338–9, 342; ideas influencing, 179–81; ideational shifts, 179, 180; institutional resources, 191–3; institutions, ­181–204; integrated

526 Index

environmental­ ­management, 180; intergovernmental agreements and, 197; international influence increasing, 199; international institutions, 198–204; memorandums of understanding (MOUs), 197; multi-stakeholder approaches, 180; natural resource agreements, 193; Oldman River Dam ruling, 197–8; personnel cuts, 192–3; political and administrative institutions, 182–91; provincial budget cuts, 192–3; provincial/territorial international interest, 199–200; reasons for choosing, 22, 23 environmental IPC: bilateral vs. multilateral approach, 195–6; deputy ministers and, 206, 210; factors negatively affecting, 310–11; gauging levels of, 189; informal relationships and, 342; institutions and, 212, 213; intergovernmental institutions and, 310; international determinants of, 326–7; interprovincial-territorial IPC not significant, 196; low priority of, 170; ministerial level and, 310; ministerial turnover and, 205–6; multilateral approach and, 194, 195–6; officials and, 207; Parliament not significant for, 325; political actors as inhibitors to, 214–15; public and, 207–8; 333–4; relationships and, 212; resources and, 212; variations in, 178–9, 191 Environmental Management Framework Agreement (EMFA), 183, 185, 193–4

environmental policy: accountability reforms, 437; actors, ­204–8, 212; climate change, 196–7, 200–1, 214; Constitution not significant for, 307; culture and, 209; executive federalism and federal role, 213–14; factors not mentioned by officials, 211–12; federal leaders, role of, 204–5; federal unilateralism, 214–15; formal political relations, 209; ideas influencing, 304; inaction, 212; informal administrative relationships and, 209, 210; inhibited by politicians, 205; intergovernmental institutions and, 214; intergovernmental agreements, 213; international institutions and, 61, 214; internationalization of some issues, 203; lack of federal policy capacity, 213–14; low capacity, 212; low conflict period, 216; lowcooperation, 212; perceptions of federal officials, 209–10; personalities and, 210; political and administrative actors, 204–7; relations and, 208–11; trust and, 210; turnover of deputy ministers, 206; Walkerton tragedy, 213–14; water pollution/federal water policy, 213–14. See also climate change. environmental protection: ideas, 212–13 Environment Canada, 190; interdependent/networked institution, 181; Program Review budget cuts, 191 equalization: defined, 347; ­federalprovincial issues re, 152–3;



Index 527

“have” vs. “have-less” provinces, 152 Equalization Program, 347 European Union (EU), 16, 61 executive federalism, 3–4, 18; accords and agreements, 52–6; accountability, lack of, 58; actors in, 65–75; administrative institutions and IPC, 307; in Canadian federalism, 40; courts and, 56–7; FMCs/FMMs, 41–2; institutions of, 19, 41–4; intergovernmental relations, 44–50; international institutions and, 60–4; ministerial councils and meetings, 42–3; Parliament and, 57–8; political institutions and IPC, 307; political parties and, 58–9; provincial-territorial cooperation, 43–4; public, exclusion of, 71–2; relations of, used in study, 20–1; stability vs. transparency, 72–3 expenditures: intergovernmental agencies and, 1995–2005, 349, T350 Expert Panel on Equalization and Territorial Formula Financing, 150 experts, external, 150–1 External Advisory Committee on Smart Regulation, 55 fair-shares federalism, 150, 366, 370 family trusts, 146 Federal, Provincial, and Territorial Council on Social Policy Renewal, 42–3 Federal Accountability Act, 2006, 74 federal government, 354–7; accountability, 354; factors

affecting IPC, 354; federal-provincial relations, 355; independent policy capacity of, and IPC, 356; intergovernmental relations, history of, 355; IPC, two sides of, 356–7; policy capacity of, 15; trade policy, 356 federalism, 11–12; budget surplus period, 37; constitutional division of powers, 37–8; continental vs. national economic integration, 62; defined, 32–3; democracy and citizen engagement, 7–8; features of, 32; ideas and, 33–7; ideas and the exercise of power in, 33–4; institutions of, see Institutions of Canadian federalism; interface with public administration, 9–11; interface with public policy and public administration, 5–14; international focus, effect on, 63; networked theory of, 8; NPM and collaborative model of, 36–7; policy outcomes and, 8; policy paralysis and, 7; public administration, ideas affecting, 35; public policy interface and, 7–9; rethinking, 11; strengths of, 415. See also executive federalism; fiscal federalism. federalism literature, Canadian, 5–7; historical institutionalism and, 5–6; ideational analysis and, 9; informal relationships of the federation, 7; institutional analysis and, 11–12; interface of federalism and public administration and, 10–11; intergovernmental policy developments and, 9; intergovernmental relations and,

528 Index

6–7, 11; policy communities, networks and, 7; state-societal relations, 7–8 federalism-policy-administration nexus, 11–13; methodology, 11 federalism test, Program Review, 35 Federal-Provincial Accords for the Protection and Enhancement of Environmental Quality, 193 federal-provincial relations: federal government, 355; federal spending power and, 136–7; fiscal imbalance, 83–4, 129, ­133–4; See also federal unilateralism; First Ministers’ Conferences/ Meetings. Federal-Provincial-Territorial Committee on Trade (CTRADE), see CTRADE federal-provincial-territorial relations: executive federalism and, 40–1; fiscal federalism and, ­139–40; fiscal imbalance issue, 133–4; health and, 280–2, 296, 313, 340; resources, uneven distribution of, 40–1; taxation conflicts, 136; variability of IPC re environmental issues, 215 federal spending power, 38, 83–4; conflict with provinces and, ­136–7; federal unilateralism and, 89; finance policy, 306 federal system of government, 3 federal unilateralism, 77, 88–9; aggravating effects of, 336–7; calls to limit, 435; environmental policy and IPC, 215; finance and, 153–5; various views of, 89 federation, Canadian: constitutional institutions of, 37–50;

court decisions and, 56–7; decentralizing policy responsibilities, 39; demise of constitutional politics, 38–9; executive federalism, see executive federalism; institutional resources, 50–2; nonconstitutional politics and, 39; political and administrative institutions of, 40–50; territories, status of, 40 Filmon, Gary, 373 finance: accords and agreements, 151–6, 318–19; actors, 158–67; budget resources, 149; central agencies and line departments, relations between, 170–1; as central agency, 169; committee work of, 163; Constitution and, 135–7; Continuing Committee of Officials, 147–8; coordinating mechanisms, 148, 309; courts and intergovernmental disputes, 173; decentralization, 168; ­divisions/branches, T146; elitist federal attitudes, 163; executive power, close association with, 138; external experts, 150–1; finance ministers’ and first ministers’ relations, 309; formal relationships, 167–71, 176; “have” vs. “have-less” provinces, ­143–4; hierarchical relations, 167, 337–8; informal relationships, 171–3, 176, 341–2; institutions and, 135–58; intergovernmental relations, 144–5, 167–73; intergovernmental technical committee system, 338; international institutions, 157–8; line departments and, 169–70; ­ministerial



