CHAPTER- I

Federalism in India and Canada

The chapter examines the theoretical perspectives of the Federalism. It examines the

concept, its trajectory and unfolding in a different cross country perspective. However,

the focus is mainly on Canada and India.

The ideas and institutions related to federal, political organisation of government is

generally traced back to ancient Indian, Greek and Israelite antiquities. The instances of

federal polities in modern times can be located mainly in the American 1787, Swiss1848,

Canadian1867, and Australian 1901, Indian 1950. Since then the Federal form of

government has had a phenomenal popularity worldwide both at national and

supranational levels. Typically, political federalism originates in social, cultural and

regional contexts, where the people desire unification as well as autonomy, such that the

constitution seeks to ensure self rule in the regions and shared rule in the federation.

Relation between decentralization and federalism has been described. Ingredients of

federal government and principle of division of functions and finances has been analysed

in this chapter. Principle of federal finance and operation of the federal principle has also

been taken care of. From there, the chapter moves on to the specificity of the Indian

context of federalism in comparison of Canadian perspective of federalism. This chapter

elaborates political and economic facts, geographical and demographic context,

bilingualism and multi culture in Canada. From there discussion moves towards Canadian

constitution, Canadian government, and Courts in Canada. Constitutional status of the

federal, provincial and territorial governments has been looked after. Then this chapter

moves to the role of government in federal economies.

If we take the case of federalism in India, it was conceived under crucial stress of

circumstances due to indigenous local factors and prejudices and predilections of the

founding fathers, which was a result of the influence of the modern Federal Constitutions

all over the world. India was not a federation prior to the 26th January 1950, though the

11

Government of India Act, 1935 contained a federal scheme which was not implemented.

The Government of India Act, 1935 for the first time provided for a federation in India

and made Legal use of the word ‘Federation’. The Constitution of India in Article 1 came

to provide, “India that is Bharat shall be a Union of States”.1 There is no mention of the

word, “Federation” anywhere in the text of Constitution. It has been described as ‘a

Union of States’. The Cripps Mission proposals and the Cabinet Mission Plan made use

of the word “Union” only.2 Sir B.N.Rau, the Constitutional Advisor to the Constituent

Assembly used the word ‘Federation’, but the Drafting committee substituted it by the

word “Union”. Dr. Ambedkar, the Chairman of the Drafting Committee pointed out that

the Canadian Federation is called “a Union”.3 In India neither the Federation was the

result of any agreement nor the supremacy of the union was the result of any agreement,

but the supremacy of the union was an established fact. This argument of Dr. Ambedkar

was accepted by the Union constitution Committee and the Constituent Assembly. The

federation is a union because it is indestructible.4

This chapter has gone into the deep situations prevailing in some other federations,

namely, Brazil, Germany, Nigeria, and seeks to identify the critically relevant issues for

India and Canada. These countries were selected on the basis of their being almost

similar and comparable to India in respect of features of federal structure and size in

terms of area and population or may be some other reason. Social factors are also

discussed in general. Federalism means complex institutional system for governance. The

essence of federal form of government is that the centre and the state governments should

be independent of each other in their respective constitutionally demarcated spheres of

action. Each level of the government should be provided with source of raising adequate

revenue to discharge the expenditure liabilities and functions entrusted to it.

Federalism in General Terms

It is difficult to define the term federation which means different things to different

people in different countries. But the most acceptable definition of federation may be that

it is a system of government in which there is division of powers and functions between

federal government and several regional governments, each of which in its own sphere,

12

coordinates with the others and each of which acts directly on the people through its

administrative machinery. There is no single ideal federal form. Many variations are

possible in the application of the federal idea in general or even within the more specific

category of full-fledged federations.5 Ultimately, federalism is a pragmatic, prudential

technique whose applicability may well depend upon the particular form in which it is

adopted or adapted or even upon the development of new innovations in its application.6

Federalism is a unifying force. But at the same time the constituent units joining then

federation also have a dream of better level of development and better standard of living

for their people which may not be possible with their own resources. Naturally the flow

of fiscal transfers from centre to states in federal states like India assumes an important

role, so far the solidarity and unity of federation is concerned. Federalism is considered

efficient from the political angle as well because of the facility it provides for a

heterogeneous population to come together under the banner of one nation and acquire

strength from unity while allowing the constituents to retain their identity and autonomy

over a wide area of public life. Federalism also fosters democratic values and the civic

virtues of people's participation in political processes.7 In recent years, it is the economic

benefits of federalism that have come to the front and sovereign nations are joining

together in economic union even while not surrendering their independence. The

European Union is a prime example.

The art of federalism lies in designing institutions with appropriate assignment of powers

and functions among different orders of government and rules to regulate their

relationship especially in the fiscal arena that can strike the right balance among different

objectives and resolve tensions.8 The peace treaty of Westphalia are said to have

established the modern concept of sovereign statehood.9 Since then, nations have evolved

along multiple paths while developing their organisational structures and institutions. In

today’s world, there are many nation-states that are based on single language, single

ethnicity, single religious affiliation and single socio cultural identities. There have been

other states that have been more diverse in one or more dimensions and sometimes, even

all of these dimensions. The challenge for many nation-states and it is particularly true of

the larger ones, is to manage the multiplicity of identities of individuals with the

requirements of a unified nation. Managing this duality has been one of the drivers of

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political evolution in the last century. In the last quarter of the eighteenth century, the

thirteen British colonies having won their war of independence showed a centripetal trend

of federalism when they framed the federation of United states of America but shortly

therefore, the reaction pioneered by Jacobins and Napoleon against the unitary

continental monarchies of Europe, notorious for their oppressiveness gave rise to a

centrifugal trend of federalism10. Federalism has been popularly employed as a safe guard

against nation’s regional resentment, linguistic racial and cultural identities, threatening

their unity by organising regional groups which are given sufficient autonomy in the

federation. In the modern age, federalism entails a principle of reconciliation between the

two divergent tendencies, the widening of the range of common interests of territorial

units and the need for their local autonomy. Neither complete independence nor total

dependence is needed but an interdependence which brings out harmony. Federalism has

been a governance issue across nations of all types, particularly in the extent of the need

to have governance as close to people as possible and to enforce accountability. But, it is

in the plural group of nations, with their inherent diversity, that federalism as a concept

has had to show ingenuity and innovation in managing contradictions. In fact large plural

democracies have been successful only by having federalism sculpted into their

institutional architecture. Multiple models of federal architectures across the world, are

trying to allow for diversity to coexist in a larger unified framework; for individual sub-

national identities to work in harmony with a larger national identity.11

Decentralization and Federalism

Decentralisation is the essence of federalism, having a system of multi-level government

and multi-level planning. Decentralisation does not mean breaking the bulk, but

devolving powers, functions, authority and finances to different territorial levels of

government. To give a concrete shape to the concept of decentralisation in a federal set-

up, decentralisation has to be based on sound practices which have to be evolved, and

necessary attitudinal changes which have to be brought about. At each level in the system

of multi-level government, there should be involvement of the people, endowed with a

degree of autonomy in decision-making, relating to functions assigned to that level,

14

within the framework of the Constitution that created the federation. No system of federal

government envisages complete autonomy.12 Different territorial governments are not

independent entities but integral parts of the whole system. The determination of

relationships between different parts of the system and with the system as a whole

constitutes a major problem confronting each federation. There has to be a proper balance

between centralisation and decentralisation in each federation. Excessive centralisation in

a federal set-up may ultimately bring about disintegration and collapse of federation.

History is replete with such examples. The process of centralisation and centralised

planning in a number of socialist economies of East Europe and Soviet Union, could not

cope with the requirements of decentralised development, regional needs and aspirations,

but accentuated regional disparities, creating distortions and contradictions, leading

ultimately to the collapse of the system and disintegration of federations.13

Multistate Government and Federalism

The gist of federalism is multileveled Government. In its simple form, a federation

comprises a single central “federal” authority superimposed on a set of lower level

“states”.14 Federalism as a concept has continued evolving and adopting itself to the

circumstances of History and Geography from one country to the other country. In form

and spirit therefore, it has been Sui Generis. In a federation, there are different layers of

governments to perform definite functions assigned to them. How many territorial levels

of government should be there in a country for the purpose of administration and

planning? No cut-and-dried answer can be given to this question. It all depends upon

factors like the size of the country, its population, its geography, its history, its social and

economic characteristics and its administrative set-up. Certainly tiny states like the

Vatican City, Monaco and San Marino, cannot have more than one level of central

government. But a country of India’s size and dimensions, with large geographical

variations, varied social and cultural attainments, demands federal set-up, with large

devolution of powers and functions and finances, to lower territorial levels of

governments.15

15

Federal Government

A federal form of government has a multi order structure, with all orders of government

having some independent as well as some shared decision-making responsibilities.16

Federalism represents either a ‘‘coming together’’ or a ‘‘holding together’’ of constituent

geographic units to take advantage of the greatness and smallness of nations. In a flat

(globalized) world, it is increasingly apparent that ‘‘nation states are too small to tackle

large things in life and too large to address small things’’17 Subscribing to the ‘‘coming

together’’ view of federalism, it is pointed out and elaborated that the word ‘‘federalism’’

has its roots in the Latin Oedus, meaning ‘‘league,’’ ‘‘treaty,’’ or ‘‘compact.’’18 More

recently, Robert Inman (2007: 530) noted that ‘‘the word ‘federal’ has come to represent

any form of government that brings together, in an alliance, constituent governments each

of which recognizes the legitimacy of an overarching central government to make

decisions on some matters once exclusively the responsibility of individual member

states.’’19 ‘‘Coming together’’ has been the guiding framework for mature federations

such as the United States, Canada, and, more recently, the European Union. The

alternative ‘‘holding together’’ view of federalism, also called ‘‘new federalism,’’ 20

represents an attempt to decentralize responsibilities to state local orders of government

with a view to overcoming regional and local discontent with central policies. This view

is the driving force behind the current interest in principles of federalism in unitary

countries and in relatively newer federations such as Brazil and India and emerging

federations such as Iraq, Spain, and South Africa.21

A federal form of government promotes decentralized decision making and, therefore, is

conducive to greater freedom of choice, diversity of preferences in public services,

political participation, innovation, and accountability.22 It is also better adapted to handle

regional conflicts. Such a system, however, is open to a great deal of duplication and

confusion in areas of shared rule and requires special institutional arrangements to secure

national unity, ensure regional equity, and preserve an internal common market. Federal

countries broadly conform to one of two models: dual federalism or cooperative

federalism. Under dual federalism, the responsibilities of the federal and state

16

governments are separate and distinct. According to William H. Riker (1964: 11), under

such a system, (1) ‘‘two levels of government rule the same land and the people, (2) each

level has at least one area of action in which it is autonomous, and (3) there is some

guarantee . . . of the autonomy of each government in its own sphere.’’ Under

cooperative federalism, the responsibilities of various orders are mostly interlinked.

Under both models, fiscal tiers are organized so that the national and state governments

have independent authority in their areas of responsibility and act as equal partners.

