In the first decade of Confederation, Canada’s political leaders made enormous progress on implementing the new system of government and tackling the problems it was designed to solve. They had not, however, resolved the question of what kind of federalism was being created. The marriage of British constitutional practice with American-style federalism had produced a hybrid, and it was not yet clear exactly how the parts would work together. Some still argued that the central government alone was autonomous; others contended that both orders of government were autonomous in their areas of responsibility. Some argued that the central government was stronger and superior or should be; others believed that the two orders of government were equal.
Oddly enough, the answers emerged from a number of political battles and court cases that seemed relatively trivial on their own merits. They included issues surrounding appointing Queen’s Counsels, inheriting property, fire insurance, granting liquor licences, playing billiards after a pub’s closing time, settling the debts of a bankrupt bank, using a timber slide on a little river, dismissing a provincial government, financing Catholic schools, distributing the estates of the Jesuit Order, building railways in Manitoba, employing Chinese labour in BC, and determining Ontario’s western border. Many of these issues dragged on for years, often overlapping with each other.
Defining the Powers of Ottawa and the Provinces
One issue that touched on many others was the position, power, and prerogatives of the lieutenant governors in the provincial capitals. In Macdonald’s view, they were officers of the federal government, instruments of federal supervision, and had no direct link to the Crown in Britain. In the view of the provinces, they were part of their governments, occupied an equivalent position and exercised the same powers as governors general did in Ottawa, and represented the Crown in the provinces. The issue was crucial to the definition of Canadian federalism, because under Macdonald’s interpretation the provinces would be subordinate to Ottawa and Canada would have a quasi-federal system. As time passed, it became clear that Macdonald wanted to use lieutenant governors the way Britain had used governors before initiating democratic government in 1848, that is, for the lieutenant governors to be in charge rather than the provincial cabinets.
One of the issues that helped answer the question was the appointment of lawyers as Queen’s Counsels. These appointments were the prerogative of the Crown, and the question was whether that meant the lieutenant governors, the governors general, or both. The issue first arose in Nova Scotia in 1879, and the Canadian Supreme Court sided with Ottawa. It arose again in Ontario in 1885, when Premier Oliver Mowat argued that the prerogatives of governors general and lieutenants general had been divided between the two orders of government and were therefore equal. The JCPC in London supported him. The wording of the decision was unambiguous: “. . . the Lieutenant Governor of a province is as much a representative of [the Crown] for all purposes of provincial government as the Governor General is . . . for all purposes of the Dominion Government.”
A complex dispute in Quebec helped clarify the roles of governors general and lieutenant governors. In 1876, the federal Liberals appointed a new lieutenant governor, the highly partisan Liberal Luc Letellier de St. Just. Ignoring three decades of democratic government, Letellier acted as though the cabinet reported to him. In March 1878, he dismissed the Conservative government of Bouchard de Boucherville, appointed as premier the Liberal leader, and the new government narrowly won the following election. All Letellier’s actions arguably exceeded the powers of a lieutenant governor. Then a federal election put Sir John A. Macdonald back in power and his Quebec MPs demanded that he dismiss Letellier. Letellier, Governor General the Marquess of Lorne, and Premier Joly all said that doing so would constitute interference in Quebec’s affairs. Macdonald asked Britain for advice, and it replied that Macdonald had the authority to dismiss the lieutenant governor and that Governor General Lorne had to accept Macdonald’s decisions. Macdonald then dismissed Letellier and replaced him with a Conservative. The issue taught both governors general and lieutenant governors that their powers were much more restricted than they had supposed and that they had to accept that it was the elected politicians who made the decisions.
