Constitution

Equalization Program in Canada: Overview and Contemporary Issues

Jay Makarenko — Thu, 24 Apr 2008 11:28:13 -0600

The Equalization Program is an important component of Canadian federalism and the notion of equality between provinces regarding the social services they provide. Moreover, the principle of equalization has been a major source of debate in Canadian politics, between the federal and provincial levels of government, as well as between provinces. This article provides an overview of the purpose, operation and history of the Equalization Program, including a summary of key contemporary issues and debates.

Introduction to the Equalization Program

Definition, purpose and history of equalization in Canada

Operation of the Equalization Program

The equalization formula and how the numbers are crunched

Issues and Debates on the Equalization Program

Contemporary issues on the operation and nature of equalization

Sources and Links to More Information

List of article sources and links to more on this topic

Introduction to the Equalization Program

Definition, purpose and history of equalization in Canada

Definition of the Equalization Program

Equalization is the Government of Canada’s program for addressing fiscal disparities between provinces. The territories do not participate in the Equalization Program (finances for the territories are governed under a separate program – the Territorial Formula Financing program). Under the Equalization program, the federal government makes financial transfers to the provinces in support of their spending initiatives. These federal transfers are unconditional block grants, meaning there are no federal conditions on the transfers, allowing the recipient province to spend the money however it chooses.

In this context, Equalization is one of three major federal transfer programs. The others are the Canada Health Transfer and the Canada Social Transfer.

Purpose of the Equalization Program

The purpose of the Equalization Program is to allow provinces to provide comparable levels of social services at comparable levels of taxation. The program’s goal is to ensure citizens in all provinces have access to roughly the same level of social services – such as education and social assistance – without having to pay exorbitant levels of taxation. In understanding this purpose more fully, it is important to note two sorts of fiscal imbalances that can arise in federations such as Canada – vertical and horizontal.

Vertical imbalance is an imbalance between the different levels of government; in the case of Canada, between the federal and provincial levels of government. This sort of imbalance occurs when the responsibilities of one level of government are disproportionately large compared with its share of revenues. Such imbalances can be addressed by a transfer of responsibilities and/or revenues from one level of government to another. In the context of Canada, the Canada Health Transfer and the Canada Social Transfer are meant to address vertical imbalances by transferring funds from the federal government to the provinces.

Horizontal imbalance, by contrast, is a fiscal imbalance within one level of government; in the case of Canada, between the various provincial governments. This sort of imbalance occurs when some provincial governments have much weaker fiscal capacities than others. Traditionally, this has included provinces such as Quebec, Manitoba and those in Atlantic Canada. Because of their smaller populations and/or economies, these provinces tend to have less capacity to support social services than their larger provincial cousins, such as Alberta, British Columbia and Ontario. Equalization is meant to address this horizontal imbalance by providing federal monies to those provinces with lesser financial capacities. The result is greater equality between provinces in terms of their levels of taxation and ability to provide comparable social programs.

Equalization and Tax Rental Agreements

The history of equalization dates back to the 1940s, with the introduction of tax rental agreements between the federal government and the provinces. These agreements meant that each province ‘rented out’ its right to collect taxes to the federal government. Under this arrangement, the federal government took over the collection of personal income taxes, corporate income taxes and succession duties from participating provinces. In exchange, the federal government paid annual compensation to the provinces to make up for the income each province lost by not collecting these taxes. The terms of the tax rental agreements were renegotiated every five years, and federal compensation was unconditional, meaning that provinces could spend the money as they saw fit.

First implemented during World War II, the tax rental agreement arrangement between the two levels of government ran until 1962. Thereafter, the federal government entered into a new system of tax collection with the provinces. Throughout this period, several provinces remained uncomfortable with the idea of ceding taxation powers to the federal government, even as part of a temporary rental agreement. Ontario did not participate until 1952, when the federal government changed the way payments were calculated, and Quebec never participated in the tax rental agreements.

Initially, the principle of equalization was not found in the tax rental agreements. Indeed, the arrangements were designed solely to compensate a province for lost tax revenues, not to increase the revenue of the provinces to a higher level based on a national norm. In 1957, however, poorer provinces whose per capita tax revenues fell below a national standard found themselves eligible for additional federal compensation. This marked the beginnings of the Equalization Program in Canada.

Evolution of the Equalization Program

Since 1957, the Equalization Program has undergone a number of significant changes, mainly having to do with the manner in which equalization has been calculated. Originally, Ontario and British Columbia were used as the comparative benchmarks. If a province’s per capita revenue from three sources of revenue (personal income tax, corporate tax and inheritance taxes) were less than these two provinces, then it was entitled to receive equalization from the federal government.

Over time, however, the equalization formula was adjusted. Today, the comparative benchmark is based upon a multi-provincial average, as opposed to simply British Columbia and Ontario. Moreover, the number of different revenue sources included in the calculation has been significantly broadened beyond simply personal income tax, corporate tax and inheritance taxes. For example, provincial revenues from natural resource extraction is now included. However, offshore oil revenue for Nova Scotia and Newfoundland has been excluded at times through individual deals between the federal government and those provinces.

See the Operation of the Equalization Program section of this article for more information on precisely how the equalization payments are calculated.

One of the most important changes to the Equalization Program came in 1982, with its inclusion in the Canadian Constitution. Section 36(2) of the Constitution Act, 1982 states that the federal government and the provinces are “committed to the principle of making equalization payments to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation” (Department of Justice Canada, Constitution Acts 1867 to 1982). It is important to note, however, that Section 36(2) only provides a commitment to the principle of equalization payments, but does precisely outline how such payments are to be calculated or made.

Operation of the Equalization Program

The equalization formula and how the numbers are crunched

Legislative Framework of the Equalization Program

As the Equalization Program involves federal transfers to the provinces, its framework is set in federally enacted legislation. This legislation is renewed every five years, at which time the federal government and the provinces work together to negotiate any changes to the program. The legislation is then debated upon and passed by the federal Parliament. Within the five-year period, the federal government can modify the program.

Calculation of Equalization Payments

The federal legislation sets out precisely how equalization payments are calculated. The following provides an overview of the equalization formula as of December 2007. It is important to note that this current Equalization Program is the result of significant reforms introduced by the federal Conservative government in its 2007 budget.

The equalization formula involves two key calculations. First, the fiscal capacity of each province must be determined. Provincial fiscal capacity is measured using five tax bases: personal income tax, business income tax, consumption tax, property tax and natural resources. However, 50 per cent of natural resource revenues are excluded in determining each province’s fiscal capacity, as well as the national standard (see below for more on the national standard). The result is a determination of how much revenue per capita (or per person) each province is able to raise. These figures will not be uniform across all provinces, as some have higher fiscal capacities than others.

Second, these per capita revenue figures are then compared with a national standard. Prior to 2007 this national standard was based on the average incomes of the five middle-income provinces: Quebec, Ontario, Manitoba, Saskatchewan and British Columbia. Following the 2007 changes, however, the national standard is now based on the average incomes of all 10 provinces. Whether a province is eligible for equalization, and how much it may receive, is based on its comparison to this national standard. Those provinces that are below the national standard will receive funds to top them up to the average of all 10 provinces. Those provinces that are above the national standard are not eligible for equalization payments.

Certain qualifications have been built into this basic system of calculation. For example, Nova Scotia and Newfoundland and Labrador have been allowed to maintain the benefits the Atlantic Accords, which had been agreed to in 2005. Under these Accords, the federal government had committed to completely protecting the two provinces from any reduction in equalization payments due to increased revenues stemming from the offshore oil industry. Originally, the Conservatives’ new system of equalization had backtracked from this commitment, which had been negotiated by the previous Liberal government. However, after these two Atlantic provinces strongly denounced the plan, the Conservative government agreed to a compromise. Under the agreement, Nova Scotia and Newfoundland and Labrador have the option of continuing under the old equalization system with the full protection of the Atlantic Accords, or adopting the new system, which includes higher levels of federal transfers for those provinces that fall below the national standard.

Comparison of Provincial Equalization Entitlements

In 2007-2008, the federal government transferred $12.9 billion to the provinces through the Equalization Program (Department of Finance, Federal Transfers to Provinces and Territories). The following provides a breakdown of equalization payments by province.

