Alternate Routes: The Dynamic of Intergovernmental Relations in Canada and Australia by Emmet Collins A Thesis submitted to the Faculty of Graduate Studies of The University of Manitoba in partial fulfilment of the requirements of the degree of MASTER OF ARTS Department of Political Studies University of Manitoba Winnipeg Copyright © 2011 Emmet Collins Abstract This Master’s Thesis compares the dynamics of intergovernmental relations (IGR) in Canada and Australia. In particular, the study explores how two such similar countries have developed such distinct sets of intergovernmental institutions. In Australia, the Commonwealth has increasingly dominated IGR since the 1930s, a process which culminated with the creation of the Council of Australian Government, a “vertical” (Commonwealth-state) institution. In Canada, federal-provincial-territorial relations have been far less institutionalized. Instead, “horizontal” (provincial-territorial) relations have evolved slowly into the Council of the Federation, the most regularized forum for IGR in Canadian history. By examining the historical development of federalism more generally and IGR specifically, this study uncovers a mutually- reinforcing relationship between centralization and the verticality of IGR in Australia, and a corresponding bond between decentralization and horizontality in Canada. Based on original interviews with key intergovernmental officials in each country, the study attributes these relationships to a number of factors, including the presence of multi-nationalism, the strength of intrastate federalism, the nature of judicial interpretation, the structure of fiscal federalism, and the personal style of political figures. The thesis concludes that verticality in Canada and horizontality in Australia are functions of the same factors which made one decentralized and the other centralized, and that institutions of IGR are both cause and effect of the prevailing dynamic in either federation. ii Table of Contents CHAPTER 1- Introduction .......................................................................................................... 1 Methodology ................................................................................................................................... 8 Defining Terms ............................................................................................................................... 9 Interstate Federalism ............................................................................................................. 10 Intrastate federalism .............................................................................................................. 11 Executive Federalism ............................................................................................................ 12 Centralization ........................................................................................................................ 13 Conditional/ Unconditional Grants ....................................................................................... 15 Horizontality/Verticality ....................................................................................................... 15 Theoretical Framework ................................................................................................................. 16 Summary ................................................................................................................................... 19 CHAPTER 2- Alternate Routes ................................................................................................. 21 Initial Conditions .......................................................................................................................... 22 Canada....................................................................................................................................... 22 Australia .................................................................................................................................... 28 Multi-nationalism .......................................................................................................................... 35 Canada................................................................................................................................... 35 Australia ................................................................................................................................ 41 Strength of Intrastate Federalism .................................................................................................. 44 Canada................................................................................................................................... 44 Political Parties ..................................................................................................................... 44 The Senate ............................................................................................................................. 47 Cabinet .................................................................................................................................. 49 iii Australia ................................................................................................................................ 51 Political Parties ..................................................................................................................... 51 The Senate ............................................................................................................................. 53 The Cabinet ........................................................................................................................... 55 Judicial Interpretation and Fiscal Balance .................................................................................... 55 Canada................................................................................................................................... 55 Judicial Interpretation ........................................................................................................... 55 Fiscal Balance ....................................................................................................................... 57 Australia ................................................................................................................................ 61 Judicial Interpretation and Fiscal Balance ............................................................................ 61 Summary Comparison .................................................................................................................. 66 Chapter 3- Intergovernmental Relations in Canada ............................................................... 68 Early IGR ...................................................................................................................................... 69 1867-1960 ............................................................................................................................. 69 Modern IGR .................................................................................................................................. 72 Québec and the APC ............................................................................................................. 72 Regional Meetings ................................................................................................................ 75 First Minister’s Conferences ................................................................................................. 76 The Council of the Federation ...................................................................................................... 81 Significance................................................................................................................................... 83 COF and the APC ................................................................................................................. 84 The Future ............................................................................................................................. 91 Summary ............................................................................................................................... 94 Chapter 4- Intergovernmental Relations in Australia ............................................................ 96 iv Early IGR ...................................................................................................................................... 97 1901-1939 ............................................................................................................................. 97 Emergency and post-war federalism ........................................................................................... 102 1939-1972 ........................................................................................................................... 102 Centralization and cooperative federalism.................................................................................. 105 1972-1983 ........................................................................................................................... 105 1983-1996 ........................................................................................................................... 108 CAF, and the decline and rebirth of COAG ............................................................................... 114 1996-2007 ..........................................................................................................................