Under Canada's federal system, the powers of government are shared between the federal government and 10 provincial governments. The provincial governments are primarily responsible for public schooling, health and social services, highways, the administration of justice and LOCAL GOVERNMENT (through municipalities), but overlapping and, at times, conflicting regional and national interests have stretched provincial concerns across virtually every area of Canadian public policy. They are free to determine levels of provincial public services, and each provincial government has been true to its regional economic and cultural interests in its own fashion.

Canada's original constitutional arrangements were far from those of a perfect or ideal federal state. The FATHERS OF CONFEDERATION envisaged a federal union (see FEDERALISM) tilted toward a strong central government. The powers of the federal government to disallow provincial statutes within one year of their passage (see DISALLOWANCE); to appoint provincial lieutenant-governors; to declare provincial works to be for the general advantage of Canada or 2 or more provinces; to appoint judges of superior, district and county courts (see JUDICIARY); and to enjoy broad lawmaking powers all confirm the intended junior status of provincial governments. The evolution of Canadian society, despite the centralizing swings occasioned by the 2 world wars and the economic depression of the 1930s, has long eroded this early sense of provincial subordination. Although not all contemporary provincial governments have been as assertive as those of Québec or Alberta, most claim a more equal partnership with Ottawa.

CONFEDERATION was predicated on a primary role for the central government in the promotion of an economic union and in the stimulation of national economic expansion through the development of transportation links (railways, harbours and canals) and other forms of public-policy support (see RAILWAY HISTORY) but by the 1880s the momentum behind nation building had slowed and was soon overtaken by the assertion of provincially based political and economic attachments. Other elements that helped enhance the status of provincial governments included the political leadership of such provincial spokesmen as Oliver MOWAT, Honoré MERCIER and William FIELDING; PM Sir Wilfrid LAURIER's more sympathetic attitude towards the provinces; the development, in various provinces, of resource-based economic interests (see RESOURCE RIGHTS); and the emergence of a provincial bent in the decisions of the JUDICIAL COMMITTEE OF THE PRIVY COUNCIL on the distribution of federal-provincial powers.

The provincial governments always played some role in their regional economic development through public investment in transportation and the growth of their public education systems; the expansion of these activities and the later growth of social assistance, health and hospital programs in the 1960s and 1970s changed the original conception of the functions and broadened the scope of provincial governments.

Legislative Power

Under the Constitution Act, 1867 (s92), the powers of the provincial legislatures were carefully circumscribed. The legislatures were granted specific jurisdiction in 16 subject areas. In s91 powers were granted to Parliament in 29 areas, but these powers were intended for "greater Certainty"; in the application of Parliament's more comprehensive (and controversial) residual power to make laws for the PEACE, ORDER AND GOOD GOVERNMENT of Canada in relation to all matters not assigned exclusively to the provinces. The scope of provincial legislative power was broadly defined in the final subsection of their grant of powers as "generally all matters of a merely local or private Nature in the Province." Other enumerated areas include property and civil rights, the management and sale of provincially owned public lands, hospitals, municipal institutions, local works and undertakings, the incorporation of companies with provincial objectives, the solemnization of marriage and the administration of justice. Provincially established courts enforce both civil and CRIMINAL LAW.

Under s93, education is an exclusive provincial responsibility, subject to certain qualifications. Under s95 agriculture and immigration are matters of concurrent jurisdiction but with federal paramountcy, ie, if there is conflicting legislation, the federal government prevails. The control of public lands and provincial ownership of natural resources has proved to be of particular importance; however, the most significant interpretations of the Constitution regarding provincial rights have been in the area of property and civil rights. These interpretations have protected provincial jurisdiction against encroachment and have provided specific support for the provincial government regulation of labour relations, marketing and business contracts.

Provincial taxing powers are limited to direct TAXATION within the province, ie, personal and corporate income taxes, consumer taxes and certain property taxes. From their jurisdiction over the management and sale of public lands, timber and ownership of natural resources, the provinces derive authority for the principal source of nontax revenues. According to a 1982 constitutional amendment (92A), the provinces were granted an unrestricted taxing power ("any mode or system") in the natural-resource field. This amendment, which clarified and expanded provincial legislative and taxing powers over nonrenewable resources, forestry resources and electrical energy, was designed to resolve the constitutional difficulties posed by revenue raising that strayed into the indirect tax field.

The federal government still retains the power to disallow a provincial statute, but has not done so since 1943. Any federal Cabinet that contemplated using disallowance today would encounter significant political difficulties. A LIEUTENANT-GOVERNOR's power to reserve a bill passed by a provincial legislature for action by the governor general can similarly be regarded as a relic of an earlier age of intergovernmental relations. The last reservation, which occurred in Saskatchewan in 1961, went against an 80-year-old understanding that this power would only be exercised on instructions from the governor general, and the bill was subsequently approved.

