Question 1

Introduction

Australia and Canada are both Constitutional monarchies with responsible parliamentary government, developed economies and federal systems of government. However, Canadian federalism originally had a strong central government and has since become decentralised, whereas the Australian framers desired the protection of states’ rights, but a centralised federation has evolved. By comparing the social circumstances and judicial decisions that impacted upon the design and development of each federation it is possible to see how aspects of each system could be adopted by the other to rectify the problems that have emerged in each country.

Origins of federalism

1. Canada

The Canadian Federation was established by the British North America Act, 1867 (BNA) (now retitled the Constitution Act, 1867[1]) and originally consisted of four provinces, but now includes 10 provinces and 3 territories[2].  British North Americans desired union as protection against the threat of the United States of America, particularly given the withdrawal of British troops in 1864[3] and the inadequacies of colonial defence.[4] The USA also influenced the shape of the BNA since colonists believed the recognition of state sovereignty by the American constitution had given rise to the secessionist movements that caused the American Civil War.[5] British North Americans also feared independence from Britain and hoped that federalism would make Canada more significant to Britain and tighten the bonds with the Empire.[6] Since colonists did not desire popular sovereignty they designed a system of subordinate federalism where sovereign power resided only in the central government.[7] The framers attempted to centralise power in s.91 of the BNA by granting the Dominion legislature power over “all the great subjects,” such as trade and commerce, and by giving residual rights to the central authority in order to ensure national unity and avoid the conflicts of coordinate federalism.[8] In addition, the Governor General had the power to disallow Provincial statutes and to appoint Provincial Lieutenant-Governors and judges.[9]

In addition to external pressures, Confederation was also the result of internal desires, including the commercial promises offered by expansion into the North West territories.[10] Confederation was also politically expedient in order to rectify the political impasses that were occurring in the Province of Canada, where the interests of the French speaking Lower Canada conflicted with the English speaking Upper Canada.[11] It was hoped that by widening the union, these conflicts could be overcome.[12] However, it was also necessary to recognise the permanent existence of a French-Canadian minority.[13] The BNA did this through constitutional asymmetry, where s.93 made denominational and linguistic guarantees in education and other sections allowed the use of French civil law.[14] It was also believed that a strong central government was needed to protect the interests of minorities.[15] Although union was desired, colonists throughout British North America shared a long tradition of localism[16] and loyalists fleeing the American Revolution had also brought a dislike of strong and distant government to British North America.[17] As a result, s.92 of the BNA enumerated the exclusive powers of the provincial legislatures in order to ensure that the provinces kept local control over the divisive local issues.[18]

1. Australia

Australian federation was established in 1901 and like Canada was made possible by improvements in rail and the electric telegraph which linked geographical distant colonies.[19] Unlike Canada, Australia’s Federation was not greatly influenced by external factors and although it was desirable for defence and immigration to be controlled by a federal government, they were not key issues in the federation movement.[20] Unlike Canada, Australia’s non-aboriginal population almost entirely Anglo-Celtic[21] and federation was facilitated by the presence of a common language, culture and allegiance to the Queen and British political traditions.[22] As in Canada, Australian federalism was motivated by imperial sentiments and the hope that unity would increase Britain’s attention to colonial grievances.[23] However, the primary motivation behind federating was the economic concerns that had emerged during the Depression of the 1890s.[24] s. 92 of the Constitution expressed the colonists’ hope that federation would achieve intercolonial free trade and revitalise trade and commerce.[25]

Despite the homogenous nature of Australian society, the population was concentrated in dispersed state capitals and colonial identities remained strong. [26] Each colony had developed independent economies, which had lead to interstate rivalries and the implementation of protectionist policies.[27] Rivalry was expressed in the unnecessary duplication of railways, which actually contributed to the Depression of the 1890s.[28] Colonists envisaged the federal government as an agency that dealt with intercolonial matters in the interests of the states,[29] and rejected the Canadian model as too centralised.[30] In addition, although both federations were established by the elites of each country, the Australian framers had greater faith in democracy than their Canadian counterparts.[31] By 1900 democratic principles were increasingly popular and people wanted greater powers retained by colonial governments.[32] The importance of states rights was reflected in s.51 of the Constitution listing the legislative powers of the federal parliament but making them concurrent powers and giving the residual powers to the states under s.107.[33]

Development of federalism

1. Canada

Despite the intentions of its founders, Canadian federalism has become increasingly decentralised as a result of judicial interpretation and continuing regional differences. Judicial decisions have limited the scope of federal powers such as the s.91(2) trade and commerce power, which was limited to international and interprovincial trade[34] in Citizens Insurance Co. v Parsons (1881) 7 A.C. 96. In the same case the scope of provincial powers was widened, particularly the s.92(13) property and civil rights power which was given a broad definition.[35] Later cases such as Re Board of Commerce, [1922] 1 A.C. 191 employed similarly narrow interpretations of the trade and commerce power out of a desire to avoid interfering in the provinces.[36] Once appeals to the Privy Council were abolished in 1949, the scope of the power widened as the court allowed regulation where it was necessarily incidental (R v Klassen (1959) 20 D.L.R. (2d) 406 (Man. C.A.). Recent use of the peace, order and good government clause has also widened the scope of federal power.[37] However, judicial interpretation has generally respected the autonomy of provinces, and especially the rights of the French minority.[38]

In 1982 provincial powers were expanded and a Charter of Rights and Freedoms was added to increase the recognition of the cultural and language rights of French Canadians and Aborigines.[39] Despite the decentralisation of Canadian federalism and the 1982 reforms, the provisions of the BNA have remained largely intact and have proved to be flexible enough to allow the Constitution to evolve as society has demanded. The people have been able to give meaning to the words as they saw fit,[40] which in the case of Canada regional differences has required provincial autonomy and the recognition of the rights of minorities.