2007-2008 Equalization Payments by Province ($ millions)
British Columbia	0	Quebec	7,160
Alberta	0	Newfoundland/Labrador	477
Saskatchewan	226	Nova Scotia	1,465
Manitoba	1,826	New Brunswick	1,477
Ontario	0	Prince Edward Island	294

(Source: Department of Finance, Federal Transfers to Provinces and Territories)

Traditionally, the key recipients of equalization payments are the Atlantic provinces and Quebec, especially when examining the amounts they receive on a per capita basis. By contrast, Alberta, British Columbia and Ontario generally do not receive equalization payments (although, British Columbia did receive small levels of payment between 1999 and 2006).

Issues and Debates on the Equalization Program

Contemporary issues on the operation and nature of equalization

Determining the Equalization Formula

Since its inception in 1957, there has been a debate on precisely how equalization payments should be calculated. Two issues are central to this debate: calculation of the national standard and calculation of individual provincial fiscal capacities.

A province’s fiscal capacity is measured against a national standard comprising the average taxing capacity of a number of given provinces. Since the first equalization agreement in 1957, the number of provinces making up the national standard has changed several times. In 1957, a province’s fiscal capacity was measured against the average taxing capacity of Ontario and British Columbia, which, at the time, were Canada’s two richest provinces. In the 1960s, the federal government changed the calculation to include all 10 provinces. Including oil-rich Alberta in the calculation created problems in the 1970s when international oil prices skyrocketed. Alberta’s tax revenues raised the average to the point where even Ontario would have received equalization.

In 1982, the federal government removed both Alberta and the poorer provinces from the calculation. The national standard was based on the average taxing capacity of five middle-income provinces – British Columbia, Ontario, Saskatchewan, Manitoba and Quebec. Several provinces argued that the five-province standard unfairly lowers their entitlements, and sought a return to the ten-province standard.

In 2007, the Conservative federal government introduced significant reforms to the Equalization Program to address some of these issues. The new system reverts back to a national standard based on the average fiscal capacities of all 10 provinces (instead of just the five middle-income provinces). In order to deal with problems stemming from including oil-rich Alberta, the new system includes only 50 percent of provincial resource revenues in calculations of the national standard. This qualification is meant to mitigate a rise of the national standard to an inflated level. Nevertheless, the result has been a substantial increase in equalization payments to eligible provinces.

In regard to the calculation of individual provincial fiscal capacities, some experts had argued that the equalization formula was too complicated. Since its inception, the number of items used to determine each province’s fiscal capacity had risen from the three items contained in the original tax rental agreements (corporate income tax, personal income tax and succession duties) to 33. Critics argued this made the program more difficult to understand, and increased the possibility of error.

The new equalization system introduced in 2007 significantly reduced the number of items used to determine a province’s fiscal capacity. Instead of taking into account 33 different types of provincial revenues, the new system is now based on only five types: personal income tax, business income tax, consumption tax, property tax and natural resources.

Equalization Encourages Dependency

Some economists have argued that the Equalization Program contributes to financial and economic dependency, particularly in the case of Atlantic Canada. The basic argument is that no incentive exists for a province to strengthen its economy, since generating more revenue would equal losing out on financial transfers from the federal government. Similarly, if a province has discovered potential sources of revenue, such as natural resources, there is no incentive to develop them, as the new revenue would lower the provinces equalization payments.

In the past, the federal government has attempted to address this issue with special agreements, such as the Atlantic Accords. These agreements provided Nova Scotia and Newfoundland and Labrador with temporary protection from reductions in equalization payments due to increased government revenues from their offshore oil industries (until these industries are fully developed). As such, the motivation to develop new revenue streams is maintained.

It is important to note that such dependency arguments assume that provincial governments are only motivated to develop their economies if it will result in greater government revenues. One may argue, however, that other factors motivate provincial governments in this respect, such as improving the economic conditions and quality of life of their residents. In this context, a government may be motivated to improve its economy even though it may result in decreased equalization payments.

Equalization Unfair to the Richer Provinces

Another important debate regarding the Equalization Program concerns its fairness to richer provinces — in particular, those provinces ineligible to receive payments from the federal government. The basic concern here is that the federal government takes tax dollars it has collected from the richer provinces, and redistributes those monies elsewhere in the country. As such, the equalization system is unfair in the sense that it represents a financial drain on the economies of non-eligible provinces.

Supporters of the Equalization Program, in contrast, draw attention to the fact that all provinces, even the rich ones, receive substantial transfers from the federal government every year (for example, through the Canada Social Transfer and the Canada Health Transfer). Moreover, supporters argue that the Equalization Program is fair in the sense that it is meant to ensure a comparable level of social services at a comparable level of taxation across the country.

At the core of this debate are very different senses of ‘fairness.’ The anti-equalization argument conceives of fairness in terms of proportionality. Those provinces with stronger economies are entitled to the full rewards of their economic success, while those with weaker economies should be satisfied with what they have. The pro-equalization argument, by contrast, views fairness in terms of sameness; all citizens are entitled to the same social services at the same tax rate, regardless of where they live. How one personally views fairness in this context will bear heavily on whether or not they support the very notion of the Equalization Program.

Equalization and the Atlantic Accords

Another important issue regarding equalization has been the 1985 and 2005 Atlantic Accords, which were agreed to by the federal government and the provinces of Newfoundland and Labrador and Nova Scotia. Under these Accords, the federal government agreed to protect these provinces from any loss in equalization payments due to increased provincial revenues stemming from the development of offshore oil industries.

For more information on the Atlantic Accords:

Mapleleafweb: Federalism and the Atlantic Provinces: Contemporary Issues and Debates

Some critics of the Atlantic Accords have questioned whether such protection should be afforded Newfoundland and Labrador and Nova Scotia. If these provinces are gaining new revenues from the extraction of offshore oil, why should they be entitled to the same levels of equalization payments as before? This criticism can seem particularly strong considering that no other provinces received similar protection regarding their natural resources revenues.

In response, supporters of the Accords have argued that Newfoundland and Labrador and Nova Scotia still require equalization protection in order to continue their financial turnarounds. These provinces have endured an extended period of economic decline, which have contributed to a cycle of government deficits and ballooning debt. Moreover, unlike other oil-rich provinces, such as Alberta, the Atlantic offshore oil industry is still in its infancy, and will not fully reward the provinces for several years to come. As such, supporters of the Accords argue that some temporary equalization protection must be offered to Newfoundland and Labrador and Nova Scotia to ensure their long-term financial stability.

This debate came to a head in 2007, when the new Conservative federal government, helmed by Prime Minister Stephen Harper, unilaterally altered the Equalization Program and the Atlantic Accords. Under the reforms, federal transfers under the Equalization Program were enriched; Newfoundland and Labrador and Nova Scotia, however, would no longer be completely protected from declines in these payments due to increasing provincial oil and gas tax revenues. This change led to a very public conflict between the two provinces and the federal government, and created strong dissent within the federal Conservative Party and its Atlantic caucus.

In an effort to overcome the issue, the Harper government offered two options to Newfoundland and Labrador and Nova Scotia. The provinces could either continue with the old equalization formula and the Atlantic Accords, or they could enter into a new enriched equalization formula that included a cap on the amount of equalization payments if offshore oil and gas revenues reached a certain level. In 2007, both provinces agreed to the new formula – although Newfoundland and Labrador did so only for one year, leaving the door open to change its position in the future.

Sources and Links to More Information

List of article sources and links to more on this topic

Sources Used for this Article

Bélanger, C. “Canadian Federalism, the Tax Rental Agreements of the Period of 1941-1962 and Fiscal Federalism from 1962 to 1977.” MarianopolisCollege. 19 February 2001. 11 February 2007. <http://faculty.marianopolis.edu/c.belanger/QuebecHistory/federal/taxrent.htm>
Courchene, T.J. “Equalization Payments.” The Canadian Encyclopedia. 11 February 2008. <http://www.thecanadianencyclopedia.com/index.cfm?PgNm=TCE&Params=A1ARTA0002632>
Makarenko, J. “Federalism and the Atlantic Provinces: Contemporary Issues and Debates.” Mapleleafweb.com. 06 February 2009. 11 February 2008. <http://www.mapleleafweb.com/features/federalism-and-atlantic-provinces-contemporary-issues-and-debates>
“The Constitution Acts 1867 to 1982.” Department of Justice Canada. 11 February 2008. <http://laws.justice.gc.ca/en/const/index.html>
“Achieving a National Purpose: Putting Equalization Back on Track.” Expert Panel on Equalization and Territorial Formula Financing. May 2006. 11 February 2008. <http://www.eqtff-pfft.ca/english/EQTreasury/index.asp>
“Renewing Equalization.” Department of Finance Canada. 11 December 2007. 11 February 2008. <http://www.fin.gc.ca/transfers/transfers_renew_e.html>
“Equalization Program.” Department of Finance Canada. 11 December 2007. 11 February 2008. <http://www.fin.gc.ca/FEDPROV/eqpe.html>
“Federal Transfers to Provinces and Territories.” Department of Finance Canada. 11 December 2007. 11 February 2008. <http://www.fin.gc.ca/FEDPROV/mtpe.html>

Links to More Information

Canadian Federalism and Public Health Care: The Evolution of Federal-Provincial Relations

Jay Makarenko — Wed, 30 Jan 2008 11:15:18 -0700

One of the most critical issues in Canadian federalism since the 1950s has been the delivery of public health care. This article provides an introduction to the nature and evolution of federal and provincial relations in the area of health care policy, with particular focus on the fiscal and policy aspects and their impact. Included is a discussion of the basic division of powers in health care, Canadian federalism and the introduction of public health care, and shifts in this federal-provincial relationship since the 1950s.