National and state governments often assume competitive, no cooperative roles under

such an arrangement. Dual federalism takes either the layer cake or coordinate authority

approach. Under the layer cake model practiced in Mexico, Malaysia, and Russia, there is

a hierarchical (unitary) type of relationship among the various orders of government. The

national government is at the apex, and it has the option to deal with local governments

either through state governments or more directly. Local governments do not have any

constitutional status: they are simply extensions of state governments and derive their

authority from state governments.23 In the coordinate-authority model of dual federalism,

states enjoy significant autonomy from the federal government, and local governments

are simply handmaidens of the states and have little or no direct relationship with the

federal government. The working of the federations of Australia, Canada., India,

Pakistan, and the United States resembles the coordinate-authority model of dual

federalism.24

The cooperative federalism model has, in practice, taken three forms. In the

interdependent spheres variety as practiced in Germany and South Africa (a unitary

country with federal features), the federal government determines policy, and the state

and local governments act as implementation agents for federally determined policies.25

In view of federal domination of policy making, state or provincial governments in this

model have a voice in federal policy making through a second chamber (the upper house

of the parliament).26 In Germany and South Africa, the second-order (state) governments

are represented in the upper house of the national parliament (the Bundesrat and the

Council of the Provinces, respectively). In the other model of cooperative federalism,

various orders of government have overlapping and shared responsibilities, and all

17

constituent governments are treated as equal partners in the federation. Belgium, with its

three territorial and four linguistic jurisdictions, has a strong affinity with this approach.

Finally, in a model of cooperative federalism with independent spheres of government,

all orders of government enjoy autonomous and equal status and coordinate their policies

horizontally and vertically. Brazil is the only federation practicing this form of

federalism. The competitive federalism model is a theoretical construct advanced by the

fiscal federalism literature (Salmon, 2006; Breton, 2006; Kenyon and Kincaid, 1999) and

not yet practiced anywhere in its pure form. According to this construct, all orders of

government should have overlapping responsibilities, and they should compete both

vertically and horizontally to establish their clientele of services. Some analysts argue

that such a competitive framework would create leaner and more efficient governments

that would be more responsive and accountable to people. Countries with a federal form

of government vary considerably in terms of federal influence on sub national

governments or states in Indian context. Such influence is very strong in Australia,

Germany, India, Malaysia, Mexico, and Pakistan; moderately strong in Nigeria and the

United States; and weak in Brazil, Canada, and Switzerland. In the, countries having

weak federal influence national control over sub national expenditures is quite limited,

and sub national governments have considerable authority to determine their own tax

bases and tax rates.27

In centralized federations, conditional grants by the federal government play a large role

in influencing the priorities of the state and local governments. In Australia, a centralized

federation, the federal government is constitutionally required to follow regionally

differentiated policies. Federal countries also vary according to sub national influence on

national policies. In some countries, there is a clear separation of national and sub

national institutions (‘‘executive’’ or ‘‘interstate’’ federalism), and the two orders interact

through meetings of officials and ministers, as in Australia and Canada. In Germany and

South Africa, state or provincial governments have a direct voice in national institutions

(‘‘intrastate’’ federalism). In the United States, regional and local coalitions play an

important role in the Congress. In some federal countries, constitutional provisions

require all legislation to recognize that ultimate power rests with the people. For example,

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all legislation in Canada must conform to the Canadian Charter of Rights and Freedoms.

In Switzerland, a confederation by law but a federal country in practice, major legislative

changes require approval by referendum. Such direct-democracy provisions indirectly

reinforce the decentralized provisions of public services. In all federal countries, local

government influences on the federal and state governments remain not- institutionalized

and weak. Federalism can be explained with two dimensions as Asymmetric federalism

and Market Preserving Federalism.

Countries with a federal form of governance do not necessarily treat second orders of

government in a uniform manner. They often offer flexibility in accommodating the

special needs or demands of constituent units or impose a federal will in certain

jurisdictions. This adaptability may take the form of treating some members as less equal

than others. For example- Chechnya in Russia and Kashmir in India enjoy lesser

autonomy than do other oblasts and states; or the federation may treat some members as

more equal than others by giving them wider powers, as is the case with Sabah and

Sarawak in Malaysia and Quebec in Canada. Some federations offer constituent units

freedom of choice to be unequal or more equal than others through opting in or out of

federal arrangements. Such options are part of the arrangements offered by Canada,

Spanish agreements, and the European Union’s treaty exceptions for the United Kingdom

and Denmark (see Watts, 1999).

Barry Weingast (2006) has advanced a theoretical concept for comparative analyses of

federal systems. Market-preserving federalism is put forth as an ideal form of federal

system. Where political authority is institutionalized in this system, sub national

governments have primary authority over public goods and services for local autonomy.

Multiple governments have clearly delineated responsibilities and all governments face

the financial consequences of their decisions as hard budget constraints. The federal

government preserves the internal common market.

19

Theoretically we can divide principals of federalism in two parts described. First one is

the principle of division of functions and finances. Second is the principle of federal

finance.

Principle of Division of Functions and Finances

All forms of federations are based on compromises, and inter-governmental relations

between them are the result of give and take, because in the ultimate analysis, both the

federal government and the constituent units have to collect taxes from the same body of

tax-payees. Fiscal federalism applies cost-benefit analysis to allocate governmental

functions to different territorial levels. Accordingly, that level of government which

provides public services at the least cost may be entrusted such functions, and public

services where supply does not involve economies of scale, should be decentralised. Such

a division of functions ensures economic efficiency in the provision of public goods,

accountability of money spent and fiscal autonomy of lower level governments.

Wherever such clear-cut demarcations are not possible and wherever benefits accrue

beyond the jurisdiction of local governments, resulting in spill over of benefits and costs,

the federation has to work out a system of transfer of resources from the higher to lower

levels of government. The general experience is that when functions and resources are

divided between different layers of government, the more elastic and productive sources

of revenue with nation-wide base tend to be allocated to the national government and less

elastic with immobile and localised base to the lower layers of government. Such a

division results in vertical fiscal imbalances between expenditure needs and own-revenue

of the local governments.

Despite evolving a scheme of division of functions and finances, there are bound to be

tax and expenditure over-lapping which require coordination and harmonisation of

expenditure and taxation policies of different layers of governments. Every federation has

to face this problem and also frequent encroachments of the higher level government in

the legitimate domain of lower level governments. For example, a large number of

centrally sponsored programmes in India, numbering more than 250, particularly in such

areas which legitimately belong to the domain of local governments, do not find any

20

theoretical support but tantamount to encroachment of the Union government in the

legitimate domain of state governments and local bodies. Such conflicts are bound to

arise in every federation and have to be resolved through dialogue, mutual understanding

and interaction.

Principle of Federal Finance

In every federation, different layers of government should have considerable freedom and

initiative to raise and manage their resources, but some degree of control and regulation

by higher levels become necessary to ensure coordination between different bodies and

also to promote sound financial management. Division of functions leads to division of

resources. Local bodies are generally allocated three sources of revenue:

(i) Independent sources of revenue - tax and non-tax.

(ii) Sharing of specific taxes and other revenues raised by higher levels of

governments.

(iii) Grants-in-aid.

In the absence of independent sources of revenue, local bodies would become the

spending departments of the central and state governments. In the allocation of sources of

revenue to local bodies, it is necessary to see that the base is local and their collection

does not involve elaborate machinery. Resources allocated to different units in a

federation must be adequate to meet needs and should be capable of expansion with

growing needs. There has to be a balance between direct and indirect taxes, to promote

equity in taxation. Prof. B.P. Agarkar has laid down three essential tests of a good federal

finance set-up.

(i) Independence and responsibility,

(ii) Adequacy and elasticity, and

(iii) Administrative economy.

21

But no cut-and-dried method can solve the problem of fiscal incoherence which all

federations have to face.28

Operation of the Federal Principle

The federal principle may be functional around three core dimensions: (1) the

constitution; (2) fiscal arrangements and (3) the party system. The first two dimensions

are formal aspects of the federal principle, while party systems have become informal and

integrated part of the federal principle but it is non-constitutional aspect. A written

constitution is a political and legal imperative in federal systems. Dicey has noted that

federal constitution is based “upon understandings and disagreements”.29 If the

constitution is to be considered federal, however, the two orders of government must be

independent in some spheres of governance. Indeed, Dicey wrote that in federal systems

“the ordinary powers of sovereignty are elaborately divided between the common or

national government and the separate states.30

The constitution has judicial authority and the other important aspect is constitutional

amendment. As federalism requires a written constitution, federations ought to have a

formal mechanism of constitutional amendment. Constitutional change by amendment

has a higher degree of legitimacy than either judicial interpretation or ad hoc change.31 In

sum, if the federal principle is to be in effect, the constitution must be constructed such

that the two orders of government are sovereign in their spheres of jurisdiction. Almost in

all the federations, subjects like defence, foreign affairs, money and banking,

countrywide communications and responsibility for macro-management of the economy

are assigned to the centre, while matters of primarily regional or local concern like public

order, public health and sanitation, water supply, irrigation and canals, and industries

other than those declared by Parliament to be of strategic interest or necessary for the

centre to control in public interest are entrusted to the states. In India, anticipating a gap

between resources that states can raise on their own and their expenditure responsibilities,

the constitution provides for transfer of revenues from the centre through the mediation

of a statutory body to be set up periodically, i.e. the Finance Commission (FC). The

constitution also stipulates the creation of an independent judiciary with the Supreme

22

Court at the apex to adjudicate disputes between the centre and the states and also

envisages bodies to resolve interstate issues in the form of an interstate council.

“The problem of finance is the fundamental problem of federalism.”32. The federal

principle guaranteeing sovereignty to each order of government must have independent

sources of revenue sufficient to meet its constitutional obligations.33 Rufus Davis has

suggested that fiscal independence in a federal system would entail four dimensions “ (a)

the right to decide when to raise revenue ; (b) the right to elect the purposes for which

revenue is to be raised: (c) the right to determine the amount to be raised and; (d) the

machinery to administer these decisions,”34. In addition, it may be speculated that a

federal system will be more stable if each order of government taps separate tax sources,

instead of competing for the same resources.

To determine if the federal principle is being followed in practice, we must discover if the

two orders of government are able to collect sufficient revenue to assume their

responsibilities, or if the state government is dependent to some degree on the centre. Is

one order of government spending revenue in area of jurisdiction of the other order of

government? And if so, is that government, in effect, legislating in that area of

responsibility? If the units are dependent on the federal government for revenue and or if

the federal government is spending money in areas of state jurisdiction, the federal

system is quasi-federal. Party systems have become integral, non-constitutional

dimensions of the federal fabric, a fact well elaborated by Modern Godzins and William

Riker.35 Rufus Davis has suggested that a federal party system is one “ in which the

parties are exclusively identified with and operate at, either the federal or state level ; in

which the parties are structurally separates from each other in their composition ; and in

which the parties perform their main business – the nomination and endorsement of

parliamentary candidates. Formulation of policy, electoral management and proselytizing

completely independent of each other.”36. Davis was quick to note that no such party

system has ever existed, and he cast doubt about the analytical utility of the federal

principle in relation to the operation of political parties.37 However, the division of

sovereignty inherent in federalism can be undermined by a governing party with a non-

23

federal-structure. In a quasi-federal party system, the federal political parties will be

integrated, hierarchal organizations. If a party governing a particular state is controlled by

the party headquarters in the centre, state sovereignty will be compromised, creating the

possibility of nationalist resentment. In federal party the sovereignty of the orders of

government will be vigorously defended by independent parties.

