The election of 1979 brought Joe Clark and the Progressive Conservatives to power in a minority government. Trudeau announced his resignation, and an era in Canadian history seemed to have come to a close. The new government did not share Trudeau’s belief that the country had become overly decentralized and the provinces too powerful, and it was therefore in a position to have much better relations with the provinces. That possibility disappeared as it almost immediately faced confrontation with two strong Conservative provincial regimes.
Another sharp jump in the international price of oil had created a new gap between that price and the one Lougheed and Trudeau had agreed upon. Lougheed was again demanding that Canadian prices rise to international levels. Although Alberta had voted solidly Conservative and the West had strong representation in the federal government for the first time since 1963, that government was managing a country whose population had enjoyed the benefits of buying oil products at less than international prices. Clark was caught between the interests of his western base of support and the majority population of central Canada, and especially between the Alberta and Ontario Conservative governments.
Energy prices were to be addressed in Clark’s first budget, which was presented on December 11. Clark assumed that with the Liberals leaderless and the election only a few months in the past, his minority government faced no danger of defeat and could govern as though it had a majority. Both assumptions proved wrong. The wily Liberal politician Allan MacEachen calculated that Clark might not have a majority for his first budget and it was he, not Clark, who had done the arithmetic correctly. The Clark government fell on December 13, and whatever beneficial effect it might have had on federal-provincial relations was lost. The next election was set for February 18, 1980.
Trudeau did not require much persuasion to withdraw his resignation. There had been no renewal of the federal Liberals in terms of leadership, personnel, or policy, but the party and Trudeau were rejuvenated by the surprising turn of events. They won a convincing victory, their seat total rising from 114 to 147. Equally important was the distribution of seats: 126 of 170 in central Canada, nineteen of twenty-five in Atlantic Canada, and only two in the West, both in Winnipeg. Canada had an eastern Canadian government, not a national one, and that would be very clearly reflected in Ottawa’s policies towards the provinces.
The reborn Liberals had a very different attitude than the one they had carried into the previous election. Given the polls in 1979, they were not surprised to have lost that election. But they had been shocked by the political obituaries that appeared after Trudeau announced his resignation. They focused on the failures, the economic mismanagement, the dismal state of relations with the provinces and with the United States, the contradictions, and the aimlessness in both policy and action. Trudeau had been rated as one of the worst prime ministers in Canadian history. Changing that reputation would drive the second Trudeau regime as much as any policy goals.
Surprised to be back in power, Trudeau and his colleagues were suddenly energized, focused, disciplined, united, and determined. They narrowed their agenda to four specific issues: Quebec, the constitution, energy, and the economy. They were not going to let any obstacles stop them or even slow them unnecessarily, including the provinces, the constitution, the public, or the British government. The word “compromise” was not in their vocabulary, and they were determined, for example, to patriate the constitution with or without the support of the provinces, and to expand Ottawa’s control of energy resources regardless of what the constitution said about provincial ownership. Observers would later describe the government’s newfound determination and its unilateralism as unprecedented in a federal state and, indeed, as a contradiction of federalism as a form of government.
The Liberals were determined to promote Canadian nationalism, to ensure that Canadians identified more with their national government than with their province, and to promote the view that all Canadians should have the same rights and access to government services. However laudable these goals, they implied a major shift in power from the provinces to Ottawa and, indeed, a denial of some fundamental principles of federalism. In particular, Trudeau was determined to ensure that Quebec be treated the same as other provinces. This was a denial of the very purpose of Confederation and of the fact that Canadian federalism had always been asymmetrical, that Quebec had always had “special status,” and that all provinces were different in some ways and had all been treated differently by Ottawa since 1867. Oddly, his actions did not conform to his stated intentions as he treated Quebec as special in many ways.
Trudeau’s concept of a charter of rights reflected his desire to have one set of values for the whole country, rather than ten slightly different ones as the BNA Act allowed. Some provinces already had bills or charters of rights, and if they differed from those of other provinces, it was because the respective populations had different circumstances and views of human rights, not that they did not respect rights. Since the main differences were between English-speaking and French-speaking Canadians, Trudeau’s proposed national charter represented, in effect, a new attempt to assimilate the Québécois and was seen by many in Quebec as a threat to la survivance, the preservation of their unique situations, society, values, language, and culture.
Canadians began to realize that there had been a significant shift in Liberal thinking when Trudeau spoke to the House of Commons on April 15, 1980. It would take some time, however, for people to understand that his new strategy was to use Canadian nationalism to counter Québécois nationalism; after all, he had condemned all nationalism for decades. One problem with nationalism, as he had written, is that in a highly nationalist people there is room for only one political identity. He saw Canadians having a choice between identifying with the country or with their province, and he seemed to reject the idea that people could see themselves as Montrealers, Québécois, and Canadian at the same time. For Trudeau, identification with Canada had to outweigh identification with a province because he was, above all, a Canadian nationalist.
The Quebec Referendum
One of the first items on the new federal government’s agenda was the Quebec referendum on separation. In the 1976 provincial election, Premier Lévesque had promised a referendum seeking authority to negotiate sovereignty-association with Ottawa. On November 1, 1979, the PQ released its arguments for separation in the form of a white paper entitled Quebec-Canada: A New Deal. The date was set for May 20, 1980. Claude Ryan and the provincial Liberals had undertaken a massive study of the province’s place in the federation and advocated remaining a province provided there was a large degree of decentralization. Their position was presented in detail in a document called the Beige Paper. It was the sort of nationalist program that had troubled Trudeau for decades: more power and special status for Quebec, the very things he had gone to Ottawa in 1965 to fight.
The first debate on the referendum took place in the Quebec Assembly on March 4, 1980, and the PQ won it convincingly. It continued to do well in the early stages of the campaign. Trudeau convinced Ryan to stop referring to the Beige Paper, to the consternation of provincial Liberals who had put so much work into it and saw it as the vision that was needed to counter separatism. But while it was no longer emphasized, the voters knew that it was the vision and the policy the provincial Liberals had put forth as an alternative to separation. It was and remained the platform of the No side.