Another seemingly trivial matter raised again the question of whether lieutenant governors were equal to governors general. Before Confederation, the estate of a citizen of Upper Canada (escheats) who died without heirs passed to the government, that is, the Crown as represented by the governor general. The death of an Ontarian raised the question of whether the Crown was now represented by the governor general in Ottawa or the lieutenant governor in Toronto. While the actual amount involved was small, the implications were enormous. According to Macdonald, only the governor general represented the Crown so the federal government should receive the inheritance. Premier Mowat argued that before Confederation, the government of the Province of Canada represented the Crown, and it had not surrendered that power in 1867, so its lieutenant governor still represented the Crown and Ontario should receive the inheritance. He also argued that both federal and provincial governments were fully autonomous so they both represented the Crown. Ottawa disallowed the Ontario legislation in April 1875. An Ontario court upheld Mowat’s law, but the Supreme Court reversed that decision. Quebec supported Ontario by passing a law similar to Ontario’s, and the Quebec courts upheld it. The matter was appealed to the JCPC in London, which supported Mowat’s position, confirming that the provinces had legal equality with the central government, and lieutenants general and governors general were equal in status.
Another important legal case concerned a fire insurance claim in the small Ontario town of Orangeville (Citizen’s Insurance v. Parsons, 1881). Mr. Parsons owned a hardware store, on which he had insurance policies with companies chartered by both Ottawa and Ontario. After his store burned, two of the companies refused to pay. When ordered to do so by the courts on the basis of a provincial law, they argued that insurance was a trade, that trade was a federal responsibility, and that the provincial law was therefore beyond the powers of the Ontario government. The Ontario court, the Supreme Court, and the JCPC all upheld the Ontario law. The JCPC ruled that the federal power over trade and commerce applied to the economy as a whole or to interprovincial or international trade, not to the regulation of a specific “trade” such as insurance within a province. Fire insurance policies were private contracts that were a matter of property and civil rights, which made them provincial. The decision was of considerable importance, because if the JCPC had ruled that regulating a business within a province was a matter of federal power over trade and commerce, then the province’s control of property and civil rights could have been severely restricted.
Mowat had allies in the other provinces, including Premier A.G. Blair of New Brunswick. In 1887, the Maritime Bank there went bankrupt while holding deposits from the provincial government. The latter claimed that, as representative of the Crown, it had royal prerogative that gave it priority over other claimants for the bank’s assets. The Maritime Bank case went to the courts, with Ottawa arguing that only the federal government represented the Crown because Confederation had cut the provinces’ ties with the British Crown. Premier Blair argued that the New Brunswick lieutenant governor also represented the Crown. The provincial court agreed, the Supreme Court upheld that decision, and so did the JCPC.
This issue had now come before the JCPC so many times that Lord Watson, who penned the decision, decided to add the Council’s specific view of Confederation. “The BNA Act . . . has not severed the connection between the Crown and the provinces; the relation between them is the same as that which subsists between the Crown and the Dominion . . . The object of the Act was neither to weld the provinces into one, nor to subordinate provincial governments to a central authority, but to create a federal government in which they should all be represented, entrusted with the exclusive administration of affairs in which they had a common interest, each province retaining its independence and autonomy . . . [and] the legislatures of each province continued to be free from the control of the Dominion and as supreme as it was before [1867].” By the time of Macdonald’s death in 1892, his attempt to use lieutenant governors the way Britain had used governors prior to the 1848 grant of democratic government had failed. Lieutenant governors in the provinces had the same power as the governor general in Ottawa, and both positions were in fact largely ceremonial.
The Liquor Trade: Federal or Provincial?
Another area of conflict that helped define federalism involved a series of court cases over the control of the liquor trade. Nineteenth-century Canada was a male-dominated, hard-working, hard-drinking society with over four thousand pubs in Ontario alone. Liquor sales provided an important source of government revenue, and appointing inspectors and granting licences were important elements in the patronage system that greased the political parties. The question was whether the federal Conservatives in Ottawa or the provincial Liberals in Toronto could regulate the business, and since the BNA Act was silent on the matter, it soon wound up in the courts. In 1872, Ontario passed a law regulating the trade and Ottawa challenged it. The following year, Ontario passed another law transferring the power to issue licences from the municipalities to Queen’s Park. That law came before the courts in the case of Severn v. the Queen and was found to be beyond provincial power. Ottawa then passed the Scott Act to regulate the trade across Canada. It was based on federal responsibility for trade and commerce and the belief that Canada should have a uniform law governing Prohibition. Oddly, that principle was contradicted by the fact that, under the Scott Act, each municipality could decide whether or not to impose Prohibition.
