Transcript - Canadian Politics 101: Federalism and Unity

10 Apr, 2025

Listen to this episode here

Table of Contents

• Introduction
• Origins and Logic of Canadian Federalism
• Division of Powers in 1867
• Evolution of Provincial Power Over Time
• Centralization and Decentralization Dynamics
• Blurred Jurisdictions: Environment and Energy
• Housing and the Spending Power
• Equalization and Fiscal Imbalances
• Quebec’s Influence on Canadian Federalism
• Alberta and Western Separatism
• What Keeps Canada Together?

Introduction

Ian Van Harten (00:01.978) Alright, Dr. Tom Bateman, it's good to be with you here again.

Tom M.J. Bateman (00:07.17) You too Ian.

Ian Van Harten (00:08.854) So our topic this time is federalism in Canada. And it's kind of interesting because when I was first developing this idea for this series on Canada's political system, and all based on the book that you co-authored, The Canadian Regime, I actually didn't have federalism on my list of things to talk about. But then as you and I were talking about the series, you had suggested that,

federalism should be on the list. And not only that, but I think you said it's one, if not the most important thing to talk about when it comes to understanding Canada. So can you explain why, why is federalism important for understanding Canada?

Tom M.J. Bateman (00:57.752) Federalism is cause and effect of the whole nature of the country, actually. I think Canadians living in Canada are a little bit like fish swimming around in a fish bowl. And if you ask the fish, so what's water? And the fish will say, I haven't got a clue.

because water is the very, very environment in which they live. They have no awareness of it because it's everywhere. It's just so sewn into.

the nature of their lives and of their understanding of things. So Canadians are kind of funny. I think they don't have a great awareness, like a conscious intellectual awareness of federalism and how it works. But they know intuitively that Canada is deeply and inexorably federal in character. And what I mean by that is that Canada has an extraordinary

geographical expanse, second largest country by physical area on the planet. Canada is also regionally very, very diverse. And Canadians who travel outside of their own province will be struck by this feature of the country. Accents are different. Some assumptions are different. The land is different.

Population variation is different. Language use, the language of conversation is often different. so that's like the basic federal reality. So much geographical difference among parts of the country that are really very distant from one another.

Tom M.J. Bateman (03:09.768) And we sort of take account of that by having the country chopped up into 13 different jurisdictions, 10 provinces, three territories, and we give the provinces their own governments. And then we give those provincial governments constitutionally protected policy jurisdiction.

And that means the people who live in a particular province have a government that enacts legislation that is particular to them and may be very different from the legislation the government in another province will legislate for people in that other province. And then we try to sort of knit it all together.

by having a Parliament of Canada with jurisdiction to pass laws that will bind all of Canadians in the same way. So that's what we have. And I think federalism is a product of some of the very basic diversities that were present at Confederation in 1867. But then on the other hand,

the very existence of provinces and the very existence of provincial governments with constitutionally protected jurisdiction sort of creates kind of like an institutional incentive for those provinces to mark themselves off from other provinces, to protect their constitutional autonomy, to insist that they're different and to resist

centralizing or homogenizing tendencies coming from other provinces or from the federal government. so federalism is sort of the consequence of certain features of this country. And we can talk about the Quebec fact in due course on this one, because that's very important. But federalism also has this causal kind of character on the decentralized feature of the Canadian polity.

Ian Van Harten (05:22.608) Mm-hmm.

Tom M.J. Bateman (05:35.094) And it is just now sort of basic to the character of the country. so sometimes I say to students that to really understand Canada, you have to understand that there are like sort of three pillars holding the whole country up. One of them is parliamentary government, which is a very distinctive arrangement of executive, legislative, and judicial institutions in Canada.

and so responsible government and members of the government of the day coming from the elected members of the House of Commons, blah, blah, blah, all that stuff. And then the other pillar is the Charter of Rights and Freedoms. Canadians are highly rights conscious and that was the product of the entrenchment of the charter into the Canadian constitution in 1982. This gives courts a very large role.

in deciding public policy disputes in the country. And then the third pillar is federalism, this arrangement of regional governments exercising policy powers in their areas, but in some kind of combination with a central government in Ottawa legislating for the whole of the country. So three pillars.

You don't understand Canada if you don't understand all three of them. And it's a tough question to answer, close call, but federalism is by no means the least important of those three pillars. I think we could have a very interesting debate about whether in fact it's the most important feature of the Canadian Constitution.

Origins and Logic of Canadian Federalism

Ian Van Harten (07:20.45) Mm-hmm and for me, so it's kind of an interesting situation to where Back in the first episode we talked about the Canadian Constitution and how it's based on the Constitution of the United Kingdom But the United Kingdom is not does not have a federal system. They have a unitary government and So I guess our idea for federalism actually came from the United States and they were our reference point for

federalism, but also sort of that they had lots of problems that we were looking for that the fathers were looking at the time but can you talk more about where this idea of federalism came from and it's it's how it fits in the Constitution as a whole

Tom M.J. Bateman (08:05.964) Yes, the British constitution is in principle unitary. But of course, we know that the UK is England, Scotland, Wales, Ireland was part of the British project for a long time, up until the early part of the 20th century. Northern Ireland is still a part of Britain. But that's all very complicated.

Over the course of the 20th century, there has been a slow incremental process of what is called devolution in the UK. And that is that the Westminster Parliament has delegated some decision-making authority to parliaments in Scotland and in Wales. Now these are not constitutionally protected grants of authority to those legislatures.

They in theory can be retracted by the Westminster Parliament But on these kinds of questions once you give once you delegate some of these powers It's pretty hard to get them back again You might be inviting like a really big political crisis. And so what many scholars say is that The UK while formally constitutionally Unitarian character is acquiring some elements of

of a federal kind of constitution, it's federalism in the slow lane and kind of by stealth, if you like. And in fact, a lot of commentators say that there is much in common between Quebec and Canada and Scotland in the UK. In fact, I've read many articles linking the two together, similar situations, blah, blah. So,

It's not that hard to caricature Britain as a unitary state. think the reality on the ground is actually kind of more complicated. But in any case, yes, the Americans are the major exemplar in having a thorough going federal arrangement as part of the new American constitution that was

Tom M.J. Bateman (10:30.542) primarily settled in 1791. the Canadians looked at that with some ambivalence, but also as a source of some sort of constitutional creativity, I would say. Because when we were contemplating confederation, we were in a position not unlike that

of the American colonies thinking about what they're going to do after they sloughed off the British imperial connection and became independent. And I think the very name of the Republic to the South is significant, the United States of America. The British colonies that had assemblies that had, you know,

fairly well-defined political communities, Massachusetts, Rhode Island, Delaware, New York, blah, blah, all the other ones and so on, the Carolinas, they retained that sort of political communal character as they entered the new Republican political arrangements after the War of Independence. so these were pre-existing.

colonial political communities that didn't want to give all that stuff up when they entered the new arrangement. And they did retain their territorial and political integrity to a great extent in the Articles of Confederation initially, and those proved to be kind of unworkable and way too decentralized. The states had way too much power. There was not even a national currency.

no national standing army, and it was just like too much of a treaty arrangement and not enough of like an integrated political community. And that's what produced the creation of a new constitution in 1791, which would give much more power to the central government to sort of balance off the existing autonomy of the states. And in British North America,

Tom M.J. Bateman (12:55.918) The situation was not dissimilar. We had the United Province of Canada, which was the outgrowth of the arrangements from the Constitution Act 1791, which created Lower Canada and Upper Canada. Then in 1840, Lower Canada and Upper Canada sort of were brought together as the United Province of Canada with one legislative assembly, but each part...

equally represented in the assembly. And in a lot of ways, the old upper and lower Canada retained their political communal integrity. They were called Canada East and Canada West, but basically it was the same political communities. And in fact, we know that the United Provinces of Canada from 1840 to 1867 really didn't work very well. And that it did not actually bring these two communities together in any obvious way.

And the failure of the United Provinces of Canada was one of the things that spurred the consideration of a larger confederation arrangement that we actually got in 1857. And in the meantime, the provinces of Atlantic Canada were crown colonies, but they had their own legislatures. And they had their own ways of doing things. They had their own currencies for heaven's sakes.

And even when they became provinces and when automobiles came into use, not only were the laws different in the provinces, but like they even drove on different sides of the road and all that kind of stuff. Like it was like super decentralized. And only over time they said, okay, I guess we better like all decide that we're gonna drive on the right-hand side of the road. Otherwise we're gonna have problems when we go to, you know, inter-provincial trips and so forth. So the point is,

Confederation also was a union of pre-existing political communities that were unwilling to relinquish their particularities. And the obvious political solution to this dilemma is federalism, where the uniting parties get to retain their particularity, but they also give up some of it to a central government that will represent everybody.

Tom M.J. Bateman (15:17.974) legislate for everybody and create a larger, beneficial political community. And so that's what we attempted. in that respect, I think the American example was instructive. But let me make one more point. And that is that there was a very important theoretical argument for federalism.

in the United States. And that is that many of the people coming together to think about a new American Constitution were very concerned that the new American Republic should not fall down into the same pattern of the regime they had just left, namely overwhelming

executive power, dictating public policy to the North American political community from the top down. The Americans were very democratic and they wanted like strong assemblies, they wanted strong states, and they wanted a capable federal government, but not a federal government that's going to become overwhelmingly powerful and may stifle

actually the autonomy of the the the United States. So it's going to be the United States of America. Not United States of America, you know. And and so Washington was to be kept on a leash and federalism was one of the mechanisms to keep Washington on a leash. Keep it controlled. Retain lots of power.

in the hands of the states. The states get to have their own militias, just in case a standing army dictated by Washington would wish to mobilize to crush the states. Like that's what the Second Amendment is all about. It's not about having handguns and being able to shoot people up at a restaurant. No, it's about a standing militia in the states to defend the states against an overweening federal government.