Index 529

continuity, 161; networks/contacts, 172–3; officials’ views, 175–6; parliamentary standing committee, 173; Parliament’s role limited, 173–4; political and administrative actors, ­158–67; political and administrative institutions and, 137–48; political effect on relations, 169, 176; ­political vs. non-partisan stance, 162; politics-administration dichotomy, 160; positive support for federal government, ­155–6; powerful role of, 338; processoriented intergovernmental officials, 161–2; provincial­territorial meetings/interactions, 141, 142, 143, 338; reasons for choosing, 22, 23; regionalism and, 142; relations and relationships, 176–7; technical definitions, supplying, 142; technical vs. political issues, 309 Finance, Department of: as guardian of public spending, 134 finance IPC: administrative institutions, 309–10; core problems of, 174; dual role in, 177; ­international determinants, 326; opinion of own impact, 329–30; Parliament not significant, 324; political leadership and, 329; political parties, minimal effect, 174; turnover and, 161, 329 finance ministers’ meetings, 138– 9; federal control of, 140–1, ­159–60; FMCs/FMMs and 266; health policy and, 266; IPC and, 140–1

finance policy: Constitution, federal spending power, 306; ideas, influence of, 175, 303–4; institutional resources and, 148–51; interest groups and, 166; public and, 163–7, 176; scale of resources available, 148–9, 316; trade liberalization, 157; unilateral vs. collaborative action, 168, 177 First Ministers’ Accords on Health Care, 54 First Ministers’ Conferences/ ­Meetings (FMCs/FMMs), 48: agenda-setting by PM, 41, 88; change in IGR, effect on, 86–7; crisis-based focus of, 266; federal health care funding, 277–8; federal unilateralism and, 88–9; Finance Ministers’ meetings and, 266; fiscal development, as sites of, 138; focus on money, 86; health policy and, 266–74, ­312–13; IGR generalists, attitudes to, 86–90; leadership, lack of, 87; long-term planning, lack of, 268–9; no continuance of, 89–90; politicians and, 86; provincial views on free trade, 223–4; tension over fiscal issues, 41–2; territorial leaders walk out of, 87–8 Fiscal Arrangements Committee of Assistant Deputy Ministers, 142 fiscal federalism, 81; bases of, 132; federal government dominance, 139–40; fundamental issues conditioning, 131–2; ideas and, 129; institutions, no constitutional basis, 135; neoconservatism and, 133, 134; public

530 Index

consulta­tion, views on, 163–5; ­technical-rational dimension, 132; technical work done by officials, 145–6 fiscal imbalance, 18, 44, 81; challenges to federal Dept. of Finance and, 309; federal-provincial, 83–4, 129, 133–4; frustration with, 174–5; ideas and, 129; research, need for, 150–1; tax conflicts, 136; vertical, 364, 366 fiscal relations: machinery, line departments/divisions/branches, T146 fiscal relations model, 421 Flaherty, James M. (Jim), 131, 367 FMCs, see FMCs/ FMMs formal intergovernmental relations: academic debates re, 447; disentanglement, 448; enhancing equality, 447–8; roles and responsibilities, clear, 448–9; trust, building, 448 formal relationships, 21, 75; IGR generalists and, 119–21,130; interpersonal relationships and, 123–4; political leaders and, 121–2; political staff and, 121; power struggle within, 446–7; role in IPC, 468; trade policy, 250–1, 257. See also relations. Forum of Federations, 60 free trade, 18, 60–1; business input, 247, 248; IPC capacity and, 219; labour opposition to, 248; policy and, 60–1; public engagement in, 247–9. See also Free Trade Agreement; North American Free Trade Agreement.

Free Trade Agreement (FTA), 60–1, 217, 224 Free Trade Agreement of the ­Americas (FTAA), 224 Frenette, Ray, 390 Fry, Earl H., 61 FTAA Summit of the Americas, 231 GATT, 218, 220–1; Kennedy Round of talks, 220; Tokyo Round, 221; Uruguay Round, 224 General Agreement on Tariffs and Trade, see GATT Global Health Security Initiative, 296 globalization, 8, 60, 217, 255; communication and, 242; IPC and, 157; Quebec’s claim to sovereignty and, 242; trade liberalization and, 157; trade policy, effect on, 218 Goldenberg, Eddie, 279, 425 Gomery Commission, 39–40 Good, David, 29 gospel of efficiency, 10 governance capacity, 16 Graefe, Peter, 75 Great Lakes Water Quality Agreement, 319 Greenhouse Gas Emission Reduction Trading Pilot, 197 Greenpeace, 208 Greenpeace Ottawa, 208 Green Plan (1990), 179, 191 Grimes, Roger, 396 Hale, Geoffrey H., 62, 64 Hall, Peter A., 18 Hamm, John, 386, 431



Index 531

Harcourt, Mike, 245, 381–2 Harmonization Accord (HA) (1995), 209, 319; internationalization of intergovernmental agreements, 203; IPC and, 194–5, 197; Quebec not a signatory, 194 Harmonization Accord (HA) (1998), 194–5, 213 Harper, Stephen, 37, 41; accountability, focus on, 74; relations with premiers, 77 Harris, Mike, 34, 76, 150, 250, 364 health: accords and agreements, 277–82, 320–1; actors, 283–90; administrative officials, 285; advisory councils and, 271–3; Constitution and, 264–6, 307; courts and, 282–3; executive power of, 283; federal connection with national associations, 288–9; federal funding, pushing for, 267–8, 277–8; federal/ ­provincial-territorial relations, 291, 340; federal-provincial-territorial conference system, 313; finance, relationship with, 270; FMMs and, 266–74, 312–13; ideas and, 260–4, 305; informal relationships and, 293–4; institutional innovation, 313; line officials vs. central agencies, 441; need for resources, 275; Parliament and, 294, 324; parliamentary committees and, 294–5; political and administrative actors, 283–5; political and administrative institutions, ­ 266–74; political parties and,