When the city of Fredericton introduced Prohibition under the federal law, a tavern owner, Charles Russell, argued that the law was beyond the power of the federal government (Russell v. the Queen, 1882). A New Brunswick court and the JCPC both upheld the federal legislation on the grounds that Prohibition fell under federal power over peace, order, and good government because alcohol consumption was a matter of public safety, like poisonous drugs or explosives, and an evil assumed to exist throughout the Dominion.
That was a major victory for Macdonald’s belief in the superiority of the federal government, but it was his last. He was back in power following the 1878 election, fully aware of the political advantages of controlling liquor licensing. He passed the McCarthy Act in 1883, requiring taverns to have federal licences and establishing a network of federal inspectors who would, of course, be Conservatives. Macdonald hoped that would end the capacity of the provinces to license taverns and that it would undermine the patronage system of provincial Liberal regimes. The following year, Quebec Conservatives proposed the repeal of the federal law as an infringement of provincial powers, and they were supported in the House of Commons by Liberal leader Wilfrid Laurier, who declared that the law was as an infringement on Quebec’s powers.
Ontario’s Mowat thus had allies, but he was the one to take the lead in
challenging the federal law. In 1884, Ontario passed a law regulating taverns; the federal government disallowed it. The issue went to court when tavern owner Archibald Hodge was fined $25 for allowing customers to play billiards past the legal closing hour of 7 pm. His lawyers argued in Hodge v. the Queen that Ontario could not pass laws regulating behaviour, that the matter was criminal and hence federal, and that Ontario could not delegate its authority to local municipalities. The Ontario court agreed with him, a higher court disagreed with that judgment, and the case went to the JCPC in London.
In a decision of great significance, the JCPC sided with Ontario on all the issues. It said that the Ontario law did apply, because a matter could be both federal and provincial in different aspects; that is, it did not have to be either federal or provincial in its entirety. Thus, Ottawa’s right to legislate for public safety, as upheld by Russell v. the Queen, did not prevent a province legislating on the same issue on matters under its jurisdiction. Liquor was a local matter and was therefore provincial under Section 92. It also stated that Ontario had the right to delegate power to municipalities. Most importantly, the JCPC said that provinces were sovereign in the matters listed in Section 92, just as the federal government was sovereign in its spheres, and the provinces were not subordinate to the federal government’s powers under peace, order, and good government. The wording was unambiguous: “the local legislature is supreme, and has the same authority as . . . the Parliament of the Dominion . . .”
Mowat then passed a law imposing heavy taxes on the pubs that had federal licences, a law that Ottawa quickly disallowed. That turned out to be a major mistake, because the case drew Ottawa’s liquor law into question and the Supreme Court declared it beyond federal power, a decision upheld by the JCPC. In 1896, Ottawa referred another Ontario liquor law to the JCPC, arguing once more that Prohibition was a matter of peace, order, and good government. Lord Watson wrote the Council’s decision, saying that the general federal powers identified in Section 91 did not allow Ottawa to overrule the provincial powers identified in Section 92. Watson may have been tired of these cases, because he went on to make a definitive statement on the issue. He said that apart from the matters listed in Section 91,
Parliament has no authority to encroach upon any class of subjects which is exclusively assigned to provincial legislatures . . . To attach any other construction to the general power . . . would . . . not only be contrary to the intendment of the act, but would practically destroy the autonomy of the provinces. If it were conceded that . . . Parliament . . . has authority to make laws [on] matters which . . . are . . . of local or private interest, upon the assumption that these matters also concern peace, order, and good government of the Dominion, there is hardly a subject . . . which it might not legislate, to the exclusion of the provincial legislatures.
He added that the federal government’s general power “ought to be strictly confined to such matters as are unquestionably of Canadian interest and importance and ought not to trench upon [provincial powers].”
Minority Rights and French-Canadian Nationalism
Another crucial matter that had to be determined was the role the federal government would play in the protection of minority rights. The BNA Act specifically protected the rights of Protestants in Quebec, but did not give Catholics in other provinces the same degree of protection. The New Brunswick government decided to establish a single, non-denominational, government-run system of schools, which would be free for all citizens. Until then, education had been provided mainly by Protestant and Catholic churches with financial support from the government. The new system would inevitably reflect the views of the Protestant majority and was therefore rejected by the Catholic minorities. The new law did not abolish Catholic schools, but it meant that Catholics would have to pay for them in addition to paying taxes for public ones.