Tom M.J. Bateman (17:44.984) That's the meaning of the Second Amendment. And that all bespeaks an interest in federalism in the United States as a way to control power. In Canada, that argument really didn't resonate very well. We had a different argument for federalism, and that was to recognize and accommodate the extraordinary

cultural, linguistic, and religious diversity in these British North American colonies. And here, the critical decision to make Canada federal was pretty much dictated by Quebec. And I think the Quebec members of the delegation to Charlottetown in August of 1864,

And then October in Quebec City in 1864 was pretty clear. There's gonna have to be protection for Quebec's distinct character in the new constitution or we're not coming, or we're not coming, period. And interestingly enough, that argument was in its own way kind of supported

by the maritime colonies. And because they said, you know, if we become part of this larger northern half of North America political union, like we're pretty small. Canada, the United Province of Canada is like really big. The new province in the West, which would be Ontario, is like really big compared to us. Quebec is big compared to us.

If all of the policy is gonna be dictated in the central government, whose parliament will have members overwhelming the number of people from the Maritimes, yeah, we're not interested. Like, we're not gonna do it. And so, nobody's gonna force these political communities into a confederal union. Like, it all has to be agreed. And so,

Tom M.J. Bateman (20:10.104) The spearhead of this whole effort was John A. Macdonald, and he was the government leader in the United Problems of Canada at the time. And he was like a real British parliamentarian and didn't like federalism very much because his view was that, and remember, we're talking about early 1860s here. The United States was in the middle of a disastrous civil war. And his view is,

This is what you get from federalism. It is so decentralized that the constituent units can just sort of do end up doing what they want. Federalism is inherently unstable. It's inherently decentralizing. And you court the dissolution of the whole political community if you go that route. And so he had this example in the United States staring at him in the face.

He had his own sort of predilections for the Westminster model, which is not federal. But then on the other side, he's got his potential members of a new confederation who are saying, yeah, we're not playing ball if it's gonna be a unitary outfit. So he reluctantly had to accept, I think the realities coming from the other parties to the negotiations in Charlotown and Quebec City.

and we ended up with something that on paper was a more or less federal legal arrangement, but Canada for lots of interesting reasons has become more federal in fact as time has gone on.

Division of Powers in 1867

Ian Van Harten (21:58.99) Mm-hmm. And well, so let's talk about about some of that evolution. But before we get to how it evolved after them, the so Johnny McDonald was interested in a more centralized government. And so while while they agreed to have a federal system, I think there were some things they put in place to make it so that the central government would be more powerful, right? In terms of what powers they delegated to the provinces and what ones

they kept for themselves. So can you talk about some of the tweaks to federalism that they put in place to try to make it so that it was more, the central government would have more power than the provinces would?

Tom M.J. Bateman (22:44.386) Yeah, a couple of things. I suppose the main thrust here has to do with the wording of the so-called division of powers in the Constitution Act 1867. Because what you need in a federal constitution is an enumeration of the constitutional jurisdiction, the actual powers that each order of government will get.

So you assign certain policy powers to the central government and then you assign other policy powers to the provincial order of government, like the regional governments, the ones in Nova Scotia, New Brunswick, Ontario, Quebec, and so on and so forth. And this is like a really difficult consequential enterprise to actually sit down and get out some paper and write down

all the things that government does, know, currency, banking, trade and commerce, criminal law, hospitals, schools, roads, know, blah, blah, blah, all that, know, trees, everything, you know, think of all the things that government can or should do, write it down. And then step two, decide which order of government is going to be responsible.

for each item on that list. That's basically the drafting exercise for a federal constitution. And I think what we can say with some safety is that the drafting of the division of powers in sections 92 to 95 of the Constitution Act 1867 was done to give the big things to the feds.

and just like the little things to the provinces. And so we have, you know, public debt and property, regulation, trade and commerce, the raising of money by any mode or system of taxation given to parliament, given to the federal government, which means like if the federal government can think of any way to raise money, it has the constitutional capacity to do so. Okay, and they've actually, they've been pretty imaginative on that point.

Tom M.J. Bateman (25:08.814) But, you know, we've like navigation and shipping, weights and measures, currency and coinage, banking, defense, the census and statistics, know, bankruptcy and solving copyrights, Indians and lands reserved for Indians, very important federal jurisdiction, marriage and divorce, criminal law, very, very important federal jurisdiction. And

Ian Van Harten (25:24.229) Okay.

Tom M.J. Bateman (25:38.222) and other related things are given to the feds. And I should mention that section 91 is drafted in a very interesting way because, and these are the powers given to the federal parliament. And it begins with a large sort of statement about what the federal parliament can do. And then,

after that large statement is a list of itemized powers, which were meant to be sort of illustrations of the large statement. So let me just read to you what I'm getting at here. At the beginning of section 91 says, it shall be lawful for the Queen, by and with the consent, advice and consent of the Senate and House of Commons to make laws for the peace, order and good government of Canada. Okay, political scientists call that the POG clause.

peace, order and good government of Canada. And that means anything that is necessary for the peace, order and good government of Canada, that's a federal responsibility. But it's vague. It's very vague, but it's supposed to be capacious. It's supposed to be very broad and encompassing. And that we understand the meaning of POG by looking at the illustrative list of particular powers.

Ian Van Harten (26:47.526) Mm-hmm.

Tom M.J. Bateman (27:05.772) given to the federal parliament that follows the POG clause. And some of those I just listed off to you. And then if you look at section 92, these are the powers given to the provinces and more limited taxation authority and municipal institutions in the province.

the management of public and reformatory prisons, shops, saloon, tavern, auctioneer, and other licenses. Okay, like this is Tiddlingwinks, right? And local works and undertakings and the incorporation of companies with provincial objects. In other words, like small business that doesn't really extend beyond the province. Yeah, we'll give those teeny weeny little things to the provinces to look after.

Then they got this thing, property and civil rights in the province. I mean, we could talk actually for the next two weeks about what that means, because the constitutional law on that is huge. But we'll lose all of our listeners if I do that. And then at the end it says, generally all matters of a merely local and private nature in the province. We'll give those to the provinces. So that's actually kind like a provincial residual clause. But then the POD clause is like the federal residual clause. Everything that's big and important.

that's not listed in section 91, that's still the federal government. So my main point here is that the intention at the beginning was to make Canada federal, but that the big prominent policy items were given to the federal parliament. And in John A. Macdonald's mind, section 92 would basically leave for the provinces small things.

of only local interests. The leader would be the parliament in Canada, no question about it. Now the other thing that was part of the original legal design is in section 90 and I'll just summarize it fairly quickly. And basically what happens here is that the British crown,

Tom M.J. Bateman (29:31.84) appoints a Governor General for Canada as his or her representative standing in his or her place in Canada. And the Governor General is the the formal head of the Canadian military, also part of Parliament, which means the royal assent of the Governor General is required for bills in Parliament to become law. And, okay, and also there's a bit of a like a kind of a prerogative

power regarding prorogation of Parliament, dissolution of Parliament, the appointment of a Prime Minister, which we just saw the other day. These are usually ceremonial tasks of the Governor-General, but sometimes they become politically quite salient, depending on the issues. But in any case, we've got the Governor-General of Canada. then what we also have is the...

the federal government's appointment of lieutenant governors in the province who represent the crown in the province but the design in the Constitution Act 1867 was for lieutenant governors to be sort of like agents of the federal government in the provinces Kind of like envoys in a way like like sort of federally appointed caretakers to make sure

Ian Van Harten (30:53.318) Hmm.

Tom M.J. Bateman (31:01.506) The provinces don't do stupid things. And given that the Lieutenant Governor has the royal assent role over legislation passed by a provincial assembly, the idea was that the Lieutenant Governor of a province could actually withhold his assent to legislation and leave it for the federal government to think about.

And then furthermore, the Lieutenant Governor could actually disallow legislation based on instructions from Ottawa. And this was actually used many times in the early part of Confederation. And in a way, this violates the federal principle, the idea that

that provinces are constitutionally autonomous in their areas of jurisdiction and that they can legislate according to their own lights, as long as they are legislating in areas given to them. Because the idea that a Lieutenant Governor has the power of reservation and disallowance suggests that the federal cabinet can tell the Lieutenant Governor or province, yeah, we don't like that provincial law, so we think you should disallow it. Well, that's kind of like anti-federal in a way, but yeah.

It was, and it was there as a, it's kind of like a federal government check on provincial autonomy, which added up then to a fairly centralized early understanding of the Canadian federal polity. What is significant is that as the 20th century came and moved into mid 20th century, the

Ian Van Harten (32:37.434) Ahem.

Tom M.J. Bateman (32:55.086) the power of reservation and disallowance fell into disuse. And it's, I don't think any government would ever contemplate using either of those powers these days. But what's happened is that in 1867, we actually did not have a high court of appeal for Canada. And that didn't come until 1875 when the Supreme Court Act was passed. And...

I think that was a significant moment because it kind of signaled that Canada was catching on to the logic of federalism and that finally and ultimately disputes about the exercise of powers under a division of powers between the provinces and the feds, it can ultimately be considered a legal question. Whether a province passing a law

actually has the constitutional authority to pass that law. So let me give you an example. The criminal law is given to the federal parliament as a constitutional responsibility. What that means is that provinces cannot pass criminal laws. But what if a province did? And what we'd have to understand, well, what does it mean? What's a criminal law versus a non-criminal law? Okay. And then you have to say, well, is it one that provides for imprisonment?

beyond just a fine? Is it a law that makes illegal conduct, which we consider to be criminal in character? It's one thing to overstay in a parking spot and then you get a $25 fine for parking without paying, but it's another thing to kill somebody.