295–6; political relations, importance of, 339–40; power dynamics, 299; provincial vs. federal resources, 275–6; reasons for choosing, 22, 23–4; relations and, 290–3; relations and relationships, 300–1; resources, varying levels of, 317; restructuring, 261–2; shared constitutional authority, 265–6; support secretariat for, 270–1; system coordination, 261; tension between IG officials, 67–8; turnover, 339–40 Health Accords, 272, 275, 428; accountability and, 279–80; federal-provincial-territorial cleavages and, 280–2; intergovernmental relations, role in, 320–1; little collaboration, 280; success of, varying, 278 Health Canada, 271; capacity of, 275–6; international activities, 296–7 Health Canada-US Relations Network, 296 health care: administrative relations, 291–2; costs, 260; federal funding for, 259, 260, 264; federal role, clarity needed, 265–6; funding advertising by provinces and territories, 268; funding cutbacks, 260; issue and premiers’ meetings, 92; mechanisms for cooperative work on, 273–4; policy, provinces responsible for delivery, 259, 264, 265 Health Care Protection Act (Alberta, Bill 11), 282 health care reports, 261, 262, 263

532 Index

Health Council of Canada (HCC), 272–3, 313, 427 Health IPC: informal relationships and, 343; innovation and lack thereof, 299–300; political leaders and, 330–1 health policy: Aboriginal groups and jurisdictional disputes, ­289–90; accountability, 263– 4, 276, 320–1; central agencies vs. line departments, 269–70; ­central agency-sectoral relationships, 292–3; competing public interests, 287–8; cooperative mechanisms, 273–4; Council of the Federation and, 267; crisis management and funding, 305; ­dispute resolution mechanisms, 268; institutional resources, 274–7; institutions and, ­264–83; interest groups, 288–9, 335; international health agreements, 296–8; knowledge and expertise, 276; marginalized public and, 335; media and public involvement, 300; NAFTA and, 61; NPM and, 263–4, 276; official viewpoints varying, 262–3; patient wait times/satisfaction, 286, 305; 335, performance indicators and, 276–7; performance reporting, 320–1; political policy-making, 283–4; poor policy capacity, 284–5; privatization debate, 260–1, 294, 295, 305; professional associations, 288; provincial, and public opinion, 286–7; public participation in, 285–90, 334–5; Take Action plan, 277; trade issues, international, 298; trust, 267

Hepatitis C issue, 269, 277, 286 historical institutionalism, 5–6 horizontal capacity: growth of, 307–8 horizontality, 50; accords and agreements, enhancing, 434; environment, 190 horizontal policy-making, 50 House of Commons, 58 House of Commons Standing Committee on Health, 294 ideas, 33–7, 132–5, 302–6; accountability, 37, 306; administrative, 303, 306; Canadian federalism and, 33–7; challenges for IPC, 466; climate change, 304; comparative analysis of, 22, 305–6; constitutional politics and, 303; deficit reduction, 133, 134; defined, 33; demographics inhibiting, 101; ecosystem approach and, 212–13; environment and, 179–81, 212–13; federal-provincial fiscal imbalance, 133–4; fiscal federalism, 37, 81, 129; health policy and, 260–4; IGR generalists, 80–1, 128, 129; indirect effect on IPC, 343–4; institutions, actors, and, 13–14; intergovernmental policy debates and, 344; IPC and, 18–19; monetarism, 133; neoconservatism, 133, 134; New Public Management see NPM; non-constitutional approaches to IGR, 81, 129, 303, 305; not explicitly identified as IPC determinants, 305–6; official vs. academic concerns/recommendations, 418–19; performance, 306; policy out-



Index 533

comes and, 8–9; power and, 33; public administration and, 35; public policy and, 12–13; shared principles, lack of, 418; sustainable development, 212–13, 304; trade policy and, 218–19; vision statements, lack of, 418 ideational analysis, 9 identity politics, 8 informal relationships: IGR generalists, 120, 124–8, 130; importance of, 449; IPC and, 124–5; negative effects of institutionalization, 125–6; provincial-territorial, 127; role in IPC, 468; trade policy and, 250, 251–3, 257; trust ties and, 449–50 information: management, trade policy, 237; sharing by federal government, 236. See also knowledge; research. Institute for Research on Public Policy (IRPP), 432 Institute of Intergovernmental Relations, 151 institutional analysis: Canadian federalism and, 5–6, 11–12, 37–65; federal-public policy interface and, 7–9; intergovernmental relations and, 6–7, 11–12; state power and, 11 institutional capacity, 16 institutionalization: democracy deficit and, 95; federalprovin­cial-territorial teams and collaboration issues, 95–6; federal-provincial trade negotiations, 221; finance relationship to other ministries, 145; informal relationships, of, 125–6; joint institution issues, 95–6; leader-

ship and, 95; line departments vs. agency units, 96; personal dimension and, 95; secretariats, 94; specialists’ vs. generalists’ issues, 96; views, pro and con, 94–6 institutional resources, 50–2, ­148–51, 430–3; comparative analysis, 315–17; downsizing, 97; environment and, ­191–3; finance and, 148–51; health policy and, 274–7; ideas, 100–1; IGR generalists, 97–101; IPC and, 19, 20; knowledge/expertise, 99–100, 317; new technologies, 99; officials’ vs. academics’ recommendations, 430–3; personnel and, 97–8; Program Review, 148; quantity, effect of, 101; time, 98–9; trade policy, 233–7. See also resources. institutions, 135–8, 181–204, ­306–28; comparative analysis of, 306–7; federal-provincial-territorial fiscal relations, for, T146; finance and, 135–58; fiscal federalism of, 139–40; FMMs, and IGR generalists’ views, 129–30; health policy and, 264–83; IGR generalists and, 82–105; intergovernmental agencies/departments and jurisdictions, 352, 353, F353, T352; IPC and, 19–20, 344; official vs. academic concerns/recommendations, 419– 20; policy outcomes and, 8; relationship with IPC, 466–7; trade policy, 219–44; working well, officials’ perception, ­419–20. See also intergovernmental institutions.

