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New Partnership: Sensitive, Consultative Federalism
“Yes” to Canadian Federalism, “No” to Status Quo

Provincial Reliance on Federal Funding

One of the main reasons Newfoundland & Labrador continues to support strong federal authority is its reliance on federal transfer payments. As a “have-not” province, Newfoundland & Labrador requires federal support in order to maintain levels of social services and infrastructure similar to those delivered in other regions of the country.

In the fiscal year 2003-04, Newfoundland & Labrador received a total of $1.5 billion in fiscal transfers from the federal government. This included approximately $600 million in Health & Social Transfers, $700 million in Equalization payments, and $200 million in compensation payments under the Canada-Newfoundland Atlantic Accord. These federal transfers accounted for 34 percent of all provincial revenues for that year, one of the highest levels among the Canadian provinces. (Nova Scotia and Prince Edward Island were the highest, at 42 percent each. By comparison, Alberta had the lowest percentage, at 16 percent.)

If Canadian federalism were to become very decentralized, there is a fear the federal government would have less constitutional authority to distribute financial resources among Canada’s provinces, and consequently, far less fiscal capacity to assist “have-not” provinces, such as Newfoundland & Labrador, in their economic and financial development.

1. Federal Transfers include equalization payments, federal cash transfers and federal tax point transfers.

2. Source: Department of Finance Canada: Federal Transfers to Provinces and Territories

Public Support for Canadian Federalism

Public opinion polls show that residents of Newfoundland & Labrador generally support Canadian federalism. Nevertheless, there are important public concerns about the way the federal government treats the Province, and a perceived lack of respect for Newfoundland & Labrador by other Canadian provinces.

A 2003 public opinion poll commissioned by the provincial Royal Commission on Renewing and Strengthening Our Place in Canada found the following:

• Overall satisfaction with Newfoundland & Labrador’s place in Canada: Eighteen percent (18 percent) of respondents indicated being “very satisfied” with Newfoundland & Labrador’s place in Canada. Another 46 percent said they were “somewhat satisfied,” while 32 percent expressed a level of dissatisfaction – including 12 percent who said they were “very dissatisfied.”
• Reasons for being very satisfied with the Province’s place in Canada: Of those who were “very satisfied” with the Province’s place in Canada, the main reasons mentioned were: “treated fairly” (34 percent), “access to health care” (26 percent), “part of a democratic society” (19 percent), and “social assistance programs” (21 percent).
• Reasons for dissatisfaction with the Province’s place in Canada: Many of the overall reasons mentioned for not being satisfied with the Province’s place in Canada related directly to treatment by the federal government. Reasons for dissatisfaction included “not treated with respect/fairly by the federal government” (51 percent), “equalization formula” (24 percent), “federal government not really concerned/ignores us” (15 percent), “have no/little say/influence with federal government” (14 percent). Other reasons included: “no control over natural resources” (27 percent), “not treated with respect/fairly by other Canadians” (26 percent), “mismanagement of the fishery” (6 percent), and “not enough jobs/out-migration for work” (3 percent).

For more information on this public opinion poll:

• Royal Commission on Strengthening Our Place in Canada: 2003 Opinion Study (PDF)

Sensitive, Consultative Federal Authority

While Newfoundland & Labrador continues to support federalism and federal authority, it has advocated for a more sensitive and consultative relationship with the federal government. This sentiment was clearly expressed in the Final Report of the Royal Commission on Renewing and Strengthening Our Place in Canada (2003), which stated the following (the following is paraphrased from the Report itself):

• Newfoundlanders and Labradorians do not believe that the province has yet found its full place in Canada. There is a strong sense that the fundamental issues facing the province are not well understood by the federal government, and are too often ignored or dismissed as “regional” and far less important than concerns seen as “central.” The overwhelming sentiment is that the status quo is totally unacceptable.
• A changed mindset, characterized by inclusion, cooperation, respect and accommodation, must guide the development of the new relationship between the federal government and the provincial government. Both governments must agree to the need for a changed relationship and make a commitment to creating a new partnership.

For the full text of the Final Report of the Royal Commission:

• Royal Commission on Renewing and Strengthening Our Place in Canada

The relationship between Newfoundland & Labrador and the federal government, although strained at times in its history, appears to work. This being said, it would seem that the Province would like to see Ottawa be more sensitive to the unique economic and financial issues it faces, while making those issues a national priority, and working with the Province to a greater extent in designing and implementing solutions.

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