There's a difference in the moral culpability of these two kinds of offenses. And provinces can certainly fine people for different kinds of traffic offenses, but they can't imprison people for murder because murder is a criminal act, regulable by criminal law. And criminal law is a federal jurisdiction, not a provincial one. And so what I'm getting at is that

Tom M.J. Bateman (35:18.114) These kinds of questions about federalism and the limits of the authority of parliament, the limits of the authority of the provinces, can be converted into a legal matter. this requires courts to undertake the activity of judicial review. Whether a jurisdiction actually has the legal authority to pass the law that is at issue in a legal dispute. And so judicial review,

has come to replace reservation and disallowance as a federal kind of check on the provinces. And this, by the way, was the federal government's idea behind creating a Supreme Court of Canada, all of whose judges, by the way, are appointed by the federal parliament. The promises have no say. centralists in Ottawa, like Johnnie MacDonald and people succeeding him, say, that's good.

because that means we've got a court appointed by people we like monitoring the exercise of legislative authority by the provinces. And so we get to keep a thumb sort of on the provinces. And it hasn't quite worked out that way because of course a court acting as an agent of one government no longer appears to be independent. And...

Ian Van Harten (36:30.693) Hmm hmm.

Tom M.J. Bateman (36:43.648) and judicial independence is like the critical watchword for the proper exercise of the judicial function. So the court has been sensitive to that and it doesn't really operate as an agent of the federal government, though that was, I think, some of the thinking of the federal government of the day.

Ian Van Harten (37:03.054) Mm-hmm. Well, can we go back a bit to the this division of powers situation and how they were being devied up? I'm just curious that because there's obviously this this sort of agenda to give the most important powers to the central government and leave the rest to the provinces but presumably the provinces were still interested in negotiating for their position on these things like they were they just

Tom M.J. Bateman (37:13.102) Mm-hmm.

Ian Van Harten (37:32.272) Did they just roll over and accept the way things were divvied up? Or were there more intense negotiations to try to get them more important powers?

Tom M.J. Bateman (37:42.498) Well, yeah, there were negotiations about the division of powers prior to confederation in 1867. the provinces were, you know what, like they were never happy about confederation. You know, when we had negotiations started in 1864, Nova Scotia and New Brunswick had provincial elections and

anti-Confederation parties won those elections. And in New Brunswick's case, the anti-Confederation party was a bit of like an incompetent train wreck. And so it didn't last very long. And then another party came back in which was sort more acquiescent about confederation. And by the way, one of the big things that got the New Brunswickers to come on side was not the division of powers.

but the promise of federal monies flowing into the province after confederation and New Brunswick's debts being picked up by the feds and so on and so forth. So they sort of dangled dollar bills in front of us and we jumped. And kind of true for Nova Scotia as well. But Nova Scotia was even more, I would say, reticent about confederation than New Brunswick was. even like

after the deal was made, an anti-Confederation party was elected to the Nova Scotia legislature. And Nova Scotia was like very seriously considering a bunch of things, including annexation to the United States. So it was kind of a close call. And Quebec was not like thrilled absolutely to bits either, but they ended up acquiescing. And July 1, 1867 was not some big giant massive celebration. It was...

kind of like a garden party with lemonade and shrugs kind of all around. And that's like so typically Canadian, it seems to me. But other provinces, they did get their other little bells and whistles to bring them onside. Quite aside from the Division of Powers, Quebec got jurisdictions that it considered important to the protection of its particularity. And...

Tom M.J. Bateman (40:08.526) distinct powers over education in section 93 of the Constitution Act 1867 were very important to Quebec and it got those and property and civil rights in the province under section 92 that was a way for the civil law system of Quebec which is different from the common law system in the other provinces to be protected and

So so different promises they got they got little things the Maritimes they got a promise of an intercolonial railway, you know, okay, it's another little thing dangling in front of us and So so there are other little side deals that that were done to to make the thing happen so complicated and you know the records of the Confederation debates are not very good. I see so we don't know all the little deals that were done

as like the background for the provisions that we see in the Constitution Act 1867. The Americans were much more prodigious recorders of events so that we actually know what the drafters of the Constitution were really thinking about as the negotiations unfolded. We have more fragmentary evidence in Canada, unfortunately.

Evolution of Provincial Power Over Time

Ian Van Harten (41:27.248) Well, so let's move to how things evolved despite the best efforts of these founders, or the fathers of confederation rather. And because even though they wanted to leave all the important jurisdictions for the central government, that's not really the way it rolled out. And in particular with healthcare was one they didn't foresee. But I think even collecting income tax wasn't.

Tom M.J. Bateman (41:33.955) Mm-hmm.

Ian Van Harten (41:57.196) one that they anticipated. So can you talk more about some of these forces that ended up giving the provinces a lot more prominence than they initially intended them to have?

Tom M.J. Bateman (42:09.23) Sure. Your mention of health is an excellent example because in 1867, healthcare meant going to a hospital and dying, basically. If you had something beyond a broken arm and the flu and so on and so forth, the medical world was not a great help. And hospitals were, in most cases, run by

church institutions as a charitable sort of exercise. And medical technology was not very well developed and medical care was not very expensive. Furthermore, people were dead by 65 in most cases. And so, so.

Healthcare just did not have the prominence that it has come to have. And so what we know is that medical technology has progressed rampantly. People live longer. Medical technology is very expensive. Medical training is much more prodigious. Doctors are greater in number and they are

highly paid for their work and they command that and if they don't get it, they will go somewhere else. And a brain drain of Canadian doctors to the United States has been a problem for decades and decades. so the provinces came to realize that a fairly insignificant jurisdictional authority they had has become huge.

it's become very prominent, very challenging, extremely expensive, but extremely important to their residents because everybody gets sick and everybody is born. And that almost always happens in a hospital and everybody dies. And often the death occurs after illness and

Tom M.J. Bateman (44:34.55) an extraordinary use of the healthcare system. In fact, if you look at, if you plot per capita cost to the healthcare system by age, what you see is a curve that goes like this, like that. And so you, you cost the system a couple thousand bucks when you're born. And then when you are young, not very much at all because people are resilient when they're young and they get better really fast from illnesses and so on and so forth. But when you get into middle age and then you get old,

Ian Van Harten (44:47.974) Hmm.

Tom M.J. Bateman (45:04.374) everything starts to break and you get chronic conditions, know, COPD and emphysema and diabetes and all that kind of stuff. Canadians are terrible in looking after themselves. And the cost to the each person, each person's cost to the health care system just like shoots up. And the longer you live, the more expensive your charges on the healthcare system. And you might think this is all very, you know, terrible and barbaric what I'm saying, but I'm just reporting the facts. That's all I'm doing.

And so the provinces now have this to deal with. And it's really important because healthcare touches everybody. Canadian voters are very sensitive to it. And they're excellent complainers about the healthcare system too. And so governments always have to do something or show that they're doing something to deal with that very expensive.

policy file, but also education. It was not a very big deal in 1867. Now it's a major ticket and people require much more education than they used to to be part of the economy. And so that's very expensive. Social services were nothing basically in 1867. Now we have large bureaucracies of social workers and public health personnel and other kinds of services.

that people demand in the contemporary world. So for a typical province, health, education, social services, there, that's between 65 and 70 % of provincial spending every year, regardless of everything else. And what that means is that the provinces...

responsibilities grow with the size of these policy files and citizen demands with respect to the same. you know, suddenly the provinces are big policy makers on these big files that nobody ever thought about in 1867. A little bit has happened on the other side, of course. You know, defense is an extremely expensive policy field.

Tom M.J. Bateman (47:25.678) now compared to what it was in 1867. And Canadians are kind of tuning in, like in a very big way, like right now about how we've been complacent free riders for a very, very long time. And now that our relationship with the United States has been kind of ruptured or something, we're gonna have to like get our own acting gear on these policy files.

And that's federal responsibility. And so now the feds are gonna have to start spending serious money on Canada's defense responsibilities. And we're just not used to that. aeronautics, there were no airplanes in 1867. Nobody thought of these things, of course. And so only in the 1930s when commercial air traffic started to become a matter of some concern.

did we begin to think, okay, so like, that a federal or provincial responsibility? And the judicial committee of the Privy Council in Britain said, no, it's federal, it's federal. And that's because it's a matter of inherent national concern beyond the capacity of any province to regulate. You we wouldn't want to have different air regulations in Canada by province, you know, for all the obvious reasons. So make that national.

So the feds have their responsibilities too, and the provinces have theirs, but I would say in terms of cost, in terms of prominence, in terms of salience for citizens and so forth, the provincial ones have been really quite significant and they've really kind of upended the division of powers. And I guess the punchline to this then is to compare the cost to the provinces of these growing policy responsibilities.

Ian Van Harten (49:08.614) Mm-hmm.

Tom M.J. Bateman (49:18.378) in relation to their capacity to raise the money to finance them. Because as I said earlier, the federal parliament has unlimited taxation power. The provinces have much more limited taxation power. And that has forced some changes in federal arrangements as well.

Centralization and Decentralization Dynamics

Ian Van Harten (49:36.354) Mm-hmm. And yeah, well, we'll get to to the influence of who's handing the money out a bit later, too, but I want to just pick up on just the way so so it kind of started they wanted it to be more centralized and then the way it evolved with these the growing influence of health and education and other things to be more Decentralized or the provinces kind of had more independence or more prominence

But there's been sort of a swinging back and forth between those two throughout our history and different factors coming into play like global events, you world wars kind of had a more centralizing force, but then other times it becomes more decentralized and we've kind of flowed back and forth and even prime ministers, individual philosophies and thinking around this has an influence. So can you just talk about a bit about how

that swinging back and forth and the different forces that influence that.

