The no-strings funding formula for health care that Finance Minister Jim Flaherty unveiled this week was pivotal in revealing how this Prime Minister plans to make his mark. For Canadians who grew up believing that the central government should play a key role in shaping national social policy, Mr. Harper offers a very different alternative, with Ottawa leaving the provinces to shape social policy as they see best.
But in its own area of jurisdiction, the Harper government has moved aggressively, beefing up the military and taking strong and sometimes contentious stands on foreign policy.
And the Prime Minister also sees Ottawa playing a more active role in promoting the economic union, by tearing down the walls of provincial interest that he believes hamper the growth of the economy.
The Supreme Court decided the government overstepped in its legislation, which invited the provinces to surrender control over regulating securities.
“The ‘dominant tide’ of flexible federalism, however strong its pull may be, cannot sweep designated powers out to sea, nor erode the constitutional balance inherent in the Canadian federal state,” the judges declared in their collectively written, unanimous decision.
The federal government argued that the 13 provincial and territorial commissions that regulate securities in Canada had become increasingly anachronistic in a globalized marketplace, impeding investment and increasing the risk of fraud.
The Constitution’s trade and commerce clause gave Ottawa the authority to regulate what had clearly become a national securities market, federal lawyers told the court. The court disagreed.
“As important as the preservation of capital markets and the maintenance of Canada’s financial stability are, they do not justify a wholesale takeover of the regulation of the securities industry,” the judges ruled.
Thomas Courchene of Queen’s University, who is one of Canada’s leading thinkers on federal-provincial relations, believes the Harper government was seeking powers that could ultimately have stripped the provinces of all control over regulating their internal economies.
“That would have been just too big a change in the distribution of powers,” he said in an interview. “It would have gone really, really far into areas that are clearly provincial jurisdiction.”
But that doesn’t mean that Mr. Harper has been checked entirely. The constitutional scholar Patrick Monahan believes the ruling opens the door for a more limited regulator responsible only for interprovincial and international capital markets.
“That seems the only realistic option left to the federal government in the wake of this major defeat at the hands of the Supreme Court,” the provost of York University wrote in an article for The Globe and Mail.
The judges did note that “a co-operative approach” between Ottawa and the provinces to create a national regulator might meet the constitutional test.
This is exactly what must happen next, urged Ian Russell, president of the Investment Industries Association of Canada. He said he wants to see both levels of government working together to create “an efficient, effective, forward-looking single regulator.”
However, as the court itself noted, various federal and provincial governments have been trying for more than 75 years to untangle the skein of provincial laws and regulations that oversee securities, without success.
Until Thursday, the Conservatives had been using their majority government to pursue their agenda with little regard to critics or even courts – dismantling, for example, the monopoly powers of the Wheat Board despite a judicial ruling that it must first hold a plebiscite among affected farmers.
Thursday’s Supreme Court decision doesn’t mean the Conservatives cannot continue their efforts to retreat from social policy while advancing the economic union. But as the judges concluded: “Co-operation is the animating force. The federalism principle upon which Canada’s constitutional framework rests demands nothing less.”
Original Article
Source: Globe
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