Division of Powers and Health Care Policy in Canada

An overview of federal-provincial constitutional powers in the area of health care

Canadian Federalism and the Introduction of Public Health Care

Federal-provincial relations and the creation of the public health care system

Canadian Federalism and Public Health Care 1970-2000

Federal-provincial relations and public health care over three decades

Recent Trends in Canadian Federalism and Public Health Care

Shifts in federal-provincial relations in public health care between 1999 and 2004

Sources and Links to Further Information

List of article sources and links to more on this topic

Division of Powers and Health Care in Canada

An overview of federal-provincial constitutional powers in the area of health care

The Constitution, Federalism, and Health Care

The Canadian Constitution is the premier political institution in Canada. It sets out the basic structure and functions of government. Central to the Constitution is the establishment of a federal system in Canada, where there are two autonomous orders or levels of government: the federal (national) government and the provincial (regional) governments. The Constitution provides these different levels of government with their own constitutional powers and jurisdictions. As such, the Constitution, and its system of federalism, plays a central role in the context of health care policy; the Constitution established the role and powers of each level of government in creating and administering key elements of Canada’s health care system.

For more information on the Constitution and Federalism in Canada:

Mapleleafweb: The Canadian Constitution: Introduction to Canada’s Constitutional Framework

Provincial Powers in the Area of Health Care

Under the Constitution, the provincial level of government is granted the majority of legislative power in the area of health care. Section 92(7) of the Constitution Act, 1867 grants the provinces exclusive authority over the “establishment, maintenance, and management of hospitals, asylums, charities, and eleemosynary institutions in and for the province, other than marine hospitals” (Department of Justice Canada, Constitution Acts 1867 to 1982). In other words, only the provinces, not the federal government, may pass laws regarding the creation and administration of hospitals and mental health facilities.

Canada’s modern health care system, however, involves much more than simply the establishment and operation of hospitals. In response to this, the courts have interpreted the provincial power over hospitals in a very broad manner, extending provincial legislative authority to almost all areas of health care delivery. This includes areas such as health care insurance regulation, the distribution of prescription drugs, and the training, licencing and terms of employment for health care professionals, such as dentists, doctors, and nurses. This judicial interpretation has resulted in provincial dominance in the area of health care, at least with respect to the power to create laws concerning how health care is delivered to the majority of Canadians.

Federal Powers in the Area of Health Care

While the provinces enjoy the majority of legislative authority in health care, the federal government nevertheless has some important powers which enable it to play an important role in the development and implementation of health care policy.

First, the federal government is constitutionally empowered to legislate in select areas of health care, including marine hospitals, quarantines, and the oversight of food, pharmaceutical, and medical device safety. The federal government is also constitutionally responsible for health care delivery to certain groups in Canadian society that fall exclusively within the federal jurisdiction. This includes First Nations peoples living on reserves, the Inuit, serving members and eligible veterans of the Canadian Forces, members of the Royal Canadian Mounted Police (RCMP), inmates in federal penitentiaries, and refugee protection claimants.

Furthermore, the Peace, Order and Good Government section of the Constitution Act, 1867 (commonly referred to as the “POGG clause”)grants the federal government the power to legislate in areas outside its normal jurisdiction in times of national emergency. In the context of health care, this would include the power to legislate whenever health issues affect the nation as a whole or becomes a problem beyond a province’s ability to deal with it, such as in the event of a widespread epidemic. Under such circumstances, the federal government may assume control over health care delivery temporarily.

One of the federal government’s most important health-related powers, however, is its spending power. This refers to the constitutional right of a government to spend money in areas outside its normal constitutional jurisdiction. This spending power is available to both levels of government. It is, however, a much more powerful tool in the hands of the federal government, as Ottawa typically has a sufficient fiscal capacity to spend in its own areas of jurisdiction, as well as those of the provinces. Most provincial governments, by contrast, do not enjoy the same financial ability.

This spending power represents a key lever for the federal government as a means of exercising authority over the provinces and, indirectly, influencing health care policy. Each year, the federal government gives the provinces billions of dollars to support the delivery of provincial health services and programs. In so doing, the federal government regularly places conditions on the provinces in conjunction with this funding. It may require the provinces to spend the money on certain health services or programs, or to deliver health care according to specific federal standards and objectives. A province may, of course, refuse the federal funding and the conditions that come with it. However, most provinces are highly dependent upon Ottawa for health care funding dollars and simply cannot afford to forgo these funds.

Territories, Cities, and Health Care

Constitutionally speaking, neither territories nor cities have any powers in the area of health care. This is because neither is granted autonomy under the Canadian Constitution. Territories fall under the jurisdiction of the federal government and are creations of federal legislation; cities are under provincial jurisdiction and owe their existence to provincial legislation.

Even though the territories do not have any constitutional powers over health care, they nevertheless have control over the delivery of health care services for their own residents. This is because the federal government has provided territorial governments with powers and responsibilities similar to those held by the provinces (although, these powers are recognized only in federal legislation and not in the Constitution). Like their provincial counterparts, the territories oversee the creation and regulation of hospitals and other health-related facilities; distribution of prescription drugs; and the management of training, licencing, and terms of employment for health care professionals. While the federal government does not intervene directly in the health policy of the territories, it does exercise considerable influence through the financial transfer of funding, as it does with the provinces.

In the past, municipalities in Canada have played a large role in health care. Indeed, at one time, in some provinces, municipalities were charged with the responsibility for creating, funding, and administering hospitals. Since the introduction of public health care, however, the role of cities has been reduced considerably. Today, most hospitals are operated by provincial governments or health boards created and controlled by provincial governments. Nevertheless, some municipalities, especially in large urban cities, will deliver limited health services and programs, either independently or in cooperation with their respective provincial governments.

Canadian Federalism and the Introduction of Public Health Care

Federal-provincial relations and the creation of the public health care system

Early Health Care in Canada

Canada’s early health care system was drastically different than it is today. Prior to the 1940s, health care services were predominantly provided by private or charity hospitals and clinics. Canadians, generally, paid for their health care services, either directly, through charitable donations, or private forms of health insurance. Health care professionals, such as doctors, primarily operated as private businesses, either independently or in association with a particular hospital or clinic. There tended to be very little direct government involvement in health care delivery, although this did vary from province to province.

Introduction of Provincial Hospital Care Plans

Beginning in the late 1940s, Canadian health care began to take on aspects of its modern public form. In 1947, the Government of Saskatchewan, helmed by Premier Tommy Douglas, introduced the first universal hospital care plan. Under this plan, the provincial government assumed hospital-related costs for its residents. The government financed the plan through a combination of annual health premiums charged to residents and general provincial revenues. By 1949, Alberta and British Columbia had also introduced similar hospital care plans for their residents.

In 1957, the federal government became directly involved in public health care through passage of the Hospital Insurance and Diagnostic Services Act. This federal legislation committed the Government of Canada to financing 50 percent of the cost of provincial hospital care. In addition to providing federal funding for pre-existing plans in Saskatchewan, British Columbia, and Alberta, the federal government used the Act to negotiate publicly-funded hospital care plans in the remaining provinces. By 1961, agreements were in place with all provinces, providing hospital care coverage across Canada.

Introduction of Nationwide Medicare

The introduction of provincial hospital care plans meant that Canadians were covered for those medical services received within hospitals. This coverage, however, did not extend to the services of physicians received outside hospitals. The majority of Canadians, instead, were required to pay for these services, either directly, through private insurance schemes, or through non-universal public plans.

