The Spending Power: Explain!

If the professor’s asking and you say, “Well, I mean, the federal government, like, ah, whatever,” you have a pretty fair understanding. You’ve grasped the essentials.

Barry Cooper’s It’s the Regime, Stupid (Key Porter, 2009) fills in particulars. I recommend it. There’s no index – pity! So let me tell you that the crucial pages are 186 and 187. The whole of Chapter Five is devoted to the spending power and would make a good addition to a course pack. Pages 186-7 are electrifying.

The spending power allows the federal government to fund programs in areas of provincial competence. It seems to have been the invention of one man, F.R. Scott, “a centralist, socialist, and formidable opponent of the government of Quebec” in the 1950s. He pulled it out of his hat, with a few distracting references to the common law of unitary states and principles of human generosity. Here’s Scott: “Because one type of government alone has jurisdiction over a class of subjects under the B.N.A. Act, does not mean that the other may not make gifts to persons whose activities fall into that class.” (“The Constitutional Background of Taxation Agreements.” McGill Law Journal, 2 (1955) 1-10.

As Barry says, the assertion has an air of unreality. Expenditures are related to taxation. “By long-established law, Parliament cannot raise taxes for provincial purposes and it therefore would be consistent that it not spend for provincial purposes.” He refers us to Andrew Petter, “Federalism and the Myth of the Federal Spending Power.” Canadian Bar Review, 68 (1989), 448-79.

I’m convinced. The spending power erodes the constitutional division of legislative powers enshrined in the Constitution Act (1867) and impairs principles of political accountability ensured by parliamentary responsible government. Its introduction in the 1950s launched Canadians on a decades-long bender of free spending and big spending that still has our heads spinning. And not least, it has, as Barry explains, encouraged a sense of dependence on the federal government, and – because dependence breeds disappointment – promoted disdain for Parliament.

Final word: don’t miss Barry’s summary of the Canadian adventure that was the Gomery Commission (Chapter Six). Another one for the course pack.


2 Responses to “The Spending Power: Explain!”

  1. 1 Brian Lee Crowley September 2, 2009 at 2:27 pm


    I agree with much that you have to say about the harmful effects of the spending power. On the other hand, saying something is harmful is not the same thing as saying that it is illegal or unconstitutional. In particular, I note that a lot of people seem to think that federal spending under the spending power is by definition excluded by the constitutional division of powers. But if we actually read the language of the constitution, we quickly see that it is very very precise as to what it say: the power distributed by the constitution to the provinces and to Ottawa is the power to *legislate*. Ottawa may not *legislate* in areas of exclusive provincial jurisdiction. But spending is not legislating. Ottawa does not use the spending power to legislate in areas of provincial jurisdiction. It uses the spending power to make gifts (with or without conditions attached) to people or organisations or provinces, something one can reasonable argue is not excluded by a distribution of legislative powers. Gifts may be refused, and indeed Duplessis famously refused federal money for many years. The provinces moan continuously about the spending power, but they have the means to get rid of it: their exclusive right to legislate in their areas of jurisdiction. They may legislate out of existence the federal spending power intrusions into their jurisdiction by passing a law saying that no person or organisation or institution on their territory shall take money from Ottawa for e.g. educational purposes. But they don’t do this. Why? Because they want the money. The alternative, of course, would be to appeal to the courts to have the spending power ruled unconstitutional. But they don’t. Why? because they know the courts almost certainly will not agree — otherwise the provinces would have had this shut down years ago. Finally, why does everyone only moan about the federal spending power? By what constitutional head of power do Quebec and other provinces maintain what are clearly foreign representative offices abroad? Why can Quebec give grants to other provinces for e.g. French-language education purposes without anyone saying a word, when this is surely just as offensive as Ottawa spending in provincial areas of jurisdiction? Provinces are happy to use their spending power for their purposes when it suits them. For what it is worth, I think people getting all exercised about the spending power is a mistake. I think it is constitutionally legitimate, and the courts have never disagreed. If the provinces thought they had a case, they would have had it ruled out years ago. They don’t try because they know they won’t win. The issue is that it is misused, like many other federal powers. But if we think the feds spend wastefully and stupidly on e.g. defence, we don’t clamour to have their defence power taken away. We clamour for them to smarten up and fly right. IMHO it should be the same for the spending power.

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