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Aaron Wudrick: Restoring the vitality of the rule of law in Canada

Commentary

The month-long drama that unfolded in Ottawa early this year with the Freedom Convoy brought the shoddy state of this country’s rule of law into painful relief. Indeed, it marked only the most recent example of a decade-long trend of authorities refusing to enforce the law of the land when it comes to road, rail, or pipeline blockades, the burning of churches, or the toppling of statues.Canada needs to rediscover its commitment to the rule of law 

The takeaway was clear: when governments fail to enforce the law consistently and fairly, they simply invite further lawlessness.

But another potentially more alarming deterioration of the rule of law does not get nearly enough attention: the fact that governments themselves are obliged to act within the law and have been failing to do so—with increasing frequency.

This will sound strange to some ears; by definition, we elect governments to create laws in the first place. But one of the most basic purposes of our constitution—including the Canadian Charter of Rights and FreedomsThe Charter at Forty: How the Charter has shaped society since 1982—is not merely to enumerate the powers our governments may properly exercise, but to delineate their limits. Regrettably, governments in Canada have been increasingly willing to ignore those constraints at will.

One example is the long list of pandemic restrictions imposed at various times over the last two years. Obviously, a pandemic is an emergency; there is no doubt that many precautionary measures would pass Charter muster as reasonable limitations on rights, as section 1 guarantees those rights “subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society.”

More problematically, there were barely any attempts by governments to “demonstrate” any justification or to wrestle with the necessary trade-offs that might inform whether the unprecedented limits of these emergency measures were reasonable. Worse, when objections were raised, there were howls of derision. 

In normal times, the insistence on a careful balancing of competing considerations and an analysis of whether a given measure would survive well-established tests, such as the Oakes test“The Supreme Court of Canada decides Charter cases using something called the Oakes test, which is named for the 1986 case of R. v Oakes in which the Court concocted it. Since then, it has so assumed the status of constitutional writ that a judge friend tells me that some of his colleagues are surprised to learn that it is not actually in, let alone required by, the constitution. The test is a form of proportionality review, a multifactor balancing test that the Court likes describe as a rigorously empirical exercise. In practice, it is an exercise of balancing incommensurable values in which the scales exist only in the judges mind. For all the show it makes of the programmatic weighing of evidence, it is less like principled or evidence-based decision-making and more like sticking a finger in the philosophical wind.” https://thehub.ca/2021-12-17/howard-anglin-opponents-of-the-notwithstanding-clause-forget-that-political-winds-can-change-direction/—to gauge elements as a rational connection to the compelling governmental objective—would result in the minimal impairment of rights and greater proportionality. 

Sadly, the pandemic led far too many would-be Charter champions to avert their eyes and shout down entirely reasonable objections.

Similarly, the staggering lack of any evidentiary basis for invoking the Emergencies Act to evict the convoy has been met with surprisingly little criticism. Since the majority of Canadians didn’t like the convoy, they seem happy to shrug as the government potentially acted outside its authority, freezing assets without a court order and suspending freedom of association even for individuals who broke no laws. 

After the alarm was sounded by retired judges to constitutional law experts, the Ottawa press gallery shrugged and its punditry fixated on excessive horn honking rather than the prospect of a government breaking its own laws.  It goes without saying the use of the Act set a terrible precedent —one that the government must be held to account, whether through one of several continuing legal challenges or a robust public inquiry, as mandated by the Act itself.“A national inquiry into the federal government’s use of the Emergencies Act to bring an end to the ‘Freedom Convoy’ trucker protests and blockades has been launched, with a mandate to examine the circumstances that led to the use of the Act, and the measures taken through it to deal with the emergency situation. Prime Minister Justin Trudeau has named Paul S. Rouleau to lead the independent ‘Public Order Emergency Commission,’ which will be ongoing for the better part of the next year.” https://www.ctvnews.ca/politics/national-inquiry-called-into-trudeau-s-use-of-emergencies-act-to-end-freedom-convoy-1.5874628

But while the Emergencies Act provided an extreme example of a government brazenly ignoring constitutional constraints, a less dramatic change has been happening slowly over time, wherein governments have been assuming powers that are properly under the jurisdiction of other levels of government.

In a federal country—especially one deliberately structured as a federation precisely to accommodate different regional preferences—this is a serious problem. It is also why our constitution specifically delineates in sections 91 and 92 the powers held by the federal and provincial governments, respectively. To this was added another tier of municipalities, tribunals, and boards created by provincial statutes and delegated certain specified powers. 

Anyone reading the news today would be forgiven for thinking these distinctions even matter at all. The recent Liberal-NDP supply and confidence deal is a case in point, committing the federal government to act in several areas—including dental care, child care, and pharmacare—that lie squarely within provincial jurisdiction. So too, arguably, was the federal government’s imposition of a federal carbon tax against the wishes of several provinces, although ultimately a majority at the Supreme Court of Canada sided with the federal government.  

Other more recent examples include school boards in Ontario attempting to impose mask mandates when they had no such power to do so, and even a pledge by Ontario Liberal leader Steven Del Duca to ban handguns in the province, even though this is a criminal law matter and therefore under federal jurisdiction

The most obvious answer as to why this is happening is the political dividends offered to governments that promise to do things outside their powers, relying on the fact the public does not know or care about this seemingly trivial detail. 