1. Australia

Australian federalism has developed in the opposite direction to Canada’s by becoming increasingly centralised, particularly regarding federal fiscal relations. The early High Court was composed of framers of the Constitution and developed the doctrine of Reserved State Powers, which favoured state autonomy when interpreting Commonwealth legislation.[41] This doctrine was rejected in favour of legal textualism in the Engineers case (1920) 28 CLR 129, allowing the expansion of federal power. The Tasmanian Dam case (1983) 158 CLR 1 and Airlines of NSW Pty Ltd v NSW (No 2) (1965) 113 CLR widened the scope of Commonwealth power under the s.51(xxix) external affairs power and the s.51(i) trade and commerce power respectively.

The fiscal power of the federal government was greatly increased when difficulties obtaining wartime finance resulted in the imposition of a uniform taxation system in the First Uniform Tax case (1942) 65 CLR 373, drastically centralising governmental power.[42] This case also established the acceptance of imposing conditional financial grants on the states, reducing their autonomy. The power of the states to impose taxes has also narrowed. Under s.90 the Commonwealth has the exclusive power to raise excise duties and the broad definition of “excise” established in Ha v NSW (1997) 189 CLR 465 has limited the states’ ability to raise funds. These constitutional decisions have increased central power in the federation and made the states financially dependent on the federal government. However, as in Canada, these changes also reflect social concerns, though unlike Canada they have been facilitated by a largely homogenous society.[43] The imposition of uniform tax was largely due to the national interest during World War Two and the expansion of the external affairs power in the Tasmanian Dam case reflected national concern about the environment. Although Australian federalism has developed from that envisaged by the framers, like Canada’s it has been flexible enough to accommodate these changes.

Reforms suggested by a comparative analysis

1. Canada

The major problem facing Canadian federalism has been the threat of secession by Quebec, which contains the majority of French-Canadians in a country where they are a national minority. Successive Quebec governments have attempted to achieve greater autonomy for Quebec and an increased federal role for the province.[44] Recently Canada has also seen the rise of regional political parties, which sends a danger signal for federal unity.[45] Although Australia lacks a parallel state for Quebec, the 1933 Western Australia secession attempt exemplifies how regional grievances can be solved by special financial assistance rather than resorting to violence.[46] Canadian federalism has generally attempted to accommodate Quebec, such as by incorporating constitutional asymmetry and allowing Quebec to operate its taxation system differently.[47] However, it may also be necessary to strengthen the federal focus of loyalty.[48] In Australia, ties between state and federal branches of political parties and composing federal cabinets with regard to the state backgrounds of members has created a greater sense of ownership of the federal government.[49] Changes to Canadian political party conventions could therefore facilitate national unity.

Reforming Canada’s second federal chamber could also improve regional representation. The Canadian Senate is based on the regional representation of provincial groups and is appointed by the federal government to hold office until their retirement at 75.[50] Australian Senators are popularly elected for six years and each state is given equal representation.[51] Due to the Canadian Senate’s role as a house of review, adopting the Australian model would increase regional representation and national unity.

1. Australia

The major problems that have emerged in Australian federalism have been the lack of state participation in policy making[52] and a high vertical fiscal imbalance.[53] Although the Hawke government’s New Federalism suggested possibilities for reform, previous governments have increased the centralisation of power.[54] Constitutional amendments have been largely unsuccessful in Australia, but the Canadian system suggests some alternative reforms. Due to Australia’s highly concurrent federation intergovernmental relations are important for assuring state interests are recognised.[55] Canada has an extensive network established for intergovernmental affairs, including permanent intergovernmental affairs departments in Provincial and Dominion Governments, and a permanent secretariat to administer and support conferences.[56] Australia has the Council of Australian Governments, which could be made more effective by establishing a supporting secretariat and mandating attendance at meetings.[57] Australia could also establish Ministers, Interparliamentary Committees and Senate Committees for intergovernmental affairs.[58]

In addition to reforming intergovernmental relations, Canadian federalism also provides a model for reducing vertical fiscal imbalance. In Canada, provinces are allowed to collect their own sales and income taxes, reducing their dependency on the federal government. [59] Aside from Quebec, provincial taxes are calculated as a percentage of federal tax and collected by the federal government, ensuring transparency and reducing tax administration.[60] Unconditional grants have also helped to reduce provincial dependency on the federal government and are an addition measure that Australia could adopt.[61] Finally, given Australia’s indigenous community and multicultural society, Australia could also learn from Canada’s example of the 1982 inclusion of a Charter of Rights and Freedoms in their constitution, which recognises the rights of Aboriginals and minority groups.[62]

Conclusion

The timing and shape of federation in both Australia and Canada was influenced by colonial experiences. Economic concerns were particularly important in Australia, whereas regional diversity and external pressures influenced Canadian federalism. These same factors have lead to Canadian federalism becoming increasingly decentralised and Australian federalism becoming more centralised. Canada’s lack of federal loyalty could be improved by adopting Australia’s political party conventions and senate model. Meanwhile adopting Canada’s intergovernmental relations policies and taxation model could alleviate some of the problems caused by Australia’s centralised federation. In spite of these problems, both federal systems have generally served each country well since they have proved flexible enough to allow federalism to be adapted to contemporary circumstances.

Bibliography

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Hodgins, Bruce W., ‘The Plans of Mice and Men’, in Bruce W. Hodgins et. al. (ed) Federalism in Canada and Australia: The Early Years, Australian National University Press, Canberra, 1978, 3-18.

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