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International Symposium on Fiscal Imbalance

The "Federal Spending Power"
Report - Supporting document 2

The Table of contents and the Introduction are presented here. The entire document is only available in PDF format (405 ko).


1. The division of powers

1.1 Initial distribution
1.2 Growing centralization
1.2.1 Interpretative theories
1.2.2 Government practices

2. The spending power

2.1 Its definition
2.2 Its scope
2.2.1 A divided legal doctrine
2.2.2 Inconclusive judicial discourse

1. Introduction
2. "Spending power" in classical federations

2.1 A constitutionalized 'spending power' in Australia and the United States
2.1.1 Australia
2.1.2 United States
2.2 "Spending power" absent from or controlled in European federal constitutions
2.2.1 Germany
2.2.2 Switzerland
2.2.3 Belgium

3. "Spending power" in quasi-federations

3.1 Spain
3.2 Italy
3.3 The United Kingdom
3.4 European Union

4. A comparative synthesis

4.1 Three groups of countries
4.1.1 Classical federations issuing from the former British Empire
4.1.2 European classical federations
4.1.3 Quasi-federations
4.2 Two revealing classifications
4.2.1 The penetration of formal "spending power"
4.2.2 The presence of conditional transfers
4.3 Factors likely to explain these differences
4.3.1 Historical and cultural factors
4.3.2 Structural factors
4.3.3 Institutional factors

5. Conclusion


This document presents an analysis of the federal spending power, a power often invoked by the federal authorities in Canada when they spend in fields of legislative jurisdiction attributed to the provinces under the Constitution, thereby giving rise, directly or indirectly, to a normative effect.

Chapter 1 of this document examines whether there is some basis in law for the existence of such a power in Canada, either in the Constitution Act, 1867 and its subsequent amendments or in the precedents established by the Privy Council, the Supreme Court and even lower courts having jurisdiction in the field. This analysis will show that not only does the federal spending power in the fields of jurisdiction of the provinces not appear in the Constitution Act, 1867 and its subsequent amendments, it is not recognized in the precedents in this field. Moreover, the fact that the Constitution Act, 1867 makes no mention of the spending power while it is constitutionalized in most federations that make use of it, strengthens the contention that it was intentionally left out of our constitutional context.

Chapter 2 of this document examines the spending power of central authorities in nine other federations or quasi-federations, chosen by reason of the characteristics that they share with Canada, namely Germany, Australia, Belgium, Spain, the United States, Italy, the United Kingdom, Switzerland and the European Union.

On the one hand, this exercise will make it possible to show that in the classic federations formed within the context of British colonialism and in the quasi-federations that are the result of administrative decentralization, the "spending power" or its counterpart is subject to little or no control by judicial mechanisms, which cannot attribute any decision-making power whatsoever to the authorities of federative or regional entities. On the other hand, it will be noted that in the other federations, a series of political mechanisms seeking to grant real powers to the constituent units of the federation permit a certain control over the use of this spending power by the central authorities.

However, although some of these mechanisms enable the constituent authorities of certain federations to control the collection of tax revenues, none of the mechanisms grants these authorities an individual veto right with respect to federal expenditures in their fields of jurisdiction. Consequently, these mechanisms do not resolve the problem that arises from the exercise of the "federal spending power", as it manifests itself in Canada. This observation is in no way surprising, given the fact that the various federal constitutions and the provisions therein governing fiscal issues reflect different contexts and address problems that have arisen differently. Hence, it is on the basis of the particular constitutional context in Canada, and notably Québec's specific situation, that the Canadian federation must find solutions to its own problems.

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