Blaming The Victim

The Genesis of the Breakup of Canada

Paul McKeever

{A lawyer practising in Uxbridge and Toronto, Ontario, Paul McKeever is an executive member of the Freedom Party of Ontario and is also a founding member and chairman of the newly- forming Freedom Party of Canada.}

The “break-up of Canada”? It’s a possibility that the federal government frequently blames on secessionist leanings in Quebec and the West. But are these movements the cause of what ails Canada, or are they symptoms? For an answer, one need only look at the genesis of secessionist sentiments.

Arguably, the genesis of Quebec and Western secessionist sentiments lies in the history of the so-called “Rule of Law”. In theory, our constitution is our supreme ruler, and all — including politicians and monarchs — are bound to obey it.

In 1867, the British North America Act (part of our constitution) ended a 27 year attempt to wash-out French culture by uniting Upper and Lower Canada. The BNA Act (now properly called the Constitution Act, 1867) returned a jurisdiction and undiluted vote to Lower Canada (therein re-named Quebec). It created the federal Parliament, which was given some of the legislative power previously held by the individual colonies. But, to the exclusion of the federal Parliament, it reserved to the provinces the power to make certain types of laws. Even today, our federal Parliament and provincial Legislatures have only the law-making powers given to them by the BNA Act.

The BNA Act gives only to the provincial Legislatures the power to make laws relating to education and health care. And, until World War I, it was not contested that only the provincial Legislatures have the power to make laws that impose a direct tax (e.g., income tax, GST). But, in 1917, the federal government made a law that imposed a “temporary” income tax, purportedly to raise revenues for the war.

In response, a Quebec civil servant named Caron argued that the federal Parliament lacked the power to make such a law. The result, in 1924, was a decision by our then highest court (see www.ownlife.com/tax/caron1.htm) that the federal government can impose a direct tax if it raises “a revenue for federal purposes” (like the military) , but not if it raises “a revenue for provincial purposes” (like education or health care). At the time, federal revenues were not spent on provincial purposes, so the income tax was held to be enforceable. However, subsequent federal spending on provincial purposes has put the enforceability of some federal taxes into doubt (see, for example, www.ownlife.com/tax/dmcsherm.htm or, in Consent #24, “Is the Federal Income Tax Act Unconstitutional?”)

In 1929, the stock market crashed. A great economic depression followed. As the U.S. Federal Reserve’s Alan Greenspan explained in Ayn Rand’s book Capitalism: The Unknown Ideal, the crash appears to have been caused primarily by inflation of the supply of government-issued force-backed (fiat) paper money. But, at the time, Keynesians, socialists and other authoritarians — arguably for political reasons — blamed the crash upon the free market. Promising to protect the poor with taxes on the “rich” and government spending programs, authoritarians in the industrialized world were voted into power: a welfare state was an easy sell during the depression. Authoritarian governments (in Canada, Liberals and Progressive Conservatives) essentially took away from individuals the freedom to make economic decisions for themselves, and transferred their power to a single, centralized government.

In Canada, the division of taxing powers between the federal and provincial legislatures was seen as an obstacle to effectively centralized control of the economy. Moreover, with only the power to impose an indirect tax (e.g. a retail sales tax), it would have been difficult for a federal government to impose higher rates of taxation on those with higher incomes (as was eventually done). So, promising to pay off the debts of the provinces and to pay them a “rent”, the federal government persuaded most of the provinces to relinquish their jurisdiction over direct taxation.

The way was thereby paved for effectively centralized, authoritarian control of the Canadian economy.

The constitution posed another pesky obstacle to centralized economic control. Specifically, until the rise of the authoritarians in the 1930s, governments had interpreted the constitution as allowing a government to spend only upon those things respecting which it could pass laws (e.g., the federal government could spend on criminal law, but not on exclusively provincial matters such as education; the provinces could spend on health care, but not on the military). Thus, the federal government literally invented the idea that its spending powers were unlimited. Making this bald assertion (an unlimited spending power is set out nowhere in the constitution), the federal government gradually circumvented the division of legislative powers set out in the Act by making so-called “conditional grants” of money to the provinces: provinces who dared not to make certain laws according to federal specifications would be denied their share of the grant.

The federal centralization of economic decision-making powers posed an obvious threat to French culture in Quebec. The BNA Act had been designed, in part, to protect French culture by limiting federal power.

Thus, almost from the outset of the authoritarians’ attempts to circumvent constitutional limits on federal power via taxing and spending, Quebec protested loudly. It refused after the second World War to enter into tax rental and tax collection agreements. In the 1950s, Premier Duplessis struck a Royal Commission (the Tremblay Commission), the primary purpose of which was to demonstrate that only the provinces had the constitutionally-conferred power to make a law which imposes a direct tax. And, in 1957 (before he became a federal politician), Pierre Trudeau, addressing the issue of federal spending on universities, demonstrated the supposedly unlimited spending power to be a myth (see his 1968 Federalism and the French Canadians, p. 79: “Federal Grants to Universities”).