534 Index

institutions of Canadian federalism: accords and agreements, 52–6; Constitution, 37–40; courts, 56–7; institutional ­resources, 50–2; international institutions, 60–4; Parliament and political parties, 57–9; political and administrative, 40–50. See also political and administrative institutions. inter-agency coordination: growth of, 307–8 interest groups, 166; accountability role, 333–4; better capacity than government, 249–50; health policy and, 288–9, 335; not always enhancing IPC, 332; Ottawa, oriented to, 249; used by federal government, 444. See also stakeholders. interface of federalism, public policy, and public administration, 5–14 intergovernmental administrative relations, 10 intergovernmental agencies, 47; greater coordination with finance departments, 49 intergovernmental agreement: growth of intergovernmental units, 46–7 Intergovernmental Climate Change Impacts and Adaptation Working Group, 203, 204 intergovernmental fiscal relations: taxation conflicts, 136 intergovernmental institutions: features of in agency structures, 47–8; hierarchical network, structure of, T45; role and func-

tions of administrative agencies, 45–6; structural changes to, 46. See also institutions. intergovernmental officials: demographic profile, 69; educational profile, 69–70; functions and powers, 67, 68T; informal networks among, 76, 77, 78; policy capacity, declines in, 70–1. See also officials. intergovernmental policy capacity (IPC): Aboriginal rights agreements, protecting, 85; accords and agreements, 53, 434; actors, 20; administrative institutions and, 94–6; APCs and, 90–1; budgets, 149–50; choice and capacity, 21; COF and, 93–4; collective, 456–7; consequences of neoconservatism, 34–5; defined, 4, 14–18; departmental organization, importance of, 229–30; determinants of, 128–9; difference from policy capacity, 17–18; diminishment by federal unilateralism, 88–9; distinguishing types of, 416; expenditures on IG relations, jurisdictional variation, 349, 352, T350, T351, T352; expertise and, 99–100; external impartial analysis and, 100; factors affecting, 20–2, 468–9; federal budget (1995), impact on, 167–8, 176–7; federal coordination issues, 97; federal-provincial fiscal imbalance, 83–4, 129; finance ministers relationship and, 139; geography, 99; “have” vs. “have-less” provinces, ­347–8, 353–4; health policy, factors



Index 535

inhibiting, 271–3; health policy, resources and improved, ­274–5; ideas and, 18–19, ­100–101; infrastructure and leverage of, 348; institutional limitations to, 429; institutional resources and, 19, 20; institutions and, 19–20; internal, 454–5; international environment agreements and, 198–9; international health collaboration, impact of, 297–8; joint, 455–6; jurisdiction and, 352, 353, F353, T352, 416; lack of thinking about, 415–16; need for more, 414–15; neoconservatism and, 34–5; networking, 100; new techniques and, 99; official vs. academic views on, 417; pensions, 138; personnel resources, 97; political-administrative relationships, 121–3; political leadership and, 105–8; provincial regionalism and, 92; provincial-territorial strategizing re, 90, 92; recommendations re, few, 417; relations and, 20–1; relativity of definition, 24; research, 15, ­149–51; resources and, 17, 97–101; scale of government and, 148–9; shift away from Constitution, effect on, 82–3; staff turnover and, 110–11, 116; tax policy, 138 IPC inhibitors: constitutional politics, 82–3; deficient cultural knowledge, 101; distance from centre of power, 114–15; federal spending power, 121; geographical limitations, 99; horizontal action reduced, 114; human

f­ actors, 126; lack of knowledge and ideas, 100–1; media coverage, 118; process vs. policy, 115–17; relations with federal government, 120–1; time pressures, 98–9. See also policy capacity. intergovernmental relations (IGR): actors, 65–78; agencies and expenditures, T350; Canadian federalism and, 6–7, 11; collaboration and constitutional politics, 39; conferences and meetings, 48–9; constitutional relationships, 37–8; court decisions, 56–7; cross-border activities, 63–4; cutbacks (1990s), 52; departments, 44–5; federal spending power, 136–7; finance departments, 145; horizontal policy-making, 50; ideas affecting, 32–7; institutions of, 44–5, 47; integrated with public policy sector management, 50; international status sought by Quebec, 60; jurisdictional expenditure, variations in, 349, 352, T350, T351, T352; limited institutional innovation, 429–30; meetings, participation in, 49; neoconservatism, effect on, 34–5; non-constitutional approaches to, 305; NPM, 35–6; Parliament and, 57–8; policy areas, growth in, 46–7; policy capacity, 50; political parties and, 58–9; provincial-territorial cooperation, 43–4; public administration and, 49–50; public engagement in, 73, 74–5; Social Union ­Framework

536 Index

Agreement (1999), 54; territories, status of, 40; theoretical work on, 10. See also First Ministers’ Conferences/Meetings; formal intergovernmental relations. intergovernmental relations (IGR) generalists: accords and agreements, 102–3, 318; accountability, views on, 117–18; actors and, 105–19; administrative institutions and IPC, 308–9; administrative machinery, significance for IPC, 94–6; APCs and, 90–2; COF and, 90–1, 93; constitutional politics and policy capacity, 82–3; Constitution and, 82–96, 306; describing own role, 109; devolution from federal and provincial jurisdictions, 85; downsizing, 97, 101; executive federalism and role of institutions, 85; expertise, 99–100; external impartial analysis, 100; factors excluded from their comments, 128; factors inhibiting IPC, 113–17; federal government power, 336–7; federal limitation on areas of provincial constitutional jurisdiction, 84–5; federal-provincial fiscal imbalance, 83–4, 129; fiscal federalism and, 81, 129; FMMs as dysfunctional, 129; formal relationships, 119–24; geographical limitations of, 99; Health Agreements and Accords (1999–2004), 102–3; hierarchy between generalists and specialists, 112; ideas and, 80–1, 100–1, 128, 129; informal relationships and, 120,

124–8, 340–1; institutional location and, 111–12; institutional resources and, 97–101; institutions and, 82–105; interface with politicians, 109; international factors and IPC, 325–6; international institutions, 103–5; lack of local/cultural knowledge, 101; line departments and, 112–17; ministers and, 109; networking, 100–1; new technologies, 99; non-constitutional approaches to IGR, 81, 129; NPM,­­ ­opinion on, 303; opinion of own impact, 329; personnel resources, 97–8; perspective of, 22; policy coordination, 112; political and administrative, 85–96, 105–17, 308; political ideas on federation and, 303; political leadership and IPC, 328–9, 331; political relations, effects of, 337; process role seen as strength, 337; provincialterritorial strategizing on IPC, 90, 92; public and, 117–19; relations and, 119–28; resources ranked highly, 315–16; SUFA, 102; time resources, 98–9; transparency, views of, 118; trust, importance of, 340; turnover, 316, 329 intergovernmental relations (IGR) specialists: international factors, 325; perspective of, 22; political leadership, 331 internal trade policy: AIT and, ­238–41, 320; courts and, 241; favouritism, 256; horizontal capacity, 240–1, 257; international institutions and, 244; shift from AIT to COF, 311. See also Agree-