In the modern age, federalism entails a principle of reconciliation between the two

divergent tendencies, the widening of the range of common interests of territorial units

and the need for their local autonomy. What is needed is neither complete independence

nor total dependence but an interdependence which brings harmony. The soul of

federalism is its universal constitution for contradictory interests of the centre and

territorial units. Reason may be vast geographical extent as happened in the United States

and in Australia, or it may be ethnic or other reasons as in Switzerland and India.

Theories of federalism have been formulated with diverse facets of the federal

phenomenon in mind. The political institutional approach to federalism addresses the

problem of conceptualizing this form of government and laying out various models of

federal constitutional engineering. The three broad designs in this context are (1) The

U.S. American system of Presidential Federalism that embeds federal division of powers

between two levels of government in the matrix of division of powers between the three

organs of the government (2) Canadian American model of parliamentary federalism that

continues a strong parliamentary centre with a federal component of government (3) The

Swiss consular model of federalism.

The concept of having an institution like the Finance Commission of India, for making

recommendations on inter-governmental financial relations and resource transfers, is

prevalent in some, and not all, of the federations. Some of the major federations, such as

Australia and Nigeria do have such institutional arrangements, whereas some other major

federations, such as Brazil, Canada and the United States of America, go without such an

institution. The issues on fiscal transfers in these countries are handled by the executive

and the legislature, leading to intensive politicisation of the transfer system. Some of

these arrangements have, however, developed into fairly stable system to cover transfers

even to the third tier of government, the local governments.

24

The form of federalism in Australia today can best be described as ‘opportunist

federalism’.38 This is a phrase that has been coined in America to describe a federal

system where the national government cherry picks issues of State jurisdiction in which it

intervenes for political or ideological reasons, rather than on any systematic basis or for

reasons of good government. The principle used by the European Union and most

federations is the principle of subsidiary. It provides that functions should, as far as

practicable, be exercised by the lowest level of government. The intention is to take

government as close as possible to the people so that local preferences can be satisfied by

local decisions, rather than a ‘one-size fits all’ approach.39

Federalism has often been seen as a method of constitutional government suited for a

diversity of population. By the year 1900, all the colonies had been granted considerable

independence of Britain. Each had its own constitution, parliament and public service

modelled on Britain. Each constitution40 empowered the parliament to make laws for the

peace, order and good government of the colony. Advocates of the federal system

stressed the ‘crimson thread of kinship’ linking the people of the six colonies. There was

no basic culture, racial religious or linguistic differences between them. Differences

between the colonies which became the states were, and have remained, differences of

Topography or Geography, size of economic activity and potential resources. Since the

second world War, immigration has meant that the Australian population has become

less Anglo- Celtic , but despite the adoption from Canada of many of the slogans and

practices of multiculturalism , ethnic or linguistic diversity is not state – based and has

little effect of Australian federalism. In their political institutions Australians remain

fairly and essentially British like. First eight years of Nigeria’s federation in a democratic

setting, witnessed intense frictions between the demands of states for autonomy and the

federal centre for control; the demands of the people for greater freedom and expansion

of democratic space and the pressure by the Obasanjo government for ‘guided’ or

‘controlled’ democracy. We also argued that there are basic challenges of federalism

which need urgent responses and appropriate adjustments. It is our contention that since

May 2007, there are new hopes for the expansion of the democratic space and

accommodation of the basic principles of federalism. In this regard, we argued that the

25

quality and style of leadership is very important. After all, the human values of

accommodation, tolerance, fairness, justice and equality can only be actualized by human

beings, no matter what laws are available as guidelines.

In all federations, the need for intergovernmental relations has become even more

pressing, as many issues of governance transcend a single tier of government. The

dynamics of Nigeria’s federation, intergovernmental relations have been low. The

National Economic Council has provided a forum for federal and state leaders to discuss

the framework for new intergovernmental relations in the delivery of services. There

should be greater intergovernmental relations between state and local governments for

effective service delivery. In Nigeria, the challenge is to ensure a more efficient delivery

of services for poverty alleviation.

Keeping in view of the above we can say that federation is not just a structure but a

process and, therefore, it is more important to activate the forum for interaction than

going in only for formal arrangements that divide the powers between the Union and the

states and the state and the local bodies. Federalism is poised for acquiring new

dimensions, with world economy getting globalised and integrated and the paradigm of

desirable arrangements of functions and finances at the sub national levels undergoing

changes, old ideas of sovereignty are fast facing obsolescence, as nations agree on their

own to abide by internationally accepted conventions and standards.41

Indian Perspective of Federalism

Indian federalism has been result of both centripetal and centrifugal forces. By the

reforms of 1919 the provincial executive were made responsible for the fundamental

functions of government, the enforcement of law and order, and the maintenance of an

upright administration .The 1919 Act and the devolution rules made there under gave the

provinces considerable latitude in financial matters. They now had freedom to adjust the

levies on transferred head of revenue they similarly had the right to spend whatever they

lacked on the transferred subject. Expenditure on reserved subjects alone continued to be

subject to regulations and control by the central government. The provinces were also

26

given the power to float loans both in India and abroad on the security of their revenues,

but there were no separations of cash balances of the centre and the provinces. The

provinces could withdraw from the same public account; and any amount overdraw was

to be reimbursed before the close of the financial years. So 1919 Act was a half way

house between control and autonomy.

The government of India Act, 1935 had not only embodied the basic principles of federal

finance but had also endowed the provinces with financial power and authority which

enables the constituent within a federation to proceed , further on the way of all round

development . The Act 1935 gave full control over provincial administration to elected

legislatures and popular ministers, subject however, to control and regulation in vital

matter by the British using the agency of the governor-General and Governors who were

invested with special responsibilities. The provincial governments no longer derived their

authority political and fiscal, by devolutions made by the centre but obtained it as a direct

grant from the crown. In the Central field also, the Act provided for a partial transfer of

responsibility to a ministry, but only when the federal provisions of the Act became

operative and it had retained the supervisory control of the secretary of state over India’s

administration. Regarding, the federal provisions becoming operative, the act 1935

provided that the federations comprising Governors’ provinces. The states which has

accused or would accede later to the federation and the chief commissioners’ provinces

would come into existence only when a proclamation of inauguration was issued by the

Majesty42. Negotiations initiated with the provinces to secure their assistance were

protected and had not made much progress when the war intervened in 1939 to interrupt

their continuance. The federal provisions of Act, therefore was put into cold storage. The

provinces relating to their, however came into force in 1937 the relations of provinces

with the centre were regulated thereafter in accordance with provisions. In this way,

although the act executed the facade of federations is retained in reality the essentials of a

unitary form of government. The reservation of usual powers to the government

answerable to the government –General and his overriding authority over the entire field

of India’s administration including the demarcated sphere of provincial jurisdiction did

little to change basically the centralized feature of administration. The purpose of the

provisions which served this position was to retain British Control over the Indian

27

government even after a responsible ministry had been installed at the centre, so this act

1935 was a half-way house of federations. At best it may be said, because of its

comprehensiveness the government of India Act, 1935 was admirably suited for adoption

as the interim constitution.

India in 1947, on the departure of British, the major portion of which was under British

rule, was divided into different provinces. There were also some six hundred states in the

country. The ‘provinces’ under British rule were declared to be ‘states’ in the formation

of Indian federation. The influence of centripetal and centrifugal forces in the formation

and shaping of Indian federation has naturally introduced some in the characteristics in

the Indian constitution , like emergency powers , judicial , review , etc. Now India is the

largest democratic federal polity inhabited by over a billion people spread over 28 states

and 7 centrally administered territories. A separate legislative, executive and judicial

arms of government are constituted at both Central and State levels. The upper house or

Rajyasabha in the parliament is the council of states. The seventh schedule to the

constitution specifies the legislative domains of the central and state government in terms

of union, state & concurrent lists. The constitution also requires the President of India to

appoint a Finance Commission every five years to review the finances of the centre and

the states recommended devolution of taxes and grant-in- aid for next five years.

Historical factors have played an important role in the adoption of federal constitution

with strong unitary features in India. The constitution of independent India relied heavily

on the colonial system of Great Britain. The arguments for the centralized arrangement

were drowned by the fissiparous tendency following the partition of the country. The

centralization inherent in the constitution assignments was accentuated by the adoption of

a planned development strategy. Development Planning required the planning

commission to allocate resources according to the envisaged priorities. The centralization

was on the peak when the major commercial banks were nationalized in 1969 and along

with the nationalization of financial institution; the Central Government virtually

acquired complete control over the financial system. Recent economic and political

events and globalization, however have led to a trend onwards greater decentralisation.

Although with the change in their boundaries the states in Indian federation by and large

28

became homogeneous, the process passed the way for local chauvinisms like Andhraits,

Bengali, Panjabi or Guajarati. Linguistic rigidity gave rise to conflicting claims and

territories were claimed by one group or the other on linguistic ground.43 The idea was

stated more plainly by F.G. Carnell in his comment on the Indian federation after the

reorganization of states: “Though the states still claims for grants from the centre for

development purposes, the growth of local solidarities or a compact cultural and

linguistic basics may slowly give rise to a doctrine of state rights.”44

It will not be correct to say that India's constitution is lacking in federalist qualities.

However, in its actual operation, federalism in India has evolved in two distinctly

different phases. The first three decades of fifties, sixties, and seventies, was marked by

pronounced concentration of economic policy making powers in the centre, while the

subsequent two decades experienced a trend towards its reversal. Two pillars of fiscal

federalism — assignment of functional responsibilities along with autonomous revenue

sources to different tiers of government and the system of intergovernmental fiscal

transfer — suffered erosion during the centralising phase of fifties, sixties, and seventies.

Part of the erosion in assignment was mended in the subsequent phase but the trends are

not in one direction alone. The transfer system seems to be in for some harder knocks

with conditional transfers assuming increasing importance.

