How to get cities out of their constitutional straitjacket

by Alexandra Flynn, Nathalie Des Rosiers, Richard Albert. Originally published on Policy Options
June 15, 2021

We need our cities to succeed. They are drivers of the economy. They are the first point of contact for social services. Cities are on the frontlines against hunger, homelessness, inequality and other pressing problems. But cities today do not have all the tools they need to help improve their neighbourhoods and communities.

Cities and their residents have been calling for reform – more money, more innovation, better leadership – for decades. The biggest problem standing in the way of cities is the former British North America Act, a foundation of our constitutional system, written at a time when urban areas represented only 20 per cent of the population, far from the 80 per cent of today. Times have changed, but even after the major constitutional reforms introduced in 1982, Canada still treats cities as though we are in 1867.

Five simple words in the Constitution Act, 1982 have put cities in a straitjacket. Under section 92, provinces have exclusive jurisdiction over “Municipal institutions in the Province.” In short, what a province gives to cities, it may take away, without much explanation why. This leaves cities with little capacity to plan, limited power to build the fiscal capacity to deliver improved social services and fully at the mercy of provincial politicians who often have little if any experience in municipal matters. What makes this even worse is the democratic deficit: electoral district rules commonly squeeze many more people into urban ridings than in rural ridings, diluting the vote of Canadians living in cities. There are many reasons for the crisis of governance that impedes the work of cities, but the proximate cause is the subservient status of cities in the Constitution.

The Canadian model of municipal government

There are many things that could be done today to address these issues. Provinces could agree to grant more power and taxation authority to their cities. There could also be court rulings on the limits of provincial power over cities. But in the end, it might be necessary to have constitutional change, even if it’s incremental and on a province-by-province basis.

The Canadian model of municipal government is not widely shared. In many other countries, cities have constitutional authority to do what their residents need them to do. These cities solve social problems, they work collaboratively as partners with other orders of government, they have far more fiscal powers in their toolkits, and they are thriving centres of democratic, artistic, economic and social innovation. In Canada, our cities are seen as service providers, not governments. As a result, Canadian cities must beg from, and bend to, provinces to do virtually everything, and certainly anything new.

Municipal empowerment is not an intractable problem. Throughout the world, and in the Global South particularly, good local governance is embraced as a political and democratic necessity. In Mexico, South Africa and within the European Union, constitutional frameworks are understood as dynamic, not rigid. Canada is lagging far behind in appreciating all the good things that cities can bring to the country as equal partners in modern governance.

The bottom line is this: the legal status of cities as “creatures” of the provinces is untenable.  Were we writing our Constitution today, we would not recreate the same structure for cities, with their existence depending on the goodwill of provincial governments. There is no good reason why this should endure any longer.

Empowering cities without amending the Constitution

In April 2021, we hosted the Massey Cities Summit, bringing together dozens of community leaders, elected representatives and scholars in a three-day conference to brainstorm how to give cities more power without amending the Constitution. Here are a few takeaways.

First, no constitution is static. The Canadian Constitution is, as judges have called it, a “living tree.” Its interpretation is meant to evolve over time, making way for new ideas to improve governance and democratic outcomes. For example, “subsidiarity” is a promising organizing theory because it counsels that the level of governance closest to the people should be the one most empowered to act. Subsidiarity can help guide the resolution of conflicts between provincial and municipal actions.

But subsidiarity is just one of many theories that can help us out of our constitutional straitjacket. In March 2021, the Supreme Court heard a constitutional challenge to the province of Ontario’s decision to dramatically reduce the size of Toronto city council against the city’s wishes – in the middle of the 2018 municipal election campaign. Toronto, and a dozen intervenors, argued that many municipalities existed before Confederation, that cities are democratic governments, not just “creatures” of the province, and that Ontario should not limit voting rights during an election. The Supreme Court has not ruled on this yet, but these are promising arguments that courts can use to help our Constitution evolve as our needs for improved local governance grow.

Second, there are political tools at our disposal. Stricter legislative language could limit provinces from overpowering municipal councils. For example, requirements for special parliamentary majorities could signal that provincial power must be exercised in a way that supports, rather than undercuts, local self-government. Enlightened provinces should see that the future depends on strong municipalities that can address crises in climate change, poverty or affordable housing – provided that cities are given the power to act.

Local governments need appropriate and reliable revenues to deliver the municipal services their residents want and need. Here, intergovernmental arrangements can be strengthened to protect municipal autonomy and stabilize funding. Promising options include granting tax points – i.e., reducing provincial taxes by a fixed percentage and giving the municipalities the right to raise taxes by similar amount – or by giving a fixed percentage of sales taxes to municipalities. Alternatively, or in addition, why not enact municipal equalization payments, just like the provinces get from Ottawa? Municipal equalization would ensure that a fair and reasonable share of sales and income taxes goes to local government.

Third, with additional municipal authority must come commensurate responsibilities. The bar must be higher for what counts as “good government” for empowered cities. Cities must have respectful relationships with First Nations and Indigenous communities located in and around city boundaries. They must recognize the needs of rural areas that feed and nurture cities. They must act deliberatively and democratically. Local autonomy will need to be exercised in the context of the interdependency that characterizes modern life. Greater powers always require greater accountability. The result will be better-trained and better-educated city halls, higher expectations for civic innovation and real, meaningful engagement with residents.

These takeaways are exciting, but they will go nowhere unless provinces are willing to go the distance to recognize the importance of cities.

Constitutional change, one province at a time

That is why another option must always remain on the table: constitutional change. The problem with a constitutional amendment to give more powers to all cities in Canada is that our  Constitution is exceedingly hard to modify in that kind of overall context — perhaps the most difficult in the world to change. That kind of change requires approval from both the Senate and the House of Commons, seven out of 10 provinces with at least 50 per cent of the Canadian population, and, quite likely, a national referendum as well. On top of all that, politicians are reluctant to “reopen” the Constitution after the failures of the Meech Lake and Charlottetown accords.

Fortunately, we might not need a Canada-wide constitutional amendment to increase municipal powers. We could proceed one province at a time, authorizing city charters in each, using the Constitution’s amending procedure in section 43. This section authorizes amendments affecting only one province to be approved by that province and both houses of Parliament – a much more manageable threshold.  A province may also amend its own constitution under section 45 by a vote of its legislature, without federal or other approvals – although the contour of this power is still unknown.

We are not lacking in options. In our view, the urgency of the problem means that all options should be considered – both those that keep us within the current constitutional framework and those requiring alterations.

The need for change has never been more dire. Cities are expected to respond to the growing needs of their residents in the wake of the pandemic, the climate emergency and massive social inequities. It is time to give cities the freedom to do the work they can do best.

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Empowering Canadian cities is a crucial democratic project for us all. Reluctance of provincial governments to share power with municipalities is not surprising, but it must be overcome. Strong municipalities do not make weak provinces. Instead, they lift up entire regions and the country as a whole. A 21^st century Canadian federalism needs municipalities at the table now.

Alan Kasperski, the conference connector for the 2021 Massey Cities Summit, executive producer of the City In Sight podcast, and participatory democracy advocate, also contributed to this article.

This article is part of the Reshaping Canada’s Cities After the Pandemic Shockwave special feature. 

This article first appeared on Policy Options and is republished here under a Creative Commons license.