Index 537

ment on Internal Trade (AIT); trade; trade policy. international institutions, 439–40; Canadian-American relationship and, 103–4; comparative analysis of, 325–8; cross-border regional groups and, 64, 439; defined, 60; developments in, 60; environment and, 198–204; executive federalism and, 60–4; finance, 157–8; free trade, 60–1; IGR generalists and, 103–5; increasing influence on environment, 199; internal trade policy and, 244; provincial-territorial, 63; Quebec and, 60; regional cross-border linkages and, 61; Team Canada and trade, 439; trade policy and, 242–4. See also institutions. internationalization: economic union, straining, 62; global agencies, growth of, 64; Kyoto Accord and, 326; social policy devolving to provinces, 61–2; transnational corporations and, 61–2 International Joint Commission on the Great Lakes, 61, 63, 189 International Trade Advisory Committee (ITAC), 247 interviews: distribution by position, T28; numerical bias against federal government, 29–30; questions asked, 28–9; quotations from, use of, 30; sample, 27–8; snowball sampling technique, 28 Jenkins, Richard, 13 Joint Emergency Response Plans, 297

judicial review, 56–7 jurisdiction, IPC and: accountability and federal intrusion, ­118–19; actors/relations, ­412–13; ­Canada, variations, 354–8; con­stitutional politics, 82–3; expenditures on IG relations, variation, 349, 352, T350, T351; importance, 346–7; independent policy capacity, 413; institu­tions, 352, 353, F353, T352; intergove­rnmental machinery, 412; population size, 411–12; uneven IPC and, 346; variance in factors affecting IPC, 345; wealth and, 412 jurisdictional comparative analysis: policy capacity and, 24–5 jurisdictional disputes: Aboriginal groups and health policy, ­289–90, 335 King, Russell, 277 Kirby, Michael, 261, 294 Kirby Report, 261, 262, 263, 294, 313 Klein, Ralph, 34, 107, 198; cutbacks to public service, 369; Kyoto Protocol, 201 knowledge: IPC and, 100–1, 343; institutional resource, as, 99–100, 317 knowledge transfer, 433 Kyoto Accord, 23, 203; federal unilateralism and, 88–9; implementation issues, 320; intergovernmental conflict and, 326–7; international politics of, and IPC, 326; IPC and, 198 Kyoto Protocol, 63, 85; Alberta opposition to, 201–2

538 Index

Labour Conventions case (1937), 219–20, 222, 256; no court challenges to, 241 Landry, Bernard, 242, 359 Lazar, Harvey, 78, 290, 437, 441 legislative committees, 58 Liberal Party Red Book, 38 line departments, 44, 45, 96; finance, 169–70, T146; health policy and, 269–70; hierarchy between generalists and specialists, 112; tense relationship with finance departments, 338; tension with central agencies, 112–17 Little, Bruce, 461 Lord, Bernard, 374, 390 Lord Macaulay, 246 MacDonald, Rodney, 386 MacKinnon, Frank, 168 MacLellan, Russell, 386 Manitoba, 373–6; as “have-less” province, 374; intergovernmental relations, history and structure of, 374–5; IPC, level of, 376; municipal relations, 375; neoconservatism in, 373; north-south relations, 375, 376; overview, 373; strategic IPC, 375–6 Martin, Paul, 37, 40, 41, 77, 107, 280, 397, 439; contentious tenure of, 132; federal budget (1995), 167–8, 176; federalprovincial relations and, 158–9 Maxwell, Judith, 100 McCall, Christina, 78 McGuinty, Dalton, 150, 211, 364, 367

McIntosh, Tom, 278 McKenna, Frank, 65, 389, 431 media: criticism of, 249, 287; IPC and, 118, 444; health policy and, 300; laziness of, 249; lack of coverage of issues, 118; policy issues, poorly explained by, 165 Meech Lake Accord, 34, 38, 72; intergovernmental agencies approach and, 228 Memorandums Of Understanding (MOUs): bilateral health agreements, 296 Mental Health Commission of Canada, 273 methodology, 25–30; comparative analysis, 22–4; intergovernmental generalists vs. specialists, 26; interviews, see interviews; limitations on, 27; public servants, reasons for choosing, 24–5; research limitations, 26; secondary sources, analysis of, 27; survey, see survey Millennium Scholarship Fund, 77 Miller, Dan, 382 ministerial continuity: IPC and, 161 ministerial councils, 48; sectoral, 42–3 ministerial meetings, 43–4; increases in, 43. See also First Ministers’ Conferences/Meetings. Ministers of Intergovernmental Affairs: IPC and, 108 Ministry of Intergovernmental Affairs (Ontario), 365 Ministry of International and Intergovernmental Relations (Alberta), 370 Mitchell, David, 471



Index 539

modes of interacting, 6 monetarists, dominance of economics profession, 133 Moody’s: and Canada’s credit rating (1995), 157 Mulroney, Brian, 244, 287, 363, 395 Multilateral Agreement on Investment (MAI): failure of, 247 municipalities, misunderstandings about, 101 NAFTA, see North American Free Trade Agreement National Action Program for ­Climate Change (NAPCC), 200 National Child Benefit (NCB), 54, 126, 156; best practices, example of, 419 National Child Tax Credit, 145 National Climate Change Adaptation Framework, 203 National Climate Change Secretariat, 200, 201 National Resources Canada, 203 National Roundtable of Environment and Economy (NRTEE), 188–9 national unity, court decisions and, 57 Natural Resources Canada, 190 neoconservatism, 34; finance policy, influence on, 304; free market ideology, 304; predominance post-1995, 133, 134; trade policy influence on, 218–19, 255 neo-institutional analysis, 12 networked relations, 4 networking: IPC and, 100 networks: business consultative mechanisms, 247; finance,

­ 72–3; informal, 76, 77, 78; 1 IPC and, 124–5; jurisdictional boundaries and, 126–7; theoretical work on, 10 New Brunswick, 388–92; Department of Intergovernmental and Aboriginal Affairs, 390–1; intergovernmental relations, history and structure, 390–1, 398; IPC levels, 392; overview, 388–9; provincial-territorial cooperation, 391–2; provincial-territorial IPC, 391 New England Governors’ and Eastern Canadian Premiers’ Conference, 61, 62, 244 New England Governors’ Conferences, 104 Newfoundland and Labrador, ­395–9; economic transformation of, 397; equalization payments, 152, 396, 397; federal-provincial relationship, 395, 396–7; Hibernia oil fields, drilling rights, 395–6; Intergovernmental Affairs Secretariat, 398; IPC regional comparisons, 399; neglect, feelings of, 398–9; overview, 395 New Public Management (NPM), 10, 35; accountability, 134–5; alternative service delivery, 36; collaboration and efficiency, 36–7; deficit downloading, 134; environmental policy and, 180; health policy and, 263–4, 305; IGR generalists’ opinion on, 303; impact, 36; international adoption of, 36; partnerships, 36 non-constitutional approaches: ­fiscal federalism and, 83–5;

