Intergovernmental relations

[ * ] An asterisk appears where sensitive information has been removed in accordance with the Access to Information Act and Privacy Act.

Context

Effective federal, provincial and territorial (FPT) relations will be integral to advancing the Government’s agenda, particularly given the number of commitments, which lie in shared or provincial-territorial jurisdiction.

In planning the approach to implementing your agenda, you may wish to take a deliberate and strategic approach to working with provincial and territorial governments, including utilizing a variety of FPT engagements and approaches according to the nature of the issue and the challenges of advancing them with partners.

There are also important federal interests and objectives in maintaining collaborative relationships with provincial and territorial governments, such as working together to advance the interests of Canadians as well as advancing the efficient functioning of the federation, FPT fiscal health and national unity.

Implementing the Government’s agenda in the intergovernmental context

As you seek to implement priorities throughout your new mandate, a number of issues will require careful consideration in advancing the Government’s agenda: COVID-19, fiscal health of the federation and various constitutional issues. [ * ]

COVID-19

The pandemic has illustrated the complementary roles FPT governments play in managing a public health issue and the necessity for collaboration. While each level of government had their own responsibilities in the public health response, there have been significant collaboration and interaction at all levels throughout the pandemic and significant financial investments by the federal government.

As Canada continues the fight against COVID-19 amid a fourth wave of infections and new variants, the country is also turning its attention to an economic and social recovery. Continuing collaborative efforts to increase vaccination rates nationally will be critical to avoid the most severe health outcomes, address capacity issues in the healthcare system and allow for a safe reopening domestically and to international travellers, including proof of vaccination.

There is an opportunity for FPT governments to continue working collaboratively to complete the current round of vaccinations and prepare for potential future vaccination campaigns (e.g., pediatric, third doses, and boosters), as well as ensure that the appropriate surveillance, screening, and response mechanisms are in place.

Fiscal health

Concerns about the long-term fiscal challenges facing provinces and territories, affecting the overall health of the federation, will be an underlying driver of FPT debates over the mandate. Significant federal support and resilient economic activity through the pandemic led a majority of provinces to project smaller deficits in 2020-21 than initially forecast. Nevertheless, provincial debt burdens have increased considerably in 2020-21, from 30.7 per cent of GDP to 37.0 per cent in aggregate, and many provinces have signalled it would take longer than anticipated to balance their budgets. [ * ]

Constitutional issues

Alberta’s equalization referendum

Equalization has become a contentious topic tied to perceptions of unfair economic treatment fuelling western alienation, particularly in Alberta. Premier Jason Kenney argues that equalization has “become the most powerful symbol of the unfairness of Alberta’s deal in Confederation” and announced his government will hold a referendum on the removal of the principle of equalization from the Constitution of Canada in conjunction with the October 18, 2021 municipal elections.

Such an amendment to the Constitution would need to be done in accordance with the general amendment procedure, whereby consent from the Senate, House of Commons, and legislative assemblies of at least seven provinces representing 50 per cent of the Canadian population is required. [ * ] 

[ * ]

Further, the formula for the Equalization program will need to be renewed before 2024. [ * ] FPT finance ministers would normally engage on these changes in 2022. [ * ]

Quebec’s Bill 96

In line with a shift towards its support for nationalism within the federation, the Government of Quebec introduced Bill 96 in May 2021, which looks to reform its French Language Charter and modify the province’s constitution by adding two clauses to s. 90 of the Constitution Act, 1867. If passed, the law would make French the common language for most work settings in Quebec, as well as enshrine the recognition that Quebecers form a nation whose only official language is French. Quebec’s National Assembly is holding public hearings on Bill 96 between September 21 and October 7, 2021.

Pursuant to s. 45 of the Constitution Act, 1982, Quebec can unilaterally amend its constitution, but such an amendment cannot affect rights guaranteed in s. 133 on the use of French and English in the debates, pleadings and procedures of the legislative assembly and tribunals of Quebec. [ * ]

Even though Bill 96 has not yet faced legal challenges, Quebec has pre-emptively applied the notwithstanding clause to shield the operation of the legislation for a period of five years after its adoption.

[ * ]

Working with Indigenous partners in the FPT context

[ * ] Key ongoing Indigenous reconciliation priorities that have significant FPT implications include:

• Implementation of the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) Act;
• Implementation of Indigenous child and family services legislation;
• Co-development of legislation to advance Indigenous health; and
• Implementing a National Action Plan on Murdered and Missing Indigenous Women and Girls.