Catholic appeals to the provincial Assembly fell on deaf ears. Some Catholics refused to pay school taxes, and the government began prosecuting them. The Church took the issue to court and lost. It then appealed to the federal government to protect minority religious rights by overturning the legislation. Riots broke out in the Acadian region of New Brunswick and lives were lost. French-Canadian MPs in Ottawa were sympathetic to New Brunswick’s Catholics, but they faced a very difficult dilemma: If Ottawa could veto legislation regarding education in one province, then it could do so in others, including Quebec. And one of the main reasons French Canadians had endorsed federalism was precisely because it gave the provinces control of education. While French-Canadian MPs were conflicted by the crisis, Macdonald found an easy way to deal with it. The BNA Act had guaranteed the rights of Catholics that were based on law, but New Brunswick’s support to Catholic schools was merely an arrangement. The federal government was not then under any constitutional obligation to protect the separate schools, and Macdonald refused to disallow the legislation. Then the New Brunswick government worked out compromises that preserved the common system of education, but allowed Catholics to function within that system. In this case, federalism was working exactly as planned.
Other developments outside the borders of Quebec added to the English Protestant/French Catholic hostility that Confederation was designed to avoid. In 1885, Louis Riel led a second uprising in western Canada. He was found guilty of treason and sentenced to hang. The federal Conservative government, including three Quebec ministers, allowed the hanging to proceed although it was argued that Riel was insane. French Canadians were outraged, and Honoré Mercier renamed the provincial Liberals the “Parti National” to make it easier for Conservatives to support him. His main objective was putting the interests of French Canadians first, as opposed to the provincial Conservative practice of supporting federal policies. Mercier led the Parti National to victory on June 29, 1887, on an anti-Ottawa, anti-Conservative platform. His government endorsed a new interpretation of French-Canadian nationalism, of Confederation, and of the role of the Quebec state. According to this interpretation, it was the duty of the Quebec government to protect French-Canadian rights across the country since Quebec was the homeland of the French-Canadian nation.
These developments reflected the emerging Compact Theory of Confederation, which argued that it was an agreement between the provinces. John A. Macdonald’s continuous attempts to weaken provincial governments were now seen as a threat in Quebec, as they had been viewed in Ontario since at least 1873. The federal government had repeatedly used its power to disallow provincial legislation, far more than Britain had ever done. Ottawa was using its power to assert dominance over the provinces, not just to prevent provinces from passing laws that seriously harmed the Dominion’s general interests or those of other provinces. Mercier’s Parti National and Mowat’s Liberals began to co-operate, and the Ontario-Quebec axis was founded. To give weight to their demands, Premier Mercier called for the first interprovincial conference in Canadian history, to be held in Quebec City in October 1887, with Mowat as chairman. Quebec’s main grievance was that federal subsidies were quite inadequate for Quebec’s needs. Mercier argued that, in 1867, the provinces had given up customs revenue of $12 million in return for subsidies of $2.75 million. Since then, federal customs revenue had increased to $24 million, while the subsidies had only increased to $3.34 million.
Macdonald declined to attend the conference, so it became a premiers’ conference. Premier Mowat did not want federal subsidies increased, as Ontarians would pay most of the bill, but he wanted even more to have allies for his battles with Ottawa. The Liberal premiers of Nova Scotia and New Brunswick came, as did Conservative Premier John Norquay of Manitoba, a province engaged in bitter struggle with Ottawa. Only the two least populous provinces, BC and PEI, declined to attend—Ottawa had given them per capita financial support far in excess of that received by other provinces and that might have influenced their decisions.
Mowat drafted most of the twenty-two resolutions that were adopted. They called for an increase in federal subsidies to $4.3 million, for half the senators to be appointed by the provinces, for an end to the federal power of disallowance, for having the courts rather than the federal government make decisions on the constitutionality of provincial laws, for provinces alone to establish voting lists, for MLAs to have the same privileges as MPs, for provincial agreement before Ottawa could declare local infrastructure as federal, and for recognition of Ontario’s claim to its western border.