Tom M.J. Bateman (50:37.72) Yeah, you've described the dynamic, I think, quite well. And I suppose what never really went away was the idea among provincial political elites that this province is important and it's ours and we want to protect it and we don't want outsiders to dictate to us how we should live our lives. And so when the federal government would want to assert itself,

the provincial governments, like they came to react pretty immediately and strongly to resist those federal incursions. And I think of a late 19th century premier of Ontario, Oliver Mowat, who not only was the premier of Ontario, but he was a constitutional lawyer and also argued cases

directly before the Supreme Court of Canada and the Judicial Committee of the Privy Council, which until 1949 was a British sort of court of appeal with jurisdiction over Canadian law, actually. And Mowat was, he was a provincialist. He was an Ontario province builder. And when he considered that federal initiatives were encroaching upon

provincial jurisdiction, he was a premier, but he argued the cases himself before the courts and won, you know, quite a bit. so some political science scholars, you know, refer to this as a dynamic of province building. The idea that the very existence of provinces and provincial governments creates an incentive

for those provincial governments to protect their status and to augment it, to aggrandize. And why is that? Because institutions are kind of like organisms. Plants grow, they wanna grow. And weeds are tenacious things. They'll find a way to survive in cracks and corners and whatever it happens to be. And provincial governments are kind of like this too. Like they'll...

Tom M.J. Bateman (53:02.168) you know, find a way to grow. Provincial governments don't like to fire employees. You know, they don't like to give up jurisdiction. They don't want to surrender autonomy. Canada does not want to fold into the United States. Canada does not want to refuse to exist. And, or, you know, the alternative. you know, interest groups don't like to fold up. Businesses don't like to fail.

Like there's like this growth imperative in any kind of human organization, it seems to me. so provincial governments kind of act this way as well. But there have been times when the challenges to Canada have been sort of universal, national in scope. Wartime, as you say, has been an extremely important example.

And on these occasions, the federal government has really stepped into a leadership position. And under legislation like the War Measures Act, for example, passed in 1917 to muster a very fulsome Canadian response to World War I, the War Measures Act gave the federal cabinet extraordinary power over the economy.

and of civil liberties for the duration of an emergency. And it was used, you know, in the two world wars. And of course, you may know that it was used in the FLQ crisis in October of 1970 to deal with separatist sort of terrorists activity, which did kind of look for a while like it was going to topple the government of the province of Quebec. And...

So we have those periods of extraordinary assertion of federal government power. But even in peacetime, know, the North American policy environment really changed after the Second World War. And for interesting reasons, governments across the developed democracies decided

Tom M.J. Bateman (55:26.636) that governments would play a much more assertive role in the economic lives of their countries and of the welfare of their citizens. And so governments began to formulate policies to protect their people from what we could call the contingencies of life, unemployment, illness, old age.

And you can't be protected from old age, but you can be protected from some of the consequences of old age, which is you're no longer working and you may court poverty. And so what we saw in the 19, late 1940s into the 1960s was the growth of the welfare state, unemployment insurance, Canada pension plan, a flowering of other policies to stabilize the economy and...

give security of employment to workers and so on and so forth. And these were initiated mainly by the federal government in Canada. And on pretty much every occasion, the federal government had the agreement or at least the acquiescence of the provinces. And that's because these things were very popular for Canadians and a provincial government.

that would stand against the feds would court being very unpopular with its own residents, its own voters. So the federal government really took a lead on some of these things. And what's interesting, sometimes we got formal amendments to the Canadian constitution. That was true with unemployment insurance. It was true with the Canada pension plan. But...

Interestingly, particular interests of Quebec usually asserted themselves. And so on pensions, for example, we have federal jurisdiction over the Canada Pension Plan. But if a province wishes to operate its own plan, it can do so as long as it conforms to very broad national standards articulated by the federal parliament. And so now we have the Quebec Pension Plan operating

Tom M.J. Bateman (57:47.8) sort of alongside, but independently of the Canada Pension Plan. And Quebec did that for very interesting reasons. And that is that if it's a Quebec pension plan, then Quebec workers pay into, they pay like a premium into the Quebec Pension Plan, which the provincial government can use. They can use those proceeds, not simply to pay out pension benefits when they are required, but it also invests that money to

reap returns that keep the pension plan solvent, but they can invest those monies in Quebec enterprises that will make money, that will give returns on those investments to the pension plan, but it also stimulates a Quebec economy and gives jobs to Quebecers and so on and so forth. so Quebec had a very interesting and systematic province building kind of agenda.

for the use of jurisdictions like the one I've just described. And it has contributed, like oddly enough, these were sometimes federal initiatives, but with provincial carve-outs and so on and so forth. But they often have like a decentralizing province building kind of effect about them. so Canadian federalism is really back and forth over time. It's a complicated history. It's very dynamic.

and hard to predict where things will go.

Blurred Jurisdictions: Environment and Energy

Ian Van Harten (59:19.362) Mm-hmm. And and so there there is this swinging back and forth but but there's also in terms of the division of powers areas of overlap or areas where they They kind of get any into each other's business a little bit and one one example that comes to mind is with natural resources and energy which I believe is a provincial jurisdiction, but the federal government has

Tom M.J. Bateman (59:33.986) No. No.

Ian Van Harten (59:49.156) on its agenda to address climate change, which has implications for how we use natural resources and how we develop energy. So that's just one example. I don't know if you want to pick up on that, but if you can just talk more about the blurriness between how the powers are divided or the areas of jurisdiction between the two levels of government.

Tom M.J. Bateman (01:00:11.246) That's a great question. let me begin with a simple example, and then maybe I will gingerly touch the energy environment example. many, years ago, the federal government became interested in Canada's economic future.

entailed among other things, preparation of the Canadian workforce for jobs for the future. And so the idea is to help Canadians get up to speed so that they are prepared for entry into the labour market and into jobs that require some preparation. And so the government, the feds thought, well, we can maybe like help.

Canadians in this respect. So they came up with a variety of programs for labor market training. Labor market training. Okay, so the very phrase labor market training straddles the division of powers because training kind of sounds like education and that's provincial. Labor market, it could be provincial, but it could be also national because a company in the labor market

might be a company that operates across the whole country, across provinces. And the courts have said that the federal government has regulation over economic enterprises that are sort of inter-provincial in scope. Whereas the provinces have jurisdiction over businesses that are intra-provincial in scope. so you've got a policy idea.

that seems to be both provincial and federal at the same time. And because you can look high and low in sections 91 to 95 of the Constitution Act, and you're not gonna find labor market training listed anywhere there. That's because it didn't occur to anybody in 1867, nor have we made an amendment to the Constitution since to recognize that. So what do do? Do we have to like amend the Constitution every time we have a bright idea? The answer is no. And so what usually happens is...

Tom M.J. Bateman (01:02:32.866) that on a file like this, the feds will say to the provinces, they'll bring them to Ottawa and they'll sit down and they'll have like a nice dinner and so on and so forth and they'll talk and they will propose that the federal government take the lead on a series of initiatives on labor market training and that this will be done in coordination with each province so that the province will have a workforce that

will contribute to that provinces particular economic objectives. The New Brunswick economy is not the same thing as the Ontario economy. We don't build cars in New Brunswick. We've got some agriculture, we've got lots of natural resources, we've got a fishery and so on and so forth. Yeah, no fishery in Saskatchewan. It's different, it's grain there. And so different provinces have different needs. So the provinces and the feds come together

and they arrive at agreements on policies respecting labor market training. And if it's agreed to, fine, away we go. And there's a lot of federal provincial programming that is of this quality. It's very technical, it's below most people's radar, it's extremely boring, and who cares, you know, as long as we get some good out of it. Maybe we do, maybe we don't, I don't know.

But then sometimes either the feds or the provinces are more aggressive and will legislate on a policy confident that they have the constitutional jurisdiction to do so, but they may not. And these often will end up in the courts and the courts will have to decide whether a certain order of government actually does have the jurisdiction to legislate in that field.

or it doesn't. so this is legal conflict. There's a winner and a loser sometimes. And the problems are just, and the feds just have to sort of move on depending on the result. But the reason why we have litigation is as you say, because the division of powers is simply not clear. A, the words are general in meaning and they are way more general than the policy details.

Tom M.J. Bateman (01:04:59.554) that we will find in laws or other policies passed by a contemporary government. And so you just don't know how the general words shall be construed to include or exclude the policy that is up for litigation. And then the other thing is that aside from the words, we've got policy fields that simply didn't exist.

when the division of powers was formulated in 1867. So planes, nuclear energy, genetic testing, reproductive technologies. Like nobody thought about any of kind of stuff in 1867, but when we have it, so into what slot do we put it? These are hard interpretive questions. so yes, now on the energy question, same deal, oil and gas.

Yeah, not really thought of in 1867. You know, it was all about trees and coal. That's how you have fuel. you know, as things unfolded, there would be private property held under private title by private people. Then there'd be large expanses of property owned by nobody in particular.

but by the Crown in general, the Crown in right of Alberta, the Crown in right of Saskatchewan, and so on and so forth. then you had, okay, so either the Crown or a private landholder owns the land. What about all the stuff underground beneath the land? Who has title to that? Now in the United States, as I understand it, the legal...

situation is that if I find a private holder and I own land, I owned everything beneath it too. In Canada, not so. The stuff beneath, even though I own the surface. so the provincial governments have a lot of control over the stuff underneath.

Tom M.J. Bateman (01:07:22.38) But what about trade and commerce, which is a jurisdiction given to the feds? And what about the federal government's unlimited taxation authority under section 91.3? And the argument has been that the federal government can and should have access

to the resources within provinces for their taxation value because federal taxation jurisdiction is unlimited. The provinces say, no, it can't be unlimited because we own those resources. It's the Crown and right of Alberta that owns those resources and ownership implies taxation capacity too. And so through the 19...

60s and 70s, especially the 70s, the feds in the provinces, I mainly mean by this, the Western provinces and the federal government were at legal war over what jurisdiction had what kind of policy control over what kinds of resources, renewable and non-renewable. And it was a big fight, super complicated court rulings and...

while all those court fights were underway, the prime minister of the day, Pierre Trudeau, decides he would like to patriate and amend the Canadian constitution. And this just made the Western premier's heads explode because they thought, well, wait a minute, like we haven't even agreed on any of this stuff and you want to patriot the constitution? And what, like stick in some provisions that declare federal ownership of all this stuff? Like forget it, you know? And it became like a really big deal.