Canadian Perspective of Federalism

It may seems that there is no need to know about Canada, Resource Transfer is only

concern of this study hence it should stick to that only instead of going irrelevant. But it

is sure that to know Canada, it is must before knowing the Canadian system of Resource

Transfer. Over the last half century, this system has had a dual effect on the evolution of

the federation. On the positive side, it has served as a crucial vehicle for creating Canada-

wide social programs and thus served as a vital instrument of nation-building within

Canada. But in so doing, it has also created significant controversy in intergovernmental

relations and exacerbated tensions between Quebec and the rest of Canada. While its

value in nation-building may have outweighed its adverse impacts, the balance between

benefits and costs can be improved. It is one of the main challenges to the future of the

29

system of resource transfer. Topography, Polity, Culture, Constitution, History, all the

facts have impact on the state of fiscal federalism; it is true about all the countries, but

more relevant about Canada. Hence knowing about Canada is must45. A multinational

federation is an appropriate form of institutional arrangement to accommodate

territorially concentrated national minorities. Canada became a federation in 1867, when

the former British colony of Canada was split into two new provinces, Quebec with a

French-speaking majority and Ontario with an English-speaking majority. Two other

British colonies along the Atlantic coast, Nova Scotia and New Brunswick, were added to

establish a four-province federation46.

Modern Canada was founded in 1867, which makes it one of the oldest and most

enduring federations. Canada is a federal country with ten provinces and three special

territories. See Figure 1 for details. The names of the provinces are: Alberta, British

Columbia, Manitoba, New Brunswick, New Found land and Labrador, Nova Scotia,

Ontario, Prince Edward Islands, Quebec, and Saskatchewan. The territorial governments

are Nunavut, Yukon and the North West Territories. Alberta, because of its mineral

wealth is the richest province.47 Ontario is the second highest in terms of per capita GDP.

Canada is a fundamentally federal country marked by a vast territory, second only to

Russia in area, and by a diverse population of over 35 million descended from

immigrants drawn from many cultures around the world as well as an aboriginal

population. Canada has two official languages, English and French, and the country

consists of distinct economic regions. The federation has grown to encompass most of the

northern half of the North American continent stretching from the Atlantic Ocean to the

Pacific Ocean to the Arctic Ocean. Commencing as a relatively centralized federation,

Canada in accommodating the internal diversity of its population and regional economies

has become one of the more decentralized federations in the world, while developing at

the same time a cohesive transportation network and system of federation-wide social

programs. The government structure consists of a federal government, 10 provincial

governments, 3 territorial governments and numerous municipal (or local) governments.

All of the federal, provincial and territorial governments are organised on the basis of the

Westminster parliamentary system. There is also a newly evolving system of self-

government for many of the aboriginal communities. Canadian provincial governments

30

are even more actively involved than their counterparts in the United States. The Quebec

government alone has as many employees dealing with international relations as the 50

U.S. state governments combined, and it certainly ranks as the most internationally active

non-central government in the world.48

Political Facts

Canada became The Dominion of Canada on July 1st, 1867. Officially it became a

country in 1982. Canada is a constitutional monarchy and a federal state with a

democratic parliament. The Parliament is in Ottawa and is comprised of the House of

Commons (Lower House) and the Senate (The Upper House - whose members are

appointed). Members of Parliament are elected approximately every 4 years. Elections

may be called early or terms can be as long as 5 years. A vote of no-confidence in the

government (where the government no longer has the support of 50 percent of the House)

may also force an election. This occurred in 1979 when PM Joe Clark's government lost

the support of the House and an election was called within a year of that government

coming to power. Senators are appointed by the Prime Minister and hold their positions

until they are 75. There are currently 5 officially recognized parties in the House of

Commons:

(a) The Liberals

(b) Canadian Alliance

(c) Bloc Quebecois +

(d) Progressive Conservatives

(e) The New Democratic Party

Canada currently sits on the United Nations Security Council as a non-permanent

representative. Canada is a member of many international organizations including

NATO, OSCE, OAS and APEC.49

Economic Facts

The Canadian dollar is divided into 100 cents, like the American dollar or Indian Rupee.

In Canada $1 and $2 are represented by coins, nicknamed the "loonie" because there is a

31

loon on it and the Townie because it rhymes with loonie. Principle Natural Resources are:

Natural gas, oil, gold, coal, copper, iron ore, nickel, potash, uranium, and zinc along with

wood and water. Leading Industries are: Automobile manufacturing, pulp and paper,

iron, steel work, machinery and equipment manufacturing, mining, extraction of fossil

fuels, forestry and agriculture. Leading exports are: Automobile vehicles and parts,

machinery and equipment, high technology products, oil, natural gas, metals and forest

farm products. Imports are: Machinery and industrial equipment, (communications and

electronic equipment, vehicles and automobile parts, industrial materials (i.e. metal ores,

iron, steel, precious metals, chemicals, plastics, cotton, wool and other textiles) along

with manufactured products and food.50

Geographical and Demographic Context

Canada is a large country, with an area of approximately ten million square kilometres,

which fronts on three oceans-Atlantic, Pacific and Arctic. Canada is the second-largest

country, by area, in the world. It is normally regarded as comprising five regions:

(a) The Atlantic region (Newfoundland, Prince Edward Island, Nova Scotia, and New

Brunswick)

(b) The central region (Québec and Ontario)

(c) The prairies (Manitoba, Saskatchewan, Alberta)

(d) The Pacific coastal region (BC)

(e) The sparsely inhabited north

Canada's land mass is 9970610 square km (The world's second largest country).Ottawa is

the Capital of Canada (located in Ontario) Canada has 10 provinces and 3 territories.51

There are more than 100 national parks and historic sites in Canada. Mountain Ranges

include: Torngats, Appalachians, Laurentians, Rocky, Costal, Mackenzie, Mt. St. Elias

and the Pelly Mountains. At 6050 metres above sea level, Mount Logan in the Yukon is

Canada's tallest peak. Great Bear Lake is the largest lake in Canada with an area of 31,

326 sq.km. The longest river is the Mackenzie River flowing 4241 km through the

NWT52. Canada has six time zones. In NFLD53 the time zone is 3 hours and 30 minutes

32

past Greenwich Mean Time (GMT). The farthest west is the Pacific at 8 hours behind

GMT. Canada's capital, Ottawa, has the coldest average temperature of any capital city in

the world.

Canada has two official languages, English and French, and the country consists of

distinct economic regions. Canada became a federation in 1867 when the former British

colony of Canada was split into two new provinces, Quebec with a French-speaking

majority and Ontario with an English-speaking majority. Two other British colonies

along the Atlantic coast, Nova Scotia and New Brunswick, were added to establish a

four-province federation. In the 133 years since that time, the federation has grown to

encompass most of the northern half of the North American continent stretching from the

Atlantic Ocean to the Pacific Ocean to the Arctic Ocean and consisting of ten provinces

and three territories. Commencing as a relatively centralized federation, Canada in

accommodating the internal diversity of its population and regional economies has

become one of the more decentralized federations in the world, while developing at the

same time a cohesive transportation network and system of federation-wide social

programs. The population of Canada as October 2002 was 35 000 000 (30 million).54 The

largest city in Canada is Toronto followed by Montreal, Vancouver, Ottawa-Hull, and

Edmonton 76.6 per cent of Canadians live in cities and towns while 23.4 per cent live in

rural areas. 31 per cent of the population live in the largest cities of Toronto, Montreal

and Vancouver the life expectancy of a Canadian woman is 80 years and a Canadian man

is 73 years. The size of the average family is 3.1 people (including 1.3 children).

Multiculturalism (as opposed to the melting pot ideology55) was officially recognized in

1988 with the Multiculturalism Act. Majority of Canadians are Christians. Canadians are

Roman Catholic, other religions in Canada include: Protestantism, Judaism, Islam,

Hinduism, Sikhism and Buddhism.56

All Canadian have free access to health care with the exception of dental services. Most

people over 65 receive their prescriptions for free. Canada has an extensive social safety

network with old age pensions, family allowance, unemployment insurance and welfare.

Popular sports in Canada include Ice Hockey, swimming, cross-country and alpine

skiing, baseball, tennis, basketball, soccer and golf. Many would suggest that the most

33

preferred spectator sports are Ice hockey and Canadian Football. The largest ethnic

groups in Canada are: British, French, German, Italian, Ukrainian, Dutch, Polish,

Chinese, South Asian, Jewish, West Indian, Portuguese and Scandinavian. It is hard to

imagine Canada being governed in any other way than as a federation. The basic units of

Canadian federalism are its ten provinces and three territories. The two largest provinces,

Ontario and Québec, contain more than half of Canada’s population between them. The

four small Atlantic Provinces (and the three territories) together contain fewer people

than each of the four largest provinces. The three territories are vast in extent but tiny in

population57. Canada has a population of more than 35 million which, while relatively

small given the large area of the country, has been growing quite strongly- in part

because of immigration from other countries. Most of the population inhabit a narrow

strip relatively close to the US border. A high proportion of the total population lives near

the American border and that country –which is also a federations-has had a strong and

growing influence on Canada, both culturally and as a trading partner. Historically, there

has been a strong linkage with Great Britain and Canada remains a member of the British

Commonwealth. Approximately one quarter of the total population of Canada lives in

the Province of Quebec, which is predominantly French speaking with a relatively strong

resistance to central government domination, and this has done much to explain the

decentralized nature of the Canadian federalism. The English/French make-up of Canada

on the one hand makes nation-building objectives difficult to achieve but, on the other

hand, leads to the use of federal provincial transfer programs as a means of doing so.

However, programs with detailed federally – imposed conditions attached to them as a

criterion for eligibility have become increasingly difficult to implement. The evolution of

the Canadian transfer System has occurred over a lengthy period, going back to the

serious economic depression of the 1930’s and the subsequent world war and, to some

extent, even earlier.

A Brief History and Cultural Characteristics

The Geography, culture and ethnic composition of Canada, necessities a flexible

approach on the part of authorities to keep the federal spirit high. The socio-cultural

composition poses a challenge to the question of unity. Plurality of culture does not pose

34

a danger to the Canadians unity; what is most serious is the development of separatist’s

feelings among the French speaking majority of Quebec province. The British North

America which came into being in 1867 was primarily a result of contract between the

two races and cultures- the English speaking and the French speaking. In the twentieth

century millions of people came from other places, mainly from Europe to settle in

Canada. Economist of nations during and after the Second World War Canada sided with

democratic forces.58

Although Canadian federation was not strong and the demand for separatism gained

momentum in the sixties when Liberal Party was in power. The reason might be that the

bargaining power of Quebec finance minister Jacques Parizeau who is regarded as the

brain of the Party Quebecois has been propounding a theory of economic association

between the sovereign Quebec and rest of Canada59. The separatists have seized the

opportunity by putting it firmly that it was a question of cultural survival for the French

Canadians and the move towards political self-determination was absolutely irresistible 60Claude Morin proclaimed : “ Its cultural and sociological- a civilization thing. Our

feelings aren’t worked out, but they’re always there, the idea of why’s can’t have a

country? “61Knowing the strategy that the number of Quebecers jumps dramatically if

economic association is linked with independence, the separatists planned to popularize

the economic association between the two separating cultural groups.