All of these demands were designed to reduce federal influence over provincial affairs, and they represented a clear and strong political challenge to Macdonald’s centralist view of Confederation. Macdonald ignored the conference, but he responded to the pressure that it created. Just one year later, he stopped disallowing Manitoba’s railway legislation and he recognized Ontario’s border in 1889. Over time, most of the other resolutions were adopted, confirming the victory of provincial rights over federal centralization.
Mercier had far more success addressing an issue that had long bedevilled his predecessors. His solution produced another needless federal-provincial dispute, one that spoke volumes about the attitudes of English-speaking Protestants. The issue was purely internal to Quebec, namely the disposition of revenues from the Jesuit’s estates. When the Jesuit Order was banned in 1774, the government confiscated its estates and used the revenue for education. After the Order was allowed to return in 1814, it wanted to regain control of that revenue. Other Catholics disagreed, and the problem dragged on for decades.
In 1887, the Mercier government decided that the issue had to be resolved and asked the Vatican for guidance. The resulting compromise called for $400,000 to be divided between various Catholic bodies and for $60,000 to be given to the Protestant churches, a fairly accurate per-capita distribution from property that had originally been public lands. Quebeckers were generally satisfied, but Ontario’s militant Protestants objected strongly to the Vatican having influence over any political affairs in Canada. They exerted strong pressure on Macdonald to veto the legislation. Macdonald refused, arguing that the issue fell exclusively under provincial jurisdiction. Federalism was working as its architects intended, and the issue demonstrated again that Macdonald would not use federal power to intervene in religious or cultural matters.
These developments reflected another stage in the evolution of French-Canadian nationalism, this time led by an MP, Henri Bourassa, whose views were based on the writings of Lionel-Adolphe Groulx. Bourassa argued that Confederation was a pact between two founding nations, French and English, and not just between provinces. Ottawa, he alleged, was violating that agreement by failing to protect French rights because it was dominated by English-speaking MPs. This new nationalism reflected French-Canadian fear of being “swamped” in the new Dominion. Quebec’s population grew from 1.2 million in 1871 to 2 million four years later, but half a million people left the province. The rest of Canada grew faster, and Quebec’s share of federal MPs dropped from 65 of 181 at Confederation to 65 of 213 in 1896. Quebec was thus increasingly unhappy with its position within Confederation and with the workings of the BNA Act, and increasingly nationalistic as a result.
Railways and Rivers: Ottawa vs. Manitoba, BC, and Ontario
Meanwhile, on the prairies a major intergovernmental clash had developed over the building of railways in Manitoba. For Ottawa, the key issue was financing the CPR, so Macdonald gave it a monopoly on rail transit on the prairies. Every farmer and businessman had to travel to the lone CPR line to deliver or obtain goods, no matter what the distance, time, cost, or inconvenience, and the CPR was able to set freight rates at three times those in central Canada. The main priority of the Manitoba government was the construction of other railways to provide competition for the CPR, to lower freight rates, and to provide branch lines. The Conservative government of John Norquay therefore chartered railway companies to meet the needs of the province’s population, and Macdonald disallowed them to meet the needs of the Dominion. Norquay passed more railway bills; Macdonald vetoed them. Norquay’s failure to protect the interests of his province undermined his party, and more and more Manitobans voted Liberal. Macdonald began to realize that while he had the constitutional authority to disallow Manitoban legislation, the political cost was too high, and in 1880 he stopped vetoing Manitoban railway charters. At the same time, Norquay pressed Ottawa for control of natural resources. The province submitted long reports on the unfairness of its treatment and its need for revenue from those lands. Ottawa refused, but offered increased subsidies.
Manitoba was not the only province to fight major battles with Ottawa over the building of the CPR, but BC’s problems were over the ethnicity of the workforce. White labour was employed to build the railway over thousands of miles from eastern Ontario to Revelstoke, BC, but the CPR claimed that it needed Chinese labour to complete the short section to the Pacific. That would be very advantageous to the CPR, as Chinese workers were willing to work and live in terrible conditions and could be paid far lower wages than white workers. Opposition to the Chinese presence mounted rapidly, reflecting racism, concerns about health, and negative effects on the wages of white workers.