Ian Van Harten (01:09:00.326) you

Tom M.J. Bateman (01:09:17.27) and leading to all kinds of other political and legal fights. And to make a very long story short, what emanated from the 1980 to 82 patrician process was new language affirming provincial ownership of resources in the province, as well as a clarification of some

provincial tax jurisdiction over those resources. And that's in the new section 92A of the Constitution Act 1867. And that significantly calmed the waters over jurisdiction over non-renewable resources and the sort of like the division of authority between the provinces and the feds over that kind of stuff. But then you mentioned a new

a new problem, and that is the need to implement policy for environmental preservation and environmental sustainability. Environment is not in the Constitution Act. They didn't think of that in 1867. So it's like a new policy responsibility. And who gets it?

who is charged with legislating for environmental sustainability. And, you know, it all depends, of course, because if you define environmental regulatory policy broadly, then you can say, yeah, mean, like, everything's environmental. know, education's environmental, health is environmental, energy, transportation.

Environmental, everything's environmental. And of course, everything is environmental. But if that's your conclusion, then let's not have a division of powers, right? Because all you can say is, yeah, one jurisdiction does it all. And I think naturally the jurisdiction who would have it all would be the feds. And one of the big reasons for this is that environmental problems are usually sort of like trans-border.

Tom M.J. Bateman (01:11:43.808) or universal in character. Think of air pollution. It comes out of a stack and the wind blows it wherever it wants to. And so if you have a province whose policies permit air pollution from the industries in that province, the air pollution doesn't stop at that provincial border. It carries on into other provinces. And...

and the other provinces may quarrel with the pollution they are experiencing from the industry in the province next door. And the provincial government is permitting that province, I'm sorry, permitting that industry to sow pollute. So there's an inherently trans-border sort of economic spillover kind of character to environmental problems. And it leads to the argument that...

provinces are not really set up for dealing with environmental problems. And that the federal government is in a much better position to do so because it's got jurisdiction over all the provinces in certain fields. And maybe it should be recognized as the one with environmental jurisdiction. That way it can deal with effluent from Alberta as it goes into Saskatchewan and

and Manitoba and Ontario. It's called the provincial incapacity argument, basically. Now, I do this with little bit of trepidation, but I'll try and keep a recent controversy fairly simple to illustrate how kind of complicated all this stuff gets. But I'm thinking of a piece of legislation introduced by the federal government under Justin Trudeau several years ago, the greenhouse gas

Pollution Protection Act, GGPPA. This was a piece of legislation designed to reduce the emissions of carbon into the atmosphere. And the structure of the legislation is to say the following, that every province should impose regulations on provincial industries

Tom M.J. Bateman (01:14:09.208) to require them to limit their emissions of CO2. And they will do so by means of a carbon tax. A tax will be levied on businesses and others in a way to garner bigger revenues for the province, bigger costs for the industry based on the amount of carbon dioxide

that industry releases. And so every emitter will be taxed in proportion to the amount of CO2 it emits. And this is like a market-based kind of policy. The more you pollute, the more you pay. So you have an incentive to reduce your emissions because that means you save money by doing so. So that's a great market incentive and so forth. But the Feds did it in a kind of an odd way.

They said that we're going to have each province look after its own situation on this. However, if a province fails to regulate the emissions enough, then the federal government policy regime is going to step in as sort of a backstop. And so the provinces need to do a minimum amount to tax, to reduce carbon emissions.

And if they do not do that in minimum amount, we're going to do it for them. And by means of federal regulations. Now, it's an interesting thing because the promises could have done something else and they could have said, listen, we got taxation power under section 91.3. It's unlimited taxation power. Environment is an important deal. So we're just going to tax Canadian businesses. And now, of course, if they did that, then everybody would understand.

it's the federal government that's taxing Canadians on carbon. And the feds appeared to be sensitive to that possibility. And so they decided to give the provinces the opportunity to tax themselves. And then if the provinces didn't do it well enough or correctly enough, then the feds would step in.

Tom M.J. Bateman (01:16:37.79) And I think there's just a lot of politics behind that particular policy design, because it makes it look like the feds are there to repair mistakes and irresponsibility on the part of the provinces, right? But in any case, and the other thing is that the federal regulations said that, yeah, we're not going to impose

the carbon tax on special emitters, emitters in industries that are really, important. Okay, so the Greenhouse Gas Pollution Protection Act had carve-outs for particular industries. yeah, climate change, terrible, terrible, terrible, carbon emissions, terrible, terrible, terrible. but economic growth, good, good, good. And so we're going to exempt certain businesses, even though...

carbon dioxide is an existential crisis for the planet and we're all gonna die and so on and so forth. So kind of, you know, like it's politics, it's the art of compromise, it's kind of messy and so forth, but that's what they did. And so away they go and the provinces, you know, immediately challenge the GGPPA in court, Ontario, Saskatchewan and Alberta.

Ian Van Harten (01:17:48.934) Mm-hmm.

Tom M.J. Bateman (01:18:04.586) their provincial courts of appeal were asked certain questions like, does the federal government actually have the jurisdiction to pass this law? And the provinces argued, no, they don't. And so it was up to the courts of appeal in these provinces to decide the question. And the question became like, under what head of power in section 91 does the federal government have the jurisdiction to tax provincial businesses?

And the federal attorney general made a very important argument. And that is that it's the POG power in section 91 that underwrites the GGPPA. And there's a branch of the POG power and it's called the Inherent National Concern Branch, which means there are some policies, there are some problems.

policy problems that transcend the capacity of the provinces to deal with them effectively. Environmental problems have this quality about them, for the reasons I described earlier in our conversation. And accordingly, the need to reduce carbon emissions is beyond the power of any province actually to...

redress. And so as a result, it is within the federal government jurisdiction under the inherent national concern branch of the peace, order and good government clause of section 91 to be able to legislate the reduction of CO2 emissions to save the environment. Okay. That's the argument. And that argument one in the

Ontario Court of Appeal by a four to one vote. It won in the Saskatchewan Court of Appeal by a three to two vote. Let me mention that judges of provincial courts of appeal are appointed by the federal government, but nevermind. And in Alberta, the argument lost by a four to one vote. This was basically an invitation for the Supreme Court of Canada to rule.

Tom M.J. Bateman (01:20:30.01) on the jurisdiction of the federal parliament to pass the Greenhouse Gas Pollution Protection Act. And a couple of years ago, the Supreme Court of Canada ruled six to three that the legislation was within the power of parliament. So it upheld the constitutionality of it. And that was a six to three vote. so...

So we have an expansion of the inherent national concern branch of the Peace, Order and Good Government Clause to embrace this particular type of environmental conservation regulation. Very, very interesting. But let me mention two points. And that is that as existential as the release of CO2 into the atmosphere apparently was for the federal parliament,

I think it was in late 2023, the federal government announced that the carbon levy would not be applied to the purchase of home heating fuel in Atlantic Canada.

And I just went like, I can't believe this. I can't believe what they just said because it undermines the whole argument for the Gigi PPA to begin with. We have to regulate the release of CO2 in the atmosphere. It's going to kill the planet. but Atlantic Canadians are okay. and they pick like...

Ian Van Harten (01:22:08.55) you

Tom M.J. Bateman (01:22:14.274) one of the most polluting fuels to be exempt from the carbon levy. Like home heating fuel is next to coal, for heaven sakes, in its emissions of CO2 into the atmosphere. And you should be doubling the taxation on that and letting people off if they're using natural gas. You should be paying people to use solar to heat their homes. But instead they do the exact opposite.

And I think you guys are just unbelievable because it undermines the exact arguments made for the GGBPA. But furthermore, the design of the policy was premised on provincial capacity because the idea was that the provinces will be allowed to levy carbon taxes on their businesses.

But if they don't do it to the level we want, then we're going to, as the federal government, we're going to do it ourselves. Well, you see, that whole design is premised on provincial capacity to regulate carbon. Whereas the constitutional argument in court was that provincial incapacity to regulate carbon is what gives the feds the jurisdiction to pass it. So go figure. That's Canada.

Housing and the Spending Power

Ian Van Harten (01:23:42.662) Okay. Well, another example that comes to my mind that illustrates a different aspect of how the lines get blurred and the division of powers isn't always clear is with housing. And I think before the threats from the US about tariffs and annexation, housing was probably the biggest concern in Canada. And... yes.

Tom M.J. Bateman (01:24:07.586) Yes. Yeah, think so. Connected to immigration in a very interesting way, too. Yeah.

Ian Van Harten (01:24:12.746) And, there was one press conference with, Justin Trudeau talking to reporters about this. And he was quoted as saying, well, housing is not primarily a federal responsibility. And I think I, or I believe technically that's correct, but he got, it ended up not being a very wise thing to say in that moment. And he got hammered for it by the opposition and.

A lot of the public were really upset at him, but it illustrates something, another aspect. And we've, we've kind of talked about this in other areas in previous episodes, but the force of public opinion and public perception in terms of influencing how all these things play out, because it's, it's tough for, if you're, if you have the top job in Canada and there's the top issue in housing, and maybe it's not in your jurisdiction, but you just kind of

point that out and hey that's not really my responsibility but that's not going to go over well and also I mean meanwhile they also have there's a housing minister I believe in cabinet may have you know a fund for housing but this is just kind of another blurry area of who's really responsible for this

Tom M.J. Bateman (01:25:32.526) That's a great question. a couple of things going on. You are absolutely correct that if we have a crisis or an emergency, then we're saying like, OK, do something, you know, or you're the prime minister, we'll do something. And that's like that. That's like a very natural, I think, impulse by by people. And that's because we're beset by the problem. But we know nothing about the technicalities of how the political system operates.