The two official sides were the PQ and the Quebec Liberals, but that left unanswered the question of what role would be played by the seventy-four federal Liberal MPs, thirteen of whom were ministers and, of course, by Trudeau himself. A prominent role for Trudeau would make Ryan look weak, so it was decided that Trudeau would make only three speeches. Jean Chrétien was put in charge of the federal forces and became co-chair of the No side. He and the Quebec federal MPs were massively engaged in the campaign in their own ridings, those who were ministers used their departments to promote federalism, and federal funds poured into the province. Ottawa had a huge advertising budget, allegedly informing the public of federal programs but effectively providing masses of pro-federal propaganda.
The debate was in theory about seeking a mandate to negotiate, but it quickly centered on the question of separation itself. That gave the advantage to the No side, and it edged ahead in the polls. It was aided by PQ blunders and by leaders from English-speaking Canada who said there would be no association if Quebec separated. Trudeau asked the key question that Lévesque could not answer: if the other provinces would not accept an association with Quebec, how could the PQ promise that it could deliver sovereignty with association? Trudeau’s role in the campaign was and remains highly controversial. In a speech on May 14, he promised that he would ensure that the constitution was renewed if the No side won. He did not provide details on what he meant by renewal, but constitutional renewal had been demanded since the mid-1960s by five successive premiers from three different parties. The renewal they demanded was a re-examination, rewriting, and re-allocating of the division of responsibilities between the two orders of government, the renewal outlined in the Beige Paper. If Trudeau meant something different, then it was his responsibility to say so.
The outcome was a resounding victory for the No side, 60 per cent to 40 per cent. It was a disaster for the PQ: if it could not even win a mandate to negotiate, then a mandate to separate was out of the question. The outcome was a disaster for the soft nationalists as well, regardless of whether they were Liberal, PQ, or Union National. The rest of Canada had shown some sympathy for a number of Quebec’s demands, but that was partly out of fear for the future of a Canada without Quebec. Now 60 per cent of Quebeckers had rejected the PQ’s strategy, and the threat of separation was gone, at least for the immediate future. But constitutional talks were now high on Ottawa’s agenda, and Lévesque would be going to those talks in the weakest position of any Quebec premier.
With the victory in Quebec, Trudeau claimed that he represented 60 per cent of Quebec’s population to Lévesque’s 40 per cent. But it was Ryan’s Quebec Liberals who had won the referendum, and they could argue that their vision of a Quebec within a decentralized Canada had received 60 per cent of the vote. Ryan probably expected that he would win the next Quebec election and pursue the object of decentralization at the upcoming constitutional talks. Trudeau could avoid that situation by forcing the pace of the talks, which is exactly what he did. As a result, Ryan and the Quebec Liberals’ vision of a decentralized Canada was not part of the official constitutional talks, and the side that had actually won 60 per cent on the referendum question was marginalized.
On the day of the referendum, no one knew just how high on Ottawa’s agenda the constitutional talks ranked. They found out within twenty-four hours, when Trudeau sent Chrétien to discuss the issues with the nine English-speaking premiers. They were quite surprised with what Ottawa was proposing—agreement on a charter of rights and an amending formula followed by patriation from London. A charter of rights and an amending formula would be additions to the constitution, not the renewal of anything in it, and patriation was a change of residence for the constitution. There was, in fact, no “renewal” in Chrétien’s brief to the premiers.
Trudeau had misled the public. There was outrage in Quebec when his definition of “renewal” became public knowledge. That was especially the case within the Quebec Liberal Party, which had won the referendum debate after offering a large degree of decentralization. Even his speech writer for the campaign—André Burelle—interpreted Trudeau’s “renewal” to be a promise of radical change and was extremely disillusioned when he found out otherwise. Trudeau said that it was very clear where he stood on constitutional issues, so people had no right to be surprised. But he had hardly been consistent in his negotiating positions on the constitution. He had agreed at different times to a number of the demands and proposals coming from the provinces. He had gradually become a strong centralist, but in 1978, he had agreed to meet a number of the premiers’ specific demands.
On his tour of provincial capitals, Chrétien discovered some support for a new round of talks, but the premiers’ mood grew steadily more negative as the summer wore on. At the first post-referendum conference on June 7, 1980, the premiers heard Trudeau’s own version of what he wanted, and most of them were strongly opposed. Premiers Lougheed and Blakeney wanted to start discussions where they had ended before the 1979 election, that is, after Trudeau had offered a number of concessions. But Trudeau now dropped that list. Indeed, he announced that he wanted to strengthen the common market by removing interprovincial barriers to the movement of goods, services, and labour. That idea had much merit and support, but it also represented a new assertion of federal control over the economy and a decline in the provinces’ ability to manage their own economies in matters that were constitutionally theirs. Trudeau also had a new plan for breaking any continuing deadlock over the constitution, namely adding a referendum option: if there was no agreement on a proposed amendment in two years, Ottawa could hold a national referendum on it. This was a brand new amending formula that would be controlled by Ottawa and denied the veto to any and all of the provinces.
Trudeau needed to give the impression that he was still flexible so he agreed to re-establishing the Continuing Committee of Ministers on the Constitution, the CCMC. It held a series of meetings over the summer and drafted some possible language for the new constitution. In the meantime, Trudeau told the Liberal caucus that all his efforts had failed, that the only means of solving Canada’s constitutional problems was unilateral patriation and that they did not need the agreement of the provinces to proceed. Cabinet and caucus agreed.
Chrétien continued his talks with the relevant ministers and reported to Trudeau that there was some progress, but that their premiers were not enthusiastic about constitutional issues. It was decided to hold another First Ministers’ meeting in Ottawa on September 8, 1980. After Trudeau’s re-election, a memorandum had been prepared under the direction of Michael Kirby, outlining the strategy to be pursued. Its authors assumed that they could not obtain provincial agreement and concluded that Ottawa should go ahead with a unilateral request for patriation. To make that credible with the British government, however, there had to be a First Ministers’ meeting on the constitution, which the authors assumed and probably hoped would fail. That was the strategy Ottawa was following in the months before the September meeting, and the Kirby memorandum made clear that Chrétien’s discussions with the provincial governments were not being held in good faith.