540 Index

g­ eneralists and, 81, 129; IGR and, 81, 129, 303, 305 non-state actors, 20 North American Agreement on Environmental Cooperation (NAECC), 189 North American Free Trade Agreement (NAFTA), 23, 60–1, 157, 189, 217, 222, 224; dispute resolution via, 242, 243; obligations compromise provincial sovereignty, 61, 238 North American region states: Canadian provinces as, 62 Northern Accord, 405 Northern Cooperation Accord, 43, 403 Northern Premiers’ Forum, 403 Northwest Territories, 401–4; bureaucracy, 402; consensusbased government, 400–1; Department of Aboriginal Affairs and Intergovernmental Relations, 402–3; intergovernmental relations, history and structure, 402–3; IPC levels, 403–4; natural resources, 401, 403; overview, 401–2; territorial cooperation, 403 Nova Scotia, 385–8; Department of Intergovernmental Affairs, 387; equalization transfers clawed back, 152, 395–6; federal-provincial relations, 386; intergovern­ mental relations, history and structure, 386–7; IPC levels, 387, 388; overview, 385–6; ­politics and IPC, 386; public sector reform, 386; regional focus of intergovernmental relations,

387–8; vertical vs. horizontal linkages, 386 Nunavut, 40, 408–11; bureaucracy, 408; consensus government, 408; dependence on federal funding, 408, 409; Intergovernmental Affairs Secretariat, 409–10; intergovernmental relations, history and structure, 409; Inuit population, 408; IPC and geography, 411; membership in international organizations, 410–11; overview, 408 Nymark, Alan, 186, 206 Office of the Canadian Coordinator for Trade Negotiations, 221 Office of the Environment and ­Sustainable Development, 190 officials, recommendations of: accords and agreements, 433–7; agencies outside the public service, 432–3; comparative analysis, 450–3; courts, none, 437; institutional resources, 430–3; internship programs, 443; jurisdictional, 451–2; mechanics for international interaction, ­439–40; mechanics to limit federal unilateralism, 435; policy knowledge, sharing, 431–2; sectoral/jurisdictional combined, 452–3; sectoral recommendations, 450–3 Okalik, Paul, 409 Oldman River Dam ruling (SCC), 57, 197–8 Ontario, 363–7; cross-border bodies, 64; equalization, against,



Index 541

366, 367; fair-shares federalism, demanding, 150; free trade and, 363; harmonized provincial sales tax, 367; as “have-less” province, 367; intergovernmental relations, history and structure of, 364–5; IPC, levels of, 365–6; Ministry of Intergovernmental Affairs, 365; overview, 363; as region state, 363; reinvesting in IPC, 366–7; relations with other provinces, 366; relations with Ottawa, 363–4, 365, 367; shifting role in federation, 366; tax collection agreements, 151, 152; vertical fiscal imbalance, 364, 366 Organisation for Economic Co-opera­tion and Development (OECD): report on regulatory policy, 36, 55 Pacific Northwest Development Council, 244 Pacific Northwest Economic Region, 61, 62 Painter, Martin, 16 Pan American Health ­Organization, 296 Parizeau, Jacques, 358 Parliament, 57–9; academic recommendations re restructuring, 438; comparative analysis, 323–5; executive federalism and, 57–8; insignificant for IPC, 211, 323–4; legislators lack role in policy-making, 58; minority ­government, health funding, 294; regionalization of, 59 Parliamentary Standing Committee on National Finance, 173

partnerships: accords and agreements and, 56 Patient Safety Institute, 273 Peckford, Brian, 395 Pelletier, Réjean, 447 performance reporting, see accountability personality: IPC and, 76, 124 personnel: institutional resource, as, 97–8; intergovernmental agencies and, 1995–2005, 349, 352, T351; IPC and, 97, 345, 349. See also turnover. Pettigrew, Pierre, 124, 251, 330 Phillips, Susan D., 74 Pierre, Jon, 16 plan of the book, 30–31 policy analytical capacity: defined, 14 policy arenas, 13 policy capacity: after downsizing, 15; declines in, 70–1; defined, 14; federal research initiatives, 52; health policy, view of, ­284–5; institutional analysis of Canadian federalism, 37–65; IPC, vs., 17; jurisdictions and, 15–16; literature, focus of, 415; new governance approach to, 16; public sector reform and, 14–15; resources and, 51, 52; statesocietal interactions and, 16–17; wealth and, 430–1 policy communities, 7 policy networks, 7 policy premiers, 65 Policy Research Initiative (PRI), 52, 189, 236, 432 political actors: impact on federalprovincial relations, 160–1. See

542 Index

also actors; political and administrative actors; political leaders; politicians political and administrative actors, 20, 65–71, 283–5, 440–3; comparative analysis, 328–32; environmental policy, 204–7; finance and, 158–63; IGR generalists and, 105–17, 130; IPC, importance for, 331–2; trade policy and, 244–6 political and administrative institutions, 307–15, 419–30; centre-to-centre coordination, 426; comparative analysis of, 307–15; environment, 182–91; federalism literature, 423–4; finance and, 137–48; growth in interprovincial-territorial administrative institutions, 315; health policy and, 266–74; IGR generalists and, 85–96; institutional innovations compared, 314; political institutions and IPC, 313–14; trade policy and, 223–33 political economy: comparative review, 347–54 political leaders: generation gap among, 107; interpersonal relationships and IPC, 123; IPC and, 105–8, 440; lack of, 108–9; relations with administrative officials, 121–3; rifts between, 123–4; trade policy, 244 political parties: decline of, 72; executive federalism and, 57–9; federal and provincial systems disjointed, 58–9; fracturing of party system, 59; insignificant for IPC, 211–12, 324–5; trade policy, 253–4

political staff: intergovernmental relations, responsible for, 121 politicians: FMCs/FMMs and, 86 Pollard, Bruce G., 51, 67 power: ideas and, 33; public administrative studies and, 14 power of state: institutional analysis and, 11–12 power relations: IPC and, 105–7 premiers: APCs and, 91–2; informed support for, 108; policy, 65; ­political-administrative relationship and, 122. See also Annual Premiers’ Conference (APC); First Ministers Conferences/Meetings (FMCs/FMMs). Premier’s Advisory Council on Health Report (Mazankowski Report) (Alberta, 2002), 261, 262 Prince Edward Island, 392–5; Comprehensive Development Plan, 393; dependent relationship with Ottawa, 392; frustration with federal government, 394; infrastructure programs, 393; Intergovernmental Affairs Office, 394; intergovernmental relations, history and structure, 393–4; IPC levels, 395; island localism, ­392–3; overview, 392; patronage in, 393; politics, 392–3 privatization, 18; debate, health policy, 260–1, 294, 295, 305 Privy Council Office (PCO), 96; intergovernmental officials, influence within, 66–7 Program Review, federal government, 34, 35, 51; federal funding direct to citizens, 84; institutional resources and, 148



