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Jason VandenBeukel: Trudeau’s Senate reforms didn’t go far enough, actually

Commentary

In a recent piece for The Hub, Ken Boessenkool argued the Senate reform process begun by Prime Minister Justin Trudeau’s government in 2015 is both “terrible policy” and “terrible politics.” There’s much to agree with in Boessenkool’s critique of the reformed Senate—notably, his positive defence of partisanship—even if I find it difficult to conclude that the unreformed Senate was better than what we have now.

But there is a deeper problem inherent in the reforms that ought to be explored: A dilemma of legitimacy that restrains the widespread acceptance of the Trudeau reform agenda.

To understand why, let’s first take a step back and consider the Senate in a broader bicameral perspective. Upper houses around the world, such as our Senate, are almost always less directly accountable to citizens than lower houses, like our House of Commons. Only about one-third have even a majority of their members directly elected, with appointment or indirect elections accounting for almost all of the remainder. Members of upper houses often serve longer terms than their lower house counterparts, and seats are often not distributed on the basis of pure representation by population.

We can see all these features in the Canadian Senate: Members are appointed by the Governor General on the advice of the prime minister; they serve until age 75 (and before 1965, for life); and the seat apportionment by province does not closely reflect the population of those provinces.

These features were chosen intentionally in order to insulate the Senate from voters, making its members less susceptible to the changing mood of the electorate and able to take a broader view of the national interest.

Yet they also put senators in a bind, facing a problem common to upper houses: How can you have an upper chamber oppose the actions of a directly elected lower chamber, and still have a democracy? But if it doesn’t do precisely that, what is the point?

The Abbé Sieyès put it more succinctly: “If a second chamber dissents from the first, it is mischievous; if it agrees, it is superfluous.”

Consider John A. Macdonald’s speech to the Legislative Assembly of the Province of Canada in 1865: On the one hand, he said, “There would be no use of an Upper House, if it did not exercise, when it thought proper, the right of opposing or amending or postponing the legislation of the Lower House.”

On the other hand, he acknowledged the Senate would be at a distinct disadvantage in any dispute with the House of Commons, and likely to give way, since its members were “chosen by the Crown, and having no mission from the people.”

This isn’t a novel observation, but it bears repeating because of its implications for the Trudeau reforms. Senators have been forced to balance the competing impulses detailed by Macdonald, exercising their power when they feel it is necessary, but doing so in a way that doesn’t spark a constitutional crisis in the process. Without direct elections providing the ultimate democratic legitimacy to senators, they need to find other ways to legitimize standing up to the House of Commons.

This idea of legitimacy—social support from citizens within our democracy—is crucial to the Senate. We give that social support to our members of Parliament by electing them at intervals of four years or less. But when it comes to senators—or for that matter, judges—the act of obtaining social support is more complicated. They can win legitimacy by reaching legislative or judicial outcomes that have broad popular approval, or by providing a type of representation that the elected House of Commons is less capable of offering—but in a democracy, it nevertheless pales in comparison to the legitimation provided by election.

And unfortunately for the Senate, public dissatisfaction has undermined its legitimacy substantially since 1867. The lack of any sort of election was a sore spot even at the time of Confederation, since the Senate replaced a colonial upper house in the Province of Canada that was partially elected. The lack of substantial input from provincial governments into the selection process has also been controversial, given the Senate is meant to act as a chamber of federalism. The selection process also led to accusations of partisanship and patronage, with Senate seats seen as a reward that could be given to party loyalists who would in turn vote in the government’s favour.

Increasingly, moreover, the disproportionate allocation of seats relative to population has excited significant opposition, especially in Western Canada. The distribution of Senate seats changed repeatedly in the decades after Confederation, partially to reflect changing population levels in Western Canada as new provinces joined the country. But that change stopped after the Constitution Act, 1915, with only a few minor adjustments made to provide representation to Newfoundland and Labrador and the three territories.

Nevertheless, the Senate has often failed to be as active or effective as many would like it to be.

All of these complaints had a negative effect on the power and effectiveness of the Senate—although admittedly, not to the extent some critics would have us believe. The Senate has repeatedly intervened when it felt necessary—sometimes with significant results, as when it blocked the Mulroney government’s attempt to introduce new legislation regulating abortion. Its committee work has also repeatedly won praise.

Nevertheless, the Senate has often failed to be as active or effective as many would like it to be. Partly this is due to partisanship, with senators less likely to block legislation emanating from the House when the same party controlled both chambers. Partly, it’s also due to the inherent limitations of an unelected chamber, as well as an awareness among senators that they stood on thin ice when blocking legislation coming from elected members of Parliament.

These concerns have given rise to a long list of Senate reform proposals. By as early as 1926 Henri Bourassa could refer to “that famous question of Senate reform, which comes periodically, like other forms of epidemics and current fevers” in a speech to the House of Commons.