BC passed a law requiring companies to obtain licences to use Chinese labour; Ottawa disallowed it. BC imposed a poll tax to raise the cost of bringing in Chinese men; the Supreme Court overturned it. Ottawa disallowed a $10 licence on workers imposed by the province in 1878. BC passed more laws to bar Chinese workers; Ottawa used various methods to disallow or veto them. But thanks to Chinese labour, the CPR was finally completed on November 7, 1885. Ottawa then began responding to BC’s demands by imposing an increasingly high head tax on Chinese immigrants. Immigration declined, and relations between Ottawa and the province improved.
At the same time, there was no relief in Macdonald’s problems with Mowat’s Ontario. In 1881, a dispute broke out over the control of rivers inside the province. A lumberman, Peter McLaren, built a timber slide on a small tributary of the Ottawa River called the Mississippi and charged fees for other lumbermen to use it. One of them, Boyd Caldwell, refused to pay, and McLaren got a court order to stop Caldwell from using the slide. Caldwell appealed to the provincial government for support. Mowat passed a law, the Rivers and Streams Act, confirming that anyone could use timber slides, but they would have to pay a fair fee. In response to a request from McLaren, Macdonald disallowed the law.
An Ontario court upheld the provincial legislation, and Mowat passed the law again in 1883. Macdonald disallowed it again. Mowat passed it a third time in 1884, and Macdonald disallowed it again. McLaren took the case to the Supreme Court and lost, and then to the JCPC, where he lost again. Mowat then passed the legislation a fourth time, and Macdonald let it stand. It is not clear why Macdonald vetoed this legislation, since it involved property rights, a small local river, and natural resources—all provincial matters—and was of no general interest to the Dominion. The matter was vital to Ontario, however, because if Ottawa could veto legislation affecting a timber slide on a little river, it could intervene in almost any economic matter in the province. The best explanations for Macdonald’s actions may well be his personal animosity towards Mowat, annoyance over the fact that Mowat was winning all the battles, and the fact that McLaren was a Conservative.
The Rivers and Streams case was a milestone in the development of federal-provincial relations. At the 1864 Quebec Conference, no one questioned the concept that the federal government should take over Britain’s right to veto provincial legislation that went beyond provincial powers or threatened the broader interests of the Dominion or of other provinces. In 1868, Macdonald had stated that the power of disallowance should be used carefully and rarely, and he followed that policy during his first term, as did Mackenzie’s Liberal government. But in the Rivers and Streams case, the central government disallowed provincial legislation that did not threaten any general Dominion interest. Those vetoes violated the convention upon which Britain’s power of disallowance was based; they violated the spirit upon which that power was passed to Ottawa in the BNA Act; and they violated Macdonald’s own 1868 guidelines. Macdonald’s actions were seen as an abuse of a power that had previously been regarded as legitimate, and they seriously undermined public support for the power of disallowance. The constitution was not amended to remove the power of disallowance, but it was used less and less frequently from then on, and only for legitimate reasons.
Ottawa and the Ontario-Manitoba Border
During the 1880s, a dispute over Ontario’s western border came to have a major influence on federal-provincial relations. At Confederation, Ontario’s territory included the watershed of the north shore of Lake Superior. The northern and western borders beyond that had not been demarcated, but Upper Canada had long disputed ownership of that territory with the HBC. The 1783 border with the United States ran from Fort William (now Thunder Bay) to Lake of the Woods, and Ontario accordingly claimed Lake of the Woods as its western border with the line then running straight north to Hudson Bay. When the federal government purchased Rupert’s Land in 1870, it inherited the HBC’s claim. The area in dispute was an enormous 370,000 square kilometres.
Jurisdiction had to be determined because lumber companies, prospectors, and settlers were moving into the area. Ottawa proposed that Manitoba’s border be extended to a point just east of Fort William, run north to the watershed of Hudson Bay, and eastwards along that watershed to Quebec, a proposal that would have given Manitoba half of modern-day Ontario and rendered Ontario the fourth largest province. Ontario was outraged, partly because it had long administered part of the territory. Control of natural resources was a major factor. Ontario controlled its own, but Ottawa controlled those in Manitoba. In proposing to extend Manitoba’s borders, Ottawa was trying to keep control of a vast stretch of valuable timber and potential mineral wealth. Manitoba would have the administrative burden; Ottawa would have control and the revenue, and Mowat regarded Ottawa’s proposal as a blatant money grab.