Index 543

provinces: policy capacity of, 15 provinces/territories: “have” vs. “have-less” and IPC, 347–8; social-economic features, 2007, T348 provincial constitutional jurisdiction: federal role in, 84–5 provincial governments: machinery for cross-border relations, 63; north-south economic relationships, 62; social policy devolved to, 61–2 provincial intergovernmental agreements, 46 provincial-territorial cooperation: APC, 43, 44; COF, 43–4; Northern Cooperation Accord, 43 Provincial-Territorial Council on Social Policy Reform and Renewal, 436 provincial-territorial IPC: growth in, 307 provincial-territorial relations: COF and, 93–4 public, the, 163–7, 443–6; anti-free trade, 246–7; anti-globalization, 247; business consultative mechanisms, 247; Charter Canadians, 72; comparative analysis and, 332–6; decision-making activities invisible to, 73; democratic deficit, 72; distrust of political elites, 72; environmental policy and, 207–8; exclusion from executive federalism, 71–2; finance and, 163–7; health policy and, 285–90; IGR generalists and, 117–19; intergovernmental relations, support for, 73–4; no interest in policy, 165–6; as non-state actors, 71–5; political aspira-

tions, function of, 249; regional identification of, 73; trade policy and, 246–50; transparency and, 118 public administration: ideas affecting, 35; interface with federalism, 9–11; interface with federalism and public policy, 5–14; intergovernmental relations and, 49–50; international forums, more use of, 440; literature, focus of, 415; NPM and, 35–7, 202, 305; political leaders’ relationships with officials, 121–3; recruiting staff and IPC, 442–3 public administration research: administrative state, focus on, 13 public consultation: CPP, 165; finance, 163–7; limitations of, 166. See also public opinion; public participation. Public Health Agency of Canada, 273 Public Management Service of OECD, 36 public opinion: health policy, ­286–7; using to achieve goals, 445–6 public participation: academics, lack of criticism, 445; call for, 422; direct vs. indirect, 444; health policy, 285–90, 334–5; IPC and, 443–4; lack of clarity around roles, 444; low interest in, 73; officials’ recommendations re, 444–5; varying definitions of, 443–4. See also public consultation; public opinion. public policy: ideas and policy outcomes, 8–9; interface with federalism, 7–9; interface

544 Index

with federalism, and public ­administration, 5–14; legislators’ low role in, 58; literature, focus of, 415 public policy-federalism literature: ideas, role of, 12–13; neo­institutional analysis, 12 Public Policy Forum, 471 public servants: relationship with ministers, 109–10; scholarly work of, 13. See also officials. public service: Alberta, cutbacks to, 369; competence of, 285; intergovernmental approach encouraged, 68–9; internationalization/ skill-set, activity expansion, 64; mobility of elites, 70; NPM, 35–7; professionalism culture, need to maintain, 443; Program Review and, 51 Quebec, 358–63; asymmetrical federalism and, 361–2; autonomy, protecting, 361; federal spending power and, 89; high level of IPC, 358, 360–1, 362–3; intergovernmental relations, history and structure of, 359–60; interprovincial collaboration, rejection of, 143–4; IPC levels, 430–1; overview, 358; premiers of, 358–9; sovereignty, 242, 256, 362; student debt, 361 Quebec referendum on sovereignty (1995), 34, 38–9, 83. See also sovereignty. Rae, Bob, 150, 364 referendum, see Quebec referendum on sovereignty (1995)

regionalism, 347; fiscal relations and, 142; provincial-territorial relations and, 92 regulatory policy: intergovernmental coordination of, 55–6 relations, 6–7, 21, 75–8, 446–50; collaboration, level of, 76, 77; communication and, 125; comparative analysis of, 336–43; critical role in IPC, 345; environmental policy and, 208–11; executive federalism of, 20–1; federal unilateralism and, 77; finance, 167–73; formal, see formal relationships; growth and evolution of, 78; health policy and, ­290–93; hierarchical between levels of government, 75; IGR generalists and, ­119–28; informal networks, 76, 77, 78; IPC and, 20–1; personality and, 76, 124; political intrusions into, 169, 176; political leaders, among, 123; trade policy and, 250–3; trust, 76, 77–8, 123. See also intergovernmental relations; informal relationships. research: agencies outside the public service, using, 432–3; knowledge sharing, 432–3; need for more, 149–51 resource allocators: intergovernmental relations and, 51 resources: critical role in IPC, 345; defined, 50–1; institutions, Canadian federation, 50–2; policy capacity and, 51, 52; time as a resource, 98; uneven distribution of, 40–41. See also institutional resources.



Index 545

rethinking government, 11 Romanow, Roy, 65, 377, 431; intergovernmental relations, fostering, 380 Romanow Commission, 77, 261, 262, 263, 272, 313; public participation, 286 Romanow Report, 294 Royal Commission on Renewing and Strengthening Our Place in Canada, 396–7 Royal Commission on the Economic Union and Development Prospects for Canada ­(MacDonald Commission, 1989), 219, 421 Royal Commission on the Future of Health Care in Canada see Romanow Commission Sahtu Dene and Métis Comprehensive Land Claims Agreement, 402 Salmon Enhancement Program, 89 Saskatchewan, 376–80; equalization transfers clawed back, 152; intergovernmental relations, history and structure, 377, 378–9; IPC levels, 378, 379–80; overview, 376–7; public service challenges, 378; Romanow government, 377 Savage, John, 386 Savoie, Donald J., 66, 67, 115, 441 scale: IPC and, 148–9 Scharpf, Fritz W., 6 Sectoral Advisory Groups on ­International Trade (SAGITs), 247

sectoral departments with intergovernmental units, F47 Seguin Report, 150 Senate, 58 Senate Committee on Foreign Affairs and International Trade, 254 Senate Standing Committee on Social Affairs, Science and Technology Report (Kirby Report): 261, 262, 263, 294, 313; health policy and, 294 seniors: health care policy and, 335 September 11 terrorist attacks, 63 Siegel, David, 29 silo mentality, 114 Simeon, Richard, 5, 37, 77–8, 438, 441 Skogstad, Grace, 436 Smiley, Donald V., 40, 66, 70, 174, 423 Smith, James, 404 social networks: state society, 14 social policy: decreased federal funding for CHST, 75; devolution to provinces, 61–2 Social Union Framework Agreement (SUFA), 23, 54, 137, 435; fiscal federalism and, 156; IGR generalists on, 102; lack of public awareness of, 73; public participation and, 286 softwood lumber dispute, 113, 218; dispute resolution and, 243; regional issue, as, 387 sovereignty: international trade agreements and, 238, 256–7; Quebec, trade policy and, 242 sponsorship scandal, 39