The most famous of these proposals, the Triple-E Senate, found its clearest expression in the Charlottetown Accord. The Triple-E Senate was a proposal to make the Senate elected, with equal representation from the provinces. It also proposed to amend and in some ways limit the power of the Senate. All of this, it was hoped, would make the Senate a more effective legislative chamber.

This proposal should be seen through the lens of legitimacy. The idea was that by increasing democratic input into the selection of senators and giving each province an equal number of seats, it would then become a more effective and active legislative body. In other words, its legitimacy would be increased by the first two “Es,” which would lead in turn to the third “E.”

Unfortunately for proponents of this system, the door to reform was slammed shut: First, by the rejection of the Charlottetown Accord in a 1992 referendum, and then by the Supreme Court in the 2014 Senate reform reference. The court ruled in response to a series of questions by the Harper government that elections and term limits for senators would require a constitutional amendment backed by seven provinces including at least 50 percent of the population (the general amending formula). Abolition of the Senate would require provincial unanimity. The Constitution already clearly stipulated, meanwhile, that reapportionment of Senate seats also required the use of the general amending formula.

Faced with this ruling, the Harper government gave up on reform. Justin Trudeau’s Liberals, however, saw an opportunity. While the third party in 2014, the Liberals retained a sizable Senate caucus from their days in government. Before the court had even ruled, Trudeau expelled all senators from the Liberal caucus, urging them to sit as independents, free of party control. After his party’s election victory in 2015, Trudeau expanded on this idea with his Independent Advisory Board for Senate Appointment.

The IAB was tasked with selecting a shortlist of senators who would be independent and non-partisan. The prime minister then chooses new senators from this list. The board also prioritized diversity, reflected in the increasing number of women, Indigenous people and members of racialized minority groups now in the Senate. This was a very different type of reform from the Triple-E Senate, but it too was concerned with the Senate’s effectiveness.

The Trudeau reforms should be seen as a legitimating exercise. Instead of addressing the concerns about election or seat distribution—now off-limits to any government unwilling to reopen constitutional negotiations—the Trudeau reforms sought to increase the Senate’s legitimacy by making it more independent and diverse. Freeing it of accusations of partisanship and cronyism, it was hoped, would make Canadians more willing to accept the Senate’s intervention in the legislative process.

There is a clear precedent for this approach working. Professor Meg Russell’s analysis of reforms made to the British House of Lords shows the expulsion of most hereditary peers in 1999 led to a more active and powerful upper house. An analysis I conducted with several colleagues, published in the Canadian Journal of Political Science, suggests the Senate, too, is now a more active legislative body than it was prior to the Trudeau reforms. 

The Senate is more actively intervening in the legislative process despite concerns about election and apportionment remaining unaddressed.

So that’s it then? Job done?

Unfortunately for proponents of the Trudeau reforms, that’s highly unlikely. These reforms may address some of the perennial concerns about the Senate and about Canadian politics more generally—patronage, partisanship and lack of diversity, in particular—but they cannot address the fundamental complaints raised by the Senate’s most ardent critics.

Consider the response given by then-British Columbia premier Christy Clark on Global News in late 2015. Speaking of the reform process, she said:

“The process doesn’t make the Senate any better. I would argue that it actually makes it worse because the Senate is completely unrepresentative of the provinces … The Senate doesn’t work now. The only other thing that could make the Senate worse would be having all of these unaccountable, unelected patronage appointments starting to think that they are somehow legitimate and have the power to make decisions on behalf of our country. They don’t. They shouldn’t … And we won’t endorse it.”

For brevity, that’s hard to beat. And Clark’s remarks get to the heart of the fundamental dilemma of the Trudeau reforms: A dilemma of legitimacy.

The Trudeau reforms are meant to increase the Senate’s legitimacy with the public by making it non-partisan, independent and diverse. This, in turn, is meant to make it more active and effective, rather than just a superfluous parliamentary chamber. And the evidence to date shows this approach is working to some extent.

But the problem is that by encouraging a more active Senate without addressing the very real and legitimate concerns many Canadians—especially Western Canadians—have about the Senate, it actually risks making the Senate less legitimate than it was before in the eyes of those Canadians. It was bad enough, as Clark said, when the Senate was relatively inactive and acquiescent to the House of Commons. It’s worse now because the Senate is more actively intervening in the legislative process despite concerns about election and apportionment remaining unaddressed.

It’s no surprise this complaint came from the premier of a province with (at the time) 4.6 million people, and only six of 105 senators. In other parts of the country—Quebec, Atlantic Canada and to some extent Ontario—concerns about the seat distribution may not be top of mind when it comes to Senate reform.