On the economic side it is a fact that Ontario has markets in western Canada and in

Quebec. Ontario and Quebec are economically interdependent and they need each other

more than any two provinces between themselves. Finance Minister Jacques Parizeau

emphasized on this point that much dependent on what stand Ontario had to take without

being pressurized by the federal government. He differentiated the emotional political

fight with the socio-economic realities of Canada. Banking on his economic association

plea Jacques Parizeau hoped for a rational approach in Ontario as the province poised

against loss in the eventuality of the break-up of the Canadian market would have to pipe

down emotions at some point in future. Jacques Parizeau had not thought of economy

association with the western Canada; he had only been talking about Ontario for years.

The approach of the separatists on this point raises many questions and one of them is

35

that Canada may be further divided in many parts if economic association among them all

can compensate the disadvantage of political separation. This issue has also raised new

questions on the relationship of various parts of Canada and U.S. Market. Quebec enjoys

protectionism in Canadian confederation. Labour, wages and such other problems will

crop up in free market.62

Donald Creighton, an eminent historian of the English Canada, raised some important

questions on the unity of the Canadian confederation and relations between the English

speaking provinces of Canada on the one hand, and French speaking Quebec on the other.

In his view the party Quebecois is morally a revolutionary body which has been

campaigning for the destruction of the basis political character of confederation. The

Party Quebecois has rejected the bicultural and bilingual character of the confederation

and has been moving towards one language in Quebec. They have been repudiated the

official Language Act and have also defined Section 133 of the British North America

Act which gives both English and French equal official standing in the legislature and

courts of Quebec is a serious point. Professor Donald Creighton has pleaded for a new

courageous approach to stop the process of blackmailing by the French Canadians. On

the economic association between the English speaking and the French speaking

Canadians he is of the view that the English speaking should not show the slightest

inclination on such a move which proposes to divide their country and threaten its

survival. The notion that the English Canada and Quebec need the political level by

making it clear that there would be economic stagnation if separatists pursue their goal to

independence. Quebec is more dependent on the English speaking Canada, particularly

on Ontario. Natural gas and oil are supplied from the western Canada.63

Bilingualism

Unanimous approval was given by the parliament in mid-1969 to the official languages

act which stipulates that “The English and French languages are official languages in

Canada” and that they “possess and enjoy equality of status and equal rights and

privileges as to use in all the institutions of parliament and government of Canada.”

Bilingualism was basically a political approach to satisfy the minority group in each

36

province and to strengthen the federal unity in Canada. From 1970 bilingualism

development programme was taken up with all sincerity, and the federal government

gave financial assistance to provincial government and municipalities for the

development of the two languages n public and private sectors. The Department of the

secretary of state works in collaboration with other agencies to promote bilingualism.64

Multiculturalism

The persistence of the Canadian state is somewhat surprising, not to say impressive,

given its high level of ethnic linguistic, cultural and religious diversity. It has been the

locus of numerous and vibrant debates about the rights of aboriginal peoples and about

the accommodation of immigrants and ethnic minorities. It has been ( and is still) faced

with deep nationalist divisions which give rise to many constitutional battles over the

status of the French-speaking national minority concentrated in the province of Québec,

and has survived two referendums on the independence of this internal national group—

the first was held in 1980 when approximately 40% of the Québécois supported

secession, the second was held in 1995 when Québec almost gave its government a

mandate to negotiate the terms of separation with Canada by voting for 49.42% in favour

of secession. Although Québec’s nationalist affirmation has almost torn the country

apart, it has not been accompanied by a wave of ethnic violence and has been handled

relatively peacefully. What has enabled this persistence of the Canadian federation as

well as the peaceful cohabitation of antagonistic nationalist groups? The answer lies in

the multinational character of the Canadian federation which has been able to

accommodate its ‘deep diversity’65 (i.e. its multinational diversity) by allowing

Québécois to exercise some degree of autonomy. To explain the dynamics of

multinational federalism in Canada, it is necessary to draw a picture of ethno cultural

diversity in Canada in which it is possible to distinguish between different sources of

diversity. This will help to highlight the specific situation and claim of Québécois as a

national minority by contrasting it with other sources of ethno cultural diversity.66

To assess the extent to which Canada can be said to be a multinational federation, it will

appear that although many aspects of the political structure and of the political processes

37

in Canada allow viewing it as a multinational federation, there are currently many

features of the Canadian political system which do not embody the idea of multinational

federalism. Further there are some obstacles to the adoption a multinational form of

federalism but none of them is insurmountable. To ensure the cultural freedom of the

Canadians a new policy of multiculturalism was introduced in October 1971. As a result

of the recommendations of the royal commission, on bilingualism and biculturalism, the

prime minister announced the federal government’s new policy which recognized the

cultural and ethnic pluralism in Canada. The prime minister said that a vigorous policy of

multiculturalism would help to create confidence among individual. In 1973, a 102

member’s Canadian consultative council on multiplication was established to provide

consultation to the minister of states on matters relating to the implementation of

programmers of multicultural policy.67

Ethno Cultural Diversity in Canada

Ethno cultural diversity in Canada is not a single phenomenon; it follows different

patterns and has multiple sources. These three kinds of ethno cultural minorities are -

(a) Ethnic and immigrant groups

(b) Aboriginal peoples and

(c) A national minority, that is, the Québécois who form a French-speaking society of

approximately 7.5 million people.

Canada has been a land of immigration since its very beginning. Whereas until the

second half of the 20th century immigrants and ethnic groups were mainly Christians of

European descent (Scottish, Irish, German), immigrant groups have become more and

more diversified in their provenance and religious allegiance ever since. This greater

diversification combined with the liberal commitment to the equal treatment of every

citizens regardless of their ethnicity, race, and religion have pushed Canadians to adopt a

multiculturalists policy which emphasizes anti-discrimination measures, the promotion of

cultural diversity in school curricula, the funding of ethnic organizations, grants some

exemptions from public holidays, dress codes (Allowing Sikhs, Muslims or Jews to wear

38

religious symbols in public institutions), etc. This set of measures aims at making

members of ethnic and immigrant groups full and equal participants in Canadian society

without requiring them to abandon important aspects of their cultural identity; its

objective is the fair integration of members of immigrant communities to the larger

society.68 Charles Taylor called it, the kind of diversity involved with ethnic and

immigrant groups “first-level diversity”69. What is at stake here is the accommodation of

cultural, ethnic and religious pluralism within a single political community. The rights

and policies associated with this kind of diversity aim at promoting the integration of

members of traditionally marginalized and vulnerable ethno cultural minorities to a

community of equal citizens in a way that is sensible to the value that members of these

minorities accord to their distinct identities.

However, as Taylor puts it, the kind of diversity involved with the two other types of

ethno cultural groups (aboriginals and Québécois) plays at another level; it is a second-

level diversity, or “deep diversity”.70 What is at stake at this level is not the integration of

members of ethno cultural groups to a single political community, but the

accommodation of certain groups whose members conceive of themselves as forming a

distinct community and share a desire to control their destiny together and act

collectively as a political actor, as a people, free from external rule. These groups

understand themselves as nations within a multinational state, which is, as peoples

entitled to self-determination.71 Accommodating these groups does not aim at offering

them fair terms of integration to a larger society, but rather requires allowing them to

enjoy a certain degree of self-government. Although the claims of the indigenous peoples

of Canada and those of the Québécois are located at the level of deep diversity, since both

want to be recognized as distinct society, or as nations, and want to exercise a significant

degree of territorial autonomy and self-government, they do represent two different

sources of diversity in Canada. Whereas Québécois form a single French speaking and

populous national minority concentrated in a given territory (Québec is the second most

populous province after Ontario), there are over 600 aboriginal bands in Canada and they

differ significantly amongst themselves; some are very small and isolated, while others

are located in urban areas and are intermingled with non-aboriginals, etc. In addition,

39

aboriginal peoples stand in a very distinct relation with the Canadian state, even when

compared to the Québécois. Whereas French-Canadians were the founding people of the

1867 Canadian confederation and have since then actively taken part in the decision

making process at both the federal and provincial level, indigenous peoples have been,

until the mid-1970s, largely excluded from exercising power and subjected to

paternalistic administrations. Because of their different dispersion on the territory and

historical relationship with the Canadian state and larger society, the claims for self-

government of Québécois and indigenous peoples cannot be met by the same institutional

arrangements. Reason is that, Québécois form a majority within a federal subunit, their

nationalist aspirations can be answered by a genuinely multinational federalism. This is

not the case of most groups of indigenous peoples, moreover some commentators point

out that many aboriginals want to achieve autonomy by negotiating a special political

status that would be external to the current federation and based on treaties anterior to the

1867 Confederation. Nationalism is thus closely related to the idea of self-determination;

it is the assertion of a group’s willingness to be the master of its own destiny, not a

conservative commitment to maintain a certain traditional culture.72 It treats them like

members of a pan-Canadian multicultural society, rather than as members of one of the

founding nation of Canada as a multi-national country.73 The same thing could be said

about the Canadian policy of Bilingualism, which affirms the bilingual character of

Canada as a single nation (it defines English and French as its two official languages and

forces federal institutions to provide services in both languages); its goal is to promote

Franco phones’ participation within a coast to coast pan-Canadian political community

rather than enabling an internal nation to enjoy territorial autonomy. States that are

characterized by what Taylor has coined ‘deep diversity’ must therefore take different

measures to accommodate national minorities than those they usually take to

accommodate ethnic and immigrant groups.74 Since national minorities conceive of

themselves as distinct political communities, they usually seek to be recognized as

nations by the state and they also seek to exercise some degree of self-government by

achieving territorial autonomy.

40

The Canadian Constitution

While the British North America Act, now known as the Constitution Act, 18667,

established two orders of government, each with a considerable array of jurisdictions, a

number of violations of the federal principle were enshrined in the Act. For example , the

provinces were given a significant set of powers in Section 92 of the BNA Act, including

“ local works and understandings” (Section 92.10), but the federal government could

assume control of these works by declaring them to be in “ the general advantage of

Canada or for the advantage of two or more provinces”(Section 92.10.C) This was known

as the declaratory power of the federal government and it was employed 472 times by

the federal government , mostly in the early years of the confederation. The most

egregious violation of the federal principle was the power enabling the central

government to disallow provincial legislation. In addition, the Lieutenant –Governor of a

province could reserve provincial legislation for consideration by the federal government.

These powers were also used extensively, at least 107 disallowances and 57 reservations

between 1867 and 1939. In both instances, disallowance and reservation, the sovereignty

of the provinces to legislative in their spheres of jurisdiction was compromised. The key

characteristics of federalism were thus rendered inoperative, at least until the 1940’s

when these practices were abandoned.75

The division of powers in the Canadian constitution was also quasi-federal. The “ Peace ,

Order , and a Good government “ (POGG) clause in the preamble to Section 91

contained the potential for the federal government to completely overwhelm all the items

reserved for provincial jurisdiction in Section 92 , including substantial heads of power

such as “ all matters of merely local or primitive nature “ and “property and civil

rights” Indeed the judicial committee of the privy Council (JCPC) concluded in the 1896

Local Prohibition case [i]f it were once conceded that the parliament of Canada has the

authority to make laws applicable to the whole of the Dominion in relation to matters

which in province are substantially that these matters also concern the peace, order, and

good government of the dominion, there is hardly a subject enumerated in Section 92

upon which it might not legislate , to the exclusion of the provincial legislatures. Lord

41

Watson thus ruled to limit the federal government’s ability to encroach upon jurisdiction

through the POGG clause. Lord Haldane later interpreted this clause as an emergency

provision to be used only as a measure of last resort. In short, the JCPC inserted the

federal principle in the constitution and gave the provinces of a degree of sovereignty in

their fields of jurisdiction. By the 1940’s most of the quasi-federal powers in the

constitution has atrophied the Canadian constitution is thus ambiguous. As whereas

concluded it is quasi-federal provinces has fallen into disuse, the fiscal systems remains

quasi-federal.