In 1962, the Government of Saskatchewan introduced universal coverage for physician services delivered outside of hospitals. Under the plan, physicians billed the government directly for the services they provided to their patients. Doctors, however, were free to practice outside the public system, and to charge higher fees than those reimbursed by the government (a practice called “extra billing”).

In 1966, the federal government introduced the Medical Care Act. Under this legislation, it committed to sharing costs with the provinces for all physician services, regardless of whether they were provided in a hospital. Moreover, the Act stipulated certain criteria which a province would have to meet in order to gain this federal funding.

The Act required that a province’s health plan be administered by a non-profit government agency (or some agency accountable to government); provide coverage for all medically necessary services rendered by a physician or surgeon; be universally available to all provincial residents on equal terms and conditions; and provide portability of benefits when the insured resident was temporarily outside of the province. Moreover, the Act stipulated that insured services were to be provided in a manner that did not preclude reasonable access to those services due to either direct or indirect charges. This limited the provinces’ discretion in charging health care premiums or to allow user fees and extra-billing by hospitals and doctors.

The federal government used the Medical Care Act as the basis for negotiating a nationwide public health care plan with the provinces (this nationwide system is commonly referred to as “Medicare”). By 1972, each province had established its own system of free access to medical services. While these provincial systems were framed by the basic conditions set out in the federal Act, there nevertheless existed significant differences from one province to another. Each province set up its own system of publicly administering hospitals. Moreover, there existed significant differences in terms of the services covered from province to province, as well as how each government paid for its public system. Some provinces, for example, introduced health premiums (annual payments made by individuals to the government to cover some of the costs of health care services). Other provinces paid for their public health plans exclusively through general tax revenues.

The introduction of national Medicare established the federal government as key player in health care policy. Under the Medical Care Act, the federal government committed to paying a significant portion of the costs associated with provincial Medicare plans (provided they met the criteria set out in the Act). During the period immediately following the introduction of Medicare, the federal government committed to paying one-half of whatever the provinces spent on health care coverage. Not only was the federal government a financial partner in public health care, but it was also able to indirectly influence provincial policy in this area through the conditions it attached to federal health funding under the Medical Care Act.

Federal-Provincial Inter-relationship in Public Health Care

Canada’s system of federalism had a significant influence on the manner in which public health care was instituted in Canada. Legislative authority for health care falls predominately within the hands of the provinces. As a result, Canada did not create a national health care system, at least in the sense of being centrally administered and completely uniform across the country. Instead, Canada’s public health care system is constituted by set of provincial regimes, which were instituted at different times and administered in different manners by their respective provincial governments.

Nevertheless, today, Canada’s public health care system can be considered ‘national’ in two important senses: a) through the use of its spending power, the federal government was able to encourage the implementation of some form of public health care across the entire country; b) as a financial partner in health care delivery, the federal government has been able to ensure basic criteria for the operation of these different provincial health care systems. While Canadians do not enjoy exactly the same public health care plans from coast to coast, provincial systems are uniform in terms of being publicly administered, relatively comprehensive, universal, portable, and without significant financial or other barriers to access.

Canadian Federalism and Public Health Care 1970-2000

Federal-provincial relations and public health care over three decades

The period between the 1950s and 1970s saw the federal and provincial governments put into place the basic framework for public health care in Canada. The decades that followed, however, saw increasing levels of tension and animosity between the two levels of government over public health care policy. This was due in large part to two main factors. The first were changes in federal funding to provincial health care plans, which saw the federal government withdraw from its earlier commitment to cover one-half of whatever the provinces spent. The second was the enforcement of federal criteria on how the provinces could operate their health plans.

Changes to Federal Health Care Funding

With the introduction of Medicare, the federal government committed to funding one-half of any provincial health care program which met the criteria set out in the Medical Care Act (see previous section). In the 1970s, however, the federal government became concerned over the rapidly escalating costs of social services, such as Medicare, and its ability to continue covering half of whatever the provinces spent.

As a result, in 1977, the federal government changed the nature of federal funding for public health care. It removed the detailed conditions placed on the provinces in order to receive federal monies. Provinces were no longer required to meet the criteria first established in the Medical Care Act. In return, the federal government announced that it would no longer pay one-half of the provincial program costs. It would, instead, only increase its funding to the provinces by a certain annual percentage – which would not necessarily cover one-half of the overall costs.

The 1980s and 1990s saw, again, a tightening of federal funding for health care, this time due to efforts by the federal government to control ballooning budget deficits. The most substantial development in the health care funding equation came in 1995, when the federal government introduced the Canada Health and Social Transfer (CHST). Previously, most federal funding for provincial social programs came in the form of Established Program Funding (for post-secondary education and health insurance) and a program called the Canada Assistance Plan (social assistance and welfare services). With the creation of the CHST, however, these federal transfers were merged into one block grant with few conditions on how the provinces spent the money.

Under the CHST, the Government of Canada reduced its overall financial transfers to the provinces. The CHST also altered the very nature of these transfers. Previously, many federal commitments, such as those dealing with provincial health care plans, were supported through cash payments to the provinces. Under the CHST, however, there was a greater reliance on tax point transfers for funding. Tax point transfers (better known as tax points) involve a reduction (or capping), by the federal government, of its taxation levels in order to provide additional ‘room’ for the provinces and territories. Accordingly, provincial/territorial governments are able to increase the amount of tax they charge to citizens and, in turn, raise new revenues to support their social programs.

These changes under the CHST had serious consequences for the provinces and their public health care systems. This was particularly true in have-not provinces – those that were highly dependent on federal cash transfers in order to pay for their health care plans. Not only were these provinces faced with reductions in overall federal transfers, but the shift to a greater reliance on tax points also posed challenges. With weaker tax bases, have-not provinces tended to benefit more from the transfer of dollars than from tax points. Consequently, many provinces faced a fiscal crunch due to rising health care costs and a reduction in the federal contribution to help offset those costs.

The result of these changes to federal funding: the provinces and territories were required to bear a greater share of the costs for social programs, such as Medicare. This resulted in a high level of animosity between the two levels of government, with the provinces regularly arguing that the federal government was not contributing its fair share to Canada’s public health care system.

Introduction of the Canada Health Act, 1984

Another important development to occur during this period was the introduction of the Canada Health Act in 1984. Originally, the federal government regulated the basic framework of provincial health care plans through the criteria outlined in the Medical Care Act. Following its 1977 decision to stop paying for one-half of health care costs, however, the federal government announced it would no longer place any conditions on federal funding in support of health care. As such, the provinces were free to administer their health care plans as they deemed fit.

This led to the introduction of a number of controversial measures by some provinces during the late 1970s and early 1980s, particularly user fees and extra-billing. User fees refer to the charges a patient is billed for specific medical services, such as a hospital visit; extra-billing (or double-billing) involves a practice where doctors charge patients fees for services in addition to seeking reimbursement for the provision of those services from the provincial government.

In response, the federal government introduced the Canada Health Act in 1984. The legislation re-established conditions that the provinces would have to follow in order to receive federal health care funds. Central to the Act was the prohibition of user fees and extra-billing, and the establishment of five basic criteria deemed essential for the operation of provincial health care services. These criteria closely matched those first introduced under the 1966 Medical Care Act, and required provincial plans be: publicly administered (administered by a public agency); comprehensive (cover all medically necessary services); universal (cover all provincial residents); portable (ensuring continued coverage when persons are temporarily outside of their home province); and accessible (reasonable access to health services without financial or other barriers).

For more information on the Canada Health Act:

Mapleleafweb: The Canada Health Act: Provisions & Administration

Additionally, the Canada Health Act included a penalty regime, under which the federal government would hold back funding to those provinces that failed to meet any of the Act’s criteria. While not widely used, this penalty regime has been applied in several instances. Immediately following the Act’s introduction in 1984, the federal government announced it would be applying penalties to those provinces that permitted user fees and extra-billing (the federal government later released the money it had held back, but only once the provinces had eliminated these practices). In the 1990s, the federal government applied the penalties on several occasions, mostly when provinces permitted the application of user fees in private medical clinics.

From the perspective of the federal government, the introduction of the Canada Health Act was an important instrument to maintaining certain national standards in public health care. From the perspective of the provinces, however, the federal action was viewed as an encroachment on provincial authority and jurisdiction. This concern was magnified, moreover, by the fact that the federal government had significantly, and unilaterally, reduced its financial commitment to provincial public health care plans.