But federal authoritarians continued their attack and dug deep trenches. In The Allocation of Taxing Power Under the Canadian Constitution (Canadian Tax Foundation, Canadian Tax Paper No. 65), then law professor Gerard La Forest recognized the limits placed on the federal Parliament’s taxation powers but suggested that “the [words] of the [judges in the Caron decision] should probably be ignored. They were made when the device of transfer payments might still have been considered doubtful.” He was later appointed by the federal Prime Minister to the Supreme Court of Canada, where he decided that, as a matter of policy, taxpayers should not be refunded money which is taken from them by means of an unconstitutional tax.

On the spending side, federally appointed judges have stated that conditional grants to provinces are not under-handed attempts to circumvent the jurisdictional limits set out in the constitution. And, despite his earlier writings, Pierre Trudeau did not hesitate to engage in such spending as federal Liberal Prime Minister. The centralization of economic decision-making power was, and remains, extended and secured.

Over the decades since the rise of federal authoritarianism, Quebec’s struggle to have the federal government respect the limits of its own power bore little fruit. Many Quebecers, having lost much provincial power, fearing the loss of their heritage and culture, and losing faith in the idea that the federal government would once again respect the terms of union set out in the BNA Act, turned their gaze to the only alternative: taking back the legislative powers it had given up to the federal Parliament in 1867 (i.e., secession). If the federal government was unwilling to respect the stated terms of the provincial partnership, the partnership would have to end.

The secession of Quebec could be very costly for the rest of Canada. And so it became the practice of the federal government to bribe Quebecers not to secede by giving Quebec relatively high shares of the federal spoils: by making the federal government seem indispensable to Quebecers despite federal violations of the terms of union. But that could not be done without providing the rest of Canada with a reason. So, rather than accepting any blame for separatist sentiment in Quebec, rather than telling the rest of Canada that federal hand-outs to Quebec were to quell the separatist feelings caused by federal circumvention of the constitution, Quebec was blamed. All of Quebec separatism was characterized as a movement born not of reaction to federal usurpation of provincial power, but merely of French bigotry and hatred toward English-speaking Canada.

And the rest of Canada was duped.

Today, most Canadians (including lawyers) know little or nothing about federal circumvention of the constitutional limits of federal power, but many people think of Quebec as a province of spoiled extortionists. A victim of federal authoritarianism has been successfully blamed, and Canada’s biggest champion for the rule of law slandered.

And, of course, federal strong-arm tactics in the West have added steam to Western secessionist sentiments. For example, any provincial talk of providing Albertans with quicker, better medical care through free market medical clinics is met with federal threats to Alberta’s share of (arguably illegal) federal health funds. But Alberta, by taking such steps as decoupling its income tax regime from that of the federal government, is working steadily toward a more autonomous state of affairs.

Whereas the secession of some provinces from federal jurisdiction (usually called the “Break up of Canada”) is a clear and undesirable possibility, Canadians must not allow the federal government to make scapegoats out of the provinces. Clearly, secessionist sentiments in Quebec and the West are the result of federal Liberal and PC centralization of the economy (and the Canadian Alliance is following suit with calls for more federal funding for health care).

Money, and the power to interfere with the free market, is the lifeblood of authoritarianism. In Canada, the federal government must continue to circumvent the constitution and usurp provincial power if it is to maintain its power to interfere with the free market. Such circumvention is — to any intellectually honest person — anti-democratic.

Democracy is the process by which the governed determine the laws of the land: law is the only direct product of democracy. So, when a government refuses to let its actions be governed by law — when, for example, it skirts constitutional limits on its legislative power and exercises unlimited force by virtue of an unlimited spending power — the country ceases to be governed in a democratic way. Democracy is replaced with tyranny. That we vote our tyrants into power does not mean that we live in a democracy.

What does this mean for the voter? It means that we must recognize that the survival of Canada depends upon democracy (by which, I am not implying majority rule). It means that, to regain and preserve democracy, we must elect only those persons and parties that are committed to respecting the constitutional limits of federal power. And, because an authoritarian federal government cannot meet its objective in Canada if the constitution is respected, democracy demands that we vote out of power our authoritarian politicians in the federal Parliament. Democracy and the abatement of secessionist sentiments require that we vote in favour of federal politicians and parties that will discontinue the practice of using direct taxation and unlimited spending to usurp provincial economic decision-making power.

The break-up of Canada? If we continue to vote for authoritarian party members (especially in Ontario), we will have nobody to blame but ourselves.

 

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