It was traditional for the governor general to host a dinner for the first ministers on the eve of their meetings, and Governor General Edward Schreyer had such an event arranged for that Sunday evening. The discussion quickly degenerated into nasty barbs. Trudeau had to ask Schreyer to speed up dessert so they could all escape from the poisonous atmosphere. Jean Chrétien, who was there as minister in charge of relations with the provinces, described it as “the most unpleasant reception I have ever . . . [attended],” a view confirmed by others who were present.
Unfortunately for Ottawa, the Kirby memorandum had been leaked to the Quebec government and it eagerly distributed copies to the premiers that evening. That made a poisonous atmosphere even worse, and it deteriorated further when Trudeau began the conference with the threat of unilateral patriation. Manitoba Premier Sterling Lyon said that would tear the country apart. Trudeau replied that if the constitution could not be patriated “then the country deserves to be torn up.” This was another example of Trudeau’s arguing style. The fact that the BNA Act had resided in London had caused no problem before the 1930s, and only upset some English-Canadian nationalists and Trudeau after that. The idea that the country could be “torn up” over a matter of consequence to so few was an extreme exaggeration. The provinces were not opposed to patriation or an amending formula, and the crisis, if there was one, was over Trudeau’s desire to add his Charter of Rights before patriating it.
Lyon said that a charter would be an invasion of provincial jurisdiction and a violation of parliamentary democracy. The inclusion of a charter in the constitution itself meant that some power would be transferred from elected legislatures to appointed courts and ultimately the Supreme Court. Trudeau had already made clear what direction he wanted that Court to lean when he appointed the strong federalist and nationalist Bora Laskin in 1970. Just three years later, Trudeau made him Chief Justice ahead of others with far more experience and arguably more balanced views on federalism. This was the very type of politicization and bias in the Supreme Court that the premiers feared.
Trudeau argued that including the Charter did not affect the balance of power between Ottawa and the provinces, because Parliament was also losing power. The provinces were hardly fooled since it was Trudeau who appointed the Supreme Court judges. He was saying, in effect, that his team could pick the referees, but that was fair since they then applied the rules to both teams. The premiers knew that most of the rights listed in the Charter were provincial rather than federal, and their power would be reduced more than Ottawa’s. The premiers were also very aware of how politicized the American Supreme Court was and how it had been making law rather than just interpreting it for decades. And they could hardly have forgotten that, in the 1970s, the Supreme Court had repeatedly sided with Ottawa on federal-provincial disputes.
Constitutional Paralysis
To no one’s surprise, the conference was a disaster. On September 27, Trudeau met the Liberal caucus to say that the premiers were demanding more and more, and he could not wait for agreement. The urgency was in the minds of the caucus and did not reflect any Canadian problem, especially as the government was just beginning a five-year mandate. The next day, cabinet confirmed the decision to proceed with unilateral patriation. That proposal was introduced into Parliament on October 2. The new constitution would be drafted and controlled by Ottawa alone and would include Ottawa’s version of an amending formula and a charter of rights, plus reform of the Senate and Supreme Court. There would be no changes to the division of responsibilities between the two orders of government. There would also be a referendum to obtain final approval, which would make clear that the people were sovereign and not the governments of Canada or the UK. Trudeau told the public that Canada had to end fifty years of constitutional paralysis. That was odd, as the constitution had been amended fourteen times, more than those of the United States and Australia over the same period. Paradoxically, it was after the Constitution of 1982 was adopted that it became almost impossible to amend it. The premiers met on October 14 to discuss a response to Trudeau’s proposed initiative, but there was no agreement.
A deadline was set for going to London by Christmas. That timetable was upset when the federal Progressive Conservatives began a very successful filibuster in the House of Commons, a tactic that was reinforced by a strong demand for public hearings. The hearings produced many submissions, and the proceedings were televised. The government’s deadline had to be moved to July 1, 1981, the 114th anniversary of Confederation. With Ontario and New Brunswick supporting Ottawa, the other English-speaking premiers began co-operating to fight Trudeau’s strategy. In London, provincial politicians and officials began a campaign to inform and lobby British MPs. It was only then that the British seemed to understand that Trudeau planned to change the constitution in ways the provinces did not accept before having Britain patriate it. British Prime Minister Margaret Thatcher asked why Canada did not patriate the Act and then change it; her question went unanswered. Lévesque decided that the advantages of co-operation with the other premiers outweighed the disadvantages, and they became known as the Gang of Eight.
They made a historic compromise, one as potentially significant as those that had led to Confederation itself. Lévesque accepted the amending formula that the others wanted, the so-called Vancouver formula, which stated that general amendments required the agreement of Ottawa and two-thirds of the provinces with 50 per cent of the population. By this formula, neither Quebec nor Ontario had a veto. In return, the seven premiers accepted the demand Quebec had been making since Lesage’s day: when Ottawa launched a program in provincial areas of jurisdiction, the provinces could opt out of it with full financial compensation, which they could spend as they chose and not necessarily on a similar program. Ottawa and the English-speaking provinces could have shared-cost programs with Ottawa setting the standards, but Quebec would no longer be coerced into participating through Ottawa’s use of the spending power. The Gang of Eight would insist on both these elements in any renewed constitution, and they did not think Britain would patriate the constitution against the will of eight out of ten provinces.
It has been argued that Lévesque made a major tactical error in giving up Quebec’s veto and that no previous premier would have done so. But Lévesque did not “give up” the veto. He traded it for the support of seven other provinces for a matter far more important to Quebec, namely regaining control over education, health, welfare, and culture, the areas of “exclusive provincial” control that had been steadily encroached upon by the federal government. Amendments were very rare so Quebec’s veto had hardly ever mattered. But by 1980, there were eighty-seven shared-cost programs and Quebec had been forced to accept them, along with Ottawa’s conditions. Opting out with full compensation now seemed within grasp and it was well worth surrendering the veto. Also, no previous premier had ever faced a federal government determined to patriate the constitution unilaterally with a charter of rights that would permanently weaken Quebec.