Recent Trends in Canadian Federalism and Public Health Care

Shifts in federal-provincial relations and public health care between 1999 and 2004

Towards the end of the 1990s, tensions between the federal and provincial governments in the area of public health care were high. Yet another shift in the nature of federal-provincial relations would take place – influenced largely by the fact that the federal government had restored order to its fiscal house, bringing its budget deficits under control, and posting larger and larger annual surpluses. Moreover, the federal government showed signs it was willing to constrain use of its spending powers in areas of provincial jurisdiction, and work with the provinces to address health care-related issues.

1999 Social Union Framework Agreement

The first significant change came in 1999, when the federal government, provinces (except Quebec), and territories signed the Social Union Framework Agreement (SUFA). SUFA provides a framework through which the two levels of government can collaborate on Canada-wide priorities and objectives in the area of social programs.

For more information on the Social Union Framework:

Government of Canada: Social Union

Central to this framework were several key commitments by both levels of government. The provinces and territories agreed to eliminate residency-based policies that constrained access to social programs for migrants, and to use funds transferred from the federal government for agreed-upon purposes – which included health care policy. In return, the federal government agreed to limit the use of its spending powers by, for example, consulting with provincial and territorial governments prior to renewing or altering existing social transfers; not introducing new social programs funded through intergovernmental transfers without the agreement of a majority of provincial governments; and providing prior notification before introducing new Canada-wide social programs funded through direct transfers to individuals. The first two of these commitments are highly relevant to health care, as they require that the federal government work with the provinces and territories before making significant changes to the basic funding or framework of the public health care system.

In addition to its commitments under SUFA, the Government of Canada also announced a multi-billion dollar increase in transfers to the provinces in the 1999 federal budget. This increase was intended to alleviate some of the financial burden on the provinces vis-à-vis the rising costs of social programs, including health care.

2002 Romanow Commission on Health Care

Another key development in this story on health care policy: the Royal Commission on the Future of Health Care, headed by former Saskatchewan premier Roy Romanow. Formed in 2001, the Commission’s mandate was to review federal, provincial, and territorial policies in health care and recommend possible measures for reform. The Commission’s final report, tabled in November 2002, comprised 47 detailed recommendations, touching on a wide range of health care-related issues. Central to the Commission’s report was the recommendation that Canada should continue to pursue a public health care system where the cost of medical services was covered by governments.

In the broader federalist context, the Commission recommended significant changes to federal-provincial/territorial relations within the realm of health care policy. Generally speaking, the Commission suggested a collaborative relationship between the levels of government – a relationship where each level of government was an equal partner in the public health care policy. Additionally, the Commission recommended enacting a Health Covenant which would have set out a national vision and framework for public health care, and be binding on all governments. It also recommended that a Health Council of Canada be created, with the goal of fostering collaboration between levels of government.

The Commission also recommended dramatic changes to federal financial support of provincial health care plans. This included creating a new federal transfer, which would solely target health care. (At the time, federal transfers for health care were lumped together with monies for other social programs under the Canadian Health and Social Transfer.) The Commission suggested this new transfer be cash-only, rather than consisting of a combination of cash and tax transfer points. Finally, the Commission recommended the federal government increase its share of federal funding for health care to a minimum of 25 percent of provincial/territorial costs. This represented an increase over existing federal funding levels at the time, but was still significantly lower than the 50 percent promised by the federal government when Medicare was first introduced.

Another Commission recommendation: the broadening of Canada’s public health care system to include uniform national coverage for prescription drugs. This included the introduction of provincial/territorial drug plans, which would be paid for, in part, by a new federal ‘Catastrophic Drug Transfer.’

For more information on the Romanow Commission:

Mapleleafweb: Romanow Commission on the Future of Health in Canada: Findings and Recommendations

2003 Accord on Health Care Renewal

While the Romanow Commission’s report was not binding on any of the governments, some of its recommendations were enacted through subsequent federal-provincial/territorial agreements on health care. The first of these was the Accord on Health Care Renewal, agreed to by all governments in 2003. The Accord constituted an action plan to improve timely access to quality health care for all Canadians. Under this plan, the federal government committed $34.8 billion dollars in additional funding for health care over the five-year period from 2003-04 to 2007-08. In 2004, the federal government added an additional $2 billion, bringing the total to $36.8 billion over the five-year period.

In addition to this increase in federal funding, the Accord also led to several other key initiatives. Under the Accord, governments created the Health Council to monitor and make public reports on the Accord’s implementation. The federal government also split the Canada Health and Social Transfer into two block grants: the Canada Health Transfer (CHT) and the Canada Social Transfer (CST). The objective in this division was to enhance transparency and accountability, both with respect to the amount of money transferred by the federal government for health care and how that money was spent by the provinces and territories.

As part of this Accord, the governments committed to ensuring Canadians would have reasonable access to catastrophic drug coverage by the end of 2005-06, with part of the $36.8 billion in new funding to be committed to new provincial drug plans. As of December 2007, however, little action had been taken on establishing national catastrophic drug coverage.

For more information on the 2003 Accord on Health Care Renewal:

Government of Canada: 2003 First Ministers’ Meeting on Health Care Renewal

2004 Agreement on the Future of Health Care

A year later, federal, provincial, and territorial governments agreed to a new 10-year plan to sustain the public health care system. Under the agreement, the federal government committed to provide an additional $18 billion to the provinces and territories over the next six years for health care. The federal government also guaranteed a 6 percent annual increase in federal health transfers after that until 2015. According to the federal government, this amounted to $41 billion in new funding over 10 years. This new money is in addition to the $36.8 billion agreed to in the 2003 Accord.

In return, the provinces (except Quebec) and territories agreed to a number of federal demands in the area of waiting times and home care services. This included setting common benchmarks for measuring waiting times across the country, and achieving agreed upon reductions in waiting times for medical treatment in five key areas (cardiac care, cancer treatment, diagnostic imaging procedures, joint replacement, and sight restoration). The provinces/territories also agreed, by 2006, to increase funding for certain home care services, such as short-term acute and mental health care, and for longer term end-of-life care.

In order to bring Quebec into the new health care arrangement, the federal government agreed to a separate agreement with the province, official entitled Asymmetrical Federalism that Respects Quebec’s Jurisdiction. Under this deal, Quebec promised to reform its home care services in its own way. The province also agreed to set its own benchmarks and indicators for waiting times that would be comparable to those implemented by the other provinces.

Another important element of the 2004 health care agreement was the establishment of a mechanism for resolving future disputes regarding the Canada Health Act. Originally part of the 1999 Social Union Framework Agreement and agreed to in a 2002 letter of intent, the purpose of the new mechanism was to minimize inter-governmental conflict over the interpretation and application of the Act’s basic criteria for provincial health care plans. In addition to a commitment by all governments to work together to avoid disputes before they occur, the new mechanism also included specific procedures for dispute resolution, most notably the establishment of a third-party panel to review disputes and make recommendations. It is important to note, however, that the decisions of the third party panel are not binding, meaning that the federal government retains final authority to apply the Canada Health Act.

For more information on the 2004 Health Care Agreement:

Government of Canada: First Minister’s Meeting on the Future of Health Care

Renewed Federal-Provincial Partnership in Health Care

The period between 1999 and 2004 saw a significant shift in federal-provincial relations in the area of health care. That said, the basic structure of federalism and public health care remains, with the provinces and territories responsible for administering their own public health care plans and the federal government acting as financial partner and enforcer of basic uniform, national standards. Nevertheless, the tone of the relationship between the two levels of government has changed from the highly combative situation of the 1970s, 80s, and 90s. This was due, in large part, to significant increases in federal funding for public health care – a critical demand for the provinces and territories. Moreover, through several agreements, including the Social Union Framework Agreement, the 2003 Accord on Health Care Renewal, and the 2004 Agreement on the Future of Health Care, the governments established key commitments and mechanisms for dealing with health priorities while minimizing inter-governmental conflict.

This, however, is not to suggest a complete absence of federal-provincial tension in health care. Continued rising costs and differences of opinion between governments on such issues as the Canada Health Act, waiting times, home care, and pharmaceutical coverage, will all continue to be potential sources of animosity between governments into the foreseeable future.