However, I think Mr. Trudeau is a bit responsible for the problem you describe and not just he but lots of prime ministers because Well, okay, I'll set the stage here and this is all concerned with the exercise what's called the spending power now a policy responsibility may reside with the provinces

but it may be very expensive for the provinces to exercise that responsibility to deal with that problem. And in fact, a lot of provinces are really short on money. And historically, the federal government has said, right, you guys, for example, have jurisdiction over health. Health is really expensive, but it's really important. And we, the federal government,

have lots of money because we've got a huge taxation capacity. So what we're gonna do is we're gonna give you money. We're gonna give the provincial government's money and it's gonna help you guys finance your discharge of your health jurisdiction. But it's not free money because we're gonna attach conditions to it. So you're gonna get the money but you're have to spend it.

according to certain national objectives that we are going to articulate. And it's up to you to take the money or not. You don't have to, but if you do, we want you to spend that money in these ways. And that's the spending power. Now sometimes the feds can give the provinces money without conditions, but often they like to attach conditions to advance political objectives that they think are very important. And the provinces are

Tom M.J. Bateman (01:27:59.198) You know, they're ambivalent about this because they like the money. But also, they don't like the conditions because they say, well, it's health jurisdiction. That's our jurisdiction. You can't tell us how to exercise our jurisdiction. So just give us the money and shut up. And the feds say, listen, we don't have to give you the money. So if you take the money, then you have to take the conditions. And if you don't want the conditions,

then figure out health yourself and have a nice day. And the provinces then would kind of reluctantly take the money and the conditions. Now, some would do it happily, but others really chafe. you think of Quebec, of course, Quebec is very, very resolute in preserving its own autonomy for the exercise of its own jurisdiction. And it has chafed at conditional transfers like all the time.

So that's the spending power. And the provinces, they don't like the conditions, but they also are concerned about the uncertainty. Like, are we guaranteed this money forever and ever, or are you gonna pull it back next year? Or is a new government gonna come in and not give us the kind of money that we need for health? Like, what's going on here? We need stability, we need security, we need certainty. This whole arrangement really doesn't give us any of that stuff. So that's a real problem. so, and then from the...

the federal government's point of view, it says, yeah, this spending power stuff is not that great because what happens is we give the provinces billions in health money, in education money, in social policy money, and it goes to the governments, and then the governments spend it, and the provincial governments take all the credit for it. And we don't get any credit for it.

we're taxing Canadians and we're getting all the blowback because Canadians think we're taxed too much, but then we're giving it back to them through the provincial governments so they can get good services, but we get no credit for it. And then, so then the other thing that the feds try to do then is use the spending power, but then they try to give it directly to Canadians and bypass the provinces.

Tom M.J. Bateman (01:30:23.084) Now, this is not a regulatory power. All they're doing is giving money, hoping that the money they give to individuals will produce the policy outcomes that they prefer. And so sometimes the feds will give money to post-secondary education students in the form of scholarships or cheaper student loans or something like that. And that's how they get a leg in the education door and bypassing the provinces. So on housing,

the possibility exists for the feds to say, yeah, we've got nothing to do with housing, but it's really important and we do have a spending power. So what we're gonna do is we're going to institute a policy of some kind that will disperse monies directly to Canadians so that they have more at their disposal to buy homes. And in fact, I think a few years ago,

This is what Mr. Trudeau proposed. He said, yeah, we're gonna give first time home buyers 10,000 bucks toward buying a new home. Okay, we're just gonna write you a check, 10,000 bucks. I think that's what it was. And of course what happened? the price of homes went up, they went up 10,000 bucks, but they're still like the same number of homes. So like, thanks Justin, know, like great. So this is the problem because...

Ian Van Harten (01:31:38.662) Okay.

Tom M.J. Bateman (01:31:52.34) If a government doesn't have the jurisdiction to deal with a problem, that means it doesn't have the tools to do it properly. It only has like a hammer when you actually need a screwdriver and pliers. And so like bang, bang, bang, and you're breaking the thing instead of like fixing it. And this is where we are with some of these things. And the governments are partly responsible, but in a way Canadians are partly responsible because they don't understand how the whole place works.

Equalization and Fiscal Imbalances

Ian Van Harten (01:32:20.518) Well, let's move to another area related to disbursement of money, and that's the issue of equalization payments. And this is another system that triggers some grievances, one in particular between Alberta and Quebec, I believe. But can you explain what the equalization system is and why it was put in place, and maybe how it's led to some of these

areas of conflict between some of the provinces.

Tom M.J. Bateman (01:32:53.709) Yes.

It has a great deal to do with the structure of the Division of Powers, but it also has a lot to do with the nature of the Canadian economy. So let me set this out with two technical terms. These are like economic terms that federalism scholars have developed a long time ago, and I think they're helpful.

So one important term in this whole debate is called the vertical fiscal imbalance. And the vertical fiscal imbalance refers to the mismatch between the policy responsibilities a jurisdiction has, an order of government has, and the constitutional taxation powers it has to finance those responsibilities.

Because what you want in a very well-designed constitutional system that is federal is that you want the feds to have taxation capacity that is commensurate with their policy responsibilities. So that they've got enough money on hand to enact the policies for which they are responsible. Same thing for the provinces. You want the provinces to have the taxation capacity commensurate with its policy responsibilities.

The argument is that we have a vertical fiscal imbalance in Canada. An imbalance because the feds have lots of taxation capacity, but more than they need, arguably, to enact their policy responsibilities. And in the provinces, it's the reverse. They've got very expensive policy responsibilities, but they lack the formal tax capacity to fund those responsibilities. Okay, so that's one point.

Tom M.J. Bateman (01:34:54.158) And this is debatable because everything in this country is debatable. But the one argument is, no, no, no, no, no. Each province has all the taxation capacity it needs. It's only a question of whether the jurisdiction wants to use the tax capacity it has to raise the money it requires. So it's actually a political question. It's not a constitutional question. Other people say, no, that's actually not true.

No, it actually is a constitutional problem. It's not just a political, I don't want a tax kind of problem. Okay, so that's that, there's that issue. And then on the other hand, there's this thing called the horizontal fiscal imbalance. this, know, horizontal means going sideways and think across the country, across the country. And what we're getting at here is that different regions,

different provinces have different economies. And in other words, they have different economic bases. They've got different business activities. They've got different kinds of industries. And some of these industries are really lucrative and they produce a ton of wealth and other industries don't produce that much wealth. And so think, you know, of

let's say the high tech areas around Ottawa. Think of automobile manufacturing in Southern Ontario. Think of oil and gas industries in Alberta, Saskatchewan, and British Columbia. Think of tourism in BC maybe and Quebec and so forth. And then think of the fisheries

and maple syrup in New Brunswick. Okay, I'm caricaturing, but what you're getting from this is that grain economy in Saskatchewan, oil and gas in Alberta, tourism, lumber, fish, some oil and gas in British Columbia. You've got fairly heavy industrial manufacturing base in Ontario.

Tom M.J. Bateman (01:37:22.232) Plus lots of natural resources, mining, rare earths, lumber, blah, blah, blah in Ontario. And then you've got some agriculture. You've got some energy, especially refining capacity in New Brunswick with the Irving refinery in St. John. But you also have aquaculture and some mining, not that much in New Brunswick. And agriculture in Prince Edward Island, some aquaculture too.

But that's, know, and tourism, those are like the big three in PI. So you get my point. What all this means is that you've got different kinds of economies and you've got different levels of provincial wealth because some economies produce lots of revenue for provinces. Other economies do not produce that much revenue for the provinces. So you got poorer provinces and you got richer provinces. got...

low per capita fiscal capacity in New Brunswick, you've got high per capita fiscal capacity in Alberta. And it's just because the economy there gives much more for the provincial government to tax. It can be the same tax in Alberta as in New Brunswick, but the Alberta government is going to get way more output, way more benefit from that tax than the imposition of the same in New Brunswick.

And so you got poor provinces and you got rich provinces. You've got low levels of public services in some provinces, high levels of public services in other provinces. And that's a function of the fiscal capacity of the governments in the various provinces, the various economies. Okay, so you put the vertical fiscal imbalance together with the horizontal fiscal imbalance and it's a real puzzle. In 1957,

We sort of formalized our approach to all of this in the country and the federal government came up with an equalization program. And what it did was it calculated the per capita fiscal capacity of each province. And when you do that calculation, you see that the per capita fiscal capacity of some provinces is really low.

Tom M.J. Bateman (01:39:48.27) Think of the maritime provinces, traditionally quite poor. And then in other provinces, especially Ontario, but also BC and Alberta, very, very high. And then the other provinces would be sort of in the middle. And then the federal government would say, right, what we're going to do is we're going to calculate a national average provincial per capita fiscal capacity. We're going to draw a line at what we think is the national average

amount of tax revenue per person a province can get if it taxes at a certain sort of level all across the board. And then what we're going to do then is we're going to make a payment to those provinces whose fiscal capacity falls below that national average. And the payment we make annually to that province will make up the gap between its

its actual provincial capacity and the national average that we've calculated. And so the equalization payment will be designed to bring the poor provinces up to that standard. And other provinces may be only a little bit below. So then we'll bring that one up that much. Another province might be right on the line. It gets zero money. Then there'll be other provinces whose per capita fiscal capacity is above the national average. That province

will get no payments. But the key here, I suppose, is that the federal government is making these payments to the so-called have-not provinces based on federal tax revenues, sales taxes, excise taxes, and...

income taxes, which means all Canadians are paying federal income taxes. so everybody's paying income taxes to the federal government. And it's the funds from those taxes that are then redistributed to some provinces based on their below average per capita provincial fiscal capacity. So the key point

Tom M.J. Bateman (01:42:15.786) is that it's actually not Alberta, Ontario, and British Columbia writing checks to New Brunswick and Quebec and Nova Scotia. No, it all gets filtered through the federal government. And New Brunswickers are paying taxes, federal taxes too. It's just that they get some back in the form of equalization because it's a poor province. Now, it's worked like fairly well, I think all things considered, but...

some provinces and especially Alberta because it is the one that has never received equalization because it has always had provincial per capita fiscal capacity above the national average. And it's true that Alberta taxpayers, because they are wealthier and they make more money at these lucrative jobs than other Canadians, they do pay more income taxes to the federal government than a New Brunswick would.