The English-speaking premiers had made a major concession: they had effectively abandoned the policy of assimilating Quebec that was being gradually achieved by Ottawa’s use of the spending power. This agreement was the twentieth-century equivalent of the one between George Brown and George-Étienne Cartier in 1864, the basis of the compromise that made Confederation possible. Trudeau was, of course, horrified. He had no intention of abandoning the long list of federal encroachments on provincial jurisdiction dating back to 1927 and was, in fact, heading in the opposite direction, of increasing federal power vis-á-vis the provinces. The compromise between Lévesque and the premiers was a major challenge to this trend. It would ensure la survivance of Québécois culture, the goal pursued doggedly since 1763, the goal achieved at Confederation but since undermined. If adopted, this formula would almost certainly have avoided the following decades of constitutional turmoil and the referendum of 1995.
It was also said that by abandoning the veto, Lévesque accepted that all provinces were equal. That was theoretically correct, in that under the agreement no province would have a veto and all of them would have the right to opt out of federal programs. But it had been clear since the mid-1960s that Quebec was the only province that would take advantage of opting out. When it alone did, it ceased to be equal to the others. More precisely, the other provinces chose not to be equal to Quebec, since they would not be exercising the right all of them would gain. That is precisely why Trudeau was so strongly opposed to opting out—it would result in Quebec being more special and distinct. Six days after Lévesque joined the Gang of Eight, they announced an accord that constituted their reply to Trudeau’s proposal to make a unilateral request to Britain for patriation. The accord called for the Vancouver amending formula, opting out of federal programs that infringed provincial responsibilities with full compensation, no charter of rights, and then patriation. Now the main issues were that Trudeau wanted the charter, which the provinces opposed, while the provinces wanted a new formula for the spending power, which Trudeau opposed.
Throughout this period, the attitudes of other provinces towards Ottawa had been hardening. That was particularly the case of Alberta Premier Peter Lougheed. In his view, Ottawa was launching an all-out assault on the provinces with its proposed changes to the constitution. It was also assaulting the oil-producing provinces with the National Energy Program of October 1980. He saw the constitutional and energy issues as being related. His concern was that Ottawa was attempting to take control of oil and natural gas resources, which were found mainly in western Canada. His view was clearly expressed: under Trudeau’s proposed constitutional changes, there would be “a very different kind of Canada. . . . It will be a much different federal state—if a federal state at all . . . it will primarily be a unitary state . . . with provinces other than Ontario and Quebec being in a second-class position . . . [Ottawa’s plans] change the rules of Confederation . . . in a very significant way . . . in terms of resource ownership of the provinces.”
An important part of the Gang of Eight’s strategy was court challenges to the idea that the federal government could unilaterally patriate the constitution. They decided to launch three challenges, for Quebec, Manitoba, and Newfoundland. In Manitoba, the provincial court found for Ottawa 3–2, a legal victory but not a very convincing one politically. In Quebec, the provincial court found for Ottawa 4–1, another legal victory but not a perfect one. Then, on March 31, the Newfoundland court unanimously rejected Ottawa’s plan: in its view, the Charter did indeed infringe on provincial jurisdiction, and by convention provincial support was required for such an amendment. The federal government could not unilaterally alter the constitution without the agreement of some provinces. Trudeau had no choice but to appeal that ruling to the Supreme Court, accept yet another delay, and hope for the best.
The precedents were quite clear: the constitution had never been amended in areas that affected the provinces except with the unanimous agreement of the provinces. Eighteen months earlier, in the Senate Reference case, the Supreme Court unanimously said that provincial agreement was necessary to change the Senate. In reaching that decision, it noted that all previous amendments affecting the provinces had been made with unanimous provincial consent. On September 28, 1981, the Supreme Court decided by a vote of 7–2, that although it had never done so in the past (that is, in spite of all precedents), Ottawa did have the legal right to make the amendments on its own. But by a vote of 6–3, it also said that doing so would violate convention and that Ottawa needed the support of a “substantial” number of provinces to make the amendments. The word “substantial” changed the amending process from unanimous provincial consent to less than unanimous provincial support, a major but undefined shift in Ottawa’s favour. The Supreme Court was continuing with its recent tradition of centralizing power and, predictably, Chief Justice Laskin had sided with Ottawa. The decision did not specify a minimum number of provinces or how much of Canada’s population they had to represent, as those were political decisions. Key questions were thus left unanswered: how many provinces, with what proportion of the population, and was Quebec one of them? If Quebec was not, then it was neither “distinct” nor “significant,” and it could not count on the courts to protect the rights and responsibilities given it in the BNA Act.
The court decision forced Trudeau to make one more attempt to reach agreement with at least some of the Gang of Eight and a First Ministers’ Conference was scheduled for November 2. For two days, there was stalemate at the table but some indications of flexibility in the private conversations that always accompanied formal meetings. That, of course, made Lévesque very nervous. He did not trust the other premiers, and vice versa—not a good situation for a group that had to remain united if they were to succeed. There was also some flexibility on the federal side in terms of Chrétien’s views, but not those of Trudeau. Trudeau did not think a deal could be made; Chrétien thought there was a possibility, but he knew that to achieve a deal they had to break the unity of the Gang of Eight.
The Constitution of 1982
On the morning of the third day, Trudeau reiterated a proposal he had made previously and that had received little attention and no endorsement. He suggested they patriate the constitution with the amending formula adopted at Victoria and then spend two years discussing the other issues. If there was no agreement at the end of that period, then Ottawa would submit its proposed changes to the people in a referendum. The proposal was a direct challenge to Lévesque, who had put his province’s future to a referendum only two years earlier. It would be very difficult for him to say that a national referendum was not acceptable. Perhaps more importantly, he probably thought that in a referendum Quebeckers would reject a constitutional proposal that would increase federal power over matters of importance to the Québécois.