After the 1878 election, Macdonald passed a law fixing Manitoba’s border at Fort William. Premier Mowat threatened to secede from Canada. He got Manitoba to agree to submit the case to the JCPC, with him drafting the questions that would be submitted. Macdonald had been seriously outmanoeuvred, because now the main protagonists were Ontario, which was determined to win, and Manitoba, which had little interest in the case. The JCPC sided with Ontario. Macdonald then asserted that Ottawa controlled land that First Nations had surrendered to the Crown. Mowat won that battle before an Ontario court in 1885 and before the Supreme Court two years later and then before the JCPC.
Ontario’s victories had contradictory effects on the state of federal-provincial relations. On the one hand, they helped create a more viable balance of power by making the provinces somewhat more powerful and Ottawa somewhat weaker, a lot weaker than Macdonald wanted. They did not, however, threaten Ottawa’s control of its responsibilities as listed in Section 91 or its ability to raise money by any means, which made it the main tax-collector in the Dominion. On the other hand, Mowat’s victories widened the imbalance between Ontario and the other provinces, and between central Canada and the other regions. One province, Ontario, contained over 40 per cent of Canada’s population, wealth, and seats in the House of Commons, and central Canada almost always dominated the federal government. This made Canada and its federalism very different from other federal states such as Germany, Switzerland, the United States, or India, where no province or state had a dominant influence on the federal government. Dealing with the imbalance between Ontario/central Canada and the other provinces has been a major and somewhat unique theme in Canadian federalism, an important feature of federal-provincial relations, and of Canadian politics ever since 1867.
By the 1890s, Canadian courts, provinces, political parties, and the public had answered the question left dangling at Confederation, namely whether the system represented genuine federalism or quasi-federalism. And the answer was genuine federalism. That had been confirmed by a number of decisions made by the JCPC, which reflected political, geographic, economic, and cultural realities in Canada and often upheld the decisions of Canadian courts. Macdonald had failed in his attempts to use various devices and clauses in the BNA Act to make the provinces subordinate.
Politics had played a large role in defining the limitations to federal power. Political calculations were certainly important when Ottawa chose not to intervene with provinces that limited the rights of minorities. Ottawa also discovered that the use of the power of disallowance was resented by citizens whose provincial governments were acting on their behalf. The workings of a two-party political system had also come into play. Macdonald’s goal of using provincial Conservative regimes to support federal Conservative policies undermined those parties in Ontario, Quebec, and Manitoba, and reinforced provincial Liberal parties in Nova Scotia, New Brunswick, and Ontario. Those provincial Liberal governments then became a natural opposition to the federal government, a check on its ambitions, a balance to its power. Since the federal Conservatives were centralizers, the opposition Liberals took the opposite position and defended provincial interests, a further check on Ottawa’s power.
In a sense, the degree of centralization written into the BNA Act reflected three circumstances that did not endure. One was the unusual influence of the American Civil War and the alleged threat that conflict posed to the British colonies. Another was the plan to purchase Rupert’s Land and build a railway to the Pacific, two huge yet short-term expenditures. The third was the lingering power of Britain to veto Canadian legislation and Ottawa’s power to veto provincial legislation. The British veto was well on the way to oblivion before Confederation, and Britain used it only once after 1867. Ottawa inherited the veto, but, like Britain, found that it was not a power that could be used effectively when provincial governments and the public were determined to have provincial laws and interests prevail.
Other factors played a role. Identification with the provinces remained very strong; identification with Canada took many years to develop. Though federal projects like the acquisition of the prairies and the building of the CPR were hugely important to the Dominion, they were not particularly important to many Canadians. On the other hand, things that were small were often hugely important to individuals, such as the local schoolhouse and the road to the nearest town. The Fathers may have underestimated the geographical, economic, historic, and cultural diversity of the federation they were creating—a centralized system simply did not reflect the underlying facts.