For my part, I disagree with Boessenkool’s argument that the Trudeau Senate reforms necessarily make it a worse institution. Reducing the likelihood of patronage appointments and lowering the level of partisanship in the upper chamber seem like positive steps to me, even if I agree we do away with partisanship completely at our peril.

But admittedly, I’m sitting in New Brunswick, a province with 10 senators and less than 800,000 people.

And it’s certainly telling that these reforms—the most significant ever made to the Senate—completely ignore the complaints raised by Western Canada, the part of the country that has pushed the hardest for reform.

Justin Trudeau, like Stephen Harper before him, clearly has no stomach for reopening the Constitution. Yet without going down that road, further major Senate reform is unlikely to occur.

That’s a shame. Without reform that addresses the understandable concerns raised over many decades by a large part of this country, the Senate’s legitimacy and effectiveness as a parliamentary and federal chamber will remain forever constrained.

Matt Spoke: Our short-sighted politicians have yet to glimpse Bitcoin’s big potential

Commentary

Although I’m a political layman, I’m familiar enough with Canada’s parliamentary system to understand the intended dynamics of a governing party and an opposition. 

In theory, opposition parties exist to challenge the government on its decisions and actions and hold it accountable for its results. Within this system of government, we should expect debates on ideas for how our government should fulfill its responsibilities with respect to its citizens. We should also expect that governments be held accountable for failure, if a valid alternative is ready to step up and govern in its place.

Debates should focus on fiscal policy, immigration, infrastructure, defence, foreign affairs etc.

But key to any debate is two sides taking opposing views on issues, and one of the challenges that seems to be occurring in Canada today is that our three major political parties sound exactly the same on many of the key issues facing Canada.

Their stated differences are primarily focused on credibility, relatability, and trust rather than substantive differences in policy. 

On issues of fiscal policy—and monetary policy by extension (apologies to Mr. Trudeau for having no time to think on this one)—all three of our political parties are falling short of providing a substantive opposition to a de facto consensus of increased debt and increased spending, and increased inflation as a result. 

So where does that leave the millions of Canadians who are legitimately concerned about the economic trajectory we’re on? If we’re not finding adequate opposition representing these concerns in Parliament, then maybe we look elsewhere.

Enter Bitcoin.

If you’re inclined to roll your eyes at this point, you may soon be in the minority. While only four percent of American adults over 55 years of age own cryptocurrency today, already over a third of Americans aged 35-44 own cryptocurrency (likely a similar figure in Canada), and that number is trending up.

Earlier this month, there was a great piece published in the American publication National Affairs, titled Bitcoin and the U.S. Fiscal Reckoning. The author, Avik Roy, makes a compelling case for why the U.S. should take a positive and encouraging stance towards the Bitcoin and cryptocurrency industry, arguing that it could be the fuel that drives the next wave of American economic growth.

But more interestingly, his analysis outlines how important Bitcoin will become as a system of government accountability, or a hedge against short-sighted government fiscal policy and central banks’ reactions in the way of inflationary monetary policy.

In essence, until very recently, citizens did not have much choice but to slowly be dragged into the consequences of governments who overspend, underdeliver, and have no sense of responsibility for the long-term consequences of their actions. 

This reality would likely look extremely similar whether we had a Liberal, Conservative, or NDP government in Ottawa. In fact, this will likely be the reality of most developed countries in the coming decade. 

More than 20 percent of American hedge funds now own Bitcoin.

That said, what most politicians and economists have failed to factor in is the decentralizing power of Bitcoin. 

For the first time ever, in a period of sustained economic decline citizens will have a choice to place their trust in something other than their government. Larger and larger portions of individual and corporate assets will shift from treasury bonds to Bitcoin and other cryptocurrencies. 

This is already happening today, if you’re paying attention. 

More than 20 percent of American hedge funds now own Bitcoin. The millions of consumers who hold Wealthsimple and Mogo accounts in Canada can now buy and trade Bitcoin. Billions of dollars are held within our publicly traded Bitcoin funds in Canada. And this shift will only accelerate. 

What Canada’s policymakers need to recognize is the incredibly rare opportunity this creates for Canada. Unlike our American cousins, our dollar is not the world’s reserve currency. We do not have to worry about decisions that might impact the global standing of the Canadian dollar to the same degree. 

With a few small policy prescriptions, Canada could ensure that we disproportionately capture a competitive share of the Bitcoin market and its related innovations. This should, at minimum, include a decision to add Bitcoin to our national treasury; slowly at first, but with a view to maintain some proportion that represents Bitcoin’s standing against global fiat currencies (Bitcoin is valued at more than $1T USD).

And now back to our short-sighted overspending politicians. You should be excited about welcoming a new taxable asset class and hyper growth industry into Canada that can fund your unlimited election promises. All you need to do is get out of the way.