Lévesque immediately agreed to Trudeau’s proposed referendum. The other seven members of the Gang of Eight were stunned, as were others who heard him, including journalists from Quebec. None of the other seven premiers wanted a referendum because they knew the Charter was popular. More importantly, Lévesque had inadvertently broken the Gang of Eight’s rule that none of them would make a deal with Ottawa without first discussing it with the others. Lévesque had risen to Trudeau’s bait and seriously undermined, if not destroyed his own position. He had betrayed and broken the Gang of Eight and confirmed their worst suspicions about dealing with a separatist premier. This was somewhat of a repeat of Lesage’s repudiation of the Fulton-Favreau amending formula in 1964 and of Bourassa’s reversal on the Victoria Charter in 1971, and the English-speaking premiers had had enough of dealing with Quebec premiers. After lunch, Trudeau cleverly presented the idea of a referendum to the other premiers as an Ottawa-Quebec deal. For years, English-speaking premiers had been upset with bilateral deals between Ottawa and Quebec City, such as the CPP/QPP of 1964, which they had had to accept. There had been other such deals going back to the 1950s that affected them, and they were in no mood for another one. What little trust existed on Monday morning had disappeared by noon on Wednesday. Lévesque tried to argue that he had not properly understood the proposal, but they had all heard him accept it.
Since none of the English-speaking premiers wanted a referendum, Trudeau thought the Conference had failed. That was what he expected and probably still hoped for. Failure would prove the impossibility of obtaining provincial agreement and presumably a reluctant Britain would then agree to the unilateral patriation of a constitution containing only his changes. Chrétien still thought a deal was possible. He convinced Trudeau to keep the Conference going and continued his talks, mainly with his colleagues from Ontario and Saskatchewan, Roy McMurtry and Roy Romanow. That choice of partners was interesting—Ontario was not in the Gang of Eight, Saskatchewan favoured centralization unlike most of its partners, and they were definitely not representative of the opposition to Trudeau’s plan.
That evening, Chrétien brought a rough outline of an agreement to 24 Sussex Drive, where Trudeau was huddled with his key ministers and advisers. Trudeau did not like it and remained adamant until 10 pm, when he received a call from his main ally, Ontario’s Premier Davis. Davis said the compromise was acceptable to himself and New Brunswick Premier Richard Hatfield. Trudeau could not go to London against the wishes of all the provinces, and he gave in. There would be patriation but the Charter would not contain everything he wanted, and there would be compromises on other federal positions.
The talks went on throughout the night of November 4–5. Various players met in hotel rooms, various proposals were made and debated, and numerous phone calls kept the participants informed as the issues evolved. The essential compromises became clear, and Chrétien, McMurtry, and Romanow are generally regarded as the prime drafters, although a number of premiers played key roles, including Newfoundland’s Brian Peckford and Saskatchewan’s Allan Blakeney. By breakfast time on Thursday, the federal government and the nine English-speaking premiers had arrived at an agreement. Peckford gave a copy of it to Lévesque, the first he knew that a deal was afoot. He immediately realized that he had been outmanoeuvred by Trudeau, Chrétien, and his recent allies in the Gang of Eight. The Quebec delegation had also very seriously mishandled the tactics of the negotiations. Lévesque thought the Conference had failed by Wednesday afternoon, and his officials did not attempt to find out if other delegations were still negotiating. None of the participants in those talks bothered to inform them because, as far as they were concerned, Lévesque had deserted the Gang of Eight when he accepted the proposal for a referendum.
That morning Trudeau and nine premiers signed the agreement. Lévesque returned to Quebec City a depressed, angry, frustrated, and defeated man. He could not acknowledge that he had misplayed his cards, so he claimed that he had been betrayed by his partners in the Gang of Eight. That argument would be received in Quebec with much sympathy, where the events of November 4 became known as the “night of the long knives,” the night Canada’s English-speaking premiers conspired to stab Quebec in the back. The theory entered the mythology of Quebec, but not that of Ottawa or the rest of Canada. Outside Quebec, there was little or no sympathy for Lévesque and perhaps a little too much satisfaction over the way things had unfolded.
The question then was what exactly had Trudeau and the English-Canadian premiers agreed upon. This was a very good question given all the changes of position, compromises, and horse-trading on the last night of the Conference, not to mention the previous three days and, indeed, the fifteen years of negotiations. The most important fact was that the premiers had accepted Trudeau’s beloved Charter of Rights. It was not, however, a total victory, as Trudeau had to accept a caveat stating that provinces could overrule the courts on certain rights, the famous “notwithstanding clause.” Alberta had developed that concept in 1971, and Lougheed introduced it into the discussion partly to test Trudeau’s interest in compromising. The clause made it possible for the legislatures to pass laws “notwithstanding” the fact they might violate some Charter rights. This was a victory, especially for Lyon and Blakeney. The notwithstanding clause did not apply to language or democratic rights, but it did preserve provincial power over other rights such as labour mobility or free speech.
Most amendments would require the agreement of Parliament plus two-thirds of the provinces with 50 per cent of the population so no province had a veto. Extremely important matters required the approval of Parliament plus all the provinces. The condition that Trudeau found so objectionable was dropped, namely the proposal that any province could opt out of federal programs with full compensation. That was what Lévesque had traded Quebec’s veto for when he joined the Gang of Seven. The premiers had thus kept Lévesque’s surrender of the veto but not honoured their half of the bargain. Quebec emerged from the conference with no veto, no opting out clause, none of the changes it wanted to the division of responsibilities, and no progress on any of the issues it had been raising since 1960.
Trudeau also dropped his proposal for a referendum mechanism, so his deal with Lévesque on Wednesday morning did not last until dinnertime. This was significant in constitutional terms. Trudeau had argued that sovereignty rested with the people, and one of his main reasons for wanting to patriate the constitution was so that it would be an act of the Canadian people and not that of a foreign government. But the Constitution of 1982 was, in fact, another British Act of Parliament, which, when ratified by the Canadian House of Commons, became a Canadian document. Unlike the BNA Act, it was not approved by a single provincial legislature. In the new constitution, sovereignty still flowed from the Crown downwards to the people. That was not much of a change, although the Crown was now Queen Elizabeth of Canada rather than Queen Elizabeth of Great Britain. Ottawa also accepted a strengthening of provincial control of natural resources and the right to tax them, the only change made to the 1867 division of responsibilities. That met Lougheed’s and Blakeney’s main goal for the talks, but it did not solve the conflict of jurisdiction between provincial control of resources and federal control of trade.