That's true. And so what the Alberta government has been doing now for several years is that it's been calculating its net contribution to federal government revenues. And I say net because what it does is it looks at all the money that Albertans send to the federal government in taxes, and then it looks at all the programming and stuff and all the money that comes from the feds.

back to Alberta in the form of like health transfers, social service transfers and whatever else it happens to be. And it notices there's a big gap. Alberta is paying more into confederation as it says, then it's getting out. New Brunswick, if it did the same calculation, you would realize that it's getting way more from confederation than it's putting in. And Alberta just goes ballistic at these comparisons because they say, yeah, we're holding this whole place up. Like you guys are a bunch of, know, step dancing welfare bums and we're like,

You know, we're we're paying for the whole welfare here. You what's going on? You know, come on, you guys get working for a change, know, da da da da. And so that's the tension, this kind of this imbalance, which chronically leads to Alberta's net contribution. And I used to live in Alberta. And when you add to this longstanding fiscal grievance,

Tom M.J. Bateman (01:44:45.093) the fact that the federal government tried in October of 1980 to confiscate all kinds of Alberta natural resource revenues through the means of the National Energy Program. And when you add to that the fact that Alberta was created as a province in 1905 but did not get jurisdiction over its natural resources until 1930. And then when you add to that, that

Alberta is like way out there in the West and a good chunk of its early immigration came directly from the United States, not from Ontario. And when you add to that, that the Liberal Party of Canada has been in office approximately 66 % of all the years of confederation and that the Liberal Party like almost never elects anybody from the province of Alberta.

And then when you add to that, that the federal government appoints all of the judges to the provincial superior courts and to the Supreme Court of Canada, which has final decision-making authority over the meaning of the constitution. And like, I could just keep on going with this kind of stuff. Then the Albertans just say like, this is all stupid. Like we're getting zip out of this country. And, you know, I think it's part of Alberta political culture just to have these grievances. But let me tell you.

We are entering an interesting time here because the actions of the American government in February, March of 2025 and beyond are really stressing the fabric of this confederation because Alberta has been looking for years for access to tidewater.

for its oil and gas production. And the federal government has been consistent in making it difficult or impossible to add pipeline capacity to Tidewater, whereupon Alberta's oil and gas could be shipped to markets other than the United States. But as it is, so much of our production has to be shipped to the United States because there are no alternatives. And...

Tom M.J. Bateman (01:47:07.598) And that means that Alberta gets about 25 or something percent less on its per barrel or per unit shipments to the United States, precisely because the United States is a monopoly buyer and it can buy at a discount and still get the supply. So we're not even getting like all of the punch out of the each barrel of oil that is being produced.

And the Albertans say, yeah, and thanks, feds, for blocking every pipeline proposal we've tried to present over the years. OK, so that's like the equalization thing is from the Alberta point of view, part of a whole basket of longstanding grievances that may become more acute as we think about putting

like a block on exports of gas to the United States to complain about their tariffs. Like the Albertans are just going to go crazy if that happens.

Quebec’s Influence on Canadian Federalism

Ian Van Harten (01:48:16.498) Well, so let's move into, I think we will get into more of this Alberta, I don't know what you would call it, like, separatist murmurings, maybe. But to get there, let's start with Quebec first. And so Quebec has had a particular influence on federalism. They've almost left the country, I think,

Tom M.J. Bateman (01:48:30.21) Yeah, could be. Yeah, could be.

Ian Van Harten (01:48:44.902) twice, but there are always sort murmurings about that beneath the surface as well. And they have this special status as a distinct society within Canada. Now, this is kind of a huge topic of Quebec in Canada, or Quebec's place in Canada, but can you help explain some of what's going on here? What's with Quebec and its kind of special standing in Canada?

Tom M.J. Bateman (01:49:13.186) Yeah, yeah, goes back to the beginning. It goes back to the plains of Abraham, Wolf versus Moncombe. It goes back to Quebec being a small struggling French colony in a continent increasingly dominated by the British. And it's connected to the Hibitan, the French inhabitants of...

of New France, tenaciously fighting to survive, but also to preserve their language, culture, faith, and law. And this has been Quebec's raison d'être really like for the whole period. It is not an accident that the motto on the Quebec

license plate is Je me souviens, I remember. Okay. Now, that's a backward looking slogan. And it does resonate, I think, because Quebec nationalism has a significant retrospective looking backward. We want to preserve something kind of character. In the 1960s, Quebec nationalism took a more secular

forward-looking progressive turn, whereas by which I mean, yeah, we have a project to enact and the project is independence. The only way a sociological nation will be able to preserve itself is to become a political nation-state. And many people in Quebec began to believe that Quebec's security as a distinct

people will only be advanced if Quebec becomes politically self-determining. And it's not self-determining as a province. It's outnumbered in the House of Commons. English Canadians are the majority in this country. They don't care about French or they are antagonistic toward French. Canada is not going to protect Quebec's particularity.

Tom M.J. Bateman (01:51:39.478) And so we have to get out. And that is the seed of Quebec separatism. And separatism occasionally had a violent terrorist kind of expression, but it more generally has had a liberal democratic expression, which means we're going to leave, but we're going to leave sort of legally, properly, peacefully, and on as good a set of terms as possible.

So that's it. Now, as I said earlier, Quebec is, I think, primarily responsible for Canada being a federal state. Quebecers put it this way, that Canada actually is the union of deux nations, two peoples, two races was the older 19th century language. And so this dualistic...

character, this bi-national character, is sort of part of the whole idea of Canada from Quebecers point of view. But that view has been less and less resonant in English speaking Canada over time. And it's partly because English speaking Canada is not even close to being an English half of the bi-national Canadian reality. know, English Canada...

is multicultural, thoroughly and completely multicultural. And we speak English, but we're not English anymore. so multicultural sort of seems like the proper description of Canada, not bicultural, not binational, not dualistic. And so there's a real disconnect increasingly between the Quebec

national idea and the Canadian multicultural idea. And yet so much of Quebec's particularity is embedded in the Constitution and it remains insisted upon by Quebec political elites. So that is an important historic and continuing part of Canadian federalism.

Tom M.J. Bateman (01:54:03.55) And, you know, it's just really hard to know what effect current events have on our Canadian politics, constitution, otherwise. one of the Quebec nationalists' big arguments over the last 40, 50 years is that Quebecers can do OK.

without Canada. Canada will probably have a period of being really angry and upset and so forth, but they'll calm down and then they will agree to reasonable trade arrangements with an independent Quebec. And Quebec will also exceed easily to free trade arrangements independently of Canada with the United States.

had free trade arrangements with the United States, Quebec will leave Canada, but they will quickly sign free trade agreement with the United States and everything will be good. And the fact is Quebecers in March, they holiday in Florida. They don't go to Ontario or Maritimes or anything like that. So, you know, a lot of people would say that Quebecers actually have a more pleasant relationship with the United States than they do with the rest of Canada because they associate all the grievances and all the...

all the rancor and bitterness with Canada, but the Americans, they don't care. If you got money, you're happy. It's all good in the United States. Just give us money and you're fine. And well, that's actually kind of different at the moment because the United States is not looking favorable at all. so Yves-Francois Blanchette, the leader of the Bloc Québécois, yeah, these are difficult days for him, just as they are difficult days for Pierre Prolieve because the...

the great alternative to Canada is now highly problematic for Quebec nationalists. And I don't think they know what they're up to just yet. So anyway, but this might be just a partisan moment which will go away with Mr. Trump when he retires or whatever. Maybe he'll be really cut down in the midterms in two years in the congressional elections. Like who knows?

Tom M.J. Bateman (01:56:25.654) maybe there's something tectonic going on, a permanent change in the Canada-US relationship, that will reverberate in Canada in a lot of different ways, and it'll affect, I think, the flavour of Quebec nationalism and of Quebec separatism.

Alberta and Western Separatism

Ian Van Harten (01:56:40.23) Mm-hmm. Well, so let's go back to Alberta for a moment. And do you see some of these similar... It'll manifest differently with Alberta, but do you see a similar movement? You were kind of hinting at that just earlier, but is there something similar going on there, do you think, with Alberta?

Tom M.J. Bateman (01:57:03.31) Yes, I think even before Mr. Trump was elected last November, November 2024, we have seen initiatives from Alberta that seek to make the province a much more independent player in Canadian political and constitutional life. And I think

The Alberta government under Danielle Smith has taken notes on Quebec's strategies for autonomy within Canada. Alberta has said, yep, that's us too. We're gonna do several of those things. We are going to assert our constitutional autonomy much more aggressively. We're gonna be contesting federal initiatives very aggressively. And...

We think we are a, I'm not even sure if they use the language, but like a distinct kind of political entity in Canada, like the language of distinctness comes up in Alberta and in Saskatchewan, by the way. And so we have seen the passage in the last year and a half of the Alberta Sovereignty Act, which is not a declaration of independence, but it is a declaration of Alberta's constitutional...

federal independence within Canada that Alberta will, excuse me, aggressively guard its constitutional authority against incursions by the federal government. And I talked at length about the Greenhouse Gas Protection, Pollution Protection Act earlier. Alberta is gonna be really on guard against that kind of stuff in future. And it's interesting that since Mr. Trump has...

has been in office and has issued his myriad executive orders on everything and has told Canada that it's gonna be the 51st state and so forth. 90 % of Canadians object to Canada becoming the 51st state. 10 % of Canadians do want to become the 51st state. And 20 % of Albertans

Tom M.J. Bateman (01:59:25.208) would be happy becoming the 51st state. So the pro-Trump, pro-America thing is more popular in Alberta than it is anywhere else in the country. And so this is what's gonna make the maneuverings of Canada with respect to the United States in the tariff war, in whatever retaliations we contemplate.

more complicated. Canadians are not speaking with one voice on some of these measures.