To advance these and other federal commitments, FPT engagement will be critical. [ * ]

[ * ]

The inclusion of the three National Indigenous Organizations in discussions on the margins of ministerial FPT meetings and formal, in-person First Ministers’ Meetings (FMM) offers opportunities for governments to engage on Indigenous perspectives; [ * ]

[ * ]

Working with municipal partners in the FPT context

Municipalities are at the forefront of many issues facing Canadians and are of growing economic and demographic importance. [ * ]

There is currently strong alignment with some cities on key federal priorities and, over recent years, the Government has begun to work more actively and directly with cities on a range of priorities. Cities are also increasingly organized in their advocacy towards the federal government in such areas as economic recovery, infrastructure, housing and affordability, immigration and labour supply, and climate change. [ * ]

[ * ] As part of the Safe Restart Agreement announced in July 2020, the Government provided up to $2 billion to assist municipalities with operating costs impacted by the pandemic and $2.7 billion to support the operating costs of public transit agencies; these funds were cost-matched by provinces and territories. This form of direct transfers to municipal operations was unprecedented and called further attention to the issue of municipal financial sustainability. While this funding was critical in helping municipalities to balance budgets throughout the pandemic, it is important that provinces and territories continue to take responsibility for the fiscal health of municipalities.

Since 2015, some departments have engaged cities through their FPT ministerial meetings where there is a strong cities agenda. The Federation of Canadian Municipalities has advocated for the creation of a formal forum for engagement between federal and municipal leaders, [ * ]

Proposed strategic approach

A deliberate and strategic FPT approach in a new mandate should be a priority as FPT relations will be particularly important to implement key commitments in your platform. The start of the mandate provides an important opportunity to begin afresh and lay out overarching objectives, along with any changes to the mechanics of FPT engagement—all of which can support progress on your platform commitments and objectives for the health of the federation.

Managing the pandemic and pivoting to economic recovery will remain critical for all FPT governments. [ * ]

The following sections provide an overview of proposed approaches to manage the agenda, supported by solidified internal governance, while keeping the health of the federation front and centre. As the mandate begins, the Privy Council Office will provide detailed advice and briefings to inform strategic decisions for advancing your priorities with provincial and territorial partners.

Actively manage FPT policy priorities

It will be important to use the full suite of tools at the Government’s disposal to advance FPT relations and implement specific priorities. [ * ] Setting this up early in the mandate will support strong sequencing and prioritization efforts, and facilitate tracking of progress on priorities with provinces and territories.

This would provide a good base to consider the multiple approaches to implement specific priorities, ranging from multilateral agreements and national frameworks to bilateral discussions and arrangements—[ * ]

Strategic engagement and planning your First FPT Meetings

FMM and other FPT platforms

As a forum to set priorities and objectives amongst governments, FMMs are best suited to discuss issues that have national significance, in the sense that they are relevant to all jurisdictions. [ * ]

[ * ]

Bilateral and regional engagement

[ * ]

There are also opportunities for regional engagement that could be pursued early in the mandate, [ * ]

Solidifying internal governance

Ensuring there is full alignment across the federal government on roles, strategies, and tactics for progressing files with provincial and territorial counterparts has proven important to successfully achieving federal objectives in a timely manner. [ * ]

[ * ]

Advancing key commitments using a variety of FPT approaches

A robust engagement approach combined with a solidified internal governance will allow the Government to focus efforts and achieve steady progress on specific priorities and key mandate commitments by using the full suite of strategies and tools at the Government’s disposal to advance key files. [ * ]

As these various approaches are considered it will be important for the Government to assess the challenges of achieving specific outcomes from provinces and territories in agreements, [ * ] The federal government will want to demonstrate results to Canadians of the funding provided as part of the agreements. [ * ]

[ * ]

Monitor and respond to the health of the federation

There are broader challenges affecting the health of the federation, such as fiscal sustainability of FPT finances and regional discontent. [ * ] It will be important for the federal government to monitor, quickly respond to and address developments that may affect the health of the federation, leveraging government initiatives and programming as well as proactive and strategic public communications [ * ]. 

As you prepare to implement your mandate, the Privy Council Office will be ready to provide you with further advice on the issues raised in this paper. Advice on advancing FPT issues and relations will be developed in collaboration with the responsible departments, and take into consideration the overall fiscal health of the federation.