Sources and Links to Further Information

List of article sources and links for more on this topic

Sources Used for this Article

Dyck, R. Canadian Politics: Critical Approaches, 3rd Edition. Scarborough, Ontario: Nelson Thomson Learning., 2000.
Jackson, R. & Jackson, D. Politics in Canada: Culture, Institutions, Behaviour and Public Policy, 6th Edition. Toronto: Pearson Education Canada Inc., 2006.
Guest, D. The Emergence of Social Security in Canada: 3rd Edition. Vancouver: UBC Press., 1999.
Jackman, M. “Constitutional Jurisdiction Over Health in Canada.” Health Law Journal. 2000. 11 December 2007. <http://www.law.ualberta.ca/centres/hli/pdfs/hlj/v8/jackmanfrm.pdf>.
“Constitution Acts 1867 to 1982.” Department of Justice Canada. 11 December 2007. <http://laws.justice.gc.ca/en/const/index.html>
Houston, S. “Hospital Services Plan.” The Encyclopedia of Saskatchewan. 11 December 2007. <http://esask.uregina.ca/entry/hospital_services_plan.html>
“1957 – Advent of Medicare in Canada: Establishing Public Medical Care Access.” Government of Canada. 11 December 2007. <http://www.canadianeconomy.gc.ca/english/economy/1957medicare.html>
“Canada’s Health Care System.” Health Canada. 07 June 2006. 11 December 2007. <http://www.hc-sc.gc.ca/hcs-sss/pubs/system-regime/2005-hcs-sss/back-context_e.html#2>
“The 2003 Accord on Health Care Renewal: A Progress Report.” Health Canada. 09 May 2006. 11 December 2007. <http://www.hc-sc.gc.ca/hcs-sss/delivery-prestation/fptcollab/2004-fmm-rpm/fs-if_01_e.html>
“First Ministers’ Meeting on the Future of Health Care 2004.” Health Canada. 09 May 2006. 11 December 2007. <http://www.hc-sc.gc.ca/hcs-sss/delivery-prestation/fptcollab/2004-fmm-rpm/index_e.html>
“2006 Annual Report: Pharmaceutical Management.” Health Council of Canada. 11 December 2007. <http://www.healthcouncilcanada.ca/en/index.php?option=com_content&task=view&id=79&Itemid=80>

Links for Further Information

The Canadian Charter of Rights and Freedoms: An Introduction to Charter Rights

Jay Makarenko — Fri, 07 Sep 2007 13:48:24 -0600

The Canadian Charter of Rights and Freedoms is a central element of the Canadian Constitution and has a major impact on the relationship between Canadians and their governments. The purpose of this article is to provide an introduction to the content, application, and enforcement of Charter rights, as well as to explain the role of the courts in determining the precise nature and scope of Charter rights.

What are Charter Rights?

Rights in Canada’s legal and constitutional context

Overview of Canada’s Charter of Rights and Freedoms

Diverse set of constitutional rights and freedoms

Application & Enforcement of Charter Rights

Other key Charter provisions

Judicial Interpretation of Charter Rights

Defining the nature and scope of Charter rights

Sources & Links to More Information

Article sources and links for more on this topic

What are Charter Rights?

Rights in Canada’s legal and constitutional context

The Charter as a Rights Document

The Charter provides Canadian citizens and residents with a broad set of constitutional rights. This, however, raises an important question: what exactly are rights? Answers to this are often very complex, and depend greatly on the context in which specific rights are recognized and exercised. Nevertheless, an introduction to the basic nature of rights can be provided by discussing a very simple example – everyday promises. While we often do not think of promises as being analogous to constitutional rights, their basic nature is very much the same.

Two key things occur when one makes a promise. On the one hand, a duty or obligation is created. When one makes a promise, s/he is obligated to fulfill that promise. On the other hand, an entitlement is also created. When one makes a promise to another, the other person is entitled to claim performance of that promise. This becomes clearer when considering an example, such as the promise to help a friend paint her house. By making that promise you have created a duty or obligation for yourself; when the time comes, you are obligated to help your friend paint. Moreover, your friend has gained an important entitlement; when she goes to paint the house, she is entitled to demand your assistance.

What exactly does all this have to do with constitutional rights? We can view Charter rights as promises made by the state to its citizens. Take, for example, the Section 2(b) Charter right to freedom of expression. This right represents a promise by the state not to interfere with a person’s expressive activities. Moreover, like promises, this right involves important duties and entitlements. On the one hand, the state has the duty not to interfere with a person’s expression. On the other hand, individuals have the entitlement to claim non-interference from the state.

Each right under the Canadian Charter of Rights and Freedoms offers a different promise with its own unique set of duties and entitlements.

See the Overview of Charter Rights and Freedoms section of this article for more information on specific rights provided for by the Charter.

Charter Rights and Canada’s Legal System

In everyday life we know promises are often not kept. When the time comes to help your friend paint the house, you might break your promise by saying you are busy, or, by simply not showing up. Unfortunately, for your friend, there really isn’t anything that she can do to force you to keep your promise. She may attempt to use guilt or threaten to end your friendship, but, at the end of the day, she really has no formal power to ensure the promise is fulfilled.

Charter rights, by contrast, have a stronger element of security attached to them. This is because they are legal rights; they are rights recognized under Canada’s legal system and enforced by Canadian courts. As such, Canadians have the opportunity to take the state to court whenever they feel their Charter rights have been violated. Moreover, the courts have the power to enforce those rights – and to force the state to perform its Charter duties.

See the Judicial Interpretation of Charter Rights section of this article for more on the role of the courts in adjudicating and enforcing Charter rights.

This, however, is not to suggest that Charter rights can never be violated. The Charter itself provides several legal avenues for the state to break its promises. Under Section 1 of the Charter, for example, the state may limit a Charter right if it can show good cause or reason. Under Section 33 of the Charter, governments may also pass laws that are exempt from certain Charter rights.

See the Overview of Charter Rights and Freedoms section of this article for more information on Section 1 of the Charter. See the Application and Enforcement of Charter Rights section of this article for more information on Section 33 of the Charter.

Charter Rights & the Canadian Constitution

Finally, the Charter is part of the Canadian Constitution. This means Charter rights have a very special status in Canada’s legal and political traditions. Firstly, the Charter (as well as all other constitutional documents and conventions) is recognized as the supreme law in Canada. As a result, all other laws must conform to the constitutional rights and duties provided for in the Charter. Whenever there is a conflict with another law, the Charter always takes precedence; it is usually the case the other law is declared void and subsequently repealed.

Secondly, the constitutional status of the Charter means its rights and freedoms can only be changed under very specific circumstances. Governments can change regular laws whenever they like by simply introducing new legislation that repeals, amends, or replaces the old law. However, they cannot do this in the context of constitutional laws such as the Charter. Instead, governments must enact a formal constitutional amendment to make any such changes. In the case of the Charter, this would require the consent of the federal Parliament (the Monarch, House of Commons, and Senate) plus two-thirds of the provincial legislatures (which combined represent at least 50 percent of the national population). While such an amendment is technically possible, it is, in practice, a very difficult thing to achieve, making Charter rights even more secure than other legal rights found in regular federal and provincial legislation.

For more information on the Charter and the Canadian Constitution: The Canadian Constitution: Introduction to Canada’s Constitutional Framework

Overview of Charter Rights and Freedoms

Diverse set of constitutional rights and freedoms

The Charter provides Canadians with a diverse set of constitutional rights and freedoms, ranging from fundamental freedoms, to democratic and legal rights, to equality rights, to language rights. The following section offers a brief introduction to each of these Charter rights.

Reasonable Limits Clause

Before describing specific Charter rights and freedoms, it is important to note a key clause found at the beginning of the document. Section 1 states Charter rights are subject only to “such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society.” What exactly does this mean? Firstly, Section 1 recognizes that Charter rights and freedoms are not absolute; they are not guaranteed to such an extent that they may never be violated or limited. Section 1, instead, states that these rights and freedoms may be limited under certain circumstances.

Under what circumstances may Charter rights and freedoms be violated? Section 1 asserts that any legitimate limitation must be prescribed by law, meaning it must be written in either legislation or regulation. The section also states that any limitation must be demonstrably justifiable in a free and democratic society. This means, among other things, that the state must provide good cause or reason for violating a Charter right. The state cannot violate a right for no reason, or on grounds the courts find to be insufficient.

Since the enactment of the Charter in 1982, the courts have provided further clarification of Section 1. In particular, they have developed an important legal test for assessing whether or not the state has provided appropriate justifications for limiting a Charter right. This legal test is commonly referred to as the Oakes test, and is named after the case in which it was first recognized: R. v. Oakes.

For judicial interpretations of Section 1 of the Charter and the Oakes test: Canadian Legal Information Institute: The Canadian Charter of Rights and Freedoms Decisions Digest (see the “Guarantee of Rights and Freedoms” section)

Fundamental Freedoms

Within the basic framework laid out in Section 1, the Charter then goes on to provide for a diverse set of basic rights and freedoms. The first of these are referred to as “fundamental freedoms,” and are found under Section 2 of the Charter.