The Canadian Government

The Canadian constitution is not fully written in the sense the American constitution is.

Even the powers of the Prime Minister and the Cabinet are based on conventions deriving

strength from the British Convections.76 The Governor General of Canada has to act on

the advice of the P.M. and cabinet. The Governor – General has to act on his own in

every extraordinary situation, when none of the parties is in a comfortable position in the

house. The prime minister has to choose his cabinet members from each province. The

organisation and working of political parties are important matters in a parliamentary

democracy, because the stability of the government at the centre and in provinces

depends upon the integrity and the unity of the ruling political party. The liberal party

which claims to be more reformists in social, economic and political matters has been

winning the elections in the last decade. The progressive conservations are the main

opposition in the house while the new Democratic Party and social credit party of Canada

have also a few representatives in the House of Commons. The liberal party has been

taken initiative during its regime to encourage multiculturalism and maintain the identity

of various cultural groups in Canada. The liberal leadership has also made renewed

efforts from 1969 onward to foster bilingualism in the Canadian social and political life.

The position of the liberal party is relatively strong at the centre, but the fact cannot be

overlooked that its strength depends upon the support it receives from Quebec. If the

regional party (Party Quebecois) gets upper hand in parliamentary election in Quebec just

as it got in the provincial election, the liberal party will lose its character of central force

unifying the nation.77

42

After the Second World War the liberals had been most of the time in power at the

federal centre. The solid contingent of liberal M.P.s from Quebec had long been the

mainstay of the liberal party at the centre. When Liberals ruled with slim majority they

were vulnerable to pressure The Canadians members of Parliaments and the governments

of Quebec was in a better position to bargain with a week federal centre. Separate and

exclusive French –Canadian interests prospered because of the weakness of the

centre .The composition of the central government as well as the parliament is so

designed that the French Canadians are sometimes in a commanding position to

pressurize the federal centre . Two main results followed from this political situation:

First the French Canadian promoted the use of French language and the status of the

French Canadians throughout the Canada; Secondly to glorify the demand of autonomy

for Quebec. The regional representation in the parliament and the Central government

cannot be overlooked. Ontario and Quebec constitute more than half of the members of

the lower house (commons) and little less than half of the strengthen of upper

house(Senate) – 48 out of 102 members. The house of common has 264 members out of

which 74 come from Quebec and 88 from Ontario. This clearly means that half of the

parliament from Ontario. This clearly means that half of the parliament has representation

from the two provinces Ontario and Quebec which was formerly known as the province

of Canada. The senate is not as powerful as the American senate and there is no equality

of representation from the ten provinces. The members of the senate are not elected by

the provinces but they are appointed by the central cabinet. Therefore, the ruling party in

the House of Commons is at an advantageous position as the new vacancies in the senate

are filled on the recommendations of the prime minister. The representatives of the

opposition parties get little chance of entering the senate.

The 264 members House of Commons functions mostly on the British pattern and

provides political stability in the confederation. Four political parties have generally been

represented in the House of the Commons the liberal party, the progressive conservative

party , the new democratic party, and le Rallimement des creditistes. During the regime

of the liberal party at the centre the separatist demand of French speaking Canada gained

momentum. At successive elections the bargaining position of the silent revolutionaries

supporting separate status for Quebec increased. The senate, or upper regional basis by

43

the governor-general on the recommendation of the prime minister, could not serve as a

check on the power like the American senate, and as such as a check on the increasing

regionalism in Quebec. The Senate does not enjoy powers like the American Senate, and

such there are lesser chances of political initiative in the Canadian senate. The Canadian

constitution prepared in the 19th century relied much upon the House of Commons as a

stabilising factor in the confederation. It was expected that the parliamentary system

would be able to meet the diverse pulls in the confederation. Political structure at the

centre and provinces was built on the basis that parliamentary elections would provide

the necessary training in political management and national unity.

After Second World War a new situation was created on account of economic

development, and increasing aspirations of people of various groups. The parliamentary

systems are increasingly required to cope with new dimensions in development and

provide safeguards for minorities. The provinces are claiming more and more autonomy

to provide services to local population. More and more centralising forces are coming up

to cope with modern developments tasks. But the success on local as well as national

projects depends upon the cooperation of the provincial units and local governments.

Planning in the urban area, development of new sources of energy and new devices to

meet the energy crisis, pollution, development of ocean science, and social welfare

schemes are some of the matters which concern most Canadians; these issues may pose

some new challenge to the centre-state relations. Apart from the constitutional division of

power between the centre and the provinces there are other matters of concern for all

Canadians , and the primary responsibility for the implementation of new programmes

lies with the provincial and local governments. A wide range of social services are

provided by the federal, provincial and local governments and by voluntary agencies in

Canada. The department of national health and welfare has the major federal role in

welfare schemes. A number of social security programmes are administered through the

department of national health and welfare. Provincial governments are responsible for

matters such as education working the provinces look after local affairs and they are

elected by the people. Thus the responsibility of the government is hared through a well –

knit process of decentralization in which there is participation of the people at various

levels of government working.

44

The ten provinces of Canada provide a variety in natural resources, economic production,

geography and climate. Brunswick and Prince Edward Island constitute 5.5 per cent of

the total area of Canada. These provinces are not advanced in industry but provide some

of the natural resources. The central provinces comprising of Quebec and Ontario are

industrially the most advanced provinces and they have a complex of modern industries,

abundant water resources and nuclear power installations. Quebec is second only to

Ontario in industrial development. Quebec is famous for its mining industry; and copper,

iron and asbestos are found in huge quantities. Ontario is equally significant for mining.

There is also intensive farming in Ontario. Among the three Prairie Provinces, Alberta

has enough of energy resources. Alberta has recently attained a strategic importance in

Canada as it produces about 70 per cent of Canada’s oil and 81 percent of gas, and has

nearly 42 percent of the country’s total coal production. Modernisation and economic

development of Alberta are realized through wealth and also famous for paper industry,

which suggests that economic development is interdependent and central Assistance is

given to provinces to meet the specific and general demands.78

The Courts

One institution that does have considerable power to check the power of the federal,

provincial, and territorial governments is the courts. They conduct judicial review on two

bases

1) The division of powers (as it is specified in the Constitution) and

2) Since 1982 on the basis of an entrenched Charter of Rights.

In both of these cases the courts have the power to rule legislation and to declare any

statute null and void if it is found to violate the terms of the Constitution.

The Federal, Provincial and Territorial Legislatures

The fusion of the legislative and executive branches of government within the federal and

provincial legislatures with executives chosen from within and responsible to the

legislatures, combined with strong political conventions of party discipline, have

effectively transferred legislative power in practice to the executive branches. The Senate

45

of Canada is the Upper House and its members are appointed by the prime minister and

hold office until retirement at 75. Although the Constitution gives the Senate, extensive

legislative powers these are rarely fully exercised because the chamber lacks democratic

legitimacy. As a result there are few checks on the power of the executive when it is

supported by a majority in the House of Commons. The House of Commons (the Lower

House) of Canada is elected by a first past the post electoral system and the number and

distribution of seats is based on population (giving provinces with a larger population

more seats). In the 41st election conservative party has won the election and Stephen

Harper has been elected as 22nd Prime Minister of Canada.

The Canadian prime minister must choose the executive from the members elected to the

House of Commons or from members in the Senate79 and as a matter of convention the

executive reflects regional, linguistic and other important interests. In order to stay in

government the executive must win votes in the Lower House on issues that are

considered central to their governing platform. This is usually assured by the electoral

system which gives the governing party a majority of seats and the use of party disciple

to ensure that members of parliament from the government’s party vote in support of the

executive’s legislation.80 This ensures a very stable executive and very stable government

(as long as one party holds the majority of seats) that faces few challenges from the

legislature or the Upper house. Provincial and territorial legislatures are unicameral.

These legislatures are elected by the same method as the federal House of Commons and

the relationship between the executive and the legislature is the same as it is in the federal

House of Commons.81

Constitutional Status of the Federal and Provincial Governments

The federal government and the 10 provincial governments are recognised and their

existence is guaranteed in the Constitution (Canada Act 1867, s.1-5). The federal and

provincial governments are independent of each other; there is nota hierarchical

relationship between the two orders of government. The provincial legislatures and the

federal parliament are each considered sovereign within their own constitutionally

46

defined areas of jurisdiction. The federal government has legislative and regulatory

powers in areas that include: regulation of trade and commerce, national defence, foreign

affairs, criminal law, unemployment insurance, and direct and indirect taxation. The

provinces have legislative and regulatory powers in important, and costly, areas that

include: education, health, social assistance, civil law (and the administration of justice),

municipal affairs, licensing, and management of public lands and non-renewable natural

resources and forestry resources, property law, civil law, direct taxation, “property and

civil rights within a province” and other matters of a “local nature.”

Local and Territorial Governments

Canada’s three territories remain under the constitutional authority of the federal

government and their legal structures are specified in several federal statutes.82 The

territorial legislatures derive their legislative powers from the federal government. In the

statutes that created the territories, the federal government delegated extensive powers to

the territorial legislatures that roughly correspond to the list of provincial powers. Local

governments (city governments, town governments, village governments, township

governments, etc) are the creation of the provincial and territorial governments and are

subject to regulation by the provincial and territorial governments that create them.83 It is

a federal state, with a Constitution that defines the respective responsibilities of the

central government and provinces. The most distinctive element of Canadian federalism

is its relatively decentralized nature in comparison with other federations. Thus, it has

strong provincial governments which, together with the local governments under their

jurisdiction, have total revenues and also total expenditures which slightly greater than

those of the federal government. There are ten provinces plus two northern territories and

about 5,000 municipalities84.