In a symbolic bow to Quebec, any province could opt out of an amendment that transferred provincial power in the fields of education or culture to Ottawa. This was hardly of significance because Ottawa had used its spending power, rather than constitutional amendments to launch programs in those areas. In response to demand from Atlantic Canada, the new constitution enshrined the equalization system—a future federal government could change it but not abolish it without provincial consent. There was also agreement on holding a First Ministers’ meeting including Aboriginal leaders to address the large number of issues that had been ignored. This was highly significant because until then First Ministers’ meetings had never included Aboriginal leaders, but the new constitution now elevated them in principle to a status bordering on that of premiers. From then on, they would be involved in federal-provincial talks, attempting to parley their new status and treaty rights into effective bargaining chips. That changed the nature of First Ministers’ meetings, but there is little evidence that the presence of Aboriginal leaders led to improvement in the situation of the people they represented. The premiers of Yukon and the Northwest Territories were also working to gain admittance to First Ministers’ meetings, so federal-provincial relations would represent more interests but be more complicated in the future. Within decades, the phrase “Ottawa and the Provinces” had been replaced by “Ottawa and the Provinces and Territories,” and Territorial premiers eventually took their turns being chairmen and spokesmen for the association of premiers.
The Charter identified a number of rights that all Canadian citizens enjoy and gave the courts the power to interpret those rights. These rights were not new, but now they were legally enshrined in the constitution, a change from British convention to American-style practice. That power had belonged to Parliament and the provincial legislatures now belonged to the courts and ultimately the Supreme Court. This represented a significant transfer of power from the legislative to the judicial branch of government, and was seen as a major step in the Americanization of Canadian politics. The Charter gave the right to education in English or French to all people born in Canada where numbers warranted it. That overruled the provision in Quebec’s Bill 101 that only English Canadians born in Quebec had that right.
There was some updating, as a few obsolete Sections of the BNA Act were repealed but others were retained, such as Ottawa’s right to disallow provincial legislation, which had not been used since 1943. One of the most significant conventional changes to the constitution since 1867, the idea that the federal government could spend money on programs in areas of provincial jurisdiction, was not written into the constitution, and nearly one hundred shared-cost programs remained in constitutional limbo. Thus the federal encroachments into health, welfare, education, local matters, municipal affairs, culture, and language remained legal by convention, not by enshrinement in the written constitution.
Canada was fully independent at last, with a revised but not renewed constitution, one that could be amended in Canada itself, but only with considerable difficulty. The monarch was still Queen Elizabeth but that was by Canadian choice, not a vestige of colonialism. Failure to address the division of responsibilities left all those issues unsolved, except provincial control of natural resources. The constitution did not indicate that foreign affairs was assigned to Ottawa, and trade remained in theory an exclusive federal responsibility, although in reality it was now shared. New issues such as the environment were not dealt with. In effect, the main change in 1982 was the addition of the Charter of Rights and Freedoms. Apart from that, the Constitution of 1982 was profoundly unimpressive, the language that of the mid-nineteenth century. It left Quebec with the special status it had under the 1867 BNA Act, and it left Canada with an asymmetrical federalism in which none of the provinces were exactly the same. Trudeau had argued for years that all provinces were the same, but he made little or no effort to make the Constitution of 1982 reflect that view. That was probably because the idea that they were the same had no basis in history or current reality or even in the way he treated them. The BNA Act was renamed the Constitution Act, 1867, which eliminated the word British with its connotations of colonialism, and the new Act with its additions was called the Constitution Act, 1982. The deal was approved by the House of Commons by a vote of 246–24; the British Parliament passed the necessary legislation; and Elizabeth II, Queen of Canada, signed it in Ottawa on a rainy April 17.
The subsequent history of court cases under the Charter did not indicate that Supreme Court decisions would strengthen the federal government as so many expected, hoped, or feared. In the first decade of the Charter, eighteen provincial laws were rejected, as were twenty-three federal ones. In a number of cases, the Court’s decisions reinforced the right of provinces to do things differently. On these matters, Canadians do not have equal rights in every province, and provinces can interpret and administer federal laws differently according to local circumstances. In the case of Haig v. Canada (1993), the Court specifically said that differences between federal and provincial law did not violate equality, and the guarantee of equality did not change the division of powers. The constitution did not solve the basic problems between English and French. It did not resolve the two fundamental competing visions of Canada: of a country including a Québécois nation in control of its own destiny, or of Canada as a single nation with one set of values including bilingualism. It did not resolve the question of what kind of federalism should prevail—Trudeau’s vision of one in which the federal government had primacy, or the premiers’ view that both orders of government had control over the responsibilities that were not shared. And Quebec, which had championed constitutional change, was weaker and more discontented in 1982 than when it first raised the issues back in 1966!
Prime Minister Pearson’s goal in calling the first conference in 1968—to make changes that would halt Quebec’s drift towards independence—had been thwarted. There were elements of both decentralization and centralization in the new constitution, but overall, it moved Canada towards centralization. The Charter strengthened identification with the nation at the expense of provincial identities but the latter did not disappear. In short, none of problems that gave rise to the debate were resolved. The period of 1968–1982 could be viewed as a series of missed opportunities, and the consequences of that failure would linger for decades and almost lead to the destruction of the country in 1995.
Quebec refused to sign, but was bound by the constitution anyway. It rejected both bilingualism and multiculturalism, and the Quebec government continued to fight Ottawa on Charter rights. The PQ refused to attend federal-provincial meetings, and federalism became more dysfunctional. In an act of defiance, the PQ passed legislation applying the notwithstanding clause to all relevant bills that were on the books and applied it to future bills as long as it was in power. Each such use made Quebec more different from the rest of Canada, more distinct, more special, and each was more annoying to the rest of Canada, the reverse of the national unity that Trudeau had sought. His vision of a charter that would bring Canadians together failed in the short term: the Charter carried English-speaking Canadians to a new level of national identity, it had the reverse effect amongst the Québécois, and the two groups were more divided in 1983 than in 1980.