What Keeps Canada Together?

Ian Van Harten (02:00:04.166) Well, so let's finish up with, with this kind of a related question here. So I have to admit when president Trump started making these threats about tariffs and annexation against Canada, it made me see, rightly or wrongly maybe, but it made me think that Canada could fall apart pretty easily and

that there's, I don't know if there's a whole lot substantively that's keeping the country together. And there's, know, there's no law that says Canada must exist as a country. And even Justin Trudeau himself, in a speech he gave, I think at the Liberal Leadership Convention recently, said Canada is not a given. And so it's kind of jarring to realize that, that maybe this is just kind of the way history goes, countries come and go.

But, yeah, it's still kind of jarring to come to see this candidate may not be here forever, even within our lifetimes. mean, you know, who knows what's going to happen, but it's a possibility. So I'm wondering if you can talk about, and I'm not asking for some cheesy response here that will make everyone feel better necessarily, but I'm wondering if you can talk about what is keeping the provinces in the country together.

Tom M.J. Bateman (02:01:35.854) Yeah, it's an excellent question, Ian. And I think your nod to the historical perspective is it's bracing, but it's important. And in some ways it should be a bit calming. And what I mean is that, yeah, in this world, nothing is forever. Impermanence is the order of things in this life.

And, you know, people who read the ancient historian Herodotus, you read Thucydides' Peloponnesian Wars, you read about the decline and fall of the Roman Empire. Like, yeah, like, no kidding, like stuff comes and stuff goes, you know? And, yeah, the people in those contexts at those times probably thought

Yeah, this is gonna last forever, this is fantastic. The sun will never set. The sun will never set on the British Empire. Well, guess what? It's dark. And yes, so that's important. And the United States won't last forever, by the way. so, fact, democracies are among the most frail of the regimes. And so that's the way it is.

and it's bracing, but it should be sort of calming in a way because we realized that, yeah, okay, so we're part of the whole parade of humanity on this point. Okay, so we're not special, it's not just happening to us. Now we have benefited as a country from our location. We are protected on three sides by lots and lots of cold water.

and far away from others who may have designs on us. And the land itself is pretty formidable. It's really expansive, really, really cold, very, very forbidding, and so therefore unattractive to many. And we've also had the good fortune of living next door to a benign neighbor.

Tom M.J. Bateman (02:04:04.626) And how about if it was Russia to our South, for example? Different ball game altogether. We'd have been gone a long time ago, quite possibly. Now, the problem here is that we have taken full advantage of our good fortune and have become very, very complacent on a lot of things. We have accepted...

that the Americans would be our best friends and providers and allies and caretakers basically forever. We've not kept up our own military forces. We assume that nobody will take any interest in our North, which is our sovereign territory, but which is essentially undefended. So we're depending on snow and ice to defend us. And guess what? Both of those are in decline.

in retreat and we're going to have now full year transit passages by ship and submarine in the north and we've got Russia and China like right on the doorsteps up there and we say yeah it's okay the Americans will take care of us it'll be fine well okay we'll see and Huyen are you still there?

Tom M.J. Bateman (02:05:31.598) Are you still there, Ian?

Tom M.J. Bateman (02:05:49.55) Hello Ian.

Tom M.J. Bateman (02:06:00.468) I'm going to wait until you step back in.

Ian Van Harten (02:07:51.562) Hey.

think I'll be back.

Tom M.J. Bateman (02:08:00.6) Okay, what happened? just got cut off?

Ian Van Harten (02:08:03.687) I, my internet got disconnected. So,

Tom M.J. Bateman (02:08:12.278) Right. Okay. So where was I?

Ian Van Harten (02:08:15.515) so you were, let me see, just making sure that, so our recording is still going. I think everything on that front should be okay. But you were talking about Canada's dependence on the United States and complacency around that.

Tom M.J. Bateman (02:08:30.768) yeah. yeah. OK. anyway, Canada has been very complacent and we've become very comfortable going about our business with the steady belief that the Americans will trade with us, that they will allow us to visit and vacation in their country.

and that they will defend us via NATO or just via NORAD or whatever against any threats. So we can just go ahead and just like spend money on stupid things in Canada and not have to worry about some of the core responsibilities of government, which is security and so forth. So...

And we've learned so quickly that Canada's integration into the United States economy is absolutely extraordinary. You know, the CPR was one of the main technological instruments of nation building, the creation of an East West political community. Well, guess what? The CPR now does more business in the United States than it does in Canada.

Like it's a completely, thoroughly, continentally integrated railroad. The Hudson's Bay Company, already it's been years owned by an American equity firm. Yeah, it's gonna go belly up. This is like one of the oldest companies associated with the very idea of Canada. So like things are not looking very good. And then when you...

put this into perspective of Canadian federalism, not simply as a constitutional idea, but as a sociological reality that we sort of live together, but we don't really know each other. We don't have a strong sense of common identity. And in fact, what Canadians have been doing for the last 50 years is emphasizing how they are unlike one another by stressing multiculturalism all the time.

Tom M.J. Bateman (02:10:58.956) Well, okay. I mean, this is sort of what you get at the end of the day. And indeed, we've sort of made a bit of a cottage industry out of slagging our own country. mean, this is what Prime Minister Trudeau has been on about for most of the term of his government, suggesting Canada is irredeemably racist and bigoted and homophobic and misogynistic and God knows what. So...

So this little like late day pivot that we're all Canadians, isn't that fantastic? It's a little bit rich for me to be quite honest. And so anyway, there's all that stuff. And when Canadians have had a spasm of nationalism, it's usually taken the form of an anti-Americanism, right? Like they, but that in a way, its own cryptic way is a description of sort of how American we are. Like the Americans are even important to our own anti-Americanism. And...

Ian Van Harten (02:11:33.367) Mm.

Tom M.J. Bateman (02:11:57.88) So, has surprised me actually is the level of intensity of this moment of nationalism we're sort of experiencing in Canada. Like we really got ticked off by this.

betrayal or whatever it is by the United States government. so, you know, lots of like, my wife is like, like she's committed to buying Canadian all the time and so on and so forth. everyone is like clogging up the aisles on the food stores, looking at labels and reading labels like crazy to figure out where else all come from, you know? So that's kind of interesting. I don't know what kind of staying power it has actually, to be quite honest, but again, we'll just have to see. it looks at least at the rhetorical level.

that Canadian governments are now really interested in dealing with inter-provincial barriers to trade east-west across the country. I think that's interesting because we've had lots of goes at this in the past and we've had some litigation on the points gone absolutely nowhere. so we'll have to see. Now it still has gone nowhere. Like, okay, so what? I can buy BC wine now, like buy

Ian Van Harten (02:13:15.799) Ahem.

Tom M.J. Bateman (02:13:25.196) FedEx, okay, whoop-de-doo, but meanwhile, we're talking about billions and billions of dollars worth of regulatory choking points between the provinces in Canada. So we'll just see what happens there. But it looks like there's a bit more seriousness about opening up markets for Canadian production beyond simply the United States. That's gonna be a very tough road to follow, but there's some kind of energy behind that. So we're doing things belatedly.

And I think at great near and medium term cost, but we are trying to think through what life might be like without utter dependence on the United States. And so, you know, perhaps the country's policy performance in any case is going to improve because of this shock therapy given us by Mr. But...

Your question remains very salient. What is it about this country that makes it a country? And, you know, one of the great formulas for stability in modern liberal democracies is for them to say, you know what, we are about economic security. We're about economic growth and prosperity. And if people are prosperous,

They get a nice house, they get a good income, they get all the good food they wanna eat, they get lots of entertainment, they're happy, and then the regime is stable and it'll last a long time. And that's like a very bourgeois kind of sensibility that liberal democracies are fundamentally about health and welfare. That's what gives them stability, that's what gives them longevity.

And that's what gives them peace. And why? Because people are not going to be willing to give up their lives in stupid international adventures which may affect their economic prosperity. And that's sort of like the game that we've been playing, it seems to me. And the problem, of course, is will you defend with your life a regime whose promise

Tom M.J. Bateman (02:15:51.392) is to give you a peaceful, long, economically secure life. That's an absolute contradiction. Okay? And that's the problem we're gonna have to try to overcome. And I'm just gonna sit back and see how it all works out.

Ian Van Harten (02:16:06.529) Sounds good. And have a nice day!

Tom M.J. Bateman (02:16:09.464) Exactly. That's right. Yes. Yeah.

Ian Van Harten (02:16:13.867) There you go. Well, kind of a bit of an ominous note to leave on, but I think it is... Mm-hmm. For sure.

Tom M.J. Bateman (02:16:18.668) Well, it's a challenging note, you know? It's up to us. It's up to us.

Ian Van Harten (02:16:26.805) Yep. But I think,

I mean, I guess we'll leave it there. But, this, yeah, Dr. Bateman, this has really been awesome doing this, series of episodes with you. And, I just really appreciate you giving your time and your expertise to, to go over all this stuff and to give us a real, good, a good run through of, of this country and the political background and, yeah, all the things we've talked about it. And it's, yeah, it's just been really fun and interesting to do. So really appreciate it.

Tom M.J. Bateman (02:16:34.711) Yeah, sure.

Tom M.J. Bateman (02:17:00.502) Okay, same here, same here, yeah.

Ian Van Harten (02:17:03.071) Awesome. Thank you.

Tom M.J. Bateman (02:17:05.144) Okay, thank you too.

#transcript