They include:

Freedom of conscience and religion;
Freedom of thought, belief, opinion, and expression, including freedom of the press and other media of expression;
Freedom of peaceful assembly; and,
Freedom of association.

Generally speaking, these freedoms have been interpreted by the courts as liberty rights. In other words, they involve the right of persons to be free from state interference when engaging in the listed activities. In the case of freedom of expression, for example, persons are to be free from state interference (such as legal prohibitions) when communicating their thoughts and beliefs to other persons.

For judicial interpretations of the fundamental freedoms: Canadian Legal Information Institute: The Canadian Charter of Rights and Freedoms Decisions Digest (see the “Fundamental freedoms” section)

Democratic Rights

Sections 3-5 of the Charter provide several rights related to Canada’s democratic system. These can be further divided into two types: the first concerns democratic participation, and gives every citizen the right to vote in federal, provincial, or territorial elections, as well as the right to run as a candidate for political office. These rights help ensure that, among other things, the state cannot exclude certain individuals or groups from taking part in the democratic process.

The second type of democratic rights relate to the operation of federal, provincial, and territorial legislatures. Section 4 of the Charter, for example, states that no House of Commons or provincial assembly can continue to sit for longer than five years (after which time a general election must be held). The section does, however, allow for longer periods under extraordinary circumstances, such as war or national emergency. Section 5 of the Charter further states that Parliament and provincial assemblies must sit at least once a year. This helps ensure that elected representatives and the public have a chance to question government actions on a regular basis.

For judicial interpretations of the democratic rights: Canadian Legal Information Institute: The Canadian Charter of Rights and Freedoms Decisions Digest (see the “Democratic rights” section)

Mobility Rights

Section 6 of the Charter provides citizens (and, in some cases, permanent residents) with a set of mobility rights.

These include the right to:

Enter, remain in, and leave, Canada;
Move to, and take up residence in, any province; and,
Pursue the gaining of a livelihood in any province.

Generally speaking, these rights help ensure that persons are free to come and go as they please, be it to enter or leave the country, or move from one area to another. The section also helps ensure that citizens are free to seek employment or business opportunities in all parts of Canada. The section does, however, allow the provinces to undertake some policies that may be considered detrimental to mobility, such as providing social benefits only to persons who have lived in the province or territory for a certain amount of time, passing employment laws requiring workers to meet certain qualifications before practicing their profession or trade, and creating employment programs that favour its own residents when the province has an employment rate that is below the national average.

For judicial interpretations of the mobility rights: Canadian Legal Information Institute: The Canadian Charter of Rights and Freedoms Decisions Digest (see the “Mobility rights” section)

Legal Rights

Sections 7 through 14 provide persons with a broad set of legal rights – rights relating to Canada’s justice system.

These include the right to:

Life, liberty, and security of the person, and the right not to be deprived thereof except in accordance with the principles of fundamental justice;
Be secure against unreasonable search or seizure;
Not to be arbitrarily detained or imprisoned;
On arrest or detention to be (a) informed promptly of the reasons therefore, (b) retain and instruct counsel without delay and to be informed of that right, and (c) have the validity of the detention determined by way of habeas corpus and to be released if the detention is not lawful;
Several rights relating to being charged with an offence (such as the right to be informed of the specific offence, tried in a reasonable time, presumed innocent until proven guilty, to name a few);
Not to be subjected to any cruel and unusual treatment or punishment;
Not to have any incriminating evidence given by a witness to be used to incriminate that witness (except in a prosecution for perjury or for the giving of contradictory evidence); and,
The assistance of an interpreter for parties or witnesses who do not understand or speak the language the proceedings are conducted in, or who is deaf.

For judicial interpretations of the legal rights: Canadian Legal Information Institute: The Canadian Charter of Rights and Freedoms Decisions Digest (see the “Legal rights” section)

Equality Rights

Section 15 of the Charter provides persons with several key equality rights. More specifically, this section states that every individual is equal before and under the law, and has the right to the equal protection and equal benefit of the law without discrimination (in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability). This section helps ensure every individual is considered equal under Canadian law and that governments don’t discriminate against certain groups in its policies and programs. Over the years, the courts have extended the section to include other grounds of discrimination, such as sexual orientation.

It is also important to note that section 15 explicitly states it does not preclude any government law or program aimed at improving the status of a disadvantaged group (for example, an affirmative action program established to increase employment opportunities for women or minorities). This clarification is important in that it eliminates constitutional challenges to such programs on the grounds they discriminate against non-disadvantaged groups (such as white males).

For judicial interpretations of the equality rights: Canadian Legal Information Institute: The Canadian Charter of Rights and Freedoms Decisions Digest (see the “Equality rights” section)

Official Languages Rights

Sections 16 through 22 deal with rights relating to Canada’s two official languages. Section 16 confirms that English and French are Canada’s official languages, and that both enjoy equal status, in terms of their use within, and by, all federal institutions. The section also recognizes the Province of New Brunswick as officially bilingual –that both language communities have equal rights in the province, and that the Government of New Brunswick has the duty to protect and promote those rights.

Sections 17-20 proceed to provide more specific official language rights:

Everyone has the right to use English or French in any debates or other proceedings of Parliament;
Everyone has the right to use English or French in any debates or other proceedings of the legislature of New Brunswick;
The statutes, records, and journals of Parliament shall be printed and published in English and French and both language versions are equally authoritative;
The statutes, records, and journals of the legislature of New Brunswick shall be printed and published in English and French and both language versions are equally authoritative;
Either English or French may be used by any person in, or in any pleading in or process issuing from, any court established by Parliament;
Either English or French may be used by any person in, or in, any pleading in, or process issuing from, any court of New Brunswick;
Any member of the Canadian public has the right to communicate with, and to receive available services from, any head or central office of an institution of the Parliament or government of Canada in English or French; and,
Any member of the public in New Brunswick has the right to communicate with, and to receive available services from, any office of an institution of the legislature or government of New Brunswick in English or French.

Sections 21 and 22 place some qualifications on the official language rights provided under sections 16 to 20. Section 21 states that the Charter’s official language rights are not to take away from any of the other language rights that existed previously under other parts of the Canadian Constitution, such as the right of persons in Quebec and Manitoba to use either English or French in their provincial legislatures and courts. Further, Section 22 helps ensure that the Charter rights to use English and French do not create limits on rights to use other languages that may exist under federal or provincial law.

For judicial interpretations of the official languages rights: Canadian Legal Information Institute: The Canadian Charter of Rights and Freedoms Decisions Digest (see the “Official language rights” section)

Minority Language Education Rights

Section 23 of the Charter deals with minority language education rights.

This section requires provincial governments to provide education to Canadians in the official language of their choice, even when only a minority speaks a given language. In English-dominated areas, this means that French-speaking minorities have the right to educate their children in French (and vice versa for English minorities in French-dominated areas). The section does, however, provide some important qualifications:

In order to claim the minority language education rights for their children, in most cases parents must have the minority language as their first language, or have received their own primary education in the minority language, or have a child who has received, or is receiving, his or her education in the minority language;
In Quebec, the minority language education rights do not apply until permitted by the provincial legislative assembly or government of Quebec; and,
In order for parents to claim these minority language education rights, there must be a sufficient number of eligible children in their area to justify providing schooling in the minority language.

For judicial interpretations of the minority language education rights: Canadian Legal Information Institute: The Canadian Charter of Rights and Freedoms Decisions Digest (see “Minority language education rights” section)

Application & Enforcement of Charter Rights

Other key Charter provisions

The previous section offered an overview of the specific rights and freedoms provided for by the Charter. This section examines other key Charter provisions which deal with the document’s application and enforcement.

Application of the Charter

Section 32 states that the Charter only applies to governments, and, as a result, not directly to private individuals, businesses, or other organizations. In other words, under the Charter, only federal and provincial governments (and, in turn, territorial and local governments) are legally obligated to respect its constitutional rights and freedoms.

This may seem a very narrow application for the Charter. Over the years, however, the courts have interpreted this section in a fairly broad manner. It is usually recognized the Charter applies not only to purely governmental actors and institutions (such as federal and provincial legislatures), but also to entities in which governments play a substantial role. This would include, for example, public schools and universities, public hospitals and other care facilities, Crown corporations, and so forth.

Moreover, the Charter applies to all governmental laws, which can, in some cases, have significant implications for non-governmental entities. For example, most provincial governments have human rights and labour codes, which govern important private relationships, such as between employees and private employers. As governmental laws, these codes must be consistent with the rights and freedoms provided for under the Charter.