Conclusions can be drawn at large from the above. Canada started as a Quasi Federal

state but now it is a Genuine Federation. Canada began as a highly centralized Federation

but now it is a highly decentralized Federation. Canada began with a system of watertight

compartment but now Powers and Responsibilities of each Order of Government are

47

collide, entangle, and competitive. Initially the federal Government had a paternalistic,

oversight role at the beginning, now provinces are autonomous and two orders of

government are equally sovereign in their spheres of jurisdiction. Canada had in 1867 and

still has a federal system dominated by the executive at both levels but Quebec’s status in

the federation remains unresolved.85 Necessity of the new programs and endless

intergovernmental negotiations are responsible for a new approach on federalism; it is

often called executive federalism.86 The role of the executive has increased in planning

and development. In Canada the central government has not been able to establish direct

links with local bodies on new development programs. Local authorities take guidance

from the provincial government on the formulation of new plans; in many cases it is a

regional approach on development of local areas. The central government has to be

diplomatic in dealing with provincial and local bodies to handle serious problems of local

jurisdiction.87 Flexibility in the political process would help solve intergovernmental

relations.88

Federalism: A Comparison between India and Canada

The constitutional similarities between India and Canada are well known. Both of the

countries have a colonial past; both are parliamentary and federal democracies; and both

have institutionalized judicial review of constitutional matters. The Social and cultural

context for the operation of the constitutional framework in both of the countries is also

somewhat similar. While the Indian society may be more complex than the Canadian

society, both the societies have marked cleavages that strain the process of political

governance in the two countries.

Canada in 1867 and India in 1950 adopted a form of government broadly similar in

principle to the Westminster model prevalent in England, but with the modification that

they added onto a parliamentary framework a federal component. This combination of

parliamentary and federal principles of government was necessitated by social and

regional diversities characterising these two countries. However it was a combination in

which the parliamentary principle was predominant over the federal component. Canada

also found the Indian experience with Union State planning of some interest and

48

relevance. India is a leading federal system in the commonwealth and the third world

generally that has experimented with democratic planning for economic development-a

technique that originated with the socialist experiment in the U.S.S.R89. If economic

situation does not significantly improve to ensure reasonable measure of equity and

justice, there may really be a demand for a renewed role of the state in the economy. The

Indian experience may be relevant to Canada which has often found its public economic

policies riddled with federal provincial confrontations and wasteful use of natural

resources. The government in Canada have been alive to this problem. For Example, the

Trudeau government in the early 1970s entrusted the following three bodies with the

responsibility of planning- The Privy Council office, the treasury board and the

Department of Finance. But a senior Canadian academician pointed out “instead of

coherence and efficiency we got confrontation bureaucratic infighting and a draining of

morale”90 Taking of this experience, Thor burn advocates, “a process of institutional

innovation in which a federal provincial economic development commission would be

created”91 Post war Canada also setup a highly developed welfare state providing social

and economic securities to Canadians which to some observers still constitute one of the

important bases of Canadian identity. India could, by no stretch of imagination, be said to

have developed a welfare state, yet chapter IV of the constitution on Directive Principles

of State policy contains the promise of a welfare state, subject to the availability of the

necessary resources with the state. Nonetheless, with limited resources, India was

probably the first among the developing countries to have gone ahead to establish a

reasonable degree of social assistance to the needy sections of the population.92

In Canada, in seventies new departments have come up at the centre such as the

department of urban affairs, Department of Environment which have increased the scope

of activities of the national government. Promotion and co-ordination of urban policies

and programs fostered intergovernmental relationships.93 The federal government has the

responsibility to initiate new policy and programs and to co-ordinate efforts relating to

environmental protection. Provincial and local governments are finally responsible to

carry out the new programs but directions in consolidated form come from the national

government.94 Modern economic activities of the state and developmental policies have

increased the scope of national government in assistance programs. Federalism is more or

49

less regarded as a technique to maintain national unity while providing the scope for

regional powers and local institutions as to grow according to local traditions and

environment. Regional sentiments and cultural diversity have an impact on the working

of the federal polity95.

The social structure affects the federal system and likewise the style of federal working

has imprint on the social and economic life of the people and even on the style of foreign

policy and diplomacy. Diverse pulls are noticed with a federation and a search for proper

balance between localism and nationalism is possible provided there is a spirit of

accommodation. Through federal device it is possible to get the co-operation of people at

the local level of administration; the national government gets support on issue of

national importance96. Localism and regionalism may have their place in federation like

Canada but a balance between the regional forces and national unity is possible by

adjustment. The federal techniques of evolving national common understanding by

giving opportunity to local and provincial elements to play their role within the larger

frameworks of significant importance in the present day state politics, some feeling of

equality among the provinces, or federal units which may not be strictly at part on

account of socio-economic and historical factors, is important for the development of

federalism. If federalism is used as a mechanism for domination by a particular province

or racial group it will not be able to protect certain basis values such as justice and

equality.

A competitive approach by political parties and provincial and local organizations may be

useful to provide wider participation of people in federation. Instead of domination by

one party at the centre emergence of two national parties will have a far reaching impact

on the political structure and federal spirit. Clarity in direction and accountability in the

political process would increase with the two competitive national political parties.97

Federal –provincial relations have acquired importance in the Canadian political system;

in the absence of effective opposition parties at the centre the opposition is provided by

the provinces. Flexibility in the working of the parliamentary system would reduce the

problem of accountability. The Canadian brand of federalism is suitable for

decentralization; participation of people at the provincial and local levels would be

50

desirable to increase the credibility of the political process. Necessity of the new

programs and endless intergovernmental negotiations are responsible for a new approach

on federalism; it is often called executive federalism.98

Role of Government in Federal Economies99

In a federation that is economy which establish the type of a federation or operation of

the federal principles. In federal economies, role of the government is very important

which can be evaluated by examining the instruments which are being used by the

government. The instruments that governments use to undertake their economic activities

include -

Expenditures on goods and services - Governments may purchase labour, capital,

goods, and services from the private sector in order to provide goods and services to their

constituents. Such major expenditure categories as defence spending, transportation,

schools, and hospitals are included in their menu of goods and services expenditures. In

some cases, the public sector actually produces the goods or services. In others, it merely

finances their provision by private producers or the non profit sector.

Welfare payments - Government spending also includes transfer payments. These can

be provided to households in the economy, for example, in the form of welfare payments,

payments for disability, and payments to the elderly people. These transfers might be

administered through the tax system or through an agency responsible for delivering them

to their intended recipients.

Subsidies to firms- A particular form of transfer are a subsidy to firms in the private

sector, whose purpose is typically to assist the firm’s participation in the private sector in

ways that facilitate government objectives.

Vertical transfers - In a federation, transfers can also be from one level of government

to another. Most commonly, intergovernmental transfers go from higher-level to lower-

level governments, but in some cases they go the other way.

51

Taxation-Governments can, and do, use a wide assortment of taxes to raise revenues,

such as individual and corporate income taxes, general sales taxes, payroll taxes, excise

taxes, import and export duties, and property and wealth taxes, to name the main ones.

Different levels of government may have access to different taxes and may share some

tax bases.

User fees- Revenues may be raised from charges that are related to services provided.

Examples include water, garbage, and sewage charges, road tolls; licenses of various

sorts imposed on individuals and businesses; user fees for parks and recreational facilities

(entertainment tax); fines; and charges for luxury ,health and education services

(education cess).

Borrowing-In additions to raising revenues from taxation and charges, governments

typically borrow money, especially but not exclusively for capital projects. Because the

borrowed funds must be paid back in the future, they can also be viewed as postponed

taxes. Lower levels of government may be restricted in what they are able to borrow.

Money creation- Governments, through their central banks, may also be able to obtain

some revenues through the creation of money. To the extent that the creation of money

induces inflation (i.e., the money supply grows more rapidly than that needed to meet the

growth in the volume of transactions in the economy), it is viewed by economists as

being analogous to a tax, in this case a tax on holding money. Control of the money

supply, however, is typically not seen primarily as a source of revenues but as a means of

controlling the movement of aggregate economic activity by affecting interest and

exchange rates.

Regulation- Regulation is a non-budgetary way of influencing the allocation of

resources. It can take many different forms, including labour market regulation (hours of

work, union formation, discrimination laws, occupational licensing, rules for layoffs,

worker safety, etc.), capital market regulation (asset or liability rules for institutions,

52

bankruptcy laws, insider trading rules, accounting requirements, etc.), and the regulation

of goods and services markets (product liability, advertising rules, price and profit

regulation for large firms, competition laws, communications regulations, environmental

laws, regulation of natural resources such as fishing and forestry, etc.). In a federation,

one level of government may have some regulatory control over another.100

Now it is proper time to move towards our second chapter titled “Fiscal Federalism-

Theory and Approaches”.

NOTES

53

1 Retrieved from www.lawyersclubindia.com › Experts › Constitutional Law

2Retrieved from parliamentofindia.nic.in/ls/debates/facts.htm

3 Retrieved from www.ambedkar.org

4Retrieved from parliamentofindia.nic.in/ls/debates/vol7p1b.htm

5Abstract from http://www.mp.gov.in/finance/ulb4e.pdf

6J.Isawa Elaigwu, The current state of federations, some basic challenges, available on http://www.igsronline.org/pdf/elaigwu.pdf

7Robert P. Inman and Daniel L. Rubinfeld, Texas Law Review,May 1997,  Volume 75, Number 6, available at http://scholarship.law.berkeley.edu/facpubs

8Amresh Baghchi, Fifty years of Fiscal Federalism in India, Kale Memorial lecture delivered at Gokhale Institute of Politics & Economics, Pune on 08 December,2001, p.2

9 Christer Jonsson, Sven Tagil, Gunnar Tornqvist, Organizing European Space, Michigan:SAGE

publication,2000 10 Retrieved from www.cultorweb.com/

11Prime Minister’s speech on the inauguration of 4th International Conference on Federalism, 05 Nov. 2007, New Delhi

12 Jonathan Roddent, Comarative Federalism and Decentralization on Meaning and Measurement ,in Comparative Politics, Published by: Ph.D. Program in Political Science of the City University of New York: Vol. 36, No. 4 (Jul., 2004), pp. 481-500

13 Cheryl Saunders ,Options for Decentralizing Power: Federalism to Decentralization, Melbourne : Melbourne Law School, available at www.constitutionmaking.org/files

14Michael keen, IMF Staff Papers, Washington D.C.: IMF Publication, A quarterly Journal of IMF, 1998,Vol 45

15 Retrieved from www.mp.gov.in/finance/ulb4e.pdf

16Federal countries (twenty-three in 2008) include Argentina, Australia, Austria, Belgium, Bosnia-Herzegovina, Brazil, Canada, Comoros, Ethiopia, Germany, India, Malaysia, Mexico, Micronesia, Nepal, Nigeria, Pakistan, Russia, St. Kitts and Nevis, Switzerland, United Arab Emirates, United States of America, and Venezuela. Nepal became a federal republic on May 29, 2008. In addition five more countries – Democratic Republic of Congo, Iraq, South Africa, Spain, and Sudan – have recently adopted constitutional provisions with federal features

17 Brian Galle and Kirk J. Stark Bell, Beyond Bailouts: Federal Tools for Preventing State Budget Crises,Bloomigton: Indiana University,2012,Vol 87,pp 13-14

18 Daniel J Elazer, Althusius and Federalism as Grand Design, Jerusalem: Centre for public affair,1992, available on Journals.cambridge.org

19 Robin Boadway, Anwar Shah, Fiscal FederalismPrinciples and Practice of Multiorder Governance, Melbourne:Cambridge University Press, 2009 available at www.cambridge.org/aus/catalogue

20 John Kincaid, Anwar Shah, The Practice of Fiscal Federalism: Comparative Perspectives,

Canada:Mcgill Queens University Press,2007

21 Ibid

22 Not all federal countries are decentralized and not all unitary countries are centralized. For example, Canada is highly decentralized, but Australia and Germany are centralized federations, as is indicated by the share of sub national expenditures in consolidated public expenditures. Nordic unitary countries are more decentralized than are Australia and Germany.