Trudeau’s failure to shift the primary allegiance of the Québécois from Quebec to Canada was confirmed by public opinion polls. In 1970, 34 per cent of Francophones in Quebec identified themselves primarily as Canadians; twenty years later the number had fallen to 9 per cent. In 1970, 44 per cent of them identified themselves primarily as French Canadians; twenty years later that had declined to 28 per cent. In 1970, 21 per cent of them identified themselves primarily as Québécois; twenty years later that had more than doubled to 59 per cent. The idea that Trudeau spoke for the Québécois was shattered in the 1984 election when Liberal strength in Quebec fell from seventy-three MPs to seventeen, with those elected mostly in non-Francophone constituencies.
Natural Resources: Ottawa and the West Again
Equally high on the agenda of the newly elected government was energy policy. After the 1980 election campaign began, Marc Lalonde convinced Trudeau that a new energy policy should be a key plank in the platform. Trudeau then announced the comprehensive policy in a speech in Halifax on June 25, 1980, almost as far from Alberta as it was possible to be. There was no agreement on it in cabinet, and the committee process established in 1968 made it very difficult for the government to adopt any legislation unless broad agreement had been achieved in the relevant committees. To avoid discussion with the ministers who questioned or opposed it, the National Energy Program, or NEP, was inserted in the budget so only the prime minister and the ministers of finance and energy were involved.
The NEP of October 28 implemented a number of the new government’s major goals. They included centralizing political and economic power in Ottawa, asserting federal power over the economy, substantially increasing federal revenues, increasing the political visibility of the federal government, solidifying Liberal support in central and Atlantic Canada, increasing Canadian ownership of the oil and gas industry, and maintaining a price below international levels. It was a regional oil and gas policy, not a national energy one, and it was as much political as economic.
A major feature of the NEP was maintaining prices below international levels. Ottawa increased some old taxes and brought in a number of new ones, especially the Natural Gas Tax and the Petroleum and Gas Revenue Tax. The revenue was needed to subsidize the cost of oil being imported into eastern Canada at world prices. Ottawa allegedly needed more money in order to manage the economy and ensure that the equalization program gave all Canadians a minimum level of governmental services, but Ottawa had the tools to manage the economy, and there were many ways to ensure that the equalization program was functioning adequately.
The 1970s goal of self-sufficiency in energy production was maintained. In order to increase the proportion of oil and gas being produced in areas controlled by Ottawa, expensive incentives were offered to companies exploring in the North and offshore. A number of other measures were designed to increase Ottawa’s influence over the entire sector. The architects of the NEP had apparently not read Adam Smith’s 1776 classic, Wealth of Nations, which explained why trade makes countries richer while protection and the quest for self-sufficiency makes them poorer. The NEP’s goals were at odds with increasing globalization and international trade, an attempt to turn the clock back to an era of mercantilism and economic autarchy.
Saskatchewan and BC were predictably angry; Alberta’s Premier Lougheed was enraged. In October 1980, he addressed Albertans on TV: “Without negotiation, without agreement, [Ottawa] simply walked into our house and occupied the living room.” Lougheed began referring to the federal government as “the Ottawa government,” suggesting that it was the government of central Canada. Alberta’s energy minister, Merv Leitch, asked why it was not possible for Canadians to pay world prices for energy when they had always paid more than world prices for manufactured goods. And he pointed out that Ottawa was not taxing the windfall profits on hydro exports from Ontario and Quebec.
Albertans were so upset that a separatist movement began to emerge, and Lougheed had to prove that the provincial government could stand up to Ottawa to head off the threat. He told Albertans, “You will determine whether or not you want to see more and more of your lives directed and controlled from Ottawa or . . . a fair portion of decision-making determined by Albertans . . .” Premier Blakeney regarded the NEP as a new assault on the provinces. The disallowance of the oil industry’s royalties as a provincial tax deduction was, he said in his Memoirs, unprecedented and aggressive, did not apply to royalties on other natural resources, and “there could not be any reason in accounting, taxation, or government principles for this.”
Lougheed was determined to force the federal government to compromise. Alberta announced that it would reduce its oil shipments to central Canada by 180,000 barrels a day, and it would do so in three stages of sixty thousand barrels each on April 1, June 1, and August 1, 1981. That would force Ottawa to increase imports by the same volume, but at world prices. In order to pay for the additional costs, Ottawa responded to the first cut by adding a tax of half a cent per litre on gasoline, plus another tax of 1.6 cents per litre after the second cut. While Lougheed and Trudeau fought in public, their officials met privately and agreement was reached on September 1, 1981. Alberta won on the main issue, as Ottawa recognized provincial control of energy resources and agreed that the Canadian price would continue to rise towards international levels. Ottawa abandoned its gas and export taxes, and the Petroleum and Gas Revenue Tax was modified. Alberta reduced its royalty rates on companies and took over the Petroleum Incentive Program.
Similar agreements were negotiated with BC on September 24 and with Saskatchewan on October 26. On March 2, 1982, Ottawa negotiated an agreement with Nova Scotia. Ottawa would manage the offshore resources, but the province would reap all of the economic benefits until it ceased to be a have-not province. This was another qualification to the equalization program making Nova Scotia “a province not like the others.” There was no similar agreement with Newfoundland since it insisted that offshore resources were completely provincial, as they had belonged to Newfoundland before Confederation and had not been transferred to Ottawa. That also made it “a province not like the others.”
Shortly after Ottawa and the provinces reached their agreements, the foundation of the NEP crumbled. The key assumption underlying it was that international prices would rise to $100 per barrel. Instead, in March 1983, OPEC reduced the price to $29—it only approached the $100-mark two decades later, only to fall back toward $50 again. The windfall that Ottawa, the producing provinces, and industry were squabbling over disappeared. Ottawa and the producing provinces found themselves giving new subsidies to the oil companies to encourage exploration. The NEP was in ruins, leaving Canadians with the world price, no self-sufficiency, a recession in Alberta, inefficient industry in central Canada, and a bitter legacy of distrust between western Canadians and their national government. Politically, the NEP virtually destroyed the Liberal party in the West at both the federal and provincial levels.