546 Index

stakeholders, 166–7; defining, 249; greater participation in IPC, 332; health care, 274; mulitlateral policy initiatives and, 334; role in intergovernmental forums, 444. See also interest groups. Standing Committee on Foreign Affairs and International Trade (SCFAIT), 254 state capacity, 16 state-societal relations, 7–8 Statistics Canada, 94 Stevenson, Garth, 137–8 Strengthening Policy Capacity (Deputy Ministers Report), 15, 68, 431, 432, 448 sugar-daddy federalism, 55 Summit of the Americas (2001), 242 Supreme Court: alleged centralizing bias, 57. See also courts; court decisions. survey: design of, 26–7; logical generalizations and, 27; response rate, 26, 27; sample size, 26 sustainable development, 18, ­212–13; 304; political ideas framing, 180 Take Action Plan, 277 tariffs, 257; trade policy and, 220–21 tax collection agreements: federalprovincial, 151–2 Team Canada trade missions, 219, 256, 257, 320; genesis of, 225; list of, 226; as multilateral approach, 225–6 technology: trade policy and, 248 technology-enabled federalism, 432

territorial governments: machinery for cross-border relations, 63; walk out of FMM, 87–8 Territorial North, 399–411; Northwest Territories, 401–4; Nunavut, 408–11; overview, 399–400; as proto-provinces, 400; regional dimensions of IPC, 400; Yukon, 404–8 territories, policy capacity of, 15 time resources, 98 Tobin, Brian, 396 trade: actors, 244–53; AIT, see AIT; accords and agreements, 320; collaborative federalism, 219, 231; Constitution and, 219–20; courts and, 241; departmental organization and, 229–30; federal minister responsible for, 227; federal-provincial-territorial coordination post–9/11, 231–2; federal-provincial-territorial relations and, 219–20, 255; horizontality of, 227–8, 233, 235–6, 339; ideas influencing, 218–19, 304; international institutions and, 242–4; neoconservatism and reform of, 218–19; new technology and, 248; OttawaQuebec alliance, 243; political-official relationships, 245; politicization of intergovernmental officials, 245–6; politicized administrative level, 330; politics, effect on relationships, 253; process vs. policy issues, 228–9; Program Review budget cuts, 233; provincial concurrence required, 220, 221; provincial legislatures and, 255; provincial-



Index 547

territorial alliances, 343; provincial-territorial participation, 339; the public and, 246–50; reasons for choosing, 22, 23; relations, 250–53; resources insufficient to meet demands, 316–17; staffing levels, 235–6; technology, use of, 236–7; turnover and, 235 trade IPC: informal relationships and, 342–3; factors affecting IPC related to public, 249–50; government size and, 234; provincial-territorial forums and, 311; structure of ministry and, 229 trade liberalization, 157 trade negotiations: federal players, 227–8 trade policy: Alberta and Quebec challenges, 225; business consultation and, 246, 247, 257, 334; Canada Trade Missions, 227; collaboration required for, 220, 221; dispute resolution, 238, 242–3; expert advice, research, 236–7; external trade, provincial role, 223–5; free market ideology, 304; intergovernmental approaches to, 228–9; internal, see internal trade policy; interprovincial, 219, 222–3; jurisdictional asymmetric, 62; labour opposition to free trade, 248; overseas trade offices, 230–1; Parliament, negligible role in, 253–4, 324; premiers’ ideologies and, 244–5; provincial IPC, building, 234–5; provincial sovereignty and international agreements, 327; public engagement in, 247–9, 257, 334; recent

developments affecting, 217–18; sub-national states’ international agreements, 238, 257; supranational institutions and, 222; Team Canada trade missions, 219, 225–6 transfer payments, 132; health care and, 260, 263–4, 264–5. See also equalization. transnational corporations, 61–2 transparency: IGR generalists’ view of, 118; vs. stability, 72–3; public and, 118 Trudeau, Pierre, 355 trust: formal IGR, 448; finance IPC and, 161, 329; health policy, 267; IPC and, 123; turnover and, 126 trust ties, 449–50 Tuohy, Carolyn Hughes, 278, 295 turnover: environment ministers, 205–6, 339–40; health policy and, 284–5; IG generalists and, 316, 329; interpersonal relationships and, 126; IPC and, 110–11; 161; trade policy and, 235 Twain, Mark, 419 Umbrella Final Agreement (UFA) (Yukon), 405 United Nations Convention on ­Biological Diversity: IPC and, 198 United Nations Framework Convention on Climate Change, 85 United States of America, 9–10, 60–3 Walkerton tragedy, 213–14 Wall, Brad, 456

548 Index

Wall Street Journal, 157 Walters, Jonathan, 9 wealth: policy capacity and, 430–1 Wells, Clyde, 396 Western Governors Association, 244 Western Premiers’ Conference, 154, 244 Western Provinces, 367–84; Alberta, 368–73; alienation of, 367; British Columbia, 380–4; Manitoba, 373–6; region, as, 367–8; Saskatchewan, 376–80 Williams, Danny, 357, 397, 431; public opinion, mobilizing, 446 Wolinetz, Steven B., 59 World Health Organization (WHO), 296, 327–8 World Trade Organization (WTO), 217, 224; demonstrations against

Seattle meetings, 247; dispute resolution and, 242–3 Yukon, 404–8; Aboriginal community, 404; Department of Economic Development and Intergovernmental Relations, 406; Directorate of Intergovernmental Affairs, 404, 405–6; Epp letter, 405; federal-territorial relations, 405–6; intergovernmental relations, history and structure, 404, 405–6; IPC, limited, 406–7; overview, 404; ­provincial-territorial collaboration, IPC and, 407–8 Zussman, David, 100