For judicial interpretations of the Charter’s application clause: Canadian Legal Information Institute: The Canadian Charter of Rights and Freedoms Decisions Digest (see the “Application of the Charter” section)

Enforcement Clause

What happens when a Charter right or freedom is violated? Section 24 states that anyone whose Charter rights have been limited or denied may apply to a court of competent jurisdiction to obtain a remedy. In other words, if an individual or group feels their Charter rights have been violated, they may take the violator (in most cases, the federal and/or provincial government) to court. It is then the job of the judicial branch of government to decide whether the Charter right has in fact been unconstitutionally denied and what course of action should be taken. Section 24 thus creates a very important role for the judiciary; it is the interpreter and adjudicator of citizens’ constitutional rights vis-à-vis the state.

For judicial interpretations of the Charter’s enforcement clause: Canadian Legal Information Institute: The Canadian Charter of Rights and Freedoms Decisions Digest (see the “Enforcement” section).

See the Judicial Interpretation of Charter Rights section of this article for more information on the constitutional role of the courts under the Charter.

Notwithstanding Clause

The Charter does, however, provide the legislative branch with an important over-ride power. Section 33 of the Charter, commonly referred to as the notwithstanding clause, allows federal and/or provincial legislatures to pass laws that are exempt from certain Charter rights and freedoms (specifically, the fundamental freedoms, legal rights, and equality rights). This exemption does not extent to other Charter rights, such as the democratic rights, mobility rights, official language rights, or minority language education rights.

Section 33 does, however, place important restrictions on the manner in which the exemption may be used:

Parliament or a legislature must make an explicit declaration that a particular law is exempt from the Charter and must state specifically which sections of the Charter are not to apply.
An exemption from the Charter lasts a maximum of five years. After that time, Parliament or a legislature must make a new declaration to continue the exemption.

The general purpose of the section is to ensure the democratically elected Parliament and provincial legislatures, not the courts, have the final say regarding the Charter’s application to important issues of public policy. However, the section also requires a government that wishes to limit a Charter right to clearly state its purpose and, as a result, to accept the political consequences of its actions. As of January 2006, provincial legislatures have used Section 33 rarely. It has never been used by the federal government.

For judicial interpretations of the Charter’s notwithstanding clause: Canadian Legal Information Institute: The Canadian Charter of Rights and Freedoms Decisions Digest (see the “Exemption where expressed declaration” section)

For general information on the Charter’s notwithstanding clause: Mapleleafweb: The Notwithstanding Clause

Other General Provisions

Finally, Sections 25 through 31 deal with general principles regarding the Charter’s application in relation to other key values, rights, and institutions in Canada.

Section 25 states that Charter rights and freedoms shall not interfere with any Aboriginal treaty rights or other rights and freedoms that pertain to the Aboriginal peoples of Canada.
Section 26 asserts that Charter rights and freedoms shall not interfere with any other rights and freedoms that may exist in Canada.
Section 27 states that the Charter shall be interpreted in a manner that is consistent with the preservation and enhancement of the multicultural heritage of Canadians.
Section 28 provides that Charter rights and freedoms are to be guaranteed equally to male and female persons.
Section 29 asserts that Charter rights and freedoms shall not interfere with any rights and privileges guaranteed under other parts of the Constitution regarding religious or denominational schools.
Section 30 states that the Charter applies to the territories exactly the same way that it applies to the provinces.
Section 31 states that nothing in the Charter extends the legislative powers of any body or authority, such as the sharing of responsibilities or the distribution of powers between the provinces and the federal government.

For judicial interpretation of the Charter’s general provisions: Canadian Legal Information Institute: The Canadian Charter of Rights and Freedoms Decisions Digest

Judicial Interpretation of Charter Rights

Defining the nature and scope of Charter rights

Much has already been said of the importance of the judiciary in relation to Charter rights. Under the Charter, the courts are tasked with the job of adjudicating and enforcing the Charter. This means that whenever individuals or groups feel their Charter rights have been violated by the state they may apply to the courts to hear their case. Moreover, the courts have the power to enforce Charter rights and ensure they are respected by the state.

Nature of Judicial Interpretation

More needs to be said, however, about the judiciary’s role as interpreters. The Charter itself is a short document with only very general statements about the nature of the rights and freedoms it provides. As such, Charter rights are often somewhat unclear or highly contestable regarding their precise meaning and application to real life situations. The courts are interpreters of the Charter in this sense; it is their responsibility to clarify these uncertainties in meaning and application. Moreover, in exercising this role, the courts have a significant impact on politics and public policy in Canada.

This point can be made clearer through use of an example. Under Section 2(b), the Charter states everyone has the right to, among other things, freedom of expression. This, however, raises many important interpretive questions when applying the right to real life. For example, what exactly does “expression” mean? Does it only include normal means of communication, such as verbal speech and communication through means of mass media, or does it also include things such as physical gestures? Moreover, what counts as a violation of freedom of expression? Do restrictions on the size or language of a billboard advertisement count as a restriction of expression? How about a law that limits speeches on public property to certain hours of the day?

The interpretive role of the courts becomes even more significant when examining Section 1 of the Charter. This section allows the state to violate Charter rights and freedoms when it provides good cause or reasons. It is the courts, however, that determine whether or not a reason given by the state is actually sufficient. For example, is protecting the dignity of women a sufficient reason for prohibiting certain forms of pornography? Is promoting equality for minorities a sufficient reason for criminalizing certain forms of hate speech?

For more on judicial interpretation of the Charter: Mapleleafweb: Supreme Court Charter Decisions and Canadian Legal Information Institute: The Canadian Charter of Rights and Freedoms Decisions Digest

Importance of Judicial Interpretation

How the courts interpret the nature and scope of Charter provisions has important implications for Canadian politics and public policy. Differing interpretations of Charter rights can result in different sorts of limits and/or opportunities for government policy and action.

Take, for example, the issue of same-sex marriage. Several provincial courts determined that governmental laws, which defined marriage as between a man and a woman, violated the Section 15 Charter right to equality. For these courts, the traditional definition of marriage discriminated against gay and lesbian couples by denying them the right to obtain legally recognized marriages. In deciding this case the courts accepted a particular interpretation of the Charter right to equality. For example, they accepted sexual orientation as a basis of discrimination, even though it is not explicitly recognized under the Charter. (Section 15 only states that persons may not be discriminated based on “race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.”) Moreover, the courts found that denying same-sex couples the right to obtain legally recognized marriages resulted in inequality, even though most other marriage-related rights (such as spousal benefits) had been previously extended to same-sex couples.

These court decisions had a major impact on government policy. Federal, provincial, and territorial marriage-related laws have now been amended to included same-sex couples. More importantly, the judicial interpretation of the Charter places significant restrictions on the ability of governments to promote traditional forms of marriage in Canadian society. Whether or not one agrees with this outcome, the significance of judicial interpretation of the Charter cannot be denied.

For more on the Charter and same-sex marriage: Mapleleafweb: Legalization of Same-sex Marriage in Canada

It is important to note, however, that the judiciary does not have the final say on these sorts of issues. The notwithstanding clause under Section 33 of the Charter does provide governments with the ability to over-ride judicial decisions and exempt laws from certain Charter rights. As such, governments could have protected the traditional definition of marriage by simply including a statement that the definition was exempt from Section 15 of the Charter. In fact, two votes were held in the (federal) House of Commons on this matter. In both cases, however, a majority of Members of Parliament voted against overriding the judicial interpretation of the Charter.

For general information on the Charter’s notwithstanding clause: Mapleleafweb: The Not-withstanding Clause. Also see the Application & Enforcement of Charter Rights section of this article for more on the Section 33 not-withstanding clause.

Sources and Links to More Information

Article sources and links for more on this topic

Article Sources

Dyck, R. Canadian Politics: Critical Approaches, 3rd Edition. Scarborough, Ontario: Nelson Thompson Learning, 2000.
“Constitution Acts, 1867 to 1982”. Department of Justice Canada. 23 January 2007. <http://laws.justice.gc.ca/en/const/index.html>
“Your Guide to the Canadian Charter of Rights and Freedoms.” Canadian Heritage. 23 January 2007. <http://www.canadianheritage.gc.ca/progs/pdp-hrp/canada/guide/index_e.cfm>
“The Canadian Charter of Rights Decisions Digest.” Canadian Legal Information Institute. 23 January 2007. <http://canlii.ca/ca/com/chart/>