This is dangerous for several reasons, not least because it further erodes the authority of the constitution as a meaningful constraint on power. It also has clear implications for national unity, as it upsets the balance between the centralizing tendencies inherent to the federal government and the need for maximum accommodation of regional and provincial preferences. 

For many decades, this seemed to be well understood when the province seeking to blaze its own path was Quebec. Today, when provinces such as Alberta and Saskatchewan are intent on being more “distinct” in their policy preferences, this principle for some reason seems to carry much less weight. 

Ignoring our constitution’s division of powers also has the effect of blurring lines of accountability to the voters, who are not able to properly assign blame (or credit!) the level of government responsible for shaping policy and spending their tax dollars to further these ends.

It is a truism that sections 91 and 92 of our constitution are not exhaustive—both because some things simply did not exist at the time of its creation and because some powers must be shared by both federal and provincial governments. Nonetheless, this cannot be the case in every policy area, or it would ultimately defeat the purpose of laying out any division of powers in the first place. 

It is increasingly necessary to address the pressing issue of the federal spending power, and to consider whether or not it might be time for the federal government to establish some agreed-upon constraints on its use. For example, where federal governments wish to exercise it, they might commit to two simple rules. 

First, to limit federal funding in any area of agreed joint jurisdiction to a maximum of 50 percent, and to leave the provinces unfettered control of program design and implementation. Second, whenever the federal government wishes to fund more than 50 percent of a program that lies within provincial jurisdiction, they should instead transfer tax points to the province to administer—thereby ensuring that the province is the one raising and spending taxpayer funds so that they can be held to account by the voters in that province, as responsible government in any democracy requires.

The past decade has seen the rule of law in Canada weakened substantially. Governments must act to restore its vitality. Governments can start by respecting and paying heed to the proper limits of their own powers.

Steve Lafleur: The federal government’s new tax-free home savings account won’t increase housing affordability

Commentary

Based on the Trudeau government’s recent budget,Making Housing More Affordable there’s some good news and some bad news on the housing policy front. The good news is that Ottawa explicitly recognized that Canada needs more housing units, in-line with evidence that Canada is dead last in the G7 in terms of the number of housing units per person.“Canada has the lowest number of housing units per 1,000 residents of any G7 country. The number of housing units per 1,000 Canadians has been falling since 2016 owing to the sharp rise in population growth. An extra 100 thousand dwellings would have been required to keep the ratio of housing units to population stable since 2016—leaving us still well below the G7 average.” https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.housing.housing-note.housing-note–may-12-2021-.html The bad news is that Ottawa is throwing fuel on the fire by stimulating the demand side of the housing market. 

Prices in housing markets, like all markets, are set by supply and demand. A sharp increase in the quantity of housing units built should put downward pressure on housing prices. By contrast, an increase in the demand for housing units should increase the price of housing. Given the rapid escalation in housing pricesTeranet–National Bank House Price Index not only in Vancouver and Toronto but in other parts of the country that used to be somewhat immune to rapid price appreciations, it’s pretty clear Canada needs more housing units. 

The Trudeau government, unfortunately, is targeting the demand side of the market in two main ways.

First, a two-year freeze on foreign homebuyers, which is unlikely to move the needle on the demand side since most people who buy homes in Canada are Canadian (in other words, not foreigners) or are exempt from the ban (foreign students, for example).

Secondly, and most importantly, a new Tax-Free First Home Savings Account, which will actually increase housing demand. The account is essentially a hybrid of a Tax Free Savings Account and an RRSP. Contributions to the account are tax deductible (like an RRSP) but withdrawals are tax exempt (like a TFSA). This means that savings for home down payments will be more tax friendly than retirement savings. In other words, the federal government is incentivizing people to allocate more money to the housing market precisely when it’s running hot. 

The new savings account also means that, at the margins, some people will contribute money to down payments that they might otherwise put into a TFSA or RRSP. In other words, it will encourage people to concentrate more of their assets into housing rather than diversifying their assets by investing in bonds and equities. It’s not clear why we should want people to be more reliant on high housing prices to fund their retirements. 

Of course, this new account might seem appealing to some people locked out of the housing market. But adding more participants to bidding wars doesn’t help buyers in the end—it helps sellers by allowing people to bid up prices even more. Giving more money to 10 people bidding on nine houses doesn’t make a tenth house appear.

To be fair, the federal government has a limited set of tools at its disposal to deal with housing prices. But those tools do exist. For instance, there have been proposals from the Conservative Party to tie infrastructure spending to increasing housing density.The conservative case for federal intervention in housing And even this latest federal budget includes a Housing Accelerator Fund aimed at cutting through red tape and local NIMBYism. One proposal is a stick, the other is a carrot. But they both show how Ottawa can help boost the housing supply. That isn’t to say that we should let municipal and provincial governments off the hook—these two levels of government have a great say in the amount of new housing that gets built. But we shouldn’t pretend that Ottawa is a passive victim of circumstances either.

In the end, however, the only thing that will really move the needle on housing affordability is building more homes. While the Trudeau budget includes measures that will hopefully encourage more supply, they’re undermined by new policies that encourage more demand. Throwing water with one hand and gasoline with the other isn’t likely to put out the fire. 

Steve Lafleur is a senior policy analyst with the Fraser Institute.