New Federal Programs, New Battles
By that time, Canada was heading for a financial crisis as the federal deficit rose at a rate that was unsustainable. One of the main causes was the series of policies Trudeau had adopted to dominate the provinces and “put Quebec in its place.” They included competition with Quebec City for the hearts and minds of the Québécois, support for declining industries and regions, spending on local infrastructure, generous increases to the unemployment and welfare programs, and subsidized oil prices and incentives for the oil industry. Even with the oil and gas revenue grab, Ottawa financed its programs in the provinces by borrowing, and the annual deficit had risen to $40 billion by 1984.
In 1982, Ottawa’s drive to become more involved in local economic development led to yet another reorganization of several of the main departments involved and the way they spent their money. The Department of Regional Economic Expansion (DREE) and the Department of Industry, Trade, and Commerce (ITC) were combined into the Department of Regional and Industrial Expansion (DRIE). It planned to contribute its funds through agreements with the provinces, which were to be called Economic Regional Development Agreements (ERDAs). Seven provinces were willing to enter such agreements, but Quebec was very wary of them. Its position was summed up in the claim that “the provinces were being reduced to simple federal agencies.” It stated: “This short-circuiting of Quebec . . . will never be tolerated . . . If . . . Ottawa has lost sight of . . . viable federalism . . . then Quebec has only one option: to demand the amounts that it is entitled to . . . [as] unconditional financial transfers.” This, in 1984, was what Lesage had demanded in 1960, and once more Ottawa rejected Quebec’s demand.
The constitution and energy policy were not the only issues where Ottawa decided it could act unilaterally. In 1981, it made a radical decrease in transfer payments with little consultation so it could spend that money directly, providing assistance to institutions and the public that had previously been funnelled through the provinces. In June 1982, Ottawa announced radical changes to regional development programs, taking direct control rather than co-operating with the ones administered by the provinces. In June 1983, it established an exclusive job creation program to replace shared-cost ones. These attempts to make Canadians look to Ottawa for support reflected the government’s increasingly nationalistic agenda.
Another assault on provincial power occurred in 1982 when the 1977 taxation agreement, the Established Programs Financing, the EPF, arrangement was due for renewal. Ottawa’s plan was to reduce transfer payments by tying them to increases to the rate of growth of the GDP. That would cut payments by 15 per cent, yielding savings of $6 billion over the term of the new arrangement. Ottawa presented its proposals only five months before the expiry of the current agreement, leaving the provinces with insufficient time to develop proper responses. In spite of unanimous provincial opposition, Ottawa imposed its new conditions in April 1982. Significantly, federal transfers to the provinces, which had been increasing for decades, peaked in 1982 and the trend line from then on was steadily downwards.
The money saved by these cutbacks was spent in part on investments to support regional economic development. Many of these programs were aimed specifically at Quebec in the competition for the hearts and minds of Quebeckers. In 1983, Ottawa began a huge program for the development of the Lower St. Lawrence-Gaspé region, the first time such a program was launched without consultations with the relevant province. This was followed a year later with another large program, the two costing $500 million. Other provinces were not treated the same, a paradoxical example of the “special status” Trudeau claimed to reject. These programs were called regional economic development. This was an Orwellian use of the word regional, because in Canadian politics, that word refers to one of the five major regions such as Quebec or Atlantic Canada, not a small local area such as southeastern Quebec.
Ottawa’s relations with municipal governments also changed. The provinces, especially Quebec, had objected when Ottawa attempted to deal directly with municipal governments. In an agreement of 1978, Ottawa accepted that it had to deal with the municipalities through the provincial governments, which would control programs, with the caveat that any federal contributions would be publicly acknowledged. In 1981, that form of co-operation was cancelled, to Quebec’s dismay. The new policy was denounced by all the provinces, and new unilateral federal programs naturally led to problems and conflict with the provinces. Quebec threatened to penalize any municipality that accepted federal funds directly, and Ottawa was forced to sign an agreement covering its programs.
Medicare was another area of disagreement. By 1984, Ottawa’s share of Medicare had declined considerably from the initial 50 per cent of the costs covered. The increased burden on the provinces and the loosening of federal controls over the program had led hospitals and doctors to begin extra-billing and charging user fees for services they thought were not covered by Medicare. Defenders of Medicare argued that this was creating a two-tier system, which benefited the rich who could pay those extra fees. In fact, Medicare had never covered all aspects of health and was a two-tier system from the beginning. A visit to the doctor was covered, for example, but not the drugs or eyeglasses the doctor prescribed, and a broken jaw bone was covered, but not a broken tooth.
The extra-billing and user fees provoked public protest, and Ottawa responded with the Canada Health Act of April 1, 1984. It imposed dollar-for-dollar penalties on provinces that allowed user fees and extra-billing. That was an additional condition to the original four. Provincial governments were enraged over yet another invasion of provincial jurisdiction, done without consultation. BC, Alberta, and Quebec took Ottawa to court over the issue. They lost, and proponents of Medicare bragged incorrectly that Canada had avoided a two-tier system. The Act did reduce extra-billing and user fees, but Medicare’s monopoly could not be fully enforced. People resented the violation of the principle of freedom of choice; some went abroad and paid for quicker or better service; some provinces began allowing medical clinics to charge for services such as MRIs; people crossed provincial borders to obtain faster service at their own expense; and uniform standards between provinces simply could not be completely enforced.
Throughout Trudeau’s second term, Ottawa’s relations with the four Atlantic provinces were quite harmonious. Their governments were receiving around half their revenue from federal grants of one kind or another, and federal spending on things like regional economic development provided another major boost to their economies, hence the population’s level of satisfaction with their provincial governments. Maintaining the flow of federal funds was thus a top priority for all these provincial governments and rocking the boat on mere constitutional issues was furthest from their minds. For a while, the NEP brought them cheap oil and gas, which was particularly important given their lack of hydro-electricity. Equalization grants and other spending had effectively turned the four provinces into clients of the federal government, and they played only a small role in the great federal-provincial debates of the period. The exception was Richard Hatfield’s government, which was a staunch ally of Trudeau on the constitutional debate because of the large Acadian population in the province. The degree to which such dependence undermined the work ethic and the ability of Atlantic Canadians to manage their own affairs was noted, but it was of minor concern within and outside of the region.