Between 1867 and 1997 there have been only 6 constitutional amendments directly affecting the powers of all provincial legislatures. The amendments of 1940, 1951 and 1964 transferred powers to Parliament with the agreement of the provinces; those of 1930, 1931 and 1982 expanded provincial powers. The 1940 amendment of s91 (ss 2A) secured exclusive federal government jurisdiction for a national UNEMPLOYMENT INSURANCE scheme.

The numerous efforts at constitutional reform since the 1960s have resulted in only one direct change in provincial jurisdiction: the 1982 s92A natural resource taxation addition. The failure of the 1987 MEECH LAKE ACCORD and 1992 CHARLOTTETOWN ACCORD led the federal and provincial governments to seek other means of constitutional adaptation. In recent years, the trend towards decentralization of responsibilities from the federal to provincial governments has continued but through inter-governmental agreements in such fields as immigration and labour market training rather than formal constitutional change.

Provincial Government Activities

Levels of government expenditure only partly reflect the range of provincial government activity, but they do underscore the role the provinces play in the provision of public goods and services and in the making of transfer payments to individuals. Since 1926, total government expenditures for all governments has risen from 16% to 50% of the gross domestic product (GDP) in the mid-1990s. In this time, provincial government expenditures (excluding intergovernmental transfers) rose from 3% to a high of 17% in 1992. Government expenditures, including federal income security payments and regional assistance programs, are of special significance for the less prosperous provinces. In 1997 federal transfer payments comprised 36-43% of provincial revenue in the Atlantic provinces and 32% in Manitoba. Provincial government expenditure as a proportion of gross domestic provincial product (GDPP) in Newfoundland, PEI and New Brunswick is more than double that of Alberta.

Provincial expenditures are primarily in the fields of hospital and medical care, education, income maintenance and other social services. The participation of all provincial governments in federal-provincial, shared-cost arrangements for hospital insurance and medicare (see HEALTH POLICY) has helped ensure nationwide standards of service, despite some differences in their modes of financing and program coverage. In contrast, the retention of a high degree of provincial autonomy in the provision of elementary and secondary education and the accommodation of religious and linguistic cleavages has resulted in a variation in SCHOOL SYSTEMS.

Personal income taxes, general sales taxes and natural-resource revenues constitute the largest proportion of provincial government revenue. The relative importance of these sources varies by province because of the wide variations in their economic bases and differing taxation policies. As of 1997, New Brunswick, Nova Scotia and Newfoundland had harmonized their sales taxes with the federal goods and services tax (GST) while Alberta continued as the only province not to levy a general retail sales tax. From 1962 on the joint occupancy of the income-tax fields by both the federal and provincial governments has been governed by a series of 5-year fiscal and tax-collection arrangements. The federal government collects personal income taxes for 9 provinces (excluding Québec) and corporation income taxes for 7 provinces (excluding Alberta, Ontario and Québec).

The pre-1980s growth of provincial activities was not only driven by their own initiatives, such as the introduction of public hospital insurance and medicare by Saskatchewan, and a full exploitation of their direct tax and other revenue-raising powers, but also by encouragement from the federal government. Federal shared cost programs in areas of provincial jurisdiction and unconditional grants in the form of equalization payments all contributed to the expansion and maintenance of provincial public services. Since 1977 the terms of federal financing arrangements have promoted greater degrees of provincial autonomy and, with increasing federal budgetary restraints, imposed limitations on the levels of federal support for social assistance, hospitals, medicare and post-secondary education programs.

Federal government budget restraint significantly reduced social program transfer payments to the provinces during the 1990s. In 1996, a new Canada Health and Social Transfer (CHST) block funding arrangement cut federal assistance by $3.6 billion for 1996-97 and a further $2.6 billion for 1997-98. In the case of British Columbia, for example, federal cash transfers declined from 32% in 1986 to 14% of provincial health, post-secondary education and income assistance expenditures in 1997.

Universal concern for the size of provincial as well as federal deficits and growth in public debt has resulted in increased budgetary restraint in all provinces. By 1995 provincial debt charges had grown to 3.3% of GDP and total provincial net debt amounted to 24% of GDP or $6160 per capita. Provincial government expenditures shrunk to 15.2% of GDP in 1995 and 5 provincial finance ministers claimed balanced budgets.

Expenditures for social services may account for the largest proportion of provincial government spending, but it is only one dimension of a far wider range of government intervention. Regulatory activity and programs for economic development conducted by a variety of provincial government agencies and CROWN CORPORATIONS play an equally important role in provincial life. Workers' compensation, labour relations, agricultural marketing, liquor sales, energy and public utilities are all, for example, regulated by provincial agencies.

