MUNICIPALITIES, THE CONSTITUTION, AND
THE CANADIAN FEDERAL SYSTEM
Prepared by:
Michael Dewing, William R. Young
Political and Social Affairs Division
Erin Tolley
Economics Division
Revised May 2006
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MUNICIPALITIES, PROVINCES AND THE FEDERAL GOVERNMENT
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Because of the broad range of federal activities that impinge on local areas, however, the provinces have not been able to prevent at least
ad hoc contact between federal departments and the municipalities. Historically, such linkages have followed informal and functional lines. For example, federal transportation specialists deal directly with municipalities about bridges over level crossings of railroads and roadways. It is also important to note that local governments are subject to various federal actions that can affect municipal options and significantly alter the physical and social fabric of urban centres. One example of this might be the impact of federal immigration policy on larger cities, such as Toronto, Montréal or Vancouver. A second example might be the impact that federal cuts to social programs, such as Employment Insurance, may have on homelessness and poverty. The federal government can also exert some control over municipal activities by means of the conditions it attaches to grants to the provinces.
Lack of coordination between
ad hoc federal activities and relationships and the rapidly expanding municipalities began to cause problems in the 1960s. It became evident that the solutions to local problems often had more than a local impact and that federal projects could have undesirable environmental or developmental consequences for municipal governments. For example, the Canada Mortgage and Housing Corporation’s financing of residential construction near Toronto International Airport in the 1960s pre-empted any plans by the federal Department of Transport to expand that facility. In the late 1960s, programs administered by 27 federal agencies had some influence over urban development plans. Other federal actions had unintended consequences for urban life. For example, the
Income Tax Act deduction for businesses providing parking spaces to employees contributed to urban street congestion.
Insofar as municipalities are concerned, recent social and economic developments have conclusively demonstrated that a major argument for changing either government structures or the Constitution is that:
… the problems of our large cities are no longer merely municipal or local problems. The Canadians whom our provincial and federal governments serve are now predominantly urban Canadians. The national goals of high employment, high growth, stable prices, viable international payments’ balance, the equitable distribution of rising incomes must now be primarily accomplished within our cities.
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The contacts between the CMHC and the municipalities evolved over time. In 1949, amendments to the
National Housing Act (originally passed in 1938) authorized joint federal-provincial programs to provide low-priced homes for sale or rent. The amended Act authorized cost-sharing by the federal and provincial governments for land assembly and servicing (75% was paid for by the federal government). Municipalities were allowed to participate in this program if their province passed legislation authorizing local administration of the provincial aspects of these housing activities. A further series of amendments to the
National Housing Act in 1964 created more comprehensive programs aimed at overall urban renewal and not just housing. As a result, the federal government could authorize a 50% contribution towards the preparation of plans, the acquisition of land and buildings, and the installation of municipal services in urban renewal plans. The federal government could also make loans to the provinces and municipalities to finance up to two-thirds of their costs.
Until the end of the 1960s, the provinces generally went along with these activities, in large part because the condition in the cost-sharing agreements gave them considerable control and also because, as a Crown corporation, the CMHC developed its policies with relative autonomy and without direct control by the federal Cabinet. The CMHC also established functional relationships with municipalities and interest groups, which tended to minimize Cabinet intervention in its affairs.
The intense constitutional discussions of the late 1960s produced a set of circumstances that ultimately altered this relationship but did not satisfy either the municipalities or the federal government. The Canadian Federation of Mayors and Municipalities intervened in the constitutional debate to state its position, but the municipalities consistently related their vaguely expressed constitutional propositions directly to their very specific financial difficulties.
The Federation established a Joint Municipal Committee on Intergovernmental Relations (JMCIR) to elaborate its views throughout the constitutional debate. In 1971, the JMCIR presented a brief to the Special Joint Committee of the Senate and the House of Commons on the Constitution. However, the only clear conclusion that emerged from the municipalities’ submissions appeared to be that there should be some form of “tripartitism” either in the division of powers or, more commonly, in a consultation process. For example, the JMCIR proposed that federal-provincial conferences should become trilateral meetings. Constitutional recognition of federal-provincial-municipal conferences would mean that the municipalities would still be “subject to provincial law but this would be modified by their right to be consulted and to be heard, a right which would be formally recognised and would no longer be a matter of provincial sufferance…”
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The Trudeau government tried – unsuccessfully – to marry the municipalities’ concept of “tripartitism” (although not enshrining it in the Constitution) with the “pragmatism” of the historical links between the federal and municipal governments. In theory, not only could this avoid the constitutional hurdles but it would “rationalize” federal-municipal relations and establish greater political control at the federal level. Accordingly, in March 1971, a Minister of State for Urban Affairs was appointed to take on responsibility not only for the CMHC but also for a new Ministry of State for Urban Affairs (MSUA). Given the inescapable constitutional limitations, this ministry had no program responsibilities but had a mandate to: plan, coordinate and develop new urban policies; integrate federal urban priorities with other federal policies and programs; and develop coordinating intergovernmental relationships. Given this mandate and its lack of funds for programs, the MSUA had to rely on the clout and persuasive powers of its Minister to achieve its goals.
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