23Robin Boadway, Anwar Shah, Fiscal Federalism: Principles and Practice of Multiorder Governance, Canada:Mcgill Queens University Press

24 Anwar Shah, “The Practice of Fiscal Federalism: Comparative Perspectives”, Canada: Mc Queen University, 2007, p 26

25 Ibid, p. 27-28

26Philip j. Weiser, Cooperative Federalism, and the Enforcement of the Telecom act, Federal Common Law, School of Law, University of Colorado, http://www.focusoncommerce.net

27 Anwar Shah, “The Practice of Fiscal Federalism: Comparative Perspectives”, Canada: Mc Queen University, 2007

28 R. Dehem, J. N. Wolfe, The Principles of Federal Finance and the Canadian Case, The Canadian Journal of Economics and Political Science , Canada: Wiley-Blackwell, Vol. 21, No. 1 (Feb., 1955), p. 64

29A.V.Dicey, Introduction to the Study of the Law of the Constitution, London: Elibron Classics, Tenth Edition, 1914, p.146

30A.V.Dicey, Introduction to the Study of the Law of the Constitution, Elibron Classics, Tenth Edition, 1914, p.143

31 W.S.Livingstone, Federalism and Constitutional Change, London:Oxford University Press, 1956, p. 13-14

32 Anthony Birch, Federalism Finance and Social Legislation in Canada, Canada: Clarendon Press, 1955

33Wheare, Federal Government, available at www.irs.gov/publications/p17/ch12.html

34 Rufus Davis, The Federal Principle Reconsidered- American Federalism in perspective”, Australian Journal of Politics and History, ed., Aaron Wildavsky, p. 17

35 Modern Godzins, The American System: A New View of Government in the United States; Transaction Publishers, 1982, William Ricker, Federalism: Origin, Operation, Significance, Boston: Little Brown Publishing House, 196

36 Rufus Davis, The Federal Principle Reconsidered, Malden U.S.A.:Australian Journal of Politics and History, p. 24

37 Ibid, p. 29

38 T Conlan, From Cooperative to Opportunistic Federalism, Public Administration Review, 2006, p.663

39 A Gunlicks, German Federalism Reform: Part One , German Law Journal,2001, 111

40 J McMillan, G Evans and H Storey, Australia’s Constitution –Time for change?, Sydney: Allen &Unwin, 1985, p 24

41 Bagchi Ameresh, Rethinking Federalism - Overview of current debate with some reflections in Indian Context , Economic and Political Weekly, August 19, 2000

42 Rangarajan, C. and D. K. Srivastava , Fiscal Deficits and Government Debt in India: Implications for Growth and Stabilizatio, Economic and Political Weekly, 2005, July

43 Loksabha Debates, Government of India, Vol 4 part 2 1956 col.6243

44 F.G.Carnell, Political Implications of federalism in new states, in U.K. Hicks et.al available at books. Google.co

45 Bird, R. and A. Tassonyi, Constraining Sub national Fiscal Behaviour in Canada: Different Approaches, Similar Results?, in J. Rodden, G. Eskeland and J. Litvack (Eds.),Decentralization and Hard Budget Constraints, MIT Press, 2003

46 Boadway, R. and P. Hobson , Intergovernmental Fiscal Relations in Canada, Canadian Tax Paper no. 96, Toronto: Canadian Tax Foundation, 1993

47Retrieved from http://en.wikipedia.org/wiki/Canada

48 Emery. H. , Controlling the Creatures: An Historical Perspective on Financing Cities, in P. Boothe (Ed.), Paying for Cities: The Search for Sustainable Municipal Revenues, University of Alberta: The Institute for Public Economics, 2003, p.1-18.

49 North Atlantic Treaty Organization, Organization for Security and Cooperation in Europe, Organization of American States, Asia Pacific Economic Cooperation.

50Boadway, Robbin and Frank Flatters, Equalization in a Federal State: An Economic Analysis, Economic Council of Canada, Ottawa: Canadian Government Publishing House, 1982

51 Retrieved from http://www.kidport.com/reflib/worldgeography/canada/canada.htm

52 North West Territories

53 New Foundland

54 October 2012, Consensus Reportof Canada

55H.G. Thorburn, Planning and the Economy: Building Federal-Provincial consensus, Toronto :Tames Lorimar and Company, published in association with Canadian Institute for Economic Policy, 1984 56Retrieved from http://www.kidport.com/reflib/worldgeography/canada/canada.htm

57 Graham, K. and S. Phillips, Who Does What in Ontario: The Process of Provincial-Municipal Disentanglement, Canadian Public Administration, Canada: Mcgill Queens University Press,1998

58Breton, Albert, and Anthony Scott, “The Economic Constitution of Federal State” Toronto: Toranto University Press, 1978 59Charles Taylor, The Dialogical Self, (304-314), in The Interpretive Turn: Philosophy, Science, Culture, Edited by David R. Hiley, James F. Bohman, and Richard Shusterman. New York : Cornell University Press, 1991, p 31160 See interview given by the Quebec Minister of Inter government affairs, Claude Morin to Peter C .Newman , MacLean ,June 27 , 1977,p. 10. Available at www.google.com

61 See Ibid

62 Anthony Birch, Federalism Finance and Social Legislation in Canada, Oxford: Clarendon University Press, 1955

63Wolfgang Koerner, The Foundations of Canadian Federalism, Political and Social Affairs Division,Parliamentary Information & Research Service, Parliament of Canada,December 1988, available at http://publications.gc.ca

64 Retreived from http://publications.gc.ca

65 Charles Taylor, The Dialogical Self, (304-314), in The Interpretive Turn: Philosophy, Science, Culture, Edited by David R. Hiley, James F. Bohman, and Richard Shusterman. New York : Cornell University Press, 1991, p 311

66 McAllister M. L., Governing Ourselves- The Politics of Canadian Communities, Vancouver: UBC Press, 2004

67Siegel, D., Municipal Reform in Ontario: Revolutionary Evolution, in J. Garcea and E. Lesage (Eds.), Municipal Reform in Canada: Reconfiguration, Re-empowerment, and Rebalancing, Oxford: Oxford University Press, 2005,pp.127-148 68 For a deeper analysis of the justifications of such multiculturalists’ policies and of the rights they entail, see Will Kymlicka’s work, 1995; 2007.

69 Taylor, N.1,P.75

70 Ibid, 75-76.

71 James Tully, Multinational Democracies, London:Cambridge Press, 2001

72 This point is emphasized by Margaret Moore, The National Self Determination and Secession, 2001, available at www.oxfordscholarship.com

73 McRobberts, Streets of Glory: Church and Community in a Black Urban Neighbourhood, Chicago:University of Chicago Press, 2003, Daniel Weinstock, The Moral Psychology of Federalism, 2007, 20-21

74 For the distinction between the claims of immigrant groups and national minorities, see Will Kymlicka, 1995

75 Adam Dodek, The Canadian Constitution, available at www.dundurn.com

76 Kenneth McRobbert , Undergraduate Journal Of Political Science, Toranta: University Of Toronto, 2003

77 Breton, Albert, and Anthony Scott, The Economic Constitution of Federal States,Toronto: Toranto University Press,1978

78 Woolstencroft, Education Policies: Challenges and Controversies, in E. Fowler and D,2001, available at www.cpsa-acsp.ca/papers-2007/MacLellan.pdf

79 Although members from the Senate can be appointed to the executive, but this is very rare.

80 Sancton, A., Merger Mania: The Assault on Local Government, Canada:McGill-Queen’s University Press,2000

81 Treff, K. and D. Perry, Finances of the Nation, Toronto: Canadian Tax Foundation, 2001

82 The Yukon Act, Northwest Territories Act, Nunavut Act, Government Organisation Act, and the Federal Interpretation Act are those specified acts. Available at laws-lois.justice.gc.ca/eng/acts

83 Sancton, A., Reducing Costs by Consolidating Municipalities: New Brunswick, Nova Scotia and Ontario’, Canadian Public Administration 39-3: 267-289, 1996

84Sancton, A., Amalgamations, Service Realignment, and Property Taxes: Did the Harris Government have a Plan for Ontario’s Municipalities?, Ontario: Canadian Journal of Regional Science, 19 90; J. Tremblay , Public Policy Review 23-1: 135-156, 2000 85 Papers of Intensive course on ‘Democratic Federalism’ ,Forum of federations, Canada, 2010, available at www.forumfed.org

86 Phillips Resnick, University of Columbia Press,1994, p. 71, available at www.columbia.edu.. See also Kymlicka, Multioculturasme, 2001, p. 97-101

87 Kymlicka, 2001, p. 95

88 Tindal, R. and S. Tindal, Local Government in Canada, Sixth edition, Scotland: Thompson Nelson publication,2004

89 Lazar, H., F. St-Hilaire et J.F Tremblay , Federal Health Care Funding: Toward a New Fiscal Pact, in H. Lazar et F. St-Hilaire (Eds.), Money, Politics and Health Care, Montréal : Institute for Research on Public Policy (IRPP), 2004

90H.G.Thorburn, Planning and the Economy: Building Federal-Provincial consensus, Toronto :Tames Lorimar and Company, published in association with Canadian Institute for Economic Policy, 1984, p.243

91 Ibid p. xv

92 Slack, E. and R. Bird , Cities in Canadian Federalism , Toronto: Institute on Municipal Finance and Governance, University of Toronto, 2006

93 Kymlicka, N 1., p.94

94 Siegel (Eds.), Urban Policy Issues, London: Oxford University Press, 276-294

95 Treff, K. and D. Perry , Finances of the Nation, Toronto: Canadian Tax Foundation, 2005

96 Kletzer, Kenneth, and Nirvikar Singh, The Political Economy Of Indian Fiscal Federalism, In Public Finance Policy Issue For India, ed. Sudipto Mundle, New Delhi: Oxford University Press, 1997 ,pp. 259-298.

97 Supreme Court of Canada, Reference re Secession of Quebec, Para. 66. Available at www.law.ualberta.ca/centres/ccs/rulings/ 98 Resnick, N.1. , p. 71. See also Kymlicka, N.1. ,97-101.

99 Robin Broadway, Recent Development in the Economics of Federalism in Harvey Lazar, ed., Towards a New Mission Statement for Canadian Fiscal Federalism, Kingston : Institute of Intergovernmental Relations, 2000

100 Robin Boadway and Anwar Shah, Fiscal Federalism: Principles and Practices of Multi order Governance, Oxford: Cambridge University Press