All provinces have publicly owned development corporations or other agencies which provide assistance, loans and other incentives for the expansion and diversification of their economies, and often compete with each other, with varying degrees of success. Other provincial crown corporations, particularly those responsible for the generation of electrical power, are also important in provincial economics. ONTARIO HYDRO and HYDRO-QUÉBEC, for example, each have assets of more than $44 billion. The contraction of provincial government services and activities during the late 1990s has, however, led to a re-examination of the role of many provincial crown corporations and agencies and to their privatization.

Cutbacks in provincial spending since 1991 have been accompanied by a decline in the total numbers of government employees who provide the managerial, clerical and manual skills required for the delivery of provincial public services. By 1994 they totalled just over 1 million, including 523 000 hospital employees, and their total wage bill amounted to $34 billion. A further 129 000 were employed in provincial government enterprises with a 1994 payroll of $6 billion.

Government Institutions

Distinctive patterns of economic and social development have produced wide variations in provincial political life and provincial PARTY SYSTEMS. All provincial government institutions and the political conventions that shape their operation remain, however, closely modelled after the British Westminster parliamentary tradition. Their practice of Cabinet government reflect the principles of RESPONSIBLE GOVERNMENT. The Crown is represented through the office of lieutenant-governor. Provincial public policymaking and administration is controlled by an executive council, ie, a Cabinet, comprising ministers of the Crown and headed by a PREMIER. A provincial legislature is defined, for lawmaking purposes, as being composed of the lieutenant-governor and the provincial Legislative Assembly in the same way that the central Parliament is composed of the Crown, SENATE and HOUSE OF COMMONS. In ordinary usage, however, the term legislature refers only to the Assembly.

Four provinces originally had a bicameral legislature made up of an elected Assembly and an appointed Legislative Council: Québec (1867-1968), New Brunswick (1867-92), Nova Scotia (1867-1928) and Manitoba (1870-76). Prince Edward Island also had a bicameral legislature but with an elected council which was absorbed into the lower chamber in 1893. Today, all have a unicameral system composed of a single elected chamber. Appointments to Cabinet are ordinarily made from members of the political party that holds the majority of seats in the Legislative Assembly. The further requirement that the premier and Cabinet maintain the support of the majority in the legislature is a principle of responsible government that had been formally acknowledged in 1848 by the colonial antecedents of the 4 original provinces.

Office of the Lieutenant-Governor

Provincial government is carried out in the name of the Crown; the lieutenant-governor of the province acts as the Crown's representative in all areas of provincial jurisdiction and in the exercise of any related prerogative powers. The lieutenant-governors appoint and may dismiss the provincial premiers and the members of their Cabinets. They summon, prorogue and dissolve the provincial legislatures and assent to provincial legislation in the name of the Crown. The lieutenant-governors still retain a power to withhold or reserve a bill for consideration of the central government. The latter power is presumed dormant, if not entirely unexercisable.

In practice the lieutenant-governor's constitutional responsibilities are circumscribed by the conventions of responsible government and conducted on the advice of the premier. The discretionary powers enabling a lieutenant-governor to act alone in the appointment or dismissal of a premier or the dissolution of the provincial Legislative Assembly remain potentially important should there be any uncertainty about who commands the support of the majority in the Assembly. If a premier or Cabinet acted in a way that was unquestionably contrary to constitutional conventions, the office of lieutenant-governor might also be used to protect those fundamental principles.

The lieutenant-governors are appointed by the federal Cabinet on the advice of the prime minister, with little participation from the provincial governments in the selection process. Their salaries are fixed and are paid by Parliament and before 1892 they were regarded as federal officers. The Judicial Committee of the Privy Council ended any suggestion of subordinate status for the lieutenant-governors - and by extension for the provincial legislatures - when it held the appointment to be an act of the Crown and the office to be as much the representative of the Crown for all the purposes of provincial government as the office of governor general was for Canada.

Premiers and Cabinets

Provincial premiers ordinarily hold the position of President of the Executive Council, and enjoy the same pre-eminent status as head of their provincial governments as the PRIME MINISTERS hold in relation to their federal CABINET colleagues. Virtually all Cabinets have ministerial assignments for such policy areas as health, education, labour, social services, energy, environment, natural resources (forests, lands or mines), economic development, agriculture, highways and transportation, tourism and recreation, justice (seeATTORNEY GENERAL), intergovernmental relations, finance, municipal affairs and consumer services.

Others, such as the minister for international relations and la francophonie in Québec, and the ministers for children and families and for women's equality in British Columbia, express the policy commitments of a particular province. The Atlantic provinces, Québec and British Columbia have specific fisheries portfolios. Some provinces have experimented with horizontal portfolios that combine responsibilities for policy development and co-ordination in broadly defined areas (eg, social development and resources development) under a single minister and New Brunswick has adopted the federal system of adding junior ministers of state. In 1996 the average size of the provincial Cabinets was 18 members, the largest being Québec with 22, the smallest being PEI with 9.

The increasing size of the provincial Cabinets and attention to central policy planning and co-ordination has spawned the use of Cabinet COMMITTEE systems. These typically include a central policy or management board/planning and priorities committee, and a treasury board (for budgetary, financial and general government management policy). They and the Cabinet are served by Cabinet offices and central policy and communications secretariats to provide administrative and professional assistance.

Legislatures

The provincial Legislative Assemblies (known as the House of Assembly in Nova Scotia and Newfoundland and the National Assembly in Québec) are significant institutional expressions of the central values of Canadian democracy. As in other parliaments, the making of provincial law requires that the government's legislative proposals (bills) move through the formal state of first reading, second reading and detailed review in committee stage, and a final third reading before receiving assent by the lieutenant-governor. The BUDGETARY PROCESS also requires that the legislature annually approve the funds required for government programs and that expenditures are to be only for those purposes authorized by the Legislative Assembly.

In practice there is rarely room for independent action by the legislature in the lawmaking process. The party loyalty of individual members of the Assembly, the power of the party leadership to maintain discipline, and the government's control of the timetable of the Assembly ensure that the work of the Legislative Assembly is dominated by the premier and Cabinet. The modern emphasis on executive government has considerably enhanced the lawmaking powers of the Cabinet and its individual ministers. The weight of government business undermines the backbencher's right to sponsor private members' bills, and few of such bills advance sufficiently to become law. The general rule that only the government may initiate spending and taxing proposals inevitably curtails backbench initiatives.

MINORITY GOVERNMENTS, such as the Liberal government in Ontario (1985-90), are rare in the provinces, and one-party dominance of the Assembly has historically been far commoner. The Nova Scotia Liberal party (43 years from 1882 to 1925) and the Ontario Conservatives (42 years from 1943 to 1985) enjoyed the two longest periods of uninterrupted government office. The provinces' first-past-the-post electoral systems also exaggerate government party majorities. At one extreme in 1987, Frank McKenna's Liberals captured every seat in the New Brunswick Legislature with 60% of the total vote while in 1996, for example, Glen Clark's New Democrats gained 52% of British Columbia's seats with a lower total vote than the Liberal opposition.

Despite the power of the government within the Legislative Assembly, the debates on the various stages of a bill, question period and the other scheduled opportunities for debates on public policy, together with the other work of the members in representing and servicing their constituents, help ensure some measure of accountable government. The premier and members of the Cabinet are generally challenged, in the Legislative Assembly, to answer for the direction and management of provincial affairs, and the reporting of the proceedings by the press gallery through the media exposes the government to public scrutiny. All provinces now publish a HANSARD report of their debates and proceedings and Saskatchewan,Québec, BC, Ontario, Nova Scotia and New Brunswick have broadcast full live television coverage.

Judged by the number of days spent sitting in debate, the provincial legislatures are less active than the House of Commons. In recent years, however, their sessions have increased in length and are generally more productive in their legislative output than their counterpart in Ottawa. Most meet for 75 or more days per year and the average number of public statutes passed by the Legislative Assemblies regularly far exceeds that passed by the House of Commons. This reflects not only the more crowded policy agendas of many provincial governments but also greater Cabinet dominance of a smaller sized legislature.

All provincial legislatures have a standing-committee system and make use of ad hoc special or select committees to investigate particular areas of public policy. The Québec National Assembly has a tradition of particularly strong committees, but elsewhere the roles and resources of committees are more limited than in Ottawa. In 1997, the total remuneration (salary and, where applicable, tax free allowances) of ordinary private members of the legislatures varied from $39 to 51 000 for the three Maritime provinces to $54 to 60 000 in Newfoundland and the Prairie provinces, and $69 to 78 000 in British Columbia, Ontario and Québec.

Demands for more government accountability has led to some provincial experimentation with more direct democracy through such devices as referendums, and British Columbia, for example, has provisions for citizens' initiatives and the recall of elected representatives. Government downsizing has also been applied to the provincial legislatures. In 1996 they varied in size from 27 members in PEI to 130 in Ontario and 125 in Québec. Alberta had 83 seats, British Columbia 75, and Manitoba 57. In 1995 and 1996 the number of members was reduced in half of the provinces: New Brunswick went from 58 to 55, Saskatchewan from 66 to 58, and Newfoundland from 52 to 48. PEI replaced its 16 dual member districts with 27 single members, and the adoption of the new federal electoral boundaries for the Ontario Assembly reduced its future membership to 103. Unlike the expansionist, province-building era of the 1960s and 1970s, the 1990s have been a decade of provincial government consolidation and pervasive restraint.